In 2017, Mr Rama and his family secured a cash credit facility from a public sector bank for his partnership business in Tirupur, Tamil Nadu. This loan was raised by mortgaging four residential and commercial properties, and it was later renewed for a total of Rs 4 crore. Unfortunately, due to some business challenges, he failed to repay the loan.
On November 25, 2018, the loan was classified as non-performing asset (NPA) because it had become irregular. Consequently, the bank began proceedings under the SARFAESI Act on February 10, 2020 by issuing a demand notice under Section 13(2) asking Ramalingam to pay his remaining loan liability. His outstanding liability was Rs 3.89 crore plus interest and cost and the bank asked him to pay this within 60 days.
