Power of institution in the event of violation of terms:
(1) If any borrower does not abide by the agreement or terms thereof entered into with the institution or fails to repay the micro-credit to the institution within the period specified in the deed or if, upon an inquiry held by the institution, it appears that the borrower has misused or misappropriated the amount of the micro-credit so borrowed, the institution may, notwithstanding anything contained in the prevailing laws, recover its principal and interest by auctioning the security furnished or held by the borrower to or with the institution, in accordance with the prevailing laws.
(2) If the borrower transfer, in any manner, the title to the security which the borrower has furnished with the institution to any other person or if, for any reason, the price of the security furnished with the institution is devalued, the institution may, notwithstanding anything contained in the prevailing laws, require the borrower to furnish additional security covering the credit for the same within the time-limit specified by the institution. If the borrower fails to furnish such a security within the time-limit specified by the institution, the institution may recover its principal and interest by auctioning the property furnished as the security.
(3) If, in making recovery by making auction pursuant to Sub section (1) or (2), the whole of the principal and interest of the institution cannot be recovered from such a security, the institution may recover its principal and interest by auctioning other assets of a member where the member has borrowed the micro-credit personally and of the members of a group where the micro-credit has been borrowed collectively.
(4) The amount of expenditure incurred in making auction sale of the property and principal and interest of the institution shall be deducted from the proceeds of the auction sale made pursuant to this Section, and the remaining amount shall be returned to the concerned person ^20
(5) If, in making auction sale pursuant to this Section, any one does not take over, the institution may itself take over the property as prescribed 21