Prasad 09 August 2017

What happens when unsecured loan borrowers dies

Hi,

My father died in 2016, After 4 months of his death, Sale officer from Co-operative central bank has come to my home and told us that he has personal loan amount of 8 lakhs. when we asked for loan details through RTI (Right To Information) act, they have provide xerox copy of their ledger (not authorized by any bank officer). I have noticed my father name is in it but not his signature. loan was taken in 2000 and due date is 2008. He paid EMI until 2004

My father look personal loan in 2000 and loan due date us till 2008 but he stopped paying EMI after 07/2004. He passed away in 2016, soon after he passed away co-operative bank sales officer started giving notices to auction assert on his name and they are fail to provide any documents officially.

Here is my doubts:

1. why bank has not taken any action during his time and why they are coming now bit aggressively

2. Is this loan is really genuine? if so why they have not provided loan document with my father signature for that mattern any officialy document. (always providing xerox copy of their ledger)

3. Do they have rights to perform auction on died persons property

4. we do not have any documents about the loan niether Bank is not providing so how to move forward.

Appriciate your suggestions

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2 Replies

(Guest)

Kindly provide the below additional details

1. Name of the Co-Op Bank

2. Whether the loan was against any surity? anything hypothecated?

3. As you say you have got written notices, does it have any details of any asset mortgaged? Is it a Demand notice?

4. How much is the outstanding amount reflecting there?

Azhagananth (Lawyer) 09 August 2017

Regarding Question No: 3

Section 6(4) of the Hindu Succession (Amendment) Act, 2005 States as : After the commencement of the Hindu Succession (Amendment) Act, 2005 (39 of 2005), no court shall recognise any right to proceed against a son, grandson or great -grandson for the recovery of any debt due from his father, grandfather or great - grandfather solely on the ground of the pious obligation under the Hindu law, of such son, grandson or great grandson to discharge any such debt:

Provided that in the case of any debt contracted before the commencement of the Hindu Succession (Amendment) Act, 2005 (39 of 2005) , nothing contained in this sub section shall affect

(a) the right of any creditor to proceed again st the son, grandson or great grandson, as the case may be; or

(b) any alienation made in respect of or in satisfaction of, any such debt, and any such right or alienation shall be enforceable under the rule of pious obligation in the same manner and to the same extent as it would have been enforceable as if the Hindu Succession (Amendment) Act, 2005 (39 of 2005) had not been enacted.

Since the loan was taken before 2004, your liable to pay the fathers debt.

Regarding Questions: 1,3 & 4. you have to verify whether the procedure was done in accordance with law and procedure or not. If the same was done not in accordance with law then you may challenge the same by a Civil suit.

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