Recovery of dues by Bank

Querist : Anonymous (Querist) 27 January 2011 This query is : Resolved
Loan is taken payable in 30 instalments.post dated cheques are issued.16 instalments are paid.party is unable to pay remaining instalments due to loss of business and seriour deseases affecting earning capacity. on cosideration of facts, Bank writes off the balance loan and issues zero balance statement to party.Can the Bank susequently recover the unpaid loan which Bank has written off and issued zero balance statement. If so, under which law. Please cite judgment if available.

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Parveen Kr. Aggarwal (Expert) 27 January 2011
The grant of loan is a contractual transaction between the creditor and the debtor. In case the creditor bank has agreed to write off the loan amount and issues Zero Balance Statement, it cannot subsequently wriggle out of it and cannot recover the loan amount.

Section 63 of the Contract Act, 1872:

"63.Promisee may dispense with or remit performance of promise.- Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance,or may accept instead of it any satisfaction which he thinks fit."

Parthasarathi Loganathan (Expert) 27 January 2011
However, even a written off loan is recoverable if the borrower repayment capacity is established in a court of law provided the Bank has not issued No Due Certificate to the borrower.

Raj Kumar Makkad (Expert) 27 January 2011
I conquer with Partha Sir.

malipeddi jaggarao (Expert) 28 January 2011
I too conquer with Mr.Parthasarathi. Normally Banks will not give No Dues Certificate in the cases of written-off debts

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