Whenever any loan is secured by any assets and/or by personal guarantee/co-obligation, the lender has got right to recover the dues by proceeding against all of them.
As per present law, if any post-dated or undated cheques were also obtained from the principal borrower, the cheques can not be presented by the lender on dates mentioned/dating the cheques. Consequently, the risk of cheque-bounce case under Section 138 of N.I.Act, does not arise. Also, if any cheques had been bounced earlier to the death of the issuer and criminal complaint had been filed or contemplated, they can not be proceeded with and will all abate. However option of a summary civil suit under Order 37 of CPC remains alongwith other remedies.
If the liability is exceeding Rs. 1 lakh, and any assets (irrespective of ownership whether of the principal borrower or guarantor) are mortgaged/pledged/hypothecated, the bank has got option to realise these assets by attachment by the Competent Authority of the same Bank, without court action, under the Recovery of Debts due to Banks and Financial Institutions Act. If any balance dues are there, then DRT/civil court has to be approached if such dues exceed rs.10 lakhs or lesser, respectively.
If there are no assets to be realised, then case has to be filed before DRT/civil ourt, monetary jurisdiction as aforesaid.
Notice procedure prescribed under the laws have to be observed by thebank. In any case, the legal eirs o the principal borrower alongwith the guarantor have to be made as parties in the legal proceedings.
If after a decree by a civil court/cerificate of recovery by the DRT, execution/recoery proceedings are launched, then at that stage, at the option of the bank, even without proceeding against others, action can be enforced against the guarantor.
Three years from the date of loan/any acknowledgement of debt. Any dated cheque upto the date of death of the drawer, any repayment made into the loan account by the borrower, any acknowledgement of debt instrument executed, any correspondence containing acknowledgement of debt, any balance conirmation letter etc. have got the effect of extending limitation by three years from the date of such transaction/document.
If any notie under RDDB Act/ proceedings before civil court/DRT is not launched within the said limitation, the part of the debt that suffers limitation, can not be enforced.
Part of the debt: This is a confusing concept. Wherever a debt is agreed to be repaid in instalments, each instalment becomes a sub-debt, from the respective due date and time for limitation starts running from such date for each sub-debt. So, even if overall debt is apparently lapsed by limitation, really only such instalment or interest debited but not repaid suffers limitation after three years from such date. This concept of sub-division, will come into play only when no acknowledgement of debt for the overall debt is avaialable.