06 March 2021
Dear Lawyers , I am a retired person aged 65 years. My son had availed an education Loan in 2010 to which I was a guarantor .
After repaying for 2 years he lost his job and was unable to continue payments as and is unemployed since then . He is driving an Uber to earn a living. The Loan turned NPA on 14/6/2017 and my son offered a one time settlement of Rs 50000 to which the Bank did not reply.but sent letters for Onetime settlement camp in November 2017 & May 2018.There was no correspondence from Bank till Nov 2020 . In Nov 2020 my son again wrote to bank ( E mail ) repeating the offer of Rs 50000 & mentioning the initial sanctioned Loan amount & total repayment made . The Bank has now set a legal notice & threatened Legal action . My questions are : 1) Is the recovery time barred as no action was taken for 3 years after the Loan turned NPA . Does the letter Dt. Nov 2020 change the position and reopen the case from its time barred status ? 2) Can the Bank initiate Legal proceedings now?
I will be very obliged if you kindly give your valued opinion and save an unemployed youth & his retired Father
06 March 2021
Yes, it is time barred as the loan turned. NPA by bank on 14-06-2017 and bank did not take any legal action within 3 years from the date of loan turned NPA . Acknowledgement of due amount after 3 years by your son does not extend limitation for recovery of due loan amount.
10 March 2021
Loan was turned NPA on 14-06-2017 and after more than three years borrower on November 2020 acknowledged Due amount which does not extend limitation.Acknowledgement should be within limitation period I.e within 3 years from date of NPA so now claim is time barred.
11 March 2021
The limitation re-started when your son has offered one time settlement, it is well within time. Bank shall proceed to recover the amount with interest and penalty despite the fact it was declared NPA in June 2017. It is advisable to consult and engage a local prudent lawyer for appreciation of fact/documents, professional guidance and necessary proceeding. .