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Settling written off loan

(Querist) 09 May 2019 This query is : Resolved 
I have few personal loans/credit card dues that are unpaid since January 2010 which makes it to a complete unpaid period of 9 years. Therefore, it has been written off by the banks I own it to.

I am still going through financial crisis and cant pay the banks as per their demand so what is the best legal course to take here as they are harassing me to pay it up.

Professional advice is what I am looking at so that I can come out of this issue. I will read through the comments to my post and possibly hire the one who I think is really taking interest in my case with a proper resolution advice and approach.

Rajesh (Querist) 10 May 2019
Any professionals here? Appreciate your time and inputs. Thanks
krishna mohan (Expert) 10 May 2019
If the load is written off why they are pressurizing? Any evidence for written off? What is quantum of loan. Any collateral provided?
Rajesh (Querist) 10 May 2019
Thank you very much for your reply.

Yes, I have proof of written off from CIBIL and the loan outstanding is of about lakh and as a collateral post dated cheques were provided which were Non CTS in the year 2007
Rajesh (Querist) 10 May 2019
Any Lawyers here? Appreciate your time. Thanks
Rajesh (Querist) 10 May 2019
Any Lawyers here? Appreciate your time. Thanks
Anil Satyagraha (Expert) 10 May 2019
It appears that since the loan is written off, then the Bank/Credit Card Company does not have any valid cause of action against you.

Please get in touch with a local Attorney, Lawyer and get a Legal Notice issued to the representatives of the Bank, and clearly mention the facts stated in your problem statement. In the legal notice, make the following demands -
(1) Firstly, to cease and desist from calling you directly
(2) Secondly, any and all communication to be routed only via your Attorney
(3) Thirdly, mention that any violation of the aforesaid would entail taking legal action that includes appropriate civil, criminal remedies. Failure to heed your demands could result in severe litigation penalties on opposite party, in the nature of reporting to Consumer Forum.

Hope this helps.

Confidentiality Notice & Disclaimer: This reply and any files transmitted with it are for the sole use of the intended recipient(s) and may contain confidential and privileged information. This message or any part of it is not construed to be Legal Advice. For legal help, kindly contact a lawyer that specializes in the area of your concern.
Dr J C Vashista (Expert) 11 May 2019
What sort of legal remedy can be made available for an illegal action for that you are so desperate?
The only solution to get details of loan account and clear it by paying it off any outstanding amount.
Dr J C Vashista (Expert) 11 May 2019
Consult a local prudent lawyer for better appreciation of facts/ documents, for further guidance and proceeding.
Rajesh (Querist) 12 May 2019
Thank you @Anil Satyagraha I am now trying to connect with some local Advocate available from Mumbai on and is specialized in this matter.

Is there any one here?
KISHAN DUTT RETD JUDGE (Expert) 13 May 2019
Dear Sir,
You may get issue a legal notice as per following judgment as there are time barred debts.
ICCI Bank Limited vs. Prakash Kaur case,

The Supreme Court in a landmark judgement reiterated its earlier stand that banks cannot deploy musclemen for recovery of loans from defaulters thus forcing them to end their lives.

"We deem it appropriate to remind the banks and other financial institutions that we live in a civilised country and are governed by the rule of law," a bench comprising Justices Tarun Chatterjee and Dalveer Bhandari said.

The court while dismissing the ICICI Bank's plea refused to delete the Delhi High Court's remarks that held the bank and its musclemen responsible for abetting a youth to commit suicide by humiliating him and taking away his motorcycle financed by the largest private sector bank.

It also asked the ICICI Bank to to pay Rs 25,000 as cost of this litigation to the respondents within three weeks and directed the Delhi Police to conclude the investigation against the bank expeditiously within three months, keeping in view the gravity of the allegations.

The court also directed the concerned Deputy Commissioner of Police to submit the investigation report in the Delhi High Court.

According to the court, complaints received by Reserve Bank regarding violation of the above guidelines and adoption of abusive practices followed by banks recovery agents would be viewed seriously.

Reiterating the RBI Guidelines on Engagement of Recovery Agents, the court said, "The Reserve Bank may consider imposing a ban on a bank from engaging recovery agents in a particular area, either jurisdictional or functional, for a limited period. In case of persistent breach of above guidelines, Reserve Bank may consider extending the period of ban or the area of ban."

"RBI had expressed its concern about the number of litigations filed against the banks in the recent past for engaging recovery agents who have purportedly violated the law," Justice Bhandari, writing the verdict for the bench, stated.

RBI in a letter accompanying its April 24, 2008 Guidelines had stated that it might consider imposing a ban on a bank from engaging recovery agents in a particular area, either jurisdictional or functional, for a limited period.

ICICI Bank had moved the apex court seeking deletion of some paragraphs in the High Court order which had said that "...the proximate cause of death of the deceased that led him to commit suicide was on account of humiliation caused by the Bank people from where loan was taken by him."

"The modus-operandi employed by the banks like ICICI for realisation of their loan amount and for recovering the possession of the vehicle against which loans are given is extra legal and by no stretch of imagination they can be permitted to employ musclemen and goons for recovery of their dues even from a defaulting party," the High Court had observed.

The High Court order had come on a petition filed by Shanti Devi Sharma, the deceased's mother, seeking a probe against the ICICI bank and its staff for the unlawful action, which led to the suicide of her 34-year old son Himanshu Dev Sharma.

Sharma had committed suicide in October 2005 by hanging himself at his house after he was allegedly intimidated and humiliated in front of his neighbours and family by recovery agents employed by the bank for recovering the loan amount taken for his motorcycle.

The ICICI Bank had contended that it was within its rights to recover loans and had followed the required procedure for recovering dues.
Keep these rules in mind while facing a loan recovery agent
Know the facts
Banks may have an in-house collection department or they may outsource the job to a third-party collection agency. Keep in mind that no bank likes non-performing assets, or bad debts, on their balance sheet. A debt becomes bad when it’s not paid for three consecutive months.
“Usually if the debt is unpaid for a month, the collection team sends reminders or calls up the customer for recovery. However, the delay in payment could just be an oversight on the borrower’s part,” said a senior banker with a private sector bank, who did not want to be named. “But when the debt becomes 90 days overdue, we initiate recovery agent visits.”
This, however, depends on a bank’s policy.
In case you are unable to repay on time, it’s best to tell the bank about your situation. If you have a genuine reason, the bank may be willing to work towards a solution. This also depends on the bank’s policy.
“A credit card debt can be easily converted into an EMI instead of total loan outstanding amount,” said the senior banker cited above. “The bank may even restructure a loan in some cases. Of course, this also depends on your past payment record.”
Handling agents
Keep in mind that at times recovery agents have big targets to achieve and may also have incentives linked to the number and volume of collection. So they are a motivated lot and handling them isn’t easy.
Know the rules: You, as a debtor, have certain rights. Knowing those rights will help you handle a recovery agent.
Identity: You can ask the recover agents to show their identity cards issued by the bank or under the authority of the bank.
Privacy: You have a right to privacy. The recovery agent cannot discuss the debt to another person. So don’t panic if he threatens to tell neighbours or co-workers about your debt. If he does so, you can file a complaint against him with the bank.
Time: The recovery agent should contact you between 7am and 7pm. However, if your working hours or work shift does not permit this, you may be contacted beyond this time limit.
Calls: You can choose the place and time for receiving recovery calls. You can also request them to not call you at a particular place or time. For instance, if you don’t want to receive calls at work, specify the same to the agent or the bank. Keep in mind, they will respect your request only till they feel you are not avoiding them.
Decency: The recovery agent has to talk to you in a decent and civilized manner. No abusive language should be used. Also, the written communication sent by the banks should be easy to understand.
Investigation: If you file a complaint against a recovery agent, the bank needs to investigate the matter. This makes recovery agents accountable for their collection practice.
Inappropriate occasions: If there is a death in your family or any such event, you can tell the agent not to call you or make visits for a few days.
Records: Banks document the content of conversations between customers and agents along with the time and number of calls. Banks also need to keep all copies of communications sent to customers.
Disputes: If you face any dispute or differences regarding dues, seek assistance of the lender.
Seeking help
There could be various reasons for you not being able to pay instalments on time— medical conditions, job loss or a twin-income family becoming a single-income household. Macroeconomic factors such as high inflation or rising interest rates, too, can be the reasons. If the reason for non-payment is not temporary, it’s best is to approach credit counselling agencies and seek help. “We provide free credit counselling for those who are struggling to get out of debt,” said Narayanan Raja, chief executive, BCSBI.
Debt counselling agencies such as Abhay and Disha also offer such services for free. If you are uncomfortable going to these centres, you can avail counselling over telephone which also is provided without any cost.
Recourse if harassed
If you think the agent is not following any of the above mentioned rules, you should file a complaint. Raja said, “If a borrower thinks he is being harassed, he should first approach the bank, and if not satisfied by its response, he should get in touch with the banking ombudsman.”
Though rules have been laid down to assist borrowers, it is best to rework household budget and make provisions to accommodate the unseen change in the repayment amount.
The bank can sue you on defaulting the credit card payment. It cannot amount to criminal liability as it would be considered as non payment of loan which will constitute as a civil act by nature.
The Banks and Financial Institutions can lend money even without security, normally, the Banks and Financial Institutions insist for security for the repayment of loan. The fixed assets, receivables etc. can be securities acceptable to the Banks and Financial Institutions for sanctioning the loans. The loan entitlements, the procedure for sanctioning the loan, the security issues etc, are exclusively governed by the guidelines/norms issued by the Reserve Bank of India.
Loan being an agreement or understanding between the Bank and the borrower, the general laws like Law of Contract, Transfer of Property Act, Specific Relief Act, Specific Performance etc., are applicable to all banking transactions depending upon the nature of transaction. When a borrower fails to repay the money to the Bank, what the Bank can do for recovering the loan is to file a civil suit earlier.
in India the remedy available to lenders has been to file an ordinary money suit for recovery against the defaulting borrower for the outstanding amounts or to file a summary suit as provided for under Order 37 of Code of Civil Procedure 1908

Please mark “LIKE” if satisfied by my answer.
Rajesh (Querist) 13 May 2019
Thank you @Respected Kishan Dutt for the insights you have provided. I have marked your message with a LIKE.

I am still hoping to find a lawyer from Mumbai on so that I can hire him/her to resolve this issue.
R.K Nanda (Expert) 27 June 2019
take help of local lawyer.

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