Deceased property mortgage to bank
Shirin Dhonde
(Querist) 26 September 2013
This query is : Resolved
My father and his business partner has a joint CC loan account (Cash Credit) of 1.5 crore in a XYZ Urban co-op bank.
Few months back my father got expired.Now the bank is asking me and mother to pay the money.
Am I or my mother supposed to pay the debit money?
Property is mortgage to bank for CC account.
Please guide.
Raj Kumar Makkad
(Expert) 26 September 2013
The bank has to recover the outstanding dues out of the mortgaged property failing which if you both have inherited any of the properties of your father then shall have to pay.
Advocate M.Bhadra
(Expert) 26 September 2013
Extract from a Judgment:
Delhi High Court
Kamal Gupta vs Bank Of India on 1 November, 2007
Equivalent citations: AIR 2008 Delhi 51
Author: M Sharma
Bench: M Sharma, S Khanna
Agreement of Guarantee and Mortgage may be separate contracts and Section 13(2) notice relates to the agreement of mortgage but the two agreements are inter-connected and inter-twined with the agreement granting loan. In the present case, the letter of guarantee records as under:
This guarantee shall be a continuing security to you, and shall not be determined except at the expiration of three calendar month's written notice given to you of intention so to do by each of us or his legal representatives and in the event of the death of any one or more of us or any one or more of us coming under a disability, the liability of the survivor or survivors and the legal representatives of the person or persons so dying or coming under any disability and of the estate of any of us so dying or coming under disability shall continue under the expiration of three calendar month's notice in writing given to you of the intention of such survivors or survivor and legal representatives to determine the guarantee.
therefore clarifies that reference to mortgagor and mortgagee would include persons deriving title from them. A conjoint reading of the aforesaid provisions of the Contract Act, 1872, Transfer of Property Act, 1882 and the Act make it clear that the word 'borrower' as defined in Section 2(f) would mean the original borrower and after his death his legal representatives. The legal representatives to the extent they have inherited the estate from the deceased become a 'borrower' for the purpose of Section 2(f) of the Act. The legal representatives steps into the shoes of the predecessor in title who had mortgaged the property (refer : Samarendra Nath Sinha and Anr. v. Krishna Kumar Nag ). The present case is not one of casus omissus but one where on interpretation of the relevant provisions the word 'borrower' as used in Section 2(f) and Section 13(2) would include not only the original mortgagor but also his legal representatives. There is no presumption of casus omissus and language permitting, Courts should avoid creating a casus omissus. [See: Ramesh Mehta v. Sanwal Chand Singhvi (supra)]
Raj Kumar Makkad
(Expert) 27 September 2013
Even under the above-noted judgment, the liability of the legal heirs cannot be denied.
