cpc

bank loan recovery of my deceased father


Dear all,

My father took CC Limit under CGTMSE scheme in 2011 and my dad died in 2012. Neither business is running nor we have any assets because we live in a villege where land belongs to forest i.e. unregistered land. Factory was running in our house and now there is no stock machinery or any thing of business/factory which was the primery security.

I am college student doing job so that me and my sibling can study but recovery notice has been sent by tribunal under rule 2 of second schedule to the IT Act 1961 read with section 29 of RDDB & FI act 1993. After receiving this we are in too tense because we have nothing to pay and hire an advocate. 

Please tell me what will happen now and whether it will affact our future/carrier.

 
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Retired employee.

If your father has declared any assets before the Bank in prescribed format, or if you have inherited any property then you must be worried.

If you are not having any properties, Bank may not proceed against you, as they do not want to spend good money on a bad cause of filing suits when legal heirs are not having any assets.

 
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LEGAL CONSULTANT

The liability would have become NPA and the matter would have been put before the DRT,for recovery.After UR father's death u must have received letters and notices from the bank.What was the colleteral security provided at the time of obtaining loan?

Bank cannot proceed against U unless U are a guarantor for the liability.

 
Reply   
 

Thank you Mr. G.L.N. Prasad and Mr. Sainath Devalla for suggession and giving me hope.

Yes sir, after my father's death we received notice from bank and after receiving notice we submitted death certificate to bank then we received notice from DRT, Lucknow and we send a reply about our financial condition.

And so far as colleteral security- there is nothing as colleteral security because of CGTMSE scheme and having no gurantor.

 

 
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LEGAL CONSULTANT

Once the loan has been reffered to DRT,bank people will not come to U.U have to fight it out in DRT.In DRT it takes years for proceedings to start.

 
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DRT has issued notice granting time period of 15 days and now it is going to start recovery proceeding. I want to know in recovery procedure can they arrest me and my faimily. And I want to know about insolvancy also.

 
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LEGAL CONSULTANT

Slowly U R comming out with more and more information only after we asked U.Initially U have never mentioned about DRT.Now I presume that U are either a co borrower or an guarantor for UR father's loan,and hence U are apprehending arrest.DRT cannot issue orders for arrest,it is only a recovery tribunal.

It can order for :

  1. Take over the possession of secured assets (mortgaged/hypothecated property or assets) under section13 (4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and auction the same to recover the dues.
 
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Dear Sir, 

I had mentioned about DRT written as tribunal and section of notice in my first message copy of which is mentioned below:-

recovery notice has been sent by tribunal under rule 2 of second schedule to the IT Act 1961 read with section 29 of RDDB & FI act 1993.

 Neither I am Co-borrower nor the gurantor. And as per the provision of section13 (4) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 they can take over the possession of secured assets but we dont have any assets.

 

 
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LEGAL CONSULTANT

Under CGTMSE Scheme the loan must have been under, Credit Guarantee Fund Scheme for Small Industries (CGFSI),which is an unsecured loan,but on the assets other material intended to be purchased,the bank has a right to secure them,if defaulted.

U are more knowledged about all these aspects.

 

 
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