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Shubham (banker)     28 January 2018

Limitation required for filing suit

Dear experts We have to file a case in DRT against a borrower whose loan has become NPA. The limitation of this loan has expired in 2017. The borrower made a cash payment in his account in 2016 , but the cash voucher does not bear his signature. I want to inquire if the case will be accepted in DRT? Any humble suggestions would be appreciated.


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 4 Replies

R.Ramachandran (Advocate)     29 January 2018

First and foremost indicate on what basis you say that the limitation of the loan expired in 2017?

SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     29 January 2018

When you say you want to file case in DRT, you must be a Bank and not an individual or non banking institution. When you are bank, your bank must be having a legal department. I am just surprised, why you are coming to a public forum instead of seeking guidance from your Legal Department.

 

  1. You have not indicated whether the loan is a pronote based or agreement based,.
  2. If it is a pronote based, 36 months from the date of pronote, a suit must be initiated failing which the debt gets barred by limitation. Of course, if the borrower signs an Acknowledgement of Debt, it gets extended by 36 months.
  3. If it is an Agreement based loan, each instalment has a limitation of 36 months. Therefore, what is the age of the NPA ie. whether time of 36 months elapsed from the date of an instalment becoming due is over or not. Verify this fact.
  4. I sincerely advise you to take up with your Legal Department and/or Panel Advocate alongwith all details and documents. Seeking some kind of quik fix solution through public forum will not help you.
2 Like

Kishor Mehta (CEO)     29 January 2018

If the cash voucher does not bear the signature of the borrower, it will be difficult to prove that the deposit is made by him.

SIVARAMAPRASAD KAPPAGANTU (Retired Manager)     29 January 2018

Yes. In exceptional circumstances only Bank has to fall back on this exemption to obtention of Acknowledgement of Debt (AOD) as per Law of Limitation. And, having worked in a PSU Bank for more than 3 decades, I never came across where Bank filed cases based on this kind of flimsy grounds. Banks normally have robust guidelines to obtain AOD once every 24 months from the date of loan or previous AOD. If this is not followed, the individual Officials concerned shall be in trouble. Normally this kind of loans shall be listed once in 6 months and a statement is sent to controlling Office and in ever regular inspection the loan papers and their validity is verified without fail (not by test audit but 100% checking).

 

 


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