cpc

need legal advise


Respected Sirs,

Kindly advise me on the following issue -

I had taken a business loan about 6 months back for business development. But the business had to be shut down 2 months after taking the loan, as debts were mounting despite best of the efforts to revive the business. My health got deteriorated due to stress and I was couldn't inform the bank about the closure of the business.

I was not having any income source after I shut down the business for 3-4 months. Despite that I had cleared 3 months EMI payments after receiving the bank's notice to pay up in a week's time. This was in Dec'13. Again in Feb'14 I cleared 2 months' installments. In all I cleared 5 months' EMI payments.

Now the bank informs me that I should clear the entire loan amount in 1-2 installment and not clear by making the monthly EMI payments, since the business no longer exists. The total tenure of the loan is 6 years.

Kindly advise me, as per law, is it right that a person should repay the business loan of the bank in one go after his business is shut down? Does the repayment as per the EMI mode of payment, even after the business is shut down, not as per law?

 
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Dear Raawindur

The information you have mentioned here is not sufficient so please advise the details like type of the loan , total tenure etc. and others at info@mmlaw.in

rgds

 
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BE/ LLM in Corporate Laws

Prima-facie , when the purpose for which loan was taken/disbursed does not exist, the contract ends then and there itself. For example, a loan is availed for purchasing a Vehicle and the Vehicle gets stolen. You claim the insurance amount and then expect to continue EMI payment for 5/7 years to the Bank is not tenable.But anyway, the Loan contract is to be seen about what are the provisions in this regard.So one has to go by the contract.

 
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Mr Sanjay Kumar,

 

If it is true that "when the purpose for which loan was taken/disbursed does not exist, the contract ends then and there itself" then anyone can take a business loan and then stop the business and run away with bank's money. This is very weird logic.

Mr/Ms Raawindur,

 

As Manoj Kumar & Sanjay Kumar have suggested, the loan documents need to be referred to, to advise you correctly. Banks generally reserve the "right to recall", which means that even if it is a term loan (a loan payable in EMIs), it can send you a recall notice demanding immediate payment. If this right to recall is there in your loan agreement (it may not be termed as right to recall but the wordings will mean the same) then the Bank is correct in demanding immediate payment. Since it is your obligation to repay the loan & if you really intend to repay, request the Bank to "restructure" the loan so that repayments are made by EMIs. Pls ensure to make all correspondences in writing so as to keep the records in case matter goes to court.

 

 

 
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Originally posted by : Prasun Chandra Das

Mr Sanjay Kumar,

 

If it is true that "when the purpose for which loan was taken/disbursed does not exist, the contract ends then and there itself" then anyone can take a business loan and then stop the business and run away with bank's money. This is very weird logic.

Mr/Ms Raawindur,

 

As Manoj Kumar & Sanjay Kumar have suggested, the loan documents need to be referred to, to advise you correctly. Banks generally reserve the "right to recall", which means that even if it is a term loan (a loan payable in EMIs), it can send you a recall notice demanding immediate payment. If this right to recall is there in your loan agreement (it may not be termed as right to recall but the wordings will mean the same) then the Bank is correct in demanding immediate payment. Since it is your obligation to repay the loan & if you really intend to repay, request the Bank to "restructure" the loan so that repayments are made by EMIs. Pls ensure to make all correspondences in writing so as to keep the records in case matter goes to court.

 

 

DEAR RAAWINDUR

WITHOUT HAVING A FULL LOOK ON THE DOCS NO ADVICE CAN BE MADE AS SAID MY MR.PRASUN CHANDRA DAS

 

RGDS

 
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Security Officer

Respected Sir/Madam

 

I am very much thankful to the lawyersclubindia and the members of the club. My several problems have been shorted - out from their advice. The problem which I am going to share with you, which I am facing since long time.  I want your kind attention and advice from the experts.

            I am working as a security guard in an institute. The institute is a autonomous body. Last week our new center head of campus, called a meeting with the security persons to develop the activities of security department. In that, several dissuasion have been took place among them, one issue which is very common among all the security staff i.e our administrative officer (female AO) is always insulting, abusing, and using unparliamentarily language to the security staff publically. We are in dissection with the center head regarding the above purpose. But after the meeting gets over administrative officer have issued us a notice of terminations.   

            I would like to request your honour that in this regard kindly brief us for necessary what action can be taken through court of law.

 

Note:

1.    We are working on contract basis.

2.    Among all we two have issued this notice

3.    We have been called for the open meeting by the administration department.

 

 Regards

 
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Your business loss has nothing to do for recovery of the debt by the bank. You have to pursue the bank for rescheduling the loan by paying the arrears in the debt. Except this there is no alternative but to face action under SARFAESI Act.

 
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