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recovery of loan after death of principal borrower

Page no : 2

monika susmita sarkar   12 October 2017

If a person has been given a personal loan on the basis of performance of credit card without any security or gurantors when the perosn is unmarried woman no parents lives on the basis of her service no property has on her name and if she suddenly dies before the repayment. Can the bank recover the loan from her family ? do the bank has to waive  off this loan?  her family are not aware about such loan or cc billssince she stays alone away from family wht will be procedure to intimate the bank abot the deaseased death?

SHIRISH PAWAR, 7738990900 (Advocate)     13 October 2017

Bank will try to recover the due from family and as a last resort bank may write off the debt.

Jaspal singh (practicing lawyer)     24 October 2017

Secured loan can be recovred by the bank in case guarantor has also executed the agreemnt with bank.

recovery suit can be file by the bank/Nbfc and in case of non payment Bank recevier can be appointed by the court to take over the possession on movable and immovable property under section 151 CP.C and in case arbitrator had been appointed in loan agreement than under section 17 arbitrator can grant interim relief by appointing arbitrator.

It might be possiable that bank has alraedy secured his loan by the insurance first of fall  question is arise what type of proprety you are talking about . ?


Jaspal S Maini



Law Aspire (Legal)     02 December 2017

Originally posted by : k.chandrasekharan

Whenever any loan is secured by any assets and/or by personal guarantee/co-obligation, the lender has got right to recover the dues by proceeding against all of them.

As per present law, if any post-dated or undated cheques were also obtained from the principal borrower, the cheques can not be presented by the lender on dates mentioned/dating the cheques. Consequently, the risk of cheque-bounce case under Section 138 of N.I.Act, does not arise. Also, if any cheques had been bounced earlier to the death of the issuer and criminal complaint had been filed or contemplated, they can not be proceeded with and will all abate. However option of a summary civil suit under Order 37 of CPC remains alongwith other remedies.

If the liability is exceeding Rs. 1 lakh, and any assets (irrespective of ownership whether of the principal borrower or guarantor) are mortgaged/pledged/hypothecated, the bank has got option to realise these assets by attachment by the Competent Authority of the same Bank, without court action, under the Recovery of Debts due to Banks and Financial Institutions Act. If any balance dues are there, then DRT/civil court has to be approached if such dues exceed rs.10 lakhs or lesser, respectively.

If there are no assets to be realised, then case has to be filed before DRT/civil ourt, monetary jurisdiction as aforesaid.

Notice procedure prescribed under the laws have to be observed by thebank. In any case, the legal eirs o the principal borrower alongwith the guarantor have to be made as parties in the legal proceedings.

If after a decree by a civil court/cerificate of recovery by the DRT, execution/recoery proceedings are launched, then at that stage, at the option of the bank, even without proceeding against others, action can be enforced against the guarantor.


Three years from the date of loan/any acknowledgement of debt. Any dated cheque upto the date of death of the drawer, any repayment made into the loan account by the borrower, any acknowledgement of debt instrument executed, any correspondence containing acknowledgement of debt, any balance conirmation letter etc. have got the effect of extending limitation by three years from the date of such transaction/document.

If any notie under RDDB Act/ proceedings before civil court/DRT is not launched within the said limitation, the part of the debt that suffers limitation, can not be enforced.

Part of the debt: This is a confusing concept. Wherever a debt is agreed to be repaid in instalments, each instalment becomes a sub-debt, from the respective due date and time for limitation starts running from such date for each sub-debt. So, even if overall debt is apparently lapsed by limitation, really only such instalment or interest debited but not repaid suffers limitation after three years from such date. This concept of sub-division, will come into play only when no acknowledgement of debt for the overall debt is avaialable.

what is the impact of revival letter 

SACHIN AGARWAL (ADVOCATE)     15 December 2017

The limitation is 3 years from the date of loan or last acknowledgement or last deposit and in case of mortgage the limitation is 12 years.

Legal heirs are liable upto the amount which they inherrited from the deceased.

Dhinesh@123   18 December 2017

My father have taken 4 Lakhs loan refinance loan on 407 tempo with the interest amount of 157000 for 36 months. He played his 1 st 15000 installment correctly. He died before the second instalment date. He had a risk insurance for that 4 Lakhs. The executive s from the finance company came and collected the death certificate in one week time after my father's death. After that they didn't contact us for 3 months. And suddenly one day they called us and asked to pay the settlement amount of 40000. They also said they have got the settlement amount of 391000 in the third month only. (The insurance company was from their own group of companies.) And we didn't pay the EMI for 3 month, that's why this amount. My question was 1) Do we need to pay the installment after the death of my father even if the principal amount of 4 Lakhs was insured. 2) my father's death happened even before the second instalment arrived. That case even if the insurance does not cover the interest rate, do we need to pay this settlement amount of 40000. Somebody please help me

Soldios Lyngdoh   10 February 2019

After 11 years of the death of Principal borrower, I received a letter from the Bank to pay the debt within 15 days as I am a guarantor!! I have no money to pay..what shall I do?

IODI IODI   01 September 2022

On the death of a son who has taken loan for business and also personal loan , does mother become responsible for repayment of the loan?


Sudhir Kumar, Advocate (Advocate)     02 February 2023

Originally posted by : IODI IODI

On the death of a son who has taken loan for business and also personal loan , does mother become responsible for repayment of the loan? 

  Please post full facts.

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