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Amit (abc)     18 December 2014

Who is liable to pay personal loan

My friend had died in an accident. He had personal loan from a private bank and same had been insured under accidental death.  But the insurance company had closed the case due to absence of postmortem report and FIR. There is no guarantor for loan. Now question is who is legally liable to pay loan, his wife and minor children or his parents or the bank is responsible itself. Can they file case against insurance company and where and is there any chance to win it? will the bank impose more interest if it is not paid?


 8 Replies

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 )     19 December 2014

Legal heirs have to pay. Legal heirs wife, children etc.

G.L.N. Prasad (Retired employee.)     19 December 2014

Try through an Advocate for exploring possibility of reliefs under CP Act by studying facts of the case in depth. (against insurance company)

Isaac Gabriel (Advocate)     19 December 2014

Without records how u say the death was due to accident? The insurance company cannot escape responsibility if the death was due to accident.Further,the bank can proceed in the terms of the loan.

malipeddi jaggarao (retired banker)     19 December 2014

When a person dies in accident, there will be definitely police case and post-martem.  In case why these are not available?

As regards payment of loan is concerned, since there is no guarantor, it is difficult for the bank to recover the loan. The legal heirs liability is limited to the estate of the deceased person.  The Bank will ask the legal heirs to sign certain documents for taking the responsibility of the deceased.  If these documents are signed by them, they will be held responsible and later, the bank can proceed against them legally.  Otherwise, it is not possible for the bank to make the legal heirs responsible.  What is the position of repayment capacity of the legal heirs?  If they received any properties from the deceased, it is their moral duty to repay the loan.  However, if they decide not to pay, they should be careful and should not sign any bank's documents.  Normally in such circumstances, the bank will write-off the loan.  

Amit (abc)     19 December 2014

Since bank has not sent a single letter for recovery of loan and has not done any written communication yet. Now their recovery agent start calling for settlement and threatening for worse result even though they are told to send letter and procedure. Bank had been notified within fifteen days when the accident happened? What precaution should be taken if borrower will go for settlement?  

Sudhir Kumar, Advocate (Advocate)     21 December 2014

fully agreed with Mr Jaggarao.

c.p.s. ramachary (1500)     21 December 2014

I fully agree with the views expressed by Sri. Malipeddi Jaggarao. Yes the legal heirs have no personal liability in the loan transaction except the estate if any inherited by the legal heirs from the deceased borrower.

T. Kalaiselvan, Advocate (Advocate)     24 December 2014

The opinion and advises of expert Mr. Malipeddi Jagga Rao are most acceptable and useful.  The suggested steps may be followed.

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