Personal loan default
3 years ago
I I got personal loan from a bank in 2016. Since then I paid my EMIs for more than a year. But after that , I lost my job and failed to pay the EMIs. Then I got a job and the payment started. During the covid 19 pandemic , i lost my job again and failed to pay EMIs since march 2020. The bank sent me the legal notice to pay the outstanding due amounting to R.1.70 lakhs immediately, failing which they said I would have to face the legal action. Presently I have no source of income since covid 19 lockdown. It has also become difficult for me to meet daily expenses. In this situation, it is not possible for me to pay 1.70 lakhs. Kindly let me know the way in this situation since the bank recovery department keeps on calling everyday and threatening about that legal notice which they served a week back.
A.Dear Sir,
ICCI Bank Limited vs. Prakash Kaur case,
The Supreme Court in a landmark judgement reiterated its earlier stand that banks cannot deploy musclemen for recovery of loans from defaulters thus forcing them to end their lives.
"We deem it appropriate to remind the banks and other financial institutions that we live in a civilised country and are governed by the rule of law," a bench comprising Justices Tarun Chatterjee and Dalveer Bhandari said.
The court while dismissing the ICICI Bank's plea refused to delete the Delhi High Court's remarks that held the bank and its musclemen responsible for abetting a youth to commit suicide by humiliating him and taking away his motorcycle financed by the largest private sector bank.
It also asked the ICICI Bank to to pay Rs 25,000 as cost of this litigation to the respondents within three weeks and directed the Delhi Police to conclude the investigation against the bank expeditiously within three months, keeping in view the gravity of the allegations.
The court also directed the concerned Deputy Commissioner of Police to submit the investigation report in the Delhi High Court.
According to the court, complaints received by Reserve Bank regarding violation of the above guidelines and adoption of abusive practices followed by banks recovery agents would be viewed seriously.
Reiterating the RBI Guidelines on Engagement of Recovery Agents, the court said, "The Reserve Bank may consider imposing a ban on a bank from engaging recovery agents in a particular area, either jurisdictional or functional, for a limited period. In case of persistent breach of above guidelines, Reserve Bank may consider extending the period of ban or the area of ban."
"RBI had expressed its concern about the number of litigations filed against the banks in the recent past for engaging recovery agents who have purportedly violated the law," Justice Bhandari, writing the verdict for the bench, stated.
RBI in a letter accompanying its April 24, 2008 Guidelines had stated that it might consider imposing a ban on a bank from engaging recovery agents in a particular area, either jurisdictional or functional, for a limited period.
ICICI Bank had moved the apex court seeking deletion of some paragraphs in the High Court order which had said that "...the proximate cause of death of the deceased that led him to commit suicide was on account of humiliation caused by the Bank people from where loan was taken by him."
"The modus-operandi employed by the banks like ICICI for realisation of their loan amount and for recovering the possession of the vehicle against which loans are given is extra legal and by no stretch of imagination they can be permitted to employ musclemen and goons for recovery of their dues even from a defaulting party," the High Court had observed.
The High Court order had come on a petition filed by Shanti Devi Sharma, the deceased's mother, seeking a probe against the ICICI bank and its staff for the unlawful action, which led to the suicide of her 34-year old son Himanshu Dev Sharma.
Sharma had committed suicide in October 2005 by hanging himself at his house after he was allegedly intimidated and humiliated in front of his neighbours and family by recovery agents employed by the bank for recovering the loan amount taken for his motorcycle.
The ICICI Bank had contended that it was within its rights to recover loans and had followed the required procedure for recovering dues.
ICCI Bank Limited vs. Prakash Kaur case,
The Supreme Court in a landmark judgement reiterated its earlier stand that banks cannot deploy musclemen for recovery of loans from defaulters thus forcing them to end their lives.
"We deem it appropriate to remind the banks and other financial institutions that we live in a civilised country and are governed by the rule of law," a bench comprising Justices Tarun Chatterjee and Dalveer Bhandari said.
The court while dismissing the ICICI Bank's plea refused to delete the Delhi High Court's remarks that held the bank and its musclemen responsible for abetting a youth to commit suicide by humiliating him and taking away his motorcycle financed by the largest private sector bank.
It also asked the ICICI Bank to to pay Rs 25,000 as cost of this litigation to the respondents within three weeks and directed the Delhi Police to conclude the investigation against the bank expeditiously within three months, keeping in view the gravity of the allegations.
The court also directed the concerned Deputy Commissioner of Police to submit the investigation report in the Delhi High Court.
According to the court, complaints received by Reserve Bank regarding violation of the above guidelines and adoption of abusive practices followed by banks recovery agents would be viewed seriously.
Reiterating the RBI Guidelines on Engagement of Recovery Agents, the court said, "The Reserve Bank may consider imposing a ban on a bank from engaging recovery agents in a particular area, either jurisdictional or functional, for a limited period. In case of persistent breach of above guidelines, Reserve Bank may consider extending the period of ban or the area of ban."
"RBI had expressed its concern about the number of litigations filed against the banks in the recent past for engaging recovery agents who have purportedly violated the law," Justice Bhandari, writing the verdict for the bench, stated.
RBI in a letter accompanying its April 24, 2008 Guidelines had stated that it might consider imposing a ban on a bank from engaging recovery agents in a particular area, either jurisdictional or functional, for a limited period.
ICICI Bank had moved the apex court seeking deletion of some paragraphs in the High Court order which had said that "...the proximate cause of death of the deceased that led him to commit suicide was on account of humiliation caused by the Bank people from where loan was taken by him."
"The modus-operandi employed by the banks like ICICI for realisation of their loan amount and for recovering the possession of the vehicle against which loans are given is extra legal and by no stretch of imagination they can be permitted to employ musclemen and goons for recovery of their dues even from a defaulting party," the High Court had observed.
The High Court order had come on a petition filed by Shanti Devi Sharma, the deceased's mother, seeking a probe against the ICICI bank and its staff for the unlawful action, which led to the suicide of her 34-year old son Himanshu Dev Sharma.
Sharma had committed suicide in October 2005 by hanging himself at his house after he was allegedly intimidated and humiliated in front of his neighbours and family by recovery agents employed by the bank for recovering the loan amount taken for his motorcycle.
The ICICI Bank had contended that it was within its rights to recover loans and had followed the required procedure for recovering dues.
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Ankur Goel @ Complete Law Shield
Responded 3 years ago
A.Recovery department is like that only.
ask bank to send legal notice if that will make them happy.
after that reply to notice that you have intention to pay back since you are paying for so long and ask for reschedule.
Hope this clarifies,
Advocate Ankur Goel
ask bank to send legal notice if that will make them happy.
after that reply to notice that you have intention to pay back since you are paying for so long and ask for reschedule.
Hope this clarifies,
Advocate Ankur Goel
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A.Hi,
You shall need to approach the bank authorities and seek a restructuring of your payment plan. In light of the circumstances, they might be understanding and willing to grant you an extension on the payment deadline. If this is not possible, you might have to put up additional assets as securities to the bank, to show that you have an intention to repay them.
You shall need to approach the bank authorities and seek a restructuring of your payment plan. In light of the circumstances, they might be understanding and willing to grant you an extension on the payment deadline. If this is not possible, you might have to put up additional assets as securities to the bank, to show that you have an intention to repay them.
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Ayantika Mondal @ Prime Legal
Responded 3 years ago
A.Hi,
You shall need to approach the bank authorities and seek a restructuring of your payment plan. In light of the circumstances, they might be understanding and willing to grant you an extension on the payment deadline. If this is not possible, you might have to put up additional assets as securities to the bank, to show that you have an intention to repay them.
You shall need to approach the bank authorities and seek a restructuring of your payment plan. In light of the circumstances, they might be understanding and willing to grant you an extension on the payment deadline. If this is not possible, you might have to put up additional assets as securities to the bank, to show that you have an intention to repay them.
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