Illegal Lenders Harassing My Dad and Advice for Bankruptcy
4 years ago
I will try to keep it short. Below is a table of the amount of debt my dad has to different lenders and their legality, there are many other (also not licensed legal loans) small loans my dad has that he took to pay interests for the big ones.
Loan Legality Amount Interest Annual Monthly Installment
Home Loan Bank 87Lacs 9.50% 94k
Credit Card Bank 3.5Lacs 15% around 20k
Private Loan Illegal lender 20Lacs 3% monthly 60k just interest
Private Committee Illegal lender 8 Lacs 0 80k
Outstanding Suppliers Business Vendors 50 Lacs
Private Loan Legal lender 20Lacs 1.5% monthly 30k Just interest
So basically, we are in a debt trap now. No matter how much we give we will never get out of it. Mostly because there are huge debts which just have sharking interests. We have paid more than 9 lacs just in interest to the person and he came to our workplace harassing my dad asking his money back. We do not want to default but it is almost impossible to pay it back with our current business as we cannot produce enough cashflow for it to even run. We are basically bankrupt. I live abroad and study and my dad is the sole proprietor of the business so we have unlimited liability. Moreover, my dad also does not believe in my advice to get professional help with his finances and always threatens me that he only has the option to commit suicide now. We have sold everything that we had, gold, car, one house. We only have the house left which is worth around 1.1cr but there are no buyers in the market. Moreover, after paying the homeloan we would be lucky to have 30 lacs in hand which still isn’t enough to cover our debts.
Therefore, my question is how do we get out of it? Can the illegal lenders make case against us on some bounced cheques? What if we declare bankruptcy? How would it affect our future? Will the bank take our house and auction it at face value? And how to get these harassers out of our way? I know these are some bad people and can try to take revenge. Please, let me know your valuable advice and I am also willing to hire a professional to deal with this case.
You may get issue a legal notice on the basis of following judgment.
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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.
Thanks.
Jagannath S Pawar
Responded 4 years ago
Rameshwar Dadhe
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