Liability of Vehicle Loan After Death
My query is regarding an outstanding loan against a vehicle(Heavy vehicle - Truck). The truck was owned by one of my family member who passed away last month and subsequently bank officials started to pressurize us to make payments of the outstanding dues. Since the deceased was only in the know of the dues, we were taken by surprise. Also two days prior to his death, the truck went missing and probably due to this tension, he suffered brain hemorrhage and died.We are told that he tried to get the FIR registered but the police refused to do so and still they are not registering the FIR. Facts about the outstanding loan which we are told by the bank officials: 1. Loan amount is 18 lacs( 7 lacs principle and 11 lacs interest) 2. The last EMI was paid in 2009. 3. The bank has not contacted the guarantee about the same in the last 6-7 years when the EMI was not paid. Now, the bank officials are threatening that they will file case against the wife of the deceased and the guarantee(who is a relative of the deceased). When i asked the bank officials after how many EMI lapses is the bank is entitled to start the recovery procedure of the loan amount, the said its 5 EMI lapses. So naturally my next question was what they were doing for the last 6-7 years. They had no answers. I feel after coming to know about the deceased the officials have started pressurizing his family. So my questions are as follows: 1. How strong is the case of the bank? 2.Can the bank act against the wife and the guarantee given the fact that they did not do anything in the last 6-7 years to recover the amount? 3.What legal course can the wife and the guarantee take in such a condition? 4. What can be done given that the police is not registering FIR for the theft of the lorry? 5. Since the loan was taken by the deceased, how liable are the wife and the guarantee? Sorry for posting a long message. Any help and direction will be deeply appreciated.
The three core issues are-
1) Whether the bank’s failure to collect EMI entitle them to collect after the delay
2) Whether the deceased’s wife and guarantee liable to pay
3) Whether any legal remedy lies on failure to lodge an FIR by the police
Answering these three issues together, we need to first understand that the recovery of loans is undertaken by the guidelines of the Reserve Bank of India. The bank under no denial has the right to recover the amount. But, as stated by the Hon’ Supreme Court of India that recovery of loans or seizure of vehicle can only be done through legal means, and any harassment or threat would be contrary to the tenets of law. Therefore, the wife and guarantee would be liable to the payment of loan, but banks are obligated to recover by the method governed by law. Now, failure to lodge an FIR by the police authority is in direct violation of access to justice. The Hon’ Court has observed that provisions of Section 154(1) CrPC is mandatory and the officer concerned is duty bound to register the case on the basis of information disclosing commission of cognizable offence.
Hence, the legal remedy advisable would be to invoke the writ of Mandamus under which the Hon’ Court would direct the authorities for lodging the complaint, and also any harassment by the bank would be stopped.
 ICICI Bank v Shanti Dev Sharma & Anrs (2008) 7SCC532
 Lalita Kumari v Govt. of U.P. (2004) 2SCC1
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