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URelated to loan, We had no choice but to pay ₹7.25 lakhs on 18.02.2025, as per a one-time settlement letter issued for a loan default of ₹9.75 lakhs. We paid on same day. The bank claimed this payment would release the loan from NPA status and resolve the mortgage. Meanwhile, a case was ongoing at the District Consumer Forum regarding this loan. The bank manager pressured my mother (the loan owner) not to pursue legal action further, insisting we wouldn’t win at the district level or state commission. He assured her he’d ensure the mortgage was released smoothly if we complied.
However, the district forum dismissed our case for flawed reasons, despite it being strong. We’re considering escalating to the State Commission due to clear service deficiencies. But here’s the issue: the bank hasn’t provided any acknowledgment, loan closure letter, or mortgage release yet (as of 02.03.2025). My mom fears that if we approach the State Commission, the manager might demand an additional ₹3 lakhs to “release everything,” as he allegedly threatened us before.
Should she file a consumer case within the next 20 days against the dismissed district court decision disregarding his delay as he can’t do anything further to keep the loan open? Any advice on how to proceed without falling prey to further exploitation would be greatly appreciated.
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QYou should have a settlement letter from the bank before repaying and what discrepancies are you referring to ,why did disat court reject your complaint you need to check with a lawyer who deals in such matters
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U
Adding whole loan history
Whole Loan timeline Summary:
2010: Loan Origination
Borrower and guarantor approached the bank for an education loan .
The bank required a mortgage as collateral and disbursed the loan.
Bank’s Breach : The bank failed to comply with mandatory clauses in the loan agreement, specifically the requirement to purchase insurance policy (a critical safeguard in case of borrower death) as they only need mortgage which can cover any case.2011: Borrower’s Death
The borrower passed away after two disbursements.
The guarantor informed the bank about the borrower’s death and requested the closure of the loan .
Bank’s Breach : Instead of recalling the loan as per the agreement, the bank kept the loan open and took no action.2011–2016: Bank’s Inaction
For five years , the bank did nothing to address the loan or its status.
Bank’s Breach : The bank failed to recall the loan or take any steps to resolve the matter, despite the borrower’s death and the terms of the agreement.2017: Legal Proceedings Begin
The bank approached the sub-judice court , claiming the moratorium period was over and that the guarantor was now liable for the loan.
Guarantor appeared for 70+ hearings , citing the insurance clause and arguing that the bank had breached the agreement.
Bank’s Breach : The bank only appeared for 5 hearings , showing minimal effort in pursuing the case.2020–2025: SARFAESI Proceedings and NPA Declaration
In 2020 , the bank initiated SARFAESI proceedings , declaring the loan a Non-Performing Asset (NPA) —9 years after the borrower’s death .
Guarantor believed the ongoing sub-judice court case would resolve the matter and waited for the judgment.In January 2025 , the guarantor learned about the possibility of filing a complaint in the consumer court as a in party person and made some mistakes while filing and arguing.
In February 2025 , the bank issued a physical possession notice , giving the guarantor just 5 days to act. Under pressure, the guarantor opted for a settlement (OTS ).
The consumer court dismissed the complaint, citing improper filing and arguing procedures by the complainant.Key Points of Contention
**Insurance Clause Violation** : The bank failed to ensure the mandatory insurance policy was in place, leaving the loan unprotected in the event of the borrower’s death.
**Failure to Recall Loan (2011) **: After the borrower’s death, the bank did not recall the loan as per the agreement.
**Delayed Action (2011–2016)** : The bank sat idle for five years, allowing interest and penalties to accumulate unnecessarily.
**Selective Participation in Court Hearings** : The bank appeared for only 5 out of 70+ hearings, showing negligence in pursuing the case.
**Unjustified NPA Declaration (2020) **: Declaring the loan an NPA nine years after the borrower’s death is questionable, especially when the case was already in court.See how a 10k cr worth bank indulged in fraudulent activities to recover 3 lakh worth loan and hide its own mistake.
Give us one reason why we should be liable for loan.
Related to loan,We had no choice but to pay ₹7.25 lakhs on 18.02.2025, as per a one-time settlement letter issued for a loan default of ₹9.75 lakhs. We paid the loan on said day.The bank claimed this payment would release the loan from NPA status and resolve the mortgage. Meanwhile, a case was ongoing at the District Consumer Forum regarding this loan. The bank manager pressured my mother (the loan owner) not to pursue legal action further, insisting we wouldn’t win at the district level or state commission. He assured her he’d ensure the mortgage was released smoothly if we complied.
However, the district forum dismissed our case for flawed reasons, despite it being strong. We’re considering escalating to the State Commission due to clear service deficiencies. But here’s the issue: the bank hasn’t provided any acknowledgment, loan closure letter, or mortgage release yet (as of 02.03.2025). My mom fears that if we approach the State Commission, the manager might demand an additional ₹3 lakhs to “release everything,” as he allegedly threatened us before.
Should she file a consumer case within the next 20 days against the dismissed district court decision? Any advice on how to proceed without falling prey to further exploitation would be greatly appreciated.
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QOkay the bank is at fault immediately file an appeal in state commission and get a stay of proceedings of the bank claim refund of money paid with interest as the insurance lapse was banks fault alternately you can also file a writ petition against the bank working and harassment caused and claim compensation and refund of the money already paid to bank with interest you have nothing to lose this writ petition route would be shorter aa state commission would also be dragged for many years then an appeal would be preferred by the bank in national commission which is situated in delhi causing more inconvenience to you Do not pay anything more to the bank instead hire a good reputed lawyer on lump sum basis for the high court
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QEven if the bank has not issued any closure documents you have paid them a substantial amount which they should have claimed from insurance discuss making the rbi party to the case as it’s their fault too if a bank under them doesn’t follow their guidelines making rbi party would put pressure on the bank do not settle outside court because the bank will try to close the issue with minimum loss to them
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