Legal Question in Credit and Debt Law in India

One of my relative has taken personal loan of rupees 800000/- before 18 months and had given ecs from bank to pay emi. He had made almost all emi payment regularly however, due to financial problems, he could not pay last 3 emi. He could also not make payment of his other credit card payment for last 5-6 months worth around 12 lacs rupees due to his severe financial bad condition. Because of constant collection agent and recovery agent team follow up, he had to leave the current residence and vacate this residence for last two month. He wants to know the following questions ? (1) whether this dishonour of ecs emi would be defined u/s 138 / 139 of negotiable instrument act ? If yes, how to overcome this situation as presently he is in very bad financial condition. (2) May i know what would be his legal condition as he is not residing at the registered address updated on banks record ( from whom his credit card is outstanding ) ? May I know what kind of legal action would apply in this case like criminal case, civil case, police complaint or others ?

Please reply and suggest solution to overcome this situation and advise to email id [email protected]


Asked on 6/24/15, 1:59 am

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

24.06.2015

Dear Sir / Madam,

Yes, the dishonour and non-realization of ECS-EMi is treated as cheque dishonour and attracts the provisions of Section 138 of the Negotiable Instruments Act, 1938. Your relative should re-negotiate and try to reschedule the personal loan and credit card settlement with the Bank. In case your relative is not traceable at the address and your relative does not inform the Bank of his address as required by the terms and conditions of the loan and credit card usage, the Bank will treat him / her as an "absconder". This is a civil case and the Bank may involve the Police at its discretion.

Regards,

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Answered on 6/24/15, 2:37 am


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