Legal Question in Credit and Debt Law in India

A borrower took a loan from a nationalised bank.The guarantor was impersonated at first while sanctioning the loan.A fraud case.Vigilance investigated and subsequently the bank manager was terminated.The co-lateral security was a piece of land.The title deed was stolen and a fraud stood as a guarantor in the name of the deed holder.However, the deed holder gave written submission before the bank vigilance that he did not know the person who impersonated him and that signature and photograph are not him (i.e. to the real deed holder).The real deed holder was an ailing man aged 75.Physically and mentally he was not fit.Apart from his physical condition his neurological and psychiatric condition was also unfit as he was suffering from emotional incontinence and dementia.This can be proved by adducing medical records and documents.Then God knows what happened how that fraud (the borrower) could have managed to catch the real deed holder and took him to the bank and took his signature by way of emotional/sympathetic blackmailing(in other word, by way of coercion) as real guarantor and this way the bank also could able to make OFFICIAL the whole episode.This was unknown to the legal heirs of the real deed holder,i.e.,the so called alleged guarantor. Subsequently the borrower defaulted.The notice 13(2) were served to both - the borrower and the guarantor.Now the guarantor is not alive.Bank approached before the learned DRT gaainst the borrower and the legal heirs of the alleged guarantor. The legal heirs were not being cooperated by the bank authority by serving the documents despite several correspondences/representations,instead, the bank filed the case before DRT.In the mean time, the legal heirs by finding no other way had to proceed under provision of RTI twice to the bank and subsequently the reply came to them.It was then evident that the loan disbursement was a fraudulent act having examining the reply from the bank on RTI and its enclosures.Dramatically, after examining the Plaint copy submitted by the applicant bank before DRT and also the aforesaid outcome of two RTIs it was revealed that the mortgaged land in question had already been sold out before the disbursement of the said cash credit. Three years past, the bank authority still not been able to serve the summon to the defendant number 1,the borrower. The legal heirs are attending the tribunal.The case is not proceeding before the main bench from the registrar bench as the service is not being completed.Not out of point to mention that the entire fraudulent act episode was not mentioned and rather suppressed in the said Plaint copy.

Now, questions are - In this instant issue / case - (1) can the legal heirs held liable? (2) is that guarantee not disputed? (3) can bank authority run after legal heirs without attaching the properties of the borrower at first? (4) can the instant case before DRT be run further if borrower, the defendant no.1 can not be traceable ? (5) what would happen if the legal heirs don't put any interest and absent in the learned DRT just for avoiding unprecedented unwanted complications which is preventing the peaceful life. (6) can still the bank attach the property of the legal heirs which is inherited from the alleged guarantor? (7) can the bank authority attach the other property / properties of the legal heirs which are not inherited from the alleged guarantor? (8) is that true that the bank authority is also responsible of the entire unlawful activities? (9) what is the proper suggestion that the legal heirs would be free and exonerated from the entire unwanted situation at the earliest ?

uttan banerjee.

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