Legal Question in Credit and Debt Law in India

we had purchased a car through citibank's financing and had paid most of it back except the last 6 months instalments due to a paucity of funds. now that we have some cash in hand, we want to clear it, but it is almost 5 years now and so we would like to know whether we will be penalised if we approach them and offer to clear all the dues?

this was the question i asked earlier and a lawguru member replied saying after 5 years, the debt is time barred. what does this mean?

and he also said that the bank will definitely ask for a penalty if we volunteer. so, i would like to know whether this penalty will be only a cash penalty and not any other legal punishment.


Asked on 10/04/10, 6:56 am

2 Answers from Attorneys
Vishwa Arya Arya & Co.

Bank by itself cannot put any punishment except the interest penalty.

Debt becomes time barred means that the bank could only claim the amount within three years of the last instalment and not thereafter.

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Answered on 10/04/10, 6:58 am
RAJIV GUPTA (Cell: +91 9811284735) [email protected]

you may clear it with the help of a lawyer as he may show you the right way. in case the bank is not demanding the money, you may restrain yourself from paying for the time being.

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Answered on 10/04/10, 11:04 am


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