After the bank issued a recovery notice in the name of a guarantor who had passed away two years prior despite being aware of his passing, the Debt Recovery Tribunal (DRT), Patna, ruled that Bank of India's debt recovery procedures were unlawful. The panel dismissed the recovery suit and fined the bank ₹50,000 for its carelessness.
The Debt Recovery Tribunal (DRT) in Patna has heard a case alleging negligence on the part of the Bank of India. The tribunal determined that the bank had initiated loan collection procedures by sending out a notification in the name of a deceased person two years prior. The tribunal ruled that the bank's actions were unlawful, halted the recovery process, and fined the bank ₹50,000.
The case is related to Baba Someshwar Automobiles and the Bank of India. According to reports, Shambhu Prasad Singh and Abhishek Singh took a Cash Credit (CC) loan of ₹60 lakh from the Motijheel branch of Bank of India between 2017 and 2019. In 2022, the bank classified the loan account as a Non-Performing Asset (NPA).
After declaring the account as an NPA, the bank issued a recovery notice in September 2022 in the name of the property guarantor, Satyanarayan Singh. However, Satyanarayan Singh had passed away on October 26, 2020, nearly two years before the notice was issued.
His son, Shambhu Prasad Singh, had already informed the bank in writing about his father’s death. Despite receiving this information, the bank continued the recovery proceedings against the deceased guarantor.
In November 2022, Shambhu Prasad Singh filed a petition before the Debt Recovery Tribunal in Patna. He argued that the bank had wrongly declared the loan account as an NPA and had also made errors in calculating the outstanding loan amount.
After hearing both sides, the tribunal ruled that the bank’s recovery proceedings were illegal. It cancelled the recovery action and directed the bank to pay a fine of ₹50,000 for its negligence.
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