what would be the right thing to do bank loans.

Question

► My mother, a widow for 8 years, is proprietor of firm “M.” After my father’s death, his elder brother (B) became head of the family and managed all finances. In 2024 he took a ₹10 lakh loan from Canara Bank in the firm’s name, with my mother signing as directed. He used it for a pan masala agency but lost everything, and also accumulated about ₹4 crore in private debts. To repay, in Nov 2025 he took another loan of ₹1.5 crore from a cooperative bank, pledging land as collateral. Again my mother signed, unaware that mediators submitted forged documents showing inflated collateral and healthy business. Most of the money went to repay lenders and EMIs, with only a fraction used for business. Monthly EMI burden was ~₹1.5 lakh. B died in Feb 2026, after which EMIs stopped; only some interest was paid through borrowings for a few months. Banks now press for dues, arguing the proprietor is alive and business open, though in reality the firm barely survives and earns little. We are struggling day to day, though outwardly we appear stable because we have a shop and house. My mother also has property meant for my sister’s wedding, while the pledged collateral was land worth about half of what we sold for ₹2.25 crore earlier. This is our situation: loans taken in my mother’s name, losses due to failed ventures managed by B, debts to banks and private lenders, and constant pressure while we are only surviving.

Answer 1

Dear Client,

As the sole proprietor, if your mother signed the document, then the loans that have been taken on behalf of the company become her responsibility. Nevertheless, if there was misrepresentation in obtaining your mother's consent or the use of forged documents by the bank with respect to the collateral or the financial position, then she may have a case to dispute the transactions and file a case for cheating and forgery. She needs to get copies of all the loan documents, refrain from signing any more documents until she seeks legal counsel, and seek legal representation of a banking lawyer to determine if the loans have been obtained fraudulently and the recovery proceedings can be challenged or otherwise restructured.

I hope this helps and if you have any further issues do not hesitate to contact us.

what would be the right thing to do bank loans.

1 Answer