Legal consequences of not paying debts due to heavy loss

My dad, age 70 years, has a business of heavy fabrication, small scale unit. He had done a some projects (project cost - Rs. 30-50 lakh) in past 6-8 years where the client did not pay him his money (more than half). He suffered huge losses & had taken some loan from bank & has sales tax pending for these works. Though he had repaid some of his debts, but with his age not on his side he is unable to stretch it further. He has a debt of ~Rs 20 lakh pending towards bank & ~Rs 7-8 lakh pending towards sales tax. He has nothing left to repay his debt (no property) and cannot work further to reduce his loans. Is there a way in which his bank loan and sale tax due can be waived? He is ready to transfer his assets (ie machinery hardly 5 lakh) to the bank and is also ready to give declaration to the sales tax department & bank to recover their debt from the client who did not pay my father money. Will this help. What are the consequences if these debts are not paid. Pls suggest way forward

Answers (2)

155 votes

If its company then you can voluntary file an insolvency petition before the NCLT. Court shall consider if company is worth of running or not, if not then he liquidate the assets of the company and simantenously you can file insolvency petion against all debtlr regarding repayment of your dues.

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265 votes

File Insolvency and Bankruptcy Petition before the Company Tribunal, forthwith.
If you are unable to pay money to any creditors, lenders or bank, and if your company is running losses, then if you filed the above Petition of Insolvency and Bankruptcy before the Company Tribunal, either your Company would be reviewed or it would be declared bankrupt.
During the process you can consider filing Suites/Cases against the persons who owes your money.
But I would like to advice, kindly consider Insolvency and Bankruptcy Petition, by providing all proper documents copies or claims, against or of you, to an advocate.
If advocate did not fit right in your mind then only take other recourses

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