If pledged property sells for Rs 140,000 against a remaining secured debt of Rs 100,000, the debt is satisfied from the proceeds and the Rs 40,000 surplus belongs in principle to the deceased owner’s estate, not to the creditor.
If it sells for Rs 70,000 against a debt of Rs 100,000, the proceeds reduce the debt and the remaining Rs 30,000 claim is dealt with under the applicable estate-debt rules. Never assume the creditor simply owns all sale proceeds.
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Accounting for proceeds and the secured claim
Kitab al-Rahn: Misuse, Loan Back, Liability and Death of the Pledgor
If pledged property sells for Rs 140,000 against a remaining secured debt of Rs 100,000, the debt is satisfied from the proceeds and the Rs 40,000 surplus belongs in principle to the deceased owner’s estate, not to the creditor.
If it sells for Rs 70,000 against a debt of Rs 100,000, the proceeds reduce the debt and the remaining Rs 30,000 claim is dealt with under the applicable estate-debt rules. Never assume the creditor simply owns all sale proceeds.