Skip to main content

Bank can't recover EMI on undisbursed loan, rules Forum

Rejecting an argument by SBI that it was not at fault in recovering monthly instalments on "disbursed" housing loan, the Dispute Redressal Forum here has asked the bank to refund the entire EMI charged unduly for 20 months from a policeman and directed it to pay him Rs 50,000 as compensation for deficient services.

In their order, issued last week Forum President M Y Mankar and members Madhuri Vishwarupe and ND Kadam directed the bank to make the payment to complainant Rajendra Sadashiv Pardesi, within the next 40 days or else pay interest on the sum at 6 per cent p.A. Till its realisation.

The new panel has adopted an innovative system by which it directs both the complainant and the respondent to file an affidavit before a specified date as regards the compliance of the Forum order which tracks the pendency in the compliance which was not happening earlier.

In his complaint, the policeman told the Forum that the bank had sanctioned him a housing loan and issued a cheque for Rs 5,61,000 on July 23, 2007 which he handed over to ACP (Police Welfare) on July 25, 2007.

After the issue of the cheque, the bank began recovering the EMI amount of Rs 7,672 from September 01, 2007 till March 2009 after which he was informed by the Police Welfare Authority that the loan amount was not received.

On enquiry, the complainant came to know that the cheque of Rs 5,61,000 handed over by him to the Police Welfare Authority, was not presented for collection till 31/3/2009 and hence, on request of the complainant a fresh cheque was issued to him in April, 2009, the Forum was informed.

Even though the loan amount was not actually disbursed to the complainant till March 2009, the recovery of the housing loan principal and interest at the rate of 10 per cent was made by the bank.

This was in breach of the loan agreement condition that interest is to be charged on the outstanding amount of the disbursed housing loan. Since the loan was not actually paid to the complainant, the recovery of principal amount and interest was not proper.

Hence the complainant filed a complaint claiming refund of principal amount, interest recovered, compensation and cost of the complaint, aggregating to Rs 2,28000.

In their order, the Forum said it was the duty of the complainant's welfare authority to deposit the said cheque for collection, which they appear to have not done.

 Article referred: http://www.business-standard.com/article/pti-stories/bank-can-t-recover-emi-on-undisbursed-loan-rules-forum-115011900244_1.html

Comments

Post a Comment

Most viewed this month

Appellate authorities under Special Statutes cannot be asked to condone delay

Madras High Court in R.Gowrishankar vs. The Commissioner of Service Tax has held that Appellate authorities cannot be asked to condone the delay, beyond the extended period of limitation A Division Bench comprising of Justices S. Manikumar and D. Krishnakumar, made this observation while considering an appeal filed against Single Bench order declining to set aside the order made in the condone delay petition filed by the petitioner to condone 223 days in filing the appeal before the Commissioner of Service Tax (Appeals). Article referred: http://www.livelaw.in/appellate-authorities-special-statutes-cannot-asked-condone-delay-beyond-extended-period-limitation-madras-hc/
Post a Comment
Read more

'Seize assets to pay damages to accident victim'

Her story might be an inspiration for the physically challenged but justice has remained elusive for her. In 2008, a bus accident left research engineer S Thenmozhi, 30, paraplegic. In April 2013, the motor accident claims tribunal directed the Tamil Nadu State Transport Corporation (TNSTC) to provide her a compensation of 57.9 lakh. However, TNSTC refused to budge and on Tuesday a city court ordered attaching of movable assets of the transport corporation. Thenmozhi was employed in C-DOT, a telecom technology development centre in Bangalore. On July 21, 2008, she was coming to Chennai in a private bus. Around 2am, the bus had a flat tyre and the driver parked it on the left side of the road near Pallikonda in Vellore district on the Bangalore-Chennai highway. While the tyre was being changed, a TNSTC bus of Dharmapuri division hit the stationary bus. The rear part of the bus was smashed and passengers were injured. Thenmozhi who had a seat at the back of the bus suffered...
Post a Comment
Read more

Mumbai ITAT rules income of offshore discretionary trust is subject to tax in India

The Mumbai Income Tax Appellate Tribunal (ITAT) has recently determined the following issue in the affirmative in the case of Manoj Dhupelia: Should the income of an offshore discretionary trust be subject to tax in India, if no distributions have been made to beneficiaries in India? The question arose from appeals filed by individual beneficiaries in relation to a Lichtenstein-based trust, the Ambrunova Trust and Merlyn Management SA (the Trust) with the ITAT. It is important to note that the individuals in this case were amongst those first identified by the Government of India (GOI) as holding undeclared bank accounts in Lichtenstein. The ITAT ruling raises the following issues: Taxation of Trust Corpus: ITAT classified the corpus of the trust as "undisclosed income" and declared it taxable in the hands of the beneficiaries. Taxation of Undistributed Income: ITAT refused to draw a distinction between the corpus and undistributed income from the trust and declared i...
Post a Comment
Read more