My PL is in NPA status now. I was always in a contact wit my bank during my financial hardship and was making small payments. I had contact bank to restructure my emi last month and i paid 2 emis in 15 days of time to show my intentions. I told them i can continue making regular payments now. It was communicated over the emails as well. And bank had acknowledged. my bank had asked me to get documents as well. However bank still sent me a legal notice to appear in a lok adalat. And now they are asking me to settle or pay all pending emis which i cannot afford. I can continue to pay regular emis and requesting to restructure. Can you please advise?
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No restructure permitted neither bank employees has any authority, how much credence you may show. Let it default, later bank will do settlement at lesser amount.
You can refuse attending lok adalat. No repercussion. Or appear there and talk about settlement without interest and at low amount and payable in interval.
Order will pass.
Without written order or settlement letter from bank, don`t pay single penny. You may lure orally/false commitment/offer by bank.
Appear in Lok adalat
you can offer to settle outstanding dues in monthly installments spread over period of x years . File consent terms to that effect
3) express your inability to pay outstanding dues immediately
You first check the said notice as what case is filed by the bank.
Later decide the steps in the said case to be taken in lok adalat
cant advice in detail about the same unless I know all the facts
You need to submit the detail in lok adalat and they need to settle the matter if possible.
If not the bank may go to DRT for recovery.
- Lok Adalat is a forum where disputes/cases pending in the court of law or at pre-litigation stage are settled/ compromised amicably.
- Since, bank has sent you legal notice to appear before the Lok Adalat, it means now bank wanted to settle the matter with you.
- You should to appear, and express your inability to repay the whole amount in one- go , and request there to reduce the amount as well.
- Otherwise, if the matter will not be settled there, then you will have much time to pay the outstanding amount.
explain to your bank why it is required convincingly, and negotiate a better deal with them.
You can reply to bank that as of now you don't have money kindly reduce the emi and increase the tenure period.
Same you have narrate in the lok adalat as well.
See restricting is sole authority of bank if the Loan is turned NPA offer settlement to bank bank will ask for One time settlement of the complete amount.
See since the bank want its money to be recovered if you offer settlement they night agree you also can ask them to lower some interest.
It is the discretion of bank authorities to accept or reject your request either for restructuring the loan or to accept your terms for EMI repayments.
You cannot claim it as a right.
If you are not able to then they may file a suit to recover the amount by observing the due procedures of law.
Thank you all for your answers. This creditor is a No- banking finance company. They have sent a criminal notice since there were PD check bounces when I missed few EMIs. I am planning to appear in the lok adalat with all my proof when was I threatened and harassed also whenever I had made payments and chat conversations with bank employees. Also planning to draft a letter with my proposal of restructuring of EMIs. I would request you to give me some suggestions how to write a letter to a court and what all pointers needs to be considered? Also wanted to know, what next if they don’t agree to my proposal and what if I cannot afford to their proposal? What next?
1) engage a lawyer make offer of settlement before lok adalat
2) offer to pay dues in equated monthly installments spread over 12 months or so
3) if no settlement is arrived case would proceed on merits
See restructuring emi is decision of the bank you can present proposal of same and you can assure timely payment of your emi's. Then in that case they can go.ahead with the cheque bounce case.
1. You should appear before lok adalat and give statement that you will continue paying regular EMI's if court order bank to recover the funds in regular EMis.
2. And before that you can approach bank and give proposal of clearing current dues in case they withdraw the case and restructure the EMI
Lok Adalats is a great way of alternative dispute resolution. Main condition of the Lok Adalat is that both parties in dispute should agree for settlement.
This can be solved based on the actions taken before the lok adalat.
For this you may take the assistance of an advocate in the local who will guide you through all the steps and bring you out safely.
In cheque bounce case, FIR u/s 420 is possible. But mere inability of a person to return the loan amount cannot give rise to a criminal prosecution.
I appeared in d lok adalat. Judge gave me time and next date in month if Jan asked to work out something before next date with bank. I requested bank for restructuring but they are not allowing and asking to go wit settlement. I cannot afford d settltment amount. Meanwhile bank has also sent me a arbitration letter. What if no agreement is made wit the bank until next date? Also why they hv sent a arbitration notice when lok adalat date still there end of this month? Please advise. I am asking for part payments of settltment of the amount which they hav offered me in one go.
See if bank and you fail to agree on settlement matter shall be referred back to the court also since there is arbitration clause you have signed with bank they can initiate the arbitration proceedings.
Lok adalat can be refuse by either party and arbitration is dispute resolution process as agreed in loan agreement.
So if things not work out, recovery can start by filing arbitration petition.
Bank will never agree for part payment. So tell them straight, Do settlement with lesser amount and payment will made in installment of 2 3.
If no settlement is arrived at case would be sent back to court for hearing
if there is arbitration clause case would be referred to arbitration
Just check whether it's a genuine lok adaalat. Many a times this financial companies sends false threatening notice.
The bank has invoked the arbitration clause which was in the agreement on further issues.
The bank can refuse to accept your terms for restructuring the loan, they have rights to reject your offer for part payment also.
Once there was a default in repayment the bank shall proceed to recover the entire amount as per the terms and conditions of the loan agreement.
You approached lok adalat with your own offer for repayment, however the bank cannot be forced to accept your terms.
There is no restrictions on bank to invoke arbitration clause while the matter is referred to lok adalat.
If you are not able to repay the entire loan amount with interest then the bank may resort to legal methods to recover the outstanding amount.
if you have received the letter then go to the lace mentioned in the notice and iyou just tell them that you are unable to pay the entire due amount in one shot, hopefully the bank people will take the entire due amount in installment. .