Bank starts recovering Home Loan EMI before actual disbursement
I applied take over of my two home loan from Bajaj Fin. with additional top-up. Two takeover cheques actually handed over to me on 4th April 2016, which got cleared on 6th April 2016 only. As per this my EMI should start considering actual date of clearance of two cheques. But bank is showing date of disbursement as on 28th Feb 2016 and started first EMI on 2nd April 2016 on which date even I do not have Cheques in hand.
Third top-up cheque still I have not received but on this first EMI also deducted on 2nd April 2016 and second EMI deducted on 2nd May 2016 showing disbursement date as on 28th Feb 2016.
I have highlighted this to the sales person who is promising me that all excess recovery will be refunded. Since it is taking some time, I am thinking to explore legal option and asked to refund all amount recovered before actual cheque clearing date with interest.
I am also thinking to stop my next ECS due on 2nd June if all excess recovery with interest will not be refunded before that next EMI date i.e 2nd June 2016. Please suggest what should I do.
Asked in Civil Law from Pune, Maharashtra
I fully understand that it is unethical on Bajaj Finance to recover installments before first disbursement.
The best option would be for you to meet the officials of Bajaj Finance in Person and resolve the issue(normally bajaj finance resolves such issues very fast to my knowledge).
However please also be informed that Bajaj FInance never has the habit of refunding the money collected as EMI.
At the most they do is reduce some notional amount of Rs3000 or so depending on the EMI Amount.
In some cases, they also reduce their processing fees to some extent.
So you should negotiate with branch officials of Bajaj Finance (ignore the sales guy) for
a) interest for advance EMI or
b) Reduction in processing fee or
which ever is higher.
Please do not stop your ECS due on 2nd june as then Bajaj finance will then resort to unnecessary blame game and this will affect your CIBIL Rating.
Hope this helps.
1) issue legal notice to company to refund excess amount charged
2) if company refuses to refund file complaint before consumer forum against company for refund of excess amount debited to your account with interest
3) also seek litigation costs and compensation
4) dont stop next ECS payment
1. Collect the written document first by which you can prove that the Bank has consciously demanded the said EMI amount prior to disbursal of the loan,
2. Send a legal notice to the Bank asking them to rectify the error and refund you the amount excess deducted or interest for the pre-deduction,
3. Send copy of the legal notice to the Chairman/MD of the Bank,
4. If still the Bank refuses to act, you calculate the excess amount paid and interest thereupon and deduct the said amount from your next EMI and send the balance,
5. Do not stop the EMIs totally.
The private finance companies function in the manner as they please and at their whims. Actually on records the disbursement should have been endorsed as 28.02.16, whereas due to the lethargy of the staff the cheque was handed over to you casually on 4.4.16.
You may not get any explanation or relief if you keep knocking the doors of the company very mildly. You have to resort to legal action is you want relief and solution for the problem. Until you do not take legal action i.e., by sending a legal notice or stopping the the next EMI and escalate the mater to the higher level of the company you may not find any solution to this carelessness.
You can proceed as you have proposed to.
This is clearly impermissible as it is an attempt to obtain unlawful gain. The remedy for you is to file a complaint case in the consumer forum to recover the excess amount debited to you and also compensation for mental agony suffered by you.
It will not be wise to stop the EMIs at this stage.
Thanks to all experts for your valuable reply. I will request if anybody will share some court verdict wherein EMI deducted before actually handed over the cheques and bank forced to refund under court order.
Else if I will get reference of any statutory guidelines wherein bank/FIs are advised to start EMI from actual clearance of disbursed cheque.
May I also get assistance to issue legal notice on my behalf (if required) and fee for the same.
Asked 12 months ago
1) You can contact any local lawyer for issue of legal notice
2) legal fees vary
3) terms of your agreement with bank would contain clauses regarding payment of EMI in respect of loan sanctioned by bank
1. I have a case own in DRT-II Kolkata where in the lending Bank had sanctioned Rs.70 lakhs as TL and Rs,140 Lakhs as CC limit but paid Rs.28 Lakhs as TL and deducted EMI which was fixed to be deducted on the disbursement of Rs.70 lakhs TL from the CC account,
2. The entire SARFAESI Proceeding initiated by the Bank including taking of physical possession of the mortgaged property was quashed by the DRTII and Bank was directed to return the said possession of the mortgaged property.
It is difficult to find such a verdict, but it is not even required.
You are free to engage any lawyer from this portal to issue the notice.
In case of transfer to the new bank as the old bank will release your documents only if they get the cheque for the balance principal amount and the new bank will release the cheque only after all the documents are submitted to them.
This will become a documentary evidence of when the take over bank has issued the cheque to the previous bank and got the documents released which will be an additional factor supporting your claim in this regard.
After this you may first send a legal notice to clarify and render you relief against the unjustified recovery failing which you may try to process further legal action.
You cannot find any judgment on such subjects at ease, your lawyer may be able to access it from his bar library, try.