Allowed

Rajbeer Singh v. Paisalo Digital Limited

DRT8 Sept 2023SA/76/2022

Case brief

AI extract

What is this about?

The Debts Recovery Tribunal held that the Respondent's claim of Rs. 2.36 Crore, based on compounded late fees charged on the entire loan principal, was illegal, exorbitant, and contrary to the loan terms. The court quashed the demand notice asserting such fees should be charged only on overdue EMI portions.

What did the court decide?

The Demand Notice dated 13.12.2021 and all consequent actions by the Respondent were quashed and set aside.

Rajbeer Singh versus Paisalo Digital Limited — Contract and Commercial Disputes | DRT (2023)

¶1

¶2

SA No. 76/2022

¶3

DEBTS RECOVERY TRIBUNAL, JAIPUR PRESIDING OFFICER: SH. VIVEK SAXENA

¶4

SA No.- 76/2022

¶5

Rajbeer Singh S/o Sh. Khubi Ram Singh, aged 36 years (about) R/o Village Lakhanpur, Bharatpur, (Raj)321028.

¶6

... Applicant/Borrower

¶7

Khubi Ram S/o Sh. Lal Chand , aged 56 years, R/o Village & Post Lakhanpur, Tehsil Nadbai, District Bharatpur (Raj)- 321028.

¶8

...Applicant/Guarantor

¶9

VERSUS

¶10

Paisalo Digital Limited , a Non-Deposit taking NBFC Registered with Reserve Bank of India, through its Authorized Signatory having its Head Office at Block 54, First Floor, Sanjay Place, Agra-282002 and Registered office at 101, CSC, Pocket 52, Near Police Station, CR Park, New Delhi - 110019.

¶11

Respondent

¶12

Present:

¶13

Sh. Raghav Sharma, Ld. Counsels for the Applicant

¶14

Sh. Avinash Kumbaj, Ld. Counsel for the Respondent FI

¶15

(Final Order)

¶16

(08.09.2023)

¶17

This SA was filed on 16.02.2022, challenging the

¶18

actions taken by Respondent FI.

¶19

Copy of Demand Notice dated 21.04.2018 (Annexure 1-2), copy of Notice invoking guarantee dated 28.06.2018 (Annexure-3), copy of Demand Notice dated 18.10.2018 (Annexure-4), Copy of relevant RBI circular dated 24.02.2021 and 03.04.2021 (Annexure

¶20

¶21

¶22

5), copy of demand notice dated 13.12.2021 (Annexure-6) and its corrigendum dated 15.12.2021 (Annexure-7) are filed on record.

¶23

As per fact, in para 5.1, it is admitted that SA applicant availed two credit facilities for Rs. 18,00,000/- and Rs. 10,00,000/- and it is also claimed that against both the loan, amount of Rs. 16,95,000/- and Rs. 9,41,000/- only were disbursed.

¶24

As per facts, in Para 5.5, it is admitted that Demand Notice was issued on 21.04.2018 in both the loan accounts.

¶25

In para 5.8 of the SA, details of Demand Notice dated 18.10.2018 are mentioned but in Possession Notice dated 13.12.2021, (Anexure-6) the amount as outstanding as claimed is Rs. 1,15,07,146/- due as on 11.08.2021.

¶26

Along with the reply to SA, copy of Demand Notice dated 12.08.2021 (Annexure R/2) is filed and this also shows details of sanctioned loan amount for Rs. 18,00,000/- and Rs. 10,00,000/- and outstanding amount for Rs. 70,71,097/- and Rs. 44,36,049/total Rs. 1,15,07,146/-

¶27

As the main objection was taken by SA applicant is of high outstanding amount therefore, this issue is required to be decided first.

¶28

Heard arguments and perused the record.

¶29

On 28.08.2023 vide Dy. No. 1593, summary of both statement of accounts and loan agreements were filed by Respondent FI.

¶30

¶31

¶32

As per statement of account for account no. RJBR000124, an amount of Rs. 18,00,000/- was sanctioned on 14.06.2016 for a period of 59 months with 16% rate of interest, with EMI of Rs. 64,800/and since 08.07.2016 to 19.10.2022, an amount of Rs. 7,92,000/- was deposited but late fee @3% p.m. compounding monthly is claimed and amount of late fee is Rs. 1,20,72,959/-

¶33

As per statement of account for account no. RJBR000146, an amount of Rs. 10,00,000/- was sanctioned on 01.10.2016 for a period of 59 months with 16% rate of interest, with EMI of Rs. 36,000/and since 30.09.2016 to 27.08.2021, total an amount of Rs. 2,18,000/- was deposited but late fee @3% p.m. compounding monthly is claimed and is amount of late fee is Rs. 75,82,000/-

¶34

A per Loan Agreement for both the loan accounts at point no. 7, late fee at the rate of 3% per month compounding on monthly rests shall be charged, is mentioned.

¶35

So, following is the status of amounts in both the

¶36

accounts.

¶37

	A/c No. RJBR000124	A/c No. RJBR000146
Finance amount	Rs. 18,00,000/-	Rs. 10,00,000/-
Finance date	14.07.2016	01.10.2016
Amount deposited	Rs. 7,92,000/-	Rs. 2,18,000/-
Overdue	Rs. 24,48,000/-	Rs. 15,82,000/-
Late fee@3%	Rs. 1,20,72,959/-	Rs. 75,43,568/-
Total Outstanding amount	Rs. 1,45,24,959/-	Rs. 91,29,568/-

¶38

¶39

¶40

Therefore, from above table, it is clear that the Respondent FI is now claiming an amount of Rs. 2,36,54,527/- against loan amount of Rs. 28,00,000/- out of which an amount of Rs. 10,10,000/- stands deposited.

¶41

If at all demand as outstanding is to be considered against the loan amount of Rs. 28,00,000/- it is more than 10 times as the same is Rs. 2.36 Crore. As statement of account, which is not dully certified, amount of late fee for the month is from Rs. 32,298/- to Rs. 2,22,587/- is claimed and in my considered opinion, such levy of late fee is extremely, high, illegal, exorbitant and against the principal of nature justice. As per terms and conditions also, late fee could have been charged on the amount of EMI and not on the amount of entire loan amount because already the Respondent FI is charging 16% interest per annum on the amount of sanctioned loan.

¶42

It is also necessary to discuss here that if both the loan accounts would have regular then the applicant was required to pay amount as under:-

¶43

EMI of Rs. 64,80059= Rs. 38,23,200/EMI of Rs. 36,00059= Rs. 21,24,000/Total = Rs. 59,47,200/-

¶44

Amount in both the loan accounts so deposited is Rs. 10,10,000/-(i.e. Rs. 7,92,000/- + Rs. 2,18,000/-)

¶45

¶46

¶47

and so the SA applicant is required to get benefit of Rs. 10,10,000/- and so Rs. 49,37,000/- is required to be paid with late fee payment, if any, on the amount of EMI and not on the amount of whole amount so sanctioned by giving benefit of amount deposited.

¶48

Therefore, in my considered opinion the amount, so claimed by Respondent FI for Rs. 2,36,54,527/- is not only highly illegal, it is also against the terms and conditions and such type of high demand is required to be stopped because a financial institution cannot be allowed to act as private lender who is involved only multiplying the demand for one or another reason.

¶49

Accordingly, the demand so raised in Demand Notice dated 13.12.2021, stands quashed and set aside and further all actions initiated by Respondent FI also stands quashed and set aside.

¶50

Accordingly, SA stands disposed of as allowed.

¶51

Copy of the order be given free to the concerned parties.

¶52

File be place before Registrar for compliance, after compliance file be consigned to record as per rules.

¶53

Vivek Saxena Presiding Officer DRT, Jaipur

¶54

Rajbeer Singh v. Paisalo Digital Limited

Case brief

What is this about?

What did the court decide?

Rajbeer Singh v. Paisalo Digital Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

Similar cases

Ms Umed Fashion versus State Bank of India

Tejmal Sancheti versus Indusind Bank Limited

Shokat Ali versus Au Small Finance Bank Limited

Patanjali Foods Ltd. versus Invent Asset Securitization Reconstruction Pvt. Ltd.

Inder Kumar versus Au Small Finance Bank Limited

M S Deeksha Iron Industries versus Bank of Baroda