Loan agency fined for naming man defaulter

Be careful while paying back a loan. Any wrong entry by the loan agency can put you in the bad books of the Credit Information Bureau India Limited (CIBIL), leading to considerable harassment whenever you apply for a loan.

This is what happened in the case of Devi Singh, a resident of Dariya village in the Union Territory. For a wrong “outstanding” amount of Rs 200, Singh’s name was listed among the defaulters of CIBIL, and he was later denied a vehicle loan. Aggrieved by the humiliation, Singh filed and won a case against Bajaj Auto Finance Ltd, from whom he had taken a vehicle loan.

The Chandigarh Consumer Disputes Redressal Forum-II has directed the firm to refund Rs 200 to Singh, issue him the required ‘No Dues Certificate’, and pay him Rs 5,000 for the harassment caused to him. The president of the Forum, Lakshman Sharma, members Ashok Raj Bhandari and Madhu Mutneja also directed the firm to take steps to ensure that Singh’s name is removed from the defaulters list of CIBIL.

In his complaint, Singh stated that he had purchased a computer from a dealer in Sector 35 for Rs 36,010. Singh made a down payment of Rs 10,311. The remaining amount of Rs 25,699 was financed by the loan agency in 18 equal monthly instalments of Rs 1,795 each.

Singh told the court that he paid the first five instalments through cheque, and the remaining 13 instalments by cash. After the entire loan amount was repaid, Singh requested the loan agency that the remaining cheques should not be presented. He also instructed his bankers not to make payment on presentation of the cheques.

However, the loan agency continued to present the cheques, which were dishonoured by the bank, and a penalty of Rs 50 imposed per cheque for dishonour.

Later when Singh approached his bank for a vehicle loan, he was refused since his name figured in the list of defaulters of CIBIL. Singh said this was done because according to the loan agency, the entire loan had not been repaid.

Though the penalty imposed by the bank was Rs 200 only, he sued the firm for the harassment and humiliation caused to him.

The firm denied the charges. But after considering the case, the forum observed that the records maintained by the firm were in such a bad shape that it did not know how much of the loan amount had been charged, and how much was overdue.

This, said the forum, led to “total confusion” as to what was due and what had been paid.

The forum also observed that the firm had wrongly shown an overdue balance against Singh, making him a defaulter in CIBIL’s records. The forum agreed that the amount of Rs 200 was small, but directed the firm to compensate Singh for the harassment and humiliation caused to him.

Source: Financial Express