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Information about being a defaulter of financial institutions

(Querist) 12 July 2008 This query is : Resolved 
Kindly let me know what are the remedies available to me as an individual who had availed Personal loan as well as used gthe credit facility from MNC Banks and had been using it properly for almost 4- years but due to some sudden financial crisis I have lost my money and now I am a BIG ZERO in terms of money and assets,I am staying in a rented place ,having no assets,surviving on my brothers salary,no job,no business,I had no mal intentions to be a defaulter as I use to make all the payments on time before this sudden shock,there has been cases filed against me under different IPC section of criminal and civil be true I do not have money to pay or to fiight cases or to ask banks to settle,kindly show me a way to save my self and my family from this legal trauma.Is insolvency or bankruptcy is a way .
anantha krishna n.v. Advocate (Expert) 13 July 2008
please take help of legal services authority of your district. They would arrange legal assistance to you.
I wish you get back on rails soon.

anantha krishna n.v. (Advocate AP High Court, Hyderabad, 9246531895)
Kapil Kumar (Querist) 13 July 2008
dear sir,thanks for reply,kindly advice as what will be the outcome,will i be jailed or will i get any kind of relief from the court being in such a bad condition.
Kapil Kumar (Querist) 13 July 2008
dear sir,thanks for reply,kindly advice as what will be the outcome,will i be jailed or will i get any kind of relief from the court being in such a bad financial condition,sir I had read somewhere a judgement of Madras High court which says that financial institutions cannot file criminal cases for beingg a defaulter.
Guest (Expert) 14 July 2008
There are no such caselaw from Madras High Court, you ave misread the judgment if you have read it.

The outcome depends are how you justify your non payment of the dues.

Banks or financial institutions give you money belonging to others as a business, they are supposed recvoer that money and pay it back to the lender/depositer. Jail may be there only if you are found to have cheated the bank, if otherwise most banks tolerate late payment for sometime, you can start paying the dues.
Kapil Kumar (Querist) 14 July 2008
thanks for the reply,sir as i have told that i was a regular payer till last year and i did the same for almost 4-5 years of my usage,but at present i am totally bankrupt and in the near future i am not able to foresee any income for myself,is it possible that court can give me some time frame like 4-5 years to make the payment ,for example the court can call all my creditors and can make an EMI schedule of the amount payable to the banks which spans around some years,i want to make a payment but it will take me some time to settle myself and start earning.
Guest (Expert) 16 July 2008
You can directly request the parties to co-operate by making payments available with you, Banks may consider.
Kapil Kumar (Querist) 16 July 2008
thanks for the reply sir,I had been adviced by many people that i should escape from my current address so that i am not traceble by banks and hence it will give me some time to accumulate money as well as it will make banks a little weaker and they will settle in lesser amount,sir is it advicable to escape so that we do nat have to face legal cases as well as get soem time because at present I do not have money and there is a fear in my mind that if court do not consider my condition and send me into jail then what will happen
J. P. Shah (Expert) 20 July 2008
U may refer to Madras H. C. judgement in Times of India [e-paper]Chennai Edn of 14-06-08. I quote part of news:

Keep off civil disputes, HC tells police

It Will Only Result In Huge Pendency Of Cases: Judge
A Subramani | TNN

Chennai: Can criminal proceedings be initiated for issues concerning credit cards, personal loans, housing loans, hire-purchase schemes, default in payment of instalments and cheque-bounce cases?
No, is the Madras High Court’s emphatic answer.

Neither the judicial/metropolitan magistrates shall entertain any private complaints from corporate firms in this connection, nor shall the police register criminal cases against persons concerned to please their corporate complainants, said Justice R Regupathi.
Not stopping with that, the judge directed the high court’s registrar (vigilance) to compile state-wide statistics on the number of private complaints lodged for these civil disputes, and the orders passed by the magistrates concerned.
U may approach Banking Ombudsman of the state. Pl visit for form, address, guidelines etc. He can restrain bank from harsh action etc. This is inexpensive, fast and effective system of RBI. All the best. Tough Times do not last, tough people do.

J. P. Shah (Expert) 20 July 2008
U can get free legal services by approaching Taluka or Dist. Legal Aid Services Authority, which is available in taluka or district court of the place of your residence. They will provide U with services of an advocate. U have to convince them of your present financial crisis. My friend had a good experience in district as well as High Court of Gujarat under this legal aid scheme, which is framed for those who cannot financially afford court and advocate expenses.

U can also go for pre-litigation redressal mechanism available in district courts. They will try to forge compromise between bank and U, acceptable to both of U. This alternate dispute redressal forum is delivering good results. Do try them. Do not worry about jail etc, till U have no malafedes to dupe the bank. Your old good record of bank transactions will help U a lot in establishing your credentials. I was bank manager for 31 years in a nationalised bank. Do not worry. Keep maintaining dialogue with senior officers of the bank at their head office through email/post and assure them that U do not intend to dupe the bank etc.Banks do help you in coming out of financial crisis. All borrowers do have good and bad times. It is business cycle. Many banks have stood by regular borrowers and even sanctioned additional loans to meet exigencies. Do not panik, if your intention is good.
Kapil Kumar (Querist) 21 July 2008
Thanks for the reply sir,kindly provide me your contact number as i would like to take your advice and if possible meet you personally.I reside in delhi.
jayachandran (Expert) 26 July 2008
all the replies and advises may be applicable for a person who can pay at least the principal amount. On reading your entire story,it is better to file an application under insolvency and get peace of mind. The only aspect may be that you will be debarred from contesting any election, become a director of a company. think practical. donot waste your time. now the law is very stingenct.

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