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knagayugandhar (employee)     28 June 2009

defence for personal loan defaulter




          i have a query regarding defence for defaulter for none payment of personal loan . the situation is like this i have barrowed amt of 2 lakhs from icici bank and made payment for 6 months after that i lost my job and finacially i was broken i informed the bank about the same but they are willing to listen what are my defence against their legal action please advise me.


 6 Replies

A V Vishal (Advocate)     28 June 2009

Dear Yugandhar

You cannot escape the liability on defaulting the loan as there can be no defense on non payment of loan amount. In fact before disbursing the loan the bank takes the signature of the borrower on various forms. In my opinion ask the bank to restructure the loan in a convienient manner so that you may repay it slowly. You can bargain to that extent and not beyond it, I suggest if you want peace of mind then don't get into unnecessary legal tangle which will cost you time, money and energy.

Swami Sadashiva Brahmendra Sar (Nil)     28 June 2009

nicely advised by Mr Vishal.

Gaurav Pandya (Advocate & Registered Trade Mark Attorney)     29 June 2009

See, the other many ways are there from come out of all this.

(1) Consent Decree with Bank etc.

u can contact me -

Akshay Sinha ( Computer Forensic Invetigator)     12 October 2009

hi can you please tell us more on this

A.P.Manoranjan (ADVOCATES & LEGAL ADVISORS)     25 October 2009

Mr.A.V.Vishal's advise is more appropriate.

Siva (Consultant)     10 April 2010

Issues pertaining to Credit Cards, Personal Loan, Housing Loan are CIVIL nature and NOT CRIMINAL cases. So, Police Investigation or Warrant can not be issued in this case. If anyone says about arrest warrant or something, it may be to threaten you. If any threatens you or your family members, then you have all the rights to approach your local POLICE and file a case against them.

Chennai High Court Ordered NOT to refer matters of Civil Nature (Non-Cognizable) cases for any Police Investigation or to issue any Arrest Warrant . So, NO Worries. However, try to settle/regularize your loan amount after negotiating with the banking officials. Pls find the Judgement passed by MADRAS (CHENNAI) HIGH COURT as follows & hope it can be useful for who are all facing similar kind of issues.

Saturday, August 23, 2008
HC: Don't refer civil nature for police investigation
“Transfer cases of civil disputes to High Court”

CHENNAI: The Madras High Court on Thursday directed the Registry to withdraw cases all over the State involving disputes of civil nature in which magistrates have ordered police investigation, call for the records and transfer them to the High Court.

Passing further orders on two criminal original petitions, Justice R. Regupathi said the Registry should place the entire material and particulars before the Chief Justice for orders for an enquiry in those matters. Further proceedings of all those cases pending with the magistrates concerned were stayed till the disposal of the proceedings by the court.

The judge said all records, including vigilance reports, might be placed before the Chief Justice for taking appropriate departmental action against the magistrates, in particular III, X, XVII and XVIII Metropolitan Magistrates, Chennai, and Judicial Magistrate-III, Coimbatore and Judicial Magistrate, Paramakudi.
The DGP was directed to instruct police officers who had received orders from the magistrates in such cases under section 156 (3) of the Cr.P.C and the Station House Officers (SHOs) who had entertained similar complaints in the name of “petition enquiry” to obtain opinion from the Director-General/Additional Director-General of Prosecution/Assistant Public Prosecutors and to file interim/final reports before the jurisdiction magistrates within two weeks. The DGP should file compliance report in three weeks.

Earlier, Justice Regupathi had directed the Registrar (Vigilance), High Court, to collect statistics of private complaints relating to credit cards, personal loans, housing loans, hire-purchase loans and default in payment of instalments and cases under section 138 of the Negotiable Instruments Act, wherein orders for police investigation were passed by magistrates. Accordingly, the Registrar submitted a report.
The judge said the huge number of cases entertained by the six magistrates was quite alarming.

Mr. Justice Regupathi said some judicial magistrates, in collusion with complainant bankers/financial institutions, were entertaining complaints relating to matters of civil nature and passed orders, under section 156 (3) of the Cr.P.C., for police investigation to the undue benefit of financial institutions. In some instances, they were entertaining similar complaints under section 200 of the Cr.P.C.
Vigilance inquiries were conducted, and the complaints entertained were quashed by the High Court. Despite the High Court’s reaction and repeated directives to judicial magistrates not to refer matters of civil nature for police investigation, it had come to light that such trend was still in vogue.

© Copyright 2000 - 2008 The Hindu

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