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sushil (partner)     15 November 2013

Get a notice from lok adalat for non repayment of loan

I have received a notice from Lok Adalat. I have taken an education loan of 2 lakh in 2005. my course has been completed in 2009. but didn't get any job. Now what should I do. I am not able to pay any amount at this time. But I can repay my loan amount in 8 to 10 months. Can I get this much time to repay my loan. Please advice me. Or should I send a lawyer in place of me at lok adalat.


 10 Replies

Hardeep (Business)     16 November 2013

This is per my limited knowledge :

- A Court makes a reference to Lok Adalat. What has been your  stance in the Court  ?

- The focus of Lok Adalat is quick resolution of the case via a compromise, if possible. Legalities such as Indian Evidence Act, Code of Civil procedure etc. are not applicable. You can represent your own case in Lok Adalat.

- If both parties reach an agreement, that is formalised by the Lok Adalat into an " Award " . This carries the same force as a Decree from a  regular Civil Court and is enforceable similarly. No appeal can be made against this Award since it is, after all, what both parties have already agreed to.

- Exception to this is a " Permanent Lok Adalat ". Where, an Award can be made even without the Consent of any/ both the Parties . For this the LA looks into the  merits of the  case. As before, this is binding with no appeal possible.

- If the reconciliation attempted in Lok Adalat fails, the case reverts back to the Court it came from when it is adjudicated afresh. Statements made in the Lok Adalat by either party are not supposed to influence in any way the proceedings of the Civil Court.

- You don't need a Lawyer and can plead your own case.

In your specific case, if you can substantiate by some evidence what you are saying , and can commit to payment within / after 8-10 months perhaps best to take that stance and ask for no interest or penalties since yours is a genuine case. The OP will obviously be seeking these , but will have to counter-balance the  same against protracted litigation in normal Civil Court. And so would you have to.  Since your case as such is weak, best to target a compromise midway. But remember that once you agree and an Award is accordingly made by the Lok Adalat, it carries the force of a Decree of a Court and so has to be obeyed.

Just my thoughts. Request Seniors on this forum to come in.

M S Krishnamohan (Retired)     16 November 2013

Lok Adalat is a quasi judicial body. The judgement given in the Adalat is in the form a settlement or arbitration. Only if both sides, i.e. the borrower and the banker , agree on the terms of settlement of the outstanding loan, the judge will deliver the order. Mere attendance at the Lok Adalat does not bind the borrower to pay the

But it isa good forum to settle long outstanding dues by mutual consent. The borrower may ask for concession in interest or time for payment of the dues.

In your case, when your intention is good, to pay back the dues, go to the adalat and explain your present financial status and request for time or one year or so to repay the loan. Please note that any loan is others' money. You are not entitled to hold it back. You have used the money and it is duty to pay it back.

Kolla Gangadhar (Practicing Advocate since 1986)     16 November 2013

Directly  you can write to Lok Adalat to seek time for payment s per your ability to repay  education loan .

sushil (partner)     16 November 2013

Yes I really want to pay this loan. And I have to pay it. Because My 2 acre land of worth Rs. 70Lakh has been kept as a security in the bank. But My current situation is not allowing me to pay any amount immediately. Can bank or lok adalat ask me to pay any amount immediately. I am planning to pay whole amount within next 1 year. The total period for repayment of the loan is 10 years. which will start from 2010. But Bank asked me to pay 60000 to 1 lakh amount immediately. What should I do and What can be possibilities in Lok Adalat or in bank if I want to settle it down.




sushil (partner)     23 November 2013

Dear Members

Today I have visited Lok Adalat. I offer to pay 50000 in six months, and 50000 before one year. and rest amount in two years, but bank refuse to accept that and said you have to pay all the amount right now. 

I just want to know what kind of legal action they can take against me. and how much time it will take them to take an action. I can think to pay all the amount in next one year. Plz help me members.

Hardeep (Business)     24 November 2013

Kind of legal action and time taken would depend upon the facts of the case and how it develops so it'd be not possible to comment on that.

I think you need to acquaint yourself with the provisions of the recent SARFAESI Act since perhaps the Bank would proceed under that.

See :


For some infos.. a snap attached...

M S Krishnamohan (Retired)     25 November 2013

By the response of the Bank, it appears that the relationship between you and the bank is not so satisfactory.  The course was completed in 2009 and repayment commenced from 2010. Not securing a job is not a justifiable reason not to repay the education loan. You father, co-borrower, was/is supposed to repay the loan. In the previous paragraph, you indicated that you will be able to repay the full amount in one year. But with the Lok Adalat, you sought 2 years time. That is why the Bank has not agreed to your proposal to pay in future instalments. Apparently, there have been repeated failed promises to repay the loan. Had you gone to the court even with Rs.25000/-, they would have given you some time.  As the loan is secured by landed property, is likely that the bank will invoke SARFAESI Act to recover the dues. (But please confirm whether it is a non-agricultural property. The SARFEASI Act cannot be invoked for agricultural property). But you may be proceeded against in the regular court. My sincere suggestion is that please raise some funds through friends and relatives and pay at least part of the loan so that the bank is convinced about your intention to repay. Bank is always soft towards students/education loan borrowers. They will certainly give you time, if properly requested.

sriram (Maintenance - Engineer )     01 December 2014

Hi Sushil,

  Here am having same kind of problem. what happen and what is the current status .

RAJU O.F., (Advocate)     13 December 2014

During Lok-adalath you may get the matter settled if you have taken efforts to convince the bank official that you could settle the loan amount along with a reasonable interest within a reasonable period. In that case bank will give some remission in interest dues and also allow a period of 3 months or more for full remittance. After reaching an agreement, if Lok-adalath passed an Award, the same is final and could not be re-opened by appeal by both sides.  On 6th Dec. 2014, there was Mega DRT Lok-adalath in which many such cases were settled with due amount as on NPA date plus half of the PLR/Base rate for the remaining period. The panel of judges usually try to persuade both sides to reach settlements.

Mohammed Khan (asst manager)     03 June 2016

Dear Sir,
I have taken a 3.8 lac loan in 2011, ...in that i have already paid 26 months x 13084 

emi = 3,40,184/-
At the time of taking loan the executive gave me loan on high interest rate and told me 

that after 1 yr i would be provided for the topup or emi will be reduce and months 

increase...that time i will get huge discount on the interest rate.
After 1 yr when i called them they gave me excuse that i will get the topup after 2 yrs 

only...after 2 yrs when i tried to call up...no one responded my phone...i called all 

the number mentioned on the citifinancial website but it says the number is invalid...i 

tried to call on Delhi number also but the phone was diverted to fax tone and the other 

number to the voice message.
Then after a couple of months finally i took leave from office and went to dadar branch 

to meet citifinancial person...but when i reached there there was no office...i wasted 

one full day searching citifinancial office in and around that area.
I was in very much financial crunch I was badly needed the topup....but there was no 

contact so i stopped the payment so that they can contact me where ever they may be.

Then finally after couple of months they called me up and started harrasing me and giving excuse that they are not able to give any benefits to me.

Now that was their mistakes and problems, but now i want to close the loan by paying  their principal amount and i want the issue/matter to be closed and the citifinance loan detail should be removed from Cibil.
To the expert i want to know whether this is posible erasing my name and citifinancial record from the Cibil ????

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