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Ratna Kumar (Consultant )     28 November 2009

Is the State Legal Service Council has the Authority ?


Dear Professional Collegues,

One of my friends took a loan from a MNC Bank in 2000. That MNC bank was absorbed by another bank. Friend repaid nearly 50% of the principal amount through PDC.

Due to unemployment, he could not pay the same. After he got a job in 2002, I paid some installments and last installment was paid on November 2003. No action was taken by a bank under 138 of NI. The PDC had been lapsed.

Now he is working in a company in Kerala whereas his family lives in Chennai.

Now, bank is traced his details through job sites and started to give trouble asking him to pay the balance dues.

He told them that the debt is time barred.

 As I have stated earlier, the multinational bank is now raising the issue for collection of time barred personal loan through state legal counsel , Chennai.

I request the professional colleagues to exchange their expertise on the issue.

Now , the multinational bank has made an application through State Legal Advisory services and State Legal Advisory service has issued a notice to appear.

My legal question is

1.Whether a state legal advisory council has the authority to entertain an application for compromising in a debt collection which is time barred .( Last payment made during September 2003).

2. Is it legally required to file before the State Legal Council any reply / objection or can we ignore the state legal advisory council as any recommendation made by State Legal advisory council is not recognized by the court if one party object to it.

3.Is there any case law or precedents restricting state legal council to entertain such time barred debt collection .


Regards

Ratna Kuma
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Learning

 1 Replies

Daksh (Student)     11 December 2009

Dear Ratna Kumar,

The proceedings before State Legal Services are Summary in nature and their job is to see that mutually the parties arrive at a settlement otherwise the only recourse left is that the matter is referred back to the court.  In most cases the cases are marked on the joint request of the parties to State Legal Service Council on which aspect your mail is silent.    In your own admission there was a hard period on account of which the debt could not be discharged you may bring this fact before Council as well.  As per my personal experience the Council mostly relied on the documents and not on pleadings.  But there is no bar in case you want to file any pleadings as such.


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