Mumbai: Commission directs two firms to refund money plus interest, that was taken in advance to process personal loan

The complainant had turned down the loan due to a loss of faith during the disbursal process.

Ashutosh M ShuklaUpdated: Saturday, November 12, 2022, 08:40 PM IST
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Commission directs two firms to refund money plus interest, that was taken in advance to process personal loan. | Pixabay

Mumbai: A district consumer commission has directed two firms to refund Rs 1.45 lakh it had taken as advance money from a loan seeker to process a Rs 10 lakh personal loan with 18 percent interest, along with Rs 25,000 in compensation for mental agony and litigation costs.

The complainant had turned down the loan due to a loss of faith during the disbursal process. The commission considered such a loan to be a consumer act because there was a transaction and correspondence between two parties to prove the case.

The order pronounced on September 16, 2022 (uploaded Nov. 10) was passed by S. S. Mhatre, president, and M. P. Kasar, member of the District Consumer Disputes Redressal Commission, Central Mumbai.

Action taken against Gujarat-based firms

Rakesh Makwana filed the complaint against Gujarat-based Nitya Enterprise (Miral and Namita Patel) and Mumbai-based Hyaline Financial Services (Kishor Prajapati).

Makwana wanted a loan and came to know of Namita Patel, who was working as an agent for Nitya Enterprises, which was into giving any kind of loan. When Makwana spoke to Namita Patel and Miral Patel from Nitya, they travelled from Gujarat to Mumbai and met Makwana.

The other party gave a condition that Makwana will have to give some money before a loan of Rs 10 lakh is sanctioned to him. The requested amount was Rs. 1.50 lakhs, plus some processing fees.

Makwana, convinced of getting a loan, transferred Rs 1.55 lakh to Namita Patel's account. Makwana was then given a loan approval letter and some loan notary documents by Hyaline Financial Services that were signed by Prajapati.

However, Makwana did not get any loans after that. When he visited their office, he again paid Rs 5,000 to Prajapati Kishorbhai. After this, he was sent a check for Rs 45,000, but that check bounced, which led to Makwana filing a police complaint with the Malad Police Station.

He asked to refund the money

After this, he informed the bank that he did not want the loan and that the Rs 1.60 lakh he had paid until then should be refunded. He received Rs 15,000 from Nitya (Miral Patel), but Rs 1.45 lakh was still pending.

When notices were sent after the matter reached the Commission, the opposing parties failed to file a written statement within the stipulated time, and the complainant sought that the case proceed ex parte.

An order was passed for the same. The Commission observed that as there were transactions and correspondences between the two, it was a consumer issue about a deficiency in the service provided and unfair trade practises.

The Commission stated that "Law pertaining to lending money by lender never permits lender to accept any amounts from the borrower prior to disbursement of loan," and that because most of the complainant's arguments went unchallenged and deficiency in service is proven to be an unfair trade practice, its order on refund and compensation must be complied with within 40 days of the order. 

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