THIRUVANANTHAPURAM: On March 15, 2017, Joseph P J was the first person to make a transaction at the cash counter of his bank in Pulpally. He said his loan instalment was due and he did not want to pay a penalty. But by the time he deposited the money at 10.30am, his lender had already presented his cheque. It bounced. A nine-year legal battle ensuedm, one that he ultimately lost.
The Kerala State Consumer Disputes Redressal Commission’s (KSCDRC) order in his case is a lesson for every borrower. If a loan instalment is due “on or before” a particular date, the lender can present the cheque on that date. If the borrower’s account is short, the borrower must pay the penalty, the commission has held.
Joseph, now 53, had taken Rs 2.49 lakh as loan from a private firm. He had to pay the instalment on or before the 15th of every month. He said the firm sent him a notice demanding a penalty for non-payment, along with a cheque bounce charge, to be paid with the next instalment. According to the commission’s order, the firm collected Rs 53 as penal interest.
Hurt by the notice, Joseph approached the Wayanad District Consumer Disputes Redressal Commission. He argued the case himself. In December 2017, the district commission found deficiency on the part of the firm and directed it to pay Joseph Rs 1,500 as compensation and Rs 1,000 as costs. The firm filed an appeal before the state commission in 2018.
Joseph told TNIE that he received a notice from KSCDRC and entrusted the case to an advocate in Wayanad, but got no information after that. The order recorded that there was no representation for Joseph at the hearing.
Allowing the appeal on October 8, KSCDRC said though the agreement allowed payment on or before the 15th, the firm was entitled to present the cheque on that date. The cheque bounced for lack of funds, in which the firm had no role.
Also, Joseph had not claimed his account held enough money then, the commission said. The penal interest was collected as per the agreement, it said.
Joseph said he learnt of the ruling only when TNIE contacted him, adding that the verdict saddened him.
How Joseph lost EMI fight
Joseph takes J2.49L loan; EMI due “on or before” 15th of month
March 15, 2017: Deposits money at 10.30 am; by then, lender has presented cheque; it bounces.
Lender levies penal interest
District consumer commission rules in Joseph’s favour, awards compensation
Lender appeals in SCDRC, Joseph unrepresented
State commission rules against Joseph, favours lender