The Commission orders two companies to repay the money plus interest, which was taken in advance to process the personal loan

The Commission orders two companies to repay the money plus interest, which was charged in advance to process the personal loan. | Pixabay

Mumbai: A district consumer commission ordered two companies to repay Rs 1.45 lakh which it had taken as an advance from a loan seeker to process a personal loan of Rs 10 lakh with 18% interest, as well as Rs 25,000 in compensation for mental agony and legal costs.

The complainant had refused the loan due to a loss of confidence during the disbursement process. The commission considered such a loan as an act of consumption because there was a transaction and correspondence between two parties to prove the case.

The order issued on September 16, 2022 (uploaded November 10) was passed by SS Mhatre, Chairman, and MP Kasar, Member of the District Consumer Dispute Redress Commission, Central Mumbai.

Measures taken against companies based in Gujarat

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

Makwana wanted a loan and met Namita Patel, who worked as an agent for Nitya Enterprises, which gave any type of loan. When Makwana spoke to Namita Patel and Miral Patel from Nitya, they traveled from Gujarat to Mumbai and met Makwana.

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

Makwana, convinced to get a loan, transferred Rs 1.55 lakh to Namita Patel’s account. Makwana then received a loan approval letter and notarized loan documents from Hyaline Financial Services which were signed by Prajapati.

However, Makwana did not secure any loans thereafter. When he visited their office, he again paid Rs 5,000 to Prajapati Kishorbhai. After that, he received a check for Rs 45,000, but this check bounced, leading Makwana to file a complaint with Malad police.

He asked to refund the money

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

When notifications were sent after the matter reached the Commission, the opposing parties did not file a written statement within the time limit and the complainant requested that the matter be dealt with ex parte.

An order has been placed for the same. The Commission observed that since there were transactions and correspondences between the two, it was a consumer issue concerning a deficiency in the service provided and unfair commercial practices.

The Commission stated that “the law relating to the lending of money by the lender never authorizes the lender to accept amounts from the borrower before the disbursement of the loan”, and that because most of the plaintiff’s arguments do not have not been disputed and the lack of service has been found to be an unfair trade practice, its order for reimbursement and compensation must be executed within 40 days of the order.

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