Introduction
In sectors dependent on manufacturing and fabrication, payment cycles are often susceptible to unpredictable disruptions. These financial shocks can easily spiral into non-performing loans, especially for small and medium-sized enterprises. This case is a compelling example of how PrivateCourt’s streamlined mediation model provided an effective solution to a brewing credit dispute involving a metal perforation unit. With its neutral stance and process-oriented framework, PrivateCourt enabled both lender and borrower to come to terms swiftly—without the baggage of court delays or damaged reputations.
The platform's impact is evident not just in dispute closure, but also in the preservation of commercial goodwill. delays in payments and supply chain disruptions often snowball into credit defaults. This case highlights how PrivateCourt’s mediation platform enabled a mutually agreeable path forward in a financial dispute involving a small-scale metal perforation unit. The claimant avoided prolonged follow-ups and potential litigation, while the borrower was provided with a dignified closure plan.
Dispute Snapshot
The dispute stemmed from a loan disbursed to a sole proprietorship engaged in metal fabrication, an industry often impacted by fluctuating raw material costs and supply chain lags. The borrower had taken the loan to modernize machinery and expand production capabilities. While the initial intent was backed by a viable plan, delays in receivables and over-leveraging led to liquidity strain. The borrower’s inability to meet EMI schedules gradually escalated into a complete halt in repayments.
Recognizing the need for expert facilitation, the claimant activated the PrivateCourt ADR channel, which offered a methodical path to resolution and recovery. engaged in metal fabrication. The loan, disbursed for business modernization and working capital, fell into default due to falling industrial orders and poor cash cycle management. Communication breakdown and inconsistent assurances followed, prompting the claimant to invoke mediation via PrivateCourt to explore out-of-court resolution.
The Journey to Default
Initial repayments had been regular, and the borrower was hopeful that modernization would yield improved output and client acquisition. Unfortunately, a sudden dip in local market demand and delayed bulk orders from institutional clients severely impacted revenue inflow. As EMIs piled up, the borrower resorted to operational cost-cutting.
However, these efforts proved insufficient. The lender’s outreach was met with vague assurances, causing concern over the borrower’s intent and ability to settle dues. By engaging PrivateCourt, the lender was able to initiate a structured yet empathetic ADR process that ultimately resulted in cooperative engagement from the borrower.
but seasonal volatility and reduced customer demand started to impact cash flows. The borrower had to choose between running operations and clearing EMIs—and opted for the former. Missed instalments soon accumulated, and despite several reminder notices, only partial commitments were received without follow-through. The claimant then approached PrivateCourt’s ADR services to break the deadlock.
Timeline of Key Events
| Date | Event |
|---|---|
| Mid 2023 | Loan Issuance |
| Late 2024 | First Default |
| Early 2025 | Notice Issued |
| May 2025 | Mediation Scheduled |
| 21 May 2025 | Settlement Agreement Signed |
Documentation and Submissions
- Loan sanction and disbursement documents
- Statement of account
- History of payment notices
- Communication records
- Agreement to mediate submitted digitally
The ADR Process Facilitated by PrivateCourt
PrivateCourt scheduled an online mediation session, wherein both parties’ representatives participated in constructive dialogue. With PrivateCourt’s guidance, a resolution was framed that ensured the claimant recovered dues without compromising legal rights, while the borrower received realistic timelines for closure.
The parties agreed to a reduced closure amount of Rs. 40,000/-, to be paid in two instalments—Rs. 10,000/- by 31 May 2025 and Rs. 30,000/- by 30 June 2025. The fallback clause allowed full claim revival with 18% interest in case of breach.
Final Award (Dated: 21 May 2025)
- Settlement Amount: Rs. 40,000/-
- Payment Plan: Rs. 10,000 by 31 May 2025 + Rs. 30,000 by 30 June 2025
- Breach Clause: Entire default amount payable with 18% interest
Final Insights
This case reiterates the relevance of sector-sensitive mediation. Through timely and neutral facilitation by PrivateCourt, both parties turned a credit dispute into an agreement in less than a month. The process ensured continued commercial viability, minimal disruption, and preserved legal compliance. PrivateCourt's tech-enabled mediation made this possible—swift, digital, enforceable.
keywords:Loan Default, PrivateCourt, ADR, SME Dispute, Mediation, Debt Settlement, Metal Fabrication