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This is a dispute between a laundry owner and an NBFC which has been involved in small loans advanced to NBFCs. The borrower, in this case, a migrant from north India, had been operating a small laundry and press service for half a decade in the suburbs of Mumbai and aspired to grow his business.
He approached a few lenders but was unsuccessful in getting the loan as he had not been filing returns due to sheer ignorance. The NBFC in question, however, was ready to fund him basis his business turnover and sent an observer to his shop to look at daily transactions for a week. Satisfied with his business acumen, a loan for the purchase of commercial appliances was sanctioned. The total loan amount advanced was Rs. 3,25,000/- for a tenure of 5 years. A rate of interest of 13% was to be levied as the loan was considered a high-risk loan.
The relationship was nurtured well as subsequent visits showed that the money advanced was utilized for the purchase of the appliances, and there was also an increase in the staff. For almost 2 years, the borrower paid the EMIs on time. The issues started when certain EMIs were missed, and ECS returned unpaid, however, were then paid along with late fees and charges. The situation worsened as EMIs completely started being missed, and there was not much of a response from the borrower to reminder calls and messages. Personal visits from the NBFCs also were futile as the borrower seemed to be not present at the address.
The problem that came up at the borrower's end was that the shop that he had rented out was to be demolished for redevelopment, and this meant that he would have needed to move to a new location and would very likely lose his captive customer base. He had been frantically looking for a place to move to, and being a sole proprietor was not really focused on the business as he was mentally quite disturbed.
While the relationship managers of the NBFC were very sympathetic to this issue, they were unsure of how to get around the situation and had to now go in for confiscation of his appliances for recovery of the loan.
His appeals to prevent the same led to the case being handed over to PrivateCourt for settlement and negotiations.
kālaḥ pacati bhūtāni kālaḥ saṃharate prajāḥ।
kālaḥ supteṣu jāgarti kālo hi duratikramaḥ॥ 06-07
Time perfects all living beings as well as kills them; it alone is awake when all others are asleep.
Time is insurmountable, rest upon truth.
काल सभी जीवो को निपुणता प्रदान करता है। वही सभी जीवो का संहार भी करता है।
वह जागता रहता है जब सब सो जाते है। काल को कोई जीत नहीं सकता।
The negotiator, after studying the case and also looking at the repayment behaviour of the customer, found that there was a clear pattern, and the default did not look to be of a wilful nature.
A dialogue with the borrower was initiated, who had lost possession of the premises and was totally out of business for almost a fortnight.
The negotiator then had a discussion with the NBFC officers, and what came through in this discussion was that there was another customer in the vicinity who had an extra unused area on his premises. The officers then set up a conversation between the borrower and the client, and a deal to lease out a part of the premises for the operation of the laundry was worked out.
Now that the laundry could be reopened, the borrower could easily settle into the business and retain his customer base. The other good thing that happened for him was that there was a significant gap between the deposit amount of his earlier landlord and that of the new premises.
This enabled the borrower to use the deposit that was returned to pay off the amount that was due, and a moratorium of 3 months was given to him before he restarted the EMIs.