A. Short facts
-in May/June 2006, the complainant took out a loan for Rs 3,000.00.
-on June 26, 2006, Kotak bank issued the loan.
Loan term: 30 months, with final payment due in December 2008.
-payment method: advanced checks totalling Rs.12,272.
-in march 2007, the complainant decided to prepay the entire amount and deposited rs.2,32,526 and prepayment fees.
-Kotak received the money and provided a receipt.
The complaint asked the bank for the unused advance checks; the bank refused, citing corporate policy, but the bank verbally assured the complainant that it would comply.
-a legal notice under section 138 of the negotiable instruments act was then given to the complainant.
When the complainant returned to the bank office, she was given a letter indicating that she had fully repaid her debt and that the matter was being discontinued.
-the bank did not drop the criminal complaint when the case was brought up.
-the bank dropped its complaint before the second hearing, and the court granted the same.
-angered by the unethical behaviour and harassment, the complainant filed a lawsuit for carelessness and unfair business practises, asking for a 15-lac award with 18% interest per year, legal fees, and 15 lacs in damages for harassment, humiliation, torture, and mental anguish.
B. Summary judgement
In this instance, Kotak was blamed for failing to close the complainant’s loan account and for allowing balance post-dated checks to be cashed after the account was closed. This amounted to carelessness as well as needless intimidation of the plaintiff by Kotak bank. In order to compensate the plaintiff for the mental anguish and suffering caused, the court ordered Kotak to pay Rs. 1 lakh, along with the expense of litigation.
c. Learnings from the case, it is best to retain any correspondence about bank and financial concerns in writing. Take the loan closure letter from the bank if your loan has been closed.