Legal Question in Consumer Law in India
Pre-Payment Penalty Legitimacy
We have financed certain machinery from a company situated at Calcuttta under the Hire Purchase Agreement. The rate of interest was 10%. Afterwards, we fould an agency at New Delhi financing the machines at 9% rate of interest. Therefore, we applied to the Calcutta based company to take the balance loan amount. But the said company insisted that we have to pay interest for the unexpired period of loan and high amount of pre-payment penalty. Besides, at first, it denied to the pre-payment of loan.
We are finding ourselves helpless.
Kindly advice.
3 Answers from Attorneys
Re: Pre-Payment Penalty Legitimacy
Approach a consumer fourm, file a complaint along with a draft of balance amount as per your calculation
Re: Pre-Payment Penalty Legitimacy
1. I do not think it is a consumer issue. I do not think a complaint can be filed in a consumer court. I think this can be filed only as a suit or plaint in a regular civil court under law of contract.
2. I think you would be bound by the terms of contract with the company. You must look closely at the terms of contract. If the terms are clear and the company is asking you for payment which looks to you excessive but which is as per the terms of the contract, then you don't have a strong case.
3. For further assistance, contact me at [email protected]
M C Gupta
MD, LL.M.
Advocate
Delhi
Re: Pre-Payment Penalty Legitimacy
Dear Sir/ Madam,
In your case you have not mentioned since how long you are repaying the loan instalments to the Kolkota based finance company.
still it is your wish to close or swap the loan account with your finance co.
You can swap the loan to other finance company and your earlier finance co cannot impose penalty.
please approch Consumer forum with fair calculation, deposit the same in Consumer forum.
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