Synopsis
This dispute is between a renowned NBFC as the Claimant, based in Mumbai, and an individual working as a freelance website designer, based out of Pune. The Claimant company has over two decades of establishment as one of the pioneer NBFCs catering to small to large-ticket-sized loans.
The Respondent, on the other hand, had switched to a freelancing profile after taking a break from a corporate job — taking a year off work for maternity reasons — and restarting work from home as a freelancer. Certified and trained from one of the top website designing academies, and having received rewards, recognition, and client appreciation at her earlier workplace, the Respondent was confident of being successful as a freelancer too.
Since her savings were minimal and she was no longer in a corporate job or holding collateral that could help avail a bank loan, the Respondent approached the Claimant for a loan amount of Rs. 3 lakhs to procure and set up a basic office — including a top-end workstation, license and app procurement, and social media marketing to attract clients.
Compared to a salaried person, availing a loan is not as easy for a freelancer. Due to the lack of a steady income, banks and other financial lenders also remain wary of this category when it comes to repayment. But the Respondent had qualitative proof to clear her KYC and demonstrate her capability to repay the loan, which boosted her chances of getting a loan sanctioned in her name as a freelancer with the Claimant company.
The Claimant company had to issue reminders, notices, and warnings when the Respondent defaulted on three consecutive payments. PDR COURT issued an Arbitration notice addressed to the Respondent as soon as it received the invocation request from the Claimant.
Facts
The loan amount was credited to the Respondent's bank account after clearing all the screenings and approvals.
The market saw an upswing in digital presence, especially post-pandemic, when many individuals decided to take charge of their careers and dive into self-employment opportunities. This brought good business for the Respondent, as requests for website designing from these businesses went up. Social media marketing, client testimonials, portfolio work, and word-of-mouth publicity kept work flowing in for the Respondent.
This well-planned freelancing venture took off smoothly for almost a year and a half, and the Respondent managed to clear all the EMIs scheduled. However, a major hurdle cropped up when the Respondent ended up cancelling one mega project midway — a project that was, in fact, a chance to make it big and also a chance for her to close the loan on foreclosure grounds.
PDR COURT received an arbitration invocation request from the Claimant NBFC when the Respondent defaulted on three EMIs consecutively, with an outstanding balance of Rs. 2,13,494.
PDR COURT Proceedings
The Respondent reverted immediately and agreed to abide by the entire procedure as described in the notice. PDR COURT requested the Respondent to furnish all necessary documents, including bank account details, invoice copies, business WhatsApp chats, and emails.
Our panel of Neutrals closely vetted this case, and both parties were requested to join a discussion call to analyse the situation with a transparent approach.
The Respondent explained that she had to drop the one and only project she was handling because her one-year-old baby had developed an unforeseen lump on her back that needed to be operated on immediately. This resulted in her cancelling the project, as the client wasn't ready to compromise on the delivery deadline.
She further had to devote the next two months to taking care of her child. This drained her financially and emotionally, and brought a complete standstill to her work. She had no time, no money, and no courage to reply to the default notices or EMI reminders sent by the Claimant.
On receiving a PDR COURT notice and being advised by our case managers that there was a way out of this without facing any major legal liabilities, the Respondent agreed to connect.
Our panel of experts listed a number of reasons why the Claimant company should not only restructure the repayment plan but also look at the matter more empathetically and offer some monetary relief. Moreover, since the Respondent had successfully started and was running her business as a freelancer, with business inquiries flooding her DMs, this was seen as a positive sign of her ability to recover and repay.
Our Philosophy
नास्ति सत्यसमो धर्मो न सत्याद्विद्यते परम्। न हि तीव्रतरं किञ्चिद् नृतादिह विद्यते।।
Nāsti Satyasamo Dharmo Na Satyādvidyate Paraṁ. Na hi Tīvrataraṁ Kiñchid Nr̥tādih Vidyate.
There is no religion like truth, nothing greater than the truth, and nothing more intense than a lie.
सत्य जैसा अन्य धर्म नहीं। सत्य से पर कुछ नहीं। असत्य से ज्यादा तीव्रतर कुछ नहीं।
Settlement Agreement
The Claimant company restructured the outstanding loan amount of Rs. 2,13,494 to be paid in 10 equal instalments, without adding any late penalties or interest.
In case of no further defaults, the Respondent would be eligible to avail a higher loan amount in future, without being disbarred on account of the current loan repayment default.
