Preferring the lok adalat route to the time-consuming process of fighting civil cases in courts, banks have started queuing up at the Tamil Nadu State Legal Services Authority (TNSLSA) to recover bad personal loans and credit card dues.
On January 6, the authority conducted an exclusive mega lok adalat for the Central Bank of India and helped the bank to dispose of 226 cases and recover a whopping Rs 11.2 crore on a single day. A total of 1,430 cases had originally been listed for hearing.
Now, the State Bank of India is all set to have its own special lok adalat at the TNSLSA premises on February 3. The ICICI Bank is also scheduled to have its own special adalat on February 5.
"Encouraged by the hugely successful adalat of the Central Bank earlier this month, the SBI has decided to bring 1,693 pre-litigation cases before the special adalat. Six adalat benches will be created for the purpose," T Mathivanan, member-secretary of the TNSLSA, said here on Monday.
"Together, these cases involve a claim amount of Rs 20.62 crore, and we hope that our customers as well as the bank itself would benefit from the exercise," said the SBI deputy general manager, V Srinivasan. The cases involve personal loans, home loans and education loans, he said.
Lok adalats, the most popular of all alternative disputes redressal (ADR) mechanisms, are very effective in bringing about expeditious remedy because the settlements are done after mutual consultation and consent. The settlement is final, as neither of the parties can appeal against the lok adalat ruling. No court fee too needs to be paid for the exercise.
Pointing out that the Legal Services Authority Act had provisions to hear pre-litigation cases, Mathivanan said it would reduce the burden on judicial forums, as in case of non-settlement of these disputes they would end up as civil suits in courts.
Asked about the nature of cases being listed for hearing on Wednesday, Srinivasan said they concerned personal loans up to Rs 1.25 lakh and small business/trade loans up to Rs 1.5 lakh. Personal loans alone involve Rs 19.6 crore as claim amount, he said. "We have participated in several lok adalats in the past too. They were beneficial both to the borrowers and the bank," he said.
Last year, up to the month of November alone, the TNSLSA had resolved 42,761 cases, and settled an estimated claim amount of Rs 172.8 crore.
