New Delhi: The Delhi High Court has sought response from the Reserve Bank of India and Securities and Exchange Board of India and others on a plea seeking independent inquiry into the alleged “unethical and unlawful lending practices” carried by Paisalo Digital, a non-deposit taking non-banking financial company.
Justice Mini Pushkarna also issued notice to Paisalo on a petition filed by one Mukesh Arya alleging that the “unfair” practices were being violative of various RBI’s Master Circulars including the July 2015 which deals with ‘Fair Practices Code’ in the case of NBFC’s and Residuary Non-Banking Companies (RNBCs).
While seeking directions to RBI and SEBI to initiate an independent inquiry into the unfair lending practices by the NBFC, it wants HC to order forensic, transaction and special audits of the accounts of Paisalo Digital and also cancellation/suspension of its registration and delisting it from the stock exchange.
Counsel Manish Gupta, appearing for Arya, said he has submitted various complaints before different statutory authorities against the unfair lending practices of Paisalo Digital but till date no action whatsoever has been taken.
Senior counsel R P Nagesh, appearing for Paisalo, told the HC that Arya’s complaint to the RBI had been closed. It further said that it had entered into a contract with Arya and the terms were clear as regards the interest rate as well as the penalty which is to be levied upon the defaulter.
Meanwhile, SEBI counsel Dhaval Mehrotra told the HC that it does not regulate the lending practices of the NBFCs, thus the prayers sought with respect to the market regulator in the present petition cannot be implemented.
Arya had approached Paisalo in 2018 for takeover of the term loan facility from Punjab National Bank for around Rs 12 crore to be repaid in 60 months at 17% per annum flat rate of interest.
While a Paisalo’s letter in May 2019 had shown the outstanding amount as Rs 15.93 crore, the NBFC after taking symbolic possession of the secured assets under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 had showed an outstanding amount at Rs 23.03 crore, the petition stated.
Arya had also drawn the HC’s attention to another letter of April 2022 where the NBFC had raised a demand of Rs. 42.27 crore without giving any breakup. In a notice invoking arbitration, Paisalo had demanded of Rs 76.71 crore including late fee and cheque bouncing charges from Arya. However, Arya alleged Paisalo Digital was charging interest at the rate of 125% per annum.
Santanu Agarwal, Deputy Managing Director, Paisalo Digital his Press statement said that “We at Paisalo Digital clarify that there is no order directing any regulator to investigate any unfair lending practices by the Hon’ble High Court at New Delhi. The ongoing issue with M/s Sat Priya Mehamia Memorial Educational Trust, Rohtak, involving a borrowed amount of Rs. 12 Crores on 24th March 2018, has prompted us to take legal action against the defaulter and its office bearers involved in selling off the land mortgaged to us. Despite our efforts and the Hon’ble High Court of Delhi’s order dated 25th January 2024 directing the maintenance of the status-quo as to the title and possession of the mortgaged properties, the defaulter and its office bearers continue to violate these orders by illegally disposing of the mortgaged properties. The company treated this as a loss asset in September 2019 in its books of accounts by providing 100%”.
He further said that “in response to the default, we have initiated various legal actions, including registering an FIR against the defaulting entity. ..Paisalo Digital remains committed to upholding the rule of law and will continue to pursue legal remedies to address this matter.”
