In the first place, if I have selected the Category and the Sub-forum wrongly, I'm sorry- Iam indeed ignorant about the exact category my case fits in to.
My brother-in-law at Hyderabad had borrowed a sum of Rs 2 Lakhs from a NBFC of repute in India. The sum was to be repaid in EMIs of Rs 12, 500 for a period of 24 months. He paid 14 dilligently and then ran in to some payment receipt problems as his funds were supposed to arrive from the US for works executed.
He immediately informed the branch from which he borrowed about the same and assured them that he would indeed fulfil his commitments even upon expiry of the loan term and requested for time which he was orally granted.
A couple of notices from an arbitrator (a retired magistrate) regarding the non-payment did indeed arrive at his residence and he received them in the form of Reg Post Ack Due.
A doctor friend of his, employed by the Govt of AP and me, a self-employed professional, are the sureties for the loan.
The applicant did not appear before the arbitrator as he was under the impression that informing the local branch authorities about the modalities and time frame of the repayment, including any penalties that the concern may levy, was about enough.
The arbitrator, meanwhile, has gone ahead and issued, on Rs 100 Non-Judicial stamp paper (a photostat copy has been received by my brother-in-law) of an "Award (Domestic)" under the title of "ARBITRATION APPLICATION NO: XXXXX" and it says the "Award has been passed in the matter of arbitration in view of the difference in payment of amount due including interest" between the NBFC on one side and the applicant & sureties on the other.
There is no issue with the amount mentioned as it clearly states the aggregate of the instalments due, penal charges and Rs 500 as legal notice charges.
The manager of the local branch says that the next step will be to issue copies of this to the concerned drawing officer of the doctor and arranging for a deduction of the sum equivalent or close to the EMI amount from the salary of the doctor who has stood surety.
I will be issued a similar notice directing me to arrange for the pending sum as I am also responsible as I have stood as a guarantor.
We, me and the other guarantor, the doctor, indeed know that my brother-in-law can and will repay the arrears in, say two parts, by Nov-Dec, when his funds will be released. We do not have any problems as he has been completely including us in the picture right from the start.
But that is not the issue. The main issue is the statement of the manager that this "Award" will be converted in to a demand for decuction from the salary of the guarantor.
I dont have any idea about the actual status of an arbitrator and the power of his/her award. Can someone please enlighten me if this is indeed as the manager of the local branch claims will happen?
With the claim of the manager about such a drastic step resulting out of this "Award" by the arbitrator, the situation has turned out to be different and that is the reason for the clarification regarding the actual authority of an arbitrator's award. Kindly clarify this for me.
Best Regards
Suresh Kumar
PS: To reiterate, the applicant has been voluntarily approaching the NBFC's local office and appraising the authorities about his financial status, requesting for time all the while.
