Liability of loan
A finance company offered a loan of Rs.7000/- @18% for purchase of mobile of Rs.10500/-(Rs.3500 cash given by borrower to dealer) to a borrower and took his signatures on their pre printed & computer filled in forms after taking some documents from him.No other conditions were told to him. He was to repay the loan in 10 EMIs @Rs.1110/- which he did not calculate to check its accuracy. Considering that the offered terms were written in the forms,he had signed the forms believing the person.But the sanction letter had different terms and copy was not given to him.Later it transpired that the company had entered Rs.10500/- as the loan amount and rate of intt as @28.84 % flat which comes as 113 % pa and other conditions contrary to the interest of the son .For a loan of Rs.7000/- , Rs.10450/- was paid within a period of 8 months.
When he learnt this, he found Rs.2840/- was excess charged up to that point , for which refund was claimed from the company which was refused by the company.Instead of refund company demanded some money. The matter was reported to Consumer Forum citing several irregularities of the finance company like deficient of service by not following RBI's guidelines to display the effective rate of interest and all terms and conditions besides that no sanction letter was issued to the party and rate of interest and loan amount was not what was stated and given.
Ignoring all the irregularities of the finance company the Consumer Forum dismissed the case on the plea that since the borrower had signed the sanction letter,so he was bound to repay.
Now 5 years have passed when he took the loan in Aug,2013 and the case in consumer forum was filed in May 2014 and decision of the forum came in May 2018.
Please advise whether the finance company sue him for the balance amount as I believe the limitation of documents are for 3 years or the limitation is extended due to the matter being in consumder court