Bill Discounting Issue: How to Handle implications with NBFC?

I am writing to seek your expert legal guidance and assistance regarding a pressing matter of Bill Discounting Issue

Seeking Legal Assistance for Bill Discounting Issue

Bill Discounting Arrangement

Last year, in August 2022, our company entered into a bill discounting arrangement with a Non-Banking Financial Company (NBFC). This agreement continued until the end of August this year, 2023. In August, the NBFC requested the renewal of our agreement. In response, we promptly submitted all the required documents.

Delay and Financial Implications

However, for a period spanning approximately 24 to 25 days, we did not receive any confirmation or response from the NBFC. Despite our diligent follow-up, which included in-person visits to their office in Delhi, we were met with promises and assurances that were not fulfilled. This situation left us in a difficult position, both financially and operationally.

Financial Impact

The delay in receiving payments impacted our ability to honor commitments to our clients, manage our material supplies, and meet labor expenses. As a result, we had to take the step of redirecting funds to our own accounts to sustain our business operations.

Continued Requests for Documents

In September, just before the 25th, the NBFC received a payment of approximately 60 lakhs, yet they remained unresponsive to our inquiries. They continued to request additional documents, despite having received all the necessary paperwork. Our company, "Goyal Fabricators," is a sole proprietorship under my Father's name, and we have diligently adhered to all agreed-upon EMIs for the past 30 years. However, in a surprising turn of events, they requested KYC documents for both me and my father. While we do have some minor overdue amounts in a few loan accounts, all accounts have remained regular and are not classified as NPAs.

Resolution Steps

In response to these challenges, we opted to redirect payments directly to our account rather than the escrow account. Currently, we are operating our business and are committed to repaying the outstanding discounted bills, which amount to approximately 1.25 crores. We are prepared to make these payments and are seeking an extension of 8-10 months to fulfill this commitment. We intend to commence payments from this month.

Request for Legal Assistance

We kindly request your assistance in reviewing all the relevant documents and providing us with guidance on our legal options. Specifically, we are interested in understanding the potential legal actions that the NBFC may take against us and how we can navigate this situation. Additionally, we seek clarification on the interest rate that the NBFC may charge, as it is mentioned as 14.5% + 4% on overdue amounts per annum.It appears that you have entered into a bill discounting arrangement with an NBFC. This has encountered several issues and complications. I understand your concerns and am here to provide you with legal guidance and potential solutions for your situation.

Understanding the Bill Discounting Issue

From your description, it seems that you had a bill discounting agreement with the NBFC from August 2022 until August 2023. Subsequently, you faced challenges, including the delay in agreement renewal, demands for additional documents, and issues related to the payment process. It is essential to evaluate the legal aspects and explore your options for resolving this Bill Discounting Issue.

Potential Legal Solutions

1. Review of Agreement: Our first step will be to thoroughly examine the bill discounting agreement that you had with the NBFC. We will assess the terms and conditions, renewal clauses, and obligations of both parties to understand your rights and responsibilities.
2. Communication with NBFC: We will initiate contact with the NBFC to establish a clear line of communication. It is crucial to address any misunderstandings or discrepancies in a professional manner. We will inquire about the status of your agreement renewal and payment issues.
3. Negotiation: If possible, we will attempt to negotiate on your behalf with the NBFC to find an amicable resolution. This may include discussing a reasonable repayment plan or extension of the payment period.
4. Legal Remedies: If negotiation proves to be unsuccessful, we will explore legal remedies for this Bill Discounting Issue that may be available to you. This could include initiating legal proceedings to protect your rights and interests.

Interest Calculation

Regarding the interest rate, it is important to note that the interest charge on overdue amounts appears to be 14.5% + 4% per annum. However, We will verify the terms of your agreement. Thereafter, we will ensure that the interest calculation is accurate and in compliance with applicable laws.

Next Steps on Bill Discounting Issue

To proceed with legal assistance, we will require a comprehensive review of all relevant documents. Furthermore, This includes the bill discounting agreement, correspondence with the NBFC, and any other related records. Let us have a complete understanding of your case. Thereafter, we will provide you with tailored advice on the best course of action.

Read More

• NBFC Troubles? Get an Expert Legal Advice in Chennai
• advocates For Anti Corruption
• Seeking Benefits under Special Category Scheme
• Purchase bill
• Are Lease Agreement Deductions Legal in India?
• Benami Transact
• Transgender Persons

I recommend that we meet at your earliest convenience to discuss this Bill Discounting Issue further and gather all necessary documentation. Finally, Please feel free to reach out to our office to schedule an appointment or to address any immediate concerns.