DLSA Loan Settlement Notice | How to settle | One time Settlement agreement | Advocate guideline

 If your client has received a notice for loan settlement from the District Legal Services Authority (DLSA), this means the matter is being referred for amicable settlement through Lok Adalat or mediation. As an advocate, your role is crucial in protecting your client's interest while helping facilitate a just and lawful resolution. Here's a step-by-step guide to what you should do:

✅ Before the DLSA Hearing

1. Review the Notice Carefully:

   • Understand whether it is for a Lok Adalat, Pre-Litigation Mediation, or a post-litigation referral.

   • Note the date, time, and venue of the hearing.

   • Check if it's for a pending court case or a pre-litigation matter.

2. Understand the Client’s Loan Account Status:

   • Collect all relevant documents: sanction letter, repayment history, default details, notices from the bank/NBFC.

   • Verify whether the outstanding dues claimed by the lender are correct.

3. Assess the Client’s Intent and Capacity:

   • Does your client want to settle?

   • How much can he/she offer in lump sum or instalments?

   • Is there a possibility of a one-time settlement (OTS)?

4. Prepare a Written Representation (if needed):

   • This can state your client’s position, grievances (if any), and a fair settlement offer.

✅ On the Date of DLSA Hearing

1. Appear with Your Client:

   • Attend with all necessary documents.

   • Be prepared to negotiate directly with the bank's representative.

2. Ensure the Process is Voluntary:

   • Remember, DLSA settlements are non-coercive and voluntary.

   • Ensure your client is not forced into an unfair deal.

3. Negotiate Fairly:

   • If the bank is offering settlement, try to get maximum waiver of interest and penalties.

   • If your client can pay upfront, banks are often more willing to reduce the amount.

   • Ask for written terms, including no future claims, no legal action after payment, etc.

4. Check the Settlement Terms Thoroughly:

   • Insist on a written settlement agreement.

   • Ensure it mentions the full and final settlement, waiver of further charges, and deletion of name from CIBIL (if agreed).

5. Record of Proceedings:

   • Get the order passed by Lok Adalat or DLSA panel recorded.

   • This order is binding and enforceable like a civil court decree.

✅ After the Settlement

1. Ensure Compliance:

   • Your client should pay as per agreed terms.

   • Get a no dues certificate (NOC) from the bank after final payment.

2. Preserve All Documents:

   • Copy of DLSA settlement agreement

   • Payment receipts

   • Bank’s NOC

   • CIBIL correction (if part of the agreement)

3. Close the Case Formally (if it was a pending court matter):

   • Submit the DLSA settlement in court (if the matter was already in litigation) to record disposal.

🔍 Other Possible Assistance

• If the bank is harassing your client, raise this before the DLSA panel.

• If the bank is unwilling to settle fairly, DLSA cannot force a settlement. You can suggest alternative legal remedies (court, RBI ombudsman, consumer forum, etc.).

• If client is very poor, explore if Legal Aid benefits can be extended.

📝 Template: Written Settlement Offer for DLSA

To
The Secretary,
District Legal Services Authority (DLSA),
[District Name]

Through: Learned Mediator/Conciliator/Lok Adalat Panel

Subject: Representation for Settlement of Loan Account – [Client Name] vs. [Bank/NBFC Name]

Respected Sir/Madam,

I, [Your Full Name], Advocate, on behalf of my client Mr./Ms. [Client’s Full Name], son/daughter of [Father’s Name], residing at [Full Address], hereby submit this representation in connection with the notice received from your esteemed office regarding the settlement of the outstanding loan dues in respect of:

• Loan Account Number: [XXXXXXXXXX]

• Bank/NBFC Name: [Name of Bank/NBFC]

• Loan Type: [Personal Loan/Business Loan/Vehicle Loan, etc.]

• Outstanding as per Bank: ₹[Amount as per notice]

My client is willing to amicably resolve the issue and settle the outstanding dues under the guidance and supervision of this Hon’ble Authority. However, considering the following circumstances, we humbly seek a reasonable waiver and settlement on humanitarian and financial grounds:

1. My client is currently facing severe financial hardship due to [job loss/business closure/medical expenses/COVID-19 impact/other reasons].

2. My client has made partial repayments in good faith and does not intend to default.

3. The outstanding amount as claimed includes excessive interest, penal charges, and late fees, which my client respectfully disputes.

4. Despite hardship, my client is now willing to settle the matter with a one-time lump sum payment of ₹[Amount] or monthly instalments of ₹[Amount] for [Number] months.

Prayer:
In light of the above, it is most humbly prayed that:

• The bank/NBFC be directed to consider a reasonable and fair one-time settlement, with waiver of interest and penalty to the extent possible.

• If acceptable, the terms of settlement be recorded and executed under the supervision of this Authority.

• A clear No Due Certificate and final closure letter be issued after the settlement to avoid any future disputes.

We look forward to a fair, transparent, and amicable resolution in the true spirit of Lok Adalat and legal services for justice.

Thanking you,
Yours faithfully,
[Signature]
[Your Name]
Advocate for the Applicant
[Mobile No.]
[Email ID]
Date: [DD/MM/YYYY]
Place: [City/District]

For any query Ask Advocate Arindam Biswas (Advocate at Bankshall Court and Basirhat Court) Whatsapp No:   9123619791