Hearing held on 28/12/2010
Challenge No. 148 of 2010 civil cassation
 

1-  Bank loan – its definition – business
A bank loan is a contract whereby the bank shall deliver to the borrower a sum of money as a loan, or record such amount on the credit side of the borrower’s account in the bank, and the borrower shall undertake to repay to the bank the loan amount, plus interest, on the dates and conditions agreed upon. Such bank loan shall be considered as a business notwithstanding the capacity of the borrower or the nature of the loan.

2-  Delay interest – this interest is actually compensation due to the creditor for the delay by the debtor in paying the loan amount on the due date, whether or not the contract includes an agreement thereon, and the creditor shall also be entitled to such interest even if the contract expires.
There are two types of interest: compensatory and delay. Compensatory interest is agreed upon by the creditor and debtor against benefiting from a sum of money during a specific period of time. Delay interest is due where the debtor is in breach of his obligation to pay the debt on the payment date, and is compensation to the creditor for the delay by the debtor in paying what he owes. As mentioned above, and as is apparent from the challenged judgment, the claim by the petitioner to oblige the respondents to pay the interest in the event they are late in paying the amounts due from them has been declined. The interest was actually compensation due to the creditor for delay by the debtor in paying what he owed on the due date, whether or not the contract included an agreement thereon, and the creditor shall also be entitled to such interest even if the contract expires.

3-  In obtaining funds to meet the needs of borrowers, the lender bank bears a burden that may be more exorbitant than the normal loan. Hence compensating the lender for the harm due to late payment of debts is the debtor’s duty, taking into account usual bank practice which is considered general knowledge and does not require proof thereof.
Whereas it is known for the court that in obtaining funds to meet the needs of borrowers, the lender bank bears a burden that may be more exorbitant than the normal loan. Hence compensating the lender for the harm due to late payment of debts is the debtor’s duty, taking into account usual bank practice which is considered general knowledge and does not require proof thereof.
If the challenged judgment contravenes this consideration, it shall be deemed defective and shall be brought forward for cassation in this regard.
 

The Facts
 

On 25/07/2010, the judgment by the Court of Appeal # 49/2010 issued on 27/05/2010 was challenged by cassation, as per a plaint of case whereby the petitioner required to accept the challenge in form, and in subject, the petitioner required to bring the challenged rule forward for cassation and to refer the case to the court of appeal to be considered again before a new court.
On the same day the petitioner filed an explanatory memorandum, and on 03/08/2010 the respondents were notified as per the plaint of challenge. On   /   /2010, the respondents filed a memorandum of their defense, together with supporting documents, whereby they asked for.....
At the hearing held on 14/12/2010, the challenge was presented before the court in camera. The court decided that the challenge was worth considering and it set a hearing for pleading. At the hearing on 14/12/2010, the case was heard before this circuit, as stated in the minutes of the hearing which the attorney for the petitioner insisted upon in his memorandum. The court postponed delivering its judgment to today’s session. 

The Court
 

Following review of the papers and hearing the report read by the Presiding Judge, and after the pleading and deliberations,
Whereas the challenge fulfilled its descriptions and formal conditions,
Whereas the facts, as they appear from the challenged judgment and all the papers, indicate that the petitioner bank filed civil plenary case No. 2200 of 2009 against the respondents for an order that they jointly and severally pay the sum of QR 1,227,923/96, plus compensatory interest at the rate of 11% per annum as of 31/07/2009 until full payment, in addition to delay interest at the rate of 3%, being the rate calculated as of the November 2008 installment until full payment.
Whereas the petitioner bank explained that under a loan contract dated 28/04/2008 the petitioner granted the first respondent a loan for QR 1,344,000 on bail of the other respondents. The loan period was 36 months and the first payment was due on 31/05/2008. However, the first respondent stopped making payments as of November 2008, the rest of the installments became due, and the bank filed the case. The court ordered the respondents to pay to the petitioner the sum of QR 1,227,923/69 and declined the other claims. The petitioner appealed this judgment #49 of 2010 regarding the claim for compensation. On 27/05/2010, the court confirmed the challenge to this judgment by cassation. The challenge was presented to this court in camera and a hearing date was set.

Whereas the petitioner complains that the challenged judgment is erroneous in the application of the law and is in default in causation and corrupt in inference, and states that the judgment failed to consider the agreement between the parties in that it calculated the interest until the due date of the indebtedness and refused to calculate the interest until full payment in accordance with the contract concluded between the petitioner and the respondents without evidence, the judgment is therefore defective and must be brought forward to cassation.
Whereas the petitioner’s complaint is sound and whereas it is prescribed that a bank loan is a contract whereby the bank shall deliver to the borrower a sum of money as a loan, or record such amount on the credit side of the borrower’s account in the bank, and the borrower undertakes to repay to the bank the loan amount, plus interest, on the dates and conditions agreed upon, and that such bank loan is considered as a business notwithstanding the capacity of the borrower or the nature of the loan.
Whereas delay interest is actually compensation due to the creditor for the delay by the debtor in paying the loan amount on the due date, whether or not the contract includes an agreement thereon, and the creditor shall also be entitled to such interest even if the contract expires.

Whereas there are two types of interest, compensatory and delay interest, and whereas compensatory interest is interest agreed upon by the creditor and debtor against benefiting from a sum of money during a specific period of time, and delay interest is due where the debtor is in breach of his obligation to pay the debt on the payment date and is a compensation to the creditor for delay by the debtor in paying what he owes.

Whereas, as mentioned above and as is apparent from the challenged judgment that the claim by the petitioner to oblige the respondents to pay the interest in the event that they are late in paying the amounts due from them has been declined, and that the interest was actually compensation due to the creditor for the delay by the debtor in paying his dues on the due date, whether or not the contract included an agreement thereon, and the creditor shall also be entitled to such interest even if the contract expires.
Whereas, in obtaining funds to meet the needs of borrowers, the lender bears a burden that may be more exorbitant than the normal loan, hence compensating the creditor for the late payment of his debts is the debtor’s duty, taking into account bank practice which is considered known to the general public and does not require proof.
Whereas, if the challenged judgment contravenes this consideration, it shall be defective due to bringing it forward for cassation in this regard.

Therefore,
The Court partially brought the challenged judgment forward for cassation and referred the case to the Court of Appeal for consideration of the part brought forward for cassation, and ordered the respondents to pay the costs and attorney fees.