CNY 975,000 Loan Dispute – Court Orders Repayment
In this case, the plaintiff Mr. Li sued the defendant Mr. Gu for repayment of loans totaling CNY 975,000, plus interest and overdue interest. The court found that multiple loans were made between the parties in 2010, but the defendant failed to repay any amount after the agreed terms expired. After a hearing, the court ruled in favor of the plaintiff, ordering full repayment of principal and calculated interest, with a partial adjustment to the interest rate on one loan that exceeded the legal limit.
The dispute arose from a series of borrowing transactions in 2010. According to the plaintiff’s claims, the defendant borrowed money on three occasions: first, a combined loan of CNY 300,000 (which included an earlier loan of CNY 450,000 and a subsequent loan of CNY 100,000), evidenced by a promissory note dated June 28, 2010; second, a loan of CNY 200,000 on October 29, 2010; and third, a loan of CNY 475,000 on November 12, 2010, with a stated repayment period of six months and an interest rate of 2.5% per month. The plaintiff asserted that he transferred all funds via bank transfers to the defendant’s account. After repeated demands, the defendant made no repayment, leading to the lawsuit.
At the hearing, the plaintiff presented three promissory notes signed by the defendant and four bank transfer receipts as evidence. The defendant, despite being properly served with legal documents by public notice, did not appear in court and filed no defense. The court examined the evidence and ruled it authentic, lawful, and relevant to the case. Based on the evidence and the plaintiff’s testimony, the court established the factual timeline of the loans.
The court held that the promissory notes represented the defendant’s genuine intention to borrow. However, for the November 12, 2010 loan, the agreed interest rate of 2.5% per month exceeded four times the benchmark interest rate of the People’s Bank of China for the same loan period, making that part of the interest clause invalid. For the other two loans, the notes did not specify any interest, so they were deemed interest-free. The court found that the defendant breached the agreements by failing to repay the principal and any applicable interest within the agreed periods.
According to relevant law, specifically Articles 205, 206, 207, and 211 of the Contract Law, and Article 130 of the Civil Procedure Law, the court determined that the plaintiff was entitled to repayment of the full principal amount of CNY 975,000. For the CNY 500,000 in loans that carried no interest, only overdue interest from the date of the lawsuit at the bank’s benchmark rate (6.1% per year) was awarded. For the CNY 475,000 loan, interest was calculated at 24.4% per year (four times the benchmark rate) from the loan date onward, as the agreed rate was partly invalid. The court calculated total interest and overdue interest through the hearing date at CNY 163,852.37, with ongoing daily interest thereafter.
The court ordered the defendant to pay the plaintiff CNY 975,000 in principal plus the calculated interest and overdue interest within ten days of the judgment. Failure to pay on time would result in double the overdue interest for the period of delay. The defendant was also ordered to bear all litigation costs, including filing fees, preservation fees, and publication fees totaling CNY 20,600. This case underscores the importance of clearly documenting loan terms, especially interest rates, and the legal limits on interest charges under Chinese law.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.