Court Orders Repayment of CNY 200,000 in Loan Dispute
A court in Central China Province has ordered a defendant to repay a loan of CNY 200,000 along with interest after finding that a valid oral lending agreement existed between the parties. The plaintiff, Mr. Mei, initiated the lawsuit after the defendant, Mr. Min, failed to return the money despite repeated requests over several years. The court ruled in favor of Mr. Mei, granting both the principal amount and interest from the date the legal claim was filed.
The dispute originated in early 2009 when Mr. Mei, together with a third party Mr. Sheng, encountered Mr. Min at a government office. Mr. Min asked Mr. Mei for a loan of between CNY 200,000 and CNY 300,000, promising to repay within three months. On February 23, 2009, Mr. Mei transferred CNY 200,000 via a bank to Mr. Min’s account. After three months passed, Mr. Mei and Mr. Sheng repeatedly sought repayment, but Mr. Min delayed. On February 24, 2010, Mr. Sheng visited Mr. Min personally, and Mr. Min issued a promissory note stating he had borrowed CNY 200,000 from Mr. Sheng. Mr. Sheng later confirmed that the note reflected the loan originally made by Mr. Mei.
At the court hearing, Mr. Mei presented three key pieces of evidence: his identity card, a bank transfer receipt dated February 23, 2009, and the promissory note dated February 24, 2010. The third party, Mr. Sheng, testified that the loan was indeed from Mr. Mei and that the note was written in his name only because Mr. Min insisted. Mr. Min did not attend the hearing despite proper notice, but he had previously appeared at the court and acknowledged the facts, agreeing to the claims but asking for installment payments due to financial hardship. The court found all evidence admissible and credible.
The court held that the private lending relationship between Mr. Mei and Mr. Min was a genuine expression of mutual intent and did not violate any legal prohibitions. Therefore, the loan agreement was valid and enforceable. Since Mr. Min received the money and failed to repay, the court ordered him to return the full principal of CNY 200,000. The court also determined that the loan had no fixed repayment term or interest clause, making it an open-ended, interest-free loan. However, after Mr. Mei demanded repayment and filed suit, interest became due.
According to relevant law, when a borrower fails to repay after a demand, the lender may claim interest at the rate set by the People’s Bank of China for similar loans. The court calculated interest on the principal from February 20, 2012, the date Mr. Mei filed the lawsuit, until the date of full payment. Mr. Min’s absence from the trial was treated as a waiver of his right to defend, and the court entered a default judgment. The court also considered Mr. Min’s request for installment payments but noted Mr. Mei’s lack of trust given previous unfulfilled promises, though it allowed a 90-day repayment period.
The court ordered Mr. Min to repay the CNY 200,000 principal and interest within 90 days of the judgment taking effect. Mr. Min was also required to pay the court filing fee of CNY 2,150, which Mr. Mei had advanced. Failure to comply within the specified period would result in an additional penalty of double the interest for delayed payment. This case highlights that oral loans documented by bank transfers and later promissory notes can be enforced even when the borrower fails to appear. It also underscores the importance of timely legal action to secure interest claims.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.