Objection To Debt 5-Day Period Interest And Principal Supreme Court Decision
Summary:
Partial payments cannot be applied to the principal unless the debtor pays the interest and expenses. The debtor’s failure to object to the accrued interest and interest rate requested in the enforcement proceedings within the five-day statutory objection period specified in Article 168 of the Enforcement and Bankruptcy Code does not eliminate the right to complain about the interest rate that will accrue after the enforcement proceedings and the garnishment notice issued accordingly.
T.C.
Court of Cassation
12th Civil Chamber
Case No: 2013/8373
Decision No: 2013/17522
Date: 7.5.2013
The creditor requested the collection of a total claim of TL 304,665.15, consisting of TL 280,591.20 principal debt, TL 23,232.18 accrued interest, and TL 841.77 commission, based on a promissory note, together with annual interest of 19% from the date of enforcement.
The debtor’s representative argued that payments made after the enforcement became final should be deducted from the total debt and that the interest rate and amount were excessive. The court decided to dismiss the complaint on the grounds that the objection to the interest was not timely and that, with regard to the objection to the amount of the debt, an application could not be made to the enforcement court without the enforcement office making a cover account.
The enforcement file shows that the enforcement office made the cover account on 30.09.2010, 04.02.2012, and 26.11.2012.
Article 2 of Law No. 3095, amended by Law No. 4489, which entered into force on 01/01/2000, states: “A debtor who defaults on the payment of a certain amount of money shall be obliged to pay default interest at the rate specified in Article 1 for past days, unless otherwise agreed in the contract.
If the interest rate applied by the Central Bank of the Republic of Turkey on December 31 of the previous year for short-term advances exceeds the amount specified above, default interest may be demanded at this rate in commercial transactions, even if there is no contract. The regulation states that “if the advance interest rate in question differs by five points or more from the advance interest rate applied on December 31 of the previous year on June 30, this rate shall apply in the second half of the year.” In the specific case, the interest calculation was made without complying with the above rules, instead of determining the interest calculation according to these rules. Furthermore, although it is contrary to the law to demand interest on accrued interest, since the debtor did not object, interest must be calculated on the total of the principal and accrued interest after the follow-up. The claim that interest cannot be charged on interest is an objection and is subject to a time limit.
On the other hand, according to Article 84/1 of the Civil Code, “if the debtor is not late in paying interest and expenses, he/she may offset the payment partially executed against the principal.” In this case, partial payments cannot be offset against the principal unless the debtor pays interest and expenses. The aforementioned article does not need to be specifically requested in the enforcement request; it must be applied ex officio even if not requested. (Supreme Court of Appeals, General Assembly, dated 09.10.2002, case no. 2002/12-709 – decision no. 2002/781)
With regard to objections to the interest rate, the debtor’s failure to object to the accrued interest and interest rate requested in the enforcement within the five-day statutory objection period specified in Article 168 of the Enforcement and Bankruptcy Law does not eliminate the right to complain about the interest rate to be applied after enforcement and the attachment memorandum prepared accordingly. Since the checks underlying the enforcement are negotiable instruments, it must be accepted that there is a commercial relationship between the parties. In this case, the advance interest rates provided for in Article 2/2 of Law No. 3095 regarding commercial default interest must be applied, and advance interest must be calculated at rates that change from period to period for the period after the enforcement.
Therefore, in accordance with Article 84 of the Civil Code, partial payments made must first be offset against interest and expenses, and the remaining amount should be deducted from the principal claim, and the balance of the claim should be determined in this manner with each payment made. Regarding the interest rate, a decision should be made based on the advance interest rate applied as of the date of enforcement, as determined by the Central Bank of the Republic of Turkey, taking into account Article 2/2 of Law No. 3095, as amended by Law No. 4489. The court should have made a decision on the objection based on the outcome, taking these rules into account and obtaining an expert report allowing for review, and the written reasoning for the judgment is incorrect.
CONCLUSION
The debtor’s appeal objections are partially accepted, and the court’s decision is REVERSED in accordance with Articles 366 of the Enforcement and Bankruptcy Law and 428 of the Code of Civil Procedure for the reasons stated above. The decision is unanimous, dated May 7, 2013, and the right to appeal the decision is open within 10 days of the notification of the judgment.