Precedent-setting ruling from the Court of Cassation concerning 16 million retirees

The General Assembly of Civil Chambers of the Court of Cassation stated that 'a customer who objects to the deduction after a certain period of loan payments have been made from their pension cannot demand the return of previous collections from the bank that stopped the deduction'.

According to information obtained from the Case Law Bulletin, the plaintiffs' attorney claimed that the client had taken out a loan from the defendant bank where their pension account was held, that the bank had placed a lien on the pension account to collect money, that the client was not allowed to benefit from promotions and similar rights, and that the client was unable to make ends meet due to these deductions; the attorney requested the removal of the lien on the account, the cessation of deductions, and the collection of the amounts deducted from the account up to the date of the lawsuit from the defendant. The defendant's attorney argued for the dismissal of the case.

THE COURT OF FIRST INSTANCE DECIDED TO DISMISS THE CASE

The Court of First Instance decided to dismiss the case on the grounds that the plaintiff had consented to deductions from their pension as collateral for the loan used and had given a transfer instruction to this effect, that this provision in the contract did not constitute an unfair term, and that accepting the payment of installments from the pension without reservation and subsequently requesting their return would not be consistent with the rule of good faith. The plaintiff's attorney filed an appeal against the decision of the Court of First Instance within the legal timeframe.

THE REGIONAL COURT OF JUSTICE DECIDED TO REMOVE THE LIEN ON THE PENSION

The Regional Court of Justice accepted the appeal of the plaintiff's attorney, overturned the decision of the Court of First Instance, and established a new judgment on the merits, deciding to remove the lien on the pension account. The defendant's attorney filed an appeal against the decision of the Regional Court of Justice within the legal timeframe.

THE 3RD CIVIL CHAMBER OF THE COURT OF CASSATION OVERTURNED THE DECISION

The 3rd Civil Chamber of the Court of Cassation included the following statements in its reversal decree:

“The decision rendered by the court of first instance to dismiss the case is in accordance with procedure and law, as well as the established practices of our Chamber; since there is no error, the decision rendered in writing by the regional court of justice based on a mistaken assessment is contrary to procedure and law and requires reversal.”

The Regional Court of Justice issued a resistance decision by repeating its previous reasoning. Thereupon, the defendant's attorney filed an appeal against the resistance decision within the legal timeframe. Thus, the file was brought to the agenda of the General Assembly of Civil Chambers of the Court of Cassation.

"A RETIREE WHO OBJECTS TO THE DEDUCTION CANNOT DEMAND PREVIOUS COLLECTIONS FROM THE BANK"

The General Assembly of Civil Chambers of the Court of Cassation overturned the decision of the regional court of justice as a result of the appellate review. The reversal decree included the following statements:

“Considering that the consumer, who is protected with the motive of not making the weaker party even weaker due to the general acceptance that they have no income other than their pension, knew that they would have to pay back the amount they received and spent in line with their socio-economic needs within the framework of the loan agreement they signed of their own free will, using their pension again; that they showed their pension as part of their assets in a way that strengthened the possibility of repayment of the loan in the eyes of the bank; that the bank, acting with this belief, allocated loans to the plaintiff multiple times; that the plaintiff did not make installment payments by any other means; and that the plaintiff did not object to the regular monthly collection of loan installments through the transfer method, which they preferred as the payment method from the very beginning, and that the bank ceased collections made by this method upon seeing that the plaintiff's will in this direction had disappeared by filing the lawsuit; it constitutes an abuse of rights to demand the cancellation of these deductions on the grounds that they are unlawful and to demand the return of the deducted amounts in connection with the acceptance of this request, and it should not be protected by the legal order as it does not comply with good faith in accordance with Article 2 of the Turkish Civil Code No. 4721.”