BEFORE THE PRESIDENT, DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, SAMBALPUR

C.C NO- 02/2019

Present-Sri Dipak Kumar Mahapatra, President, Smt. Smita Tripathy, Member (W).

Joginder Nath Kumar ,aged about 88 years,

S/O- Late Gurandittamal Kumar,

At-Quality Mansion, Nayapara,

P.O/City/Dist-Sambalpur.                                                                …..Complainant

Vrs.

1. The Chairman,

HDFC LTD,Roman House,

HT Parekh Marg, 169 Backbay Reclamation,

Churchgate, Mumbai-400051,India.

2. The Manager,

HDFC Bank Ltd, At-Nayapara,

Po/City/Dist-Sambalpur-768001,Odisha

Counsels:-

1. For the Complainant:-                      Sri P.P.Panigrahi, Advocate.
2. For the O.P-1             :-                      Sri. M.Upadhyay, Advocate,
3. For the O.P-2             :-                      Sri. A.K.Sahu, Advocate.

DATE OF HEARING : 17.02.2021, DATE OF ORDER : 24.02.2021

SRI DIPAK KUMAR MAHAPATRA, PRESIDENT:-Brief facts of the case is that, the Complainant being the senior most of his family which is a Joint Hindu Family opted to avail a housing loan for purchase of a Flat. The O.P-1 during the month of April -2016 through its senior Executive Md. Salim who have approached and canvassed the Complainant to avail loan and for that purpose he had several time visited to the residence of the Complainant with one Subhendu Bhola, Branch Head, Rourkela to processing the loan and execution of loan agreement. The O.P-1 has the marketing tie ups with the O.P-2. Finally three agreements were executed for financing the loan in the name of the Complainant along with his wife Mrs. Puspa Kumar, Son Kanwar Sanjay Kumar and daughter-in-law Mrs. Rinku Kumar as co- borrower. The blank forms were provided by HDFC Ltd.(O.P-1) and all the co-borrowers singed in advance in good faith in the blank spaces on the bunch of paper of agreement  by advice of Md. Salim at Sambalpur with a promise to supply copies of agreement after signing of the competent officer. After a few months the copies of agreement were handed over to the Complainant with leaving some columns unfulfilled. Loans are availed to the Complainants on which Interests  are charged at floating rates prevailing time to time with reset revision cycle of three months. Loan details:-

Loan Ag.No.                       Date                      Amount(Rs)      Payment Term                EMI(Rs)              Rate

616808004                        April-2016         23,90,000           108 months                       33,069                  9.55%

616808107                        April-2016         23,47,113           108 months                       32,413                  9.55%

616814980                        25.07.2016         10,00,000           108 months                       14,904                  9.55%  

 The condition of the loan permits foreclosure and prohibits any penalty in the event of prepayments. Also the Reserve Bank of India and National Housing loan prohibits charges on repayment/foreclosures. But when the Complainant/Borrowers foreclosed all the loans in Jan/Feb -2018 the financier charged  and realised Rs.96,267 as penalty towards prepayments of loans.

Details of Prepayment /Foreclosure Charges:-

Loan Agreement No.             Date of Payment                    Charges

616814980                            17.01.2018                             4,145/-

616808004                            05.02.2018                             48,980/-

616808107                            05.02.2018                             43,142/-

                                                                                    Total   96,267/-

The Complainant had protested to the arbitrary realisation of penalty by the O.P-2 but the financier paid no heed to the requests of the Borrowers. Also an email was sent to the customer

The O.P-1 after service of notice though appeared before this Commission through his Advocate but failed to file written statement thus challenging the allegations made by the Complainant. So taking it in to consideration as “IT IS A YEAR OLD CASE”, this Commission has rightly decided to dispose the case as well in absence of  the O.P-1 in this case. Hence hearing conducted as per Rule-10 of Order-9 of Civil Procedure Code. 

            The O.P-2 denied all the allegations made in the Complaint petition stating that the petition is not maintainable as it is misconceived, false, frivolous, vexatious, misrepresented etc. Again he stated that as the HDFC Bank Ltd is a juristic person can be sue and be sued in its corporate name and not by the name of it’s designated authority. The Complainant has not annexed any documentary evidence substantiating his claim of involvement of the O.P-2 in deficiency in service. He added that there is no relation of “Consumer” and “Service provider” between the Complainant and the O.P-2 as he has not availed any service for consideration paid or promised, partly paid or partly promised and so on. Also he is not a necessary party to this case and claims that the suit is in the name of wrong plaintiff. The loans taken by the Complainant are foreclosed at his own will with the terms and conditions accepted by him, so the allegations made against the O.P-2 are unfounded and just to blackmail the O.P-2. Again he added that the relief claimed by the Complainant against the amount of loan taken is exceeds the pecuniary jurisdiction of this Forum at the time of filling the Complaint hence it is not maintainable. Being a separate entity, in the entire transaction the O.P-2 is no way related to the O.P-1 hence the complaint petition is deserves to be dismissed being devoid of any merit.

POINTS OF DETERMINATION:-

1. Whether the Complainant is comes under the purview of Consumer Protection Act-2019?
2. Whether the O.Ps are separate entities?
3. Whether the O.Ps are empowered to collect penalty on foreclosure of loans?,
4. Whether the Commission have pecuniary jurisdiction to try this case?
5. Whether the O.Ps has committed any Deficiency in Service to the Complainant?

  `         From the above discussion and materials available on records we inferred that the Complainant comes under the purview of Consumers, as he being the head of his “Joint Hindu Family”, along with the other co- borrowers has availed housing loan from the O.Ps which is a service provided by the O.Ps.

            Secondly, it is evident that HDFC Ltd is the parent company of HDFC Bank and there are many like HDFC Bank under the umbrella. HDFC's key associate and subsidiary companies include HDFC Bank Limited, HDFC Standard Life Insurance Company Limited, HDFC ERGO General Insurance Company Limited, HDFC Asset Management Company Limited, GRUH Finance, HDFC Venture Capital Limited, HDFC RED and Credila Financial Services Private Limited. Promoted by the Industrial Credit and Investment Corporation of India, HDFC (Housing Development Finance Corporation Limited) was incorporated in 1977 with the primary objective of promoting home ownership by providing long-term finance to households for their housing needs.. HDFC holds approx. 22.8% of shares in HDFC Bank. HDFC was amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to set up a bank in the private sector, as part of the RBI's liberalisation of the Indian Banking Industry in 1994. The bank was incorporated in August 1994 in the name of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank commenced operations as a Scheduled Commercial Bank in January 1995. HDFC Bank sources home loans for HDFC for a fee. So the O.Ps are not separate entity but are branch of one tree.

Thirdly, Reserve Bank of India by its circular dated May 7, 2014 dealt with the levy of foreclosure charges/prepayment penalty on floating rate term loans. The circular referred to in Part-B of the first bi-monthly monetary policy statement, 2014 announced on April 1, 2014. It noted that, such bi-monthly monetary policy statement indicated that, in the interest of the consumers, bank should consider allowing their borrowers the possibility of prepaying floating rate term loans without any penalty. The Reserve Bank of India by such circular advised the banks that, they will not be permitted to charge foreclosure charges/prepayment penalties on floating rate term loans sanctioned to individual borrowers with immediate effect. Therefore, at least with effect from May 7, 2014, banks are not entitled to charge foreclosure/prepayment penalties on floating rate term loan sanctioned to individual borrowers from such date notwithstanding the terms of the sanction. Again it is inferred from the para-1, 4 & 5 of the Complainant petition that the O.P-1 is the financier who have effected the loan and took signature on the dotted line and simultaneously the foreclosure was made with the O.P-1 as per para-9.  Here the O.P-1 has collected penalty of for foreclosure of loans from the Complainant which amounts to Deficiency in Service along with Unfair Trade Practice to the Complainant as per the C.P Act-2019. This matter has been well settled in the case of Devendra Surana vs Bank Of Baroda & Ors on 12 December, 2018 decided by Calcutta High Court (Appellete Side).

On consideration of jurisdiction we are in the view that the as per the C.P Act-2019 the Commission has enhanced jurisdiction to try this case. From the above observations, as there is no role played by the O.P-2 in the above discrepancies, he cannot be held liable for any unfair trade practice and hereby discharged from the allegations made against him. Hence we order as under:-

ORDER

The Complaint petition is allowed. The O.P-1 is directed to proceed to refund the sum of Rs. 96,267/- received from the petitioner, along with interest, calculated at the rate 9% per annum, commencing from the date of receipt of the sum of Rs.96,267/- from the petitioner, till the date of refund thereof to the petitioner. The O.P-1 is further directed to pay Rs. 5,000/-(Rupees Five Thousand)as compensation and Rs.3,000/- (Rupees Three Thousand) towards the cost of litigation to the Complainant. All the orders are to be carried out within 30 (Thirty) days of receiving of this order, failing which, the complainant is at liberty to proceed in due process of law.

            Order pronounced in the open court today i.e, on 24^th  day of February-2021 under my hand and seal of this Commission.

Office is directed to supply copies of the Order to the parties free of costs receiving acknowledgement of the delivery thereof.

I agree,

Sd/-(24.2.2021)                                                                                         Sd/-(24.2.2021)

MEMBER.(W)                                                                                               PRESIDENT.

                                                Dictated and Corrected

                                                                By me.       

                                                         Sd/-(24.2.2021)

                                                            PRESIDENT.