BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANGALORE

Dated this the 28^th November 2016

PRESENT

        SMT. C.V. SHOBHA             :   HON’BLE PRESIDENT 

        SMT.LAVANYA M. RAI        :   HON’BLE MEMBER                                                                                                                                                                                                                         

                                                                                    COMPLAINT NO.290/2010

                                                 (Admitted on 30.10.2010)

Sri. Subbayya Shetty T,              

S/o A. Krishna Shetty,

Aged about 62 years,

R/a Fernandez compound,

Lalbagh, Mangalore Taluk 575003,

Dakshina Kannada District.

                                                                      …… COMPLAINANT

(Advocate for complainant  Sri RKG)             

VERSUS

1. ICICI Bank Limited,

Car Loan Division, RAPG 201/202,

Classis Arcade, K.S. Rao Road,

Mangalore- Represented by its

Branch Manager.

2. ICICI Bank Limited,

Having its corporate office at ICICI Bank Towers,

Bandra Kurla Complex,

         Mumbai 51

Represented by its principal officer.

                                                                                 ……Opposite Parties

 (Advocate for the Opposite Party No. 1: Sri. PAA)

 (Opposite party No.2: Ex parte)

ORDER DELIVERED BY HON’BLE PRESIDENT

SMT. C.V. SHOBHA:

I.       This complaint is filed under Section 12 of the Consumer Protection Act alleging deficiency in service against the Opposite Parties claiming certain reliefs.  

          The case on hand was come up before us on the 2^nd innings by virtue of the orders passed by Hon’ble State Commission Bangalore vide appeal No. 1008/2012 dated 09.09.2014 on the specific direction that, the final order which passed by this forum in this case that on 26.11.2011 was set aside and remanded the same to pass a fresh order, by giving opportunity to both the parties, to adduce their respective evidence in the light of the observations made in detail.  Further since the matter is of the year 2010, dispose the case within 6 months.

          As such the said aspect was taken by this forum as per the order sheet that on 24.12.2014, at the first time.  Thereafter case proceeded by time to time.  Despite complainant appeared through counsel, at no point of time Opposite Party appeared and made any efforts in the case, as per the directions, regarding the opportunity either done or utilized, no evidence in oral or documentary, shown by the Opposite Party.   Hence proceeded for final orders after heaving the arguments.  Hence we taken up the matter for passing final orders.

          The brief facts of the case are as under:

          The complainant submits that, he had availed a car loan of Rs. 8,00,000/ from the Opposite Party No.1 as per loan agreement No. LAMNG00010244593 for purchase of Honda CRV/M/T.  It is stated that, the above said loan agreement was taken with blank spaces which was filled up later by the Opposite Party No.1 at their office and the complainant is not aware as to what was filled up in the blank spaces.  It is stated that, at the time of availing of the loan, the Opposite Party No.1 had taken several postdated cheques towards monthly installments for the repayment of the loan amount.  On 20.01.2010 the complainant had made entire payment of Rs. 4,49,135/ and foreclosed the loan.  On making the said foreclosure, the Opposite Party No.1 had debited Rs.23,375/ towards the foreclosure charges at 5.52% on the outstanding principal amount which is not correct and amounts to unfair trade practice.  The Opposite Party cannot charge foreclosure charges and hence they issued a notice calling upon the Opposite Party to refund the same.  Hence, the above complaint filed under section 12 of the Consumer Protection Act 1986 (herein after referred to as the act) seeking direction from this Forum to the Opposite Parties to pay a sum of Rs. 23,375/ being foreclosure charges paid by the complainant along with interest at 14% p.a from 14.01.2010 onwards and also claimed Rs. 15,000/ as compensation and also cost of the proceedings.

II. Version notice served to the Opposite Parties by RPAD. Opposite Party No.2 despite of serving notice neither appeared nor contested the case till this date.  Hence, we have proceeded exparte as against the Opposite Party No.2.  The acknowledgement placed before the FOR A marked as court document No.1. Opposite Party No.1 appeared through their counsel filed version admitted that the complainant availed a car loan and also stated that, the transaction between the complainant and the Opposite Parties are governed by the terms of the agreement executed by the complainant with the Opposite Party.  The complainant voluntarily foreclosed the loan before the maturity/stipulated period hence pre-payment charges were levied on the outstanding loan amount at 5% of the outstanding amount and stated that there is no deficiency and prayed for dismissal of the complaint. In support of the complaint, Sri.Subbayya Shetty (CW1) filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on him.  Ex C1 to C15 were marked for the complainant as listed in the annexure.  One Sri. Harish Srivatsa L (RW1), G.P.A. holder of the Opposite Party No.1 filed counter affidavit and answered the interrogatories served on him.  The Opposite Party No.1 produced one document as listed in the annexure.  The complainant as well as Opposite Party No.1 produced notes of arguments along with citations.

III.     In view of the above said facts, the points now that arise for our consideration in this case are as under:

1. Whether the complainant proves that the opposite parties committed deficiency in service?
2. If so, whether the Complainant is entitled for the reliefs claimed?
3. What order?

           We have considered the arguments submitted by the learned counsel and also considered the materials that was placed before this Forum and answer the points are as follows:         

    Point No. (i) & (ii): Affirmative.

                            Point No. (iii): As per the final order.        

REASONS

IV.   POINTS No. (i) & (ii): 

          The facts which are not in dispute is that, the complainant who had availed a car loan of Rs.8,00,000/ from the Opposite Party No.1 as per loan agreement No. LAMNG00010244593 for purchase of Honda CRV/MT.  The said car is registered as KL.14/G3987.  As per the loan agreement, the complainant agreed to pay the above said loan amount in 60 installments for monthly installment of Rs.18,160/.  It is also not in dispute that, on 20.01.2001 the complainant made the entire payment of Rs.4,49,135/ towards the aforesaid car loan due and foreclosed the loan. Now the point in dispute between the parties before this FOR A is that, the complainant contented that the Opposite Parties debited Rs.23,375/ to his account by charging 5.52% on the outstanding principal amount of Rs.4,23,477/ towards foreclosure charges which is illegal.  Feeling aggrieved by the above, the complainant came up with this complaint. The Opposite Parties on the other hand contended that before entering into the agreement, all the terms and conditions of the car loan agreement was explained to the complainant and after that the complainant signed the loan papers including loan agreement and denied that the signature of the complainant was taken in blank papers.  It is further contended that, as per the agreement conditions clause No.III, Sub clause 11, Pre payment charges 5% of the outstanding amount of the facility, or any other rate as stipulated by ICICI Bank from time to time, as per the above condition the foreclosure charges are charged and stated that there is no deficiency. The complainant filed oral evidence by way of affidavit and produced Ex C1 to C5.  Opposite Party No.1 also filed oral evidence by way of affidavit and produced one document. On perusing the admitted as well as oral and documentary evidence available on record before this Forum, we find that, whether the bank can charge pre payment charges on the customer/Complainant? Answer is No.  In view of the principle laid under many number of reported judgments, we are of the clear opinion that, collecting the foreclosure charges from the banking institutions are illegal.  There is no justifiable ground to charge pre closures are concerned.  Even in this case, there is no legal justification by the Opposite Party No.1 to collect the above said amount.  However, it could be seen that the complainant availed the car loan of Rs. 8,00,000/ and the said loan was pre closed by paying Rs. 4,49,135/.  But we noticed that, the Opposite Party while closing the loan collected 5.52% as pre closure charges i.e. Rs.23,375/ as per Ex.C2. The Ex C2 i.e, the letter dated 20.01.2010 clearly shows that, the Opposite Parties have collected 5.52% as pre closure charges as stated supra but the Opposite Parties contended that as per clause No.III sub-clause 11 of the alleged agreement they are entitled to collect pre closure charges.  But the Opposite Parties not produced the original agreement despite of direction given by this FORA, later by taking sufficient time at the end, they have produced one Xerox copy of the credit facility application form (which is also not readable and visible copy)  before this FORA.  But the above said document is objected by the counsel for the complainant to mark before this FORA.  The above alleged document not marked in accordance with law.  However, for the sake of discussion, we have seen the above document i.e, captioned as details of the facilities and other charges: pre payment charges shown as 5% of the then outstanding amount of the facility or any other rate as stipulated by ICICI Bank from time to time but the Opposite Party has not produced any rule under which the said pre payment charges is payable by the customer/complainant nor produced any circular issued by the RBI stating that the ICICI bank can charge any rate from time to time. There is judgment against the ICICI Bank, inspite of that the ICICI bank not stopped collecting pre closure charges.  We are of the considered opinion that, the collecting the pre closure charges from the customer/complainant by the banking institutions itself is illegal and unjustifiable.  Because as we know, the pre closed loan amount will not be kept in suspense account or keeping aside without using the said amount in banking transaction by the banking institutions.  The Pre closed loan amount collected from the customers are utilized by the bank to some other customers and collecting interests as per their banking norms.  In the absence of Rules governing the payment of pre closure charges, in our view, it is not appropriate for the Opposite Parties to collect the same. That apart the contention taken by Opposite Party Bank regarding the annexed agreement which executed between the parties by the time of raising loan.  It is so, the burden of proving the same rests on the Opposite Party bank only.  Even it was observed by us earlier, the same was questioned by Opposite Party in the appeal also.  On that ground the Hon’ble State Commission also made an observation and permitted the Opposite Party to produce original of the same with additional evidence if any.  Despite it was not made by either producing original agreement or adducing additional evidence before us.  Such being so, even when it was disputed by the complainant in total, in such a situation, we are unable to believe the defense which taken by Opposite Party regarding the said disputed document of agreement, it is in Xerox copy and moreover , as directed by the Hon’ble state Commission in its order, page o4 para 12, the said Xerox copy could not be able to prove the total case of the Opposite Party.

          The Delhi State Consumer Disputes Redressal Commission, New Delhi in State Bank of Indiaversus Usha Vaid (Dr) and Another reported in II (2008) CPJ 166 and another case in Karnataka State Consumer Disputes Redressal Commission, Bangalore in M.Anees UR Rehman and others versus Jammu and Kashmir Bank Limited and others reported in III (2008) CPJ 175 and another case in Karnataka State Consumer Disputes Redressal Commission, Bangalore in S.Krupanidhi Educational Trust versus Union Bank of India reported in III (2009) CPJ 82. 

The above Hon’ble Commissions taken the view that it is an appropriate for the bank to collect the pre-payment charges and in the event if the borrower had come forward to discharge the loan much earlier to the expiry of the loan.  The above principles are applicable to the case on hand.  In the instant case, the ICICI Bank indulged in unfair trade practice and charged/collected pre payment charges which is illegal and cannot be considered as a Rule or Regulation providing for pre payment charges. Hence without any hesitation we pass the following order once again, stating that there is a pure deficiency of service by the Opposite Party to the complainant including unfair trade practice, for that the complainant caused mental agony and hardship.  In view of the above discussion, we hold that, in the absence of rules governing the payment of pre closure charges in our view it is not appropriate for the Opposite Parties to collect the same.  Therefore we are directing the Opposite Party to pay the said total sum of Rs. 23,375/ which was collected, to the complainant immediately with accrued interest at the 10% from 14.01.2010 till realization as the said amount of Rs.23,375/ was kept by the Opposite Party without any reason unnecessarily, though it was aware by the Opposite Party that, the same was belonging to the complainant.  Hence the same was compensated by us by imposing the interest to pay on the said amount as stated above.  And also awarded the compensation of a sum of Rs.5,000/ and another sum of Rs.3,000/ towards cost and litigation expenses incurred by the complainant.

Point No. iii. In the result, we pass the following:

ORDER

The complaint is allowed.  All the Opposite Parties are jointly and severally held liable and responsible to pay/refund the amount of Rs.23,375/(Rupees twenty three thousand three hundred   seventy five only) collected from the complainant with accrued interest at the rate of 10% p.a from 14.01.2010 till realization.  Further, Opposite Parties are also liable to pay for a sum of Rs.5,000/ (Rupees five thousand only) towards compensation and Rs.3,000/ (Rupees three thousand only)  towards cost and litigation expenses incurred by the complainant.  Payment shall be made within 30 days from the date of receipt of copy of this order.

Copy of this order as per statutory requirements, be forwarded to the parties and therefore the file shall be consigned to record room.

(Page No.1 to 10 directly dictated by President to computer system to the Stenographer typed by him, revised and pronounced in the open court on this the 28^th day of November 2016.)

                MEMBER                                      PRESIDENT

   (SMT.LAVANYA M. RAI)                  (SMT. C.V. SHOBHA)

   D.K. District Consumer Forum             D.K. District Consumer Forum

                 Mangalore.                                         Mangalore.

ANNEXURE

Witnesses examined on behalf of the Complainant: 

CW1: Sri. Subbayya Shetty.                 

Documents marked on behalf of the Complainant:

ExC1: 20.01.2010: Receipt for payment of Rs.4,49,135.

ExC2: 20.01.2010: Letter of the Opposite Party to the complainant.

ExC3: Statement of account issued by the Opposite Party to the complainant.

ExC4: Repayment schedule issued by the Opposite Party to the complainant.

ExC5: to C9: Cheque of State Bank of India issued in favour of the Opposite Parties (5 in numbers).

Ex.C10 to C14: Cheque of the South Indian Bank issued in favour of the Opposite Parties (5 in numbers).

Ex.C15: 02.02.2010: Letter addressed by the complainant to Opposite Party No.1 with endorsement of Opposite Party No.1.

Witnesses examined on behalf of the Opposite Parties:

RW1: Sri. Harish Srivatsa L, G.P.A. holder of the Opposite Party No.1.

Documents produced on behalf of the Opposite Parties:

Doc.No.1: Copy of the agreement.

Dated: 28.11.2016                                    PRESIDENT