DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-II

Udyog Sadan, C-22 & 23, Qutub Institutional Area

(Behind Qutub Hotel), New Delhi- 110016

Case No. 191/2019

Sh. Bijender Singh

S/o Ram Singh

H. No. 60, Harkesh Nagar,

Near Shiv Mandir, Tilpat, Amarnagar,

Faridabad, Haryana-121003

….Complainant

Versus

AU Small Finance Bank Ltd.

F-4, Ground Floor, East of Kailash

New Delhi-110065

        ….Opposite Party

 Date of Institution    : 08.07.2019      

 Date of Order            : 28.01.2023      

Coram:

Ms. Monika A Srivastava, President

Ms. Kiran Kaushal, Member

Sh. U.K. Tyagi, Member

ORDER

Member: Sh. U.K. Tyagi

1. Complainant has requested to pass an award directing A.U. Small Finance Bank Ltd. (hereinafter referred to as OP) (i) to return Rs. 20259/- with interest @ 18 % p.a. from the date of deductions till the payment of the same; (ii) to charge rate of interest @ 13 % p.a. as promised by the official of Bank;

(iii) to pay interest on the sum of Rs. 5 lac which was released belatedly;

(iv) to take necessary legal action against the delinquent officials of OP for its unfair trade practices & forgery etc;

(v) to pay Rs. one lac towards compensation for mental agony/harassment/legal expenses etc.

2. Brief facts of the case are as under:-

The complainant had applied for loan of Rs. 10 lac for business/personal need on 10.02.2019. In response to the same, he was intimated about approval of loan & its EMI as Rs. 1500/- on 03.03.2019. The complainant was sent message on 09.03.2019 for intimating the sanction of loan amount to the tune of Rs. 10,00,000/-. It was alleged that soon after  03.03.2019, the OP deducted first EMI from his account whereas no loan was credited to his account by this time. The first installment of the loan amount of Rs. 4,47,000/- was credited on 03.04.2019. Copy of whats app message for demanding Rs. 1500/- is enclosed as Annexure- CW. The 2^nd installment of loan amount of Rs. 4 lac was received on 11.04.2019 and last installment of said loan amounting of Rs. one lac was received on 15.04.2019. As such, total amount of loan was received by the complainant was 9,47,000/- and Rs. 53000/- was deducted by the OP in the name of property & fire insurance and processing fees, etc. The complainant further alleged that at the time of initial negotiation for the loan, it was agreed to charge Rate of interest @ 13 % p.a. and Rs. 5900/- was to be charged for loan document. He further alleged that the complainant was forced to give Rs. 20259/- as documentation charges in the Bank A/Cs of these officials/middle men of OP. It was alleged that the sanction letter was made available to him only on 09.03.2019 not on 28.02.2019 as maintained by OP. The said agreement was negotiated on 27.02.2019. The OP forged and fabricated the documents and necessary action should be taken against them under IPC. All these incidents indicate the unfair trade practices as defined under the provision of Consumer Protection Act 2019. Hence the complaint.

3. OP, on other hand, filed its written statement interalia raising some preliminary objections. The complainant should have invoked the provision of Arbitration Agreement made between the parties. It was further exhorted that there is no deficiency in service on the part of OP. The OP also mentioned the loan agreement. The amount of loan was shown Rs. 10,00,000/- @ 18% p.a. for the tenure of 120 months for which EMI payable was Rs. 18019/- copy of the loan agreement is enclosed at Annexure-D/1 for perusal. It was noticed that the OP vide its reply asked the complainant to put the documents of alleged averments of made by him on strict proof. The OP also maintained that the loan agreement was sanctioned on 28.02.2019 and loan account began from the same date too. And EMI started on 03.03.2019 as per reply of OP. Schedule I & II which were duly signed by the complainants.
4. Both the parties filed evidence in affidavit. Written statement is filed so is rejoinder. The OP filed written submission whereas the complainant did not wish to file written arguments as recorded by the Commission. Oral arguments were heard and concluded.
5. This Commission has gone into the records available. Due consideration was given to the arguments. It was noted that Loan Application Form & Loan Agreement are duly signed by complainant & his wife i.e. Ranjana. Schedule I & II attached with loan agreement were also signed by both loanees. Loan amount, EMI-amount, rate of interest, tenure of loan, date of commencement of EMI etc. find mention clearly in these documents. As such, the contention of the complainant for rate of interest, negotiations between the officials of OP & complainant does not hold good. As regards to payment at various occasion by the complainant to the officials of OP  middle man the same was not supported by the Bank Statement of the other parties or deposition slips vide which these amount were deposited by the complainant in the accounts of the officials of OP/middlemen. Hence it may not be possible for this Commission to place reliance on his statement.
6. During the arguments, the attention of the Commission was drawn to the fact that the loan was not disbursed in one go rather it was paid in three installments on following date:-

7. As such total loan amount of Rs. 447,000/- disbursed to the complainant. Rs. 53000/- was deducted from loan amount in the name of insurance and processing fee. The OP has enclosed the said letter alongwith Schedule-I & II at Annexure-D/2 which indicates the processing fee to the tune of Rs. 23600/-. The I^st EMI to be charged on 03.04.2019 whereas last installment of loan amount was disbursed on 15.04.2019. The equated monthly installment is based on the entire  period i.e. total tenure i.e. 120. The EMI was deducted before the disbursement of total loan. The terms and condition of loan has been fixed by the OP-Bank. Prima facie, the same seems to be biased against the loanee. The complainant has alleged the unfair trade practice/mal practice in the above mentioned contentions.
8. As per provision of unfair trade practice as contained in Consumer Protection Act-2019, a trade practice which falls within the scope of ‘unfair method’ ‘unfair practice’ or deceptive Practice’ will be an unfair tractice. However, these terms have not been defined in the said Act and the list so provided in said Act are merely statutory illustration of unfair trade practice and are not exhaustive.

In nutshell, this Commission finds the following as unfair trade practices:-

1. The deduction of EMI before the disbursement of entire loan amount as EMI are based on total nos of days of loan.

2. Processing fee charged by the OP seems to be very high.

The OP Bank has not adduced any evidences or directions of the RBI on the charges of processing of the loan and deduction of EMI before the disbursement of entire loan amount.

In view of above, this Commission is of the strong view that the OP is found short of obligation and deficient in services. Accordingly OP is directed (i) to return Rs. 20,000/- which was charged as processing fee alongwith Rate of interest @ 9% p.a. from the date of deduction till realization as the fees of Rs. 23,600/- seems too high. The OP has not produced any guidelines from RBI for charging fee at such a high rate.

3. The loan amount of Rs. 500,000/- was disbursed belatedly so interest @ 18% for one month be given to complainant  as OP has charged interest @ 18% p.a.  
4. As regards to rate of interest, the loan agreement is signed by both the loanee as rate of interest @ 18% finds mentioned in these documents.
5. Rs. 10,000/- may be disbursed as compensation towards litigation charges and mental agony/harassment etc.
6. The return of Rs. 20,259/- is not found supported by evidences. Hence this prayer is rejected.

The OP is directed to make the above payment within three months failing which rate of interest @ 9% p.a.  additionally shall be levied till its realization.

Parties to be provided copy of order as per rules. File be consigned to the record room. Order be uploaded on the website.