Chandigarh

StateCommission

A/192/2023

DR. RACHNA ARORA - Complainant(s)

Versus

AXIS BANK LTD - Opp.Party(s)

RANJAN ARORA

13 Sep 2024

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Appeal No.	:	192 of 2023
Date of Institution	:	08.08.2023
Date of Decision	:	13.09.2024

 

 

 

 

 

Dr. Rachna Arora, Aged about 47 years, wife of Dr. Ashish Puri D/o Shri H.C. Lal, presently resident of H. No.95, Sector 9, Panchkula (Haryana)-134109.

Second Address:

C/o Flat No.106, Block-B, First Floor, Regalia Towers, Dhakauli, near Gurudwara Baouli Sahib, Zirakpur, District Mohali, Punjab 160104.

…..Appellant/Complainant.

Versus

1]       Axis Bank Ltd., through its Managing Director-cum-Chief Executive Officer, Registered office: “Trishul”, 3rd floor, Opp. Samartheshwar Temple, Near Law Garden, Ellisbridge, Ahmedabad (Gujrat) -380006.

2]       The Managing Director-cum-Chief Executive Officer, Axis Bank Ltd. Registered office: “Trishul”, 3rd floor,   Opp. Samartheshwar Temple, Near Law Garden, Ellisbridge, Ahmedabad (Gujarat) 380006.

3]       Ms. Megha alias Kamalpreet Ahluwaia, The Centre operations Head-cum-Manager, Axis Bank Ltd., Retail Asset Centre (RAC), SCO No.350-352, Sector 34-A, Chandigarh.

….Respondents/Opposite Parties.

 

BEFORE:     JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                   MR. RAJESH K. ARYA, MEMBER

 

ARGUED BY :-      

Sh. Ranjan Arora, Advocate for the appellant.

Sh. Ammish Goel, Advocate for the respondents.  

 

PER  RAJESH  K.  ARYA, MEMBER

                   The complainant – Dr. Rachna Arora has filed the instant appeal for modification of order dated 25.05.2023 passed by District Consumer Disputes Redressal Commission-I, U.T., Chandigarh (in short ‘District Commission), vide which, her consumer complaint No.303 of 2019 has been partly allowed by directing the opposite parties (respondents herein) as under:-

“11. In view of the above discussion, the present consumer complaint partly succeeds and the same is accordingly partly allowed. OPs are directed as under:-

1. To issue  NOC to the complainant if already not issued in respect of the loan in question  alongwith all the blank cheques/documents  taken from him at the time of sanction of loan.
2. To issue a fresh statement of loan account by accounting of deposited amount from the next date of deposits  and refund the excess amount so worked out with interest @9% p.a.  from the date of filing of the complaint till realization.
3. To pay compensation of Rs.25000/- for  causing mental agony and harassment to him;
4. to pay 10000/- to the complainant as costs of litigation.

12.     This order be complied with by the OPs within thirty days from the date of receipt of its certified copy, failing which, they shall make the payment of the amounts mentioned at Sr.No.(ii) & (iii) above, with interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(i)&(iv) above.”

2]                The brief facts as narrated by the District Commission in its order are as under:-

“Briefly stated the complainant availed home loan of Rs.14,25,00/- from the OPs bank, which was got foreclosed by the complainant on 5.5.2017 by depositing the balance amount of Rs.3,48,765/-. Earlier also an amount of Rs.1,20,000/- was also deposited by the complainant on 22.3.2017 but the same was credited to the loan account on 3.4.2017 though the complainant was having sufficient funds in his account.  Further an amount of  Rs.7,20,000/- was deposited by the complainant on 16.2.2017  towards the part payment of the loan in question but again the same was credited in the loan account of the complainant on 21.2.2017 though there were sufficient funds in the account of the complainant.  The allegation of the complainant is that despite the fact that he deposited  the amount of Rs.3,48,765/-  with the OPs on 2.5.2017 for foreclosure of loan but the same was shown as received on 5.5.2017 and credit in loan account on 18.5.2017 despite sufficient fund in the account of the complainant and  thereby the OPs  illegally deducted EMI of Rs.6,199/- on 10.5.2017. Even earlier on 10.4.2017 an amount of Rs.6.199/- was also deducted as EMI instead of Rs.4,614/-  being revised EMI after part pre-payment of the loan. The excess amount of Rs.1,585/- was not refunded by the OPs. It is alleged that despite of payment of loan in full and final the property documents and cheques and NOC was not issued by the OPs.  The OPs were requested several times to redress the grievance of the complainant and even legal notice was sent but to no avail. Alleging the aforesaid act of Opposite Parties deficiency in service and unfair trade practice on their part, this complaint has been filed

2.       The Opposite Parties in their reply while admitting the factual matrix of the case stated that the due date of installment of the loan was 10th of every month whereas the complainant deposited  an amount of Rs.3,48,765/- in her account on 4.5.2017  which was credited to her account on 8.5.2017, however, by that time the account had not been closed by the OPs as per stand (Turn Around Time) TAT and the due installments had  automatically deducted from the account of the complainant. But when the OPs realized that the account of the complainant had already been closed by paying full and final amount, excess amount deducted by the OPs was credited back in the account of the complainant with immediate effect. Even earlier also the due amount of Rs.6,199/- was deducted from the account of the complainant on 10.4.2017. It is denied that EMI of Rs.6,199/-  was reduced to Rs.4,614/-. Immediately after closure of loan account in question  letter of release of equitable mortgage  and No Objection Certificate  was issued in favour of the complainant on 12.9.2017 which also included original documents which was handed over to the him.. However, despite several requests to collect the blank cheques, the complainant did not turn up to collect the same and the Ops are ready to handover the same as and when he approaches for the said purpose. All other allegations made in the complaint has been denied being wrong.”

3]                Modification of the impugned order has been sought by the appellant on the ground that the District Commission failed to fully and properly consider the evidence presented by the appellant, particularly regarding the improper deductions and adjustments made by the respondents. It has further been stated that these included multiple deductions totaling ₹62,239/-, which were applied only towards interest rather than the principal, despite the regular EMI being ₹15,752/-. It has further been stated that the District Commission overlooked key issues such as the higher than disclosed interest rate, the charging of a processing fee despite a commitment of zero fees, the denial of a 1% loan subsidy as per RBI guidelines, and the illegal deductions and additional payments imposed on the appellant. It has further been stated that the District Commission did not address the taking of a blank signed cheque for insurance against the appellant’s wishes, the forced purchase of a life insurance policy and credit card and the failure to return two original payment receipts that could impact future disputes with the builder. It has further been stated that despite the Appellant’s multiple visits and requests to review the original visitors and attendance registers, these documents were not produced by the respondents, leading to continued mental agony and harassment for the appellant since 2017. The appellant also filed her written arguments to support her case.

4]                On the other hand, the respondents also filed their detailed written arguments stating that the deficiency in service is a condition precedent for awarding compensation etc. whereas in the instant case, in the given circumstances, no deficiency in service has been there on the part of the respondents and thus, awarding compensation of ₹25,000/- on account of deficiency in service is not called for and warranted and moreover, when awarding of compensation without placing on record, the proof of actual loss being suffered by the appellant is arbitrary and illegal. It has further been stated that the District Commission has failed to appreciate that the appellant had neither established by any cogent/material evidence of the alleged loss nor had furnished break up thereof. It has further been stated that there was no deficiency in service on the part of the respondents in view of the circumstances as explained in detail in the written statement filed before District Commission.  It has further been stated that it is crystal clear that the appellant has filed false & frivolous complaint before the District Commission on false allegations without any material on record against the respondents. It has further been stated that the appellant has failed to set out any case for deficiency in service or unfair trade practice against the respondents. Lastly, prayer for dismissal of appeal has been made. 

5]                Before proceeding further, we would like to mention that there is a minor delay of 24 days in filing the present appeal, for condonation whereof, the appellant has also moved a Miscellaneous Application bearing No.602 of 2023. We have gone through the reasoning given in the application for the delay. The reasoning for delay in filing the appeal, given in the application, is duly supported by affidavit of the Counsel for the appellant, dated 25.07.2023. After going through the contents of the application, which is supported by duly sworn affidavit and in view of law settled by Hon’ble Supreme Court of India in Pundlik Jalam Patil Vs. Executive Engineer, Jalgaon Medium Project, (2008) 17 SCC 448 and Basawaraj and Anr. Vs. Special Land Acquisition Officer, (2013) 14 SCC 81, the appellant has shown rational reason for the delay, which has been caused due to bonafide reasons. As such, the delay in filing the appeal is condoned. MA/602/2023 stands disposed of accordingly.

6]                After considering the rival contentions of the Counsels for the parties and going through the impugned order, material available on record and the written arguments of the parties very carefully, we are of the considered view that the appeal is liable to be partly accepted for the reasons to be recorded hereinafter.

7]                Upon thoroughly reviewing the record, it becomes abundantly clear that the appellant’s primary grievance centers around the delayed crediting of payments made towards his loan account by the respondents. This delay in processing payments not only led to the accrual of additional and unnecessary interest charges but also imposed significant financial strain on the appellant, causing her considerable distress. The appellant, who had made diligent efforts to ensure timely deposits of the required amounts into her loan account, found herself at the mercy of the respondents’ inefficiencies and questionable practices. Despite her consistent and timely payments, the respondents failed to credit these amounts to her account either on the same day or the following day after clearance, as would be expected in the normal course of business. This pattern of delayed crediting is not an isolated incident but a recurring issue that significantly impacted the appellant financial situation. The delays in processing these payments represented a systemic failure on the part of the respondents to manage their financial responsibilities effectively. The consequence of these delays was that appellant was unfairly burdened with additional interest charges that could have been avoided, had the payments been credited promptly. This resulted in the appellant facing a higher overall loan cost, contrary to what she had anticipated when agreeing to the loan terms. The financial burden placed upon the appellant by these unnecessary interest charges was compounded by the fact that she had fulfilled her obligations by making timely payments, only to be penalized due to the respondents’ failure to process these payments efficiently.

8]                Furthermore, the situation was exacerbated by the respondents’ failure to issue the necessary No Objection Certificate (NOC) upon the full repayment of the loan. The issuance of NOC is a standard procedure that serves as an official acknowledgment that the borrower has fulfilled all financial obligations related to the loan and it is critical for the borrower to receive this document to clear any future claims on the loan account. The respondents’ refusal or failure to provide this certificate, despite the appellant’s full repayment, was a significant breach of protocol and an indication of their negligence and disregard for customer rights. In addition to the delayed crediting and the failure to issue the NOC, the respondents also failed to return the blank cheques that had been signed by the appellant and left in their possession as a security measure. These cheques, which were meant to be returned upon the full settlement of the loan, remained with the respondents even after the appellant had paid off the entire loan amount. The retention of these cheques without any valid reason was not only an unethical practice but also poses a potential risk to the appellant, as these cheques could be misused or mistakenly processed, leading to further financial complications. The respondents’ refusal to return these cheques, despite the appellant’s requests, reflected a significant lapse in their duty of care and a failure to adhere to standard banking practices.

9]                The respondents have attempted to justify their actions by arguing that when the respondents realized that the account of the appellant had already been closed by paying full and final amount, excess amount deducted by the respondents was credited back in the account of the appellant with immediate effect. This argument does not absolve the respondents of their responsibility to manage customer accounts in a timely and transparent manner. The existence of a cut-off date does not justify the prolonged delays in crediting payments, especially when these delays have a direct and adverse impact on the borrower. The respondents have failed to explain the significant delays in crediting payments that were made well in advance of the cut-off date by the appellant. The documents on record provide clear evidence of these delays, which were not trivial but substantial and have been clearly documented and acknowledged by the respondents themselves. The impact of such delays was significant as it resulted in the accrual of additional interest charges, thereby increasing the financial burden on the appellant. The respondents’ failure to promptly credit these payments was a clear indication of their negligence and lack of concern for the appellant’s financial well-being.

10]              Moreover, it is undisputed that the respondents still hold the blank cheques signed by the appellant, even after the full repayment of the loan. The retention of these cheques is a serious issue, as it represents a breach of trust and a violation of standard banking procedures. The appellant had provided these cheques in good faith, with the understanding that they would be returned upon the settlement of the loan. The respondents’ failure to return these cheques, despite repeated requests from the appellant, is indicative of their disregard for proper financial management and customer care.

11]              Thus, given these facts, it is evident that the respondents engaged in unfair trade practices by delaying the crediting of payments and retaining the appellant’s cheques without any valid justification. Their actions constituted a clear deficiency in service, which forced the appellant to endure significant stress and inconvenience. The appellant, having made every effort to fulfill her financial obligations in a timely manner, was left with no choice but to seek redress from the District Commission due to the respondents’ continued negligence and unethical practices. The respondents’ behavior reflects a blatant disregard for their responsibilities and obligations towards their customers, highlighting a systemic issue within their organization that needs to be addressed.

12]              The failure to provide timely crediting of payments, the refusal to issue the NOC and the retention of the appellant’s cheques were all indicative of a broader pattern of negligence and unfair practices by the respondents. The respondents’ actions in this case have caused considerable financial harm and emotional distress to the appellant, who had trusted them to manage her loan account in a professional and responsible manner. Instead, the appellant was subjected to repeated delays, unjustified charges and a lack of transparency, all of which contributed to an overwhelming sense of frustration and helplessness. The appellant’s decision to bring this matter before the Commission was not made lightly; it was a last resort after all other avenues of resolution had been exhausted. The fact that the respondents’ conduct necessitated such action was a clear indication of their failure to meet even the most basic standards of customer service and financial management.

13]              As regard the claim of the appellant qua the charging of a processing fee of ₹8,427/- despite initial commitment of zero fees and offer of 1% loan subsidy as per RBI guidelines, by one Mr. Amit son of Sh. S. P. Singh, who was the authorized official of the opposite parties/respondents, it may be stated here that the appellant has failed to establish his claim qua these two alleged commitments/assurances by leading any cogent and convincing documentary evidence. Not only this, sanction letter dated 30.06.2012, Annexure OP-1/2 clearly stipulated that an amount of ₹8,427/- inclusive of service tax would be charged as processing charges and the appellant duly agreed to the same by putting her signatures. Furthermore, with regard to issuance of credit card and insurance, Annexures OP-1/14 & OP-1/15 established the case of the respondents that they never gave credit card or insurance to the appellant as she herself was not interested in getting these facilities. Thus, reliefs sought on these accounts stand rejected.

14]              So far as the relief sought by the appellant with regard to refund of balance amount charged by the respondents as extra rate of interest than the initially committed/agreed one (i.e. charged ROI @10.75 per annum as against the initially agreed ROI @10.25% per annum), it may be stated here that we do not find any wrong in charging of interest by the respondents as the rate of interest was the floating one as in the Schedule appended to the Home Loan Agreement, the Interest Rate is mentioned as 10.75% p.a. Floating (Base Rate plus Markup). Moreover, in the Loan sanction letter also, same rate of interest had been mentioned, which had been acknowledged by the appellant by putting her signatures. Relief sought on this account also stands rejected.

15]              As regards the claim of the appellant qua refund of undue interest charged from her on account of delay in processing the payments, as already observed by us in the earlier part of our order, the delays in processing the payments by the respondents represented a systemic failure on the their part to manage their financial responsibilities effectively and due to these delays, the appellant was unfairly burdened with additional interest charges that could have been avoided had the payments been credited promptly. Thus, the respondents are liable to refund the undue interest charged from the appellant on the amounts of ₹7,20,000/-, ₹1,20,000/- & ₹3,48,765/- for the respective periods of delay in crediting these amounts in the Loan Account of the appellant.

16]              So far as the deduction of EMI of ₹6,199/- on 10.05.2017 by the respondents despite the fact that the cheque of ₹3,48,765/- towards full and final payment to foreclose the loan was already received by the respondents on 08.05.2017, is concerned, we find sufficient force in this claim of her’s as this deduction of EMI of ₹6,199/- was totally illegal on the part of the respondents as they themselves were at fault in crediting the aforesaid cheque in time, as is apparent from the Account Statement, at Pages 164-165 of the record. Thus, the respondents are liable to refund this EMI of ₹6,199/-, which they deducted illegally and arbitrarily.

17]              With regard to the allegation of the appellant qua illegal deduction of the amounts of ₹3,052/- and ₹14,064/- on 14.12.2012 and 18.03.2013 respectively by the respondents, we do not find any force in this claim as it is clearly evident from the statement of account (Annexure OP-1/5) that both the above said amounts had been deposited by the appellant herself through cheques and accordingly the said amounts had been credited by the respondents on respective dates and benefit of the same had been given to the appellant. As such, relief sought qua refund of these amounts stands rejected.

18]              To sum up all, we are of the concerted view that the evidence presented in this case overwhelmingly supported the appellant’s claims of unfair trade practices and deficiency in service by the respondents. In our considered opinion, the compensation awarded by the District Commission seem to be on the lower side and the same also needs to be enhanced adequately to meet the ends of justice.

19]              Thus, the impugned order passed by the District Commission needs to be modified to the extent indicated above.

20]              For the reasons recorded above, this appeal is partly accepted. The impugned order stands modified in the following manner that the respondents/opposite parties are directed as under:-

1. to issue  NOC to the appellant/complainant, if already not issued, in respect of the loan, in question , alongwith all the blank cheques/documents  taken from him at the time of sanction of loan.
2. to issue a fresh statement of loan account by accounting of deposited amounts from the next date of deposits and refund the undue interest charged from the appellant/complainant on the amounts of ₹7,20,000/-, ₹1,20,000/- & ₹3,48,765/- for the respective periods of delay in crediting these amounts in the Loan Account of the appellant/complainant;
3. to refund the EMI of ₹6,199/- to the appellant/complainant, which the respondents wrongly deducted;
4. to pay compensation of ₹35,000/- for  causing mental agony and harassment to the appellant/complainant;
5. to pay ₹20,000/- to the appellant/complainant as costs of litigation.

21]              This order be complied with by the respondents/opposite parties within 30 days from the date of receipt of its certified copy, failing which, they shall make the payment of the amounts mentioned at Sr.No.(ii), (iii), (iv) & (v) above, with interest @9% per annum from the date of this order, till realization, apart from compliance of direction at Sr. No.(i) above.

22]              Pending application(s) if any stands disposed of, accordingly.

23]              Certified copies of this order be sent to the parties free of charge.

24]              File be consigned to the Record Room after completion.

Pronounced.

13.09.2024.

(JUSTICE RAJ SHEKHAR ATTRI)

PRESIDENT

 

 

 

 

(RAJESH K. ARYA)

MEMBER

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