Complainant through Adv. Shri. Kasabekar
Opponent through Adv. Halade
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Per : Mr. V. P. Utpat, President Place : PUNE
// J U D G M E N T //
(29/05/2013)
This complaint is filed by private limited company against finance company for deficiency in service under section 12 of the Consumer Protection Act, 1986. The brief facts are as follows,
1] The complainant is a leading consultancy firm engaged in research and development activities. It had obtained loan from the opponent worth of Rs. 4,37,00,000/-. The said loan was sanctioned on 29/7/2009. The tenure of the loan was 15 years. Floating rate of interest for the loan was 17% p.a. and the EMI was fixed as Rs. 5,67,365/- per month. The opponent had further sanctioned loans to the complainant on 30/8/2009 Rs. 1,78,30,645/- and on 8/2/2010 Rs. 1,71,31,825/-, total sanction of loan was Rs. 3,49,62,470/-. The opponent informed the complainant on 23/4/2011 that the loan proposal of the complainant is kept on hold. But the opponent failed to abide its promise; hence complainant had sustained substantial loss.
On 4/5/2011, the opponent levied 2% pre-payment charges on outstanding principal amount of Rs. 3,38,69,486/- i.e. to the tune of Rs. 6,77,389/-. The complainant proposed to pre pay the said loan prior to the agreed date of repayment. Accordingly the complainant had paid loan amount before due date. Hence the opponent recovered an amount of Rs. 6,77,389.72 as the pre-payment charges. The opponent has illegally recovered that amount, which amounts to deficiency in service. The complainant has prayed for refund of the amount, which is illegally recovered, Rs. 1,00,000/- towards financial loss, Rs. 2,50,000/- for mental torture and harassment, Rs. 10,000/- for miscellaneous charges.
The complainant has also asked interest @ 18% p.a. on the above mentioned amount.
2] The opponent appeared in the Forum and resisted the complaint by filing written say. According to the opponent, the complaint is not maintainable, as the complainant is not ‘consumer’ as per the definition under section 2(1)(d) of the Consumer Protection Act, 1986. It is further contended that, as per loan agreement, there is clause as regards pre-payment charges. The said clause is also referred in sanctioned letter and complainant agreed to pay 2% pre-payment charges. In such circumstances, there is no deficiency in service. The complainant has suppressed this material fact. The opponent has prayed for dismissal of the complaint.
3] After scrutinizing the documentary evidence, which is produced before this Forum, hearing the arguments, as well as perusing written arguments of both the parties and considering pleadings, the following points arise for my determination. The points, findings and the reasons thereon are as follows-
Sr.No. | POINTS | FINDINGS |
1. | Whether complainant has proved that there is deficiency in service due to recovery of pre-payment charges? | In the negative |
2. | What order? | Complaint is dismissed |
REASONS :-
4] The learned Advocate for the complainant argued before me that the opponent has caused deficiency in service by recovering pre-payment charges of due amount, as loan amount is paid before due date and that amounts to deficiency in service. Per contra, the opponent has brought to my notice that the complainant is a company, who had entered into an agreement with the opponent and candidly agreed the terms and conditions of the loan agreement, in which there is specific clause as regards payment of 2% penalty i.e. pre-payment charges on principal amount, which is outstanding, if the amount is paid before due date.
It is significant to note that, the banking company as well as financial institutes have their own economics and these institutes are using the public money for said business. If the financial institutes have expectations that, it will get handsome interest by financing the borrower and if the borrower had suddenly repay the loan amount, the financial
institute suffered loss of that interest. The learned Advocate for the complainant had not brought to my notice that levying of pre-payment charges is illegal and unconstitutional. After considering the principles of banking jurisprudence, these pre-payment charges are held to be legal one, as the financial institutes are doing business for profit. These institutes have made investment for infrastructure, for salary of the employees and they have to meet out the expenses of their business, hence it can not be said that the recovery of pre-payment charges is illegal concept. It is significant to note that the complainant had repaid the loan amount from borrowing some another institute. It is not brought on record that the complainants have repaid the loan amount from their own funds. Moreover, the complainants are dealing in the business of Consulting and Marketing and the present loan transaction is not regarding housing loan. In such circumstances, I held that charging of pre-payment charges does not amount to deficiency in service. All the forms of loan are in English language and the complainant has signed and accepted the terms and conditions of the loan agreement. The complainant has also accepted sanctioned letter, in which there is specific reference of pre-payment charges. In such circumstances, I held that the complainant has failed to prove that there is deficiency in service and the complainant is not entitled for compensation as well as refund of the pre-payment charges. In the
result, I answer the points accordingly and pass the following order,
** ORDER **
1. The complaint is dismissed, there is
no order as to the costs.
2. Copy of the order be supplied to both
The parties free of cost.
