BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MYSORE-570023

CONSUMER COMPLAINT NO.228/2017

DATED ON THIS THE 8^th June 2018

      Present:  1) Sri. H.M.Shivakumara Swamy

B.A., LLB., - PRESIDENT   

                     2) Sri. Devakumar.M.C.                  

                                                B.E., LLB., PGDCLP   - MEMBER

Sri. Devakumar,M.C.

Member

1.     The complainant filed the complaint under section 12 of the C.P.Act 1986, against the opposite parties, alleging deficiency in service and unfair trade practice and seeking direction to refund the pre-closure charges of Rs.9,44,248/- collected by them along with interest at 24% p.a. till the date of realization, and to pay damages of Rs.1,00,000/- for the mental agony with such other reliefs.
2.     The complainant availed loan from opposite party No.2, branch of opposite party No.1, on 30.11.2016, with floating rate of interest and subject to the terms and conditions.  The EMI being paid since 02.01.2017.  During May 2017, decided to pre-close the loan account by payment of the balance loan amount.  The opposite party No.2 levied pre-closure charges.  Collection of pre-closure charges in spite of directions from the National Housing Board has been alleged as deficiency in service and unfair trade practice and filed the complaint seeking reliefs.
3.     The opposite party Nos.1 and 2 filed common version, denying the allegations and admitted the issue of loan on floating rate of interest for a term of 180 months from the date of sanction of the loan.  The said loan stands closed on payment of balance loan amount with fore-closure of Rs.9,44,248/-, as per the terms and conditions of the loan agreement and also as per the regulation of NBFCs, as the complainant availed loan on fixed rate of interest.  Thereby, the allegation is denied as false and the complainant is not entitled for any reliefs.  As such prays for dismissal of the complaint with costs.
4.     To prove the facts both parties led evidence by filing affidavit and relied on documents.  Written arguments filed.  Heard the complainant counsel.  The opposite party counsel not addressed the arguments.  Perused the material and posted for orders.
5.    The points arose for our consideration are:-

1. Whether the complainant establishes the deficiency in service and unfair trade practice by opposite parties, for collecting pre-closure charges of the loan account and thereby he is entitled for the relief sought?
2.  What order?

6.    Our findings on the aforesaid points are as follows:

Point No.1 :- Partly in the affirmative.

Point No.2 :- As per final order for the following

:: R E A S O N S ::

7.    Point No.1:- The complainant availed loan of a sum of Rs.2,08,00,000/- from opposite party No.2, the branch office of opposite party No.1 on 30.11.2016, by executing loan agreement with floating rate of interest and to repay the same in 180 EMIs.  The EMI amount was paid regularly and during May 2017 decided to pre-close the loan account by payment of the entire balance amount.
8.    The opposite party No.2 demanded a sum of Rs.9,44,248/- towards pre-closure charges and the same has been paid under protest.  The complainant alleged the levy of the pre-closure charges as opposed to the directions issued by the National Housing Board.  Hence, the complaint and sought for the reliefs.
9.    The opposite party admitted the sanction of loan subject to terms and conditions.  It is contended that the complainant was sanctioned the loan at “fixed rate of interest” and as NHB guidelines only they levied the pre-closure charges on balance loan amount.  As such the allegations are denied and prays for dismissal of the complaint. 
10. On perusal of the pleadings, affidavit and the documents placed on record and also the loan sanction document, the complainant availed the individual loan of Rs.2,08,00,000/- for a term of 180 months and agreed to pay the interest at ‘Floating rate”.  The EMI was fixed at Rs.2,14,072/-.  The document clearly established that there is no pre-closure charges for an individual, who avail loan at “Floating rate” of interest.  In view of the same, the demand and levy of fore-closure charges from the complainant is held as unjustified.  As such, the opposite parties are liable to refund the pre-closure charges collected from the complainant, with interest and also liable to pay compensation for the deficiency in service and unfair trade practice.  Accordingly, the point No.1 is answered partly in the affirmative.   
11. Point No.2:- In view of the observations made in point No.1, the opposite parties jointly and severally liable to refund the pre-closure charges collected from the complainant with interest at 18% p.a. and also liable to pay compensation.  Hence, the following :-

:: O R D E R ::

1. The complaint is allowed in part.
2. The opposite parties jointly and severally hereby directed to refund the entire pre-closure collected (i.e. Rs.9,44,248/-) with interest at 18% p.a. from the date of complaint i.e. 26.07.2017 in respect of the loan account, to the complainant, within 60 days of this order. In default to comply, to pay penalty of Rs.100/- per day until compliance.
3. The opposite parties jointly and severally directed to pay compensation of Rs.3,000/- for the deficiency in service and unfair trade practice and Rs.2,000/- damages for the mental agony and inconvenience and Rs.2,000/- towards litigation expenses to the complainant, within 60 days of this order.  Failing to pay, shall pay interest at 12% p.a. on the total sum of Rs.7,000/-, till payment made. 
4. In case of default to comply this order, the opposite parties to undergo imprisonment and also liable for fine under section 27 of the C.P.Act, 1986.
5. Give the copies of this order to the parties, as per Rules.

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