Punjab

Ludhiana

CC/15/685

Sat Pal Duggal - Complainant(s)

Versus

Capri Global Capital Ltd - Opp.Party(s)

Inderpreet Singh Adv.

31 Aug 2016

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

 

Consumer Complaint No. 685 of 27.11.2015

Date of Decision            :   31.08.2016

 

Sat Pal Duggal, Prop. M/s Duggal Traders, St.No.8, New Madhopuri, Ludhiana.

 

….. Complainant

                                                         Versus

 

1.Capri Global Capital Limited, Corporate Office 4^th Floor, Merchant Chambers, 41, Sir Virthaldas Thackersey Marg, New Marine Lines, Mumbai-400020, through its Managing Director.

 2.Capri Global Capital Limited, SCO 16-17, 3^rd Floor, Opp. Stock Exchange, Feroze Gandhi Market, Ludhiana, through its District Head.

 

…Opposite parties

 

 

          (Complaint U/s 12 of the Consumer Protection Act, 1986)

 

 

QUORUM:

SH.G.K.DHIR, PRESIDENT

SH.KARNAIL SINGH, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainants                    :        Sh.Inderpreet Singh Tara, Advocate

For OPs                         :        Sh.Kamaljit Sharma, Advocate

 

PER G.K.DHIR, PRESIDENT

 

1.                Complainant claims to have availed loan against property from the OPs with loan account No.LNCGCLUDTL0000002455. Rs.80,35,965.22P was availed as principal amount, but the net payable amount was Rs.83,26,712.22P. Out of this, amount of Rs.2,74,831/- was foreclosure charges. In October 2015, when the complainant submitted request for the foreclosure of his loan facility, then he was asked to pay pre-payment charges/foreclosure charges, despite the fact that same is not payable as per Circular DNBPS(PD.CC.No.399/03.10.42/2014-15) dated 14.7.2014 of Reserve Bank of India . That circular was brought to the notice of OPs, but they remained adamant in levying pre-payment charges, due to which, Rs.2,74,831/- had to paid by the complainant on 19.10.2015. Refund of that amount of Rs.2,74,831/- with interest @18% per annum sought by claiming that OPs are guilty of unfair trade practice. Compensation for mental harassment and agony of Rs.1 lac along with litigation expenses of Rs.33,000/- more claimed.

2.                In the written statement filed by OPs, it is pleaded interalia as if the complaint is not maintainable being filed for building up pressure on OPs; complainant has no cause of action to file the complaint because there is no deficiency in service on the part of OPs; this Forum has no jurisdiction with regard to the commercial transaction entered by complainant firm with OPs. A settlement letter was issued in favour of the complainant, which was duly acknowledged by him qua payment of foreclosure charges. Besides, it is claimed that foreclosure charges were levied as per the terms and conditions of the contract agreement signed by the complainant. Benefit of RBI Circular not available to the complainant because the loan was contracted in the name of firm against mortgaged property. All the terms and conditions were signed by the complainant at the time of contracting loan and as such, he gave consent for charging the foreclosure charges. It is denied that the complainant is a   consumer. Admittedly, the complainant firm has been depositing all the dues as per the terms of the loan agreement. Those deposits were made without raising any objection at that time. As firm M/s Duggal Traders availed the loan and closed the account by depositing all dues and as such, benefit of alleged RBI circular is not available to the complainant. Each and every other averment  and   allegation levelled in the complaint denied.

3.                Complainant to prove his case tendered in evidence his affidavit Ex.CA along with documents Ex.A1 to Ex.A4 and then closed the evidence.

4.                On the other hand, counsel for OPs tendered in evidence affidavit Ex.RA of Sh.Joginder Singh, Manager of OPs along with documents Ex.R1 to Ex.R4 and thereafter, closed the evidence.

5.                          Written arguments submitted by complainant alone, but not by the OPs. Oral arguments of counsel for the parties heard and records gone through minutely. 

6.                It is vehemently contended by counsel for the complainant that M/s Duggal Traders is not a partnership firm, but is a proprietorship concern, due to which, the same comes under the purview of individual borrower category,   due to which, benefit of RBI circular is available to the complainant. It is claimed that Rajan Duggal and Amit Duggal were made co-applicants only for securing the rights of the OPs qua recovery of advanced loan or for ensuring that they may not raise any sort of family dispute  qua                          processing of recovery, if any, by OPs. Rather, it is claimed that signatures for Duggal Traders and stamps of Duggal Tradrs on the documents were signed by the complainant Sh.Sat Pal Duggal and as such, complainant falls under the category of individual borrower. All these submissions advanced by counsel for the complainant has no force because after going through loan application form Ex.R1, it is made out that loan was contracted for manufacturing Garments with investment in plant and machinery in the limit of Rs.5 crore to Rs.10 crore. This fact is borne from the last page of loan application form Ex.R1. Besides, the loan application from Ex.R1 was filed for contracting loan of Rs.100 lac by mentioning the name of applicant as M/ Duggal Traders carrying on the business of Garments and Trading of Knitting clothes. Stamps of Dugal Traders are there on this application form, on which signatures of Sat Pal Duggal obtained as proprietor. So, loan was contracted by Sat Pal Duggal as proprietor of M/s Duggal Traders. Even if this loan was contracted by proprietor Sat Pal Duggal of M/s Duggal Traders, but despite that the same was contracted for augmenting the business of garments of trade of knitting clothes and as such, certainly this huge loan amount of Rs.85 lac contracted for commercial purpose.

7.                Consent letter Ex.R2 discloses as if the application for MSME Term Loan was filed by Sh.Sat Pal Duggal, Sh.Rajan Duggal and Sh.Amit Duggal. Loan of Rs.85 lac was sanctioned under MSME Term Loan against property. On Google Internet Search, it is made out that MSME Term Loan always availed for augmenting the enterprises working capital gap and to help in implement of current ratio and also for meeting the genuine business requirements. Further as per that search on Google internet, the facility also      available for repayment of secured or unsecured loan of banks, but not for any purpose, which is not related to the enterprises activities. Micro, Small and Medium enterprises as per regulatory definition with annual sale turn over at Rs.10 lakh to 5 crore falls in the category of enterprises groups, who can avail loan under this SME Medium Term Loan. In view of this, it is obvious that virtually loan application form Ex.R1 was submitted by M/s Duggal Enterprises through proprietor Sh.Sat Pal Duggal along with co-borrowers Sh.Amit Duggal and Sh.Rajan Duggal for availing short term medium loan of Rs.85 lac for augmenting the business of Duggal Traders Enterprises. So, it falls under the definition of commercial loan.

8.                In consent letter Ex.R2 itself it is mentioned that part pre-payment can be made only after 6 months from the date of full disbursement, but all part prepayments made 12 months prior to the full payment of the loan will be charged at the applicable full prepayment rate at the time of prepayment. This last page of sanction letter Ex.R2 is signed by Sh.Sat Pal Duggal, Sh.Amit Duggal and Sh.Rajan Duggal. So, virtually terms and conditions for pre-payment charges were accepted by the complainant and co-borrowers, while availing short term medium loan for augmenting the business of trading of knitting clothes or of garments. So, loan in question certainly does not fall in the category of loan as availed by individual borrower.

9.                After going through para no.2 of Circular Ex.R4=Ex.A4 of Reserve Bank of India dated 14.7.2014, it is made out that foreclosure charges/prepayment penalties on floating rate term loans sanctioned in favour of individual borrowers not leviable. Loan in case in hand was not availed by individual borrower, but by M/s Duggal Traders for augmenting the business of enterprises and as such, submissions advanced by counsel for the complainant has no force that loan was contracted by individual borrower.

10.              As and when the services of financial institutions or of any other institution availed in relation to commercial purpose or in connection with business transaction, then consumer complaint is not maintainable because the concerned borrower will not be a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986. In holding this view, we are fortified by law laid down in cases titled as The Branch Manager, Punjab National Bank vs. M/s Bhasker Textile-2015(1)CLT-89(N.C.); Birla Technologies Limited vs. Neutral Glass and Allied Industries Limited-(2011)1-Supreme Court Cases-525; Nikita Cares vs. Surya Palace-IV(2015)CPJ-405(N.C.) and Pharos Solution Pvt. Ltd. and  others vs. Tata Motors Limited, Bombay House-2015(IV)CLT-265(N.C). Ratio of all these cases is fully applicable to the facts of the present case because loan in question availed for commercial purpose or for augmenting the business.

11.              There is no plea taken in the complaint or in the affidavit of complainant that loan was contracted for earning livelihood by means of self employment and as such, in absence of pleadings and proof in that respect also, the produced documentary evidence as discussed in detail above, enough to hold that loan was contracted for commercial purpose for augmenting the business of Duggal Traders. Being so, complainant does not fall under the definition of consumer and even there is no deficiency in service on the part of OPs because levying of pre-payment charges permissible as per terms of Ex.R2 as discussed in detail above.

12.              Therefore, as a sequel of the above discussion, the present complaint dismissed without any order as to costs. Copies of order be supplied to the parties free of costs as per rules.

13.                        File be indexed and consigned to record room.

 

                                      (Karnail Singh)               (G.K.Dhir)

                              Member                            President

Announced in Open Forum

Dated:31.08.2016

Gurpreet Sharma.