Punjab

Ludhiana

CC/16/38

Amrik Singh - Complainant(s)

Versus

Cholamandalam Ins.&Finance Co. - Opp.Party(s)

Inderpal Singh Adv.

17 Mar 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

 

Consumer Complaint No.38 of 12.01.2016

Date of Decision          :   17.03.2017

 

Amrik Singh, aged 64 years, s/o Sh.Mohar Singh, resident of House no.472-D, Model Town Extension, Ludhiana.

….. Complainant

Versus 

1.Cholamandlam Investment and Finance Company Limited, Dare House, 2, N.S.C.Bose Road, Parrys, Chennai 600001, India through its Managing Director.

2.Cholamandlam Investment and Finance Company Limited, SCO-145, Ground Floor, Feroze Gandhi Market, Ludhiana through its Branch Head.

 

..…Opposite parties

 

 (COMPLAINT U/S 12 OF THE CONSUMER PROTECTION ACT, 1986)

 

QUORUM:

SH.G.K.DHIR, PRESIDENT

SH.PARAM JIT SINGH BEWLI, MEMBER

 

COUNSEL FOR THE PARTIES:

For Complainant              :         Sh.Inderpreet Singh, Advocate      

For Ops                           :         Sh.Rishi Bansal, Advocate

 

PER G.K DHIR, PRESIDENT

 

1.                           Shorn of unnecessary details, the case of the complainant is that he availed financial services by way of Home Equity loan against property from Ops through loan account No.X0HELIN00000498740. On 7.10.2015, amount of Rs.1,58,73,286/- was shown outstanding due as principal amount. Net payable amount on that date shown as Rs.1,69,88,922.93P. Rs.7,23,821.44P shown as foreclosure charges in the said amount alleged to be due on 7.10.2015. When the complainant requested for foreclosure of the loan facility, then he was asked to pay pre-payment charges for such foreclosure charges, despite the fact that Reserve Bank of India vide its Circular DNBPS (PD.CC. No.399/03.10.42/2014-15) dated 14.7.2014 has prohibited the Banks to claim such charges. Contents of that circular brought to the notice of Ops, but they remained adamant for levying such charges and as such, complainant had to pay the same under compelling circumstances. Complainant claimed that act of non refunding the amount of Rs.7,23,821.44P got deposited as pre-payment charges is an unfair trade practice, due to which, the complainant suffered mental tension and agony. Prayer therefore, made for directing Ops to refund the amount of Rs.7,23,821.44P with interest @18% per annum. Compensation for mental harassment of Rs.1 lac and litigation expenses of Rs.33,000/- more claimed.

2.                 In joint written statement filed by Ops, it is claimed that OP2 is one of the branches of OP1, a company carrying business of extending financing facility to prospective customers under their various schemes. In order to secure the amount of loan to the customers, an agreement is always executed between the parties for laying the terms and conditions of the contractual obligations. It is claimed that the complainant has not approached this Forum with clean hands because he has suppressed the material facts. In fact, the complainant alone did not avail the loan facility from the Ops. Rather, the complainant along with Mandeep Kaur, M/s Kabir Infra (P) Ltd., as well as Izu Singh jointly applied for loan against property for their business purposes. These persons applied for loan vide application forms number 119709, 119749 and 119710. Loan facility was sanctioned in favour of all above mentioned persons, but the complainant has suppressed these material facts. As loan was availed for business need and as such, the complainant is not a consumer. Besides, the circular referred in the complaint is not applicable to the case in hand. Complaint also alleged to be bad, due to non joinder of necessary parties because all the co-borrowers are not impleaded as party. In view of arbitration clause in the loan agreement, this Forum has no jurisdiction. Circular referred in the complaint applicable to loan sanctioned to individual, but not in respect of loan transaction contracted by the company or by the partnership firms or co-borrowers. Moreover, Reserve Bank of India has not issued guidelines to non banking financial institutions for not charging the foreclosure charges, in case loan taken for commercial or business purposes. OPs took the pre-payment charges as per the terms and conditions of the loan agreement and not in derogation of the circular relied by the complainant. Each and every other allegation of complaint denied by claiming that no unfair trade practice adopted and the complainant has no cause of action.

3                  Complainant to prove his case tendered in evidence his affidavit Ex.C/A along with documents Ex.A1 to Ex.A3 and thereafter, closed the evidence.

4.                 On the other hand, counsel for OPs tendered in evidence affidavit Ex.RA of Sh.Vikas Manchanda, Deputy Manager-Legal along with documents Ex.R1 to Ex.R7 and then closed the evidence.

5.                 Written arguments not submitted by any of the parties. Oral arguments alone addressed and those were heard. Records gone through minutely. 

6.                 Contracting of loan amount of more than  Rs.1 crore is an admitted fact. Ex.A2 is the statement showing as if foreclosure charges of Rs.7,23,821.44P claimed by the Ops from the complainant along with principal amount of Rs.1,58,73,286/-. No due certificate Ex.A3 was issued in respect of the loan in question by sending intimation to the complainant Sh.Amrik Singh. So, virtually Home Equity Loan account was closed on 7.10.2015, but this complaint is filed on 12.01.2016. Virtually the contractual obligation of payment or of recovery came an end with issue of No Due certificate Ex.A3 of date 23.10.2015 and as such, complainant ceased to be a consumer with effect from this date.

7.                 The purpose of contracting loan is not mentioned in the complaint or in the documents produced by the complainant, but the same is disclosed by the contents of agreement Ex.R5. This agreement is signed not only by the complainant Amrik Singh, but by Mandeep Kaur and also bear the stamp of Kabir Infra Pvt. Ltd. Virtually, contractual obligations through Ex.R5 were undertaken not only by the complainant, but by Mandeep Kaur as well as Kabir Infra Pvt. Ltd. However, despite that Mandeep Kaur and Kabir Infra Pvt. Ltd. not impleaded as party and as such, the complaint is bad due to non joinder of necessary parties. As per law laid down in case of ICICI Home Finance Company Limited vs. Bhim Sen Lekhra-2016(3)CLT-554(N.C.), in case applicants obtained loan by signing loan agreement, but the complaint filed by a single complainant without impleading the other co-applicants, then complaint being bad due to non joinder of necessary parties is not maintainable. Ratio of this case is fully applicable to the facts of the present because here co-applicants/co-borrowers namely Mandeep Kaur and Kabir Infra Pvt Ltd not impleaded as party and as such, complaint deserves to be dismissed on this ground also.

7.                 Perusal of page no.21 of Ex.R5 reveals that loan of Rs.2 crore was availed for business need. So, virtually loan was contracted in connection with commercial business venture. As and when services availed for commercial purposes, then complainant concerned will not be a consumer, particularly when it is not impleaded that business is run for earning livelihood by means of self employment. In holding this view, we are fortified by law laid down in case titled as Mahesh Kumar vs. Shubhanker Marketing Pvt. Ltd. and others-2016(2)CLT-552(N.C.). Perusal of ratio of above cited case reveals that when complainant claims to have been engaged in the business, but without impleading that said business carried by means of self employment exclusively for earning livelihood, then complainant concerned will not be a consumer. Same is the position in the case before us because here nowhere in the complaint, it is mentioned that the loan contracted for business need was for running business for earning livelihood by means of self employment.So,complainant is not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act, 1986.

8.                 Besides, after going through circular Ex.A1 relied upon by the complainant, it is made out that foreclosure charges/prepayment penalty not recoverable in respect of floating rate term loan sanctioned to individual borrowers only. However, the loan in question as disclosed by contents of Ex.R5 was not got sanctioned by an individual borrower, but by group of borrowers consisting of a firm known as Kabir Infra Pvt. Ltd. So, one of the necessary ingredients of Ex.A1 qua applicability of circular to individual borrower is missing in this case and as such, charging of foreclosure charges is not an act of unfair trade practice. So, looking from any angle, complaint is not maintainable, particularly when contents of Ex.R5 even establishes that loan was availed not for individual need.

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

10.               File be indexed and consigned to record room.

 

                       (Param Jit Singh Bewli)                          (G.K.Dhir)

                                  Member                                          President

Announced in Open Forum

Dated:17.03.2017

Gurpreet Sharma.