Chandigarh

DF-I

CC/899/2016

Satnam Kaur - Complainant(s)

Versus

Cholamandalam Investment and Finance Co. Ltd. - Opp.Party(s)

P.S. Khurana

05 Jul 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

============

Consumer Complaint  No	:	CC/899/2016
Date  of  Institution	:	04/10/2016
Date   of   Decision	:	05/07/2017

 

 

 

 

 

Satnam Kaur w/o Sh. Kanwaljit Singh Mahal, R/o H.No.87, Phase-7, S.A.s. Nagar, Mohali.

….Complainant

 

Vs.

 

[1]  Cholamandalam Investment & Finance Co. Ltd., Home Equity, SCO 2423-2424, Sector 22-C, Chandigarh, through its Authorized Signatory.

 

[2]  Cholamandalam Investment & Finance Co. Ltd., Dare House, 2, N.S.C. Bose Road, Parrys, Chennai 600001, India, through its Authorized Signatory.

 

…… Opposite Parties 

 

 

BEFORE:   MRS.SURJEET KAUR             PRESIDING MEMBER

          SH. SURESH KUMAR SARDANA     MEMBER

 

For Complainant	:	Sh. Manjot Singh Mahal, Advocate.
For Opposite Parties	:	Sh. Aman Singla, Advocate.

 

PER SURESH KUMAR SARDANA, MEMBER

 

 

 

          In brief, the Complainant had availed the financial facility by way of Home Equity Loan to the tune of Rs.2 crore from the Opposite Party No.1, pursuant whereof a Loan Agreement was also executed between the Complainant and the Authorized Signatory of Opposite Party No.1. The equated monthly installments on the basis of sanctioned loan was Rs.2,59,053/-. The Complainant started regularly paying the EMIs against the aforesaid loan after the release of the amount. The Complainant decided to foreclose the loan, upon which the Opposite Party No.1 demanded foreclosure charges @4% of the outstanding principle. The Complainant raised the protest qua the foreclosure charges in view of the RBI guidelines. However, finding no positive response from the Opposite Parties and compelled by the circumstances the Complainant had to settle the accounts along with the foreclosure charges. The No Due Certificate was also issued by the Opposite Parties on 07.08.2015. Thereafter, the Complainant raised the demand of refund of foreclosure charges from the Opposite Parties, but to no success. When all the frantic efforts made by the Complainant, failed to fructify, as a measure of last resort, alleging that the aforesaid acts of the Opposite Parties tantamount to deficiency in service and unfair trade practice, the Complainant has filed the instant Complaint u/s 12 of the Consumer Protection Act, 1986, seeking various reliefs. 

 

2.     Notice of the complaint was sent to the Opposite Parties, seeking their version of the case.

 

3.     Opposite Parties in their reply have stated that the Complainant was sanctioned a loan amounting to Rs.2,00,00,000/- for business needs (SME Loan) which was to be paid in 168 monthly installments of Rs.2,59,053/- each. It has been admitted that when the Complainant decided to foreclose the loan, the statement of account was provided to her and foreclosure charges @4% on the outstanding loan was also mentioned. It has been asserted that the RBI has not issued any guidelines to Banking and NBFC’s not to charge foreclosure charges in case the loan is taken for commercial purposes. Therefore, the answering Opposite Parties were justified in charging pre-closure charges which have been charged as per the agreed terms of the loan agreement. Denying all other allegations and stating that there is no deficiency in service on their part, Opposite Parties have prayed for dismissal of the complaint.

 

4.     The Complainant also filed rejoinder to the written statement filed by the Opposite Parties, wherein the averments as contained in the complaint have been reiterated and those as alleged in the written statement by the Opposite Parties has been controverted.

 

5.     Parties were permitted to place their respective evidence on record, in support of their contentions.

 

6.     We have heard the Ld. Counsel for Parties and also perused the record, with utmost care and circumspection.

 

7.     The main grievance of the Complainant is that the Opposite Parties charged her foreclosure charges @4% on the outstanding principle, which as per the Complainant were not payable. We have perused Annexure P-11 (Pg.73 of the paper book), which are the instructions dated 14.07.2014 issued by the Reserve Bank of India, regarding levy of foreclosure charges/pre-payment penalty on floating rate loans. Para 2A(iv)(d) of the said instructions stipulates that NBFCs shall not charge foreclosure charges/ pre-payment penalties on all floating rate term loans. On perusal of Annexure R-2 which is a loan agreement, containing sanction letter dated 29.04.2014, we find that the type of loan sanctioned is “Home Equity” and the type of interest is “Floating Rate”. Therefore, to our mind, the charging of foreclosure charges by the Opposite Parties from the Complainant is not justified and they are liable to refund the same to the Complainant. Thus, finding a definite deficiency in service on the part of the Opposite Parties, we have no other alternative, but to allow the present complaint against them.

 

8.     In the light of above observations, we are of the concerted view that the Opposite Parties are deficient in giving proper service to the complainant and having indulged in unfair trade practice. Hence, the present complaint of the Complainant deserves to succeed against the Opposite Parties, and the same is allowed, qua them. The Opposite Parties are, jointly and severally, directed:-

[a]  To refund the foreclosure charges charged from the Complainant;

 

[b]  To pay Rs.20,000/- as compensation for mental agony & harassment suffered by the complainant;

                                   

[c]  To pay Rs.10,000/- as costs of litigation.

 

9.     The above said order shall be complied within 30 days of its receipt by the Opposite Parties; thereafter, they shall be liable for an interest @9% p.a. on the amounts mentioned in sub-paras [a] and [b] above from the date of institution of this complaint, till it is paid, apart from cost of litigation as in sub-para [c].  

 

10.     The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

05^th July, 2017                                  Sd/-         

 (SURJEET KAUR)

PRESIDING MEMBER

 

                                           Sd/-

(SURESH KUMAR SARDANA)

MEMBER