BEFORE THE DISTRICT CONSUMER DISPUTES
REDRESSAL FORUM, JALANDHAR.
Complaint No.303 of 2015
Date of Instt. 16.07.2015
Date of Decision:05.12.2017
Pawan Kumar Chawla son of Sh. Bhagat Ram Chawla aged about 44 years approximately, resident of House No.204, New Model Town, Phagwara, District Kapurthala. Mob. No.98159-57475
..........Complainant
Versus
1. Cholamandlam Investment and Finance Company Limited, Jalandhar-144001 through its Manager.
2. Cholamandlam Investment and Finance Company Limited, Dare House No.2, N.S.C., Bose Road, Parrys, Chennai-600001 through its Chairman/Managing Director/Official
….… Opposite parties
Complaint Under the Consumer Protection Act.
Before: Sh. Karnail Singh (President)
Sh. Parminder Sharma (Member)
Present: Sh. Sandeep Singh, Adv Counsel for the complainant.
Sh. Vikas Sood, Adv Counsel for the OP No.1 and 2.
Order
Karnail Singh (President)
1. The instant complaint is filed by the complainant, wherein alleged that the OP No.2 is a Non-Banking Financial Company under the name and style of Cholamandlam Investment and Finance Company Limited and is having its various branches all over India and one such branch of OP No.2 is being run by OP No.1 at Jalandhar. The complainant took a loan against his property from OP No.1 amounting to Rs.27,00,000/- on 21.06.2012, vide agreement No.XOHEJRH00000770247 and top up on that loan amounting to Rs.10,00,000/- on 30.06.2011 was further taken, vide agreement No.XOHEJRH00001003328.
2. That during the course of time, the complainant decided to clear off the entire loan amount that the complainant had taken from OPs and accordingly, the complainant contacted the officials of OP No.1 many times for obtaining the documents of his property, which were lying in the custody of OP No.1 and 2, but every time the officials of the OPs failed to give the requisite documents to the complainant on one pretext or the other. All the visits of the complainant to the office of the OPs proved futile and the OPs kept on dilly dallying the matter on one pretext or the other and did not handover the relevant documents to the complainant. That instead of providing the relevant details as per the normal procedure, the officials of OP No.1 issued two details, thereby raising total demand of Rs.25,12,696.24/- on 17.09.2014 under Agreement No.XOHEJRH00000770247 and also raised demand of Rs.9,90,195.96/- under agreement No.XOHEJRH00001003328. The complainant was shell shocked to find out that OPs had added an amount of Rs.1,07,561.04/- and Rs.42,392.76/- towards foreclosure charges in the said respective amounts. The complainant protested about the same to the OPs stating that this action of the OPs is totally in contravention to the instructions of RBI, but the officials of the OP No.1 clearly told the complainant that in order to clear the entire loan amount, the complainant is under obligation to pay the said foreclosure charges. It is important to mention here that the complainant raised the said loan and further top-up loan from the OPs in his individual capacity and both the said loans were obtained by the complainant on floating rate i.e. the same were
floating rate terms loans sanctioned to the complainant in his individual capacity.
3. That finding no other alternative, the complainant through HDB Financial Services Limited, Khullar Tower, 2nd Floor, G.T. Road, Phagwara paid the amount demanded by the OPs to the tune of Rs.25,19,444/- under agreement No.XOHEJRH00000770247, vide Manager's Cheque bearing No.007562, drawn on HDFC Bank Ltd., in the name of Cholamandlam Investment and Finance Company Limited, which included the foreclosure charges. Hence, the complainant cleared the entire claim raised on the part of the OPs upto date. However, the said amount of foreclosure charges was paid by the complainant under protest. The complainant sent one email to Reserve Bank of India on 28.10.2014 complaining about the unfair trade practices of the OPs, in pursuance to the same, OP No.2 sent a letter dated 08.12.2014, whereby the OPs stated that RBI Notification pertaining to NIL foreclosure charges applies to cases of individual borrowers and that the case of the complainant does not come under the purview of individual borrowers as enumerated in the RBI notification and OPs refused to comply with the claim of the complainant.
4. That in view of above reply, it is quite pertinent to refer to the fact that RBI had issued one circular RBI/2014-15/121 DNBS(PD).CC.No.399/03.10.42/2014-15 on dated 14.07.2014 to all the Non-Banking Financial Company/Residuary Non-Banking Companies, thereby bringing to notice paragraph (iii) of Guidelines of Fair Practices Code for NBFCs issued vide Circular DNBS(PD) CC No.80/03.10.042/2005-06 dated 28.09.20016 and paragraph 2(A) (iii) of Master Circular DNBS(PD) CC No.388/03.10.042/2014-15 dated 01.07.2014 and directed that as a measure of customer protection in order to bring in uniformity with regard to pre-payment of various loans by borrowers of banks and NBFCs, it was advised that NBFCs shall not charge foreclosure charges/prepayment penalties on all floating term loans sanctioned to individual borrowers, with immediate effect. It is crystal clear by going through the language of the said notification that the floating term loan is required to be sanctioned to individual borrowers so as to grant the benefit of non-charging of any foreclosure charges. No further stipulation has been engrafted by the notification, whereas OPs are reading something which was never mentioned and totally amiss from the purport of said notification. In the wake of this language employed in the said notification, it becomes evident that the complainant had obtained the said floating term loans in his individual capacity therefore, the complainant is entitled not to be charged any amount towards foreclosure charges. In violation of the said guidelines, OPs charged a foreclosure, to the tune of Rs.1,07,561.04/- in one agreement and Rs.42,392.76/- in other agreement and as such, the OPs have committed unfair and restrictive trade practices by over charged from the complainant with malafide intention and accordingly, a legal notice was served to the OPs, but all in vain and as such, necessity arose to file the present complaint with the prayer that the complaint of the complainant may be accepted and OPs may kindly be directed to refund the amount of Rs.1,49,953.80/-, which was taken from the complainant by way of foreclosure charges including two loan cases, alongwith interest @ 18% per annum from the date, the same were received from the complainant till realization and further OPs be directed to pay compensation for harassment and mental tension to the complainant, to the tune of Rs.1,00,000/- and also directed to pay litigation expenses of Rs.15,000/- with interest @ 18%.
5. Notice of the complaint was given to the OPs and accordingly, both the OPs filed joint written reply and contested the complaint by taking preliminary objections that the complaint of the complainant is not maintainable even the complainant has not come to the Forum with clean hands and further alleged that the true facts are that the complainant got the financial assistance from the OPs for the business needs i.e. for commercial purposes. The purpose of the loan was commercial. Loan agreement was also executed between the parties, vide which the OPs disbursed the loan for commercial purpose. This fact was suppressed by the complainant at the time of filing the present complaint, hence, the complaint is liable to be dismissed on this score alone and further alleged that the complainant is estopped by his act, conduct and acquiesce. The complainant paid the amount without any protest and discharged the liability. He got the mortgaged releasing letter and all the documents. Thereafter, he filed the present complaint just on the basis of afterthought story. The OPs have charged the amount as per law and this is not the proper Forum to adjudicate the matter, moreover once complainant has received the documents, and closed the account without any dispute and protest that means the present complaint is just an abuse of law hence, liable to be dismissed. Para No.1 of the complaint is reply i.e. the matter of record and further admitted that the complainant has taken the loan for business needs and loan was closed and documents have already been handed over to the complainant, but the other allegations as made in the complaint are categorically denied and lastly prayed that the complaint of the complainant is without merits and the same may be dismissed.
6. In order to prove the case of the complainant, the counsel for the complainant tendered into evidence affidavit of the complainant Ex.CA alongwith some documents Ex.C-1 to Ex.C-16 and closed the evidence.
7. Similarly, counsel for the OPs tendered into evidence affidavit Ex.OP/A alongwith some documents Ex.OP/1 to Ex.OP/8 and then closed the evidence.
8. We have heard the learned counsel for the respective parties and also gone through the case file very minutely.
9. From the over all circumstances as explained in the pleading as well as come on the file by way of documentary evidence, it is not in dispute that the complainant has taken a loan amount of Rs.27,00,000/- on 21.06.2012 and another loan of Rs.10,00,000/- was taken on 30.06.2011 and it is also admitted that the complainant has paid the said loan amount by preponding the last date of payment alongwith interest as well as foreclosure charges, but the complainant alleged that he deposited the said amount of foreclosure under protest, which is total Rs.1,49,953.80/-, on the ground that the OP has charged the said foreclosure charges illegally, after going beyond the guidelines of the RBI, issued vide letter dated 14.07.2014 Ex.C-5, whereby it is clearly mentioned that foreclosure charges/pre-payment penalties on all floating rate term loan sanctioned to individual borrowers can be recovered, but in this case, the complainant alleged that he took the loan for his individual capacity and not for any Firm or Company or Partnership Firm, whereas the OP has brought on the file Loan Form Ex.OP/2 and Loan Agreement Ex.OP/3 having 9 leafs and on the back side of first page, it is categorically mentioned the nature of the business, which is filled in the form “Trading” and further on the same page under the heading 'Customer Profile', which is filled by the complainant “Customer is running the business of all kinds of crockery items”. Not so at Page-9 of the agreement, it is again mentioned the purpose of loan and it was filled by the complainant “Business Needs”. So, the document produced on the file by the OP itself established that the plea taken by the complainant that the loan was taken for individual capacity, is not true version of the complainant rather it is concocted story made by the complainant after paying the entire loan amount alongwith interest as well as foreclosure charges and getting back the hypothecated documents, then made this story just to get refund the said foreclosure charges from the bank. We find that the case of the complainant is not for a individual capacity loan and therefore, the same is not covered under the Guidelines/Notification of the RBI Ex.C-5. Therefore, the complainant is not entitled for the relief claimed and furthermore, we find no substances in the argument of the learned counsel for the complainant and accordingly, the complaint of the complainant being without merits, the same is dismissed with no order of cost. Parties will bear their own cost. Complaint could not be decided within stipulated time frame due to rush of work.
10. Copies of the order be supplied to the parties free of cost, as per Rules. File be indexed and consigned to the record room.
Dated Parminder Sharma Karnail Singh
05.12.2017 Member President
