Chandigarh

DF-I

CC/122/2015

Mohinder Kumar Garg - Complainant(s)

Versus

Cholamandalam Investment and finance limited. - Opp.Party(s)

Gaurav Bhardwaj

15 Dec 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

U.T. CHANDIGARH

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Consumer Complaint No.	:	CC/122/2015
Date of Institution	:	24/02/2015
Date of Decision	:	15/12/2015

 

 

1.      Mohinder Kumar Garg s/o Sh. Mangat Rai, r/o 1057, Ground Floor, Sector 21-B, Chandigarh.

2.      Sandhya Garg w/o Mohinder Kumar Garg r/o 1057, Ground Floor, Sector 21-B, Chandigarh.

…..Complainants

V E R S U S

Cholamandalam Investment and Finance Limited, SCO No.2423-2424, Sector 22-C, Chandigarh through its Manager.

……Opposite Party

 

 

QUORUM:	P.L.AHUJA	PRESIDENT
	SURESH KUMAR SARDANA	MEMBER

                                               

                                               

                       

ARGUED BY	:	Sh. Gaurav Bhardwaj, Counsel for complainants
		Sh. Mohit Sareen, Counsel for OP

                       

                 

PER P.L.AHUJA, PRESIDENT

1.         Sh. Mohinder Kumar Garg (husband) and Smt. Sandhya Garg (wife), complainants have filed this consumer complaint under Section 12 of the Consumer Protection Act, 1986, against Cholamandalam Investment and Finance Limited, Opposite Party (hereinafter called the OP), alleging that they applied for a loan against property for the use in business and the loan of Rs.1,38,00,000/- was sanctioned by the OP on 13.6.2011.  The said loan was to be repaid in 180 monthly installments with rate of interest as 13.30% floating.

According to the complainants, as per the agreement (Annexure C-2) and terms of sanction letter, in case of foreclosure of loan, foreclosure charges were 2% if repaid through own funds and 4% if paid via any other financer. The rate of interest was increased from time to time and ultimately it was increased from 13.30% to 13.80% and the tenure of the loan was also increased from 180 to 190 months vide letter dated 1.1.2012. The complainants decided to foreclose the loan account and vide letter dated 1.8.2014, foreclosure charges were mentioned as Rs.2,90,446.58, which were paid by them. The complainants have contended that they came to know that the Reserve Bank of India had issued certain guidelines to all banks and non-banking financial institutions advising that foreclosure/prepayment charges should not be levied on all floating rate term loans sanctioned to individual borrowers with immediate effect. Accordingly, the complainants approached the OP and requested for refund of the foreclosure charges @2% p.a. i.e. Rs.2,90,447/- in the light of the said guidelines, but, it flatly refused to refund the same. Alleging that the aforesaid acts amount to deficiency in service and unfair trade practice on the part of the OP, the complainants have filed the instant complaint. 

2.         In its written statement, OP has not disputed the factual matrix. It has been averred that the complainants had taken loan from it for use in business.  It has been stated that the RBI had not issued any guidelines to the banking and NBFC’s not to charge foreclosure charges in case the loan was taken for commercial purposes.  It has been contended that the OP is justified in charging pre closure charges as per the agreed terms of the loan agreement.  Pleading that there is no deficiency in service or unfair trade practice on its part, OP has prayed for dismissal of the complaint.
3.         In their rejoinder, the complainants have controverted the stand of the OP and reiterated their own. It has been contended that the OP has acted against the guidelines and direction of the RBI with regard to foreclosure charges.
4.         The parties led evidence in support of their contentions.
5.         We have gone through the entire evidence, written arguments submitted by the complainants and heard the arguments addressed by the learned Counsel for the parties. 
6.         The most crucial question for determination in this case is whether the complainants are covered under the definition of ‘consumer’ as defined in Section 2(1)(d) of the Consumer Protection Act, 1986?  It has been urged by the learned counsel for the complainants that the complainants have pleaded in para 1 of the complaint that complainant No.1 is the sole proprietor of a brick kiln and he is earning his livelihood by manufacturing bricks and tiles and the loan was taken for the use in his business with the OP and as this para has not been specifically denied by the OP in its written statement, therefore, the complainants availed the services of the OP exclusively for the purpose of earning livelihood by means of self-employment and they are consumers under the Consumer Protection Act, 1986.       
7.         On the other hand, the learned counsel for the OP has argued that the complainants had taken the loan from the OP for use in the business, therefore, the OP is justified in charging pre-closure charges which has been charged as per agreed terms of the loan agreement.
8.         After giving our careful consideration to the above arguments, we find considerable force in the arguments of the OP.  It is significant to note that the complainants have nowhere alleged in the complaint that the loan was availed by them exclusively for the purpose of earning their livelihood by means of self-employment. Otherwise also, a brick kiln business cannot be carried out by a single person rather he has to engage a number of persons, therefore, the question of livelihood and self-employment would not arise.  Still further, the loan taken by the complainants was to the tune of Rs.1,38,00,000/- which itself shows that it was for commercial purpose.  We feel that the services of the OP were hired or availed for ‘commercial purposes’, therefore, the complainants do not fall within the purview of ‘consumer’ as defined under Section 2(1)(d) of the Consumer Protection Act, 1986 and this consumer complaint is not maintainable before this Forum.
9.         For the reasons recorded above, we do not find any merit in the complaint and the same is dismissed leaving the parties to bear their own costs.  We do not deem it necessary to deal with the remaining issues involved in the complaint.  Needless to say, complainants may approach the civil court for redressal of their grievances.
10.         The certified copies of this order be sent to the parties free of charge. The file be consigned.

 

	Sd/-		Sd/-
15.12.2015	[Suresh Kumar Sardana]		[P. L. Ahuja]
hg	Member		President