BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL COMMISSION, JALANDHAR.

 Complaint No.138 of 2020

      Date of Instt. 03.03.2020

      Date of Decision: 01.10.2024

Sh. Amit Jaggi S/o Sh. Surinder Jaggi R/o H. No.3, Globe Colony, Jalandhar-144004.

..........Complainant

Versus

Cholamandlam Investment & Finance Co. Ltd. through its Branch Manager, Panesar Complex, G. T. Road, Near Vishal Megal Mart, Jalandhar.

….….. Opposite Party

Complaint Under the Consumer Protection Act.

Before:        Dr. Harveen Bhardwaj             (President)

                   Smt. Jyotsna                                      (Member)

Present:       Sh. Amrit Pal Singh, Adv. Counsel for the Complainant.

                   Sh. Vikas Gupta, Adv. Counsel for OP.

Order

Dr. Harveen Bhardwaj (President)

1.                The instant complaint has been filed by the complainant, wherein it is alleged that the complainant had taken home loan amounting to Rs.95,00,000/- from the OP. The said loan was repaid by the complainant and at the time of the payment, the OP issued letter dated 30.07.2018, vide which the actual amount paid by the complainant for closing his loan account on 30.07.2018 was bifurcated as below:

                   The complainant paid Rs.92,00,000/- and Rs.79,380/- on 30.07.2018 by way of two DDs and was issued payment receipt by the OP. The OP is not entitled to charge any foreclosure charges on prepayment of loan as per RBI guidelines. The complainant has been asking the OP to return the amount of Rs.4,15,161.57 taken as foreclosure charges but they totally refused to return the same. The services provided by the OP are deficient and defective in nature and the OP is indulging in unfair trade practice. The complainant is under constant stress, strain and tension because of the attitude of the OP. The complainant had served legal notice to the OP, 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 be directed to make payment of Rs.4,15,161 charges as foreclosure charges. Further the OP be directed to pay Rs.1,00,000/- as compensation for causing mental tension and harassment to the complainant and Rs.50,000/- as litigation expenses. Further, the complainant be entitled interest @ 18% per annum on the aforesaid amounts of Rs.4,15,161/- i.e. Rs.1,19,157/- (582 days from 30.07.2018 to 02.03.2020 and future interest @ 18% per annum from date of filing of complaint till payment.

2.                Notice of the complaint was given to the OP who filed reply and contested the complaint by taking preliminary objections that the complainant does not falls within the definition of Consumer as provided under Consumer Protection Act. It is further averred that the complainant alongwith other co-borrowers namely Smt. Shivani Jaggi, Smt. Usha Kiran, Sh. Surinder Jaggi, M/s Pipe Joint Industries (a Proprietorship concerns of Smt. Usha Kiran) and M/s Jaggi Industries (a Proprietorship concerns of Sh. Surinder Jaggi) have taken a loan against property for the business purpose. It is further averred that this Forum has got no jurisdiction to try, entertain and decide the present complaint. It is further averred that the present complaint is bad for mis-joinder and non-joinder of necessary parties. It is further averred that the complainant has not disclosed to this Forum that loan is availed alongwith some other co-borrowers and which includes two commercial organizations, complainant also conceal the fact that loan is availed for business purpose and on ground of these concealments and mis-information present complaint is liable to be dismissed. It is further averred that circular dated 02.08.2019 is issued by the RBI after one year of closure of loan and said provides that Banks and NBFC’s cannot charge foreclosure charges on loans other than business loans and in the present case loan is granted for the business purpose only as such same is not applicable to the facts of the present complaint. On merits. On merits, all the allegations as made in the complaint are categorically denied and lastly submitted that the complaint of the complainant is without merits, the same may be dismissed.

3.                Rejoinder to the written statement filed by the complainant, whereby reasserted the entire facts as narrated in the complaint and denied the allegations raised in the written statement. 

4.                In order to prove their respective versions, both the parties have produced on the file their respective evidence.

5.                We have heard the learned counsel for the respective parties and have also gone through the case file as well as written arguments submitted by the counsel for the complainant very minutely.

6.                The complainant has alleged that he has taken a home loan of Rs.95,00,000/- from the OP and terms and conditions of loan were issued by the OP as Ex.C-1. The entire loan was repaid by the complainant, but the OP has charged foreclosure charges @ 4% on principal outstanding i.e. Rs.4,15,161.57. He has referred the RBI guidelines Ex.C-5 and Ex.C-6 and submitted that as per these guidelines, the OP cannot charge the foreclosure charges on prepayment of loans, therefore, he has alleged the deficiency in service on the part of the OPs and has demanded the refund of Rs.4,15,161/-.

7.                The complainant has relied upon the statement Ex.C-1 vide which the amount of Rs.95,00,000/- was disbursed and as per Ex.C-2, the foreclosure charges of Rs.4,15,161/- were charged on principal outstanding of Rs.87,95,796/-. The complainant has relied upon the guidelines Ex.C-5 and Ex.C-6 issued by RBI dated 14.07.2014 and 02.08.2019 respectively. Perusal of these letters and instructions show that as per RBI guidelines, the foreclosure charges/prepayment penalties on all floating rate term loans sanctioned to individual borrowers with immediate effect shall not be charged. Similarly, as per Ex.C-6 NBFC shall not charged foreclosure charges/prepayment penalties on any floating rate term loan sanctioned for purpose other than business to individual borrowers with or without co-obligant(s).’

8.              Perusal of Ex.OP-2 shows that Amit Jaggi i.e. the complainant alongwith other customers namely Smt. Shivani Jaggi, Smt. Usha Kiran, Sh. Surinder Kumar have moved application for home equity loan. As per the application form, Amit Jaggi alongwith Shivani Jaggi, Usha Kiran, Surinder Jaggi and Firm i.e. M/s Pipe Joint Industries filled the application form for loan, which shows that Amit Jaggi was not the only borrower, who has taken the loan from the OP, there are 6 co-applicants and borrowers, who have taken the loan from the OP. As per Ex.C-5, NBFC shall not charge foreclosure charges/prepayment where the loan is sanctioned to individual borrower, but in the present case, the loan was not sanctioned to individual borrowers rather there were six applicants and six borrowers for obtaining the loan. Therefore, these guidelines dated 14.07.2014 are not applicable to the complainant. Ex.OP-2 the application form further tells that the purpose for the loan has been mentioned as business need. Ex.OP-5 further shows that all the applicants total 6 in number have jointly and severally and unconditionally promised to pay the OP the sum of Rs.95,00,000/-. The applications forms clearly show that the borrower was not the individual rather there were six applicants/six borrowers, who, have promised to repay the loan amount. Similarly the loan was taken for the business purposes. As per Ex.C-6 the NBFC shall not charged foreclosure charges for the term loan sanctioned for purpose other than business, but the complainant has taken the loan for business purposes, therefore, these guidelines Ex.C-6 dated 02.08.2019 are also not applicable to the complainant. More so, Ex.C-6 is the letter issued in the year 2019, whereas the complainant has closed his account and has paid the foreclosure charges in the year 2018, therefore, this letter is not applicable to the complainant. It has been held by the Hon'ble National Commission in Consumer Case No.137 of 2020, decided on 31.01.2000, titled as ‘M/s Bird Machines Pvt. Ltd. Vs. Indusind Bank Limited & Anr.’ that ‘Commercial purpose Banking and financial services Cash credit limit and loan obtained Dispute as to Foreclosure charges/processing fee for BBG, Tax Invoice on deducted amount, and over that amount of GST - Credit facilities were taken by the complainant from the bank for the purpose of its business activities Amount which the complainant took from the bank was to be used to serve the commercial interest of the company - Services of the bank were availed by the complainant for commercial purpose - Complaint dismissed.’

                   In the present case also the complainant has taken the loan from the OP for the purpose of his business and his industries i.e. M/s Pipe Joint Industries and M/s Jaggi Industries, were also co-applicants. Therefore, as per the provision of Section 2(1) (d) of Consumer Protection Act, the complainant is not a consumer. It has been held by the Hon'ble National Commission in a Revision Petition No.3115 of 2012, decided on 13.02.2015, titled as ‘Vikas Jain and others Vs. Reliance Capital Ltd. and another’  that ‘Housing loan Revision - Revisionists complainant in previous suit - Revisionist applied for housing loan and same was sanctioned Revisionist given loan of Rs.2,37,00,000/- - Revisionists had issued post-dated and undated cheques to respondent against said disbursed loan - On foreclosing the loan, the opposite parties illegally charged Rs.11,70,829 as foreclosure charges @ 5% of the loan amount - Perusal of record further reveals that revisionist deposited aforesaid demanded amount without any protest - On 27.7.2009 for the 1st the revisionist requested for waiving of foreclosure charges - Complaint was filed after 6 months i.e. dated 25.1.2010 - Held, once complainant deposited amount without any protest, he was estopped from challenging demand of disputed amount - Pre-payment charges have been collected by OP as per terms and conditions of loan agreement dismissed. No illegality or jurisdiction impugned order - Revision’

                   In the present case also the complainant has deposited the foreclosure charges without any protest and even prior to the issuance of the letter by the RBI in the year 2019. He was not the individual borrowers, therefore, the letters relied upon by the complainant were not applicable to him. He, alongwith other borrowers, has agreed for the payment of the charges as per agreement, therefore, he is estoped from challenging the foreclosure charges and further seeking refund of foreclosure charges. Thus the complainant has failed to prove any deficiency in service and unfair trade practice on the part of the OP and accordingly, the complaint of the complainant is dismissed with no order of costs. Parties will bear their own costs. This complaint could not be decided within stipulated time frame due to rush of work.

9.                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                                         Jyotsna                       Dr. Harveen Bhardwaj     

01.10.2024                      Member                               President