DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,<br /> BATHINDA(PUNJAB)<br /> <br /> C.C. No. 256 of 30.8.2007 Decided on : 22.1.2008 <br /> <br /> Dilpreet Singh S/o Manjit Singh, R/o Street No. 2, Baba Farid Nagar, Bathinda. <br /> .... Complainant<br /> Versus<br /> <br /> 1.Citifinancial Consumer Finance India Ltd., Regd. Office 3, Local Shopping Centre, Pushp Bihar, New Delhi-110062 through its Managing Director/Chairman.<br /> 2.Citi Financial Consumer Finance India Ltd. through its Branch Manager/Incharge, The Mall, Bathinda.<br /> ..... Opposite parties<br /> <br /> Complaint under section 12 of the Consumer Protection Act, 1986<br /> <br /> QUORUM:<br /> Sh. Lakhbir Singh, President<br /> Sh. Hira Lal Kumar, Member<br /> Dr. Phulinder Preet, Member<br /> <br /> For the complainant : Sh. N.P Singh, Advocate<br /> For the opposite parties : Sh. Jaideep Nayyar, Advocate<br /> <br /> O R D E R.<br /> <br /> LAKHBIR SINGH, PRESIDENT:- <br /> 1. Complainant was to construct his house. He was in need of raising loan. Opposite party No. 1 is a finance company, whereas opposite party No. 2 is its Branch Office at Bathinda. Opposite party No. 2 was approached by him in the month of October, 2006 through authorised agent Mr. Rajiv for obtaining loan of Rs. 5,00,000/-. It (Opposite party no. 2) had agreed to sanction loan to this extent at the rate of interest of 13% P.A repayable in 120 instalments. Requisite formalities were completed by him. Original sale deed of plot, his income tax returns and that of his mother Kuldeep Kaur, bank statements, three photographs, non-encumbrance certificate and 36 blank cheques were received from him. Rs. 1,000/- were got deposited from him in cash as file charges. His signatures and the signatures of his mother were obtained on various blank forms and papers as security of the loan amount. Loan of Rs. 5,00,000/- was sanctioned on 25.10.2006 vide Account No. 10084231. Cheque No. 714923 dated 15.11.2006 for Rs. 2,00,000/- and another cheque No 714924 dated 15.11.2006 of Rs. 1,21,986/- were issued to him by opposite party No. 2. Assurance was given that payment of the remaining loan amount would be made soon after inspection of the site by their officials. Loan amount of Rs. 3,21,986/- released to him has been spent by him on construction. Officials of opposite parties had inspected the site in December, 2006 and again in February, 2007. Photographs of the building and rooms etc. were taken. It is alleged by him that he is visiting officials of opposite party No. 2 for release of the balance loan amount, but to no effect. The rates of iron, bricks and cement material are increasing day by day. He is facing problems for the construction of his house due to non-payment of the balance amount. Opposite parties have charged file charges for a loan of Rs. 5,00,000/- and are charging interest on the total amount of Rs. 5,00,000/- since December, 2006 illegally without releasing the balance loan amount of Rs. 1,78,014/-. Opposite party No. 2 has not provided copies of the loan documents as per instructions of Reserve Bank of India. It has charged Rs. 561/- illegally for supply of the copy of agreement. His request for releasing the balance loan amount has not been acceded to. Opposite parties are deficient in service and are indulging in unfair trade practice. In these circumstances, complaint under section 12 of the Consumer Protection Act, 1986 (Here-in-after referred to as the Act) has been preferred seeking direction from this Forum to the opposite parties to charge interest @ 13% P.A on the amount of Rs.3,21,986/- and not on Rs. 5,00,000/-; release balance loan amount of Rs. 1,78,014/- to him; pay Rs. 50,000/- to him as compensation for mental agony, harassment, frustration and rising index of prices of building material and Rs. 5,000/- as costs of the complaint.<br /> 2. Opposite parties filed their version taking preliminary objections that complaint is not maintainable; intricate, complex and complicated questions of law and facts are involved for which elaborate oral and other voluminous evidence is required which is possible only in Civil Court; transaction is material in nature and as such, it does not fall within the ambit, scope and purview of the Act and complainant is not consumer. On merits, they do not deny the fact that complainant was in need of loan for construction of his house. There is no specific denial that opposite party No. 2 is the Branch Office of opposite party No. 1 which is a finance company. Complainant had approached opposite party No. 2 for loan of Rs. 5,00,000/- in the month of October, 2006. Infact, it was a personal loan. They deny that rate of interest was 13%. Loan agreement No. 10084231 was executed. It was repayable alongwith interest @ 14.8% P.A in 89 equated monthly instalments of RS. 6,327/- each. They admit that documents were obtained from the complainant for securing the loan. A sum of Rs. 1,000/- was not received as file charges. Rather, it was obtained towards processing fee. They deny that signatures of the complainant and his mother were obtained on blank forms and papers. Loan of Rs. 5,00,000/- was sanctioned on 25.10.2006 vide Account no. 10084231. Cheques for Rs. 2,00,000/- and Rs. 1,21,986/- were issued. They deny that assurance was given that the remaining amount of loan would be released soon after inspection of the site. As per terms and conditions of the loan agreement, total amount of Rs.5,00,000/- was agreed to be disbursed in three instalments contingent upon certain level of construction in respect of house, for which loan was sanctioned. Complainant has failed/avoided to raise the construction upto the agreed level at the relevant point of time. Out of the third instalment of Rs. 1,78,014/-, part payment of Rs. 1,61,398.78 has been disbursed on 8.1.2007. Complaint has been filed with oblique motives. They deny that they are illegally charging interest on the total amount of Rs. 5,00,000/- without releasing the balance amount. Similarly, they deny that Rs. 561/- have been illegally charged for supplying copy of the agreement. They do not admit the remaining averments in the complaint. <br /> 3. In support of his allegations and averments in the complaint, Dilpreet Singh complainant tendered into evidence his own affidavits (Ex.C.1 & Ex.C.2), photocopy of Account Repayment Statement (Ex.C.3), photocopies of letters (Ex.C.4 & Ex.C.12), photocopy of postal receipt (Ex.C.5), photocopy of receipt (Ex.C.6), photocopy of Home Loan Agreement (Ex.C.7), photocopy of Schedule-I (Ex.C.8), photocopy of Amortization schedule alongwith Demand Promissory Note (Ex.C.9), photocopy of Power of Attorney (Ex.C.11) & photocopy of Declaration dated 12.10.2006 (Ex.C.13).<br /> 4. On behalf of the opposite parties, reliance has been placed on affidavit (Ex.R.1) of Sh. Ashish Ahluwalia, its Authorised Representative.<br /> 5. We have heard the learned counsel for the parties. Apart from this, we have gone through the record and considered the written arguments submitted by the complainant.<br /> 6. Some facts do not remain in dispute. They are that complainant had applied for house loan of Rs. 5,00,000/-. No-doubt, in the reply of the complaint at one place opposite parties have tried to explain this house loan as personal loan, but truth has come from their mouths in para No. 6 of the reply of the complaint in which they have mentioned that he (complainant) has failed to raise construction upto the agreed legal at the relevant point of time meaning thereby that loan was sanctioned for raising the construction of the house. Two cheques of Rs. 2,00,000/- and Rs. 1,21,986/- were issued by opposite party No. 2 in favour of the complainant.<br /> 7. Arguments pressed into service by Mr. N P Singh learned counsel for the complainant are that house loan to the tune of Rs. 5,00,000/- was sanctioned by opposite party No. 2 on 25.10.2006 out of which amount of Rs. 3,21,986/- has been released. Balance amount of Rs. 1,78,014/- has not been paid by the opposite parties despite various requests. Act and conduct of the opposite parties has caused mental agony, harassment, frustration and financial loss to the complainant as the rates of the building material are rising day by day. Opposite parties are charging interest on the total sanctioned amount of Rs.5,00,000/- instead of on the released amount of Rs. 3,21,986/-. They are bound to release the balance payment of the loan amount. <br /> 8. Mr. Nayyar, learned counsel for the opposite parties argued that intricate and complex questions of law and facts are involved for which voluminous evidence is required which is possible in the Civil Court and as such, complainant should be relegated to the Civil Court. Moreover, complainant is not consumer. Third instalment of loan amount was not released to the complainant as he did not raise the construction upto the agreed level at the relevant point of time. However, subsequently out of the instalment of Rs. 1,78,014/-, part payment of Rs. 1,61,398.78 has been made on 8.1.2007. Loan was repayable alongwith interest @ 14.8% P.A in 89 equated monthly instalments of Rs. 6,327/- each in accordance with the terms and conditions of the loan agreement.<br /> 9. We have considered the respective arguments. Opposite parties could not show us on which point detailed and elaborate evidence is required which cannot be produced before this Forum. Matter has been set at rest by their Lordships of the Hon'ble Supreme Court in the case of CCI Chambers Co-operative Housing Society Ltd. Vs. Development Credit Bank Ltd.-III(2003)CPJ-9(SC) that the principal object sought to be achieved by establishing Consumer Foras is to relieve the conventional courts of their burden which is ever-increasing with the mounting arrears and whereat the disposal is delayed because of the complicated and detailed procedure which at times is accompanied by technicalities. Merely because recording of evidence is required or some questions of law and facts arise which need to be investigated and determined, cannot be a ground for shutting the door of any Forum under the Act to the person aggrieved. Similar view has been held by their Lordships of the Hon'ble Apex Court in the case of J.J. Merchants Vs. Shrinath Chaturvedi-III(2002)CPJ-8 (S.C.). Accordingly, the objection that the complainant be relegated to the Civil Court, is not tenable.<br /> 10. Loan was applied for by the complainant. A sum of Rs. 1,000/- has been paid by him which the opposite parties say that it was deposited towards processing fee. Loan to the tune of Rs.5,00,000/- has been sanctioned to him as is clear from the affidavits of the complainant which are Ex.C.1 & Ex.C.2. Even Account Repayment Statement has been issued by the opposite parties, copy of which is Ex.C.3. Home loan agreement was executed, copy of which is Ex.C.7. Sh. Ashish Ahluwalia in his affidavit Ex.R.1 has admitted the receipt of Rs.1,000/- from the complainant although it was towards processing fee for the loan. In these circumstances, when complainant has availed the services of opposite parties for consideration, he is certainly a consumer.<br /> 11. Admittedly, a sum of Rs. 3,21,986/- has been disbursed to the complainant out of the loan amount of Rs. 5,00,000/- vide cheques dated 15.11.2006. Balance amount is Rs. 1,78,014/-. Opposite parties allege that balance amount could not be released as complainant could not raise construction upto the agreed level at the relevant time of time. He did not complete such level of construction. Onus to prove that complainant could not raise the construction upto certain level and on that account third instalment of Rs. 1,78,014/- could not be issued is upon them. Learned counsel for the opposite parties could not point out the level of construction required for release of third instalment of Rs. 1,78,014/-. Evidence to this effect is lacking. Their allegations in para No. 6 of the reply of the complaint as well as in para No. 12.1 of affidavit Ex.R.1 have not gone beyond the stage of allegations. Their stance that a sum of Rs. 1,61,398.78 has been disbursed to the complainant on 8.1.2007 out of the amount of Rs. 1,78,014/- does not stand substantiated from any record. An application was moved by the complainant directing the opposite parties to produce record of disbursement of third instalment of Rs. 1,61,398.78 on 8.1.2007 and other record. What to speak of producing the record, even the reply of this application was not filed by the opposite parties despite several opportunities afforded to them for filling it. Since, they failed to produce the remaining documents sought in the application, adverse inference was ordered to be raised against them for their non-production. In the absence of any documentary proof regarding the payment of Rs. 1,61,398.78 on 8.1.2007, adverse inference is that opposite parties did not make payment of this amount out of amount of Rs. 1,78,014/-. To the contrary, it is evident from the affidavits of the complainant that the amount of Rs. 1,78,014/- has not been released to him. In these circumstances, we have no hesitation in concluding that third instalment of Rs. 1,78,014/- has not been released to the complainant and only a sum of Rs.3,21,986/- has been released out of the sanctioned loan amount.<br /> 12. Now question arises as to what is the agreed rate of interest payable on the loan amount. Mr. Nayyar, learned counsel for the opposite parties drew our attention to Article 2.2 of the Home Loan Agreement, copy of which is Ex.C.7, according to which the lender can review and revise the rate of interest under certain conditions. This submission of the learned counsel for the opposite parties is not acceptable as opposite parties have not established market conditions applicable, law and regulations according to which interest in the case of the complainant could be enhanced from 13% P.A. In the copy of the Account Repayment Statement, copy of which is Ex.C.3, nature of the loan has been recorded as home loan. Amount of finance is Rs. 5,00,000/- and the tenure in months is 180. Interest rate recorded is 13%. Similarly, in the Amortization Schedule, copy of which is Ex.C.9, the rate of interest recorded is 13%. In Schedule-1, copy of which is Ex.C.8 as well, the number of equated monthly instalments is 180 and the rate of interest is 13%. In these circumstances, how can the opposite parties say that rate of interest is 14.8% P.A and amount is repayable in 89 equated monthly instalments. In the Repayment Statement, instalments have been shown to be 180 upto 5.11.2021. Hence, we conclude that complainant is liable to pay interest @ 13% P.A on the amount of Rs. 3,21,986/- released to him from the dates of release of this amount. Repayment schedule would be accordingly re-drawn by the opposite parties for payment of this amount alongwith interest at this rate in 180 equated monthly instalments. Since, opposite parties have not released the remaining payment of Rs. 1,78,014/-, there is deficiency in service on their part. For this, we are fortified by the observations of the Hon'ble State Commission of Jammu & Kashmir in the case of Kamal Nagpal Vs. State Bank of India and Another-1995(2)CLT-676. Accordingly, direction deserves to be given to release this amount to the complainant. If amount is released, he would be liable to pay interest on it @ 13% P.A. This amount of Rs. 1,78,014/- alongwith interest would be payable in 180 equated monthly instalments for which separate schedule of payment would be released by the opposite parties. Act and conduct of the opposite parties in not releasing the balance payment of Rs. 1,78,014/- must have caused mental agony, harassment, frustration and financial loss to the complainant for which he deserves some compensation which we assess as Rs. 5,000/-.<br /> 13. No other point was urged before us at the time of arguments.<br /> 14. In the premises written above, complaint is allowed against the opposite parties with costs of Rs. 1,000/-. Opposite parties deserve direction as under :-<br /> ( i ) Charge 13% interest on the amount of Rs. 3,21,986/- released to the complainant out of loan amount of Rs. 5,00,000/- from the dates of its release and accordingly, send repayment schedule for payment of this amount in 180 equated monthly instalments. If any amount has already been paid by the complainant out of the amount of Rs.3,21,986/-, the same be adjusted. <br /> ( ii ) Release the balance payment of loan of Rs. 1,78,014/- to the complainant. Issue repayment schedule of this amount of Rs. 1,78,014/- after it is released for repayment in 180 equated monthly instalments alongwith interest @ 13% P.A from the date of release of the amount.<br /> ( iii ) Pay Rs. 5,000/- to the complainant as compensation under section 14(1)(d) of the Act.<br /> ( iv ) Compliance within 30 days from the date of receipt of copy of this order, failing which the amount of compensation would carry interest @ 9% P.A till payment.<br /> 15. Copy of this order be sent to the parties free of cost. File be also consigned.<br /> <br /> Pronounced (Lakhbir Singh)<br /> 22.01.2008 President<br /> <br /> <br /> (Hira Lal Kumar)<br /> Member<br /> <br /> <br /> (Dr. Phulinder Preet)<br /> Member<br /> 'bsg'<br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br />