STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T., CHANDIGARH
First Appeal No. | : | 26 of 2013 |
Date of Institution | : | 28.01.2013 |
Date of Decision | : | 25.3.2013 |
[1] Punjab National Bank, Sector 33-D, Chandigarh, through Senior Manager.
[2] Punjab National Bank, Retail Asset Branch, SCO No. 119-120, Sector 17-B, Chandigarh, through its Branch Manager.
……Appellants/Opposite Parties.
Versus
[1] Dev Raj Arora s/o Late Sh. Ram Rakha Arora, H. No.87, FF, Sector 15-A, Chandigarh.
[2] Smt. Kiran Arora w/o Sh. D.R. Arora, H. No.87, FF, Sector 15-A, Chandigarh.
....Respondents/Complainants.
Appeal under Section 15 of the Consumer Protection Act, 1986.
BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT.
MRS. NEENA SANDHU, MEMBER.
Argued by: Sh. D. K. Singal, Advocate for the appellants.
Sh. Dev Raj Arora, Respondent No.1, in person and also on behalf of respondent No.2.
PER MRS. NEENA SANDHU, MEMBER.
This appeal is directed against the order dated 18.12.2012, rendered by the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (hereinafter to be called as the District Forum only), vide which, it allowed the complaint of the complainants and directed the Opposite Parties, as under: -
“12. In the light of above observations, we are of the view that the Opposite Parties No.1 and 2 are found deficient in giving proper service to the complainant. Hence, the present complaint of the Complainants deserves to succeed against the Opposite Parties No.1 & 2, and the same is allowed. The Opposite Parties No.1 & 2 are jointly and severally directed, to:-
[a] To withdraw the demand of penal interest vide letter dated 6.9.2011, 22.9.2011 and 20.10.2011; and also to return any amount already paid by the Complainants towards these demands;
[b] To pay Rs.35,000/- as compensation on account of deficiency in service and causing mental and physical harassment to the Complainant;
[c] To pay Rs.10,000/- as cost of litigation;
13. The above said order shall be complied within 45 days of its receipt by the Opposite Parties No.1 & 2; thereafter, they shall be liable for an interest @18% per annum on the amount mentioned in sub-para [a] & [b] of para 12 above, apart from cost of litigation of Rs.10,000/-, from the date of institution of this complaint, till it is paid.”
2. The facts, in brief, are that complainant No.1, by virtue of being a Member of the New Punjab Judicial Officers Cooperative House Building Society Ltd., Mohali, was the holder of one share equivalent to 500 sq. yards in the land, purchased by the Society, in village Mullanpur Shingariwala, Tehsil Kharar, District Mohali. It was stated that the objects of the Society were to purchase the land and to develop the same, in a residential area and then to allot the Plots to its Members. It was further stated that the Society also got the facility of advance arranged, to its Members, from Opposite Party No.1. It was further stated that the complainants entered into an agreement dated 5.7.2006 with Opposite Party No.1, for raising the loan of Rs.7.00 lacs, to be repaid in 120 monthly installments of Rs.8526/- p.m. with interest @8.25% p.a. with monthly rests. It was further stated that the complainants further raised another advance of Rs.2.00 lacs from Opposite Party No.1 vide agreement dated 28.2.2009, repayable in 60 monthly installments @ Rs.4200/- p.m. with interest @9.5% p.a. with monthly rests. It was further stated that the complainants were repaying the loan amount, regularly without any default. It was further stated that Opposite Party No.2, vide letter dated 6.9.2011, informed complainant No.1 that term loan was advanced for the purchase of the plot and as per the terms & conditions of the agreement, in case, the construction of the house was not raised within 5 years from the date of disbursement of loan, interest @2% over and above the prescribed rate, from the date of disbursement of loan was to be charged. It was further stated that since the construction of the house was not commenced/completed, interest @2% over and above the prescribed rate, from the date of the disbursement of the loan, was charged. It was further stated that complainant No.1 protested against the charging of aforesaid penal interest @2% vide reply dated 16.9.2011 (Annexure C-VI). It was further stated that Opposite Party No.1, without taking into consideration the grounds raised by Complainant No.1, in his protest letter, vide letter dated 22.9.2011 (Annexure C-VII), informed that the hike in rate of interest was kept at the lowest possible level of 2% on account of non construction of house on the plot and the said hike was made applicable on housing loan accounts of all the Members of the Society, as per banking guidelines, mentioned in the loan agreements. It was further stated that failure, on the part of the Opposite Parties, to withdraw the demand vide letter dated 6.9.2011 (Annexure C-V) and to repeat the said demand vide letter dated 20.10.2011 (Annexure C-VIII), amounted to deficiency in rendering service and indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), directing the Opposite Parties, to quash the demand of penal interest claimed vide letters dated 06.09.2011, 22.09.2011 and 20.10.2011; pay adequate compensation and Rs.25,000/- as litigation expenses, was filed.
3. The Opposite Parties, in their written version, took up some preliminary objections to the effect that the complaint was barred by limitation; the complainant had no locus standi to file the complaint; the complainants failed to discharge their obligations as stipulated in the loan agreement, and further failed to raise construction within a period of 2 years (subsequently enhanced to 5 years) from the date of availing of the loan facility; the complainants had not approached the Forum with clean hands; and the complaint was bad for misjoinder and non-joinder of necessary parties. However, on merits, it was stated that the complainants approached the Opposite Parties, for availing of housing loan and, accordingly, considering their request, and after executing the required documents including the Loan Agreement, a Term Loan of Rs.7.00 lacs, was sanctioned on 5.7.2006, which was to be repaid in 120 monthly installments of Rs.8,526/- each, starting w.e.f. 1.8.2006 and the interest accrued thereon at the rate of 8.25%, subject to changes as per RBI guidelines from time to time (Loan A/c No.325200NC00007846). It was further stated that another request for enhancing the loan was received from the complainants and a Term Loan of Rs.2.00 lacs was sanctioned on 28.2.2009, which was to be repaid in 60 monthly installments of Rs.4200/- each, starting w.e.f. March, 2009 and the interest accrued thereon @9.25%, subject to changes as per RBI Guidelines from time to time (Loan A/c No.325200NC00010965). It was further stated that as per the RBI Advance CIR.23 dated 28.8.2004, the period of 2 years for completing the construction was enhanced to 5 years and the penal interest was also reduced to 2% (Annexure R-5). It was further stated that as the Complainants failed to complete the construction on the plot, in question, within a period of 5 years, from the date of disbursement of loan, hence, a letter dated 6.9.2011 was written to Complainant No.1. informing that since construction on the plot, in question, was not completed within a period of 5 years from the date of disbursement of loan, therefore, interest @2% over and above the prescribed rate of interest from the date of disbursement of loan was charged (Annexure R-6). It was further stated that again letter dated 22.9.2011 was sent to the complainants, elaborating therein how the amount was calculated and they were requested to deposit the interest amount. It was further stated that keeping in view the peculiar facts and circumstances of the case, the penal interest was further reduced to 1% which was deposited by the Complainants. It was further stated that there was, thus, neither any deficiency in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. The remaining allegations, contained in the complaint were denied.
4. The parties led evidence, in support of their case.
5. After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, accepted the complaint, vide the impugned order, in the manner, referred to above, in the opening para of the instant order.
6. Feeling aggrieved, the appellants/Opposite Parties, have filed the instant appeal.
7. We have heard the Counsel for the parties, and, have gone through the evidence and record of the case, carefully.
8. At this stage, it is pertinent to mention here, that the appellants/Opposite Parties, have moved an application seeking permission to place, on record, statement of account in respect of Loan Account No.325200NC00007846, by way of additional evidence. It was submitted that since the respondents/Complainants had placed, on record, of District Forum, the Pass Book entries pertaining to the said account updated up to 29.09.2011 as Annexure C-3, whereas, the said account was operated upon and closed on 28.12.2011, therefore, the account statement, now sought to be placed, on record, was essential for the just decision of the case.
9. On the other hand, the respondents/Complainants, opposed the application, by filing reply, on the ground, that since, the documents, sought to be placed, on record, were very much in possession of the appellants/Opposite Parties, and they did not place the same before the District Forum, at the time of leading their evidence, therefore, this document, could not be admitted into evidence, at the appellate stage.
10. From the perusal of the document, sought to be placed, on record, it is apparent that the same was very much in possession of the appellants/Opposite Parties, during the pendency of the complaint, before the District Forum. However, the Counsel for the appellants/Opposite Parties, has not been able to show any plausible cause, as to why, this document, was not placed before the District Forum. Therefore, the document, sought to be placed, on record, cannot be admitted into evidence, now at the appellate stage. Accordingly, the application, for additional evidence, is dismissed.
11. The Counsel for the appellants/Opposite Parties, submitted that it was mentioned in clause 2 (f) of the loan agreement that in case the construction of the house was not completed within a period of two years or in the event the plot/land was sold for gain or profit or any other reason, interest chargeable was @ 4% over PTLR . It was further submitted that the appellants/Opposite Parties, despite the aforementioned condition had raised the demand after the expiry of period of 5 years from the date of disbursement of loan to the respondents, for charging penal interest 2% over and above PTLR instead of 4% (which stood modified to 2%). It was further submitted that the aforesaid condition, including the other conditions, mentioned in the loan agreement were duly agreed upon by the respondents/complainants, which could not be questioned, as per the settled law. It was further submitted that the appellants/Opposite Parties, had extended the benefit of circular letter dated 28.8.2004, issued by the RBI even though the same was not incorporated in the loan agreements and, therefore, no prejudice, whatsoever, was caused to the respondents/complainants, on this account, in any manner whatsoever. It was further submitted that the District Forum failed to appreciate the fact that the respondents/complainants had paid the penal interest @1% which could be borne out from copy of the pass book entries filed by them as Annexure C-3, before the District Forum without any protest, as an amount of Rs.65,943/- was debited being equivalent to 2% penal interest. It was further submitted that subsequently an amount of Rs.29,150/- was credited to the loan account, resulting into charging of 1% penal interest. It was further submitted that although the respondents/complainants made representation against charging of the said amount vide letter dated 16.9.2011 (Annexure C-4) yet the same was decided by the appellants/Opposite Parties vide letter dated 22.9.2011 wherein the basis for charging 2% penal interest on account of non construction of the house n the plot had been explained and consequently they were requested to deposit the said amount. It was further submitted that the respondents/complainants deposited the amount due in the aforesaid account, with the appellants/Opposite Parties on 28.12.2011, and therefore, it could not be construed that the said amount was not deposited voluntarily by the respondents/complainants. It was further submitted that since the respondents/complainants had proceeded in pursuance of the terms and conditions of the loan agreement and the circular aforesaid, estopped from challenging the same, as per the settled law, subsequently, by filing the complaint before the District Forum. It was further submitted that even if no document was placed, on record, to extend waiver of 1% in penal interest, yet there was no denial on the part of the respondents/complainants, in paying 1% penal interest on account of non construction of house over the plot more particularly, when the aforesaid factual position was duly pleaded in the written statement. It was further submitted that the production of the document showing the extension of waiver of 1% in penal interest would not alter or vary the position of the parties vis-a-vis the terms and conditions agreed to vide the loan agreements. It was further submitted that the complaint was hopelessly barred by limitation, and was liable to be dismissed. It was further submitted that no protest was ever lodged by the respondents/complainants against the terms and conditions of the agreement. It was further submitted that District Fora had no jurisdiction and competence to rewrite the contract, which had already been executed, between the parties. It was further submitted that the District Forum, while passing the impugned order, altered/changed the condition of charging penal interest as mentioned, in the loan agreements, and consequently had rewritten the terms and conditions of the loan agreement. In this regard, the Counsel placed reliance on M/s Suraj Mal Ram Niwas Oil Mills (P) Ltd., Versus United India Insurance Co. Ltd. & another, 2010 (4) RCR (Civil) 845 (Supreme Court) as also State Bank of India Versus Yasangi Venkateswara Rao, 1999 (1) SCR 213 (Supreme Court). It was further submitted that the District Forum did not decide the preliminary objections raised in the written statement. Reliance was also placed on Omega Packaging Pvt. Ltd. Vs. Central Bank of India & Others, 1995 (I) CPR page 274 to contend that in case excess interest, was alleged to have been charged by the bank, transactions involved a number of entries, and numerous transactions, and the same could not be satisfactory adjudicated upon in time bound proceedings under the Consumer Protection Act, 1986. It was further submitted that the District Forum wrongly allowed the complaint and the impugned order, being illegal and perverse, is liable to be set aside.
12. On the contrary, the Counsel for the respondents/ complainants submitted that the order passed by the District Forum being based on the correct appreciation of evidence and law, is liable to be upheld.
13. The case of the appellants/Opposite Parties, was that as per Clause 2(f) of the Agreement for Housing Loan (Annexure
R-2), in case of non-completion of construction of the house on the plot within a period of 2 years or in the event of the plot/land being sold for gains or profits or for any other reason, they were entitled to charge interest @4% over PTLR. However, vide letter dated 06.09.2011 (Annexure R-6), and keeping in view the RBD Advances CIR.23 dated 28.08.2004 (Annexure R-5), the period of 2 years for completing the construction was enhanced to 5 years, and the penal interest was also reduced from 4% to 2%. Subsequently, the appellants/Opposite Parties further reduced the rate of penal interest from 2% to 1%, in case of non construction of house on the plot, within 5 years, which the respondents/complainants deposited. On the other hand, the case of the respondents/ complainants was that the appellants/Opposite Parties, could not do so, because it was never the part of Agreement for Housing Loan (Annexure R-2), executed between the parties. Admittedly, as per Clause 2(f) of the Agreement for Housing Loan (Annexure R-2), it was agreed upon, between the parties that in case of non-completion of construction of the house on the plot within a period of 2 years, or in the event of the plot/land being sold for gains or profits, or for any other reason, the complainant was liable to pay penal interest @4% over PTLR. Admittedly, vide letter dated 06.09.2011 (Annexure R-6), written by the appellants/Opposite Parties, to the respondents/complainant, the penal interest @4% was reduced to 2% and the period of completion of construction of the house on the plot was extended from 2 years to 5 years, by placing reliance on RBD ADV. CIR.23 dated 28.08.2004 (Annexure R-5), sent by the Assistant General Manager, Index-Housing Finance-Scheme (Public) to all the officers, in supersession of RDB ADV. CIR No.21 dated 10.08.004, wherein it was clearly mentioned, interalia, as under:
“2. Based on the freedom extended to the Banks by RBI to lay down the period within which they would require the borrower to construct a house on plot purchased with the help of the bank loan, the existing provision of terms and conditions under Item No.5 and 14 relating to Rate of Interest clause (FOR PURCHASE OF PLOT/LAND) and Pre Payment Charge resp3ecitvely, on the above scheme have been amended as under:
RATE OF INTEREST
FOR PURCHASE OF PLOT/LAND
Construction of a House on the plot/land purchased with the help of bank loan be completed within a maximum period of 5 years. In case construction of the house is not completed within 5 years from the date of disbursement of the loan or in case the plot/land is sold, penal interest rate of 2% p.a. over and above the prescribed rate of interest may be charged.
RMs & above, however, may reduce penal rate of interest, maximum by 1% p.a., on merits of each case like genuine/real constraints faced by borrower in construction of House or account of lack of infrastructure development; no development in locality/colony/area etc., where plot/land is located.”
15. It is also the admitted case of the parties, that the appellants/Opposite Parties, further reduced the penal rate of interest from 2% to 1% per annum, based on the above quoted circular, which was undisputedly, paid by the respondents/ complainants. The respondent/complainant No.1, himself referred to the aforesaid document in his affidavit, which was filed, in evidence, before the District Forum. The stand taken by the appellants/Opposite Parties, in their written statement, is further corroborated from the affidavit of Sh. Vinod Parshad, Manager, Punjab National Bank, SCO No.119-120, Sector 17, Chandigarh, filed in evidence, alongwith documents marked Annexures R-1 to R-7. Further, it was not the case of the respondents/complainants, that they completed the construction within the stipulated period of 2 years and the appellants/Opposite Parties, suo-moto extended the period by further three years by reducing the penal rate of interest by 2% or subsequently by 1% and, thus, changed the terms and conditions of the agreement of loan. Thus from the facts and circumstances of the case, it is established that the appellants/Opposite Parties, did not change the terms and conditions and the penal rate of interest, to be charged, in case of non completion of construction of the house on the plot. On the hand it was reduced from 4% to 2% and subsequently by 1%, on the basis of RBD ADV. CIR.23 dated 28.08.2004 (Annexure R-5) but this fact was not appreciated in proper manner by the District Forum, while passing the impugned order. Further the District Forum, wrongly re-write the terms and conditions of the loan agreement, which was totally against the RBD ADV. CIR.23 dated 28.08.2004 (Annexure R-5). In these circumstances, we are of the considered opinion that, the District Forum, without considering the factual position of the case as also the law settled on the subject, wrongly passed the impugned order, in favour of the respondents/complainants. In these circumstances, it could not be said that there was any deficiency, in rendering service, or indulgence into unfair trade practice, on the part of the appellants/Opposite Parties.
16. No other point, was urged, by the Counsel for the parties.
17. The impugned order, therefore, suffers from illegality and perversity, warranting the interference of this Commission.
18. For the reasons recorded above, the appeal filed by the appellants/Opposite Parties, is accepted, with no orders as to costs. The impugned order, passed by the District Forum, is set aside and the complaint filed by the respondents/complainants, before the District Forum, is dismissed.
19. Certified Copies of this order be sent to the parties, free of charge.
20. The file be consigned to Record Room, after completion.
Pronounced.
25.3.2013
Sd/-
[JUSTICE SHAM SUNDER (RETD.)]
PRESIDENT
Sd/-
[NEENA SANDHU]
MEMBER
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STATE COMMISSION
(First Appeal No.26 of 2013)
Argued by: Sh. D. K. Singal, Advocate for the appellants.
Sh. Dev Raj Arora, Respondent No.1, in person and also on behalf of respondent No.2.
Date
ORDER
Vide our detailed order of even date, recorded separately, this appeal filed by the appellants/Opposite Parties, has been accepted with no orders as to costs, as per the directions.
(NEENA SANDHU) MEMBER | (JUSTICE SHAM SUNDER(RETD.)) PRESIDENT | |
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