Tamil Nadu

North Chennai

10/2013

Harsh Dugar, Regional Head Corporate Banking HDFC Bank, - Complainant(s)

Versus

ECL Finance ltd, - Opp.Party(s)

m/s.K.Sumathi

20 Nov 2017

ORDER

                                                             Complaint presented on:  20.12.2012

                                                                Order pronounced on:  20.11.2017

 

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHENNAI (NORTH)

    2^nd Floor, Frazer Bridge Road, V.O.C.Nagar, Park Town, Chennai-3

 

        PRESENT: THIRU.K.JAYABALAN, B.Sc., B.L.,        PRESIDENT

                    THIRU. M.UYIRROLI KANNAN B.B.A., B.L.,      MEMBER - I

 

                                 MONDAY THE 20^th  DAY OF NOVEMBER  2017

 

C.C.NO.10/2013

 

 

Mr.Harsh Dugar,

Regional Head, Corporate Banking,

HDFC Bank Ltd.,

No.115, Dr.Radhakrishnan Salai,

9^th Floor, Mylapore,

Chennai – 600 004.

                                                                                        ..... Complainant

 

..Vs..

 

1. ECL Finance Limited,

Edelweiss House,

Off CST Road,

Mumbai – 400 098.

 

2. Mr.T.Rosario,

Sales Manager,

ECL Finance Limited,

Shree Arcade Plaza,

Old No.91, New No.106,

D Block, 3^rd Floor,

Anna Nagar (East),

Chennai – 600 102.

 

 

 

3. Mr.Hiren Doshi,

Senior Manager,

ECL Finance Limited,

Edelweiss House,

Off CST Road,

Mumbai – 400 098.

	...Opposite Parties

Date of complaint                                  : 10.01.2013

Counsel for Complainant                      : M/s.K.Sumathi, V.Deepa

Counsel for  Opposite parties                   :M/s.J.Viswanathan, Uma Viswanathan

 

 

O R D E R

BY PRESIDENT THIRU. K.JAYABALAN B.Sc., B.L.,

          This complaint is filed by the complainant  to direct the opposite parties  to compute and accept  the rate of interest for the outstanding principal amount at the rate of 8.5% per annum and also to refund a sum of Rs.4,06,284/-  towards wrongful sale of securities and to declare arbitrarily  changing the spread period without notice is an unfair trade practice and also to pay compensation for mental agony with cost   u/s 12 of the Consumer Protection Act.1986.

1.THE COMPLAINT IN BRIEF:

          The complainant is an employee of the regional head in the HDFC Bank in the year 1996 onwards. His service was recognized by the bank and was given an option to subscribe 5500  number of shares  of HDFC to the value of Rs.10/- under the employees talk option scheme. Towards the said scheme, he applied for ESOP loan from the 1^st opposite party, which is a non financing banking company. The complainant  negotiated with the 1^st opposite party and agreed for the rate of interest and on 20.12.2010 he sent a mail to the 1^st opposite party confirming his discussions with his representative and the same extracted in para 6 of the complaint. As per the understanding between the complainant and the 1^st opposite party, the 1^st opposite party has to reset the interest rate of applicable from 1^st April, 1^st July, 1^st October and 1^st January. According to the complainant the same has been confirmed by the 2^nd opposite party, through  the mail issued by the on 24.12.2010.

2. The complainant was under the impression that the rate of interest is 8.5% per annum and the same could be reset upon only from the 1^st April onwards. However, all of the sudden on 14.02.2011 the 1^st opposite party sent a mail informing the complainant that spread period and PLR can be changed only on quarterly basis. The complainant was surprised to receive a mail dated 10.02.2011 from the 1^st opposite party stating that the revised spread period from 825 bps to 450 bps. Such a communication is strange according to the complainant and the same is contradictory to the agreement entered between the parties when the loan document was executed by him. The complainant immediately sent a communication with regard to the change of period of spread on 15.02.2011 to the opposite parties and the opposite party has not replied to his mail and on 14.07.2011 and again the complainant sent a letter to the 1^st opposite party.

          3.The complainant alleged the arbitrary response of the 1^st opposite party in resetting the period of interest is an unfair trade practice and also further alleged that the 1^st opposite party in response to his communication dated 15.07.2011 withheld 1300 share of HDFC and reads over 26000 shares to him. According to the complainant without intimating him, priorly the 1^st opposite party has sold the 1300 shares of the HDFC bank on 05.09.2012 and appropriated a sum of Rs.4,59,988/- and the same was credited towards the loan amount  availed by him. The complainant  alleged the demand by the opposite party is illegal against  the conditions of the contract entered between the opposite party in which he was not put on notice with regard to change of spread period more over he ought to have intimated priorly with regard to the sale of the withheld shares.

          4.The complainant  alleged that the demand made by the opposite party is illegal and against the conditions of the contract entered between them, in which he was not put on notice with regard to the change of the spread period. Moreover, he ought to have been intimated prior to the sale of the withheld shares.

          5. The 1^st opposite party sold 781 shares of the HDFC bank at the rate of Rs.591.60 per share, whereas the share price as on 29.11.2012 was Rs.702/-. The complainant  sent a legal notice alleging upon the 1^st opposite party to refund the sale consideration of 4,59,988/- wrongfully realized and appropriated besides compensating a sum of Rs.1,00,000/- towards depreciation of rights over the share and also enhanced compensation of  Rs.5 lakhs for the mental agony suffered by him due to the action of the opposite parties. The legal notice dated 19.09.2012 caused by the complainant. In pursuant to the legal notice, the complainant deprived the denying the allegations by the reply notice dated 08.10.2012. Hence the complainant filed this complaint seeking various reliefs.

6.WRITTERN VERSION OF THE OPPOSITE PARTIES 1 & 2  IN BRIEF:

          The  opposite parties specifically denied that the spread period could be done only after intimating the complainant. Furthermore, the opposite parties alleged in their version that the complainant was called upon to clear the balance sum of Rs.4,06,284.46/- along with interest. The opposite parties further contended that after a period of 45 days from the date of communication, the complainant has not responded to his demand notice for the payment. Hence the 1^st opposite party sold the 519 numbers of HDFC shares and the same was appropriated to his account. The   opposite parties further contended that only with regard to reset of the interest the complainant ought to have been put on notice not with regard to any other shares.

          7. The opposite parties contented that the schedule of terms in respect of the loan period, the lender shall have the right to increase and show or change spread period any time without prior notice to the borrower. Thus the opposite parties have got every right to change the spread period at any time. The complainant having failed to pay the demand moved by the opposite parties thus forced him to withheld the shares and also to sell the same in order for appropriating the default made by the complainant. Hence the 1^st &2^nd opposite parties sought for the dismissal of the complaint.  

8.WRITTERN VERSION OF THE  3^rd OPPOSITE PARTY IN BRIEF:

           The 3^rd opposite party filed separate written version, adopting the written version of the opposite parties 1 & 2. 

          9. The 3^rd opposite party being a Senior Manager in the 1^st opposite party company, had been providing appropriate instruction to his sub-ordinates, precisely, to the 2^nd opposite party, whenever the e-mails were addressed to him. The complainant failed to appreciate that as initial offer, he was given reduction in the processing fee to the tune of 10% and the rate of Interest on the basis of ECL PLR -9000 bps subject to a minimum of 8.5%. However, owing to the tight and severe hike in the Interest rates in the market, the spread was changed to the complainant as 450 bps resulting to a rate of interest as 13% and subsequently as 350 bps resulting to a rate of interest as 14%. This was communicated to him immediately upon making changes in the books of accounts of the complainant’s Loan account. The 3^rd opposite party submits that he has acted with all fairness, Justice and in very professionally. The changes in the rate of Interest and the calculation of the Loan account were promptly informed to the complainant, periodically. There is no specific allegation against the 3^rd opposite party, which itself proves that the complaint has been filed with an ulterior motive to damage the reputation and career of the 3^rd opposite party. Hence the opposite party prays to dismiss the complaint.

10.POINTS FOR CONSIDERATION:

          1. Whether this Forum has got jurisdiction to try this complaint?

          2. Whether there is deficiency in service on the part of the opposite parties?

          3. Whether the complaint is entitled to any relief? If so to what extent?

11.POINT NO : 1

          The admitted facts are that the  complainant is an employee of the regional head in the HDFC Bank in the year 1996 onwards and his services was recognized by the bank and was given an option to subscribe 5500 number of share of HDFC to the value of Rs.10/- under the employees talk option scheme and towards the said scheme, he applied for ESOP loan to the opposite parties, which is a non financing banking company under Ex.A3 application and the  complainant  agreed for the rate of interest and negotiated with the 1^st opposite party and on 20.12.2010 he sent Ex.A1 mail to the opposite parties  confirming his discussions with his representative  and as per the understanding Ex.A4 schedule of terms between the complaint and the 1^st opposite party, the 1^st opposite party has to reset the interest rate applicable from 1^st April, 1^st July, 1^st October and 1^st January and according to the complainant the same has been confirmed by the 2^nd opposite party mail to the complainant  dated  24.12.2010, which is marked as Ex.A7.

          12. The opposite parties counsel specifically argued that the Master loan agreement signed by the opposite parties at New Delhi and hence New Delhi only has the territorial jurisdiction and not this Forum. The Ex.B2, Master loan agreement and its schedule  is signed by the complainant at Chennai only. Having the complainant signed at Chennai, part cause of action arose at Chennai, and hence this Forum has got jurisdiction to entertain this complaint.

13.POINT NO : 2

           Is whether the reset could be done without intimating the complainant or not is the issue to be decided by this Forum with regard to the relief sought for in the ‘a’ portion of the claim in the complaint. The complainant has been put on notice by the opposite party with regard to the period of spread. However, as per the reset period is concerned, both the parties are covered by the terms of the agreement which has been signed in Ex.A4 schedule of terms dated 21.12.2010 and further as per the communication Ex.A6 of the complainant dated 23.12.2010, the 2^nd opposite party on behalf of the 1^st opposite party has also confirmed the same under Ex.A7 dated 24.12.2010.  Hence the resetting period according to the parties starts from 01.04.11, 01.07.11, 01.10.11 and 01.01.2012. In the case in hand, the opposite parties has reset the period from 10.02.2011 contrary to the agreement entered between the parties with regard to disbursement of loan. Hence the opposite parties have committed deficiency in service and also indulged in unfair trade practice without even intimating the complainant, the reset period has been changed.

 

14. POINT NO.3

          Whether the complainant is entitled for the relief sought in prayer of the complaint, with regard to the payment of principal and interest at the rate of 8.5% per annum from the date of dispersal till the date of maturity. As regards the period of interest and rate of interest is concerned alone, the lender got the right to change the rate of interest according to the norms issued by the Reserve Bank of India. The opposite parties being the lender have got the every right to reset. The only point whether the reset could be done on which period is the issue.

          15. For the relief sought in the prayer (b) with regard to sale of the withheld shares of the complainant by the opposite parties. The complainant sought for a sum of Rs.4,06,284/- which has been realized by the wrongful sale of the securities withheld by the  opposite parties  and also sought for a direction to pay a sum of Rs.1 lakhs being the notional compensation for the loss of ownership and uses of assets namely, 781 shares. The complainant had been put on notice by the opposite party with regard to the payment due on the default made by him by the opposite party as early as on 05.03.2012 through his email and neither the same has been denied nor replied by the complainant.  After waiting for a period of 45 days, the opposite parties had sold the shares only to appropriate the dues to him.

          16. The 3^rd relief sought by the complainant in clause (c) of the complaint with regard to mental agony suffered by the complainant seeking Rs.5 lakhs as compensation as relief  sought for in deficient  act of the opposite parties in resetting the proviso contrary to any notice. According to the complainant the spread period has been changed without any notice by the opposite parties. However the opposite parties categorically denied the same that only with regard to the period of lending interest alone to be changed without getting the consent of the borrower. With regard to spread the lending party (1^st opposite party) got every right to reset or change the spread without any notice to the borrower. Hence the relief sought for in the prayer is denied by the opposite parties. The opposite parties mainly disputed the resetting of loan as the resetting of loan is done only as per the guidelines of the Reserve Bank of India and hence the complainant is not entitled for the relief sought for as per ‘a’ portion of the complaint.

          17. The opposite parties cannot be directed to compute and accept the outstanding amount payable to the complainant as principal with interest at the rate of 8.5% per annum till the date of stipulated period for the reasons, that the 1^st opposite party are bound by the guidelines. The complainant has never stated that the opposite party has violated the guidelines of the RBI in modifying the interest from 8.5% to 9% per annum. Hence the relief sought by the complainant in respect of the clause (a) is rejected. The relief sought in the clause (b) of the complaint directing the 1^st opposite party to refund of Rs.4,06,284/-  alleged due by him is also rejected for the above reasons. The opposite party has already put the complainant on notice prior to the sale of the withheld shares on 05.09.2012. After waiting for a period of 45 days, the  opposite parties has chosen to sell the withheld shares in view of fact that the complainant has neither responded to the mail dated 05.09.2012 nor represented the opposite party from getting along with the sale of the withheld shares. Hence the complainant is not entitled for the relief sought.

          18. In respect of the relief sought for by the complainant in clause (c) that the opposite parties are directed to pay a sum of Rs.5/- lakhs for mental agony suffered for the deficiency in service and unfair trade practice has to be considered by this Forum. The opposite party having agreed to reset the loan period from 1^st April 2011 unilaterally and arbitrarily reset the loan period from 1^st April to 10.02.2011 held as unfair trade practice of deficiency in service. Moreover, both the parties entered into terms of loan agreement on 23.12.2010 itself on the understanding the reset period which starts from 01.04.2011 onwards. The opposite parties only obligation is as per the standard form of contract not to insert any proviso without getting the consent or putting the complainant on notice with regard to inserting of provision in the contract. Hence the opposite parties committed unfair trade practice.       As on 10.02.2011 the  opposite parties has changed the reset period and hence they have committed deficiency in service and the complainant is entitled to get the Rs.1,00,000/-  for the mental  agony suffered by him, besides a sum of Rs.5,000/- towards litigation expenses.

          In the result the Complaint is partly allowed. The Opposite Parties 1 to 3  jointly or severally  are  ordered to pay  a sum of Rs.1,00,000/- (Rupees one lakh only) towards compensation for mental agony in respect of  resetting  of the spread period and raising the interest  rate from 10.02.2011 instead of 01.04.2011 contrary to the loan agreement, besides a sum of Rs.5,000/- (Rupees five thousand only) towards litigation expenses. The Complaint in respect of other reliefs sought for is dismissed.

          The above amount shall be paid to the Complainant within 6 weeks from the date of receipt of the copy of this order failing which the above said amount shall carry 9% interest till the date of payment.

Dictated to the Steno-Typist transcribed and typed by her corrected and pronounced by us on this 20^th   day of November 2017.

 

MEMBER – I                                                                PRESIDENT

LIST OF DOCUMENTS FILED BY THE COMPLAINANT:

Ex.A1 dated 20.12.2010	Mail written by Complainant to the 2nd Opposite Party being sales Manager of the 1st Opposite Party
Ex.A2 dated 21.12.2010	Mail from Complainant to the 2nd Opposite Party
Ex.A3 dated 21.12.2010	Loan Request Form executed by the Complainant
Ex.A4 dated 21.12.2010	Schedule of Terms executed by the Complainant
Ex.A5 dated 21.12.2010	Acknowledgement taken from Complainant for having received documents executed on 23.12.2010
Ex.A6 dated 23.12.2010	The mail from Complainant to 2nd Opposite Party seeking confirmation on agreed terms including rate of interest, Reset
Ex.A7 dated 24.12.2010	The reply mail by the 2nd Opposite Party confirming the Rate of Interest, Reset applicable to Complainant as per his mail dated 02.12.2010
Ex.A8 dated 10.02.2011	Email from 1st Opposite Party to Complainant
Ex.A9 dated 10.02.2011	Reply mail from Complainant to the Opposite Parties
Ex.A10 dated 14.02.2011	Reminder mail sent by Complainant to the 2nd Opposite Party
Ex.A11 dated 14.02.2011	E-mail response to Complainant from the 1st Opposite Party
Ex.A12 dated 15.02.2011	Email from Complainant to the Opposite Parties
Ex.A13 dated 14.07.2011	Email sent by Complainant to the Opposite Parties
Ex.A14 dated 15.07.2011	Email from the Opposite Party to Complainant
Ex.A15 dated 16.07.2011	Email by Complainant to the 2nd Opposite Party
Ex.A16 dated 25.07.2011	Email from Complainant to the 2nd Opposite Party
Ex.A17 dated 10.08.2011	Email from Complainant to the 2nd Opposite Party
Ex.A18 dated 14.01.2012	Email from Complainant to the  Opposite Parties
Ex.A19 dated 18.01.2012	Email from the 2nd Opposite Party to the Complainant
Ex.A20 dated 21.01.2012	Email from Complainant to the Opposite Parties
Ex.A21 dated 29.06.2012	Legal notices caused on behalf of Complainant to the 1st, 2nd and 3rd Opposite Parties
Ex.A22 dated 17.07.2012	Reply to Legal Notice issued on behalf of the Opposite Parties
Ex.A23 dated 05.09.2012	Intimation mail sent by the 1st Opposite Party to the Complainant
Ex.A24 dated 08.09.2012	Objection mail sent by  Complainant to the 1st Opposite Party
Ex.A25 dated 10.09.2012	Contract – cum – Bill bearing the Settlement Date 07.09.2012 issued by the 1st Opposite Party to Complainant
Ex.A26 dated 01.04.2010                  To 10.09.2012	The statement of accounts issued by the 1st Opposite Party to Complainant
Ex.A27 dated 10.09.2012	Email form the Opposite Party to the Complainant
Ex.A28 dated 19.09.2012	Legal Notice  caused by the Complainant  to the Opposite Parties
Ex.A29 dated 08.10.2012	Reply Notice caused by the Opposite Parties to counsel for Complainant

LIST OF DOCUMENTS FILED BY THE OPPOSITE PARTY:

Ex.B1 dated 30.01.2013                   ECL Finance Limited

Ex.B2 dated 21.12.2010                   Resident Individual Client Registration Form

Ex.B3 dated 02.10.2011                   Subject Revision of interest rate for your ESOP

                                                Account

 

Ex.B4 dated 06.01.2012                   Edelweiss

Ex.B5 dated 18.01.2012                   Letter

Ex.B6 dated 23.02.2012                   confirmation of funds

Ex.B7 dated 05.03.2012                   Interest rate

Ex.B8 dated 07.09.2012         ESOP Loan –EHB2312830 

 

 

MEMBER – I                                                                PRESIDENT