Andhra Pradesh

Visakhapatnam-II

CC/62/2013

B. Rajesh - Complainant(s)

Versus

First Blue Home Finance Limited - Opp.Party(s)

Sk. Safi

02 Jan 2015

ORDER

                                              Date of Registration of the Complaint:20-03.2013

                                                                                                Date of Order:02-01-2015

BEFORE THE DISTRICT CONSUMERS FORUM-II AT

                             VISAKHAPATNAM

 

P  r  e  s  e  n  t:

1.  Sri H. Ananda Rao, M.A., L.L.B.,

     President           

2. Smt K. Saroja, M.A. B.L.,

     Lady Member 

                                3. Sri C.V. Rao,  M.A., B.L.,

                                     Male Member

 

                            Friday, the 2^nd day of January, 2015.

                                 CONSUMER CASE No.62/2013

Between:-

B. Rajesh, S/o Venkateswara Rao, Hindu,

aged 38 years, residing at Door No.16-4-12,

Official Colony, Maharanipet, Visakhapatnam-2.

 

….. Complainant

And:-

First Blue Home Finance Ltd., 10-1-44/6,

Peejay Plaza, Opp: Hotel Tycoon, C.B.M.

Compound, V.I.P. Road, Visakhapatnam-3,

rep. by its Authorised Signatory P. Ramesh

Reddy.

                                                                                          …  Opposite Party    

                     

          This case coming on 16.12.2014 for final hearing before us in the presence of Sri P. Appanna and S.K. Safi, Advocates for the Complainant and Sri G.V.S. Sree Rama Kumar, Advocate for the Opposite Party is called absent and having stood over till this date for consideration, this Forum made the following:

 

                                                ORDER

          (As per Sri. H. Ananda Rao, Honourable President, on behalf of the Bench)

 

1.       This consumer complaint is filed by the Complainant against the Opposite Party directing him to refund the amount of Rs.6,532/- (difference of access interest collected and refunded) “ Rs.8,000/- minus Rs.1468” with interest @ 24% p.a. from the date of collection till date of realization, to refund the foreclosure charges of Rs.99,084/- with interest @ 24% p.a. from the date of its receipt till realization, to pay Rs.50.000/- towards compensation for causing mental agony and costs.

 

 2.      The case of the Complainant in brief is that the Complainant is an employee under private organization and the Opposite Party is doing business in the name and style of Housing Finance Business with its Branch Office situated at Visakhapatnam and the Complainant availed housing loan of Rs.45,00,000/- (Rupees Forty five lakhs only) from the Opposite Party vide loan account VIS/030287 dt.12.02.2010 and he paid the installments regularly as and when fault due, and he thought of closing the loan his mother approached the Opposite Party on 16.03.2012 and requested for quotation for Foreclosure of Loan to which the Opposite Party issued Ex.A1.  Wherein it is mentioned net amount receivable is Rs.44,19,786/- and the foreclosure charges due as nil.   But the Complainant could not close the account on the said date as the funds could not be arranged for. 

 

3.       The Complainant stated that again his mother approached the Opposite Party on 22.05.2012 after making with all arrangements to close the account, the Opposite Party again issued “Quotation for Foreclosure Loan” i.e., Ex.A2 dated 22.05.2012 wherein the net amount mentioned is Rs.45,09,914/- which includes the Foreclosure Charges as Rs.99,084/- against the head of the foreclosure charges dated 25.05.2012  i.e., Ex.A3 to the Opposite Party stating the incidents of the foreclosure charges is against the directors of the RBI and as such, they may be exempted from the payment of foreclosure charges, on that the Opposite Party got issued a reply notice dated 30.05.2012 i.e., Ex.A4 stating that the exemption of foreclosure charges is available in case of loans with floating/variable rate of interest and this exemption is only for that month.   Restricting the validity of quotation for that month only is an invented difference but nowhere own mentioned i.e., Ex.A4 on that he got issued a rejoinder dated 22.06.2012 stating the reasons for on abolition of foreclosure charges etc.,

 

4.       That he paid an amount of Rs.44,99,591/- p.m. on 23.06.2012 including foreclosure charges by way of D.D. dt. 22.06.2012 drawn on H.D.F.C Bank towards discharges of loan including interest calculated up to 30.06.2012 but though the closed loan the Opposite Party charged interest up to 30.06.2012 though he is not entitled to charge interest on the loan from 26.06.2012 to 30.06.2012 as the loan was closed on 26.06.212.   On that they got issued a legal notice, not only for refund of the excess interest the collected amount but also for foreclosure charges but there is no response.   Hence, this Complaint.

 

5.       The case of the Opposite Party denying the material averments and admitted that the Complainant availed Housing Loan of Rs.45,00,000/- but stated that the loan provided was with Special Rates of Interests (SIR) i.e., Fixed and Floating.   As per the terms agreed the interest charged on the Opposite Party’s loan account for initial period of 24 months from the first day of the subsequent month in which the first disbursement was made, was fixed @ 8.5% after the expire of the said period the interest rate on the loan will automatically be converted into Variable Interest Rate (VIR).   The rate of interest variable rate of interest is linked to the Retail Basic Lending Rate.   The sanction letter very categorically discloses the said fact.

 

6.       That when the Complainant had approached the Opposite Party in the month of March, 2012 expressing his intention to close the account a quotation dated 16.03.2012 for pre-closer of loan was facilitated which shall be applicable only if the loan is closed in the month of March, 2012.   But the Complainant has not preferred to close the loan for the best and when he approached again in the month of May, 2012.  The Opposite Party accorded to a quotation dated 22.05.2012 afresh, for pre-closing his loan account, and on that when the Complainant got issued a legal notice 25.05.2012 questing the quoting of fore-closure charges of Rs.99,084/- and he got issued a reply notice. 

 

7.       As per the terms agreed if the Complainant prefers to pre-closure his loan account he shall pay 2% on the amount pre-paid towards prepayments charges.   It is also their case as they being the Housing Finance Company registered with the National Housing Bank, a statutory authority and the guidelines and directives issued by the National Housing Bank are binding on them vide Ex.B2.   Vide Ex.B1 it does not refer to the excess covered under SIR no pre-payment charges were mentioned in their quotation dated 16.03.2012.   Subsequently, the National Housing Bank have issued a clarification vide Ex.B3, the pre-closure charges applicable to fixed interest rate housing loan shall also be applicable for the loans under Special Interest Rates.   Hence, pre-closure charges were been quoted in their quotation dated 22.05.2011 and accordingly, the Opposite Party charged pre-closure charges from the Opposite Party.   Hence, the pre-closure charges, charged from the Complainant were as per the rules prevailing as on the date of closing of the said loan account.   Hence, the allegation of the Complainant that the Opposite Party has made unlawful gain by imposing pre-closure charges is absolutely false.  

 

8.       With regard to the claim of Rs.8,000/- made by the Complainant alleged to be excess interest collected by them, they contended that as per the terms agreed the interest payable is on the monthly rests.   As they have received the clearance of the closure amount on 29.06.2012, as per the prevailing rules and practice their entitled to charge the interest when the amount actually received to its account as per Ex.AB4.    That if be so they have not charged access amounts towards interest for these reasons, the Complainant is liable to be dismissed.

 

9.       To prove the case on behalf of the Complainant filed his sworn affidavit and got marked Exs.A1to Ex.A19 was also Additional Affidavit.   On the other hand, on behalf of their Deputy Manager evidence affidavit his filed got marked Exs.B1 to Ex.B4.

 

10.     Ex.A1 is the photo copy of Quotation for Foreclosure of Loan issued on 16.03.2012 by the Opposite Party in favour of the Complainant.  Ex.A2 is the photo copy of the Quotation for Foreclosure of Loan issued by the Opposite Party in favour of the Complainant on 22.05.2012.  Ex.A3 is the Registered Lawyer’s Notice addressed by the learned counsel of the Complainant to Opposite Party on 25.05.2012.  Ex.A4 is the Reply notice addressed by the Opposite Party to the Complainant’s counsel on 30.05.2012.  Ex.A5 is the Office copy of rejoinder sent by the Complainant to the Opposite Party on 22.06.2012.   Ex.A6 is the office copy of the letter addressed by Complainant to Opposite Party on 25.08.2012.  Ex.A7 is the office copy of the Legal Notice issued by the Complainant to the Opposite Party on 23.10.2012.   Ex.A8 is the Reply Notice sent by the Opposite Party.  Ex.A9 is the letter addressed by the Opposite Party to the Complainant on 03.11.2012.  Ex.A10 is the photo copy of Axis Bank Cheque for Rs.1,468/- on 03.11.2012 issued in favour of the Complainant.   Ex.A11 is the Acknowledgement card from the Opposite party on 27.06.2012.   Ex.A12 is the Acknowledgement card from the Opposite Party on 30.10.2012.  Ex.A13 is the photo copy of Pre-payment Penalties on Home Loan Closure Abolished as per RBI.   Ex.A14 is the RBI abolishes prepayment penalty on Home Loans NDTV Correspondent, New Delhi on 17.04.2012.  Ex.A15 is the photo copy of RBI abolishes prepayment penalty on Home Loans NDTV Correspondent, New Delhi on 17.04.2012.   Ex.A16 is the photo copy of RBI Guidelines.  Ex.A17 is the photo copy of RBI Guidelines on 16.06.2012.   Ex.A18 is the photo copy of RBI Guidelines on 5.6.2012.   Ex.A19 is the letter addressed by Complainant to the Opposite Party on 23.06.2012.     

 

11.     Ex.B1 is the attested copy of Loan Offer letter addressed by HDFC  Bank in favour of the Complainant dated 12.02.2010.   Ex.B2 is the attested copy of Directives vide their Circular NHB (ND)/DRS/Pol-No.43/2011-12 dated 19.10.2011.   Ex.B3 is the attested copy of Circular NHB (ND)/DRS/Pol-No.48/2011-12 dated 04.04.2012.  Ex.B4 is the attested copy of Account Statement Pickup Location wise issued by HDFC Bank   

 

12.     Both parties filed their respective written arguments.  

 

13.     Heard oral arguments from both sides.

 

14.     Now the point that arises for determination is:-

Whether there is any deficiency in service on the part of the Opposite Party and the Complainant is entitled for the reliefs asked for:

 

1. Whether the collection of pre-closure/foreclosure charges by the Opposite Party from the complaint is lawful or not?
2. Charging of interest by the Opposite Party till 30.06.2014 when the loan was closed on 23.06.2012 is lawful or not?
3. Is there any deficiency of service on the part of the Opposite Party or not?
4. To what relief?

 

15.     It is an admitted fact that as per the terms agreed, if the Complainant prefers to pre-closure his loan account he shall pay 2% on the amount prepaid towards prepayment charges vide Ex.B1, coming to the issue, as per the terms agreed the rate of interest charged as per the agreement is Special Rate of Interest i.e., fixed and Floating.   As per the terms agreed the interest charged on the Opposite Party’s loan account for initial period of 24 months from the first day of the subsequent month in which the first disbursement was made was fixed @ 8.5% after the expire of the afore-mentioned period of 24 months the interest rate on the loan will automatically be converted into the Variable Interest Rate (VIR) and it is applicable for the balance period/term.   The rate of interest for the variable rate of interest is linked to the Retail Basic Lending Rate (RBLR).

 

16.     As per Ex.A1 the quotation dated 16.03.2012 for pre-closure the foreclosure were not mentioned since there was no clarity by NHB in its circular NHB(ND)/DRS/Pol-No.43/2011-12 dt.19.10.2011 i.e., Ex.B2.  It appears by the time 2^nd quotation dated 22.05.2012 i.e., Ex.A2 the NHB has issued a circular clarifying the position relied to Housing Loan relating to Special Rate of Interest vide its circular NHB (ND)/DRS/Pol-No.48/2011-12, dated 4.4.2012 vide Ex.B3.  Therefore, the fore-closure Charges were included.   It is evident as per Exs.B2 and B3 no foreclosure charges shall be levied on the loans bearing Variable Interest provided the loans are closed with own funds

 

17.     That since this Special Rate of Interest was applicable to the Complainant loan and as per Ex.B3 the foreclosure charges are applicable and that the Complainant has not closed the loan with his own funds but by barrowing from India Bulls Housing Financial Ltd., a financial institutions which fact was not denied by the Complainant at any point of time.   Therefore, the guidelines of the National Housing Bank a Division of RBI shall be binding on the Opposite Party.

 

18.     Point-1:    The Complainant relied Ex.A11 to Ex.A16 contending RBI advised all the Housing Financial Institutions to follow the uniformity of waving foreclosure charges to preclude the existing customers to switch over to other institutions that are not charging the same, but the guidelines NHB are otherwise as referred supra.   Therefore, the contention of the learned counsel for the Complainant has no legs to stand.   Further the record clearly and categorically goes to show the Complainant closed the loan by barrowing loan from other financial institutions.    For all these reasons, we are of the considered view the allegation of the Complainant that the collection of foreclosure charges is illegal has no legs to stand.   Accordingly, this point is answered.

 

          Point-2:   It is true that the Complainant has paid the amount loan by way of D.D 699878 dated 23.06.2012 but the Opposite Party received the clearance of the closure instrument on 29.06.2012 which is evident as seen from Ex.B4.   Hence, the interests were charged till 29.06.2004.   Though the interest chargeable is on monthly rests as the matter of special juncture an interest collected on 30.06.2012 was returned to the Complainant.   For these reasons, it can be held the Opposite Party has right to collect the amount till the date of realization, of the instrument.   Therefore, we hold that the Opposite Party charged the interest, in accordance with the agreement and rules.    Accordingly, this point is answered:-

 

          Point-3:     It is held under points No.1 & 2 the Complainant failed to prove that there is illegality on the part of the Opposite Party in collecting the foreclosure charges and the rate of interest collected only till 29.06.2012.  Therefore, we are of the considered view that no deficiency of service can be attributed to the Opposite Party.   Accordingly, this point is answered.

 

19.     In the light of our discussions referred in the aforementioned paragraphs, the Complainant filed by the Complaint deserves to be dismissed.  

 

20.     In the result, this Complaint is dismissed.   No costs.

     Dictated to the Steno, transcribed by him, corrected and pronounced by us in the Open Forum, this the 2^nd day of January, 2015.

Sd/-                                     Sd/-                                                Sd/-

Male Member                     Lady Member                                     President

                            

 

APPENDIX OF EVIDENCE

For the Complainant:-

NO.	DATE	DESCRIPTIONOFTHEDOCUMENTS	REMARKS
Ex.A01	16.03.2012	Quotation for Foreclosure of Loan	Photo copy
Ex.A02	22.05.2012	Quotation for foreclosure of loan	Photo copy
Ex.A03	25.05.2012	Registered Lawyer’s Notice issued by learned counsel of the Complainant to OP	Office copy
Ex.A04	30.05.2012	Reply Notice issued by OP	Original
Ex.A05	22.06.2012	Notice of rejoinder issued by Complainant to OP	Office copy
Ex.A06	25.08.2012	Letter addressed by Complainant to OP	Office copy
Ex.A07	23.10.2012	Legal Notice issued by Complainant to OP	Office copy
Ex.A08		Reply Notice sent by the OP	Original
Ex.A09	03.11.2012	Letter sent by OP	Original
Ex.A10	03.11.2012	Cheque for Rs.1,468/-	Photo copy
Ex.A11	27.06.2012	Acknowledgement Card	Original
Ex.A12	30.10.2012	Acknowledgement Card	Original
Ex.A13		Pre-payment Penalties on Home Loan Closure Abolished as per RBI	Photo copy
Ex.A14	17.04.2012	RBI abolishes prepayment penalty on Home Loans NDTV Correspondent, New Delhi.	Photo copy
Ex.A15	17.04.2012	RBI abolishes prepayment penalty on Home Loans NDTV Correspondent, New Delhi	Photo copy
Ex.A16		RBI Guidelines	Photo copy
Ex.A17	16.06.2012	RBI Guidelines	Photo copy
EX.A18	05.06.2012	RBI Guidelines	Photo copy
Ex.A19	23.06.2012	Letter issued by Complainant to OP	Original

For the Opposite Party:-                 

NO.	DATE	DESCRIPTIONOFTHEDOCUMENTS	REMARKS
Ex.B01	12.02.2010	Loan Offer Letter issued by Deutsche Post Bank to Complainant	Attested copy
Ex.B02	19.10.2011	Directives vide their circular NHB (ND)/DRS/Pol-No.43/2011-12	Attested copy
Ex.B03	04.04.2012	Circular NHB (ND)/DRS/Pol-No.48/2011-12	Attested copy
Ex.B04	28.06.2012	Account Statement Pickup Location wise issued by HDFC Bank	Attested copy

     Sd/-                                Sd/-                                               Sd/-

Male Member                     Lady Member                                      President