Delhi

East Delhi

CC/420/2014

HARISH - Complainant(s)

Versus

G.E.MONEY - Opp.Party(s)

21 Mar 2018

ORDER

 DISTRICT CONSUMER DISPUTE REDRESSAL FORUM (EAST)

GOVT. OF NCT OF DELHI

CONVENIENT SHOPPING CENTRE, FIRST FLOOR,

SAINI ENCLAVE, DELHI – 110 092

 

C.C. NO. 420/14

 

Shri Harish Johar

R/o C-404, Nagarjuna Appts.

A1 Chilia Regulator, Mayur Vihar Extn,

Delhi – 110 096                                                                              ….Complainant

Vs.

1. GE Money Financial Services Ltd.

Off.: Unit No. 401 & 402, 4^th Floor

Aggarwal Millennium Tower, E-1,2,3

Netaji Subhash Place

Pitampura, New Delhi – 110 001

 

2. MAGMA Fincorp Limited

AEG Off – 24, Park Street

Kolkata – 700 016Opponent

 

Date of Institution: 03.05.2014

Judgment Reserved on: 21.03.2018

Judgment Passed on: 26.03.2018

CORUM:

Sh. Sukhdev Singh (President)

Dr. P.N. Tiwari (Member)

Ms. Harpreet Kaur Charya (Member)

 

Order By : Ms. Harpreet Kaur Charya (Member)

 

JUDGEMENT

            The present complaint has been filed by Shri Harish Johar against GE Money Financial Services Ltd. (OP-1) and Magma Fincorp Limited (OP-2) under Section 12 of the Consumer Protection Act 1986 alleging deficiency in services.   

2.         Briefly stated the facts of the complaint are that the complainant was approached by the executive of OP, who convinced the complainant to apply for home equity loan.  The said loan was for Rs. 15,00,000/- for a period of     8 years vide loan account no. HDLH 00012391 @ 13.30% p.a. interest, with EMI of Rs. 25,463/-.   The complainant had handed over the post dated cheques. 

            It has been stated in the complaint that the complainant was regular in paying installments which commenced from 07.11.2007.  In the month of February, 2013, the complainant was informed that OP-1 had been taken over by Magma Fincorp Limited (OP-2). 

            It has been further stated that in 2013, the officer of OP-2 requested the complainant to issue fresh cheques for April and May 2013, as they had been lost.  Complainant issued fresh cheques with assurance that no interest would be charged.  Thereafter, the complainant met one of the officers of OP, to foreclose his account and requested for statement of loan account. 

            The complainant was shocked to see that OP had mentioned installment overdue as stated in note dated 22.01.2014, Rs. 19,421.97 +      Rs. 6,041.03, interest on principal outstanding till dated 4,587.20/-, OD INT. 20770.79/- and CBP as 800/-.  

in their letter dated 20.02.2014, 03.03.2014, the complainant did not get any satisfactory reply.  Hence, the present complaint praying for directions to OP to refund all the excess charges as prepayment charges, cheque dishonor charges, CBP charges and DD interest; Rs. 4,00,000/- as compensation for harassment and mental agony and Rs. 50,000/- as litigation charges.

            Complainant has annexed with the complaint the loan account statement, schedule of charges and general information, letter dated 06.10.2007, written by OP-1, receipts dated 08.08.2008, 23.10.2013 and 31.01.2014, letter dated 12.02.2013 issued by OP-1 and letters written by the complainant to OP. 

3.         WS was filed by OP on service of the notice, where they took several pleas such as there was no cause of action in favour of the complainant; the complainant did not invoke arbitration clause as envisaged in the agreement; the complainant was defaulter and irregular in paying installments etc.  It was submitted that as per terms and conditions, in case the complainant returned the loan in 48 months then he was liable to pay 4.49% as foreclosure charges. 

4.         Rejoinder to the WS of OP was filed by the complainant where the contents of the complaint were reiterated and those of WS were denied.  It was reiterated that the foreclosure charges were 2%. 

5.         Evidence by way of affidavit was filed by Shri Harish Johar, the complainant who have examined himself on affidavit and reiterated the averments made in his complaint. 

            In defence, OP have examined Shri Lalit Kumar, AR of Magma Fincorp Ltd., who has deposed on oath the contents of their WS and have relied on copy of Loan Agreement.

6.         We have heard the submissions on behalf of the Ld. Counsel for the complainant and have perused the material placed on record.  Firstly, deciding on the preliminary objection, raised by OP that the complaint was barred due to existence of arbitration clause in the agreement.  IN respect to this objection, Hon’ble Supreme Court in M/s. Emar MGF Land Limited & Anr. vs. Aftab Singh in CA No. 23512-23513 of 2017, has held that Arbitration Clause in the agreement cannot circumscribe the jurisdiction of consumer for a, notwithstanding the amendments made to Section 8 of the Arbitration Act.  Hence, this forum has jurisdiction to adjudicate the present complaint.

            Now, deciding on the merits of the complaint, the complainant has firstly disputed the foreclosure charges, it has been stated by the complainant that foreclosure charges were 2% of the Principal outstanding in case of 37 to 48 months on books, but OP has charged 4.49%.  If we look into the Schedule of Charges and General Information, the note reads as

“Current Pre-payment Charges:

Between 0-12 months – No prepayment allowed*

If prepayment is made between 13-24 months – 5.00%

If prepayment is made between 25-36 monhths – 3.50%

If prepayment is made after 36 months – 2.00%

* At sole discretion of company, minimum 5% + balance interest for the first year.

In the event pre-payment is requested by the Borrower for availing a loan facility on the same property from any other bank, financial institution or entity, the Borrower shall pay an additional pre-payment charge of 2% of the outstanding Loan over and above the pre payment charges stated in the sub-clause 12 above.”

as well as the loan agreement placed on record by OP also bears the same.  So, the plain reading of Clause 12 of Loan Agreement shows that 2% were the foreclosure charges as in the present case, complainant made prepayment after 36 months.  Even otherwise, OP has not pleaded that the borrower/complainant had requested prepayment for availing loan facility on the same property from any other bank, financial institution.  Thus, from above discussion OP has wrongly charged 4.49% as foreclosure charges. 

            Further, with respect to the default in payment of 2 installments for the month of August 2008 and September 2008, the complainant has placed on record the receipt bearing no. CDL1255803 for payment of the same by cash and one receipt for 23.10.2013, therefore, there has been a delay in payment of installment due for September 2008.  Thus interest on late payment is justified.  OP has failed to give plausible explanation regarding OD charges also. 

            Hence, we hold that OP has indulged in unfair trade practice by charging 4.49% as foreclosure charges alongwith OD charges.  Therefore, we direct OP to refund excess of 2.29% charge charged by them and also        Rs. 20,770/- on account of OD charges.  We also direct OP to pay               Rs. 15,000/- as compensation on account of mental agony and harassment which includes the cost of litigation.  

            Copy of the order be supplied to both the parties as per rules.

File be consigned to Record Room.

 

(DR. P.N. TIWARI)                                              (HARPREET KAUR CHARYA)

Member                                                                                Member    

 

            (SUKHDEV SINGH)

             President