Punjab

Ludhiana

CC/14/239

Kuldeep Kumar - Complainant(s)

Versus

GE Money Financial ServicesLtd - Opp.Party(s)

06 Aug 2014

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

 

                                                          C.C. No.239 of 12.03.2014

                                                          Date of decision:06.08.2014 

 

1.Kuldeep Kumar resident of H.NO.3075 New, F-17, Old, Gurdev Nagar, Opp. Ansal Plaza, Ludhiana.

2.Neena Narang w/o Sh.Kuldeep Kumar resident of H.NO.3075 New, F-17, Old, Gurdev Nagar, Opp. Ansal Plaza, Ludhiana.

3.Brijesh Narang s/o Sh.Munshi Ram r/o H.No.113, Panchsheel Vihar, Near Magnet Resort, Barewal Road, Ludhiana.

4.Raj Kumar s/o Sh.Munshi Ram r/o H.No.113, Panchsheel Vihar, Near Magnet Resort, Barewal Road, Ludhiana.

                                                          ….Complainants.

                                       Versus

                                                                    

1.GE Money Financial Services Ltd., Regd.Office: Unit No.401 and 402, 4^th Floor, Aggarwal Millennium Tower, E-1,2,3, Neta Ji Subhash Place Pitampura, New Delhi-11034 through its authorized signatory.

2.GE Money, Megma Fincorp Ltd., Room No.213-214, 2^nd floor, Savitri Complex, Dholewal Chowk, G.T.Road, Ludhiana.

                                                …Opposite parties.

 

COMPLAINT UNDER SECTION 12 OF THE

CONSUMER PROTECTION ACT, 1986.

 

Quorum:    Sh. R.L.Ahuja, President.

                   Sh.Sat Paul Garg, Member.

                   Smt.Priti Malhotra, Member.

 

Present:       Sh.L.D.Gupta, Adv. For complainant.

Ops ex-parte.

 

                                                ORDER

SAT PAUL GARG, MEMBER.  

 

1.                Present complainant under Section 12 of the Consumer Protection Act, 1986 has been filed by Sh.Kuldeep Kumar on his own behalf and on behalf of Mrs.Neena Narang, Sh.Brijesh Narang and Sh.Raj Kumar(hereinafter in short to be described as ‘Complainants’) against GE Money Financial Services Ltd., Regd.Office: Unit No.401 and 402, 4^th Floor, Aggarwal Millennium Tower, E-1,2,3, Neta Ji Subhash Place Pitampura, New Delhi-11034 through its authorized signatory and others(hereinafter in short to be described as ‘Ops’), directing them to refund the amount of Rs.4,67,902/- with interest @24% from the date of due till its payment alongwith Rs.2 lakh as compensation for causing mental tension and agony and Rs.55,000/- as litigation costs  besides other benefits to the complainant.

2.                In brief, case of the complainants is that the complainants took a loan of Rs.58 lakh from the OPs against loan account No.HLHE00001870 and complainant no.2 to 4 were co-borrowers of the abovesaid loan which was to be repaid in 180 equated monthly installments alongwith interest and the rate of interest could only be increased or decreased for the payment of future installments. As surety of the abovesaid loan, the complainants pledged their property No.3075 NEW, F-17 (old), Gurdev Nagar, Opp.Ansal Plaza, Ludhiana with the Ops. The complainant paid all the due installments of the said loan within the stipulated period and they were not defaulted in the payment of any installment. Over and above, the payment of regular installment of this loan, the complainants in order to lessen their burden, paid lumpsum amount of Rs.23 lakh on 7.7.2012 which was accepted by the Ops without demanding any pre-payment charges or raising any other objection regarding the payment of Rs.23 lakh. Due to personal reasons and high cost of this loan, the complainants decided to pre-pay(foreclosure) the entire balance of this loan and requested the OPs to intimate them the balance amount of this loan to be deposited. In response to which, OPs vide their letter dated 26.11.2012 had intimated the complainants for the payment of the certain amounts which are totally illegal, unlawful, unwarranted and against the terms and conditions of this loan. The OPs asked the complainant to pay Rs.1,13,881.65P on the balance loan amount and Rs.1,03,270/- as pre-payment charges on the amount of Rs.23 lakh which the Ops had accepted without raising any objection and without demanding any prepayment charges of this amount. This entire demand of Rs.2,17,151,65P is claimed to be illegal and unwarranted by the complainant. Further, it is averred that the Ops are also demanding alleged overdue amount of interest amounting to Rs.2,53,634/- which is totally illegal, unwarranted and against law. The complainant has been paying all the installments of this loan alongwith the amount of interest as and when demanded by the OPs. Now, suddenly, when the complainants wanted to foreclose this loan, the OPs raised this demand of overdue interest of Rs.2,53,634/- on the false plea that the Ops have increased the rate of interest on this loan with retrospective effect which is totally false and fabricated and not liable to pay by the complainant. The complainant was never intimated about the alleged increase in “GEMFSFRR” and increase in the rate of interest from 13.5% to 15.91%. Even in the Amortization schedule supplied by the Ops to the complainants on 23.8.2012, the Ops calculated the balance on the basis of rate of interest 9.5%, 10.29%, 11%, 11.71%, 10.96%, 11.71%, 12.71% and 13.21%. Action of the Ops in raising this amount of Rs.2,53,634/- at the time when the complainant is in the clutches of the Ops is totally illegal,, unwarranted and claimed to be deficiency in service. Hence, this complaint.

3.                Upon notice of the complaint, earlier Sh.Sanjeev Rajput, Legal Advisor was appeared on behalf of OP2 and sought time for filing the written reply, whereas, notice of the complaint was sent to OP1 through registered post on 26.03.2014, but the same was not received back and as such, after expiry of 30 days of period, Op1 was proceeded ex-parte vide order dt.29.04.2014 by this Forum. 

4.                When the case was fixed for filing written reply by OP2, Sh.Sanjeev Rajput, Legal Advisor of OP2 had suffered statement to the effect that above mentioned case does not pertain to their company i.e. Megma Fincorp Limited/OP2 and this case does not belong to them. They had not any record relating to this case and asked to summon the GE Money Financial Services Ltd. However, despite granting number of opportunities to the OP2 to file the written reply, OP2 failed to file the same and also failed to appear despite granting last opportunities in this regard and as such, OP2 was also proceeded against ex-parte vide order dated 3.7.2014 by this Forum.

5.                In order to prove the case of the complainant, learned counsel for the complainant tendered into evidence affidavit of complainant as Ex.CA alongwith documents Ex.C1 to Ex.C15 and thereafter, closed the evidence of the complainant.

6.                Written arguments have been submitted by the complainant, wherein, same allegations have been reiterated and further argued that OP could not recover any prepayment charges (Rs.1,03,270/-) on this amount of Rs.23 lakh and could recover prepayment charges @2% only on the balance loan amount of Rs.25,36,339.56P which was paid at the time of foreclosure of this loan on 28.01.2013 and further relied upon certain citations as placed on file.

7.                We have gone through the pleadings as well as defence taken by the Ops and also perused the written arguments alongwith judgments filed by the learned counsel for the complainant and have also considered the oral arguments alongwith the documents and evidence on the file very carefully.

8.                Perusal of the pleading of the complainant and record reveals that it is an admitted fact that the complainants had raised a loan of Rs.58 lakh from the Ops vide Loan Account No.HLHE00001870. Vide letter dated 24.3.2006 Ex.C2, the complainants were required to pay the amount of loan by way of installments as per the terms and conditions settled between the parties. Further, it is a proved fact on record that the complainants on 7.8.2012 had deposited an amount of Rs.23 lakh with the Ops, who had accepted this amount without raising any demand for pre-payment charges or without raising any other objections regarding the payment of lumpsum amount of Rs.23 lakh. Thereafter, the complainants had raised a query to know as to how much amount, they were to pay on the foreclosure of the loan amount and Ops vide its letter dated 26.11.2012 Ex.C1 had intimated the complainants that they are to pay Rs.1,13,881.65P as pre-payment charges on the balance loan amount and Rs.1,03,270/- was determined as prepayment charges on the amount of Rs.23 lakh which the Ops had accepted without any objection and without demanding any prepayment charges of this amount. Thus, the entire demand of Rs.2,17,151.65P is claimed to be illegal and unwarranted on the grounds that Reserve Bank of India have already abolished the prepayment charges on such loans. So, this demand of Rs.2,17,151.65P is totally illegal. The complainants further averred that the Ops had calculated this amount of Rs.2,17,151/- @4% + Service Tax @12.36% (4.49%). Even this calculation is considered to be wrong and against letter of offer dated 24.3.2006 Ex.C2, wherein, it is clearly mentioned that the prepayment charges applicable are 5% for a customer upto 6 months on books, 3.5% for 7 to 24 months and 2% thereafter. Since, the complainants are covered in 2% category because period of 24 months has already elapsed and amount of pre-payment charging @4% are illegal. Moreover, in the offer letter dated 24.3.2006 Ex.C2 there is no mention about the services charges which have wrongly demanded by the Ops. Thereafter, the complainant was never intimated about the alleged increase in “GEMFSFRR” and increase in the rate of interest from 13.5% to 15.91% which is also illegal especially in the light of the judgment of the Hon’ble Supreme Court of India held in (I(2011)CPJ-4-SC)).

9.                The averment of the complainants that demand of the Ops qua the amount of differential interest of Rs.2,53,634/- as increased “GEMFSFRR” on the basis of amortization charges Ex.C10 is also un-justified because as per the terms and conditions mentioned in document Ex.C3, the loan was sanctioned on floating rate of interest which is dependent on the benchmark rate i.e.’GE Money Floating Reference Rate(GEMFSFRR). Hence, any revision in ‘GEMFSFRR’ leads to proportionate revision in Floating Rate of Interest which is applicable to the complainants against their loan.

10.              So, since the amount of Rs.2,53,634/- is not proved to be illegal by the complainant by placing any document. Rather, perusal of the document Ex.C3, it was settled between the parties that since the loan was taken on floating rate of interest. Hence, this relief cannot be granted to the complainant being devoid of any merit. However, the offer letter Ex.C2 reveals that pre-payment charges applicable are 5% for a customer upto 6 months on books, 3.5% for 7-24 months and 2% thereafter and the complainants are clearly falls the category of 2% and while the Ops have excessively charged the rate of interest @4% + service tax. However, Ops are bound to refund the remaining amount after calculating the pre-payment charges @2% + service tax if it is mandatory as there is no mention of the service tax in the Ex.C2. At the same time, the guidelines of the Reserve Bank of India are not made available to this Forum, whereby the foreclosure charges are exempted.

11.              In view of the above discussion, we hereby partly allow this complaint and direct the OPs to overhaul the loan account of the complainants especially by levying 2% of pre-payment charges only on balance amount and further, OPs are directed to pay compensation and litigation costs compositely assessed as Rs.10,000/-(Ten thousand only) to the complainants on account of mental pain, agony and harassment suffered by them. Compliance of order be made within 30 days from the date of receipt of copy of this order and refund excess money with interest @9% p.a from the date of payment made by the complainant. Copies of the order be supplied to the parties free of cost and thereafter, file be consigned to the record room.

 

                 (Priti Malhotra       )        (Sat Paul Garg)             (R.L.Ahuja)

               Member                         Member                          President 

Announced in Open Forum.

Dated:06.08.2014

Gurpreet Sharma

 

 

 

Kuldeep Kumar and others vs. GE Money Financial Services

 

06.08.2014

 

Present:       Sh.L.D.Gupta, Adv. For complainant.

Ops ex-parte.

 

                    Written arguments filed on behalf of the complainant. Oral arguments have been heard. Vide our separate detailed order of even date, complaint is partly allowed. File be consigned to record room after due completion.

 

 (Priti Malhotra)       (Sat Paul Garg)          (R.L. Ahuja)

                      Member                    Member                            President

Announced in Open Forum

on 06.08.2014