Punjab

Ludhiana

CC/14/698

Harbhajan Singh - Complainant(s)

Versus

HDB Financial Services Pvt.Ltd - Opp.Party(s)

A.K.Verma Adv.

12 Apr 2016

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

 

Consumer Complaint No. 698 of 07.10.2014

Date of Decision            :   12.04.2016 

 

Harbhajan Singh Walia aged about 65 years s/o Sh.Hakam Singh R/o Near Octroi, Samrala Road, Khanna, District Ludhiana.

….. Complainant

                                                         Versus

 

1.The Chairman/General Manager, HDB Financial Services Ltd., Regd. Head Office:Radhika IInd Floor, Law Garden Road, Navrangpura, Ahmedabad-380009.

2.The Branch Manager DB Financial Services Ltd., Branch Surya Tower, G.T.Road, Khanna.

…Opposite parties 

             (Complaint U/s 12 of the Consumer Protection Act, 1986)

 

QUORUM:

 

SH.G.K.DHIR, PRESIDENT                                     

MRS.          VINOD BALA, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant                      :          Sh.K.K.Sharma, Advocate

For OPs                          :          Sh.Rahul Rajput, Advocate.

 

PER G.K.DHIR, PRESIDENT

 

1.                Complainant, a retired ex-serviceman from Indian Army, filed the present complaint by claiming that he obtained a term loan of Rs.24 lack from OP2 in the month of March, 2012 against Loan I.D.No.204686 and thereafter, started paying the installment of Rs.38,720/-. 31 installments were paid against the loan till the filing of the complaint. Even an amount of Rs.5 lac was paid on 16.8.2014. Complainant claims that he is ready to deposit the balance outstanding amount in his term loan account in lumpsum, due to which, he approached OP2 and obtained copy of statement of account of his loan account. Complainant got the knowledge as if amount of Rs.16,72,444.22P is due and outstanding against him as on 22.09.2014. Demand draft of Rs.16,73,000/- was got prepared by the complainant on 22.09.2014. That demand draft was issued by Punjab National Bank, Branch A.S.College, Khanna and was payable to HDB Financial Services Ltd., at Khanna, District Ludhiana. Complainant with this demand draft visited OP2 and handover the same. Complainant requested OP2 to credit the amount of demand draft in his loan account with the request to issue No Due Certificate. Complainant even requested for delivery of title deed of his property back because those documents were lying as collateral security against loan transaction. OP2 refused to receive the demand draft by asking to the complainant to deposit Rs.74,405.53P as pre-payment charges and Rs.21,881.34P as FC charges on part payment @4.49% upto August, 2014. Complainant was asked by OP2 to deposit Rs.17,68,638.09P in all for settling the loan account. However, as per instructions and guidelines of Reserve Bank of India vide Circular No.399/03.10.42/2014-2015, foreclosure charges and pre-payment penalty amount is not recoverable from the loanee. That amount claimed in an arbitrary manner by OP2 from the complainant. Even demand draft amount of Rs.16,73,000/- has not been credited in the loan account of the complainant till the filing of the complaint. By pleading deficiency in service on the part of OPs, directions sought against OPs to credit the amount of Rs.16,73,000/- in the loan account of the complainant and issue No Due Certificate. Even directions sought against Ops to deliver the original title deeds of the properties of the complainant. Compensation for mental agony, physical harassment and financial loss as well as litigation expense also claimed. Complaint alleged to be filed after service of legal notice dated 25.09.2014 through counsel Sh.A.K.Verma, Advocate. That notice was returned back to the complainant by OPs.

2.                OPs appeared and filed their joint written statement by claiming interalia as if the present complaint is false, frivolous and vexatious; complainant has suppressed the material facts and averments/allegations contained in the complaint are not correct. Admittedly, complainant contracted loan vide agreement dated 23.02.2012 of Rs.24 lac. That amount was payable in 145 EMI of Rs.38,720/- each. It is claimed that complaint has been filed for getting undue benefit, despite the fact that there is no deficiency in service on the part of OPs. Allegations regarding deficiency in service alleged to be vague because deficiency in service not pointed out. Admittedly, complainant handed over the demand draft of Rs.16,73,000/- and thereafter, complainant was called upon to deposit the pre-payment charges and foreclosure charges as per term of the agreement. Till these charges paid, the amount of demand draft could not have been credited. It is also claimed that Reserve Bank of India circular is not applicable in this case. It is denied that complainant is not liable to pay interest after 20.9.2014. Draft was returned to the complainant because he despite repeated reminders did not deposit the foreclosure and pre-payment charges. Each and every other averment of the complaint denied by praying for dismissal of the complaint with costs.

3.                Complainant to prove his case tendered in evidence affidavit Ex.CA along with documents Ex.C1 to Ex.C15 and thereafter, his counsel closed the evidence.

4.                On the other hand, counsel for the OPs tendered in evidence affidavit Ex.RA of Sh.Sukhveer Singh, Manager of HDB Financial Services, Mall Road, Ludhiana along with documents Ex.R1 to Ex.R6 and thereafter, closed the evidence.

5.                          Written arguments not submitted by any of the parties. Oral arguments alone addressed. Records gone through minutely. 

6.                Admittedly, term loan of Rs.24 lack was contracted by the complainant from OP2 and he tendered demand draft of Rs.16,73,000/- towards the payment of outstanding loan amount, but the said amount was not credited by OP2 by claiming that pre-payment charges and foreclosure charges to be also paid. That demand draft was received by OP2 on 23.9.2014 is a fact borne from perusal of letter Ex.C10. In this letter Ex.C10, it has been specifically mentioned that loan was raised for business purposes by disclosing the business income and that is why term of payment of foreclosure charges applies. Circular of Reserve Bank of India Ex.C5 has been produced by the complainant to show that NBFCs will not charge the foreclosure charges/pre-payment penalty on all floating rate term loan sanctioned to individual borrowers w.e.f.1.7.2014, the date of circular of Reserve Bank of India quoted in Ex.C5 itself. So by going through the term of Ex.C5, it is made out that foreclosure charges/pre-payment penalty not recoverable in case term loan sanctioned on floating rate to individual borrowers. Even letter Ex.C14 dated 18.12.2014 produced by the complainant to show that foreclosure charges not recoverable on home loan. So from this documentary evidence available on record, it is made out that the foreclosure charges and pre-payment penalty not recoverable in case home loan or the term loan contracted with floating rate of interest by the individual borrowers.

7.                Ex.C15 is the document showing as if home loan of Rs.8 lac was contracted by the complainant from OP2 by filing an application in that respect. However, case of the complainant as well as of OPs is that loan of Rs.24 lac was contracted by the complainant. Another loan application form, copy of which is Ex.R1 has been produced by the OPs to show that request for sanctioning loan of Rs.35 lac was submitted by Smt.Kulwinder Kaur Walia by mentioning as if the loan required for business purposes and that is why the business income is mentioned in this application. Ex.C15, the loan application form bears No.359187 and the same is also produced by the OPs as part of Ex.R1. Loan application form No.359189 also in photo stat copy form has been produced to show that complainant applied for loan of Rs.35 lac by mentioning requirement for business purposes. Properties were put under mortgage as collateral security. In schedule I of the particulars of loan facilities of Rs.24 lac, it is specifically mentioned that purpose/end use of the contracted loan is business. So the contracted loan was not exclusively for individual need, but the same was for business requirement as well as part of the same was a home loan. Circular Ex.C5 and Ex.C14 are applicable in respect of transaction of home loan or of term loan contracted on floating rate by an individual borrower. As and when the loan was contracted for business purposes, the same does not  fall  in  the  category of home loan or by term loan by an individual borrower and as such, if the demand  for foreclosure charges for commercial purpose was put forth by OP2, then the same in no way can be termed against the contents of circular Ex.C5 and Ex.C14. In view of that in case demand of foreclosure charges put forth qua the loan contracted for business purposes, then no illegality committed by OP2 in that respect. However, amount of foreclosure charges and pre-payment penalty not recoverable in respect of the home loan transaction.

8.                Contents of Ex.C1 reveals that Rs.74,405.53P were demanded as prepayment charges, but Rs.21,881.34P were demanded as foreclosure charges upto August 2014 by claiming that amount of Rs.17,68,638.09P is due against the complainant. However, through Ex.C2, the said foreclosure charges and prepayment penalty claimed by claiming that total payable amount is Rs.17,75,082.52P as on 1.10.2014. Amount of pre-payment charges and foreclosure charges mentioned in Ex.C1 and Ex.C2 is the same. Ex.C3 and Ex.C4 are the documents showing as if demand draft of Rs.16,73,000/-(Ex.C4) was tendered by the complainant with OP2 for obtaining No Due Certificate. This amount of demand draft alleged to be not credited in the account of the complainant till the filing of the complaint on 7.10.2014. However, copy of statement of account of loan Ex.R2 shows as if this amount of Rs.16,73,000/- credited in the account of the complainant on 31.10.2014 and as such, credit of this amount of demand draft done in loan account of the complainant after filing of this complaint. That amount of Rs.16,73,000/- acknowledged by the bank as payment towards the outstanding principal amount is a fact borne from the contents of Ex.R3. After adjusting this amount, demand of balance outstanding amount of Rs.1,44,866/- raised through Ex.R4=Ex.C11, but of Rs.1,09,195/- through Ex.R5=Ex.C12. Through Ex.C13, complainant was disclosed specifically the cause as to why the circular Ex.C5 is not applicable. Through Ex.C13, complainant was specifically apprised that he contracted the loan on the basis of business income and by mentioning the end use for business purposes and that information was supplied through Ex.C13 is correct because the foreclosure charges/prepayment penalty not payable in respect of the home loan transaction or when term loan contracted on floating rate by an individual borrower.However,major part of loan in this case contracted for business  purposes by mentioning end use as business and by disclosing the business income and as such submissions of counsel for complainant has no force that actually foreclosure charges not recoverable from the complainant. Those foreclosure charges were not paid at the time of tendering demand draft Ex.C4 and as such, non-crediting of the same for one month was due to the genuine dispute raised by the OP2. 

9.                Perusal of Para no.8 of affidavit Ex.RA reveals that during pendency of complaint, on request of counsel for the complainant, foreclosure charges were waived off by disclosing as if amount of Rs.36,452/- is outstanding against the complainant. Copy of statement of account Ex.R6 in that respect has been produced by showing as if Rs.60,592.10P refunded, but it is also mentioned as if Rs.2512/- charged as late payment penalty charges. As the amount of foreclosure charges has been waived off during the pendency of complaint by mentioning the due outstanding amount and as such, virtually Ops have provided due services. Merely because the foreclosure charges waived off during the pendency of the complaint, due to that alone it cannot inferred that foreclosure charges in entirety were liable to be waived off because of the above discussion. As deficiency in service on the part of OPs not proved and as such, complaint merits dismissal.

10.              Therefore, as a sequel of the above discussion, complaint stands dismissed with no order as to costs. Copies of order be supplied to the parties free of costs as per rules. 

11.                        File be indexed and consigned to record room.

 

                   (Vinod Bala)                                 (G.K. Dhir)

            Member                                        President

Announced in Open Forum

Dated:12.04.2016

Gurpreet Sharma.