JUDGMENT Per Justice Sham Sunder , President This appeal is directed against the order dated 19.7.2010, rendered by the District Consumer Disputes Redressal Forum-I, U.T. Chandigarh (hereinafter to be referred as the District Forum only),vide which it dismissed the complaint. 2. On 27.10.2006, the complainant took a loan of Rs.2 crores, from the OPs, which was to be repaid in monthly installments of Rs.2,70,956/- till 7.03.2019. The property worth Rs.30 crores of the complainant was mortgaged with the OPs, against the said loan. The OPs started increasing the rate of interest, during the period from 30.12.2006. On 30.12.2006, the rate of interest was increased from 11.50% to 13% per annum. From 23.02.2007, the rate of interest was increased from 13% to 14% per annum and from 13.04.2007, it was increased from 14% to 15% per annum and the duration of the loan period was also extended. Aggrieved against the said unreasonable increase, in the rate of interest, the complainant decided to repay the whole of the loan amount, before the agreed duration. It requested the OPs for details of the amount to be repaid by it. Thereafter, on its request, the OPs vide letter dated 13.10.2009 demanded the total amount of Rs.1,82,40,868/-, out of which, the interest to be paid was calculated as Rs.38,484/-, whereas the prepayment charges @4.41% were Rs.7,68,523/-, on the outstanding principal. It was further stated that the prepayment charges calculated and demanded by the OPs, on the principal amount, were approximately 20 times, more than the interest, calculated by them. It was further stated that the OPs were deficient, in rendering service, and indulged into unfair trade practice. 3. The OPs, in their written reply, admitted the factual matrix. It was admitted that a loan agreement was executed between the parties. It was stated that, in case of closure of loan, prior to the agreed tenure, the complainant was liable to pay an amount equivalent to 4% of the total principal payable, plus statutory levies and taxes. It was further stated that since the complainant wanted to pay the amount, before the expiry of the duration, according to the terms and conditions of the agreement, he was liable to pay the prepayment charges @ 4.41%. It was further stated that the OPs had rightly charged/demanded an amount of Rs.7,68,253.55, being 4.41% of the total loan amount of Rs.1,74,26,873.93 outstanding, which was strictly, as per the terms and conditions of the agreement. It was further stated that all the financial institutions are charging prepayment charges, in case, the customer wants to close the loan, before the expiry of the duration. It was further stated that the OPs were neither deficient, in rendering service nor they indulged into unfair trade practice. The other material averments were denied, being wrong. 4. The parties led evidence, in support of their case. 5. After hearing the Counsel for the parties, and, on going through the evidence and record of the case, the District Forum, dismissed the complaint, as stated above. 6. Feeling aggrieved, the instant appeal, was filed by the Appellant/complainant. 7. We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully. 8. The Counsel for the appellant, submitted that, the rate of interest was enhanced by the respondents, unilaterally, within the short span, due to which, the complainant company decided to prepay the loan in lumpsum. He further submitted that the OPs could not charge prepayment charges @ 4.41% on the outstanding principal amount. He further submitted that such a demand on the part of the banking institution, could not be said to be legal and valid. He further submitted that the order, being illegal, is liable to be set aside. 9. On the other hand, the Counsel for the respondents, submitted that, since the complainant wanted to prepay the loan, according to the terms and conditions of the agreement Annexure C-3, prepayment charges @4.41% could be charged by the OPs. It was further submitted that the loan was granted subject to floating rate of interest, and, as such, the complainant could not complain that the same was increased arbitrarily. He further submitted that the rate of interest was charged from time to time according to the market trends. He further submitted that the District Forum was right, in dismissing the complaint, as there was no deficiency in service, on the part of the OPs, nor they indulged into unfair trade practice. 10. After giving our thoughtful consideration, to the rival contentions, advanced by the Counsel for the parties, we are of the considered opinion, that the appeal is liable to be dismissed, for the reasons, to be recorded hereinafter. First, coming to the rate of interest, it may be stated here that an agreement Annexure C-3 was executed, between the parties, according to which, the loan was granted on floating rate of interest, meaning thereby, that the rate of interest was to go up or go down, as per the market trends. As and when, there was increase, in the rate of interest, due intimation was given to the complainant, by the OPs, from time to time. The factum regarding intimation of enhancement of interest, from time to time, was also not denied by the complainant. Under these circumstances, the OPs charged interest, as per the agreement, which was executed between the parties. Thus, it could not be said that the OPs acted illegally. The OPs, on the other hand, rendered proper service by informing the complainant, regarding the enhancement of rate of interest. The submission of the Counsel for the appellant, therefore, being devoid of merit, must fail, and the same is rejected. 11. Now coming to the second point, regarding charging of prepayment charges @ 4.41%, it may be stated here that, in the agreement, it was provided that if the complainant intended to repay the loan amount, before the expiry of the duration, then prepayment charges @ 4.41% p.a. shall be charged. Annexure C-3 is the agreement, in that regard. According to the OPs, prepayment fee, as per the agreement, is 4 % and 0.41% are the taxes and other levies, which the bank is liable to pay to the Income Tax Authorities, on account of receipt of prepayment charges, which are apart from interest. Since the complainant had agreed to pay the prepayment charges, he could not legally raise any protest, with regard to the same. The District Forum, was, thus, right in holding that in charging prepayment @4.41% the OPs were neither deficient in service, nor they indulged into unfair trade practice. 12. The order passed by the District Forum does not suffer from any illegality or perversity, warranting the interference of this Commission. 13. For the reasons recorded above, the appeal, being devoid of merit, must fail, and the same is dismissed with costs quantified at Rs.5000/-. The order of the District Forum is upheld. 14. Certified Copies of this order be sent to the parties, free of charge. The file be consigned to record room.
| | HON'BLE MRS. NEENA SANDHU, MEMBER | HON'BLE MR. JUSTICE SHAM SUNDER, PRESIDENT | , | |
