BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

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Parshotam Singh Sobti S/o Sh.Amar Singh Sobti, R/o H.No.2091, Phase-7, Mohali.

…..Complainant

                           V E R S U S

1]  HDFC Bank Ltd., Retail Assets Division, Bank House Building, Ground Floor, Plot No.28, Phase-I, Industrial Area, Chandigarh, through its Branch Manager.

2]  Sh.Aditya Puri, Managing Director, HDFC Bank Ltd., Bank House, Lower Parale, Mumbai

                      ………Opposite parties

CORAM:   SH.RAJINDER SINGH GILL        

PRESIDING MEMBER

         DR.(MRS) MADANJIT KAUR SAHOTA

                                   MEMBER

Argued by:      Sh.H.S.Parwana, Counsel for the complainant.

Sh.Sandeep Suri, Counsel for OPs.

PER DR.(MRS) MADANJIT KAUR SAHOTA,  MEMBER

          The case of the complainant is that he had availed loan facility from erstwhile Bank of Punjab Ltd., Sector 9, Chandigarh, at the rate of 8% p.a. Subsequently, the said bank was merged into Centurion Bank of Punjab and the complainant availed another loan facility from it to the tune of Rs.3.00 lacs.  At that time, Rs.8,44,363/- was outstanding against his loan account as per sanction letter dated 1.3.2006 (Ann.C-1). It is averred that as per Ann.C-1, issued by Centurion Bank of Punjab Ltd., the payment of schedule of both loan accounts was mentioned as 132 monthly installments of Rs.9639.00 and Rs.3547/- respectively. The interest chargeable was mentioned as 8% p.a. and 8.75% p.a. for the loan of Rs.8,44,363 (BT) and Rs.3.00 lacs (Top Up) respectively.

         Thereafter, the Centurion Bank of Punjab Ltd. was taken over by HDFC Bank Ltd. Though, the complainant was paying regular installments, but he came to know only from the statement of account, dated 14.12.2009 (Ann.C-2) that the tenure for the repayment of his loan amount was increased from 132 months to 191 months. Similarly, the loan tenure of another loan of Rs.8,44,363/- was also increased to 208 months (Ann.C-3).  It is averred that tenure of loan, was increased on account of increase in the rate of interest from the sanctioned rate of interest, but the same was neither mentioned in the copy of statement of accounts nor intimated to the complainant.

         It is pleaded that the complainant requested the OPs to supply the copy of statement of accounts indicating the interest charged from time to time, but they did not supply.  It is also pleaded that the OPs have been raising/revising the interest rate from time to time without any notice or intimation to the complainant and as such had increased the tenure of his both loan accounts.  Ultimately, the OPs issued certificates (Ann.C-4 & C-5) in June, 2009, wherefrom the complainant came to know that the interest in his loan accounts is being charged @13% p.a. Thereafter, the OPs vide letters dated 12.7.2010 (Ann.C-6 & C-7) intimated the complainant that the interest rate has been changed from 13% p.a. to 12.75% p.a. The complainant has sent an e-mail to the OP Bank (Ann.C-8) to the effect that the interest rate being charged by them is on higher side and the same should be reduced as per prevailing rate, but the same was not replied inspite of issuing reminder letter (Ann.C-9).

         It is averred that the complainant want to close the account by making full and final payment towards the loan, in response to which, the OPs vide letters Ann.C-10 & C-11, informed the outstanding loan amount as well as pre-payment charges.  Thereafter, the complainant availed loan of Rs.7.60 lacs from Housing Development Finance Corporation Ltd. vide loan agreement Ann.C-12.  Ultimately, the complainant paid a sum of Rs.7,58,468/- through cheque Ann.C-13 to the OPs towards the adjustment of loan account and the same was adjusted on 8.4.2010 by making additional payment of Rs.2838/- on account of interest upto 8.4.2010.  It is alleged that the OPs have charged Rs.13,893.74 and Rs.4944.51 as pre-payment charges in respect of the loan account of Rs.8,44,863/- and Rs.3,00,000/- respectively, though the pre-payment charges were not at all permissible under any rule or regulation.  Henceforth, the OPs issued No Due Certificates (Ann.C-14 & C-15).  The complainant took the said matter with OPs a number of time, but to no avail.  Hence, this complaint.

2]       OPs NO.1 & 2 filed joint reply and admitted the factual matrix of the case.  It is stated that the rates of interest was variable.  Moreover, the change in the rates of interest was in the knowledge of the complainant and it was not necessary for the OPs to inform the complainant, in respect of the same, on every occasion.  The variation of the rate of interest is dependant on several conditions including, but not limited to, cost of funds, market conditions, the government credit policies, the CRR rates fixed by the RBI, the rates prevalent in the international money market etc. It is also stated that the rate of interest increased or decreased and the benefit, whenever there was a change, was provided to the complainant.  It is denied that the applicable rate of interest was 8 to 9% when the OP Bank was charging 13% interest.  It is asserted that the pre-payment charges have been charged/taken as per the agreement.  Rest of the allegations have been denied with a prayer to dismiss the complaint.

3]      Parties led evidence in support of their contentions.

4]       We have heard the ld.Counsel for the parties and have also perused the record.   

5]       The contention of the complainant, in the present complaint, is that the OPs kept on raising/revising the interest rates from time to time on the basis of floating rate of interest as well as increasing the tenure of loan payment on account of increase in the interest, but did not intimate/inform the same to him, which was the legal obligation of the OPs.  It is also contended that the interest rate applicable on the housing loan in other banks was 8% to 9% p.a., but the OPs did not reduce their rate of interest.  Further, the OPs had also charged pre-payment charges, which was not permissible under any rule & regulations.  Therefore, such an act & conduct of the OPs constitute deficiency in service on their part.

6]       On the other hand, the OPs have stated that the rate of interest was variable/floating and the same was in the knowledge of the complainant.  It is further stated that the interest as well as pre-payment charges, received from the complainant were as per the terms & conditions of the loan agreement executed between the parties.

7]       Going carefully/deeply into the facts as well as circumstances, which gave rise to the present dispute, the clauses mentioned in the Facility Agreement (Page NO.17), executed between the parties, has thrown enough light on the factual position of the case. 

8]       First of all, we determine the allegation of the complainant regarding floating rate of interest charged by the OPs from time to time and then pre-payment charges charged by the OP Bank when the loan account was closed by the Borrower/Complainant after making full payment of outstanding dues. 

9]       In the Facility Agreement (Page-17) placed on record by the OPs, executed between the parties, duly signed by them, under Clause 1.11, the Floating Rate of Interest has been clarified/mentioned, which reads as under:-

“1.11    “Floating Rate of Interest” shall mean CBPLPLR applied by the Lender to the financial assistance granted by the Lender to the Borrower with a spread, if any, as may be decided by the Lender from time to time, pursuant to this Agreement. This is the applicable rate.  Floating rate of interest will be  reviewed as per the policy of the bank from time to time.”

10]      Moreover, the rate of interest being variable, is also establish/proved from Ann.C-1, placed on record by the complainant.

11]      The above reproduced clause as well as other clauses of the Facility Agreement, nowhere stipulates/specified that the variation in the rate of interest, from time to time, should have to be intimated to the complainant, as alleged by him. Therefore, the allegations of the complainant that the OPs were legally bound to intimate such change in the rate of interest every time, does not hold water and is not sustainable.

12]      Similarly, at Page No.20 of the Facility Agreement, Clause NO.2.9 pertains to Pre-payment of the Loan, which reads as under:-

    “2.9     Pre-payment of the Loan

The Lender may, in its sole discretion and on such terms as to pre-payment fees, etc., as it may prescribe permit acceleration of EMIs or pre-payment at the request of the Borrower. If permitted by the Lender, the Borrower shall give prior written notice of his intention to Prepay the full amount of Loan and pay to the Lender such prepayment charges mentioned in serial no.7 of Schedule A, subject to change by the Lender from time to time.

The Borrower agrees that no Prepayment can be made during the first 6 months from the Effective Date or till the Loan is fully disbursed, whichever is later.  There are no charges on part prepayment of the loan after 6 months of disbursal.  However, if the Loan closes because of the prepayments made, charges as per Schedule A will be applicable.  If the Borrower prepays only a part of the amount payable by the Borrower to the Lender, the Lender shall be entitled to adjust the amount prepaid against the amount payable by the Borrower in such manner as the Lender thinks fit……………”         

13]      At the face of it, from the above clause, duly agreed by the complainant, it is clearly proved that if the Loan closes because of the prepayments made, the charges were to be paid.  Hence, the allegation of the complainant that the OPs have wrongly deducted pre-payment charges, is baseless and holds ground.

14]      Having judged from every angle and after going through the terms & conditions agreed upon between the parties, referred above, we came to the conclusion that the allegations made by the complainant do not stand in the absence of any plausible justification and concrete evidence.  Therefore, we do not find any merit, weight or substance in the present complaint.  The same is accordingly dismissed, with no order as to costs.

         Certified copies of this order be sent to the parties free of charge. The file be consigned.