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

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1]     Navneet Singla,

2]     Amit Singla,

Both residents of House No.70, Ajit Enclave, Dakholi, Tehsil Derabassi, Distt. Mohali.

….…Complainants

V E R S U S

[1]    HDFC Bank Ltd., through its Managing Director, Sandoz House, Dr.A.B.Road, Worli, Mumbai 400018.

[2]    Branch Manager, HDFC Bank Ltd., Plot No.28, Industrial Area, Phase-I, Chandigarh

.…..Opposite Parties

CORAM:   Sh.P.D. GOEL                                             PRESIDENT

SH.RAJINDER SINGH GILL                         MEMBER

                        DR.(MRS).MADANJIT KAUR SAHOTA              MEMBER

Argued by: Sh.Ammish Goel, Counsel for complainants.

                        Sh.Sandeep Suri, Counsel for OPs.

PER P.D.GOEL,PRESIDENT

1.                The complainants after availing a loan of Rs.25.00 lacs from OPs - Bank, to be repaid in 120 equated monthly installments of Rs.35,868/-, paid regular installments upto June,2011. On 6.6.2011, they deposited a cheque of Rs.5,87,000/- (Annexure C-5) with OPs - bank towards part payment of the total outstanding loan amount.  The said amount was arranged by them from their own sources.  However, the OPs - Bank did not close their loan account and instead demanded a sum of Rs.77,377.75 on account of prepayment charges as shown in statement Annexure  C-6. 

                   It is averred that since the outstanding amount in their loan account was accumulating day-by-day, they had to deposit the amount of Rs.18,32,658/- (Annexure C-8).  It is further averred that the complainants vide letter dated 5.7.2011 (Annexure C-7) clarified that they had arranged the loan amount from their own sources and as per the guidelines of OP No.1 (Annexure C-9), there shall be no prepayment charges. However, the OPs did not refund the amount of Rs.77,377.75, charged on account of prepayment charges.  As such, legal notice dated 12.8.2011 (Annexure C-10) was sent to them, but to no avail.  Hence, the present complaint has been filed alleging the said act of OPs as gross deficiency in service and unfair trade practice, due to which the complainants had to suffer mental agony, physical harassment and financial loss. 

2.                OPs No.1 & 2 filed reply and admitted the factual matrix of the case. It is submitted that the document produced by complainants as Annexure C-9 did not pertain to HDFC Bank Limited, rather, it pertains to HDFC Limited.  It is further submitted that the Title Deeds cannot be sent by Post, as the same are important documents. The title deeds can only be handed over to the parties.  It is stated that as per Clause 9 of the loan agreement, the prepayment fee of 4% on the outstanding principal amount of loan is payable.  The complainants were fully aware of all the clauses of loan agreement.  It is further replied that no amount is liable to be refunded to the complainants.  Denying rest of the allegations and pleading no deficiency in service, OPs have prayed for dismissal of the complaint.

3.                Parties led evidence in support of their contentions.

4.                We have heard the learned Counsel for the parties and have perused the record.

5.                The admitted facts may be noticed thus ;

1.                That the OPs - bank advanced the loan of Rs.25.00 lacs against property to the complainants.

2.                That the rate of interest was floating.

6.                Now the only point which calls determination from this court is whether the OPs - Bank had a legal right to charge foreclosure charges, in view of the terms and conditions. The answer to this is negative.

7.                The learned Counsel for the complainants raised the arguments that the OPs - Bank sanctioned the loan of Rs.25.00 lacs, which was to be repaid in 120 equated monthly installments of Rs.35,868/-. On 6.6.2011, the complainants deposited a cheque of Rs.5,87,000/-  with bank towards part payment of the total outstanding loan amount.  It was further argued that since the outstanding amount in their loan account was accumulating day-by-day, the complainants deposited the amount of Rs.18,32,658/-. It was lastly argued that the complainants vide letter dated 5.7.2011 clarified that they had arranged the loan amount from their own sources and as per the guidelines of OP No.1, there shall be no prepayment charges but the OPs charged Rs.77,377.75 @ 4.41% on account of prepayment charges and did not refund the same, despite repeated requests and legal notice dated 12.8.2011. 

8.                The learned Counsel for the OPs raised the arguments that the loan was sanctioned on floating rate of interest. It was also argued that the prepayment charges were rightly demanded as per Clause 9 of the Loan Agreement. It is submitted that the complainants were liable to pay prepayment charges of 4% on the outstanding principal loan amount.       

9.                Annexure C-9 is a copy of the guidelines issued by OP No.1 – bank with regard to loan against property which deals with pre-closure/full prepayment charges. The relevant portion of the clause pre-closure/full prepayment charges reads as under :-

“There shall be no incidence of Prepayment charges in the event a loan  is  preclosed (prepaid) in full out of own sources of the borrower.”

10.              Now, it is proved on record that as per the said clause, the bank has no legal right to charge prepayment charges in case the loan is preclosed/prepaid out of own sources of the borrower.

11.              According to the learned Counsel for the complainants, Smt.Shivani Singla wife of Sh.Amit Singla sold the land for a sum of Rs.10 lacs  to Sh.Sukhwinder Singh son of Sh.Gurcharan Singh vide Annexure C-1 and, thereafter, he deposited the amount of Rs.7 lacs in the account of the complainant vide Annexure C-3 at page No.22 of the complaint. It was further argued that Sh.Navneet Singla son of Sh.Tara Chand sold the plot to Sh.Nihal Singh son of Sh.Dilip Singh for a sum of Rs.40,50,000/- through registered sale deed vide Annexure C-2 and, thereafter, he transferred the amount of Rs.14 lacs and Rs.10 lacs on 19.5.2011 and  11.6.2011 vide Annexure C-4 in the account of the complainants. It was further argued that after the transfer of the amount by Smt.Shivani Singla and Sh.Navneet Singla, the complainants made the payment of Rs.18,32,658/- to the OPs – HDFC Bank Ltd.

12.              The learned Counsel for the OPs contended that as per the complainants, the amount of Rs.7 lacs and Rs.24 lacs has been transferred to the account of the complainants by Smt.Shivani Singla and Sh.Navneet Singla and, thereafter, the complainants made the payment to the OPs, so the payment in question cannot be considered to be made out of own sources of the borrower – complainants. This limb of argument is not available to the learned Counsel for the OPs as Sh.Navneet Singla and Smt.Shivani Singla had transferred the amount of Rs.31 lacs to the account of the complainants of their own. Since the amount of Rs.31 lacs had been transferred to the account of the complainants, so the said amount is the property of the complainants. Thus, we have no hesitation to hold that the payment of Rs.31 lacs has been made by the complainants from their own sources.

13.              To prove that the loan was preclosed/prepaid in full out of own sources of the borrower, the complainants have placed on record the copy of cheque bearing No.188568 dated 5.7.2011 for Rs.18,32,658/- (Annexure C-8) which was forwarded through letter dated 5.7.2011 (Annexure C-7) and its careful scrutiny makes it clear and leaves no doubt in the mind of this Fora that the complainants had made the payment of the loan amount in full out of own sources.

14.              Thus , it is held that the complainants had made the prepayment charges, out of own sources and in view of guidelines issued by OP No.1 – bank which also deals with pre-closure/full prepayment charges - Annexure C-9, the OPs had no authority or right rather estopped to ask the complainants to pay the foreclosure/prepayment charges.

15.              Confronted with this type of situation, it is held that the OPs - Bank had illegally charged a huge amount of Rs.77,377.75 from the complainants on account of prepayment charges, particularly when the entire outstanding of the said loan had been arranged by the complainants from their own sources, which amounts to deficiency in service and unfair trade practice. Consequently, the complaint succeeds. The OPs - Bank are directed jointly and severally to refund the prepayment charges of Rs.77,377.75 to the complainants. OPs are also directed to pay compensation of Rs.30,000/- for harassment and mental agony to the complainants, besides Rs.20,000/- as costs of litigation.

16.              This order be complied with by the OPs - Bank within one month from the date of receipt of the certified copy, failing which, the OPs - Bank shall be liable to pay the awarded amount along with interest @ 12% p.a. from the date of filing of the complaint till realization besides costs of litigation of Rs.20,000/-. 

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