CONSUMER DISPUTES REDRESSAL COMMISSION-VII

DISTRICT: SOUTH-WEST

GOVERNMENT OF NCT OF DELHI

FIRST FLOOR, PANDIT DEEP CHAND SHARMA SAHKAR BHAWAN

CASE NO.CC/224/18

          Date of Institution:-    10.09.2018

          Order Reserved on:- 24.04.2024

          Date of Decision:-      01.05.2024

IN THE MATTER OF:

Mr.Vinay Bajaj,

S/o Late O.P. Bajaj

R/o D-69, South City-I,

Gurugram, Haryana - 122001

.….. Complainant

VERSUS

HDFC Bank Ltd.

Through its Manager

The Capital Court, OLOF Palme Marg,

Outer Ring Road Munirka, New Delhi - 110067

.…..Opposite Party

Suresh Kumar Gupta, President

1. The complainant has initially filed the complaint against HDFC Ltd. The OP has filed the application for the change of name of OP from HDFC Ltd. to HDFC Bank Ltd. The said application was allowed by this forum. The amended memo of parties was filed.
2. The complainant has filed the complaint under section 12 of Consumer Protection Act, 1986 (hereinafter referred to as Act) with the allegations that in October 2016, he along with his wife and son has applied for home loan transfer from Citi Bank with OP. The loan of Rs.17700000/- was approved by OP vide letter dated 28.10.2016. On 29.10.2016, an agreement was executed between complainant, his wife and son with OP. A cheque of the said amount was issued for account number 138513 of the complainant maintained with Citi Bank. The amount was repayable in 15 years with an EMI of Rs.183230/-. The instalments were paid from the bank account maintained with J & K Bank by the complainant. In September, 2017, he has applied for the foreclosure of the loan. The OP informed that it will be closed subject to prepayment charges. A legal notice dated 14.10.2017 was issued to OP that there cannot be any prepayment charges in terms of the notification dated 05.06.2012 and 07.05.2012 issued by RBI. The OP has charged Rs.403434/- as prepayment charges by ignoring the notifications of RBI. A legal notice dated 11.04.2016 was issued for the refund of the amount with interest but in vain. There is deficiency of service on the part of the OP. Hence, this complaint.
3. The OP has filed the reply to the effect that complainant along with Ms.Nalani Bajaj, Kshitij Bajaj and Vin Cargo Pvt. Ltd. had applied for housing loan of Rs.17700000/- from OP to repay the loan taken from Citi Bank. The loan was sanctioned vide letter dated 28.10.2016. The borrowers acknowledged the most important terms and conditions of the sanction of the loan upon which Home Loan Agreement was executing. A co-option and confirmative agreement dated 29.10.2016 was executed to make Vin Cargo Pvt. Ltd. as a co-borrower. The borrowers have executed a promissory note dated 29.10.2016 in favour of OP. The complainant did not disclose that company is also a borrower and deliberately omitted to implead company as a party so complaint is liable to be dismissed for non-joinder of necessary party. OP is NBFC duly registered with National Housing Bank and regulating its business as per circular and guidelines and NHB from time to time. NHB has issued a Circularno.NHB/ND/DRS/Policy Circular66/2014-15 dated 03.09.2014 titled as Levy of foreclosure charges/prepayment penalties on floating rate term loan-clarification to all the registered housing finance company including OP in response to the Circular issued by RBI. The Circular is applicable to loan sanctioned to the individual borrowers only. The complainant has concealed the fact that loan was also taken by the company. The complainant has not approached the forum with clean hands so complainant is guilty of supressing the material facts. The complainant has filed the complaint in his individual capacity although the company is co-borrower without impleading company as a party. The complainant is not a consumer.The circular dated 07.05.2014 of RBI is not applicable to the case of the complainant. The allegations are false and frivolous. The legal notice is not based upon the real facts.
4. The complainant has filed the rejoinder to the written statement of OP wherein he has denied the averments of written statement and reiterated the stand taken in the complaint.
5. The parties were directed to lead the evidence.
6. The complainant has filed his own evidence and corroborated the version of complaint and placed reliance on the documents Ex.CW1/1 to CW1/7 though exhibits are not put on the documents.
7. The OP has filed the affidavit of Sh.PrasunParashar, in evidenceand corroborated the version of written statement and placed reliance on the documents Ex.RW1/1 to RW1/10.
8. We have heard Ld. Counsel for the parties and perused the entire material on record.
9. It is clear from the material on record that complainant, his wife Ms.Nalini and son Kshitij Bajaj have applied for the loan from OP vide application dated 10.09.2016 shown as Ex.CW1/1 in the affidavit. The OP vide letter dated 28.10.2016shown as Ex.CW1/2has sanctioned a loan of Rs.1,77,00,000/- to the complainant, his wife and son. The Ex.RW1/1 is the same document exhibited by the OP which also shows the name of the company Vin Cargo Pvt. Ltd. which is written with pen.Ex.RW1/2 is the most important terms and conditions of the agreement duly executed between the borrowers i.e. complainant, his wife and son with OP.A home loan agreement shown as Ex.CW1/3 (also exhibited as RW1/3 by the OP) in the affidavit was executed between the complainant, his wife and son with OP. Ex.RW1/4 is the co-option and confirmatory agreement duly executed between the borrowers which also shows Vin Cargo Pvt. Ltd. as a borrower with OP in order to confirm with the main loan agreement Ex.RW1/3. Ex.RW1/5 is the promissory note executed by borrowers and Vin Cargo Pvt. Ltd. in favour of OP.The complainant has made a request for prepayment of the loan and said request was allowed on the payment of the foreclosure charges in accordance with the circular bearing no.NHB/ND/DRS/PolicyCircular66/2014-15 dated 03.09.2014 issued by National Housing Bank though this was objected by the complainant and thereafter a legal notice was issued to refund the foreclosure charges with interest which was not done.
10. The OP has taken the plea thatVin CargoPvt. Ltd. is a company which is one of the borrowers. The circular issued by RBI is applicable to the individual borrowers and same is not applicable if company is a borrower. The loan was disbursed to complainant, his wife and son as well as to Vin Cargo Pvt. Ltd. so complainant cannot draw any support from the circular issued by RBI though complainant has taken the plea that loan was sanctioned to complainant, his wife and son i.e. the loan was granted to the individuals. The company is a co-obligant so the OP has to comply or abide by circular issued by RBI.
11. Ex.CW1/1 shows that complainant along with his wife and son has applied for the loan. Ex.CW1/2 is a duplicate letter issued by OP which shows loan has been sanctioned to complainant, his wife and son without reflecting the name of the company though Ex.RW1/1 shows the name of company which is separately written with the pen. This Forum is not going into the issue whether this name was added later on or not.
12. Ex.RW1/2 is the most important terms and conditions and this documentshow that loan has been given to complainant, his wife and son.The name of the company does not find reflection in this document. The OP has failed to explain why the name of company does not find reflection in this document in case company was also the co-borrower. The omission of the name of the company from this document gives support to the version of the complainant that loan was sanctioned to complainant, his wife and son.
13. The loan agreement Ex.RW1/3 was executed by complainant which also bears the signature of his wife and son. This document does not show that complainant is executing this document on behalf of company. This document does not find the name of company as a co-borrower which again gives support to the version of the complainant that loan was sanctioned to complainant, his wife and son. The OP cannot draw support from the co-option and confirmatory agreement Ex.RW1/4 to press the point that company is a co-borrower as this agreement was executed to confirm themain loan agreement.
14. The promissory note Ex.RW1/5 shows that company is a co-obligant. The borrowers along with company are liable to repay the loan amount. This document nowhere shows that company is a co-borrower.
15. The loan amount has been transferred to the account of the complainant. The EMI has been paid by the complainant from his account. The OP should have transferred the loan amount to the account of the company in case company is a co-borrower or EMI should have been from the account of the company.This fact further fortifies the plea of the complainant that company is not a borrower.
16. The loan has been sanctioned to the individual borrowers i.e. Complainant, his wife and son.The document on the record shows that loan was disbursed to the individuals which were not for any business activity. The circular no.RBI/2014-15/121 dated 14.07.2014shows that NBFC shall not charge foreclosure charges/prepayment penalties on all floating rate term loans sanctioned to individual   borrowers. The another circular RBI/2019-20-29 dated 02.08.2019of RBI is to the same effect. The issuance of circular dated 14.07.2014 is not disputed by the OP. The National Housing Bank has issued the circularno.NHB/ND/DRS/Policy Cirular66/2014-15 dated 03.09.2014 on the pattern of RBI that foreclosure charges will not be charged from the individual borrowers.
17. The loan has been sanctioned to the individuals. TheOP has not considered the entire facts in totality and wrongly concluded that company is a co-borrower. The OP cannot take the foreclosure charges by taking shelter under the circular Ex.RW1/6 for levying the foreclosure charges.
18. The above discussion shows that OP should not have levied foreclosure charges. There is deficiency of service as well as unfair trade practice on the part of OP.
19. Hence, in view of our discussion, the complaint of the complainant is allowed to the effect that OP shall refund the amount of Rs.4,03,434/- with interest @10% p.a. from the date of filing the complaint till its realization. The complainant has undergone mental agony so he is entitled for compensation on this score also. The OP shall pay Rs.50,000/- towards compensation and litigation charges. The OP shall comply with the order within 45 days from the date of receipt of order failing which complainant is entitled for interest @10% p.a. on compensation from the date of order till its realization.

• A copy of this order is to be sent to all the parties as per rule.
• File be consigned to record room.
• Announced in the open court on 01.05.2024.