Date of filing   :  23.08.2016

                                                                                  Date of transfer: 27.06.2022

                                                                                  Date of order    : 17.10.2022

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, VELLORE

PRESENT: THIRU. A. MEENAKSHI SUNDARAM, B.A., B.L.     PRESIDENT

                THIRU. R. ASGHAR KHAN, B.Sc., B.L.                    MEMBER – I

        SELVI. I. MARIAN RAJAM ANUGRAHA, M.B.A.,     MEMBER-II

MONDAY THE  17TH  DAY OF OCTOBER 2022

CONSUMER COMPLAINANT NO. 90/2022

Selvaraaj Manoharan,

S/o. V. Manoharan,

No. 246, Plot No.33, Maxworth Nagar,

S. Kolathur Kovilambakkam,

Chennai – 600 117.                                                                  …Complainant

                                  -Vs-

HDFC Bank,

Rep. by its Area Sales Manager, 

No. 110, Nelson Manickam Road,

Aminjikarai,

Chennai – 600 029.                                                                   ...opposite party

Counsel for complainant      :   Thiru. V. Balaji

Counsel for opposite party  :    Thiru. S.V. Soundararajan

ORDER

THIRU. A. MEENAKSHI SUNDARAM, B.A.,B.L. PRESIDENT

    This complaint has been filed Under Section 12 of Consumer Protection Act 1986.    The complainant has prayed this Hon’ble Commission to direct the opposite party to pay a sum of Rs.54,691.87/- illegally amount deducted by the opposite party and to pay a sum of Rs.1,00,000/- as compensation for mental agony and deficiency in service and also to pay a sum of Rs.10,000/- towards the cost of this complaint.   

1. The case of the complaint is briefly as follows:

    The complainant has availed a Car loan of Rs.11,20,232/- to purchase Maruthi S Cross 1.3. Alpha on EMI basis and the monthly EMI was Rs.23,747/-. Starting from 05.10.2015, the complainant paid five months instalments amounting to Rs.1,18,735/-. Due to unforeseen circumstances he was not able to take delivery of the vehicle. The opposite party cancelled the auto loan and forfeited the amount of Rs.54,691.87 as interest against total amount of Rs.1,18,735/- paid by the complainant. The main allegation of the complainant is that in fact, as per clause 3.3 of the loan agreement it is stated that “In the event of (1) the Borrower(s) does not utilize the loan within 7 days of issuance of cheque/demand draft of a loan, or (b) the Borrower(s) requests the Bank to cancel the loan within 7days disbursement of the Loan, or the first tranche thereof, as the case may be, the Bank may at its sole and absolute discretion, suspend or cancel the Loan(s) and the Borrower(s) shall be liable to pay forthwith the cancellation charges and other charges, if any, as set out in the Schedule hereunder written along with the total amount of Loan(s), if disbursed and utilised, interest and other Dues”. The combined reading of clause 3.3 read with schedule clearly demonstrate that the opposite party has got a right to charge interest only for seven days from the date of disbursement.  However, in this case the opposite party has collected the interest without any basis and authority of the law.  On legal advice the complainant states that as held by Hon’ble National Commission in AWAZ-Vs-RBI, reported in 2008 (3) CPJ 98 NC the Commission has got jurisdiction to entertain the complaint.  Hence, this complaint.   

2.    The written version of opposite party is as follows:

    The opposite party admitted that the complainant had approached the opposite party in the month of August 2015 for availing the Auto Loan Facility for a sum of Rs.11,20,232/-  for purchasing Maruthi Car.  Further, it is admitted by the complainant that the complainant had executed loan agreement dated 31.08.2015 after reading and understanding the terms and conditions of the said loan agreement. The averments stated in para 2 of the complaint is not absolutely correct, in fact the following tabular column will clearly establish the breakup of the total amount financed

    It is pertinent to note here that the said loan amount was dispersed to the complainant on 31.08.2015, in such event it is the duty of the complainant to take the delivery of the vehicle at the earliest and register the said vehicle under the Motor Vehicle Act with an endorsement of hypothecation in favor of the opposite party bank.  But the complainant did not take any steps to fulfill the above acts which is contrary to the terms and conditions of the loan agreement.  Therefore the opposite party bank communicated a mail dated 27.01.2016 to the complainant, that the said loan shall be foreclosed for failure of taking the delivery of the said vehicle and registering the same under the Motor Vehicles Act.  In spite of repeated reminders and request the complainant failed to adhere to the terms and conditions of the loan agreement.   Further it is submitted that, to save the interest of the opposite party bank and public money, the opposite party bank foreclosed the said loan account and returned a sum of Rs.64,044/- to the complainant after deducting all applicable interest and charges from the amount of Rs.1,18,735/- which was paid as EMI by the complainant from the date of disbursal of loan amount. In Clause 3.3 of the loan agreement without understanding the same.  It is clearly mentioned that the borrower shall be liable to pay forthwith the cancellation charges and other charges, if any, as set out in the schedule hereunder, written along with the total amount of loans if disbursed and utilized, interest and other dues.  It is pertinent to note here that the said loan was disbursed to the complainant in the month of August 2015 and the same was foreclosed in the month of March 2016, therefore the applicable interest for said period and foreclosure charges were charged as per the terms and conditions of the loan agreement. If the complainant fails to adhere to the terms and conditions of the agreement the complainant is liable to pay applicable interest and other charges with penalties which are contractual and binding which are governed by the terms of conditions of the loan agreement.  As per the guidelines of the Reserve Bank of India of which all the customers are well informed including the complainant.  The bank had disbursed the said loan to the complainant under the good faith.  The bank is under no obligation to penalize the complainant as alleged by him.  The complainant had initiated proceedings by citing one reason or other and deficiency in service without any basis.  Hence, there was no deficiency in service as alleged by the complainant.  The opposite party respectfully prays that this Hon’ble Commission may be pleased to dismiss, the complaint with cost.   

3.    Proof affidavit of complainant filed, Ex.A1 to Ex.A3 were marked. Proof affidavit of opposite party filed.  Ex.B1 to Ex.B3 were marked.  Written arguments of both sides filed.  Oral arguments of both sides heard.        

4.    The points that of arises for consideration are:

    1. Whether there is any deficiency in service on the part of the opposite      

               party?

    2. Whether the complainant is entitled for relief as claimed in the complaint?

3. To what relief complainant is entitled to?

5.    Point Nos.1 & 2:           The complainant availed a car loan of Rs.11,20,232/- on 31.08.2015 and the monthly EMI was Rs.23,747/- and total period EMI was 60 months.  The complainant paid 5 monthly instalments amounting to Rs.1,18,735/- Due to unforeseen circumstances the complainant could not take delivery of the vehicle.  Therefore the opposite party cancelled the loan and forfeited an amount of Rs.54,691.87/- as interest against the total amount of Rs.1,18,735/- paid by the complainant.  for which the complainant objected and sent various communications.  The opposite party by their reply dated 18.03.2016 stated that they have collected the said amount as per loan agreement.  In view of the clause of 3.3 of the loan agreement, if the borrower does not utilize the loan within 7 days the opposite party have the right to cancel the aforesaid loan. Therefore for ready reference the relevant clause of 3.3 here under. 

    “In the event (a) the Borrower(s) does not utilize the Loan within 7 days of the issuance of cheque / demand draft of a Loan, or (b) the Borrower(s) requests the bank to cancel the Loan within 7 days of disbursement of the Loan, or the first
tranche thereof, as the case may be, the Bank may at its sole and absolute discretion, suspend or cancel the Loan(s) and the Borrower(s) shall be liable to pay forthwith the cancellation charges and other charges, if any, as set out in the Schedule hereunder written along with the total amount of Loan(s), if disbursed and utilised, interest and other Dues”.     

6.    The combined reading of clause 3.3 read with schedule clearly demonstrate that the opposite party has got a right to charge interest only for 7 days from the date of disbursement.  But in the current case the opposite party has collected the interest, without any basis and authority of the law.  Per contra the opposite party admits the car loan and cancellation of the said car loan as well.  The opposite party states that as per clause 3.3 of the loan agreement that the borrower shall liable to pay forthwith the cancellation charges and other charges if any set out in the schedule hereunder, return along with the total amount of loans, if disbursed and utilized, interest and other dues. It is pertinent to note that the said loan was disbursed to the complainant in the month of August 2015, and the same was foreclosed in March 2016.  Therefore the applicable interest for the said period and foreclosure charges were charged as per the terms and conditions of the loan agreement.  Therefore there is no deficiency in service on the part of the opposite party.  In this regard we refer to

The WEST BENGAL STATE CONSUMER DISRUPT REDRESSAL COMMISSION JUDGEMENT.

The Manager HDFC Bank Retail Asset Division

Vs

Srimathi Durgavathi Tripathy

wherein the Hon’ble state commission held that, 

“We are of the view that admittedly the complainant paid 4 instalments and hence due to such payments of 4 instalments the loan amount would be diminishing figure and the principal amount was on diminishing stage.  The bank cannot charge interest on Rs.5,00,000/- because the complainant has already paid a sum of Rs.68,480/-. So the bank should recalculate the intern amount on Rs.68,480/- not on Rs.5,00,000/-.

In the present case, the only issue to be decided by this Hon’ble Commission is that whether the opposite party have a right to charge interest on entire loan amount or only on the amount paid by the complainant i.e. Rs.1,18,735/-. In this regard we refer to the aforesaid judgement, where interest should be calculated only on the amount paid by complainant and not the entire loan amount of Rs.11,20,232/-  Therefore the claim of the opposite party does not hold good.  Accordingly, this complaint is partly allowed. Hence these Point Nos.1 and 2 are decided in favour of the complainant.   

7. POINT NO.3:     As we have decided in  Point Nos.1 and 2 that there is a deficiency in service on the part of the opposite party. The opposite party is hereby directed to refund Rs.22,844/- (Rupees Twenty Two Thousand Eight Hundred and Forty Four only) the excess amount paid by way of interest by the complainant and to pay a sum of Rs.50,000/- (Rupees Fifty Thousand only) as compensation for deficiency in service and mental agony and also to pay a sum of Rs.10,000/- (Rupees Ten Thousand only) towards cost to the complainant.  Hence, this Point No.3 is also answered accordingly.   

8.      In the result, this complaint is partly allowed.  The opposite party is hereby directed to refund Rs.22,844/- (Rupees Twenty Two Thousand Eight Hundred and Forty Four only) the excess amount paid by way of interest by the complainant and to pay a sum of Rs.50,000/- (Rupees Fifty Thousand only) as compensation for deficiency in service and mental agony and also to pay a sum of Rs.10,000/- (Rupees Ten Thousand only) towards cost to the complainant, within one month from the date of receipt of this order, failing which the above amounts shall carry interest at the rate of 9% per annum from the date of receipt of this order to till the date of realization.

Dictated to the steno-typist transcribed and typed by her corrected and pronounced by us in the open Commission on this the  17th October 2022.

Sd/-                      Sd/-                    Sd/-

MEMBER-I                                     MEMBER – II                                    PRESIDENT

LIST OF COMPLAINANT SIDE DOCUMENTS:

Ex.A1- 31.08.2015 – Copy of Auto Loan Agreement.

Ex.A2- 16.03.2016 – Copy of Letter of the complainant

Ex.A3- 18.03.2016 – Copy of reply by the opposite party

LIST OF OPPOSITE PARTY SIDE DOCUMENTS:                                       

Ex.B1-31.08.2015  -  Copy of Loan Agreement

Ex.B2-27.01.2016  -  Copy of mail to the complainant

Ex..B3                    -   Copy of Statement of Accounts

  Sd/-                      Sd/-                    Sd/-

MEMBER-I                                     MEMBER – II                                    PRESIDENT