Punjab

StateCommission

FA/12/518

Harmeet Singh - Complainant(s)

Versus

HDFC Ltd. - Opp.Party(s)

Updip Singh

16 Mar 2015

ORDER

2^nd Additional Bench

 

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB

DAKSHIN MARG, SECTOR 37-A, CHANDIGARH

 

First Appeal No. 518 of 2012

                                                           

                                    Date of institution: 27.4.2012  

                             Date of Decision:  16.3.2015

 

Harmeet Singh s/o S. Gurbaksh Singh (Case Gagan Deep Singh & Others), 158, Basant Avenue, Amritsar.

…..Appellant/Complainant

                                      Versus

1. The General Manager, HDFC Ltd., 143-155, Sector 8-C, Madhya Marg, Chandigarh.
2. Branch Manager, HDFC Ltd., Ranjit Avenue, Amritsar – 143 001

…..Respondents/Opposite Parties

 

First Appeal against the order dated 20.3.2012 passed by the District Consumer Disputes Redressal Forum, Amritsar.

 

Quorum:-

 

              Shri Gurcharan Singh Saran, Presiding Judicial Member

              Shri Jasbir Singh Gill, Member

    Shri Harcharan Singh Guram, Member

 

Present:-

 

          For the appellant             :         None.

          For the respondents        :         Sh. Shekhar Verma, Advocate

 

 

Gurcharan Singh Saran, Presiding Judicial Member

ORDER

The appellant/complainant(hereinafter referred as “the complainant”) has filed the present appeal against the order dated 20.3.2012 passed by the District Consumer Disputes Redressal Forum, Amritsar (hereinafter referred as “the District Forum”) in consumer complaint No.366          dated 7.4.2011 vide which the complaint filed by the complainant was dismissed.  

2.                The complaint was filed by the complainant under the Consumer Protection Act, 1986 (in short ‘the Act’) against the respondents/opposite parties(hereinafter referred as ‘OPs’)  on the plea that he had availed a house loan of Rs. 50 lacs from the ops with interest @ 7.5% per annum but it was sanctioned and disbursed @ 8% p.a. in the year 2006. With effect from January 2007, they increased the EMI from Rs. 38,871/- to Rs. 53,121/- per month and increased the interest rate to 11.75% and at present it is being charged @ 10.5% per annum. Number of letters were written to the OP to reduce the rate of interest @ 8% p.a. on which the loan was sanctioned but with no result. The loan was sanctioned for 15 years and they had paid 60 installments. On coming to know, the conversion scheme floated by the Bank, they approached the Chandigarh office for conversion of their housing loan. However, the bank advised to pay the instalment for January, 2010, the penal interest amounting to Rs. 16,000/-. Despite paying a sum of Rs. 24,73,156/-, they were still to pay a sum of Rs. 46,52,000/-. The bank was offering lower rate of interest i.e. 8.25% per annum to new customers but it was still charging 10.50% per annum to the existing trusted, loyal and regular customers. When their grievances were not redressed, they had to shift  to other bank for availing the credit facility for the remaining period but before that he had to pay the pre-payment charges @ 2% p.a. amounting to Rs. 1 lac, which are totally illegal and the complaint was filed for the refund of this amount and Rs. 1 lac as compensation on account of harassment.

3.                The Ops filed reply to the complaint stating that the complaint was not maintainable as the interest charged for the loan was according to the loan agreement dated 30.12.2005 and that the transaction between the bank or the financial institution and its debtor shall not be reopened by any Court; the Hon’ble Fourm  had no jurisdiction to go through the contractual terms and conditions; the complainant were not the consumer as there was no deficiency in services on the part of the Ops. The complainants vide loan application requested for the home loan and a sum of Rs. 50 lacs was sanctioned subject to the terms and conditions stated therein and the complainant entered into loan agreement dated 30.12.2005 under adjustable rate home loan. The interest applicable at the time of availing the loan was 7.5% p.a.. Since the complainant had opted for ARHL scheme, which is linked to Retail Prime Lending Rate (in short ‘RPLR), which was subject to change and linked to cost of lending of Ops and various other market forces and the complainant was to repay the amount in equated monthly instalments for a specific period and thereafter in case rate of interest is increased then EMI amount is increased. The Ops were forced to increase the RPLR in April, 2006 as per the reset cycle of the complainant’s loan. The interest rate was revised to 8% p.a.. In case RPLR 11.25% - 3.25% spread. As per Clause 2.6 (c) of the loan agreement duly signed and executed by the complainant, it was clearly mentioned that the Ops shall have the right at any time or from the time to time to review and reschedule the repayment terms of the loan in such a manner and to such extent as Ops may in its sole discretion decide. According to Clause 2.6 (d), if the EMI amount is intended to be kept constant while changing the number of EMI’s, however, in case the EMI amount does not cover in full either interest component or principal component then in such a case the EMI amount needs to be increased. The complainant was very well aware and had understood the clauses of the loan agreement. IN the year 2007, the complainant had approached the Ops with a request to take the benefit of Clause 2.13 of the Loan Agreement. The Ops were willing to give that benefit of the higher spread over the RPLR, which reduced the rate of interest as applicable to the complainant but on payment of charges as mentioned in the loan agreement. The complainant refused to pay the said charges and accordingly, the complainant was requested to first pay the outstanding due thereafter pay the requisite charges and upon payment of such charges, he could avail the benefit of reduced rate of interest. But lateron he approached the Ops with a request to repay the said loan and as per the policy, the Ops were entitled to the charges @ 2% on the outstanding principal amount. The complaint filed by the complainant was without merit. The interest and re-payment has been taken from the complainant according to the agreement between the parties. Therefore, the complaint be dismissed.

4.                The parties were allowed by the learned District Forum to lead their evidence.

5.                In support of his allegations, the complainant had tendered into evidence his affidavit Ex. C-1, letters of different dates Exs. C-2 to C-23, affidavit Ex. C-24, account schedule Ex. C-25, payment receipts Exs. C-26 & 27. On the other hand, the opposite party had tendered into evidence affidavit of Nandan Singh Rawat Ex. R-1, loan application Ex. R-2, loan application Ex. R-3, home loan agreement Ex. R-4, letter dt. 6.2.20 Ex. R-5, letter of OP Ex. R-6.

6.                After going through the allegations in the complaint, written reply filed by the OPs, evidence and documents brought on the record, the complaint was dismissed by observing that the part payment charges have been taken according to the agreement.

7.                In the appeal, none has appeared on behalf of the appellant and we have gone through the grounds of appeal as well as record of the case with the help of learned counsel for the Ops Sh. Shekhar Verma, Advocate.

8.                Mainly the complaint of the complainant is with regard to charging of 2% pre-payment charges at the time of closing the account because the Ops were not agreed to reduce rate of interest and in case other banks were offering the loan at a lower rate of interest then he had shifted the loan to the other bank after paying entire outstanding amount to the Ops including 2% pre-payment charges.

9.                With regard to pre-payment charges, the counsel for the OP has drawn our attention with regard to the terms and conditions of the agreement executed between the parties and placed on the record as Ex. R-4 and Clause 2.8 is pre-payment, which reads as under:-

“2.8   Prepayment

The borrower shall be entitled to prepay the loan, either partly or fully, as per rules of HDFC, including as to the prepayment charges, for the time being in force in that behalf.”

10.              As per the application form, the complainant himself is an employee of Punjab & Sind Bank, Hall Bazar, Amritsar with the qualification M.Sc. Physics and co-applicant, who is Narinder Kaur wife, who is also a Graduate. There is a notification dated 18.10.2011 issued by Housing Bank and it was observed in the said notification that in case the payment is made from own sources then there will be no prepayment charges and in case it has been shifted to some other financial institution then prepayment charges will be paid. A reference has been made to “Punjab National Bank Vs. Chaman Kumari” 2005(3) CLT-248. In that case, prepayment charges @ 2% were charged on the basis of that Circular and charging of prepayment charges was justified. Whereas a reference has also been made to the judgment F.A. No. 810 of 2009 “Standard Chartered Bank Ltd. Versus Ashish Aggarwal & Mrs. Alka Aggarwal”, decided on 24.7.2013 by State Commission, Delhi wherein it was observed that in case any consumer avail the services of those banks, which charged lesser rate of interest, the consumer could naturally make a request for loan from previous bank to other bank charging lesser rate of interest and such a request would not come within the ambit of terminology of prepayment.

11.              However, it is not clear whether there was agreement between the parties for payment of pre-payment charges in that case. However, in the present case, there was a loan agreement between the parties in which there was a condition of pre-payment charges. In case the loan is either partly or fully repaid as per rules of the Bank and also relying upon the notification dated 18.10.2010 issued by National Housing Bank that in case the loan has been shifted to some other financial institution then prepayment charges will be levied. Certainly, in this case, the complainant has shifted his loan account to some other bank, as the OP bank was laying some conditions to reduce the rate of interest to pay some amount for the purpose to which the complainant did not agree. In case the terms and conditions have been agreed between the parties then the Consumer Fora cannot go beyond those terms and conditions between the parties. In these circumstances, we cannot say that prepayment charges have been charged by the opposite Bank from the complainant beyond the scope of loan agreement between the parties, therefore, the learned District Forum was justified to dismiss the complaint. We affirm the findings.

12.              In view of the above discussion, we do not find any merit in the appeal and the same is dismissed with no order as to costs.  

13.              The arguments in this appeal were heard on 11.3.2015 and the order was reserved. Now the order be communicated to the parties as per rules.

14.              The appeal could not be decided within the statutory period due to heavy pendency of Court cases.

 

 (Gurcharan Singh Saran)

Presiding Judicial Member

 

                                                                            (Jasbir Singh Gill)

                                                                                                    Member

 

March            16, 2015.                                                      (Harcharan Singh Guram)

as                                                                                                Member