JUDGMENT Per Jagroop Singh Mahal, Member This appeal for enhancement of compensation by complainant is directed against the order dated 8.7.2009 passed by learned District Consumer Forum-II, U.T. Chandigarh whereby his complaint bearing No.955/2009 was allowed with costs of Rs.5000/- and OP No.2 was directed to refund to the complainant the insurance premium on pro rata basis for the unexpired period i.e. from 14.2.2009 to 18.3.2013 after deducting the process charges etc. OP No.2 was also directed to pay Rs.10,000/- as compensation for mental agony and harassment. The aforesaid amounts were directed to be paid by OP No.2 within 45 days from the date of receipt of certified copy of the order, failing which OP No.2 was made liable to pay interest @ 18% p.a. from the date of complaint i.e. 23.9.2009 till payment. 2. In nutshell, the facts as set out in the complaint are that the complainant took housing loan of Rs.19,57,300/- by mortgaging his flat No.202 in Royale Estate, Zirakpur. As per scheme of the Bank, his loan was insured and one time insurance premium was paid by him to OP-2. OP-Bank assured him that they would not charge any foreclosure charges in case he wanted to clear the loan amount and they would adjust the insurance premium at the time of full and final settlement of the loan amount. In order to clear the loan amount, complainant deposited Rs.10 lacs vide receipt dated 07.11.2008 and Rs.5 lacs vide receipt dated 15.11.2008. On receipt of the statement of account about outstanding amount , the complainant was shocked to see that an amount of Rs.4,88,712.82 were shown as outstanding amount which included the late payment penalty charges, cheque bouncing charges and foreclosure charges @ 2.25 % on the outstanding principal amount. Thereafter, the complainant approached OP-Bank to rectify the same as he was not liable to pay the foreclosure charges etc. but officials of the OP-Bank refused to do so. Under the compelled circumstances and in order to clear the loan amount, the complainant paid Rs.4,88,713/- vide receipt dated 19.11.2008 . The complainant requested OP-Bank to return the original documents of the flat, the insurance premium, EMI Chart, principal certificate etc. but they told the complainant that they had not received the same from their head office. The complainant made repeated visits as well as requests to OPs to return the aforesaid documents but to no effect. It was also averred that in the statement of EMI (repayment schedule) dated 15.01.2009, the payment of Rs.4,88,713/- was not adjusted. OP-Bank issued NOC in respect of the loan account of the complainant only on 13.02.2009 but the insurance premium was not returned to him. The complainant, then made an application dated 13.02.2009 to the OP-2 for refund of the insurance premium but even then the same was not refunded. Hence, alleging deficiency in service and unfair trade practice on the part of OPs, the complainant filed the complaint. 3. OP-1 in its reply stated that the prayer of complainant for refund of the insurance premium relates to OP-2 and OP-Bank has no concern with the issuance of the insurance policy or its cancellation. It was pleaded that the amount, if any, was to be refunded by OP-2 and there was no deficiency in service on its part. OP NO.2, however, in its reply admitted that the complainant had taken the insurance policy for securing the loan which was valid for the period 19.03.2008 to 18.03.2013 and it was a single premium policy under which the policy continues to exist for such period of time as the loan availed by the complainant would have continued with OP No.1. It was pleaded that the amount could only be refunded on a pro rata basis and OP was ready to refund the same after deduction of the processing fees, charges etc. 4. After going through the evidence and hearing the learned counsel for parties, learned District Forum allowed the complaint as indicated above. Still dissatisfied, complainant has come up in this appeal. 5. We have heard learned counsel for the parties and carefully gone through the file. 6. The contention of learned counsel for complainant/appellant is that he had leveled allegations of deficiency of service and over recovery against OP NO.1/Respondent bank but no relief has been granted in this respect. His contention is that the compensation of Rs.10,000/- is meager amount as compared to the harassment caused to him by the OPs. On the other hand, learned counsel for OPs/respondents argued that no relief had been claimed against the OP NO.1/Respondent bank nor any deficiency was alleged and therefore no compensation was directed to be paid by OP NO.1. This contention does not appear to be correct. In para-3 of the complaint, complainant has mentioned that OP bank without his consent or permission charged double installments due to which the cheque issued subsequently was dishonoured. It was mentioned in para No.5 of the complaint that the OP bank has charged late payment penalty and cheque bouncing charges as well as foreclosure charges @ 2.25%, though at the time of disbursement of loan it was agreed that no foreclosure charges were to be imposed. It is then mentioned in para-8 of the complaint that after making the full payment towards loan, complainant approached OP bank to get back original documents and he was asked to visit their office again after a week. He later on visited the bank and made phone calls but the documents were not returned to him. He also requested the bank for ‘No Objection Certificate’ but the same was issued to him as late as 13.2.2009, as mentioned in para-13 of the complaint. The complainant in para-14 mentioned of having made a number of visits and correspondence for refund of the insured amount/premium but the OP NO.2 did not pay back the same. Complainant in para-20 (ii) requested for compensation from the OPs on account of financial loss, mental harassment, agony caused to him due to their joint unfair and deficient services as stated in the complaint. It, therefore, cannot be said if the complainant had not alleged deficiency in service on the part of OP/ Respondent No.1 bank or had not prayed for any compensation from it. 7. However, the reply given by OP/Respondent No.1 bank is evasive, vague and cryptic. It was not disputed by the OP bank if they submitted the cheques for two installments on one occasion depleting the balance amount in the account of the complainant due to which the cheque bounced. The facts in para No.5 about the charging of late payment penalty, cheque bouncing charges, foreclosure charges which were not due have not been denied. The allegations mentioned in para No.12 are that the NOC alongwith other documents were asked but they did not return the same. It is therefore clear that the allegations levelled by the complainant against OP bank have not been denied. 8. The learned counsel for the OP/Respondent No.1 bank has argued that otherwise also they were entitled to the foreclosure charges from the complainant and there was no overcharging in this respect. He referred to annexure C-1 vide which the loan was sanctioned in which the fee for full and final payment could be charged by OP bank @ 2% on the amount prepaid and on all the amounts tendered by the complainant towards prepayment of the loan. The fact that fee for prepayment could be recovered by the OP bank is therefore not disputed. However, the OP bank did not recover prepayment fee from the complainant which means that this fee was waived of by them. On the other hand, as per letter dated 19.11.2008, foreclosure charges @ 2.25% at outstanding principal amount have been charged from the complainant. There is no dispute about it that in annexure C-1 there is no mention of charging of foreclosure charges @ 2.25%. The learned counsel for OP/Respondent No.1 bank argued that prepayment charges and foreclosure charges are interchangeable terms which are used by the bank. We, however, do not find any merit in this argument. The New Webster’s Dictionary and Roget’s Thesaurus defines the ‘prepayment’ (at page 296) to pay before hand. However, ‘foreclose’ has been defined (at page 157) as follows; To prevent; to exclude; to deprive of the right to redeem a mortgage or property It therefore nowhere mentions if ‘foreclosure’ means prepayment also. In Mitra’s legal and commercial dictionary fifth edition, the foreclosure is defined as follows ; Foreclosure is a legal term which implies that the relief given be equity against forfeiture of the security is withdrawn. In this dictionary, foreclosure does not mean prepayment. In the Shorter Oxford English Dictionary, foreclosure has been defined as follows ; The action of foreclosing (a mortgage) a proceeding to bar the right of redeeming mortgaged property. In the present case there had been no mortgage of the property and the question of foreclosing of property therefore did not arise. 9. In this manner, foreclosure does not mean prepayment nor does prepayment mean foreclosure. These are, therefore, not interchangeable words and if the OP can charge prepayment fee under the agreement between the parties. It is not necessary that it can charge foreclosure charge also. We are therefore, of the opinion that OP bank has charged foreclosure charges regarding which there was no agreement between the parties and charging of this amount by the OP bank amounts to unfair trade practice besides deficiency in service. 10. The complainant had paid the entire amount due from him vide annexure C-II on 19.1.2008 and asked for NOC vide his application Annexure C-13 but it was given to him on 13.2.2009,though Annexure C-16 which had been prepared by them on 29.11.2008. The learned counsel for complainant argued that it was not despatched to the complainant promptly in order to harass him and during this period complainant had been making rounds to the office of OP bank which fact as mentioned above has not been denied by the bank in its reply. This also amounts to deficiency in service on their part. 11. The learned District Forum did not refer to any of these facts and proceeded with the assumption that the complainant had failed to make out any case of deficiency in service against OP/Respondent No.1 and no relief has been sought against it. This observation of the learned Forum is factually incorrect and therefore dismissal of the complaint against OP bank on this ground cannot maintain. On the other hand, deficiency in service and unfair trade practice adopted by OP bank is not only proved from the facts of the case but has not been disputed by the bank itself. In view of the above discussion, we are of the opinion that the complaint against OP NO.1/Respondent No.1 must succeed. The same is accordingly allowed and the impugned order is modified. In addition to the relief granted by the learned District Forum against OP No.2, the OP No.1 is liable to refund the amount of Rs.43666.32p alongwith interest @ 9.25% p.a. (as mentioned in annexure C-2) since 19.1.2008 till amount is paid back to the complainant. The OP No.1 is also directed to pay Rs.25,000/- as compensation for adopting unfair trade practice and for deficiency in service as mentioned in various paras of the complaint referred to above. Complainant would also be entitled to Rs.5000/- as costs of litigation. The aforesaid amounts shall be paid by OP NO.1/Respondent No.1 to the complainant within thirty days from the date of receipt of copy of this order, failing which it would be liable to pay penal interest @ 12% p.a. with effect from today till its payment. The appeal is accordingly allowed in the aforesaid terms. Certified Copies of this order be sent to the parties, free of charge. The file be consigned to record room.
| | HON'BLE MR. JAGROOP SINGH MAHAL, MEMBER | HON'BLE MRS. NEENA SANDHU, PRESIDING MEMBER | , | | 
