DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-II

Udyog Sadan, C-22 & 23, Qutub Institutional Area

(Behind Qutub Hotel), New Delhi- 110016

Case No.761/2009

Sh. Rajiv Agarwal

S/o Late Sh. C.P. Singh,

R/o Agarwal Bhawan

G.T. Road, Tis Hazari,

Delhi - 110054

                                                                                                                        ….Complainant

Versus

ICICI Bank

Uphar Cinema Complex

Green Park Extn.

New Delhi - 110016

        ….Opposite Party

       Date of Institution    :         14.10.2009

       Date of Order            :         21.03.2022

Coram:

Ms. Monika A Srivastava, President

Ms. Kiran Kaushal, Member

Sh. U.K. Tyagi, Member

ORDER

Member: Sh. U. K. Tyagi

Complainant has requested to pass an award for (i) to repay the sum of Rs.95,305/- being pre-payment charges; (ii) amount of Rs.1,00,000/- on account of causing mental agony and harassment; and (iii) to pay interest @12% on the amount to be granted by this Commission till date.

            The facts leading to the case are that the Complainant took a Home loan of Rs.43,50,000/- as a Top-up loan in the beginning of 2008 from the ICICI Bank (hereinafter referred as OP). He paid the entire loan in last week of May, 2009 by way of making total payment of Rs.44,53,786/- to the OP. He alleges that a sum of Rs.95,305/- has been charged by the OP on account of pre-payment charges @2.21% on the outstanding amount. It is also stated that he made this payment under protest at that time. He alleged that the said charges in the guise of said pre-payment are totally illegal and unjustified. He also referred to the judgement dated 27.04.2007 of Hon’ble State Commission in appeal No. 7/130 titled  as State Bank of India vs Dr. (Mrs.) Uma Vaid. The said case has also been upheld by Hon’ble Supreme Court. The Complainant also averred that by charging pre-payment charges, OP had indulged in unfair trade practice which amounts to deficiency in service. The Complainant also enclosed the payment receipt dated 30.05.2009 of Rs.44,53,786/- and also the copy of payment of penalty being pre-payment charges.

            On the other hand, the OP has stated that on the repeated request, the home loan to the tune of Rs.40,00,000/- was sanctioned to the Complainant. The same was repayable in 180 months with a floating rate of interest @10.75% as on the date of sanction. It was also emphasized on behalf of the OP that the fees on full and final pre-payment would be levied @2% on the prepaid amount. Further more, service charge @0.21% was to be levied upon the said pre-payment amount. Thus, the OP Bank has acted solely and entirely in accordance with agreement. The Complainant has not disputed the pre-payment charges at the time of fore-closing of the loan. Copy of said letter as well as Application Form is annexed at Annexures R-1 and R-2. It was also stated that the Complainant had readily agreed to pay the pre-payment charges at his own choice, wish and accord, then, the Complainant cannot allege deficiency of services now.

            OP also stated that the Complainant should be estopped from alleging at this stage as the pre-payment charges are not required to be paid whereas he himself paid these charges at his own accord. There was no protest by the Complainant at the time of pre-payment of loan amount. The OP also averred that the ratio of the judgment of Hon’ble State Commission in the case of Dr. (Mrs.) Uma Vaid is not relevant as the facts of this case are different. Briefly, in the case of Uma Vaid, it was specifically agreed that the bank shall not charge any pre-payment charges.

            It was also noticed that the OP-Bank had also filed an application under order VII Rule 11, Code of Civil Procedure, 1908 and Section 13(3B) of the Consumer Protection Act, 1986. It is observed from the record that the OP-Bank did not press for the disposal of the application.

            Both the parties have filed evidence by way of affidavits and written submissions. Rejoinder is also on record so is written statement. Argument were heard and concluded.

            This Commission has gone into the material placed on record as well as pleadings made by the respective advocates. The Complainant has relied upon the case of Dr. (Mrs.) Uma Vaid. Before we discuss the case in detail, we may also ponder over the other documents filed by the Complainant and OP-Bank. While examining the letter at Annexures R-‘1’ which is offer for loan in response to the loan application of the Complainant. On going through the terms and conditions of loan, it is noticed that “the pre-payment charges @2% on amount prepaid and on all amounts tendered by the Borrower towards pre-payment of the loan during the last one year from the date of final payment would be levied”. It is evident from the above offer letter that term of the pre-payment charges is vividly mentioned.

            The payment receipt for tendering the loan is also on record. The Complainant apparently wrote a letter dated 30.06.2009 (on record) showing his reservation for the payment of pre-payment charges of Rs.95,305/- and requested further for refund of the same. No protest was recorded at the time of payment of pre-payment charges. To buttress his case, the Complainant also annexed the News Paper cutting of some paper referring the annoyance of the RBI but no such order from Central Bank (RBI) to this effect was adduced.

            Now, we may revert to the judgment dated 27.04.2007 of Hon’ble State Commission in the case of Dr. (Mrs.) Uma Vaid V/s State Bank of India, the facts of this case are that the original bank was not allowing the benefit of lower rate of interest by invoking the “Clause 4 of the Agreement (signed between Bank and Dr. (Mrs.) Uma Vaid which stipulates that pre-payment charges @2% and the amount showing pre-payment shall be levied when loan is pre-closed for the reasons to take offer by another bank”. The Hon’ble Commission found this clause restrictive in nature and the practice of this kind amounts to indulging in unfair trade practice. But the facts of instant case are entirely different. The Complainant had not questioned the pre-payment charges at the time of fore-closure of the loan. The Hon’ble Supreme Court in Union of India vs Krupanidhi Educational Trust AIR 2021 Hon’ble State Commission 3441 has held that “We are of the considered opinion that once a long agreement was signed between the parties, a concluded contract came in to being incorporating pre-payment charges”. The agreement would bind the parties. The Respondent-Bank was the beneficiary of the pre-closure charges and therefore if it opted to waive a part of the benefit by reducing the pre-closure charge from 2% to 1%, it was their discretion and jurisdiction which obviously inures to the benefit to the Complainant. But in no case could the pre-payment charge be lowered beyond that waived by the Respondent-Bank under the agreement.

            Therefore in the light of the facts and circumstances of the case and the judgement of Hon’ble Supreme Court, this Commission is of the view that the complaint is found devoid of merit and fails. No order as to costs.

File be consigned to the record room after giving copy of the order to the parties. Order be uploaded on the website.