Delhi

East Delhi

CC/349/2016

SATENDRA - Complainant(s)

Versus

ICICI BANK - Opp.Party(s)

26 Nov 2018

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM (EAST)

GOVT. OF NCT OF DELHI

CONVENIENT SHOPPING CENTRE, FIRST FLOOR,

SAINI ENCLAVE, DELHI – 110 092

 

C.C. NO. 349/16

 

Shri Satendra Kumar

S/oShri Triloki Nathi

R/o House No.4, Pocket-1

Jasola Vihar, Delhi – 110 025                                      ….Complainant

Vs.    

 

1. ICICI Bank Ltd.

Regd. Off.: Landmark, Race Course Circle

Vadodara – 390 007, Gujrat

                                             

2. The Manager

Home Loan Department

ICICI Bank Ltd.

Preet Vihar Branch

F-11, Vikas Marg

New Delhi- 110 092                                                         …Opponents

 

Date of Institution: 14.07.2016

Judgement Reserved on: 26.11.2018

Judgement Passed on: 03.12.2018

CORUM:

Sh. Sukhdev Singh (President)

Dr. P.N. Tiwari (Member)

Ms. Harpreet Kaur Charya (Member)

 

Order By: Sh. Sukhdev Singh (President)

 

JUDGEMENT

            This complaint has been filed by Shri Satendra Kumar against ICICI Bank (OP) under Section 12 of the Consumer Protection Act, 1986 with allegations of unfair trade practice and deficiency in service. 

2.         The facts in brief are that the complainant Shri Satendra Kumar obtained home loan from OP vide loan account no. LBGUR00001977497. The complainant, vide letter dated 24.09.2015, requested for foreclosure of the loan account and sought foreclosure statement of the said account and also confirming the title documents already lying with OP towards security. 

OP issued a statement of account vide letter dated 05.02.2015 and made a demand for prepayment charges of Rs. 2,10,434/- from the complainant for foreclosure of the said loan account.

It was stated that the complainant handed over a copy of the RBI letter no. RBI/2013-14/582 dated 07.05.2014 containing directions for demand of prepayment charges to OP, but they forced him to pay the prepayment charges.

The complainant sent a legal notice dated 16.02.2016 to OP, but they did not pay any heed to the same.Thereafter, OP charged a sum of Rs. 2,10,434/-, being prepayment charges @ 2.29% at outstanding principal amount from the complainant

It was further stated that the complainant approached OP several times for refund of the amount of Rs. 2,10,434/-, which caused undue harassment, mental pain and agony.It was stated that OP have violated the guidelines of RBI and have indulged in gross deficiency of service and unfair trade practice.Hence, the complainant has prayed for direction to OP to refund the prepayment charges of Rs. 2,10,434/-; Rs. 2,00,000/- as compensation on account of mental pain, agony and harassment and cost of litigation.

3.  

It was stated that as per the RBI notification, the waiver of pre-payment penalty on foreclosure was not applicable.They have also placed reliance on the judgement of Hon’ble Supreme Court in the matter of Ravneet Singh Bagga in which “the onus to prove deficiency is upon the complainant’. Other facts have also been denied.

4.         The complainant has filed rejoinder to the WS of OPs, wherein he has controverted the pleas taken in the WS and reasserted his pleas. 

5. n support of its case, the complainant have examined himself.  He has deposed on affidavit.  He has narrated the facts which have been stated in the complaint.  He has also got exhibited documents such as copy of letter dated 05.02.2016 (Ex.CW-1/A), copy of RBI letter no. RBI/2013-14/582 dated 07.05.2014 (Ex.CW-1/B) and copy of legal notice alongwith postal receipts (Ex.CW-1/C).

            In defence, OP have examined Ms. Akriti Mishra, Manager (Legal) and AR of OP, who has also deposed on affidavit. She has narrated the facts which have been stated in the written statement. She has also got exhibited copy of the circular of RBI dated 05.06.2012 (Annex. 2).    

6.         We have heard Ld. Counsel for complainant and have perused the material placed on record as none appeared to argue on behalf of OP.   It has been argued on behalf of the complainant that ICICI bank have charged a sum of Rs. 2,10,434/- being pre-payment charges @ 2.29% on outstanding principle amount which was against the directions of RBI.  He has further stated that these charges were not levyable on foreclosure of his loan account.  Though, none have appeared to argue on behalf of ICICI Bank Limited, but the stand which they have taken in their reply has been that waiver of pre-payment policy on foreclosure was not applicable to the complainant as the loan was not an individual loan, but loan to HUF i.e. Hindu Undivided Family. 

            To appreciate the arguments of Ld. Counsel for the complainant and the stand taken by ICICI Bank in their reply as well as in their evidence, a look has to be made to the sanction letter as well as circular of RBI in respect of foreclosure of home loan.

            Firstly, from the sanction letter which has been filed alongwith the reply as well as narrated in the affidavit of Ms. Akriti Mishra, Manager (Legal), it is noticed that the loan has been sanctioned against application no. 7779208340 and 7779208339 in the name of Mr. Satendra Kumar, complainant alongwith Lav Kumar, Uma Kumar and Pooja Kumar. This home loan has been Top-up Loan for an amount of Rs. 2,40,00,000/- on floating rate of interest.  The plea which has been taken on behalf of ICICI Bank (OP) has been that the loan has been sanctioned to the complainant not as an individual loan, but to “HUF” i.e. Hindu Undivided Family comprising of complainant Shri Satendra Kumar, Lav Kumar, Uma Kumar and Pooja Kumar.  On the face of it, it is evident that the loan has been sanctioned to the complainant not as an individual loan, but a loan to all members of his family viz. Lav Kumar, Uma Kumar and Pooja Kumar.

            Now, the question arises as to whether the foreclosure facility was applicable to the home loan which has been sanctioned to the complainant alongwith his family members.  For this, a look has to be made to the RBI circular of dated 07.05.2014 which is on the subject “levy of foreclosure charges/pre-payment penalty on floating rate term loan”.  The relevant portion of this circular is reproduced hereunder:-

“A reference is invited to Part B of the First Bi-monthly Monetary Policy Statement 2014-15 announced on April 1, 2014 proposing certain measures for consumer protection. It was indicated that in the interest of their consumers, consider allowing their borrowers the possibility of prepaying floating banks should rate term loans without any penalty.  Accordingly, it is advised that banks will not be permitted to charge foreclosure charges /pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect”.

            From the reading of this, it comes out that an advisory has been issued to all the banks that they have not to charge foreclosure charges / pre-payment penalties on all floating rate term loans, sanctioned to individual borrowers.  The word “Individual Borrowers” have been used in this circular.  It is only the individual borrower, which have been given this facility of non levy of foreclosure charges / pre-payment penalty.  Except the individual borrower, the circular does not exempt any of the loan borrowers for this facility.

            In the present case, complainant have taken loan alongwith his family members which is termed as “HUF” i.e. Hindu Undivided Family.  When the complainant have taken the loan in the capacity of HUF and not an individual borrower, he cannot claim the facility of non-levy of foreclosure charges/ pre-payment penalty.  Therefore, his case cannot be covered under the circular of RBI of dated 07.05.2014 for non levying of foreclosure charges / pre-payment penalty on floating rate term loan.  Thus, the foreclosure charges levied by ICICI Bank Limited (OP) cannot be said to be contrary to the rules. 

            That being so, it cannot be said that there has been any deficiency on the part of ICICI Bank Limited (OP).  When there is no deficiency on the part of ICICI Bank Limited (OP), his complaint deserve its dismissal and the same is dismissed with cost of Rs. 10,000/- which has to be deposited with the Legal Services Authority of East District Court at Karkardooma Courts.

            Copy of the order be supplied to the parties as per rules.

            File be consigned to Record Room.

 

 

(DR. P.N. TIWARI)                                              (HARPREET KAUR CHARYA)

       Member                                                                             Member 

  

            (SUKHDEV SINGH)

                   President