BEFORE THE ADDITIONAL BENCH DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT MYSURU.

Consumer Complaint (C.C.)No. 1153/2016

Complaint filed on 10.03.2016

Date of Judgement.18.03.2016

PRESENT                                : 1. Shri Ramachandra  M.S.,  B.A., LL.B.,

                                                       PRESIDENT

                                       2. Shri  Thammanna,Y.S., B.Sc., LL.B., 

                                           MEMBER

Complainant/s               :                        Pramod Chakrvarthy.N

         S/o M. Nagesh,

No. 1139, 2^nd cross, Kurubarageri Lashkar Mohalla,

Mysusu-570001.

     (Sri Apporvananda.K., Advocate)

V/s

Opponent        /s                     :                    1.IDBI Bank , RAC,

   MIG 11, Anand Arcade,

   VM Double Road

   Saraswathipuram

   Mysuru-570009.

                                                         (Sri.  M.U. Subbaiah., Advocate)

SHRI RAMACHANDRA . M.S.,

 PRESIDENT

JUDGEMENT

The complainant filed by the complaint Under Section 12 of Consumer Protection Act, 1986 against the opposite party.

2. The brief facts of the complaint is that is a staff of HDFC Bank, VV Mohalla Branch and the wife of the complainant is also gainfully employed. The complainants submits that he had availed a housing composite loan of Rs. 30,00,000/- from the  opposite party on 26.09.2015. The said was sanctioned taking into account the eligibility of both the complainant and his spouse. The said duration of the loan was 240 months (20 years) and the rate of interest was 9.75% p.a . The complainant already had purchased a plot of dimension 30X50 in Srinagara (Gnanaganga Housing  co-operative society) and the said loan amount was for the construction of a  house on the said plot.

3. A sum of Rs. 14,00,000/- was withdrawn from the said loan account for purchase of site in Gnanaganga Housing co-operative society. The complainant however found out that Dewan Housing Finance Limited (DHFL) was sanctioning loans at a marginally lower interest rate than that of this opposite part. DHFL was ready to sanction the loan at 9.5%  p.a and hence though it to be most suiting to transfer the loan account to DHFL.

4. The complainant thus made an application to IDBI to transfer the loan account to DHFL. The complainant had Simultaneously opened a loan account in DHFL and withdrawn a sum of Rs. 11,50,000/- and the balance amount is paid by the savings account to pay the opposite party in order to close the existing  loan account.

5. The said amount was withdrawn from DHFL and the complainant paid a sum of RS. 13,75,000/- to the opposite party owing to some adjustments as the complainant had also paid the first EMI due to the opposite party.

6. On February 9^th 2016, he was however called and informed by the opposite party that he was supposed to pay the pre closure charges of Rs. 45,650/- the complainant was chocked to hear  the same as no bank is supposed to levy a pre closure charges owing to a circular issued by   RBI bearing number RBI/2011-12/589/DBOD.No.Dir. BC. 107/13.03.00/2011-12 dated  05.06.2012 The RBI is a supreme regulator for all banking related activities and hence the opposite party is bound such circular and hence the charges levied by this opposite party is illegal and amounts to deficiency of service and unfair trade practice. In spite of repeatedly showing the RBI Circular the bank did not let down in the demand but instead change their demands from pre-closure to penalty for non construction of the building. However, tenure of the composite loan is for 15 months as of now and the complainants  has 9 months to start the construction.

7. The opposite party also refused to hand over the original documents in order to deposit in the bank wherein loan account has been transferred and refused to hand over the same unless such pre closure charges are paid up to the satisfaction of opposite party on a fear of the said loan account being terminated or fearing even more worse circumstances, the complainant with no choice paid the pre closure charges on 02.03.2016 and the same has also been acknowledged by the opposite party. As on date, the documents have not yet been handed over to complainant in spite of payment of pre closure charges to the full satisfaction of opposite party. The complainant does not wish to press the issue of non-receipt of original documents as the opposite party has sought for time to return the same.

8. The notice to the opposite party is duly served and he engaged counsel and also filed version, affidavit , written arguments in support  of his defence. In the version statement of opposite party admits it is true that a some of Rs. 14,00,000/- was disbursed from the loan account on 10.10.2014 for purchase of site from Gnanaganga Housing  co operative society.

9. The complainant made an application for fore closure of loan to the opposite party on 19.02.2016. The amount that was due to the paid by the complainant to the opposite party on the date of application was Rs. 13,75,000/- the complainant paid the same and got the Housing composite loan closed.

10. But the averment made in the para 6 of the complainant that the opposite party demanded the complaint to pay Rs. 45,650/- as fore closure charges and collect the original documents in absolutely false.

11. The amount that the complainant was asked to pay not fore closure charges, but penal charges by way of additional interest at 2% for closure of loan within 24 months from date of disbursement without completion of construction this condition has been clearly incorporated in the sanction letter which is very much within the knowledge of the complainant.

12. The condition clearly states as follows in case of foreclosure of the loan from own sources balance transfer etc within period of 24 months from the date of first disbursement with non completion of construction, penalty by way of additional interest rate of 4% over and above the base rate due to non completion of construction would be levied we first disbursement at the time of foreclosure of the loan.

13. Though the penalty by additional interest was at  4% at the time of sanctioning of loan , the opposite party  has charged the complainant with the existing rate of 2% additional interest towards penalty that amounts to Rs. 45,650/-.

14. There is a clear guideline by the Reserve Bank of India that Bank credit is used for production, constructions activities and not for activities connected with speculation in real estate.

15. No person can make profits out of public money by indulging in real estate speculations. It is for this reason, the condition is impose that the borrower shall complete the construction within the stipulated period of two years. If the borrower seeks for pre closure of laon without complying this condition, he shall be liable for penalty in the form of additional interest as fixed from time to time.

16. This condition is very much within the knowledge of the complainant. Complainant has suppressed all these facts and has come up with this frivolous complainant to make unlawful gain which has to be curbed.

17. In fact the complainant has made payment of this penalty of Rs. 45,650/- and collected all the original documents from the opposite party.

Knowing fully well that the payment of Rs. 45,650/- has made towards penalty by way of additional interest at 2% for force closure of loan within 24 months without completion of construction, He has given it a name of fore closure charges and has approached this fora there is neither deficiency of service nor the opposite party has indulged in unfair trade practise as alleged by the complainant. The opposite party has acted as per the guideline laid by the Reserve Bank of India.

18. There is no deficiency in rendering service by this opposite party to the complainant. The complainant has come up with false complaint suffering the truth to have unlawful gain. The opposite party prays for the dismissal of the complainant.

19. The complainant in support of his case has filed his chief examination affidavit and also filed some documents and written arguments. The opposite party have filed their version and chief examination affidavit along with written argument in support of defence.

20. Heard arguments.

19. The points that arise for our consideration are;

1. Whether the complainant has proved deficiency in service on the part of OP by collecting foreclosure charges from the complainant thereby op is liable for the relief?

2. What order?

20. Our answer to the above points is as follows;

1. Point No.1: In the Negative .

2. Point No.2: As per final order for the following;

REASONS

21. Point No.1:-It is not disputed that there is a transaction of loan to the tune of 30,00,000/- between complainant and opposite party on 26.09.2014 loan was sanctioned at rate of interest 10.25% for a period 240 months. These facts is admitted by both parties.

22. It is further submitted that out of loan amount of Rs. 30,00,000/- a sum of Rs. 14,00,000/- was only disbursed from the loan account on 10.10.2014. for the purchase of site  to the complainant.  These facts is also admitted by both parties there is no dispute regarding this transaction by any of the party.

23. Further when the complainant made an application for foreclosure of loan to opposite party 19.02.2016 the amount that was due to be paid by complainant to the opposite party on the date of application was Rs. 13,75,000/- The complainant paid the same and got housing composite loan closed. Here regarding foreclosure of the said loan amount by the complainant is un disputed fact. Here only issue is that the opposite party have collected for closure charges of Rs. 45,650/- from the complainant. Here this foreclosure charge is disputed fact between complainant and opposite party. The complainant contends that it is only a transfer of loan amount of Rs. 13,75,000/-  from the opposite party bank to DHFL Bank .

24. Further stated that the collection of foreclosure charge in respect of loan amount is illegal. since the complainant is only taking transfer of loan amount from one bank to another bank as guidelines and circular of Reserve bank of India dated 05.06.2012 whatever the opposite party levied  loan foreclosure charges  is illegal and it amounts to deficiency service and unfair trade practice in spite of  repeatedly  showing the RBI circular  the bank did not accept for the demand . But, instead of that the bank collects the foreclosure charge from the complainant. The complainant except by making bald allegation against opposite party of collecting foreclosure charges they have miserable failed to produce any cogent and convincing evidence in support of their allegation as against opposite party . Further the complainant also failed to prove that whatever foreclosure charges which is collected by opposite party is not permissible or under the guidelines of Reserve Bank of India.

25. It is further submitted that the opposite party in his version have  clearly and categorically contended that  they have admitted the loan  transaction  between  opposite party and sanction and disbursement of loan amount of Rs. 13,75,000/-  it is further stated that  the amount  that the complainant was to pay is not a foreclosure charges , but  it is a penal charges by way of additional interest at 2% for foreclosure of loan within 24 months  from the date of disbursement without completion of construction  this condition has been clearly in corporate in the sanction letter which is very much with in knowledge of  complainant.

26. The condition clearly states as follows:-

“ The case of foreclosure of the loan from own sources/ balance transfer etc within period of 24 months from the date of first disbursement with non completion of construction, penalty by way of additional interest rate of 4% over and above the base rate due to non completion of construction would be levied we first disbursement at the time of foreclosure of the loan’”. Though  the penalty additional interest was 4 % at the time of sanctioning of loan, the opposite party has charged the complainant with the existing rate of 2% additional interest towards penalty that amounts to Rs. 45,650/-.

27. There is a clear guideline by the Reserve Bank of India that Bank credit is used for production, constructions activities and not for activities connected with speculation in real estate.

28. Further no person can make profits out of public money by including in real estate speculations. It is for this reason, the condition is imposed that the borrower shall complete the construction within the stipulated period of two years. If the borrower seeks for pre closures of loan without complying this conditions , he shall be liable for penalty in the form of additional interest as fixed from time to time. The guidelines of Reserve Bank of India clearly manifesting the above condition is produced this condition is very much within the knowledge of the complainant. Complainant has suppressed all these facts and has come up with this frivolous complaint. All these facts is supported by the annexure documents produced by opposite party. Here the complainant has produced the document which pertains to said loan transaction for which the complainant has affixed his signature by giving consent to all the term and conditions which were imposed by opposite party at the time of sanction of loan. These transaction is nothing but contract between complainant and opposite party. As soon as when both parties have entered in to contract they are bound by the conditions in this case the opposite party by living penalty by way of additional interest at rate of 2% for foreclosure of loan within 24 months without completion of construction here complainant has wrongly misinterpreted the same and named the penalty as foreclosure charges for non completion of construction as the charges of foreclosures of said loan.

29. The opposite party by producing loan application and the condition in the application in respect of penalty for foreclosure charges for non completion of construction. They have supported their defence by way of producing relevant documents. It speaks regarding conditions which are laid down to be followed when such case arises for levying penalty of foreclosure of loan amount in respect of construction loan. This condition is also corroborated by the guidelines, circular issued by Reserve Bank of India. And the same is adopted and followed by opposite party in the case. The opposite party has rightly levied penalty of foreclosure of loan in respect of construction. act of opposite party is neither illegal nor against terms and conditions of contract between these parties. Whatever penalty levied by opposite party is in accordance with circular and guidelines of RBI.

30. Opposite is relied on the Judgement of Hon’ble National Consumer Dispute Redressal Commission, New Delhi between   DEV RAJ ARORA   and ANR V/s PUNJAB NATIONAL BANK & ANR. The principle of the ruling is applicable to the  complainant on hand. The principle of this rule is very similar to the complainant. It is aptly applicable to the complaint.

31. For the above reasons by looking at the facts and documents produced by complainant, have miserable failed to  prove his case beyond reasonable doubt and also complainant  has failed to prove that there is a deficiency in service on the part of opposite party by doing unfair trade practice.

32. According this forum we answered Point no.1 in the negative and pass the following:

32. Point no.2:- For the above discussion we here by proceed to pass the following:

ORDER

1. The complaint is hereby dismissed.

2. Give the copies of this order to the parties as per Rules.

(Dictated to the stenographer transcribed , typed by her, transcript corrected by us and then pronounced in open court on the 18^th  March 2017)  

Shri Thammanna Y.S.,                                 Shri Ramachandra M.S.,    

          Member.                                                          President.                                                                 

LIST OF WITNESSES EXAMINED AND DOCUMENTS MARKED ON BEHALF OF COMPLAINANT

Evidence by way of affidavit on behalf of complainant:

CW-1           :         PRAMOD CHAKRAVARTHY.N

Documents marked on behalf of complainant:

Annexure.1 :         Receipt of pre-closure payment charges

Annexure.2           Foreclosure letter

Annexure.3 :         Provisional payment receipt

Annexure.4 :         Notice

Annexure.5 :         Schedule charges

Annexure.6 :         RBI circular

Annexure.7 :         Service document

LIST OF WITNESSES EXAMINED AND DOCUMENTS MARKED ON BEHALF OF OP.

Evidence by way of affidavit on behalf of OP:

RW.1:                   AJAY  K. PETER

Documents marked on behalf of Op.:

NIL

Shri Thammanna Y.S.,                                 Shri Ramachandra M.S.,    

       Member.                                                               President.