ORDER
PER SH. RakeshKapoor, President
In May 2006 the complainant availed of a housing loan of Rs 48,50,000/- from the OP. In October, 2011 the complainant found out that the OP was charging more interest than Axis Bank and therefore decided to preclose the loan and get it transferred to Axis bank. The grievance of the complainant is that while closing the housing loan at 21.4.2011, the Op charged a penalty of Rs 1,08,133/- which act of the OP was alleged to be illegal and arbitrary. He has, therefore, approached this forumfor an order for refund of a sum of Rs 1,08133/- along with interest, compensation and cost of litigation.
The OP has contested the complainant and has denied any deficiency in service on its part. It has granted that it had granted a housing loan in the sum of Rs. 4850000/- to the complainant. It has also admitted that in October 2011 the complainant had sought the foreclousure of the loan account . It has justified its act of charging a sum of Rs 1,08,333/- as preclosure penalty on the ground that it was charged in accordance with the terms and conditions of the loan agreement. It has prayed that the complaint be dismissed.
We have heard arguments advanced at the bar and have perused the record.
It is admitted by the parties that there was a clause in the agreement entered into between the parties according to which the OP bank was entitled to levy prepayment charges /penalty in case of foreclosure of the loan account. The question for consideration,however, is as to whether the OP was entitled to enforce the prepayment clause.
The learned counsel for the complainant has placed reliance to a judgment titled State Bank of India V/s Usha Vaid (Dr and another) II (2008) CPJ 166 wherein the Delhi State Commission in a similar case has held as under:-
9. No bank or for that purpose finance companies can be allowed to indulge in restrictive trade practice by binding the consumer to go on availing loan even if rate of interest charged by the said bank is higher than the othe banks and any such clause which operates adversely to the consumer like consumer 4 has to be held void and, therefore, not enforceable.
The aforesaid judgment was upheld right up to the Hon’ble Supreme Court in appeal(civil ) number16345 /2007 (order dated 19.9.2008). In view of the aforesaid judgment , it must be held that the OP was not justified in enforcing the repayment clause and charging a penalty of Rs 1,08,133/- on account of foreclosure. We , therefore, hold that the OP was deficient in rendering service to the complainant and direct it as under:-
- Pay to the complainant a sum of Rs 108003/- (Rs One Lakh Eighty One Thousand One Hundred Thirty Three Only) along with interest @ 10% p.a. from the date of institution of this complaint i.e. 25.4.2013 till payment.
- Pay to the complainant a sum of Rs. 25000/- as compensation for the pain and agony suffered by him.
- Pay to the complainant a sum of Rs. 5,000/- as cost of litigation.
The above amount shall be paid by the OP to the complainant within 30 days from the date of this order failing which OP shall be liable to pay interest on the entire awarded amount @ 10% per annum from the date of this order till the date of payment. If OP fails to comply with the order within 30 days, the complainant may approach this Forum u/s 27 of the Consumer Protection Act, 1986.
Copy of the order be made available to parties free of cost as per law.
File be consigned to R/R.
Announced in open sitting of the Forum on_____________
