Chandigarh

DF-I

CC/547/2023

M/S GAURAV AGENCIES - Complainant(s)

Versus

IDFC FIRST BANK LIMITED - Opp.Party(s)

DEVINDER KUMAR

03 Sep 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                                     

Consumer Complaint No.	:	CC/547/2023
Date of Institution	:	21/11/2023
Date of Decision	:	03/09/2024

 

M/s Gaurav Agencies, 757, Near Manav Public School, Adjoining IT Park, Kishangarh, Chandigarh 160101 through its Proprietor Sh. Gaurav Sharma.

… Complainant

V E R S U S

1. IDFC First Bank Limited, Nariman Chambers, C-32, G Block, Bandra (East), Mumbai 400051 through its Managing Director.
2. IDFC First Bank Limited, Regd. Office : KRM Towers, 7^th Floor, No.1, Harrington Road, Chetpet, Chennai-600031 through its Senior Manager.

… Opposite Parties

 

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	MRS. SURJEET KAUR	MEMBER
	SHRI SURESH KUMAR SARDANA	MEMBER

 

                                                                               

ARGUED BY	:	Sh. Devinder Kumar, Advocate for complainant
	:	Sh. B.D. Jindal, Advocate for OPs

 

Per Pawanjit Singh, President

1. The present consumer complaint has been filed by M/s Gaurav Agencies through its proprietor, complainant against the aforesaid opposite parties (hereinafter referred to as the OPs).  The brief facts of the case are as under :-

1. It transpires from the allegations, as projected in the consumer complaint, that the complainant-M/s Gaurav Agencies is running its business at Kishangarh, Chandigarh through its proprietor, Gaurav Sharma. The aforesaid firm comes under the Micro, Small and Medium Enterprises (hereinafter referred to as “MSME”) and the Govt. of India has already issued certificate (Annexure C-1) to this effect.  In the month of February 2021, officials of the OPs approached the complainant and allured to obtain loan facility from them with the assurance to provide best/prompt services and loan at lower rate of interest. Believing their version, complainant agreed to avail loan facility from the OPs and, at that time, officials of the OPs had also assured that there would no foreclosure charges.  On completion of formalities, OPs vide sanction letter dated 22.2.2021 (Annexure C-2) firstly sanctioned loan against property to the complainant amounting ₹96,30,000/- under loan account No.40066564 (hereinafter referred to as “1^st loan account”). Thereafter, the OPs vide letter dated 31.7.2021 (Annexure C-3) sanctioned another loan against property amounting to ₹52,50,000/- under loan account No.47018492 (hereinafter referred to as “2^nd loan account”). From the date of disbursement of loan till July 2022, complainant had completed all the formalities of the OPs. Thereafter when the complainant compared the rate of interest given by the OPs on the aforesaid loan amount with other banks, it was found that the other banks had reduced rate of interest, but, despite of repeated requests of the complainant, OPs refused to reduce the rate of interest.  On seeing this conduct of the OPs, complainant requested them for closure of both the loan accounts, but, the OPs started demanding 4% foreclosure charges from the complainant. As no such foreclosure charges was permissible under MSME firm, said demand made by the OPs was unlawful. The complainant through email dated 21.4.2022 (Annexure C-4) requested the OPs to resolve the issue of foreclosure charges, but, vide email (Annexure C-5) OPs failed to consider the same. On 7.5.2022 (Annexure C-7), OPs issued foreclosure letter with respect to 2^nd loan account, but, vide letter dated 20.7.2022 (Annexure C-8) demanded ₹3,67,228.52 with regard to foreclosure of 1^st loan account. Upon this, complainant approached Axis Bank which had paid a sum of ₹96,70,401.97 i.e. entire loan amount alongwith foreclosure charges and the OPs issued No Due Certificates dated 5.8.2022 (Annexure C-9 & C-10) in respect of both the loan accounts.  In this manner, the aforesaid act of the OPs in charging foreclosure charges to the tune of ₹3,67,228.52 from the complainant amounts to deficiency in service and unfair trade practice on their part. OPs were requested several times to admit the claim, but, with no result.  Hence, the present consumer complaint.
2. OPs resisted the consumer complaint and filed their written version, inter alia, taking preliminary objections of maintainability, cause of action, non joinder of necessary parties and also that the complainant is not a consumer. On merits, admitted that two loans were sanctioned in favour of the complainant M/s Gaurav Agencies i.e. 1^st loan account to the tune of ₹96,30,000/- and 2^nd loan account to the tune of ₹52,50,000/- for business expansion and both the loans were repayable in 180 monthly installments.  It is further alleged that the loan was sanctioned to the firm M/s Gaurav Enterprises as borrower and Gaurav Sharma, Gagan Shiv Kumar and Vandana Sharma  co-borrowers and as two of the co-borrowers who have not been impleaded as parties in the present consumer complaint, the same is liable to be dismissed for non-joinder of necessary parties.  It is further alleged that the loan was sanctioned in favour of the complainant only after it had understood the terms and conditions of the loan agreement which even provides payment of foreclosure charges by the complainant.  Moreover, RBI has directed the banks not to charge foreclosure charges on floating rate term loan sanctioned for a purpose other than business to individual borrowers with or without co-obligant(s).  In the case in hand, as the complainant has obtained the aforesaid loan for business purposes, it cannot seek exemption from foreclosure charges. As the case of the complainant is not covered under the RBI instructions, OPs have rightly charged the foreclosure charges from the complainant and the consumer complaint of the complainant is not maintainable. The facts as stated in the preliminary objections have been reiterated. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
3. Despite grant of sufficient opportunity, rejoinder was not filed by the complainant to rebut the stand of the OPs.

2. In order to prove their case, parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3. We have heard the learned counsel for the parties and also gone through the file carefully.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that the complainant firm comes under MSME, as is also evident from copy of registration certificate (Annexure C-1) and the OPs had sanctioned two loans i.e. of ₹96,30,000/- vide 1^st loan account and ₹52,50,000/- vide 2^nd loan account, as is also evident from Annexure C-2 & C-3,  and OPs have charged foreclosure charges to the tune of ₹3,67,228.52 in respect of 1^st loan account, as is evident from the foreclosure letter (Annexure C-8) and have not charged even a single penny on account foreclosure charges in respect of 2^nd loan account, as is also evident from the foreclosure letter (Annexure C-7), the case is reduced to a narrow compass as it is to be determined if the OPs are unjustified in charging the foreclosure charges to the tune of ₹3,67,228.52 in respect of 1^st loan account and the complainant is entitled to the reliefs prayed for in the consumer compliant, as is the case of the complainant, or if the OPs have rightly charged the aforesaid foreclosure charges and the consumer complaint of the complainant, being false and frivolous, is liable to be dismissed, as is the defence of the OPs.
   2. Perusal of copy of email (Annexure C-5) sent by the OPs to the complainant clearly indicates that the OPs have asked the complainant to explain if he has repaid the loan amount from his own sources of fund and only in that case he can be exempted from payment of foreclosure charges.  Similar email (Annexure C-6) was again sent by the OPs to the complainant asking him about the payment mode. However, the Code of Bank’s Commitment to Micro and Small Enterprises clearly indicates that the borrowers covered under Micro and Small Enterprises (MSEs), as defined under Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 have been provided protection. The relevant portion of the aforesaid code is reproduced below for ready reference :-

“5.3 Sanction/Rejection

We will :

xxx                   xxx                   xxx

h.     Permit prepayment of floating rate loans without levying any prepayment penalty.”

 

3. Thus, as it is an admitted case of the parties that first loan account was also sanctioned to the complainant firm by the OPs for the purchase of property of the firm, which is also covered for the purpose of micro and small enterprises and rehabilitation and the same includes infrastructure development i.e. property purchased for the business purposes, to our mind the case of the complainant is clearly covered under the aforesaid code and the complainant is certainly entitled for exemption/protection provided from payment of foreclosure charges, especially when it is an admitted  case of the parties that the OPs have not charged any foreclosure charges for the business of the firm i.e. 2^nd loan account making further clear that the OPs have wrongly charged an amount of ₹3,67,228.52 against the loan which was provided to the complainant firm for the purchase of the property i.e. the 1^st loan account.
4. In view of the aforesaid discussion, it is safe to hold that the complainant has successfully proved the cause of action set up in the consumer complaint and the present consumer complaint deserves to succeed and OPs are liable to refund the amount of ₹3,67,228.52 alongwith interest and compensation etc.

4. In the light of the aforesaid discussion, the present consumer complaint succeeds, the same is hereby partly allowed and OPs are directed as under :-

1. to refund the amount ₹3,67,228.52 to the complainant alongwith interest @ 9% per annum (simple) w.e.f. 5.8.2022 (i.e. date of NDC) onwards.
2. to pay ₹15,000/-, in lump sum, to the complainant as compensation for causing mental agony and harassment and litigation expenses.

5. This order be complied with by the OPs within a period of 45 days from the date of receipt of certified copy thereof, failing which the amounts mentioned above shall carry penal interest @ 12% per annum (simple) from the date of expiry of said period of 45 days, instead of 9% [mentioned at Sr.No.(i)], till realisation.
6. Pending miscellaneous application(s), if any, also stands disposed of accordingly.
7. Certified copies of this order be sent to the parties free of charge. The file be consigned.

03/09/2024	Sd/- [Pawanjit Singh] President
	Sd/-
	[Surjeet Kaur] Member
	Sd/-
	[Suresh Kumar Sardana] Member