Haryana

Ambala

CC/240/2020

Vikramjit Singh - Complainant(s)

Versus

IDFC First Bank Ltd - Opp.Party(s)

Gursevak Singh

10 Oct 2023

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, AMBALA.

Complaint case no.	:	240 of 2020
Date of Institution	:	19.10.2020
Date of decision	:	10.10.2023

 

Vikramjit Singh Age 45 years s/o Late Sh. Pritam Singh, resident of House no. 630, Ashok Vihar, Ambala City at present residing at House no.BI, 240/1, Charkhi Mohalla, Circular Road, Ambala City.

….Complainant

 

Versus

1. IDFC First Bank Limited (formerly known as IDFC Bank Limited) Big Bazar, Ambala Cantt. through its Branch Manager.
2. IDFC First Bank Limited (formerly known as IDFC Bank Limited) Registered Office KRM Towers, 7th floor, No.1. Harrington Road, Chetpet, Chennai-600031. Through its Managing Director.
3. IDFC First Bank Limited (formerly known as IDFC Bank Limited) Naman Towers, C 32, G Block, Bandra Kurla Complex, Bandra (East), Mumbai-400051 Through its Managing Director.

….…. Opposite Parties.

Before:        Smt. Neena Sandhu, President.

                      Smt. Ruby Sharma, Member.           

Present:-     Shri Gursewak Singh Bawa, Advocate, counsel for the complainant.                                                                                                                Shri Puneet Sirpaul, Advocate, counsel for the OPs.

Order:        Smt. Neena Sandhu, President.

                   Complainant has filed this complaint under Section 35 of the Consumer Protection Act, 2019 (hereinafter referred to as ‘the Act’) against the Opposite Parties (hereinafter referred to as ‘OPs’) praying for issuance of following directions to them:-

1. To refund the foreclosure charges of Rs.22,185/- and Rs. 3994/- recovered on account of GST Charges.
2. To pay a sum of Rs.50,000/- as damages on account of mental agony, harassment, deficient services and unfair trade practice.
3. To pay cost of litigation of Rs.11,000/-.
4. To pay the interest @ 18% per annum on the abovesaid amount from the due date till its realization
5.  Grant any other directions which this Hon’ble Commission may deems fit.

 

2.             Brief facts of the case are that the complainant availed the service of personal loan of Rs.5,18,000/- from OP No.1 vide loan account no. 19333552 in his own name. At the time of sanctioning of the said loan, it was promised by the OPs that they will not charge any foreclosure charges, if he will close the above said loan account after 6 months. Even there are RBI instructions that the bank could not charge the foreclosure charges from the borrowers, who had closed their loan account before their loan period. The complainant arranged for the remaining amount of loan and on 22.10.2019, he approached OP No.1 for foreclosure of his above said loan account. However, the complainant got shocked when the OPs demanded foreclosure charges of Rs.22185/- and another amount of Rs.3994/- on account of GST Charges @ 18% for foreclosure of his above said loan account. As such, under forced circumstances, the complainant paid the said foreclosure charges of Rs.22185/- and Rs.3994/- on account of GST @18% to the OPs. Thereafter, the complainant contacted the OPs, number of times, with a request to refund the said amount, illegally received by them but to no avail. The complainant also lodged complaint to the Banking Ombudsman office, Chandigarh on 8.6.2020 in the matter but no action was taken by the banking ombudsman. Hence, the present complaint.
3.           Upon notice, OPs appeared and filed written version wherein they raised preliminary objections to the effect that as per clause set out in the terms and conditions of the hypothecation agreement this Commission is not vested with territorial jurisdiction; the relationship between the complainant and the OPs is pursuant to the contract entered into between the parties hereto; this complaint is not maintainable; as per clause of the agreement entered into between the parties hereto, all disputes, differences, claims and questions whatsoever arising out of this agreement shall be referred to the sole arbitrator; the present complaint is filed by the complainant just to evade his legal liability due towards the OPs; the complainant has not approached this Commission with clean hands; complainant is not a consumer etc. On merits, while admitting the factual matrix of the case regarding disbursal of loan amount in question to the complainant and charging of foreclosure charges and also GST as mentioned by the complainant in his complaint, it has been stated that the complainant had availed loan from the company and signed the agreement after understanding all the terms and conditions of the agreement. The complainant closed his account and the OPs charged the charges as per RBI rules and terms and conditions of the loan agreement which was signed by the complainant at the time of taking loan. Rest of the averments of the complainant were denied by the OPs and prayed for dismissal of the present complaint with cost.
4.           Learned counsel for the complainant tendered affidavit of the complainant as Annexure C-A, alongwith documents as Annexure C-1 to C-3 and closed the evidence on behalf of complainant. On the other hand, learned counsel for the OPs tendered affidavit of Manpreet POA, IDFC Bank, Ambala as Annexure OP-A alongwith documents Annexure OP-1 to OP-8 and closed the evidence on behalf of OPs.
5.           We have heard the learned counsel for the complainant and learned counsel for the OPs and also have carefully gone through the case file.
6.           Learned counsel for the complainant submitted that by charging foreclosure charges and GST thereupon on the principal loan amount, at the time of repaying the same, the OPs are deficient in providing service and adopted unfair trade practice.
7.           On the other hand, learned counsel for the OPs while reiterating his objections taken in the written version submitted that the foreclosure charges and GST thereupon, on the principal loan amount, at the time of repaying the same by the complainant was rightly charged by the OPs, strictly in terms and conditions of the agreement and also the rules and regulations laid down by the Reserve Bank of India and the complainant is not entitled for refund of the same. 
8.           The first question that falls for consideration is as to whether this Commission has territorial jurisdiction to entertain and decide this complaint? It may be stated here that since the complainant is a resident of Ambala, which falls under the territorial jurisdiction of this Commission as such, in this view of the matter, this Commission has territorial jurisdiction to decide this complaint in view of Section 34 (2) (d) of CPA 2019 and therefore, objection taken by the OPs in this regard is rejected.
9.           Coming to the objection taken by the OPs  with regard to Arbitration, it may be stated here that this issue has already been set at rest by the larger Bench of the Hon’ble National Commission in Aftab Singh  Vs. Emaar MGF Land Limited & Anr., Consumer Case No. 701 of 2015, wherein, vide order dated 13.07.2017, it has been held that an Arbitration Clause in the Agreements/contracts cannot circumscribe the jurisdiction of a Consumer Fora notwithstanding the amendments made to Section 8 of the Arbitration Act. Civil appeal bearing No.23512-23513 of 2017 and  Review Petition (C) Nos.2629-2630 of 2018 filed by the builder, before the Hon’ble Supreme Court of India, also stood dismissed vide orders dated 13.02.2018 and 10.12.2018 respectively. As such, objection taken in this regard also stands rejected.
10.           It is not in dispute that the complainant had availed personal loan of Rs.5,18,000/- from OP No.1 vide loan account no.19333552 and the same stood repaid by him on 22.10.2019, for which the OPs received foreclosure charges of Rs.22185/- and another amount of Rs.3994/- on account GST Charges @ 18% for foreclosure of the said loan account. Under these circumstances, the moot question which falls for consideration is, as to whether, the OPs  were legally entitled to charge the said foreclosure charges alongwith GST thereupon from the complainant or not. Perusal of terms and conditions of the agreement, Annexure OP-1 reveals that the OPs have mentioned therein  that the complainant is liable to pay foreclosure/prepayment charges @5% of principal outstanding amount exclusive of GST. We have also perused the relevant part of the said circular is reproduced hereunder:-

                   RBI/2019-20/29                                          August 02, 2019

                   DBR Dir. BC No.08/13 03.00/2019-20

 

 

All Scheduled Banks

A Small Finance Banks

All Local Area Banks

 

Dear Sir/Madam

 

Levy of Foreclosure Charges Pre-payment Penalty on Floating Rate Term Loans

 

Please refer to our circulars DB00 No Dir BC 107/13.03.00/2011-12 dated June 5, 2012 and DBOD.Dir. DBG.No.110/13.03.00/2013-14 dated May 7, 2014, in terms of which banks are not permitted to charge foreclosure charges/pre-payment penalties on home loans / all floating rate term loans sanctioned to individual

2. In this connection, it is clarified that banks shall not charge foreclosure charges/ pre-payment penalties on any floating rate term loan sanctioned, for purposes other than business, to individual borrowers with or without co-obligant(s).

 

Yours faithfully

S.K. Kan Chef General Manager

 

11.           Admittedly, the complainant prepaid the personal loan availed by him for which OPs charged foreclosures charges from the complainant and  GST thereupon, in the manner stated above. It may be stated here that by charging the foreclosure charges and GST thereupon, the OPs have violated the provisions of the circular afore-extracted issued by the RBI.
12.           The OPs by levying foreclosure charges and GST thereupon at the time of foreclosure of loan account by the complainant have definitely caused mental agony, harassment and financial loss to the complainant, which act amounts to deficient in rendering service and adoption of unfair trade practice on the part of the OPs. The OPs are therefore held liable to refund the said amount of foreclosure charges of Rs.22,185/- and Rs.3,994/- charged on account GST Charges thereupon.
13.           In view of the aforesaid discussion, we hereby allow the present complaint and direct the OPs, in the following manner:-

1. To refund the amount of foreclosure charges of Rs.22185/- and Rs.3994/- charged on account GST Charges thereupon to the complainant alongwith interest @6% p.a. from the respective date of receipt of the aforesaid amount, till its realization.
2. To pay Rs.3,000/-, as compensation for the mental agony and physical harassment suffered by the complainant.
3. To pay Rs.2,000/-, as litigation expenses.  

          The OPs are further directed to comply with the aforesaid directions within the period of 45 days, from the date of receipt of the certified copy of the order. Certified copy of this order be supplied to the parties concerned, forthwith, free of cost as permissible under Rules. File be indexed and consigned to the Record Room.

Announced:- 10.10.2023

 

	(Ruby Sharma)	(Neena Sandhu)
	Member	President