Haryana

Panchkula

CC/70/2016

M/S RAJ GRAPHICS. - Complainant(s)

Versus

INDIA BULLS HOUSING FINANCE LTD. - Opp.Party(s)

VARUN CHAWLA.

16 Aug 2016

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,  PANCHKULA.   

                                               

Consumer Complaint No	:	70 of 2016
Date of Institution	:	28.03.2016
Date of Decision	:	16.08.2016

1.       M/s Raj Graphics, Service Booth No.38, Industrial Area, Phase-1, Panchkula through its Proprietor Sh.Naresh Kumar S/o Sh.Raj Kishan Sharma.

2.       Smt.Neeru Sharma W/o Sh.Naresh Kumar, R/o H.No.2124, Sector-15, Panchkula.

3.       Sh.Raj Kishan Sharma S/o Sh.Ram Ji Lal, R/o H.No.2124, Sector-15, Panchkula.

4.       Sh.Sanjay Sharma S/o Sh.Raj Kishan Sharma, R/o H.No.2124, Sector-15, Panchkula.

5.       Sh.Naresh Kumar S/o Sh.Raj Kishan Sharma, R/o H.No.2124, Sector-15, Panchkula.

                                                                                      ….Complainants

Versus

 

1.       India Bulls Housing Finance Ltd., M-62 & 63, First Floor, Connaught Place, New Delhi-110001 through its Managing Director.

2.       India Bulls Housing Finance Ltd., SCO No.230, 1^st Floor, Sector-20, Panchkula through its Branch Manager.

                                                                      ….Opposite Parties

 

COMPLAINT UNDER SEC. 12 OF THE CONSUMER PROTECTION ACT, 1986.

 

 

Before:                 Mr.Dharam Pal, President.

              Mrs.Anita Kapoor, Member.

              Mr.S.P.Attri, Member.

 

For the Parties:     Mr.Varun Chawla, Adv., for the complainants. 

Mr.Jatin Sherawat, Adv., for the OPs.

 

 

ORDER

 

(Dharam Pal, President)

 

1. The complainants have filed this complaint under Section 12 of the Consumer Protection Act, 1986 against the Ops with the averments that they obtained loan of Rs.48,50,000/- which was sanctioned on 30.11.2013 with LFRR of 18.50% after completing certain documents. At the time of completion of formalities, the complainants were made to sign on number of printed documents but despite numerous requests, the complainants were not aware about the contents of the documents or supplied the copy of the same. As per assurance of the Ops, the complainants were to repay the loan amount in 180 equal monthly installments with EMI of Rs.58,209/- and further they were assured that there would be no processing charges for processing the loan as a benefit extended to the firms availing loan/credit facility. The complainants were sanctioned loan amount of Rs.48,50,000/- but only Rs.47,47,973/- was disbursed by the Ops. When the complainants asked for the difference of the amount, the official of Ops told that the difference in amount was due to the processing charges, insurance premium and other incidental charges whereas the complainants were assured that there would be no processing charges and the Ops also did not sought any consent of the complainant. Further the complainants demanded the account statement depicting the details of the charges and they were assured that the same would be sent to the complainants at their address but to no avail. The complainants visited the Ops in the last week of April, 2014 to know the detail of their loan account and also for taking the account statement and the complainants were made aware that an amount of Rs.48,877/- had been charged as processing fee & an amount of Rs.50,000/- as insurance charges. Despite repeated requests, the Ops also did not provide any insurance policy to the complainants. The complainants came to know the tenure had been mentioned as 188 and on asking, the Ops told that 188 refers to the numbers of EMI’s to be paid by the complainants. After protesting by the complainants, the Ops informed that the EMI’s have been increased from 180 to 188 as the interest rates had increased and LFRR had increased from 18.50% to 18.75% in the month of January, 2014. In the month of February, the complainants approached the Ops to know the procedure of foreclosure of the loan account and an account statement was provided in which total amount of Rs.50,22,370.41 was payable in which an amount of Rs.2,35,187.95 @ 5.62% was included for foreclosure charges on the principal amount. The complainants were shocked to know as at the time of obtaining loan, the Ops assured that foreclosure charges would not be applicable and loan was granted in the name of the firm on one of the assurance that foreclosure charges would be waived off. Furthermore, the foreclosure charges mentioned on the loan documents was 5% within 2 years whereas the letter issued by the Ops depicted the foreclosure charges as 5.62% and again no plausible explanation was given by the Ops. Thereafter, the complainants were suggested by the official of Ops that they might opt for the prepayment of the loan amount upto 25% of the principal outstanding and there would be no charges on the prepayment of loan amount upto 25% of the outstanding principal amount. The complainants sought the loan agreement from the Ops and the soft copy vide email was provided by the Ops in the month of March, 2015. The complainants deposited an amount of Rs.6,50,000/- in the loan account in the month of April and May, 2015 after arranging money from different resources. The complainants again approached the Ops in the month of July to know the status of the account and a statement was provided in which an amount of Rs.42,90,901.02 was payable and this amount included the foreclosure charges @ 5.70% of the principal amount and further prepayment charges @ 5.7% on Rs.6,50,000/- deposited by the complainants. Thereafter, the complainants obtained loan from the HDFC Bank at a floating rate of interest @ 10.50%. This act of the opposite parties amounts to deficiency in service on their part. Hence, this complaint.
2. The Ops appeared before this Forum and filed written statement by taking some preliminary objections and submitted that the Ops is housing finance institution in terms of Section 2(d) of the National Housing Bank Act. 1987 and is registered with the NHB in terms of Section 29A of the NHB Act. It is submitted that in terms of Section 30A of the NHB Act, NHB is to determine the policies and issue directions in this regard to the institutions working under it. It is submitted that NHB has issued various circulars from time to time with regard to levy of foreclosure charges. It is submitted that the complainants had taken the loan for commercial purpose by a proprietorship and this loan could not be considered as loan sanctioned to individual borrowers, therefore, NHB circular dated 14.08.2014 and 03.09.2014 are not applicable in the present case which are as under:-

“NHB Circular dated 14.08.2014:

“HFC shall not charge foreclosure charges/pre-payment penalties on all floating rate term loans sanctioned to individual borrowers with immediate effect.”

NHB Circular dated 03.09.2014:

“Loans in which company, firm etc, is a borrower or co-borrower therefore, is excluded from its purview.”

It is submitted that loan facility availed by the complainants from the Ops was Rs.48,50,000/-, therefore, as per section 11(i) of the Consumer Protection Act, this Forum has no territorial jurisdiction to entertain the present complaint as the prayer clause exceeds Rs.20,00,000/-. It is submitted that loan was availed at floating rate of interest @ 12% against the equitable mortgage of the property i.e. LIG House No.2124, Housing Board Colony, Sector-15, Panchkula. It is submitted that the complainants themselves opted for taking the loan in the name of their firm. It is denied that any commitment was made regarding reduced interest rates, repayment schedule and processing fee. It is denied that the complainants were told that by taking the loan in the name of the firm the foreclosure charges would be waived off. It is submitted that foreclosure charges were to be levied as per terms and conditions of loan agreement executed between the complainants’ alongwith co-borrowers and Ops. It is submitted that the complainants after fully understanding all terms and conditions had signed the loan agreement. It is submitted that the complainants signed the loan agreement and other necessary documents which were required for advancing of the loan in favour of the complainant. It is submitted that the complainants were explained with the terms and conditions and after going through the documents put signatures and entered into the loan agreement. It is denied that the complainants were not supplied the copy of documents signed by them. It is submitted that the tenure of the loan was 180 monthly installments @ Rs.58,209/-, however, it was clear from the loan agreement that complainants had opted for taking the loan at floating rate of interest, therefore, the Ops were liable to increase/decrease in Floating Reference Rate (FRR) of the company. It is submitted that increase/decrease in rate of interest would lead to increase/decrease tenure of repayment of loan or amount of monthly installment. It is submitted that whenever rate of interest was increased/decreased, complainants were duly informed regarding the change in the rate of interest through email. It is submitted that the insurance premium was deducted in consultation with the complainants. It is submitted that the complainants raised the issue of processing charges and insurance premium for the first time after the elapse of approx. 2 years as the loan was sanctioned on 30.11.2013. It is submitted that while signing the loan application form, complainants themselves declared that “I/we understand that processing fee payable by me/us is non-refundable irrespective of sanction/rejection of this loan”. It is submitted that processing fee is to be charged for conducting legal and technical verification of the property sought to be mortgaged by the customer against the security of loan amount and only after finding the property free from encumbrance through legal and technical verification, loan amount is disbursed. It is submitted that complainants had also opted for insurance policy for which insurance premium was deducted from their loan amount as per their request vide the request letter duly signed by the complainants. It is submitted that Ops have always followed the guidelines of Governing Authority i.e. National Housing Bank (NHB) and whenever tenure of repayment of loan amount was changed from 180 to 188 and an email was sent to the complainants in this regard. It is submitted that the complainants always had the option to transfer the present loan facility to some other bank/financial institution. It is submitted that as per the loan agreement, the complainants had agreed for the foreclosure charges. It is denied that any assurance was given for waiving of the foreclosure charges. It is submitted that both parties are bound by the terms and conditions of the loan agreement duly executed between them and applicable circulars/guidelines passed by governing authorities. It is admitted that the complainants paid Rs.6,50,000/- however, it was received as a part payment towards total outstanding liability of the complainants. It is submitted that foreclosure charges @ 5.7% shown in the statement is inclusive of service tax. Thus, there is no deficiency in service on the part of Ops and prayed for dismissal of the complaint.

3. The counsel for the complainant has tendered into evidence affidavit Annexure C-A along with documents Annexure C-1 to C-12 and closed the evidence. On the other hand, the counsel for the OPs has tendered into evidence affidavit Annexure R-A along with documents Annexure R-1 to R-7 and closed the evidence.
4. We have heard learned counsel for the parties and have perused the case file carefully and also considered the written arguments submitted by the counsel for the Ops.
5. Perusal of record reveals that complainant has obtained loan of Rs.48,50,000/- from Ops but the grievance of the complainant is that only of Rs.47,47,973/- was disbursed to him. Core question is whether complainant hired services for any consideration from OPs for falling within purview of consumer.  Section 2 (o) defines ‘service’ as under:

“Section 2 (o)      "service" means service of any description which is made avail­able to potential users and includes, but not limited to, the provision of  facilities in connection with banking, financing insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;”

It is simple case of advancing loan by Ops to the complainant on interest which does not fall within purview of financing and aforesaid advancement of loan does not fall within purview of any facility in connection with banking, transport, etc. as mentioned in Section 2 (o) and in such circumstances, complainant does not fall within purview of consumer within Section 2 (d) of Consumer Protection Act and complaint for deficiency of service was not maintainable before District forum. There is no deficiency of service pertaining to facilities under Section 2 (o) of the Consumer Protection Act.  In such circumstances, complainant should approach appropriate court for such relief. On this point reliance can be taken from case law titled as Sunny & Ors. Vs. Rajesh Tripathi decided on 11.09.2015 by Hon’ble National Commission in Revision Petition No.3759 of 2007.   Keeping in view the above discussion and factual position the present complaint stands dismissed being not maintainable before this Forum. However, the complainant is at liberty to approach at appropriate Court/forum if he so advised and in that eventuality, the period of litigation before this Forum shall not be counted towards the period of limitation for approaching appropriate court/forum.  Exemption of time spent before this Forum is granted  in terms of the  judgment of the Hon’ble Supreme Court of India in the case titled “ Laxmi Engineering Works versus PSG Industrial Institute  (1995) 3 SCC page 583.

8.  

8. A copy of this order be sent to the parties free of costs. File be consigned to records after due compliance.

 

Announced

16.08.2016        S.P.ATTRI        ANITA KAPOOR         DHARAM PAL

                          MEMBER         MEMBER                      PRESIDENT

 

 

Note: Each and every page of this order has been duly signed by me.

 

    

                                 

                                                         DHARAM PAL

                                                          PRESIDENT