BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL FORUM, JALANDHAR.

Complaint No.424 of 2014

Date of Instt. 01.12.2014

Date of Decision :08.07.2015

Vinod Bhalla son of T.R.Bhalla R/o H.No.326, Lajpat Nagar, Jalandhar.

..........Complainant Versus

1. India Bulls Housing Finance Ltd, Branch Office/Area Sale Office:- SCO 8-9, Ist Floor, Crystal Plaza Building, Chotti Baradari, Jalandhar.

2. India Bulls Housing Finance Ltd, 448-451, Udyog Vihar, Phase-5, Gurgaon-122001.

.........Opposite parties

Complaint Under Section 12 of the Consumer Protection Act.

Before: S. Jaspal Singh Bhatia (President)

Ms. Jyotsna Thatai (Member)

Sh.Parminder Sharma (Member)

Present: Sh.Umesh Dingra Adv., counsel for complainant.

Sh.Sushil Mehta Adv., counsel for opposite parties.

Order

J.S.Bhatia (President)

1. The complainant has filed the present complaint under section 12 of the Consumer Protection Act, against the opposite parties on the averments that the complainant was approached by executive of the opposite parties who conversed the complainant that their company is a non-banking financial company having a good reputation of its dealing in grant of financial loan against security. Accordingly the opposite parties granted home equity loan of Rs.1,40,50,000/- to the complainant on the terms and condition as per their sanctioned letter dated 1.3.2013 vide reference No.304168. As per the terms of the loan, the repayment was fixed having EMI amount of Rs.2,05,659/- in the tenure of 120 months. The opposite parties against the grant of said loan, have taken the security by way of deposit of title deed for creating equitable mortgage of the property of the complainant bearing No.326, Lajpat Nagar, Jalandhar which is the only residential house of complainant. The repayment of the said loan was to start from 1.5.2013 and was to be ended on 5.6.2020 i.e the stipulated repayment tenure. The complainant had been adhering the terms and conditions of the sanctioned letter of the opposite parties and had been regularly making the payment of installments as per the repayment schedule. Accordingly the opposite parties had been receiving the payment of EMI's from the complainant without any objection. The complainant in order to repay the entire outstanding amount towards the loan had requested the opposite parties to provide him with the complete details towards the prepayment of home equity/loan. The opposite parties in response to the request of the complainant issued a letter dated 24.7.2014 conveying the complainant the total outstanding amount payable by complainant as Rs.10,252,706.67ps. The complainant on receiving the said letter from opposite parties was shocked to note that the opposite parties in their above said letter has mentioned the total outstanding amount as Rs.98,71,869.02ps alongwith the interest of Rs.86,721.62ps without mentioning the period and the rate of interest charged. The opposite parties has also claimed foreclosure charges @ 2.25% on the outstanding principal amount as Rs.2,22,117.03ps alongwith prepayment charges @2.25% at Rs.32,00,000/- i.e Rs.72,000/-. In fact, the opposite parties had already included the interest in the installments of each month as such the opposite parties were left with no right to charge the further amount of Rs.86,721.62ps towards the interest. Inspite of the knowledge of the guidelines/ circulars/directions of the RBI, the opposite parties did not adhere to the same and forced the complainant to pay total sum of Rs.10,252,706.67ps against the total outstanding amount of Rs.98,71,868.65ps thereby had charged excess amount of Rs.3,80,838.65 by way of foreclosure charges, interest, prepayment charges from the complainant to which the opposite parties were not entitled and authorized to receive and recover against the RBI guidelines and circulars. The opposite parties considering the foreclosure rate on 27.07.2014 charged additional interest beyond the said date @3770.51 per day which act of opposite parties is against the directions of RBI. On such like averments, the complainant has prayed for directing the opposite parties to refund an amount of Rs.3,80,838.65/- alongwith interest. He has also claimed compensation and litigation expenses.

2. Upon notice, opposite parties appeared and filed a written reply raising preliminary objections regarding maintainability as complainant is not consumer as per section 2(1)(d) of the Consumer Protection Act, no deficiency in service etc. They further pleaded that as the complainant had availed loan from the opposite parties and had executed various loan documents after reading and understanding the contents therein. At the time of the execution of various loan documents, the complainant had admitted to abide by all the terms and conditions governing the schedule of its repayments. The complainant had at the time of execution of the loan documents has agreed to abide by all the terms and conditions governing the schedule of its repayment. The complainant is entitled to levy prepayment charges as per the opposite party's policy and NHB guidelines. As per loan agreement, complainant himself had agreed to pay 5% foreclosure charges alongwith service tax. At his own request, the foreclosure charges were reduced to 2.5% and service tax. They denied other material averments of the complainant.

3. In support of his complaint, learned counsel for the complainant has tendered into evidence affidavit Ex.CW1/A alongwith copies of documents Ex.C1 to Ex.C7 and closed evidence.

4. On the other hand, learned counsel for the opposite parties has tendered affidavit Ex.OPA alongwith documents Ex.OP1 to Ex.OP4 and closed evidence.

5. We have carefully gone through the record and also heard the learned counsels for the parties.

6. Without going into merits of the case, we are of the opinion that complainant can not be termed as consumer under the provisions of Consumer Protection Act, 1986 as he took loan for commercial purpose. It may be mentioned here that housing loan is distinct from home equity loan. Where any loan is taken against collateral security of residential property then it is termed as home equity loan. Counsel for the complainant contended that in the loan agreement there is no mention that loan has been taken for commercial purpose. On the other hand, it has been contended by learned counsel for the opposite parties that in the application for loan the purpose of taking loan is specifically mentioned. We have carefully considered contentions advanced by learned counsel for both the parties. In the loan agreement, the name of borrowers are mentioned as Vinod Bhalla, Vinod Bhalla HUF, Hotel Kings Bar and Restaurant, Reena Bhalla, BVB Builders Private Limited, Akshay Bhalla. All these borrowers have singed the loan agreement and their name is mentioned as borrowers in the schedule attached with the loan agreement. Ex.OP2 is the loan application form and in the column of loan usage, column of business expansion has been ticked. So these facts clearly shows that the above said huge loan amount was taken for the purpose of business expansion. Since the loan was taken for business expansion i.e for commercial purpose as such the complainant can not be termed as consumer under the provisions of the Consumer Protection Act and consequently the present complaint is not maintainable. The remedy of the complainant is to approach Civil Court or any other appropriate Forum.

7. In view of above discussion, we hold that the present complaint is not maintainable and is dismissed as such. However, the complainant is at liberty to approach Civil Court or any other appropriate Forum. There shall be no order as to cost. Copies of the order be sent to the parties free of costs under rules. File be consigned to the record room.

Dated Parminder Sharma Jyotsna Thatai Jaspal Singh Bhatia

08.07.2015 Member Member President