BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

                                                Complaint No:  272 of  23.04.2015.

                                                Date of Decision: 27.01.2016.

Jagdish Chand Verma, aged about 51 years, son of Sh. Sukh Lal, R/o. 1136/131/10, St. No.3/2, Gobind Nagar, Mundian Kalan, Tehsil and Distt. Ludhiana.

..… Complainant

 Versus 

India Bulls Housing Finance Ltd., having its Branch Office at Feroze Gandhi Market, Ludhiana, through its Manager/Authorized Representative.

…..Opposite party. 

                                      Complaint under the Provisions of Consumer Protection Act, 1986

QUORUM:

SH. G.K. DHIR, PRESIDENT

SH. S.P. GARG, MEMBER

COUNSEL FOR THE PARTIES:

For complainant            :         Sh. Arun Anand, Advocate.

For OP                           :         Sh. Arun Sabharwal, Advocate.

ORDER

PER G.K. Dhir, PRESIDENT

1.               Complaint under Section 12 of The Consumer Protection Act, 1986 (herein-after in short to be referred as ‘Act’) filed by alleging that the complainant obtained housing loan of Rs.4 Lac through loan account No.HHLLUD00000463 from OP in 2006. At the time of advancing loan the OP fixed monthly installment of the loan at Rs.5599/- and thereafter an agreement was executed between the parties. However, subsequently OP for extraneous reason at his own increased the monthly installment from time to time in arbitrary manner and without giving intimation of the same to complainant, despite the fact that complainant has been regularly making the payment of installment of the loan amount against proper receipts. Earlier OP threatened the complainant for declaring him as defaulter and auctioning the mortgaged property after attaching the same. Thereafter, complaint under Section 12 of The Consumer Protection Act, 1986 (herein-after in short to be referred as ‘Act’) was filed before this Forum by complainant and on approaching by OP, complainant withdrew the complaint. At that time OP agreed to decrease the installment of loan of complainant. OP further directed complainant to deposit Rs.54,406/- on assurance that the said amount will be adjusted in loan account of complainant. That amount was deposited by complainant vide 2 receipts dated 31.01.2012 and 27.02.2012, but till date the said amount has not been adjusted despite numerous requests. It is claimed that OP has arbitrarily usurped the amount of Rs.54,406/-. Complainant again submitted request for the foreclosure  of the loan, but the OP demanded huge penalty from the complainant. The loan was repayable in 15 years, but now OP proclaiming that loan period is 20 years.  So by pleading deficiency in service on the part of OP, prayer made for directing OP to adjust/refund the above referred amount of Rs.54,406/- in the loan account and issue foreclosure certificate. Directions also sought for calling upon OP to pay damages of Rs.40,000/- for mental harassment, pain and agony.

2.                In written statement filed by OP, it is pleaded, interalia, that this Forum has no jurisdiction in view of arbitration clause in the loan agreement; complainant has not approached this Forum with clean hands  because he has distorted the facts; complainant has no cause of action to file the complaint and even he has no prima face case. Besides it is claimed that complainant is not a consumer because the relationship of creditor and debtor exists and the remedy available with complainant is to file civil suit. Notification of Reserve Bank of India has not prescribed any rate of interest which is to be charged from the borrower. Section 21A of Banking  Regulation Act, 1949 provides that a transaction between a banking company and its borrower shall not be reopened by any court on the ground that the rate of interest charged by the banking company is excessive. Factum as to whether rate of interest charged is excessive or not alleged to be beyond purview of this Forum. As per clause of arbitration in the agreement, the matter is liable to be referred for the sole arbitration of an arbitrator to be appointed by OP. Decision of that arbitrator will be final and binding on the parties as per arbitration clause. Moreover jurisdiction vests in courts at Delhi as per clause in the loan agreement. Complainant is bound to follow the terms and conditions of loan agreement and pay EMI accordingly. Complaint alleged to be filed with malafide intentions for forcing OP to accept illegal demand of the complainant. Admittedly, complainant availed housing loan facility against equitable mortgage of his property bearing No.3, 25/32 Vakaya Mundian Kalan, Hadbast No.179, Tehsil and District Ludhiana. Loan of Rs.4 Lac was sanctioned on executing loan documents including loan agreement dated 28.06.2006 by complainant in favour of OP. The loan facility was availed by complainant at floating rate of interest. Rate of interest at the time of execution of loan agreement was 15% 13(FRR)+2(Margin)%. That rate of interest was amenable to change as per clauses of the loan agreement. Even tenure of repayable of loan amount was amenable to change. Loan facility was availed by the complainant along with Sh. Dharminder Verma, co-borrower. As per terms and conditions of the loan agreement, if the floating  reference rate increases or decreases, the interest rate will be changed accordingly.  OP is solely dependent on wholesale financing from different banks and non banking financial companies, mutual funds and financial institutions. So as and when there is change in money market conditions, rate of interest bound to float. The FRR change is monitored, revised and approved by the asset liability committee of the company as per mandate of Reserve Bank of India. Due intimation of change of rate of interest or of the tenure of loan is always sent to the customer and the same was also sent to the complainant. List of the couriers sent to complainant reproduced in para no.2 of the written statement contains particulars of booking date and Awb numbers. Complainant committed default in payment of various monthly installments due to which overdue charges/penal interest accrued and same was levied. Copy of statement of account showing the erratic and irregular payment schedule of the complainant alleged to be annexed with the written statement. OP has every right to take legal action against complainant under SARFAESI ACT 2002, so as to recover outstanding due amount. Payment of Rs.23,577/- was received on 31.01.2012 and of Rs.30,829/- on 27.02.2012. So total amount of Rs.54,406/- was paid by the complainant for clearing his outstanding due penalty and the said amount was duly adjusted in the loan account of the complainant. Tenure of installments was increased due to rate of interest being floating in nature and that has been done as per terms of the  loan agreement. Other averments of complaint denied.

3.                 Complainant to prove his case tendered in evidence his affidavit Ex. CW1 along with documents Ex. C1 to Ex. C3 and thereafter, counsel for complainant closed evidence.

4.                On the other hand, counsel for OP tendered in evidence affidavit Ex. RA of Sh. Sanjeev Kumar, Legal Manager of OP along with documents Ex. R1 to Ex. R17 and then closed evidence of OP.

5.                Written arguments have not been submitted by any of the parties, but oral arguments alone addressed and heard. Record carefully gone through.

6.                There is no dispute qua fact that housing loan of Rs.4 Lac was availed by complainant from OP by execution of loan agreement Ex. R1 in 2006. As that document in English is signed by complainant in Hindi, but his co-borrower Sh. Dharminder Verma in English and the said document is in legible English print and as such, after putting the signatures and availing loan facility, complainant is estopped from denying the execution of Ex. R1. It is admitted by counsel for complainant during course of arguments that some installments could not be paid in time due to certain financial constraints. Even it is contended by counsel for complainant that after bouncing of the issued cheque towards repayment of loan amount, the due amount of cheques along with penalty were used to be paid and as such, in view of the full payment of the loan amount by complainant to OP, complainant is entitled for issue of foreclosure certificate.  These submissions advanced by counsel for complainant as such itself establishs that the complainant committed default in making payment of certain installments. In view of irregularity in payment of the monthly installments, certainly OP is entitled to proceed against complainant as per terms of agreement Ex. R1.

7.                As per clause 2.2 of Ex. R1, rate of interest applicable to the loan as on the date of execution of the agreement is one as is stated in Schedule-A of the agreement. In Part-II of the terms and conditions applicable to the loan with floating interest rate, it is clearly mentioned that floating rate of interest applicable to the loan will be as per variations made by IBHFL in terms of the agreement. In that Part-II, which is part of Schedule-A annexed with the agreement, it is specifically mentioned under clause (B) that borrower shall reimburse or pay to OP such amount as may have been paid or to be payable by OP to Central or State Government on account of tax levied on interest. As per Clause-C (iii) of Part-II of Schedule-A annexed with Ex. R1, floating interest rate will be reset on Ist day of the month following the quarter in which IBHFL-PLR is changed. As per Clause-C (ii) of Part-II of Schedule-A of agreement Ex. R1, in an event IBHFL changes floating interest Rate prior to the disbursement of the full loan, the weighted average of the different Floating Interest Rate shall be applicable. Further as per Clause-C (i) of Part-II of Schedule-A of agreement Ex. R1, all future/further floating interest rates applicable for the amount of loan lent by IBHFL to the borrower shall be applied by IBHFL on the first date of month following the quarter in which IBHFL-PLR is changed. At page 28-B of Ex. R1 itself it is mentioned that IBHFL floating reference rate is 13% P.A. (as on the date of execution of this agreement). Tenure of repayment fixed as 180 along with EMI of Rs.5599/- as per page 28-B, but those were subject to variance as per terms of agreement is a fact incorporated in Clause-G of Part-II of Schedule-A of agreement Ex. R1. As the floating rate of interest was fixed and that floating rate of interest permissible as per IBHFL-PLR changes as envisaged by  Clause-C of Part-II of Schedule-A of Ex. R1 and as such, complainant cannot claim that rate of interest or the tenure of EMI is not changeable.

8.                It is contended by counsel for complainant that amount of Rs.54,406/- paid by complainant to OP through receipt Ex. C1 and Ex. C2 has not been adjusted towards the loan amount. However, copy of statement of account produced on record as Ex. R15 establishes that those amounts were adjusted and entry in that respect exists at page No.13 of that statement of account dated 09.06.2015. As the due credit of the amount deposited through receipt Ex. C1 and Ex. C2 has been made in the statement of account at page 13 against dates of 31.01.2012 and 27.02.2012 by mentioning the receipts No.210884 of Rs.23,577/- and 216001 of amount of Rs.30,829/- and such submission of counsel for complainant has no force that the received amount of Rs.54,406/- has not been adjusted. Even if the initial tenure of the loan was  fixed as 180 months, but despite that the same is liable to be changed because of the defaults committed by the complainant in making payment and in view of variation in rate of interest as stipulated of the agreement Ex. R1 itself. The cheque bouncing charges were claimed from the complainant many times as revealed by the entries of the statement of account and that action of the OP is not illegal because as and when a cheque is issued, then the liability of the person who has issued the cheque, is to ensure that due amount remains in his account for satisfying the claim of the holder of the cheque. Reference to few entries of 07.08.2008, 07.10.2008, 07.11.2008, 08.12.2008 etc. can be made for finding that cheque bouncing charges were claimed on the bouncing of the cheque issued by complainant. If such amounts charged, then no irregularity committed by OP because bouncing of the cheque took place due to fault of the complainant.

9.                Even if EMI of Rs.5599/- may have been fixed initially, but despite that for the default committed by complainant in not paying the installment and in view of legal right of OP to charge floating rate of interest, if prevalent rate of interest charged by extending the tenure of repayment, then no irregularity committed by complainant.

10.              Parties are bound by the terms of the contract and this Forum cannot add or subtract anything to those terms and as such in view of agreement arrived at between parties qua charging of floating reference rate or of contemplated right of OP to vary terms of repayment, OP has not committed any fault in case the tenure extended. Reference to the statement of account Ex. R15 has been specifically made while referring above referred dates.

11.              Ex. R3 and Ex. R4 are the letters produced by OP to establish that change of floating rate of interest from 13.25% to 13.75% and then from 13.75% to 14.75% was notified to complainant. In view of this the amount of EMI was increased from Rs.5599/- to Rs.5728/- through letter Ex. R5 sent to complainant and further increased from Rs.5728/- to Rs.6028/- through letter Ex. R6 sent to complainant. Ex. R7 to Ex. R12 are the other letters produced to show that change of rate interest or of the tenure of installment was notified by OP to complainant. Delivery certificate required of loan account is produced as Ex. R14 and Ex. R15 is the statement of account, which shows that due to floating rate of interest tenure of installment enhanced to 205. Reflection of enhancement of the installment amount to Rs.5728/- and then to Rs.6028/- and then to Rs.5914/- or  of Rs.5728/- etc. specifically made in entries contained in Ex. R15 as well as in Ex. C3 itself. So even if proof of despatch of letters Ex. R3 to Ex. R12 not produced by OP, despite that the complainant was given notice of the change of the amount of EMI through statement of account. As that statement of account Ex. C3 has been produced by complainant himself and as such, it does not lie in his mouth to claim that change of amount of EMI’s done unilaterally since 2007. So in such circumstances even if complainant may have paid more than double of the amount contracted as loan, but despite that he cannot shirk from his liability of repaying the loan as per terms of agreement Ex. R1. The complaint has been filed on false facts qua non adjustment of amount of Rs.54,406/- and OP acted as per  terms of Ex. R1 and as such, there is no deficiency in service on the part of OP.

12.              As a sequel of above discussion, the complaint dismissed without any order as to costs. Copies of order be supplied to parties free of costs as per rules. File be indexed and consigned to record room.

                              (Sat Paul Garg)                     (G.K. Dhir)

                              Member                                President

Announced in Open Forum.

Dated:27.01.2016. 

Gobind Ram.