DISTRICT CONSUMER DISPUTE REDRESSAL FORUM (EAST)
GOVT. OF NCT OF DELHI
CONVENIENT SHOPPING CENTRE, FIRST FLOOR,
SAINI ENCLAVE, DELHI – 110 092
C.C. NO. 689/13
Shri Chander Mohan Sethi
S/o Late Shri Gian Chand Sethi
R/o E-18, Preet Vihar, Delhi – 110 092 ….Complainant
Vs.
M/s. India Infoline Finance Ltd.
Registered Office
IIFL House, Sun Infotech Park
Road No. 16V, Plot No. B-23,
MIDC, Thane Ind. Area
Wagle Estate, Thane - 400 604 ….Opponent
Date of Institution: 07.08.2013
Judgment Reserved for : 02.08.2016
Judgment Passed on : 02.08.2016
CORUM:
Sh. Sukhdev Singh (President)
Dr. P.N. Tiwari (Member)
Ms. Harpreet Kaur Charya (Member)
Order By : Shri Sukhdev Singh (President)
JUDGEMENT
The complainant Shri Chander Mohan Sethi has filed a complaint under Section 12(a) of the Consumer Protection Act 1986 (hereinafter to be referred as Act), against M/s. India Infoline Finance Ltd. (OP) for refund of interest mis-calculated/change in excess of chargeable interest amounting to Rs. 2,00,000/-.
2. The facts in brief are that the complainant Shri Chander Mohan Sethi was one of the directors of M/s. Sethi Buildwell Pvt. Ltd., a company incorporated under Indian Companies Act 1956, having its registered office at B-7, Surajmal Vihar, Delhi. The company has been into reality business and with a view to honour his business commitments and/or to meet immediate personal financial requirements, the complainant approached M/s. India Infoline Finance Ltd. (OP) for financial assistance. OP sanctioned interest bearing ‘Home Equity Loan’ on 27.02.2010 for a sum of Rs. 4,70,00,000/-. The complainant, after one year from disbursement of loan facility and in compliance of additional terms of sanction letter dated 27.02.2010, invoked ‘Foreclosure Clause’ and asked for the ‘Foreclosure Amount’ by its letter of dated 08.05.2011.
It is further stated that a sum of Rs. 2,00,000/- in cash was given on behalf of the company, which was received by Shri Gurdeep Singh from M/s. SMG Resource, credit facilitating agency. The company has not repaid or reimbursed Rs. 2,00,000/- as this amount was to be refunded after disbursal of the loan. After a long follow-up, OP agreed for ‘Foreclosure’ of the loan account no. 587395 on 31.01.2013 and ‘Foreclosure Amount’ proposed by the company was agreed under protest.
The complainant served a legal notice on 19.05.2013. Thus, the complainant has prayed for refund of Rs. 2,00,000/- paid at the time of registration of properties along with interest; proportionate interest on Rs. 3,60,768/-; interest charged excess by the company of Rs. 8,19,438/- ; refund of the amount charged excess by the company and returning of cheque bearing no. 013191 (blank) drawn on AXIS bank. Though, he has claimed these reliefs, but in the prayer clause, he has only prayed for refund of interest mis-calculated/change in excess of chargeable interest and refund of Rs. 2,00,000/- paid in connection with the registered mortgage of properties etc.
In the rejoinder to the WS, the complainant has controverted the pleas of OP and have reasserted his pleas made in the complaint.
3. In support of its complaint, the complainant has examined himself on affidavit. He has narrated the facts, which have been stated in the complaint. He has also got exhibited the documents such as sanction letter of dated 27.02.2010 (Annexure P-1), receipt for a sum of Rs. 2,00,000/- paid to Credit Facilitating Agency, M/s. SMG Resource (Annexure P-3), additional terms of sanction letter dated 27.02.2010 and letter of dated 08.05.2011 for ‘Foreclosure’ (Annexure P-2), legal notice dated 27.12.2012 (Annexure P-4), acknowledgement (Annexure P-7), copy of legal notice endorsed to higher authorities (Annexure P-6), letter of dated 31.01.2013 written to regional head, requesting for resolving the pending issues.
The complainant has also examined Shri Atul Kumar who has also deposed on affidavit. He has stated in his affidavit that Shri Chander Mohan Sethi approached M/s. Moneyline Credit Ltd. (presently known as M/s. India Infoline Finance Ltd.) for financial assistance through ‘Credit Facilitating Agency’ e.g. M/s. SMG Resource. Home Equity Loan amount to Rs. 4.70 crores was sanctioned in favour of Shri C.M. Sethi on 27.02.2010. This loan was against registered mortgage of residential properties at Preet Vihar and Surajmal Vihar. He has further stated that on 07.05.2010, Shri Gurdeep Singh, an employee of Credit Facilitating Agency, visited Shri C.M. Sethi and submitted in his presence that an amount of Rs. 2,00,000/- was required in connection with registered mortgage of two IPs. This amount was given to Shri Gurdeep Singh in his presence against receipt placed as annexure P-3.
OP has examined Shri Chanchal Sharma, who was an authorised representative of the OP. He has deposed on affidavit. He has also narrated the facts, which have been stated in the WS. He has got exhibited the reply sent to the complainant as Ex.-RW-1/A and Ex.-RW-1/B. He has further stated that the receipt was made at plain paper with the signatures of Shri Gurdeep Singh, on behalf of M/s. SMG Resource Credit Facilitating Agency, who was not the employee of respondent company. He has further deposed that this Forum was not having territorial jurisdiction. He has also deposed that the complainant was not consumer as the loan was taken for business purposes.
4. We have heard Ld. Counsel for the parties and have perused the material, placed on record. It has been argued on behalf of OP that this Forum was not having jurisdiction, as the cause of action has not arisen within the jurisdiction of this Forum. He has further argued that the complainant was not consumer as the loan was taken by the complainant for business purposes.
On the other hand, Ld. Counsel for the complainant has argued that the complainant was consumer and he took the loan for personal use. He has also argued that the Forum was having jurisdiction.
To appreciate the arguments of Ld. Counsel for the parties, a look has to be made to the testimony of the complainant, testimony of OP and the documents placed on record. Firstly, a look has to be made to Annexure P-1, which is a sanction letter. In the sanction letter under the column Loan Account No., 587395 has been mentioned; under the column Product, it has been mentioned as Home Loan / Home Equity / Business Loan / Personal Loan; under the column Purpose of the Loan, Business Use, under the column Loan Amount Sanctioned – Rs. 4,70,00,000/-. This sanction letter has been signed by the Director of M/s. Sethi Lease Fin. (P) Ltd., for Sethi Estates Pvt. Ltd. and for C.M. Sethi (HUF) etc. etc.
On the face of it, sanction letter (annexure P-1) categorically state the purpose of loan as “Business Use”. Further, in para 2(a) of the complaint, it has been stated that the loan was taken for business commitments and meet his immediate personal financial requirements. To quote from the complaint:-
“2. TRANSACTION
a. WHEREAS with a view to honour his business commitments and/or to meet immediate personal financial requirements, the complainant approached “the Company” for financial assistance”.
Thus, from the reading of the complaint as well as the sanction letter, it becomes evident that the loan was taken by the complainant for business purposes. When the loan was taken for business purposes, it has to be same as to whether the complainant was consumer under the Consumer Protection Act or not. For this, a look has to be made to Section 2(1)(d)(ii) of the Act. The same is reproduced hereunder:
Section 2(1)(d) : “Consumer” means any person who-
-
- [hires or avails of] any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who [hires or avails of] the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person [but does not include a person who avails of such services for any commercial purpose].
(Explanation For the purposes of this clause, “commercial purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment].
From the reading of this section, it comes out that a person who hires or avails any services for a consideration, will be a consumer but a person who avails of such services for any commercial purpose, shall be excluded. Commercial purpose has further been explained and excludes a person, who has availed such services exclusively for the purpose of earning his livelihood by means of self-employment. Thus, a person who avails the services for any commercial purpose for his livelihood by means of self-employment will also be a consumer.
6. In the present case, as is evident from the complaint as well as the evidence placed on record, it is evident that the complainant has got sanctioned home loan for business use. When he has got sanctioned the loan for business use, he was not covered under the definition of “consumer” under Section 2(1)(d)(ii) of the Act.
Since the complainant was not a consumer, there is no point to go into the other arguments in respect of jurisdiction. Thus, the arguments advanced on behalf of OP holds good.
In view of the above, we are of the opinion that the complainant was not a consumer. Therefore, his complaint was not maintainable and deserves dismissal. Hence, the same is dismissed with a cost of Rs. 20,000/-.
Copy of the order be supplied to the parties as per rules.
File be consigned to Record Room.
(DR. P.N. TIWARI) (HARPREET KAUR CHARYA)
Member Member
(SUKHDEV SINGH)
President
