Haryana

Kurukshetra

CC/475/2019

Gurdyal Singh S/o Jai Chand - Complainant(s)

Versus

indiabulls Housing Finance - Opp.Party(s)

Anil Kumar Sharma

08 Nov 2021

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KURUKSHETRA.

 

                                                          Consumer Complaint No.475 of 2019

Date of instt.4.11.2019 

                                                          Date of Decision: 08.11.2021

 

Gurdyal Singh son of Sh.Jai Chand resident of house No.271, Chatta Complex, Kurukshetra, District Kurukshetra.

                                                                             …….Complainant.                                                          Versus

1.Branch Manager, Indiabulls Housing Finance Limited, 1^st Floor, SCO-2, Sector 17, Kurukshetra District Kurukshetra.

2.Managing Director, Indiabulls Housing Finance Limited, Indiabulls House 448-451, Udyog Vihar, Phase-V, Gurugram, Haryana – 122001.

3. Concerned office Head, Indiabulls Housing Finance Limited. Indiabulls, Finance Centre, Tower 01, 4^th Floor, Senapati Bapat Marg, Elphinstone Road, Mumbai (W) Maharashtra – 400013.

 

          ….…Opposite parties.

 

                  Complaint under Section 12 of Consumer Protection Act.

 

Before        Smt. Neelam Kashyap, President.    

                   Ms. Neelam, Member. 

                   Shri Issam Singh Sagwal, Member.                                                        

 

Present:      Dr.Anil Kumar Sharma, Advocate for the complainant.

                   Sh.Shekhar Kapoor Advocate for the Ops.

ORDER

                                                                         

                    This is a complaint under Section 12 of the Consumer Protection Act, 1986 moved by complainant Gurdyal Singh  against  Indiabulls etc., the opposite parties.

2.                The brief facts of the complaint are that the complainant  had applied for a home loan for purchase of property-residential and a loan of amount of Rs.2037545/- was sanctioned from the bank of  Ops at Kurukshetra i.e. OP No.1. branch of OP No.2 and 3 vide reference No.567615 and sanction letter dated 26.3.2016 and as per sanction letter there were 240 EMIs of the said loan and each EMI was agreed @ Rs.18,927/- per month at the rate of interest of Rs.9.45 %per annum. The account no. of this loan was HHLKRK00271761. It is further submitted that on the another application of the complainant another loan ofRs.409341/- for  renovation of property was also sanctioned by the OP No.1 vide sanction letter dated 30.12.2016 and the reference No.666610.The said loan was to be paid in 180 EMIs of Rs.4189/- each and the rate of interest was agreed  9.15% per annum and the account loan for this loan was HHLKRK00307895. It is also submitted that in the month of November 2017 the Ops illegally and malafidely closed the loan account no. HHLKRK00271761 and opened a new account i.e. account No. HHLKRK363051 of the remaining amount without giving any intimation to the complainant.  It is also submitted that the Ops have not complied their own terms and conditions and have intentionally increased the rate of  interest from 9.40% to 11.75% per annum in the month of January 2019 illegally on the account No. HHLKRK363051 without any intimation to the complainant. The Ops  have also illegally increased the monthly installments from 240 to 471 without any intimation to the complainant. However, the complainant was depositing the installments in time as was desired.  It is further submitted that the Ops have only increased the rate of interest on the account No. HHLKRK363051 whereas the rate of interest on the loan account No. HHLKRK00307895 is being charged at the rate of Rs.9.40% per annum which is illegal and against the law. It is submitted that due to increase of interest, the complainant made up his mind to get the loan transferred in some other  bank and applied for the same to OP No.1 and applied for foreclosure of loan account to  OP No.1 but due to this the Ops levied Rs.38190/- on the account No. HHLKRK363051 and Rs.7511/- on the account no. HHLKRK00307895 as foreclosure charges which is illegal and in contravention of the  ruling of Reserve Bank of India.  The copies of foreclosure letters dated 13.3.2019 and dated 15.3.2019 are enclosed.  The complainant requested the Ops to waive off the foreclosure charges  and submitted letter No.RBI/2013-14/582 dated 7.5.2014 issued  by the RBI in this regard to all the scheduled Commercial Banks in which it  clearly mentioned that the banks will not be permitted to charge foreclosure charges/prepayment charges on all floating rate terms loans sanctioned to the individual borrowers but the Ops did not pay heed to the genuine request of the complainant.  It is also submitted that at the time of foreclosure , the complainant came to know that the Ops have illegally added the firm of the complainant i.e. M/s Gurdyal Jony and Associates as co-applicant in the said house loans without the consent of the complainant.  The complainant had submitted the documents of the firm only for the purpose of showing the income of the complainant and this act on the part of the Ops amounts to deficiency in services. It is submitted that the complainant completed all the formalities in the State Bank of India and the loan was taken over by the SBI, Kurukshetra  and the SBI handed over the cheque to Ops of the amount of Rs.23,41000/- dated 15.6.2019 in which the Ops have charged Rs.38176.39 and Rs.7436.30 as foreclosure charges which is illegal. The complainant also served legal notice dated 4.10.2019 upon the Ops calling upon the Ops to refund the excess amount received from the complainant  due to increase of rate of interest from January 2019 to till the date of closing of the account .   Thus, alleging deficiency in services on the part of the Ops, the complainant has filed the present complaint  and prayed that the Ops be  directed to refund the amount of 45612.69 + Rs.7436.30 i.e. Rs.45,612.69 alongwith compensation for the mental harassment caused to him and the litigation expenses.

3.                Notice of the complaint was given to the Ops. Ops appeared and filed their written statement disputing the claim of the complainant. It is submitted that the complainant approached the OP seeking a home loan facility to the tune of Rs.20,37,545/- on 30.4.2016 under the loan account No. HHLKRK00271761 and Rs.4,09,341/- on 30.12.2016 under the loan account No. HHLKRK00307895 as is borne out from the loan application Form submitted by the complainant  with the Ops and accordingly both the loans were sanctioned vide letter dated 26.3.2016 and letter dated 30.12.2016.  The complainant has failed to abide by the terms and conditions of the agreement and that the complainant is merely an investor and therefore does not qualify as a consumer under the provisions of the Consumer Protection Act 1986. The complainant had opted for floating rate of interest and not for fixed rate of interest which is a matter of record. The upwards or downwards change in the PLR is made by a Financial Company/bank to manage its cost of funds and operations. As per company policy, all customers are intimated from time to time regard CHANGE IN PLR. In terms of the Fair Practice Code adopted by the company besides sending of individual intimation, the PLR changes are notified and displayed on the  website of the answering OP for intimation to the public at large and all their clients/stake holders. It is submitted that the circular issued by the Reserve Bank of India Circular No.RBI/2013-14/582 DBOB. Dir B.C.No.110/13.3.00/2013-14 dated 7.4.2014 and circular NO. NHB(ND)DRS/Policy Circular No.63/2014-15 dated 14.8.2014 are not in dispute, however, the National Housing Bank vide its circular No.17/2015-16 dated 22.7.2016 clarified to whom the circular No. NHB(ND)DRS/policy  Circular NO.63/2014-15 dated 14.8.2014 shall be applicable.  That as per new circular dated 22.7.2016 bearing No.17/2015-16 “ Sole Proprietorship concerned/Firm or and HUF, as borrower or co borrower will not be treated as an individual borrower. It is also submitted that the present complaint is not maintainable.  Thus, it is submitted that there is no deficiency in services on the part of the Ops and same may kindly be dismissed.

4.                The complainant in support of his case has filed his affidavit Ex.CW1/A and tendered documents Ex.C-1 to Ex.C-18 and closed his evidence.

5.                On the other hand, Ops in support of their case have filed affidavit Ex.RW1/A and tendered documents Ex.R-1 to Ex.R-8 and closed their evidence.

6.                We have heard the learned counsel for the parties and gone through the case file very carefully. 

7.                The learned counsel for the complainants while reasserting the averments made in the complaint has argued that the  complainant took home is  from the OP to the tune of Rs.20,37,545/- on 30.4.2016 under the loan account No. HHLKRK00271761 and Rs.4,09,341/- on 30.12.2016 under the loan account No. HHLKRK00307895 and accordingly both the loans were sanctioned vide letter dated 26.3.2016 and letter dated 30.12.2016. It is  also argued that home loan is granted to the individuals and not to a firm as alleged by the Ops.  It is further argued  that the Ops have not complied  with their own terms and conditions and have intentionally increased the rate of  interest from 9.40% to 11.75% per annum in the month of January 2019 illegally on the account No. HHLKRK363051 without any intimation to the complainant. The Ops  have also illegally increased the monthly installments from 240 to 471 without any intimation to the complainant. However, the complainant was depositing the installments in time as was desired.  It is further submitted that the Ops have only increased the rate of interest on the account No. HHLKRK363051 whereas the rate of interest on the loan account No. HHLKRK00307895 is being charged at the rate of Rs.9.40% per annum which is illegal and against the law.  It is further argued that the Ops have charged Rs.38176.39 and Rs.7436.30 as foreclosure charges which is illegal and against the instructions of Reserve Bank of India.  The complainant also served legal notice dated 4.10.2019 upon the Ops calling upon the Ops to refund the excess amount received from the complainant. The learned counsel for the complainant has relied upon the law laid down in the authority Ajay Partap Singh Versus India Bulls Housing Finance Limited, (2018) 3 CPJ 88.

8.                On the other hand learned counsel for the Ops while reiterating the contentions made in the written statement has argued that as per new circular dated 22.7.2016 bearing No.17/2015-16 “ Sole Proprietorship concerned/Firm or and HUF, as borrower or co borrower will not be treated as an individual borrower because the  firm of the complainant i.e. M/s Gurdyal Jony and Associates is a co borrower and as argued above, the borrower or co-borrower will not be treated as an individual borrower and the foreclosure benefit cannot be given on the loan sanctioned to the person wherein in the agreement some firm is a co borrower ,therefore, foreclosure charges has been rightly charged from the complainant and same cannot be refunded.  It is argued that as firm is a co-borrower, therefore, the rate of interest has been rightly increased in this case and   e-mails  vide Ex.R-3 at pages 46, page 48, page 50 and at page 52 have been issued  regarding increase of the interest. It is also argued that the rate of interest has also been rightly charged from the complainants as per rules of the Finance Company and prayed for dismissal of the complaint.

9.                After hearing both the learned counsel for the parties, we are of the view that the Ops have wrongly charged foreclosure charges from the complainant. A bare perusal of the loan sanction letter Ex.C-1 shows that it is addressed to complainant Gurdyal Singh  and Sandeep Kaur, M/s Gurdyal Jony  & Association  is shown as Guarantor. Likewise, the loan sanction letter Ex.C-2  is addressed to complainant Gurdyal Singh  and Sandeep Kaur, M/s Gurdyal Jony  & Association  is shown as Guarantor. Thus, the loan has been sanctioned in the name of Gurdyal Singh in individual and not to the firm. Home loan is always given to an individual and not to a firm. It shows that the Ops made the firm as co-applicant with a wrong intention to charge the foreclosure charges from the complainants. Thus, it is observed that the said company does not have any relation whatsoever with the loan in dispute and the complainant has mentioned his firm only to show source of income and not a co-applicant. Perusal of the file also shows that foreclosure letters and change of interest intimation is also addressed to the complainant Gurdyal Singh. The foreclosure charge/prepayment penalties shall not be applicable to the individual borrowers.   In the present case, it is clearly proved that the loan was taken in the capacity as individual borrower, therefore, the  Ops have wrongly charged as foreclosure charges. So, we are of the view that the complainants are entitled for refund of Rs.38176.39 and Rs.7436.30 as foreclosure charges illegally charges from the complainants.

          The Reserve Bank of India by its circular dated May 7, 2014 dealt  with the levy of foreclosure charges/pre-payments penalty on floating rate term loans. The circular referred to in part B of the first bi-monthly monetary policy statement, 2014 announced on April 1, 2014 it noted that, such bi-monthly monetary policy statement indicated that in the interest of consumers, bank should consider allowing their borrowers the possibility of prepaying floating rate term loans without any penalty. The Reserve Bank of India by such circular advised the banks that they will not be permitted to charge foreclosure charges/ prepayment penalties on floating rate term loans sanctioned to individual borrowers with immediate effect. All the banks are governed by the instructions  Ex.C-7 of the RBI whereby RBI has advised that the banks will not be permitted to charge foreclosure charges/prepayment penalties on all floating rate term loans sanctioned to individual borrowers with immediate effect. Accordingly, the foreclosure charges have been wrongly levied upon the complainants and the complainants are entitled to refund of the same. The argument of the complainant that no notice has been given before enhancing the rate of interest on the floating rate seems to be justified. Perusal of  e-mails  vide Ex.R-3 at pages 46, page 48, page 50 and at page 52 have been issued  regarding increase of the interest. Ex.C-3 is e-mail wherein as per  page 46 the interest has been raised from 9.00 %  to 9.20% and  this is shown in an e-mail Ex.R-3 and no notice to the complainants has been given. Further in the Ex.R-3 at page 48 it is shown that the rate of interest has been raised from 9.20% to 9.30% and no notice of the same has been given to the complainants. In the e-mail Ex.R-3 at page 50, shows that the rate of interest has been raised from 9.30 % to 9.50% without any notice. Likewise in the Ex.R-3 at page 52, rate of interest has been raised from 9.50 % to 9.70%. Thus, the Ops have raised the rate of interest without any notice which is not permissible under the law and thus the Ops are liable to refund the amount of excess amount charges from the complainant. The Ops are held liable to refund the amount charged from the complainant beyond 9.70% together with interest on the said excess amount charged by way of excess interest. So there is deficiency in services and unfair trade practice on the part of the Ops because firm has been wrongly shown as loanee whereas the said firm is only guarantor as shown in the loan sanction letters Ex.C-1 and Ex.C-2. In coming to our this conclusion, we are supported by the  authorities cited on behalf of the complainant.

10.              In view of our above discussion, we accept the present complaint against the Ops and direct the Ops to refund the amount of Rs.38176.39 and Rs.7436.30 charged from the complainant as foreclosure charges alongwith interest @ 6% per annum from the date of charging of said amount till its actual realization. The Ops are further directed to refund the amount of interest charged beyond the  rate 9.70% from the complainant alongwith interest @ 6% per annum from the date of charging of interest  beyond 9.70%  till its realization. The complainant shall also be entitled to the sum of Rs.10,000/- as compensation for the mental agony caused to him and Rs.5000/- as  litigation expenses. The Ops are further directed to make the compliance of this order within a period of 45 days from the date of this order, failing which the complainant shall be at liberty  to initiate proceedings u/s 25 and 27 of the Consumer Protection Act. The file be indexed and consigned to the record after due compliance.

 

Announced in the open Commission

Dated: 08.11.2021.                                                        President.

 

 

                   Member                 Member.