Punjab

Ludhiana

CC/16/160

M/s Arya Ind. - Complainant(s)

Versus

Indian Overseas Bank - Opp.Party(s)

Vipin Saggar ADv.

09 Apr 2018

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

 

Consumer Complaint No.160 of  01.03.2016

Date of Decision            : 09.04.2018

 

M/s Arya Industries, VPO Rankey, Hambran Road, Jagraon, District Ludhiana through its Proprietor Sh.Mahesh Kumar son of Sh.Satish Kumar.

….. Complainant

Versus 

 

Indian Overseas Bank, Opposite Godavari Motors, Ferozepur Road, Threeke, District Ludhiana through its Branch Manager.

..…Opposite party

 

 (COMPLAINT U/S 12 OF THE CONSUMER PROTECTION ACT, 1986)

 

QUORUM:

 

SH.G.K.DHIR, PRESIDENT

SH.VINOD GULATI, MEMBER

 

COUNSEL FOR THE PARTIES:

 

For complainant            :         Sh.I.S.Luthra, Advocate

For OP                           :         Sh.Rajan Arora, Advocate 

 

PER G.K DHIR, PRESIDENT

 

1.                          Complainant, a proprietorship concern availed term loan facility of Rs.60 lac and also of Rs.30 lac against property from OP for earning livelihood and livelihood of his family members. Mention of account No.041503261000001 and account No.041503261000002 is made in this respect. That loan was repaid prior to the scheduled period. Op charged Rs.85,159/- from the complainant against term loan No.041503261000001 and of Rs.40,501/- against account No.041503261000002 as pre-closure charges. Letter dated 9.10.2015 was sent by the complainant for raising objection and reply to the same was sent by OP. Op refused to reverse the pre-closure charges to the complainant in the aforesaid accounts. It is claimed that Op has floated the guidelines of Reserve Bank of India because it was not competent to charge any amount/penalty on pre-closure/prepayment on all floating rate term loan sanctioned to the borrower. OP has committed deficiency in service and complainant by filing this complaint is seeking refund of amounts of Rs.85,159/- and of Rs.40,501/- referred above along with interest @12% per annum from the date of deduction till actual payment. Compensation for mental harassment and agony of Rs.50,000/- and litigation expenses of Rs.25,000/- more claimed.

2.                          In written statement filed by Op, it is claimed that complaint is filed on vague, false and frivolous allegations because there is no pith and substance in the story cooked by the complainant regarding alleged deficiency. Rather, a false complaint alleged to be filed for dragging Op in litigation. Moreover, it is claimed that complaint in the present form is not maintainable and complainant estopped by his act and conduct from filing the complaint. Op bank vide letter dated 30.1.2016 informed the complainant in reply to his letter dated 3.9.2015 that there is no question of reversal of pre-closure charges, charged at the time of takeover of the credit facilities by HDFC Bank. As per clause 2.i on page 3 of Credit Sanction advice dated 11.3.2014 duly acknowledged by the complainant, it was stipulated that “prepayment of borrowed amount will be subject to the    applicable prepayment charges and revised terms and conditions”. So, OP rightly expressed its inability to consider the request of the complainant for reversal of pre-closure charges, but complainant despite knowledge of the above referred clause 2.i has filed this false complaint on the basis of illusionary claim. OP never indulged in deficiency of service. Complainant has filed this complaint to squeeze some money by hook or crook from OP bank. Claim of seeking payment is civil in nature and as such remedy under the Consumer Protection Act is not available because of requirement of adduction of elaborate evidence. It is also claimed that in view of involvement of complicated question of law and facts, matter cannot be decided in these summary proceedings. Moreover, it is claimed that transactions between the parties does not come under the purview of the Consumer Protection Act because complainant does not fall in the definition of consumer. No cause of action has accrued in favour of the complainant. Admittedly, Sh.Mahesh Kumar is proprietor of complainant’s concern and complainant availed term loan facility of Rs.60 lac and also of Rs.30 lac against property from Op in 2010. It is also admitted that these loans were availed for earning livelihood by the proprietor for self and family members and the above numbered accounts were duly maintained. Admittedly, loan was repaid prior to the scheduled time and OP charged additional pre-closure charges referred above. It is denied that OP has violated and floated the guidelines of Reserve Bank of India. Credit sanction advice dated 11.3.2014 was duly acknowledged by the complainant, in which, it is clearly mentioned that pre-payment of the borrower accounts will be subject to the applicable prepayment charges and revised terms and conditions. In view of this stipulation, there is no violation of guidelines of RBI. Complainant is not entitled to any penny at all. Each and every other averment of the complaint denied by praying for dismissal of complaint.

3.                Complainant to prove his case tendered in evidence his affidavit Ex.CA along with documents Ex.C1 to Ex.C6 and thereafter, his counsel closed the evidence.

4.                On the other hand, Sh.Amit Kumar, Assistant Manager of Op along with counsel tendered in evidence affidavit Ex.RA of said Sh.Amit Kumar along with documents Ex.R1 to Ex.R3 and thereafter, closed the evidence.

5.                          Written arguments not submitted by any of the parties. Oral arguments by counsel for parties addressed and those were heard. Records gone through minutely. 

6.                Undisputedly, Sh.Mahesh Kumar,  proprietor of complainant’s concern availed two loans of denomination of Rs.60 lac and of Rs.30 lac as term loan and loan against property respectively, but the payment of same made before the scheduled time. It is contended by counsel for complainant that loans were contracted for purchase of machinery for earning livelihood and as such levying of pre-closure charges of Rs.40,501/- and of Rs.85,159/- (as reflected in copies of statement of accounts Ex.C1 and Ex.C2) is in violation of circular, copy of which is produced on record as Ex.C5. Even if OP may have admitted in reply that loans were availed for earning livelihood by the complainant for self and his family members, but despite that it is mentioned in the reply that complainant is not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act. So, even if half hearted support rendered by Op to the complainant in its assertions of availing loans for earning livelihood, but in fact it is for this Forum to ascertain as to whether really the complainant falls within the definition of Consumer or not.

7.                If submission of counsel for complainant accepted that loans in question contracted for purchase of machinery, then this means that virtually these huge loans totaling Rs.90 lac availed for running a factory. No one will avail loan of Rs.90 lac in a financial year for earning livelihood and that too in 2010, when there was not so much inflation as is at present. So, virtually the plea regarding contraction of loans in question for earning livelihood has been taken just for abusing the process of law knowing fully well that complainant actually contracted loans in question for huge investment in a concern for earning profits. It is on account of this that purpose of contracting the loans not specifically disclosed in the complaint or in the submitted affidavit of complainant or in any other loan documents produced by any of the parties. Copies of loan agreement or of sanction letter in this respect are not produced, from which, it may be made out as to for what purpose the two loans in question were availed. So, virtually there is deliberate suppression of material facts in this respect, so that exact conclusion may not be arrived at. However, even then factum of contraction of loans of Rs.90 lac in all for business concern itself reflects that these huge loans contracted for not earning livelihood, but for carrying on business at large scale. Investment of loan of amount of Rs.90 lac in business concern virtually is always for expanding business, so as to earn more profits and as such submission advanced by counsel for Op has force that loans in question were not contracted for earning livelihood. Rather, loans in question were contracted by the complainant for earning profits by way of huge investment and as such, certainly complainant is not a consumer within the meaning of Section 2(1)(d) of the Consumer Protection Act.

8.                As per case titled as R.K.Handicraft and others vs. M/s Parmanand Ganda Singh & Company and others-II(2015)CPJ-13(N.C.), if a generator set purchased for generating electricity to run a factory for manufacturing of handloom products, then the complainant concerned is not a consumer. Ratio of this case is fully applicable to the facts of the present case because complainant concerned is an industrial concern and that is why, it is named as Arya Industries as reflected in Ex.C1 to Ex.C4 and Ex.C6 as well as in Ex.R2 and Ex.R3. If an industrial concern invested the contracted huge loan of Rs.90 lac in it, then inference is obvious that actually the investment in such industrial concern is  for  expanding  business. So, ratio of above cited case is fully applicable to the facts of the present case. So, virtually an unbelievable plea is taken in the complaint as if loans contracted for earning livelihood. Even if words used in the complaint regarding contraction of loans for earning livelihood of complainant and his family members are there, but despite that there is no mention made anywhere in the complaint or in the affidavit Ex.CA of complainant or in any other documents that contraction of these loans in question was for earning livelihood by way of self employment. In case, a person/concern to come in the domain of consumer, then in view of explanation appended to section 2(1)(d) of the Consumer Protection Act, it has to be pleaded and proved by convincing evidence that services availed or goods purchased for earning livelihood by way of self employment. As complainant failed to plead and  prove that loans were contracted for earning livelihood by way of self employment and as such, benefit of section 2(1)(d) of the Consumer Protection Act is not available to the complainant, more so when huge loan amount invested in the industry obviously for the purpose of expanding business.

9.                In case titled as Nikita Cares vs. Surya Palace IV(2015)CPJ-405(N.C.), it has been held that even the installation of lift for commercial purpose renders the purchaser concerned not a consumer. Likewise, in case of Jagrook Nagrik and others vs. Cargo Motors Pvt. Ltd. and others-III(2015)CPJ-1(N.C.), it has been held that purchase of truck chassis for expanding the existing transport business, will render the purchaser concerned     to be not a consumer. Same is the position in this case because huge loans contracted either for expanding the business or for earning profits from an industrial concern. If the complainant is not a consumer, then certainly this consumer complaint is not maintainable. Even if the notification Ex.C5 may be providing that foreclosure charges/pre-payment penalties not leviable on all floating rate term loans sanctioned to individual borrowers w.e.f.14.7.2014, the date of this notification, despite that remedy available with the complainant is to approach the Civil Court in such circumstances, more so when contractual obligation undertaken by the parties through clause 2.i of Credit Sanction Advice Ex.C6=Ex.R3  provides that prepayment of borrowal accounts will be subject to the applicable prepayment charges and revised terms and conditions. As complainant himself signed on this document Ex.C6=Ex.R3 and  has relied on it and as such rule of estoppel also denudes the complainant from challenging the levy of pre-payment charges. Rather, through clause 2.i of Ex.C6=Ex.R3, complainant undertook to pay the applicable prepayment charges in his borrowal accounts in question and as such, now complainant cannot claim in violation of this agreement that prepayment charges are not leviable. Submission of counsel for OPs in this respect has force. Even if rate of prepayment charges not mentioned in clause 2.i of Ex.C6=Ex.R3, despite that prepayment charges are leviable as per guidelines and circulars of bank. Complainant has not pleaded or proved or claimed that prepayment charges levied by OP are at higher rates than the one fixed by the circular/rules/regulations and as such, it cannot be said that prepayment charges are excessive.

10.              Certainly ratio of cases titled as Massa Singh vs. State of Punjab and others-2016(4)RCR(Civil)966(D.B. of Punjab and Haryana High Court); Malabar Fisheries Company vs. The Commissioner of Income-tax Kerala-1980 AIR (S.C.)176; M.Hemalatha vs. D.Kannan-2016(2)CTC-669(Madras High Court); Vinay Kumar Aggarwal vs. Pace Stock Broking Services Pvt. Ltd-2012(3)RCR(Civil)-445(Delhi High Court); Anil Dhir and others vs. Enforcement Directorate-2010(3)LRC-211(Delhi High Court) and Zuko Engineers vs. Ministry of Commerce and Industries-2002(99)DLT-360(Delhi High Court) lays that sole proprietorship concern is not a legal entity, but it is a name, in which, the individual proprietor himself carries on his business. So, on the basis of ratio of all these cases, submission advanced by counsel for complainant has  force that as complainant concern is a proprietorship concern owned by Sh.Mahesh Kumar and as such the identity of the complainant    concern to be taken as an identity of individual borrower. Even if that be the position, despite that consumer complaint is not maintainable because complainant is not a consumer as discussed in detail above.

11.              As a sequel of above discussion, complaint dismissed without any order as to costs. Copies of order be supplied to the parties free of costs as per rules.

12.                        File be indexed and consigned to record room.

 

                     (Vinod Gulati)                               (G.K. Dhir)

            Member                                           President

Announced in Open Forum

Dated:09.04.2018

Gurpreet Sharma.