Tamil Nadu

StateCommission

A/375/2014

DVTSCHE BANK, BRANCH MANAGER - Complainant(s)

Versus

K.S. ELANGOVAN - Opp.Party(s)

SAI KRISHNAN ASSOCIATES

14 Jan 2015

ORDER

 

 

 

BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION,CHENNAI

BEFORE :  THIRU.A.K.ANNAMALAI                           PRESIDING JUDICIAL MEMBER

                                TMT.P.BAKIYAVATHI                                                    MEMBER

                                                                                  F.A.NO.375/2014

(Against the order in CC.No.222/2010, dated 14.02.2014 on the file of DCDRF, Chennai (North)

DATED THIS THE 14^th DAY OF JANUARY 2015

Deutsche Bank AG,

Rep by its Branch Manager,

No.114, Kothari Buildings,                               M/s.SaiKrishnan Associates

Nungambakkam High Road,                            Counsel for Appellant /Opp.party

Chennai 600034.

-vs-

K.S.Elangovan,

S/o.R.Sivakolundu,

No.115, 4^th Block,                                          M/s.M.Velmurugan

Kaviarasu Kannadasan Nagar,                         Counsel for Respondent/Complainant 

Chennai 600 118.

          The Respondent is the complainant filed a complaint before the District Forum against the opposite party praying certain relief.  The District Forum allowed the complaint. Against the said order, the appellant / opposite party filed this appeal praying for to setaside the order of the District Forum in CC.No.222/2010, dated 14.02.2014.     

          This appeal coming before us for hearing finally on 19.12.2014, upon hearing the arguments on either side, perusing the documents, lower court records, and the order passed by the District Forum, this commission made the following order.

A.K.ANNAMALAI,  PRESIDING JUDICIAL MEMBER

          The opposite party is the appellant.

2.       The complainant availed a personal loan of Rs.1,00,000/- with the opposite party bank and paid as per the terms and conditions from 5.7.2008 to 5.6.2011 and before which on 19.3.2010 the complainant approached the opposite party for pre-closure of the loan account by paying entire amount of balance and thereby he was forced to pay Rs.43,510/- along with Rs.2248/- towards fore closure charges against the RBI rules and thereby a consumer complaint came to be filed alleging unfair trade practice against the opposite party.

3.       The opposite party denying the allegations admitting the fore closure as per the agreement dated 8.6.2008 the complainant agreed to pay the pre closure charges. As per the reply given by the RBI under the RTI Act dated 7.10.2008 freedom has been given to the banks in collecting the amount.

4.       The District Forum after an enquiry on the basis of both sides materials allowed the complaint directing the opposite party to refund a sum of Rs.2248/- collected towards pre-closure charges to the complainant with 9% interest from 2.6.2010 and directed to notify the closure of the loan account with CIBIL and to communicate the same to the complainant immediately and also directed to pay Rs.12,000/- to the complainant as compensation (for unfair trade practice of Rs.5000/- and to pay Rs.5000/- for mental agony and also to pay Rs.2000/- towards costs).

5.       Aggrieved by the impugned order the opposite party has come forward with this appeal contending that the District Forum erroneously allowed the complaint without considering the freedom given to be bank as per the RBI guidelines and the District Forum erroneously relied upon the document Ex.A7 and thereby the complaint is to be dismissed by allowing the appeal.

6.       We have heard both sides arguments, contentions and perused the entire materials including the order passed by the District Forum.  It is the admitted case of both sides that the complainant having availed the personal loan for Rs.1,00,000/- from the opposite party repayable in 36 EMIs between the period from 5.7.2008 to 5.6.2011 before that period on 5.6.2010 itself in advance i.e., by pre-closing the account he had paid the entire amount for which the opposite party / appellant collected a sum of Rs.2248/- as foreclosure charges which is contrary to the RBI Guidelines as alleged by the complainant.  Whereas the appellant contended that even as per the guidelines given by the RBI Guidelines the banks are given freedom to collect the service charges on banking transaction reasonably and thereby there was no unfair trade practice on their part and also disputed the relevancy of Ex.A7 accepted by the District Forum.  On perusal of Ex.A7 we find it is a newspaper article of “Times of India” dated 22.9.2009 mentioning “RBI against loan prepayment penalty” and in which as a report it is stated under RTI Act information furnished “RBI does not approve of charging penalty or foreclosure charges.  We have advised banks to lay out appropriate internal principles and procedures so that usurious interest including processing and other charges are not levied by them on loans and advances.”  On this basis the complainant claiming that the opposite party did not entitled for any collection of foreclosure charges, whereas the opposite party contended that the RBI guidelines permitted them to collect reasonable charges by way of giving freedom for the same as internal arrangements and they have collected such an amount by relying the extract of reply of RBI in Serial No.589/08-09 as found under Ex.B1.  On perusal of the District Forum order it is observed in page No.6 while discussing in Point No.1 it is observed as follows:

          “But the perusal of loan agreement under Ex.A1 would go to show that especially in the event, the complainant had foreclosed the loan, he had to pay the foreclose charges.  There is no such specific clauses in the loan agreement.  In clause 6.18, even though the reference has been made for pre-payment charges, nothing has been stated under what rate, the pre-payment charges has to be collected or what is the exact rate in force in the opposite party’s bank.  That there is no such specific clause in the loan agreement, simply for the reason that the complainant had paid the entire loan agreement in advance, he could not penalize by the bank by collecting the extra amount of Rs.2248/- as foreclose charges.” 

On perusal of the complainant’s communications by way of E-mails under Ex.A2 to A4 he had requested for considering the waiver of pre close amount and in case if the amount is being collected, it is without prejudice subject to his right to move before the appropriate forum and thereby the contentions of the opposite party that the complainant had agreed for the foreclosure amount cannot be accepted as a valid ground.  Even though relying upon Ex.B1 when the customer being regular in his payments towards loan amount and choosen to foreclosure the loan in advance and also having continuous transactions with the bank as an employee through the employers crediting his salaries having invested mutual fund deposits with the bank instead of encouraging their customer who is regular on prompt in his transactions with the bank without exercising discretion in waiving the foreclosure charges ofcourse though  not  authorized to  collect in strictly speaking as per RBI guidelines they have charged  the same  without  considering the  complainant’s request and protest and even made the complainant’s name as a defaulter by including in CIBIL list and thereby we find no error or infirmity in the order of the District Forum.  Regarding the award passed by the District Forum is concerned it awarded a sum of Rs.5000/- towards unfair trade practice and Rs.5000/- as compensation for mental agony and to Rs.2000/- as costs and these amounts are concerned while considering the facts and circumstances of the case and ordeal undergone by the complainant in this regard inspite of regular payee towards loan amount he was harassed by including his name in the CIBIL list even though the opposite party contended that they have updated in removing his name from the CIBIL and no documents filed by the same we find those amounts are nominal and justifiable and thereby there will be no need to interfere with the same and thereby the appeal is liable to be dismissed as devoid of merits and accordingly

          In the result, the appeal is dismissed by confirming the order of the District Forum, Chennai (North) in CC.No.222/2010, dated14.02.2014.

          No order as to costs in the appeal.

 

P.BAKIYAVATHI                                                              A.K.ANNAMALAI

     MEMBER                                                      PRESIDING JUDICIAL MEMBER

 

INDEX; YES/NO

VL/D;/PJM/BANK