STATE CONSUMER DISPUTES REDRESSAL COMMISSION

UNION TERRITORY, CHANDIGARH

Appeal No.117 of 2010

Sh. Angrej Singh, Harpreet Singh, Opp. Octroi Post, Patiala Road, Sunam, District Sangrur, Punjab.

                                                                                    ..…Appellant.

Versus

LIC Housing Finance Ltd., SCO No.2445-46, Sector 22-C, Chandigarh through authorized Officer/Area Manager.

                                    ..…Respondent.

BEFORE:            HON’BLE MR. JUSTICE PRITAM PAL, PRESIDENT.

                        HON’BLE MRS. NEENA SANDHU, MEMBER.

ARGUED BY: Sh. Jagmohan Singh, Advocate for the appellants.

                        Sh. O. P. Narang, Advocate for the respondent.

MRS. NEENA SANDHU, MEMBER.

1.                     This appeal has been filed by the complainants against order of District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (for short hereinafter to be referred as District Forum) dated 17.2.2010 passed in complaint case No.945 of 2009 vide which the learned District Forum has dismissed the complaint case.

2.                     Briefly stated the case of the complainant is that he had obtained a loan of Rs.5.00 lacs from OP for home repair/ construction on 30.09.2002 and the agreed rate of interest was 10.25% p.a., which was subsequently reduced by the RBI to 7.5% p.a. It was averred that in case of default, an additional interest/penalty of 18% p.a. i.e. 1.50% p.m. would be charged by the OP on the unpaid amount. As per the complainant, a sum of Rs.500/- were charged as administrative charges. Some blank papers were got signed from the Complainant after disbursal of loan. It was next averred that an amount of Rs.4,00,717/- had been returned back by the Complainants and as on 31.10.2008, an amount of Rs.1,00,503/- as principal amount was balance; Interest due @10.25% to 7.5% was Rs.1,59,241/- and additional interest/penalty @18% p.a. on unpaid amount was calculated to be Rs.14,923/-. It was next alleged that the complainants requested the OP to provide them actual loan statement/calculation on the basis of reduced interest rates, so that they could settle their loan account, but without supplying of actual statement of loan amount, OP started harassing them to recover more amount from them and even resorted to blackmail tactics to make the payment as per their desire. Aggreived by this act of OP, the Complainants, it was averred, filed a complaint before the SLSA, U.T. Chandigarh, which was subsequently withdrawn. The complainant alleged that OP had been adding interest on the principal amount monthly and also charging interest/penalties on that interest plus principal amount monthly instead of yearly. Alleging the aforesaid acts of OP as deficiency in service and unfair trade practice on its part,  the Complainants had filed the present complaint before the learned District Forum seeking an amount of Rs.1.00 lacs as compensation on account of damages, legal expenses and harassment suffered at the hands of OP.

3.                     The version of OP in its written statement is that the Complainants took housing loan of Rs.5.00 lacs @10.25% p.a. (floating rate) and the additional interest/penalty, in case of default as mentioned in the agreement executed (Annexure R-II). It was denied that the rate of interest was decreased by the OP only on receiving direction from the RBI. OP also annexed the statement of changed rate of interest as being floating rate at Annexure R-III. It was also denied that an amount of Rs.4,00,717/- was paid towards the principal amount whereas as per OP, only an amount of Rs.1,61,411.57 had been paid/adjusted towards the principal amount, which was evident from Accounts Statement (Annexure R-IV). As per the OP, the Complainants were given the accounts statement whenever demanded and they never approached the OP for return of the whole amount. OP further pleaded that the Complainants were chronic defaulters in repayment of EMIs towards their liabilities of housing loan taken by them. As per the OP, the statement made by the Chartered Accountant of the complainants was prepared on wrong basis and misleading information given by the Complainant. OP specifically denied that the repayments were required to be firstly adjusted against the principal and only then towards the element of interest. OP also asserted that the interest was being charged as floating and as per agreement and nothing wrong had been committed by the OP. Pleading no deficiency in service on its part, OP prayed for dismissal of the complaint with exemplary costs.

4.                     The learned District Forum, in its analysis of the complaint, recorded in the impugned order that the entire case of the Complainants was based on certain assumptions and on that account, he had alleged deficiency in service on the part of the OP. Settling the two issues with regards to the floating rate of interest being charged by the OP wrongly and the charging of interest on monthly basis instead of yearly basis, the learned District Forum referred to loan offer letter (C-2), which clearly states that the interest was payable monthly and the initial rate of interest was 10.25% p.a., subject to the floating rate, which may change from time to time. The learned District Forum further recorded that these facts were also available in the loan agreement document (R-2). It was further recorded that in the same loan agreement document, it was also stated that the repayment term would commence on the 1st day of the calendar month immediately following either the disbursement of the final installment of the loan or expiry of 12 months from the date of disbursement of the first installment of loan, whichever was earlier. The learned District Forum next recorded that as per this loan agreement, in the case of default in paying the EMIs, additional interest @1.5% p.m., shall be levied, which includes 18% p.a. for the period upto and inclusive of 12 months default and 2% p.m. i.e. 24% p.a. on the defaulted installments beyond 12 months default. It was clear to the learned District Forum from perusal of the statement of loan account submitted by the OP (Ex.R-4) that the Complainant had been a chronic defaulter in paying the EMIs and a large number of cheques given by the Complainant to the OP in repayment of the housing loan were bounced, resulting in overdue interest and penalty charges, which had not been taken into account by the Complainant, while making his own calculations through his Chartered Accountant. As per the learned District Forum, it was not possible to segregate the interest component from the principal amount in the EMIs, as the amount of the EMI is settled right in the beginning, subject to change by the floating rate of interest but the C.A of the complainant had also done this in his statement on the presumptions and assumptions. In the view of the learned District Forum and as per the final statement prepared by the OP (R-6), the total amount repayable as on 10.9.2009 by the Complainant was Rs.4,98,530.43P. As per the learned District Forum, apart from the proceedings before the Lok Adalat, the detailed statement of loan account (R-4) also supported and corroborated the fact that the Complainant had been a chronic defaulter, which had resulted in not only the imposition of the overdue interest, but also certain other penalties from time to time as per the loan agreement. It was observed that the entire statement of loan account containd a large number of entries which showed that the PDC cheques given by the Complainant as EMIs in repayment of the loan had bounced at regular intervals and there were at least 25 such instances as per the statement of loan account where the cheques had bounced and no payment could be adjusted against the outstanding loan, resulting in huge amounts of overdue interest and penalties etc. Thus, in the view of the learned District Forum, there were no reasons to disbelieve the statement of loan account prepared by the OP, as per which the outstanding amounts was to the extent of Rs.4,98,530.43P. Holding no deficiency in service or unfair trade practice on the part of OP, the learned District Forum dismissed the complaint and the parties were left to bear their own costs.

5.                     Aggrieved by the said order of learned District Forum, the complainant has filed the present appeal seeking setting aside of the impugned order and awarding relief as prayed for in his complaint case. Ms. Hemlata Issar, Advocate initially appeared on behalf of the respondent but on the date of final hearing i.e.3.8.2010, none appeared on behalf of the respondent whereas Sh. Jagmohan Singh, Advocate represented the appellant/complainant. Arguments on behalf of the appellant were heard and the case was reserved for orders. Subsequently, on 4.8.2010, Sh. O. P. Narang, Advocate appeared before the Bench and sought leave to argue the matter. Sh. O. P. Narang, Advocate submitted that the order passed by the learned District Forum is just and fair and it did not need any interference and he prayed that the appeal be dismissed. Record of complaint case was also received from the District Forum concerned.

6.                     We have gone through the record on file as well as the impugned order and have also heard the learned counsel for the parties.

7.                     From perusal of the detailed statement of loan account (R-4), it is proved on record that the Complainant had been a chronic defaulter in repayment of the loan amount and there are large number of entries in this statement, as per which, the PDC cheques given by him as EMIs had bounced at regular intervals and no payment could be adjusted against the outstanding loan, resulting in huge amounts of overdue interest and penalties etc. In our opinion, the complainant is to be condemned for not making the repayment of the loan amount and as such, he cannot be extended any relief for his own wrongs. In this view of the matter, the complainant has totally failed to adhere to the terms and conditions of the loan agreement entered into between him and the OP. So far as the statement prepared by the C.A of the complainant is concerned, we are of the opinion, that the same is prepared on the information supplied by the complainant and that too to his own whims and fancies. Thus, the report of C.A cannot be relied upon, when on the other hand, the Account Statement of the complainant brought on record by the OP is very clear and as per the terms and conditions of the loan agreement, as per which, the total amount repayable as on 10.9.2009 by the Complainant was to the tune of Rs.4,98,530.43P. We are, therefore, in consonance with the view held by the learned District Forum that  there was no deficiency in service

8.                     In view of the foregoing discussion, we find no merit in this appeal and the same is dismissed with no orders as to costs.

9.                     Copies of this order be sent to the parties free of charge.

Pronounced.

5^th August, 2010.

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[JUSTICE PRITAM PAL]

PRESIDENT

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[MRS. NEENA SANDHU]

MEMBER

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