Chandigarh

DF-II

CC/570/2013

Khem Gupta - Complainant(s)

Versus

Manager Allahabad Bank - Opp.Party(s)

-

05 Jan 2016

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Consumer Complaint  No	:	570 of 2013
Date  of  Institution	:	10.12.2013
Date   of   Decision	:	05.01.2016

 

 

 

 

 

Khem Gupta, Partner Gupta Agencies, SCO No.80, Sector 24-C, Chandigarh.

 

             …..Complainant

Versus

 

1]  Allahabad Bank Chandigarh Branch Office, Sector 8-C, SCO No.90-92, Chandigarh, through its Manager.

 

2]  Zonal Office Allahabad Bank, SCO No.49050, Sector 17-B, Bank Square, Chandigarh through its GM

 

3]  Head Office Allahabad Bank, 2 Netaji Subhash Road, Calcutta 700001 through its Director.

 

 

….. Opposite Parties

 

BEFORE:  SH.RAJAN DEWAN                 PRESIDENT

         SH.JASWINDER SINGH SIDHU       MEMBER

         MRS.PRITI MALHOTRA             MEMBER

 

 

For complainant(s)      :     Sh.Karan Singh, Advocate

 

For Opposite Party(s)   :     Ms.Jasleen Kaur, Advocate

 

 

PER JASWINDER SINGH SIDHU, MEMBER

 

 

          As per the case, the complainant is partner of Gupta Agencies.  The Gupta Agencies have an account No.20157788912 and 20157789223 with the Opposite Party No.1 Branch, having mode of Cash Credit Accounts and provided sanctioned limit of Rs.3.00 crore from 2010.  It is averred that the rate of interest on the limit of complainant in the Opposite Party Bank was higher than the prevailing rate of interest in other banks in market and apart from that the complainant was also facing other problem, as such the complainant applied for transfer of CC Limit in ING Vysya Bank.  That the complainant paid all the due to Opposite Party Bank through ING Vysya Bank vide two demand drafts of Rs.2.00 lacs and Rs.1.50 crore against both accounts respectively on 1.1.2013.  It is stated that the Opposite Party No.1 encashed the said demand drafts on 1.1.2013 and by doing so, accepted the above amount, as full and final settlement including all charges and interest and further Opposite Party No.1 agreed to issue the No Dues Certificate within 15 days also, as per letter Ann.C-1.  Thereafter, the complainant applied for No Dues Certificate from the Opposite Party bank as the same was needed in ING Vysya Bank, but the Opposite Party Bank lingered on the matter and issued the same only after debiting Rs.3,68,777/- from the account of the complainant, as pre-payment charges, wrongly and illegally on 30.1.2013, even after accepting amount towards full and final settlements.  It is pleaded that otherwise also the account of the complainant was a Cash Credit Account and it was not a term loan, which is being paid prematurely and for that pre-payment charges are being imposed. The complainant took the matter with the Opposite Parties but to no avail. Hence, alleging the said act of the OPs as illegal and deficiency in service, the present complaint has been filed.

 

2]       The OPs have filed joint reply and admitted the factual matrix of the case with regard to holding of account by Gupta Agencies as well as its closure on being applied to ING Vysya and that the amount was forwarded as full and final payment. It is stated that all the documents were to be released on the receipt of prepayment charges, as per stipulations of the sanction letter. It is admitted that No Dues Certificate was issued and Rs.3,68,777/- was debited as per prepayment charges as per bank’s policy. It is also stated that the condition of prepayment was conveyed at the time of sanction and the complainant has acknowledged the sanction letter in which it is clearly mentioned that prepayment fee 2% is to be charged on outstanding balance in case of takeover of the account. Rest of the allegations have been denied with a prayer to dismiss the complaint.

 

3]       Parties led evidence in support of their contentions.

 

4]       We have heard the ld.Counsel for the parties and have also perused the record.

 

5]       The complainant has preferred the present complaint against the OPs on the ground that he was maintaining two different accounts bearing No.20157788912 and 20157789223 with Opposite Party No.1 with the sanctioned limit of Rs.3.00 Crores.  The complainant claims that the rate of interest being charged by Opposite Party No.1 was on the higher side as comparable to other banks.  The complainant had requested the Opposite Party No.1 to rationalize the rate of interest, but as no repeated request were paid heed to, he preferred to change his Banker and applied for the transfer of the Cash Credit Limit with ING Vysya Bank.  Pursuant to this arrangement, the ING Vysya Bank wrote a letter dated 28.12.2012 for taking over of Banking Facilities (Credit Facilities) of M/s Gupta Agencies, Firm of the complainant.  The ING Vysya Bank even attached a pay orders/DDs of Rs.1.5 Crore and Rs.2.00 lacs to be adjusted in both the aforementioned bank accounts towards full & final payment/settlement of all credit banking facilities availed by the firm of the complainant, which also included all charges and interest till date from Opposite Party NO.1. 

 

6]       The complainant claims that the Opposite Party No.1 was requested by him to adjust the said amount against his Cash Credit Facility and release the collateral properties and related documents in favour of the ING Vysya Bank.  The complainant is aggrieved of the demand of Rs.3,68,777/- as mentioned in the letter dated 30.1.2013 addressed to him by Opposite Party NO.1 claiming that such amount is outstanding on account of pre-payment penalty at the rate of 2% on the outstanding balance in the account of the complainant. The complainant had alleged that this act of the Opposite Parties is totally illegal and arbitrary and even raised his such grouse through his letter dated 6.2.2013, wherein he had requested for the waiver of pre-payment charges levied by Opposite Party NO.1 vide its letter dated 30.1.2013.  On not receiving any favourable reply from the OPs, the complainant has alleged deficiency in service on the part of the OPs and sought the quoted relief.

          

7]       The Opposite Parties while contesting the claim of the complainant have categorically stated that the pre-payment penalty of 2% on the outstanding principal amount of the accounts of the complainant was charged, as the loan liability of the complainant were taken over by another financial institution and such pre-payment penalties were in consonance with the terms of the conditions of the Cash Credit Facility offered to the complainant in the year 2007.  The Opposite Parties have placed on record the copy of the sanction letter, as well as Ann.A, which contains the other terms & conditions of the sanction offered to the complainant.  The Opposite Parties have also claimed that the rate of pre-payment charges was incorporated at the rate of 2% at the time of sanction of the Cash Credit Facility and the same was prevalent at that point of time.  The Opposite Parties have also placed on record their own in-house circulars, which are effective from 15^th May, 2007 and 1^st June, 2013 respectively, in support of their version.  The Opposite Parties have also claimed that at the time of issuance of sanction letter, which was duly received by the complainant, the copy of terms & conditions of sanction too was received by him, at the time of receipt of the sanction letter and the same is proved from Ex.R-2, wherein the signatures of the complainant, acknowledging the receipt of the sanction letter, are appended.  Therefore, having charged the pre-payment charges at the rate of agreed terms & conditions of the sanction letter issued in the year 2007, the Opposite Parties claimed of not being deficient in rendering service to the complainant and prayed for the dismissal of the complaint.

 

8]       We have perused the documents placed on record by the parties and are of the opinion that the facts with regard to existence of Cash Credit Facility offered to the complainant by the Opposite Parties in the year 2007 on their application dated 31.7.2007, is admitted.  The copy of the sanction letter is Ann.R-1, wherein the details of Cash Credit Facility are found mentioned and even the nature of facility, existing sanctioned limit, limit enhanced by this letter, margin rate of interest, period of sanction, terms of repayment, properties mortgaged as security etc., is found mentioned.  It is also necessary to mention here that in column No.14 under the heading ‘Other Terms & Conditions of the Sanction’ Ann.A-1 attached with it is found mentioned.  It is Ann.A-1 column NO.25 wherein the Pre-Payment Fee of 2% is mentioned, which was to be charged on outstanding balance in case of takeover of the account. There is also an addition by the same handwriting, pen and ink in Column NO.19 of Ann.A-1 wherein the date ‘3.9.2008’, the date of review of the sanction is found appended, which is in relation to Column No.8 of the Sanction Letter.

 

9]       The complainant has claimed that the Opposite Parties have acted in a deficient manner while claiming the pre-payment charges, when the existing cash credit limit was offered to be taken over by the ING Vysya Bank vide letter dated 28.12.2012 Ann.C-1, which accompanied two Pay Orders/DDs amounting to Rs.1.5 Crore and Rs.2.00 lacs respectively. The last line of this letter also mentions the condition that in case of any reason for withholding the release of securities, the Pay Orders/ DDS be returned immediately. The Opposite Party No.1 while accepting this offer of takeover, adjusted the Pay Orders/DDs in different accounts of the complainant and at the same time, raised the demand of Rs.3,68,777/- disclosing the pre-payment penalty at the rate of 2% on the outstanding balance through its letter dated 30.1.2013. The complainant claims that the Opposite Parties should not have demanded Rs.3,68,777/- and should not have imposed the pre-payment penalty while accepting the takeover offer from the ING Vysya Bank.  The complainant even went to the extent of claiming that no such pre-payment penalty was agreed upon at the time of sanctioning of Cash Credit Facility.  However, we are not inclined to accept this line of pleadings of the complainant as the document found annexed as Ann.R-2 is a letter from Opposite Party NO.1 to the firm of the complainant, wherein the receipt of sanction letter along with terms & conditions and their acceptance is mentioned.  This letter is signed by two different partners of the Firm of the Complainant and it does not lie in the mouth of the complainant to deny the receipt of terms & conditions, when he has not filed the affidavits of the partners, whose signatures are found appended on document Ann.R-2.  Therefore, on the basis of Ann.R-2, it can be safely concluded that the sanction letter, dated 3.9.2007 along with Ann.A-1, which included the other terms & conditions of the sanction, was received by two partners of the Firm of the Complainant and the same was binding upon the complainant too.  The complainant cannot escape from his responsibility of payment of pre-payment penalty on the outstanding principle of the Cash Credit Facility availed by his Firm from the Opposite Parties.

 

10]      It would not be out of place to mention here that though the complainant had preferred the taking over of his existing loan facility of the Opposite Parties by another bank i.e. ING Vysya Bank, which was, according to us was a necessary party, to disclose whether a pre-foreclosure statement was required by it to process the takeover of Cash Credit Facility of the complainant from the Opposite Parties.  It is necessary to mention here that ING Vysya Bank must have confirmed itself of the existing loan liabilities of the complainant outstanding at the time of takeover offer, and the information of such liabilities were to be adduced from the existing banker of the complainant i.e. Opposite Parties, apart from other documents necessary for the forwarding of fresh Cash Credit Limit by the new bank, in the present case, ING Vysya Bank.  We feel that by following such process, the complainant would have been in advance knowledge of the pre-payment penalty to be levied by the Opposite Parties in terms of the sanction letter and could have challenged the same in the very first instance, rather than raising the matter, after having paid the same without raising the protest, at the time of such payment.  It is also necessary to mention there that the complainant has placed on record the copy of legal notice as well as its reply by the Opposite Parties, but there is no mention about the protest, which was raised by the complainant at the time of making good the pre-payment penalties to the Opposite Parties.

 

11]      Therefore, the complainant’s allegation of deficiency in service against the Opposite Parties are found hollow in terms of Ann.A-Terms & Conditions of the sanction letter, which was duly received by two partners of the Firm of the Complainant. Secondly, the complainant should have objected before making the payment of pre-payment penalty by raising such grouse in writing and then contesting the same through the present complaint.

 

12]      In view of the above observations, we are of the opinion that the complaint deserves dismissal.  Accordingly, the complaint stands dismissed with no order as to costs.

 

         The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

 

Announced

5^th January, 2016                                                                  

                                                                        Sd/-

 (RAJAN DEWAN)

PRESIDENT

 

 

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER

 

 

Sd/-

(PRITI MALHOTRA)

MEMBER

Om                                                                                                                       

 

 

DISTRICT FORUM – II

CONSUMER COMPLAINT NO.570 OF 2013

PRESENT:   None   Dated the 5th day of January, 2016

O R D E R                        Vide our detailed order of even date, recorded separately, the complaint has been dismissed.                    After compliance, file be consigned to record room.

 

(Priti Malhotra)	(Rajan Dewan)	(Jaswinder Singh Sidhu)
Member	President	Member