DATE OF FILING :14/12/16 

IN THE CONSUMER DISPUTES  REDRESSAL FORUM, IDUKKI

Dated this the 30th day of October  2018

Present :

SRI. S. GOPAKUMAR PRESIDENT

           SRI. BENNY. K. MEMBER

CC NO. 355/16

Between

Complainant       :    Rasheed P.M.,

                                                         Padinjarechalil,

                                                         Muvattupuzha P.O., Partner, 

                                                         Idea Builders & Developers, Thodupuzha

(By Adv: K.M.Sanu)

And

Opposite Party                                          :   The Manager,

                                                     Dhanalakshmi Bank, Thodupuzha Branch, 

                                                     Thodupuzha P.O., Thodupuzha.

(By Adv: Babu Sebastian)

 

O R D E R

SRI. S. GOPAKUMAR (PRESIDENT)

 

The case  of the complainant is that,  

 

Complainant is a partner of a partnership firm named as “Idea Builders & Developers”.  The complainant along with other partners pulling on their life from the earning of this partnership firm.  On 11/01/14 the said partnership firm availed a loan of Rs.590 Lakhs and on 14/07/14 another loan of Rs. 110 Lakhs from the opposite party bank for the construction building under the Housing Loan Scheme.  The  rate of interest of the said loan were 11.5% and duration in 84 months.  At the time of availing the loan the complainant requested the opposite party bank they are intended to close the loan as and when they arranged the amount and further reported that to sanction further financial assistance without any processing charges and the opposite party bank accepted this request.  The complainant remitted the amount prior to the tenure of the loan period, at that time opposite party realized penal interest from him in addition to a huge amount by way of processing charges.

 

 

                                                                                                                                                                                             

                                                                                         (Cont....2)

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Complainant further averred that, when he remitted the loan instalments without any default he closed the loan of Rs.110 Lakhs on 19/08/15 and other loan of Rs.590 Lakhs on 23/03/16.  At the time of closing these two loans opposite party realized Rs.99952/- and Rs.532359/- respectively in the said loans as penal charges. This deed against the prevailing direction of the RBI and the RBI banned such practice of financial institution through their circular of the year 2012.  Hence this act of the opposite party is gross unfair trade practice.  Against this the  complainant filed this petition directing the opposite party to return the above said amount with interest @ 12% along with compensation and cost.

 

The opposite party entered appearance and filed reply version stating that the complaint is not  maintainable before this Forum.  The complainant is a partnership firm engaged in the business of construction and development of building and the same is either sold out or leased out for high margin of profit.  Opposite party sanctioned the term loan dated 11/01/14 of Rs.5.90 crores to the complainant for the completion of the construction of a mall.  Further on 27/05/14 the opposite party sanctioned a term loan of Rs.1.10 crores for the construction of a commercial building.  Since the loan were availed by the complainant for the commercial purpose and the subject matter of this complaint, as alleged in the complaint, is purely a commercial transaction the subject dispute is not a consumer dispute as defined in the Consumer Protection Act.

 

Opposite party further contented that the complainant has availed the service of the opposite party bank for availing the loan for commercial purpose on specific term and condition agreed by them.  More over the complainant is unregistered partnership firm and hence this complaint is hit by section 69(2) of the Partnership Act.  Opposite party further contented that the complainant never approached the opposite party under any housing scheme rather it availed the business loan for the construction of a commercial building.  There was no discussion about the foreclosure charges at all at any stage of processing of the loan as baldly alleged in the complaint.  The charges levied by the opposite party is towards foreclosure charges which is specifically stipulated in the sanction communication duly accepted by the complainant while availing the said loan.  The  direction  of  Reserve  Bank  of  India  during

                                                                                                                             

                                                                                         (Cont....3)

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February 2012 as highlighted by the complainant is only applicable to purely housing loan availed by individual citizens and it has no application here at all.  The opposite party has not charged anything illegal and beyond the directives of the Reserve Bank of India.  The complainant never approached the opposite party demanding reimbursement  foreclosure charges, where as he has  sent a lawyer notice and for which a reply notice has been sent to him by the opposite party incorporating all the true and genuine facts involved in the case.

 

The evident adduced by the complainant by way of documents and the documents marked as Ext.P1 to Ext.P5.  Ext.P1 is an authorisation letter, Ext.P2 is the copy of legal notice, Ext.P3 is its reply notice, Ext.P4 is the copy of circular of Reserve Bank of India, dated 7th May 2014, Ext.P5 is the copy of the representation submitted by the complainant.  No oral or documentary evidence is adduced from the part of the opposite party.

 

Heard both sides,

 

The point that arose for consideration is whether there is any deficiency in service from the part of opposite parties, and if so, for what relief the complainant is entitled to ?

 

The Point:- We have heard the counsels for both the parties and gone through the evidence on record. 

 

The complainant is filed for getting back the penal charges received by the opposite party at the time of closing the housing loan availed from the opposite party.  From the plaint averments it is seen that complainant availed two loans from the opposite party bank on 11/01/14 and 14/07/14 for the period of 84 months and both these two loans were closed in a lump sum before its closing term.  At that time opposite party realized an amount of Rs.99952/- and Rs.532359/- respectively in these loans as penal or foreclosure charges.  The complainant alleges that this act of the opposite party is clearly the violation of Ext.P4 Circular of Reserve Bank of India dated 7th May 2014 preventing the financial institution from realizing penal or foreclosure charges in individual housing loan. Here opposite party vehemently resisted that the loans in question was not an individual housing loan, but it was advanced to a partnership  firm  for  the completion of construction of a commercial mall and

                                                                                         (Cont....4)

 

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for the construction of a commercial building.  The complainant and other partners have many business and resultant income derived from there in they are eking  out their mode of livelihood is absolutely false.

 

On going through the complaint, we can see that, the contention of the complainant is the loan is granted in the category of housing loan and the complainant is living from the income which he is derived from the building construction.

 

Even though opposite party contented that they sanctioned the above loan in the name of a partnership firm and especially for the purpose of construction of a mall.  No evidence is produced before this Forum to substantiate their plea.  No sanction letter or loan application is produced before this Forum for corroborating the lengthy contention of the reply version to show that the loan is granted to a firm.  More over the opposite party has not took any effort to examine the complainant to explain the actual fact behind this deal.

 

On the other hand complainant himself stated that he is a partner of a partnership firm”Idea Builders and Developers” but nowhere he is stated that, the loan granted in the name of a partnership firm at the same time he pleaded that the loan is availed by him for the purpose of house construction and it was a housing loan. Absence of specific and cogent evidence to counter this allegation, Forum has no other way either to admit the version of the complainant.   As such the objection relating to the maintainability of the complaint based on its nature cannot be acceptable, since opposite party has miserably failed to prove that the loan advanced by them  to the complainant is for commercial purpose.

 

Then regarding the applicably of the circular of Reserve Bank of India dated 7th day  May 2014. Through this Circular Reserve Bank of India given direction to all scheduled commercial bank that “it is advised that bank will not be permitted to charge foreclosure charges/pre-payment penalties on all floating term loans sanctioned to individual borrowers with immediate effect” In this context the complainant himself admitted that he is a partner of a partnership firm and further contented that the loan is availed by him from the

                                                                                        (Cont....5)

 

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opposite party bank for housing construction purpose.  That means, this loans are individual loans, with floating rate of interest.  Nothing is brought out by the opposite party bank against this contention that, this loan is sanctioned to a partnership firm and not an individual loan.

 

On the basis of the above discussion, the Forum is of a considered view that the loan discussed above are coming in the category of individual floating rate term loans and the charging of foreclosure charges or pre-payment penalties in this loan is a clear violation of Circular of the Reserve Bank of India No. RBI/2013-14/582, dated 07/05/14 and hence the complaint  allowed.

 

Opposite party bank is directed to repay  the amount of Rs. 99952/- with interest from 19/08/15, and an amount of Rs.532359/- with interest @ 9% from 23/03/16 which the opposite party collected from the complainant as foreclosure charges, to the complainant within 30 days from the date of receipt of copy of this order along with Rs.2000/- as litigation cost, failing which this amount shall carry 12% interest per annum from the date of default  till the realization. 

 

Pronounced in the Open Forum on this the 30th day of October, 2018.

 

                                                                        Sd/-

                                                             SRI. S. GOPAKUMAR (PRESIDENT)

                                                                             Sd/-                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 

             SRI. BENNY. K.  (MEMBER)

 

 

 

 

 

 

 

 

 

 

                                                                                                                                                    

                                                                                         (Cont....6)

 

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APPENDIX

Depositions :

On the side of the Complainant :

Nil

On the side of the Opposite Party :

Nil

Exhibits :

On the side of the Complainant :

Ext.P1            -  Authorisation letter

Ext.P2            -  The copy of legal notice

Ext.P3          -  The reply notice

Ext.P4          - The copy of circular of Reserve Bank of India, dated 7th May 2014

Ext.P5          - The copy of the representation submitted by the complainant. 

On the side of the Opposite Party :

Nil.

 

      Forwarded by Order,

 

 

            SENIOR SUPERINTENDENT