Chandigarh

DF-I

CC/169/2024

NAVEEN KUMAR - Complainant(s)

Versus

M/S KOGTA FINANCIAL INDIA LIMITED - Opp.Party(s)

DEVINDER KUMAR

04 Dec 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-I,

U.T. CHANDIGARH

                          

Consumer Complaint No.	:	CC/169/2024
Date of Institution	:	22.03.2024
Date of Decision	:	04/12/2024

 

Naveen Kumar son of Sh Rajinder Lal, aged about 47 years, House No. 1909, Main Bazar, Manimajra, Chandigarh.

....Complainant

VERSUS

1.    M/s KOGTA Financial India Limited, 206, Ganpanti Plaza, M.I. Road, Jaipur, Rajasthan-302001 through its Managing Director.

2.    M/s KOGTA Financial India Limited, SCO No. 19, First Floor, Sector 7-C, Madya Marg, Chandigarh through its Branch Manager.

...OPs

CORAM :	SHRI PAWANJIT SINGH	PRESIDENT
	MRS. SURJEET KAUR	MEMBER
	SHRI SURESH KUMAR SARDANA	MEMBER

 

                                                                               

ARGUED BY	:	Sh.Devinder Kumar, Advocate for complainant
	:	Sh.Dhruv Mittal, Advocate for OPs.

Per Pawanjit Singh, President

1.        The present consumer complaint has been filed by complainant against the OPs (hereinafter referred to as the OPs).  The brief facts of the case are as under :-
   1. It transpires from the averments as projected in the consumer complaint that in the month of March, 2018,  the officials of the OPs approached the complainant and allured him for availing the loan facility from OPs as they will provide best and prompt services to him on lower rate of interest in comparison to the other banks and also that in case of foreclosure of the loan, no charges shall be payable by him.  Believing on the version of the OPs, complainant agreed to avail the loan facility  in order to purchase a second-hand vehicle for which complainant submitted all the required documents  with the OPs and accordingly, the OPs sanctioned the loan which was payable in EMIs. In the month of October, 2022, the complainant purchased another second- hand vehicle bearing registration No.HR70-E-6781 and submitted the documents with the OPs who  after going through the documents had financed a sum of Rs.15,25,457/- to the complainant (hereinafter referred to as the ‘subject loan’). A copy of Loan Account Information is Annexure C-1. It was submitted that out of Rs 15,25,457/-, OPs have disbursed a sum of Rs. 10,77,619/- to the Channel/Direct Sales Agent i.e. M/s Raj Shree Auto Credit, Sector 26, Chandigarh of vehicle bearing registration No. HR70- E-6781 and rest of amount was have adjusted in the previous loan amount. As per the payment schedule, the complainant  has to pay a sum of Rs. 44,820/- per month (EMI) to OPs and period of the loan was 48 months. However, the complainant was shocked to know that OPs are charging higher rate of interest and accordingly, he contacted/approached the OPs with a request to reduce the rate of interest but with no result. Having no other option except to close the loan account, he approached to Yes Bank, Sector 9, Chandigarh who agreed to provide the loan facility to him and after obtaining the loan from the said bank, he approached the OPs for closure of loan account and the OPs provided Termination Value Statement dated 06.11.2023 (Annexure C-2) and demanded premature closure penalty of Rs.1,02,963/-. Thereafter, he requested the OPs to waive-off the said closure penalty but they did not waive off of the same.  The Yes Bank had issued a cheque of ₹14,44,665/- in favour of OPs for the closure of the loan account which was acknowledged by the OPs vide receipt dated 09.11.2023 (Annexure C-3). Despite of the fact that the officials of the OPs had assured the complainant that no foreclosure charges will be payable by him, the OPs had charged the aforesaid foreclosure charges from him by refunding a sum of Rs.28,865/- being excess amount/EMI received from him. It is further alleged that in this manner, the Ops have violated the RBI guidelines and illegally charged the unlawful charges. Finally, the complainant issued legal notice dated 25.01.2024 to the OPs and the copies of the legal notice and the postal receipts are Annexures C-4 to C-6. The aforesaid act amounts to deficiency in service and unfair trade practice on the part of OPs. OPs were requested several times to admit the claim, but, with no result.  Hence, the present consumer complaint.
   2. OPs resisted the consumer complaint and filed their written version by way of affidavit, inter alia, taking preliminary objections of maintainability, cause of action and concealment of facts.  However, it is alleged that the complainant had applied for loan vide loan application dated 20.09.2022 (Annexure R-1) and had also executed the agreement (Annexure R-2) vide which the complainant had agreed to pay the foreclosure charges. Even the complainant had earlier obtained the loan for purchase of the second hand vehicle and for the closure of the same, he had paid the foreclosure charges which fact has been concealed by him and now he has filed the false and frivolous complaint against them. On merits, the facts as stated in the preliminary objections have been re-iterated. The cause of action set up by the complainant is denied.  The consumer complaint is sought to be contested.
   3. In replication/rejoinder, complainant reiterated the claim put forth in the consumer complaint and prayer has been made that the consumer complaint be allowed as prayed for.
2.        In order to prove their respective claims the parties have tendered/proved their evidence by way of respective affidavits and supporting documents.
3.        We have heard the learned Counsel for the parties and also gone through the file carefully, including the written arguments.
   1. At the very outset, it may be observed that when it is an admitted case of the parties that the complainant had firstly applied for personal loan with the OPs in the month of March, 2018 for purchase of the second hand vehicle, which was financed by the OPs and later on he got another loan sanctioned in his favour for second hand vehicle bearing registration No.HR70-E-6781, which was also financed by them and at the time of closure of the first loan, he had paid the foreclosure charges to the OPs and later on, he decided to further close the subject loan after availing the another loan from Yes Bank and the Yes Bank had directly paid ₹14,44,665/- to the OPs for the closure of the subject loan, as is also evident from Annexure C-3 and for the subject the loan, the OPs had also charged the foreclosure charges to the tune of Rs.1,02,963/- from the complainant, the case is reduced to a narrow compass as it is to be determined if the OPs have charged the aforesaid foreclosure charges from the complainant against the RBI guidelines and the complainant is entitled for the refund of the same, as is the case of the complainant, or if the OPs have charged the aforesaid foreclosure charges as per the loan agreement (Annexure R-2) as well as the RBI guidelines and the complaint of the complainant, being false and frivolous, is liable to be dismissed, as is the defence of the OPs.
   2. In the back drop of the foregoing admitted and disputed facts on record, one thing is clear that the entire case of the parties is revolving around the terms and conditions of the loan agreement (Annexure   R-2) and the RBI guidelines especially when it is an admitted case of the parties that the complainant is an individual borrower and had obtained the loan for his personal use, on the fixed rate of interest.
   3. Perusal of the loan agreement (Annexure R-2) clearly indicates that the parties have executed agreement before sanctioning of the subject loan. Clause 2.2 of the agreement clearly indicates that the borrower had agreed to Annualized Rate of Interest at the Rate mentioned in the First Schedule, compounded with monthly rests which shall remain fixed during the term of loan facility unless mandated by the RBI, makes further clear that the rate of interest was fixed during the term of loan facility, which was admittedly payable by the complainant, within 48 months. Relevant portion of the same is reproduced as under:-

2.2  Annualized Rate of Interest Computation:-

(a)   The Borrower shall pay Annualized Rate of Interest at the Rate mentioned in the First Schedule, compounded with monthly rests on the outstanding balance, namely the balance of the Loan unpaid interest and costs, charges and expenses outstanding at the end of the month.

(b)   The Annualized Rate of interest stipulated in the First Schedule shall remain fixed during the term of the Loan facility unless mandated by the Reserve Bank of India or other Regulatory Authorities or unforeseen or exceptional changes in money market conditions. In such even notwithstanding the provisions of the First Schedule, the Borrower agrees to pay interest on such revised Rate and this agreement shall be  construed as if such revised Rate was expressly mentioned herein.

3. xxxx        xxxx        xxx”
   4. Similarly Clause 16 of the agreement deals with the foreclosure charges and the relevant portion of the same is reproduced as under:-

16.  Foreclosure:-

16.1 If the Borrower desires to prepay the Loan earlier than as indicated in the Second Schedule, foreclosure charges as indicated in the First Schedule shall be payable by the Borrower on the balance outstanding on the date of such foreclosure in addition to the Loan. The prepayment shall take effect only when cash has been paid in or cheques have been realized”.

5. As per the RBI notification dated 02.08.2019, the Banks are not permitted to charge foreclosure charges /pre-payment penalties on home loans/all floating rate term loans sanctioned to individual borrowers. The relevant portion of the said notification is reproduced as under:-

Levy of Foreclosure Charges /Pre-payment Penalty on Floating Rate Term Loans

       Please refer to our circulars DBOD.No. Dir.BC. 107/13.03,00/2011-12 dated June 5, 2012 and DBOD. Dir.BC. No. 110/13.03.00/2013-14 dated May 7, 2014, in terms of which banks are not permitted to charge foreclosure charges/pre-payment penalties on home loans / all floating rate term loans sanctioned to individual borrowers.

2.    In this connection, it is clarified that banks shall not charge foreclosure charges/ pre-payment penalties on any floating rate term loan sanctioned, for purposes other than business, to individual borrowers with or without co-obligant(s)”.

6. In the case in hand, it is an admitted case of the parties that the complainant is an individual borrower but since the rate of interest has been fixed during the term of loan and is not sanctioned/payable by the complainant on floating rate term, it is clear that the complainant is liable to pay even as per the loan agreement (Annexure R-2) especially when the case of the complainant is not covered under the RBI guidelines, which exempts the borrower from paying the foreclosure charges in case of floating rate term loan.
7. In view of the aforesaid discussion, it is safe to hold that the complainant has failed to prove the cause of action set up in the consumer complaint and the present consumer complaint deserves dismissal.

4.        In the light of the aforesaid discussion, the present consumer complaint, being devoid of any merit, is hereby dismissed leaving the parties to bear their own costs.
5.        Pending miscellaneous application(s), if any, also stands disposed off.
6.        Certified copies of this order be sent to the parties free of charge. The file be consigned.

04/12/2024			Sd/- [Pawanjit Singh] President
			Sd/-
			[Surjeet Kaur] Member
			Sd/-
			[Suresh Kumar Sardana] Member