Chandigarh

DF-II

CC/51/2013

Avtar Singh - Complainant(s)

Versus

M/s Kotak Mahindra Prime Ltd. - Opp.Party(s)

Sandeep Bhardwaj,Adv

25 Mar 2015

ORDER

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

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Consumer Complaint  No	:	51 of 2013
Date  of  Institution	:	05.02.2013
Date   of   Decision	:	25.03.2015

 

 

 

 

 

Avtar Singh s/o Jawala Singh r/o House No.74, Phase-II, Mohali, Punjab.

                 ...  Complainant.

Versus

1]  M/s Kotak Mahindra Prime Ltd., SCO No.153-155, Second Floor, Sector 9-C, Chandigarh through its Branch Manager/Authorized representative.

 

2]  M/s Kotak Mahindra Prime Ltd., 36-38-A, Nariman Bhawan 227, Nariman Point, Mumbai through its Managing Director /Authorized representative.

…. Opposite Parties.

 

 

BEFORE:  SH.RAJAN DEWAN                 PRESIDENT

         SH.JASWINDER SINGH SIDHU       MEMBER

        

 

Argued By:  Sh.Sandeep Bhardwaj, Counsel for complainant.

Sh.Rajneesh Malhotra, Counsel for OPs.

 

 

PER JASWINDER SINGH SIDHU , MEMBER

 

 

          As per the case of the complainant, he is owner of three vehicles which are being used by the complainant alongwith his family members. According to the complainant, he got financed three vehicles i.e. Innova, Endeavor and Skoda vide three loans bearing Nos.4885780, 4885800 and 4885760, all dated 27.09.2008 respectively.  It has further been averred that the complainant is running a construction business and he used to visit sites by using the Skoda vehicle and as such the vehicle was registered in the name of the company.  It has further been averred that all the vehicles were purchased for self-use by the complainant and his family.  It has further been averred that due to some reasons, some dispute arose between the parties which resulted into litigation. According to the complainant, the Opposite Parties approached him and told to settle the matter by closing all the three loan accounts.  The complainant was informed that he had to pay an amount of Rs.5,09,960/- in order to close all the three loan accounts and accordingly, he paid Rs.5,09,960/- through cheque No.268889 dated 24.09.2011, Annexure C-1. The copies of the receipts are Annexures C-2 to C-4.  It has further been averred that on asking of the complainant, the Opposite Parties handed over a letter dated 24.09.2011 mentioning therein that the NOC would be released after the foreclosure of the loan within 15 working days. The complainant approached the Opposite Parties in order to ascertain as to why the NOC had not been issued till date but he was informed that there was still amount outstanding towards the loan account which was a shocking moment for him.  Ultimately, the complainant got served a legal notice dated 18.11.2011, Annexure C-6 upon the Opposite Parties which replied vide reply dated 06.12.2011, Annexure C-7.  It has further been averred that the Opposite Parties did not issue any demand notice or letter within 15 days or thereafter mentioning about any outstanding amount towards the loan.  The act and conduct of issuance of the letter on the date of receiving the amount on 24.09.2011 itself proves that the amount was received against the three loan account under the pretext of closing all the three accounts.  According to the complainant, he had paid the entire installment to the Opposite Parties and paid last three installments together on 24.09.2011 towards all three loan accounts. A copy of the loan account statement is Ann.C-8 to C-10. Hence, this complaint has been filed alleging the said act & conduct of the OPs as gross deficiency in service, which caused mental & physical harassment to the complainant apart from financial loss.

 

2]       The Opposite Parties No.1 & 2 have filed joint reply and admitted the grant of loans in question and execution of separate loan agreements (Ann.R-1 & R-3). It is stated that the loans in question were taken for the purchase of vehicles duly financed by Avtar Singh & Co., who is not a party to the present case, hence complaint is bad for mis-joinder of wrong party. It is denied that the loans stands repaid as alleged. It is submitted that due to insufficient funds maintained by the complainant in his bank, the EMIs of the loans were not credited to the account of the respondents and when arbitration proceedings were initiated, the complainant stated paying the EMIs against the loan though irregular. It is denied that any settlement has been arrived between the complainant and the company or that any full and final payment of Rs.5,09,960/- was received from the complainant. The letter dated 24.9.2011 issued is admitted and the outstanding dues against the three loan accounts are to be paid by the complainant. It is also submitted that the complainant is misreading the letter dated 24.9.2011 that the complainant had to pay Rs.509960/- as full and final payment.  It is pleaded that the NOC will be released after foreclosure of the loan accounts within 15 days, meaning that the company was to release the NOC after the loans had been foreclosed by the complainant by clearing/paying all dues, which has not been done by the complainant. The statements of all three loan accounts are annexed as Ann.R-4 to R-6.  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 on the ground that he had availed three different loans against his different personal vehicles, which were being used by him and his family members for the personal use, of these one vehicle (Skoda Octavia bearing Regd. NO.CH-03U-0074) was registered in the name of Avtar Singh Construction Company Pvt. Ltd.  The other two vehicles namely an Innova bearing Regd. No.CH-03U-3754 and another Ford Endevour bearing Regd. No.CH-04A-7474, which are in the name of the complainant himself. 

 

6]       The three different loans bearing No.4885760, 4885780 and 4885800 for an amount of Rs.10.00 lacs, Rs.9.00 lacs and Rs.16.15 lacs respectively, each of these beginning from 15.10.2008 for a period of 3 years i.e. 36 months with an EMI of Rs.36,270/-, Rs.32,644/- and Rs.39,626/- respectively, were disbursed by the Opposite Parties in favour of the complainant.  The complainant has claimed that he has been regularly paying the installments against all the three aforementioned loans and that he had completely paid the 36 EMIs against each of these loans amounting to Rs.13,05,720/-, Rs.11,75,184/- and Rs.21,08,736/- respectively, which included the interest part along with the Principal loan amount.  The complainant during this period went into litigation against the Opposite Parties and even the Opposite Parties themselves opened litigations against the complainant. The complainant claims that in order to settle the matter amongst themselves, an agreement was reached between the parties, on the basis of which the Opposite Parties asked the complainant to pay an amount of Rs.5,09,960/- and also withdraw the pending litigations against each other with respect to the subject agreement and that the Opposite Parties will release the NOC after the foreclosure of the loan within 15 working days. 

 

7]       The complainant claims that he made the payment of Rs.5,09,960/- vide cheque dated 24.9.2011 drawn on UCO Bank (Ann.C-1).  Thus fulfilling the part of the obligation as per the agreement reached between the parties and also had withdrawn pending litigations at that point of time against the Opposite Parties, but is aggrieved of the act of the Opposite Parties in demanding more amount before issuing any NOC against these loan agreements in question.  Thus, alleging deficiency in service on their part, the complainant has sought the quoted relief.

 

8]       The Opposite Parties while defending themselves have claimed that the complainant had failed to settle the entire loan amount as agreed for the reason that the amount deposited by the complainant on 24.9.2011 was only towards the outstanding principal amount, whereas in order to foreclosure the loan accounts, the remaining outstanding in each such accounts were required to be paid by the complainant before seeking the NOC as agreed between them. The Opposite Parties claimed that until & unless the outstanding amount against the loan accounts is not paid in totally, no NOC can be issued and furthermore, these outstanding amounts are attracting interest as per terms & conditions of the agreement, which are increasing each day. Thus, claiming no deficiency in service on their part, the OPs have sought dismissal of the complaint with heavy costs.

 

9]       We have minutes gone through the complaint of the complainant, reply of the OPs along with the relevant annexures relied upon by them and are of the opinion that the complainant who had availed three different loans of which two were in his personal name and the third one was in the name of Avtar Singh Construction Company Pvt. Ltd., which too was a personally owned company of the complainant, therefore, for the purpose of all these three loans secured from the Opposite Parties, the complainant is a consumer qua them. The complainant who had availed all these three loans on 27^th Sept., 2008 with the first EMI starting from 15.10.2008 in each of these loans.  The total EMIs against each such loan was for a period of 3 years totaling to 36 numbers. The Opposite Parties, while calculating the amount of EMI in each of these loan accounts added the interest part to the principal amount, on the agreed rate as per the agreement. All these loan accounts were to complete on the payment of last EMI on 15^th Sept., 2011, for all purposes this date is very important. 

 

10]      It is admitted case of the parties that they went into multiple litigation against each other during the tenure of these three loans and it was only after the expiry of the loan period, they preferred to enter into an agreement to settle the matter amongst themselves on the score that the complainant would pay an amount of Rs.5,09,960/- to the OPs and both the parties would withdraw all pending litigations against each other.  The complainant insisted to the Opposite Parties to issue a letter to this effect, which is Ann.C-5, dated 24.9.2011.  The complainant after making the payments of Rs.5,09,960/- asked the OPs to issue NOC, but the Opposite Parties demanded some more amount, which annoyed the complainant, resulting into the present complaint. 

 

11]      The only two contentious issues with regard to the wordings/language used by the Opposite Parties in its letter Ann.C-5, dated 24.9.2011 are (i) Principal outstanding and   (ii) release of NOC after foreclosure of the loan.  Dealing with these two issues one by one, the matter with regard to the principal outstanding against the complainant has not been quoted in each of the three loan accounts by the Opposite Parties on the date of issuance of the letter i.e. 24.9.2011.  As we have already observed earlier that all these three loan accounts had already completed their tenure of 3 years as on 15.9.2011 as per Ann.R-4, Ann.R-5 & Ann.R-6 and as per the details of Ann.C-8, C-9 & C-10, the complainant had paid the entire amount of loan amount of Rs.13,05,720/- Rs.11,75,184/- and Rs.21,08,736/- on 24.9.2011, after the payment of Rs.5,09,960/-.  The Opposite Parties have nowhere explained that whatsoever the amount that remained against the complainant against each such loan was the principal outstanding and the total amount which the complainant had paid till 24.9.2011 was adjusted under different heads whatsoever they may be.  Therefore, without giving any details of such break-up, the Opposite Parties cannot claim such a huge amount towards principal outstanding. It is necessary to quote here that when this Forum has repeatedly asked the Opposite Parties to explain the manner in which the loan has been calculated, the official of the Opposite Parties (Sh.Puneet Sharma, Collection Executive), who had come present in the Forum had disclosed during the course of proceedings on 4^th Sept., 2014 that the rate of interest @18.55% (FIXED) mentioned on the title of the loan schedule (Page No.27 & 46) was to be calculated on flat rate.  However, the Opposite Parties were asked to place on record the details of the principal and the interest already paid by the complainant against all three loan accounts, but the Opposite Parties failed to come up with any such details till the case was finally reserved for orders.  Hence, we are left with no other option, but to believe that the Opposite Parties are not interested in helping this Forum to reach a definite conclusion about the principal outstanding as on 24.9.2011 and therefore, the amount so mentioned in their letter Ann.C-5 i.e. Rs.5,09,960/- was the principal outstanding, which the complainant had paid.    

 

12]      Coming to the second aspect of “foreclosure of the loan” as per the wording of the letter Ann.C-5, it is necessary to visit the loan agreement annexed as Ann.R-1 (Page No.27) wherein under the heading Prepayment Interest – 5% of Principal Outstanding is mentioned and the terms & conditions of the agreement relating to the Prepayment are found enshrined in Clause 15 under the heading ‘Prepayment of the Loan’.  It is a common knowledge that prepayment of loan is also explained as foreclosure of the loan and this process can be initiated by a borrower and on such request the lender allows such request in terms of the charges recoverable for that purpose.  However, under no circumstances a pre-payment or foreclosure of loan can be made after the expiry of the tenure of the loan account as is the case of the complainant. By no stretch of imagination the case of the complainant can be termed as a foreclosure of the loan account on 24.9.2011 (Ann.C-5) for the reason that the tenure of the loan agreement had expired on 15.9.2011. Therefore, the Opposite Parties having incorporated the word “foreclosure” in their letter dated 24.9.2011 have tried to give an unnecessary twist to the agreement that had already been reached between the parties and we feel that by such additions, the Opposite Parties have tried to squeeze extra money from the complainant on account of extra charges, even though the terms & conditions of the loan agreement are contrary to such a demand after the completion of the tenure of the loan agreement on 15.9.2011.  Therefore, the Opposite Parties are not entitled to recover any other amount except for Rs.5,09,960/- as quoted in letter dated 24.9.2011 (Ann.C-5) and such a demand is illegal, unlawful and against the principles of natural justice.

 

13]      In the light of above observations, we are of the concerted view that the Opposite Parties are found deficient in rendering proper service to the complainant and also having indulged into an unfair trade practice. Hence, the present complaint of the Complainant is allowed qua OPs jointly & severally. The Opposite Parties are directed jointly & severally to issue No Objection Certificate (NOC) in favour of the complainant against all three loan accounts in question. All other demands raised by the Opposite Parties as on 24.9.,2011 are quashed and the Opposite Parties are saddled with a compensation to the tune of Rs.25,000/- along with litigation expenses amounting to  Rs.10,000/-.   

         The above said order shall be complied within 45 days of its receipt by the Opposite Parties; thereafter, they shall be liable for an interest @18% per annum on the amount of compensation of Rs.25,000/- from the date of this order till it is paid, besides paying litigation expenses of Rs.10000/-. 

 

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

Announced

25^th March, 2015                                                           Sd/-  

 (RAJAN DEWAN)

PRESIDENT

 

 

 

Sd/-

 (JASWINDER SINGH SIDHU)

MEMBER

Om                                                                                                                        

 

 

DISTRICT FORUM – II

CONSUMER COMPLAINT NO.51 OF 2013

PRESENT:   None   Dated the 25th day of March, 2015

O R D E R                        The applications dated 04.09.2014 and 17.10.2014 moved by the parties are only with regard to place on record the documents.  Though the parties have contested the same, but as on 23.2.2015, the case was still open for filing of evidence by the parties, being the last opportunity on the given date, therefore, the parties could have placed on record any document favouring them, even without moving such applications.  Therefore, in the interest of justice, we allow these applications and order the relevant documents be taken on record.                       Vide our detailed order of even date, recorded separately, the complaint has been allowed against Opposite Parties.                    After compliance, file be consigned to record room.

 

(Jaswinder Singh Sidhu)	(Rajan Dewan)
Member	President