Complaint filed on: 28.11.2013

                                                      Disposed on: 28.04.2017

BEFORE THE IV ADDL DISTRICT

CONSUMER DISPUTES REDRESSAL FORUM, BENGALURU

 1^ST FLOOR, BMTC, B-BLOCK, TTMC BUILDING, K.H.ROAD, SHANTHINAGAR, BENGALURU – 560 027       

CC.No.2649/2013 & 2650/2013

DATED THIS THE 28^th APRIL OF 2017

PRESENT

SRI.H.Y.VASANTHKUMAR, PRESIDENT

SMT.N.R.ROOPA, MEMBER

Complainants: -                            

1. CC.No.2649/2013

Mr.Venkataramana Bhat Sadangaya

S/o Sri.S.Narayana Bhat

Aged 58 years

c/o M/s.Laveena Engineering

At no.6/1A, 428/488, Arunodaya School Road, Sunkadakatte,

Bengaluru-560091

2. CC.No.2650/2013

1. Mr.Venkataramana Bhat Sadangaya

S/o Sri.S.Narayana Bhat

Aged 58 years

2. Mr.Narayana Bhat Sadangaya, S/o Sri.S.Narayana Bhat,

Aged 56 years

Both c/o M/s.Laveena Engineering

At no.6/1A, 428/488, Arunodaya School Road, Sunkadakatte,

Bengaluru-560091

Both Complaints by Adv.Sri.S.N.Keshava Bhat    

V/s

Common Opposite

Parties in both

complaints:-                     1.  M/s.Bajaj Finance Ltd.

Registered Office at Mumbai, Pune Road, Akurdi,

Pune-411035

Rep.by its Chairman

2.  M/s.Bajaj Finance Ltd.

Branch office at:

8^th floor, Prestige Towers,

Residency Road,

Bengaluru-560025

Rep.by its Manager

By Adv.Sri.K.R.Venkataramana

ORDER

Under section 14 of consumer protection Act. 1986.

SRI.H.Y.VASANTHKUMAR, PRESIDENT 

            In CC.No.2649/13, the Complainant/Venkataramana Bhat Sadangaya, in CC.No.2650/13 both the Complainants namely Venkataramana Bhat Sadangaya and Narayana Bhat Sadangaya/brothers have been alleging the deficiency in service and unfair trade practice against the Opposite parties no.1 & 2 relating to the debiting of charges to their loan accounts.

1a. In CC.no.2049/13 the Complainant has claimed the refund of Rs.16,55,296/- with compensation of Rs.3 lakhs with No Due Certificate relating to his loan account.

          1b. In CC.No.2650/13, The Complainants have claimed the refund of Rs.4,91,019/- with interest and compensation of Rs.2.5 lakhs and the litigation charges.  

          2. The case of the Complainant/Complainants in brief is that they along with their respective spouses started the family firm M/s.Laveena Engineering and applied for the business loan by submitting the loan application in July 2010.  The Opposite parties sanctioned the said loans separately on 29/30.09.10 to the extent of Rs.2,43,85,194/- and Rs.1,16,00,000/- repayable in 120 months with EMI of Rs.3,46,342/- and Rs.1,76,638/- respectively. The said loans were based on creating equitable mortgage of their immovable properties during August-September 2010. The amount of the loans were intentionally disbursed in December 2010.  At the same time they collected the pre-EMI amount, so as to applicable from 30.09.10, thereby wrong entries were made. When they brought during their personal visits to the notice of the Opposite party no.2, the assurances were made to refund the amounts by rectifying the mistakes by reversing the charges or by giving credit for the said unauthorized charges already debited.  But they did not kept up their promises. The distinction between the sanctioning of the loan and disbursing of the loan was deliberately done by the Opposite parties and it amounts to deficiency in service and unfair trade practice. Hence they become entitled to get back the wrongly debited amounts and the interest applied on the sanctioned loan amounts but not on the disbursed amount. Being fed-up with their said attitude and attitude of not issuing no due certificate, they were constrained to close the loan account on 28.05.13 by taking over the liabilities from another NBFC (Non-Banking Financial Corporation). They collected the processing fee to cover the entire loan transactions because of their pre-closure account. They are not liable to pay more than Rs.6,000/- mentioned as non-refundable. Their legal notice dtd.12.08.13 was not replied or complied by the Opposite parties. Hence both these cases were filed.  

2a. In CC.No.2649/13, the Complainant further alleges that the Opposite parties made him to pay insurance amount of Rs.9,85,194/- compulsorily though it is optional and that they delayed the releasing of loan amount by issuing the DD dtd.01.12.10 delivered to them only on 30.12.10.

2b. In CC.No.2650/13, the Complainants further allege that instead of disbursing the sanction loan immediately, they delayed and intentionally disbursed in 03.11.2010 giving credit to their loan account in their separate names. They issued the DD dtd.01.12.10 to them only on 30.12.10. At the same time they collected the pre-EMI amount, so as to applicable from 30.09.10, thereby wrong entries were made. They become entitled to get back the wrongly debited amount of Rs.2,79,895/- and thereby they applied interest on the sanctioned amount but not on the disbursed amount.

          3. In both the CC.No.2649/13 and CC.No.2650/13, the Opposite parties no.1 & 2 in their common/joint version contended that though the Complainant/Complainants filed the loan applications, completed all their required formalities on 30.09.10 and thereby they sanctioned the term loan of Rs.2,43,85,194/- and Rs.1,16,00,000/- respectively. Rs.29,37,129/- and Rs.29,50,000/- were to be handed over after ING Vysya bank loan becomes closed. For their convenience they disbursed the top-up amount on 30.10.10 and further repayment were made through Bank of India of M/s.Laveena Engineering. They have not created equitable mortgage as alleged. The Complainants failed to deposit the pay order favouring ING Vysya bank account for Rs.57 lakhs and Rs.2,33,76,450/- and for releasing top-op portion of Rs.29,37,129 and Rs.29,50,000/- towards the closure of ING Vysya Bank account. The claim that no dues certificate are false as the NOCs were forwarded to them on 31.05.13 and has also been forwards to Fullerton India the concerned NBFC taking over the loan of the Opposite parties. Further, the statement of account is accessible by all customers through online account access on the Opposite party’s website which is also accessible by the Complainants. There is no deficiency in service or unfair trade practice by them. The pay order for Rs.57 lakhs, Rs.2,33,764.55 were refused by the Complainant’s earlier bank ING Vysya with a request to them dtd.28.11.10 to re-issue the same in the name of the Complainant Venkataramana Bhat Sadangaya himself, as the Complainant had to decide to get back the security documents on his own. Thereby they were constrained to issue pay order of the loan amount in the name of the Complainant/Complainants on 01.12.10 mentioning the name of his firm M/s.Laveena Engineering. The Complainant/Complainants have mislead this forum by suppressing the true facts. The Complainant/Complainants himself/themselves opted for insurance by executing the declaration dtd.30.09.10 and it was not made compulsorily as alleged by him/them. His/their loan is not on creating equitable mortgage and it was not possible also, because earlier banker the ING Vysya had the said security documents.  The EMI was collected from the date of disbursement on 30.09.10 and not from the date of delivery of the cheque as per the loan agreement itself and accordingly EMI was collected for the month of November, December 2010, January 2011 and it was not collected wrongfully. The process fee is not refundable one, as per the declaration form signed by the Complainant/ Complainants. Floating rate of interest was applied to his/their loan. The Complainant/Complainants has/have not come to this forum with clean hands. The Complainant/Complainants had taken further additional loans in 2011 also without raising any such objection about the loan of September 2010.  He/they could have opted for arbitration clause no.11. The disputed transactions relating to the period September 2010 becomes barred by limitation as this complaint was filed in November 2013. Hence the complaints become liable to be dismissed with costs.

          4. In CC.No.2649/13, the Complainant and the official of the Opposite parties no.1 & 2 filed their affidavit evidences and have relied on Ex-A1 to A7 and Ex-B1 to B16 documents respectively. Written arguments were filed by both side and both have relied on reported decisions. Arguments were heard.

          4a. In CC.No.2650/13, the he Complainants and the official of the Opposite parties no.1 & 2 filed their affidavit evidences and have relied on Ex-A1 to A7 and Ex-B1 to B14 documents respectively. Written arguments were filed by both side. Opposite parties have relied on reported decisions. Arguments were heard.

          5. The Common consumer disputes that arise for consideration are as follows:

1. Whether the complaint is barred by limitation ?
2. Whether the Complainants establish the alleged deficiency in service and unfair trade practice by the Opposite parties in disbursing the loan and levying the charges ?   
3. To what order the parties are entitled ?

6. Answers to the above consumer disputes are as under:

1) Affirmative

2) Negative

3) As per final order – for the following      

REASONS

          7. Common Consumer Disputes No.1 to 3: The undisputed facts reveal that the Complainant no.1/Venkataramana Bhat Sadangaya and Complainant no.2/Narayana Bhat Sadangaya being brothers with their spouses started M/s.Laveena engineering firm as per the extract of the registrar of the firms Ex-A1. Both of them applied for sanctioning of the family business loan through applications Ex-B1 in July 2010.  The Opposite parties sanctioned the loans on 29.09.10 wide sanction letters Ex-A2. The Opposite parties sanctioned Rs.2,43,85,194/- and Rs.1,16,00,000/- repayable EMI of 120 months.  

8. The Opposite parties issued the DD/Ex-A3 for Rs.2,33,76,450/- dtd.01.12.10 to Venkataramana Bhat Sadangaya and DD/Ex-A3 for Rs.57 lakhs of the same date in favour of Narayana Bhat Sadangaya. It was entered in the respective pass books Ex-A4 & A5 (CC.No.2650/13). The said transactions were also supported by account extract/Ex-A6 of the Opposite parties. Both the brothers got issued the legal notice/Ex-A7 dtd.12.08.13 calling the Opposite parties to pay Rs.21,11,145/- relating to both the transactions and it was served on the Opposite parties wide Ex-A7(b)/postal acknowledgement.

9. The Opposite parties contended that the Complainant brothers through loan application/Ex-B1 had sought loan of Rs.8 crores on 18.09.10 with their spouses. The said required loan was for the purpose of the balance transfer of their business loan with their earlier banker/ING Vysya bank, as undertaken by them wide Ex-B2/letter of undertaking. Subject to the terms & conditions, they agreed to clear the loans of earlier bank ING Vysya shown in Ex-B3. Accordingly they sanctioned Rs.2,43,85,194/- and Rs.1,16,00,000/- wide Ex-B4.  Through request Ex-B5, both the brothers had requested to release Rs.57 lakhs on 30.09.10 favouring M/s.Laveena Engineering and Rs.29.5 lakhs each to their names. The HDFC bank informed the Opposite parties that they had legal issues with the parties namely M/s.Laveena Engineering and ING Vysya Bank ltd. account number ended with 000022. The M/s.Laveena Engineering had the account with Bank of India also as per Ex-B7. The Complainant brothers entered in to loan agreement with the Opposite parties wide Ex-B13, B14 (CC.No.2650/13) and Ex-B16 (CC.No.2649/13) separately.

10. Through Ex-B6 email HDFC bank has informed that Laveena Engineering, ING Vysya Bank ltd with 000022 account was having debiting entries both dtd.11.10.10 for Rs.57 lakhs and Rs.2,33,76,450/- with the further information that there are some legal issues with the parties. The Complainants have their bank accounts with the Opposite parties as per the account extracts Ex-B8 & B9, B12 (Ex-B15 in CC.No.2649/13) separately. The Opposite parties issued 4 “no objection certificates” Ex-B10 (Ex-B13 in CC.No.2649/13), certifying that the Complainants cleared all their dues towards personal/business loan on 30.09.10, 23.08.11, 31.07.12 & 31.07.12 and all the said 4 certificates issued on 28.05.13. On 21.02.13, the Complainant Narayana Bhat raised objections to the Opposite parties alleging that EMI recovered is not as per re-payment schedule.

11. The counsel for the Opposite parties has seriously contended that both the Complaints are hopelessly barred by limitation, the interest for pre-payment in terms of agreement does not become illegal and does not give right to interfere in to the compliance of the agreed terms and thereby the dispute related to the accounts cannot be considered as Consumer Disputes.

12. In support of the above contentions the learned counsel for the Opposite parties has argued that the cause of action arose from 29.09.10/30.09.10 cannot be questioned in both the complaint filed on 28.11.13 which is more than 3 years old [I(2007) CPJ 290], the interest charged in terms of agreement which was signed by both the Complainants with open eyes now cannot be agitated [IV (2007) CPJ 51, II (1996) CPJ 58 NC, I (2013) CPJ 401 NC] and such disputes relating to accounts between the parties does not become the Consumer Disputes and cannot be adjudicated by the forum [II (2005) CPJ 491].

13. Ex-B10 the account extract of Venkataramana Bhat shows Rs.2,43,85,194/- as financed amount on 30.09.10. Ex-B11 shows crediting of Rs.29.5 lakhs to his account ended with no.80116 on 30.09.10. Ex-B15 the account extract shows crediting of Rs.57 lakhs on 30.09.10. All these entries show that the Opposite parties sanctioned the loans and credited the same to the Complainant/Complainants on 30.09.10 itself and thereby there is no delay in disbursing of the loan amounts to their respective loan accounts. Issuing of DD for Rs.2,33,76,450/- wide Ex-A3 dtd.01.12.10 (CC.No.2649/13) and issuing of DD for Rs.57 lakhs wide Ex-A3 dtd.01.12.10 (CC.No.2650/13) have to be explained properly. Ex-A4 & A5 pass books of Complainant brothers show the entries of Rs.29.5 lakhs each on 03.11.10 and those amounts are the part of the sanctioned loan. The entries regarding the pay orders or DD are not reflected in their pass books as they were issued in the accounts of HDFC Bank.

14. As rightly contended by the Opposite parties all these financial transactions are relating to the period 30.09.10 and December 2010. The said payments became the disputed point here, in these cases filed in November 2013 and thereby they are hopelessly barred by limitation.

15. Such loans cannot be disbursed part by part and the loan once disbursed the loan account start operating whether the amount was utilized directly or indirectly and thereby there is no question of believing the version that the amounts in small portions out of the sanctioned limit were issued to them.

16. The contention of the Complainant that by creating the equitable mortgage they got the loan sanctioned is not proved, as the earlier mortgage with earlier banker/ING Vysya Bank was not yet cleared and there was the dispute raised by the said loan accounts by Bank of India and HDFC.

17. The interest at the floating rate collected by the Opposite parties is not proved as against the terms of the loan agreement. The Complainant/Complainants who declared themselves that the process fee becomes non-refundable now cannot urge the refund of major portion on the alleged ground of pre-closure account.

18. The Opposite parties have furnished the statement of account to show that even after 2011 also the Complainant/Complainants obtained additional loans. The content that without raising any objections and by keeping silent all these years without invoking the arbitration clause, the Complainants who enjoyed the loan facilities filed these complaints with malafide intention and they have not approached this forum with clean hands and there is no reason to disbelieve their contentions. Their contentions are supported by above referred decisions.

19. The Complainants have relied on 2012 AIR SCW 1191 to contend that they become the consumer and thereby it is accepted and considered as they are consumers. But their   further argument that non-release of the amount within the stipulated period [I (2007) CPJ 322 NC], against the assurance [III (2006) CPJ 29 NC] cannot be made applicable to these cases and thereby the Complainants do not become entitled to get the reliefs. The cause of action of October to December 2010 cannot be considered as recurring till it is closed in 2011, to question the correctness of the disbursement of the sanctioned loans and the charges thereon [FA 801/2003 of NC dtd.23.10.08].

20. The Complainant in CC.No.2649/13 has contended that the Opposite parties mandatorily made him to pay the insurance charges of Rs.8 lakh and the same denied by the Opposite parties, relying on the executed documents which described the insurance as optional one. The Complainant has not proved the said contentions. 

21. The relief sought for by the Complainant is debiting of charges in granting the loans in September to December 2010 as shown in the tables of the complaints and the relief thereon became barred by limitation u/s 24A of CP Act. Accordingly the Consumer Disputes no.1 is answered in the affirmative, Consumer Dispute no.2 is answered in the negative and the Complainant/Complainants deserve to get the following.

COMMON ORDER

          The CC.No.2649/2013 and 2650/2013 filed by the Complainant/Complainants are hereby dismissed. No order as to costs.

          Supply free copy of this order to both the parties. 

This order shall form part of record in CC.No.2649/2013 and the copy of the same shall be kept in the complaint CC.No.2650/2013 records.

Wide separate order.

          (Dictated to the Stenographer, got it transcribed, typed by her/him and corrected by me, then pronounced in the Open Forum on 28^th of April 2017).

Copies of Documents marked on behalf of Complainant/s:

Copies of Documents marked on behalf of Opposite party no.1 & 2