The brief facts of the complaint are that in the year 2012, the complainants had a home loan running from India Bulls Housing Finance Ltd. which the complainant wanted to be taken over by OP at a better rate of interest with Top up. The complainant applied for home loan with the OP and the OP sanctioned the loan vide letter dated 31/07/2012.

At the time of sanctioning the loan, it was written and agreed between the parties that there shall be NIL foreclosure charges/ pre-payment penalty in the said loan at the time of foreclosure of the said loan. In the month of March,2014 the complainant transferred the said home loan from OP to some other bank at a competitive rate of interest, as such the complainant requested for foreclosure to the OP vide letter dated 26/03/2014. After repeated follow up, finally, in the end of January, 2015 OP accepted the foreclosure request subject to the pre-payment penalty @ 2% + 12.36% ST to the tune of Rs. 93,960.13/-. Complainant requested to the OP on several occasion to remove the foreclosure charges as the same was not agreed at the time of taking the loan, but nothing was heard on behalf of OP. The complainant being trapped and having no other option, paid a sum of Rs. 93,960.13/- to the OP (under protest).

 The complainant requested the OP to refund the aforesaid amounts illegally charged but to no effect.  It is alleged by the complainant that the OP has been guilty of deficiency in service as a result of which they have suffered huge monetary loss.  Hence, this complaint.

 The OP bank has contested the complaint and has filed a written statement.  It has denied any deficiency in service on its part and has claimed that the OP never committed any error, omission or negligence and it is acting within the cannon of law.  It is further stated that an amount of Rs. 93,960.13/- was charged rightly and in consonance of said circular issued from National Housing Bank, as per RBI guidelines which permitted Housing Finance companies to levy foreclosure/ Pre-payment charges on foreclosure of floating terms loans apropos companies, firms etc. and prayed for the dismissal of the complaint.

Both the parties have filed their evidence by way of affidavit.
We have heard arguments advanced at the bar and have perused the record.

Some facts are not disputed in this case.  It is admitted by the counsel for the OP that they had levied the foreclosure charges on the home loans, under the pretext that foreclosure charges are neither illegal nor unknown in the banking industry.  Such charges are rightly levied by the banks as per RBI guidelines which permitted Housing Finance companies to levy foreclosure/ Pre-payment charges on foreclosure of floating terms loans apropos companies, firms etc.

 However, we are not convinced with the contention of the counsel for the OP.  The complainant has placed on record the copy of the offer letter of home loan in which it is clearly mentioned that “pre-payment charges would be Nil” hence, the OP cannot take the shelter of the circular dated 03/09/2014.

Moreover, it was held by the Hon’ble State Commission, Delhi in State Bank of India V/s Usha Vaid (Dr.) & Anr. II (2008) CPJ 166 that

“No bank or for that purpose finance companies can be fallowed to indulge in restrictive trade practice by binding the consumer to go on availing loan even if rate of interest charged by the said bank is much higher than the other banks and any such clause which operates adversely to the consumer like Clause 4 has to be held as void and, therefore, not enforceable.”

 In the present case also the complainant has availed the facility of transfer of loan from OP to some other bank, hence, the foreclosure charges levied by the OP bank is illegal.

In view of the above discussion, we hold OP guilty of deficiency in services and direct it as under:

1.   Refund to the complainant a sum of Rs. 93,960.13/- alongwith interest @ 9% p.a. from the date of filing of this complaint i.e. 14/07/2015 till payment.

2.    To pay to the complainant a sum of Rs. 10,000/- as compensation for the pain and agony suffered by him.

3.    To pay to the complainant a sum of Rs.05,000/- as a cost of litigation.

 The OP shall pay this amount within a period of 30 days from the date of this order failing which they shall be liable to pay interest on the entire awarded amount @ 9% per annum.  If the OP fails to comply with this order, the complainant may approach this Forum for execution of the order under Section 25/27 of the Consumer Protection Act.

Copy of the order be made available to the parties as per rule.  File be consigned to record room.

          Announced in open sitting of the Forum on 18/03/2020