Haryana

StateCommission

A/544/2016

HDFC BANK LTD. - Complainant(s)

Versus

NAVEEN SANGWAN - Opp.Party(s)

RAMANDEEP KAUR

26 Sep 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, HARYANA, PANCHKULA

 

 

                                      First Appeal No.           544 of 2016

                                                Date of Institution:       13.06.2016

                                                Date of Decision:         26.09.2016

 

HDFC Bank Limited, Branch Office, Kath Mandi, Rohtak Road, Sonepat, Registered Office at HDFC Bank House, Senapati Bapat Marg, Lower Parel (West), Mumbai – 400013 and Regional Office at HDFC Bank House, Plot No.28, Industrial Area, Phase 1, Chandigarh through its Legal Manager Mr. Rajesh Bhatia.

…..Appellant-Opposite Party

 

Versus

 

Naveen Sangwan son of Ram Chander Sangwan, resident of 529/1, Faiz Bazar, Moh. Kot, Sonepat.

…Respondent-Complainant

 

 

CORAM :            Hon’ble Mr. Justice Nawab Singh, President

                             Mr. B.M. Bedi, Judicial Member.

                             Mr. Diwan Singh Chauhan, Member.

                  

For the parties:  Mr. H.S.Kathpal, Advocate for the appellant

                             Mr. Naveen Singh, Advocate for the respondent.

 

O R D E R

 

NAWAB SINGH J, (ORAL)

 

          HDFC Bank Limited-opposite party (hereinafter referred to as ‘Bank’) is in appeal against the order dated May 05^th, 2016 passed by the District Consumer Disputes Redressal Forum, Sonepat (for short ‘District Forum’) whereby complaint filed by Naveen Sangwan-complainant was allowed.  The Bank was directed to refund the amount of Rs.51,770/- to the complainant within a period of 60 days from the date of passing of the order.

2.      On May 23^rd, 2014 complainant took personal loan of Rs.13,88,000/- from the bank.  The loan was repayable in monthly installment of Rs.33,569/- In the month of September, 2015 the complainant requested the bank  to clear his loan.  The bank asked the complainant that he shall have to pay foreclosure/prepayment charges.  As per the complainant, it was told that after one year of advancement of loan, if he makes the prepayment of loan, no charges would be recovered from him. The complainant was asked to deposit Rs.51,770/- as prepayment charges, which he paid.  The complainant requested the bank to refund Rs.51,770/- but in vain.  Hence, the complaint.

3.      The bank, in its written version pleaded that loan amount was paid by the complainant before it was due.  The bank charged the foreclosure/prepayment charges as per the agreement executed. No Objection Certificate was issued to the complainant.   

4.      It is not in dispute that loan of Rs.13,88,000/- was taken by the complainant from the bank and he has repaid the loan in advance alongwith foreclosure/prepayment charges of Rs.51,770/-. Reserve Bank of India has issued notification dated May 07^th, 2014, which reads as under:-

          “RBI/2013-14/582
DBOD. Dir.BC.No.110/13.03.00/2013-14

May 7, 2014

          All Scheduled Commercial Banks

          (Excluding RRBs)

          Dear Sir/Madam

                   Levy of foreclosure charges/pre-payment penalty on Floating Rate Term Loans

Please refer to our circular DBOD. No. Dir.BC.107/13.03.00/2011-12 dated June 5, 2012 on ‘Home Loans- Levy of Fore-closure Charges/ Pre-payment Penalty’.

2. A reference is invited to Part B of the First Bi-monthly Monetary Policy Statement 2014-15 announced on April 1, 2014 proposing certain measures for consumer protection. It was indicated that in the interest of their consumers, banks should consider allowing their borrowers the possibility of prepaying floating rate term loans without any penalty. Accordingly, it is advised that banks will not be permitted to charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect.

Yours faithfully,

          Sd/-

(Prakash Chandra Sahoo)

Chief General Manager”

 

5.      A reading of the aforesaid notification shows that bank is not permitted to charge prepayment/foreclosure charges from borrower.  The guidelines/notifications issued by the Reserve Bank of India are binding on all the banks in India. Thus, the order under appeal requires no interference. The appeal consequently fails and is hereby dismissed.

6.      The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the complainant against proper receipt and identification, in accordance with the rules, after the expiry of period of appeal/revision, if any.

 

Announced 26.09.2016

(Diwan Singh Chauhan Member

(B.M. Bedi) Judicial Member

(Nawab Singh) President

 

U.K