Punjab

Fatehgarh Sahib

RBT/CC/105/2018

Sunil Kumar Garg - Complainant(s)

Versus

PNB Housing Finance Limited - Opp.Party(s)

In person

02 Mar 2023

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, FATEHGARH SAHIB.

RBT No.	:	CC/105/2018
Complaint No.	:	RBT/CC/105 of 2018
Date of Institution	:	22/01/2018
Date of Decision	:	02/03/2023

                  

 

Sunil Kumar Garg S/o Harmesh Kumar Garg R/o Flat No.4B, Divine Apartments, Lohgarh Road Near Muncipal  Park Zirakpur, District SAS Nagar Mohali.

 

                                                                                                                     …………....Complainant

 

                                                Versus

 

1.  PNB Housing Finance Limited, having its registered office at 9^th floor, Antriksh Bhawan, 22 Kasturba Gandhi Marg, Near Connaught Place, New Delhi 110001, through its Managing Director.

 

2. Regional Manager of PNB Housing Finance Limited, having office at SCO no.323,324, 2^nd floor, Sector 35-B Chandigarh (UT)

 

                                                                              ..………....... Opposite Parties

 

 

Complaint under Section 12 of Consumer Protection Act 1986(Old)

Quorum

Sh. Satish Kumar Aggarwal, President

Ms. Shivani Bhargava, Member

Sh. Manjeet Singh Bhinder, Member

Present: None for complainant.

     Sh.Mohit Jaggi, counsel for OPs(through VC)

 

Order By

 

MS. SHIVANI  BHARGAVA, MEMBER

 

 The  complaint has been filed by the complainant  against the OPs (opposite parties),  Under Section 12 of Consumer Protection Act-1986(old) alleging deficiency in service with the prayer for giving direction to the OPs to give Rs.2,47,105/ for charging excessive interest  and   Rs.15,000/- which were paid to UCO Bank Branch Zirakpur to switch over the loan and Rs.1,00,000/- as compensation  for mental and physical harassment  and Rs.10,000 as  litigation  expenses to the complainant .

1.   The brief facts of the complaint are that the complainant had applied for a house loan with the OPs to purchase a flat. After receiving the required documents as well as 24 blank cheques etc.  the loan was sanctioned by the OPs vide sanction letter dated 29.10.2010. Processing charges i.e valuation report as well as legal report and other miscellaneous charges were paid separately. As per Sanction letter itself, the agreed rate of interest for home loan is 9.25% at floating rate, loan amount was Rs.10,35,000/-, loan tenure was 20 years and EMI was mentioned as Rs.9481 (Principal plus interest) but complainant  initially agreed to pay an amount of Rs.10,000/- per month instead of Rs.9481/- so that the loan will be cleared within 15 years instead of 20 years. A cheque bearing no.982969 of Rs.10,35,000/- drawn on PNB branch  Sector 17, Chandigarh, was issued by the OPs to Sukhwant Singh S/o Jagjeet Singh (seller) on 1.11.2010 at Derabassi at the time of execution of the sale deed and said amount was disbursed only on 5.11.2010. The complainant’s loan was sanctioned @ 9.25% per annum and initially the same was kept on increased after every two months till the same reached to 10.75% in span of 9 months from the date of sanction.   Such frequent increase had never  taken place with regard to home loan, which clearly depicts the unfair trade practice on the part of the OPs.  The rate of interest reduced a number of times in last 6 years but OPs had reduced only once.   At present the rate of interest for home loan is 8.35% as per the own website of the OPs and 8.50% for salaried and self employed professional , at  floating interest rate which is going on from last around two and half years but in the case of complainant, the interest rate had not been reduced.  However, when the OPs were not hearing the genuine requests of the complainant then finally the complainant personally gave a legal notice dated 17.11.2017, which replied by e-mail on dated 29.11.2017 and offered that rate of interest could be reduced to 10.20% that too after paying .25% POS+ GST & subject to approval .  When the  rate of interest is floating, then they have to increase/decrease it, as per the RBI guidelines without  charging any fee but the OPs kept on increasing it on  its own without informing  the complainant .  The floating interest rate is adopted only for the reason that, if the interest rate reduced by  the RBI, then consumer will be able to get that benefit.  As per OPs one month’s interest ( i.e from 30.10.2010 to 30.11.2010) was Rs.7984/- on Rs.10,35,000/- ( as shown in account statement ) and in the next month interest amount reduced to Rs.7938/- (due to decreasing principal), which means approximately Rs.2100/- per month is paid towards the principal amount  in  3^rd month  and lateron when instalment was paid as Rs.10,500 then Rs.3000/- per  month was towards principal amount (due to  enhanced EMI and reduced principal) and said principal part kept on increasing approximately @ Rs.600/- PA with the decreasing principal.  The decreasing principal has been calculated on annual  basis though the interest is charged on monthly basis.  Further if the interest rate is taken as to be increased with RBI’s increase and to be reduced with RBI’s decrease then it would meant that OPs are charging 2.5% higher rate of interest (i.e 10.85% instead of 8.35%)., hence a loss of Rs.25,000/- P.A on a loan of Rs.10,00,000/- which comes to be Rs.1,50,000/- for six years.  In addition to the above the OPs had wrongly charged for Rs.10,000/- under different frivolous head. Hence this, complaint.
2.        Notice of the complaint was given to the OPs through registered Post, OPs appeared through their Counsel  and filed  written version.
3.        The complaint has been contested by the OPs, who filed written version ,raised preliminary objections, that the present complaint is based on wrong facts, incorrect appreciation of material on  record and perverse and/or incorrect appreciation of law. The complainant has instituted the captioned complaint with malafide and motivated intentions, to somehow derive some undue and unwarranted monetary  benefit from the OPs. The complainant has not approached this Commission with clear hands.  The Complainant is guilty of concealing material facts from this Commission. The complaint filed by  the complainant is an abuse of the process of law  and is not maintainable. There are intricate questions of law and facts which are involved in the present complaint which can be decided only after the lengthy evidence of the witnesses are recorded  and can only be decided by the Civil Court.  The complainant is not a consumer as per the definition as mentioned under the  Consumer Protection Act.  The complainant contested on merit  that  he  had applied for a house  loan with the OPs.  The complainant was given the loan at then prevalent interest rate.  Since the loan in question was sanctioned on a floating rate of interest, the EMI would differ from time to time because of the said condition.  The complainant paid the instalments without any objection.  The complainant had written a letter dated 17.6.2011 to the OPs that he had no objection to increase the rate of interest and ECS   to be deducted @ Rs.10,500/- Per month.  The complainant  can not  question the rate of interest at this moment when the loan account had been closed.  Bank had charged the rate of interest as per the loan agreement signed by both the parties at the time of agreement. The rate of interest had changed from time to time, being floating in nature. The rate of interest had also come down as per the prevalent market conditions, at that relevant time.  Being variable rate of interest, it was to float upwards/downwards as per the change in the prevailing market conditions and PNBHFR.  Hence the same changes had been effected in the complainant’ account during the tenure of the loan.  The complainant can not seek the benefit of prevalent rate of interest, which  is only for the new customers.  It was clearly update on the website  of the OPs that PNB Housing offers rate of interest, linked to its benchmark rate PNBHFR:

PNBHFR for existing customer (Loan disbursed) acquired before 1^st march 2017: 14.60% P.A.

PNBHFR for new customers ( loandisbursed) acquired on and after 9^thApril 2018 as follows;

PNBHFR HL salaried 8.75%

PNBHFR HL SENP:8.80%

Rate of interest are subject to change at the sole desecration of the PNB Housing.

Therefore, the rate of interest was not changed for the already disbursed loan cases before 1^st March 2017.The OP is not governed by the instructions from the RBI. Rather, the OP is governed by the National Housing Bank(NHB). The complainant had applied for the take over of the loan with UCO Bank with his ownsweet will.The OP has rightly charged Rs.10,000/- for sanction letter, FCL letter, cash handling charges etc.and there is nothing wrong it . Hence prayed fordismissal of complaint with cost.

4. The complainant in support of his complaint tendered in evidence his  affidavit Ex.CW1/1 along with copies of  documents  i.e Ex.C1 copy sanction letter of loan by PNBHFL, EX.C2 copy of Sale deed, Ex.C3 copy of loan closure statement, Ex.C4 copy of   advertisement  showing  Rate of Interest, Ex.C5 copy of legal notice,  Ex.C6 copy of reply to legal notice  sent through email for Rate of Interst  conversion offer by OP, Ex.C.7 Copy of Master  circular fair practice code by NHFB.  In rebuttal the OPs tendered Ex.OP1/1 affidavit of Umesh Sharma Manager Legal, PNBHFL Housing Finance Ltd  along with copies of  documents i.e Ex.OP1 Letter of authority, Ex.OP2 copy of  Resolution,  Ex.OP3 Sanction  Letter, Ex.OP4 loan agreement  for floating Apna Ghar Yojana, Ex.OP5 Consent letter by complainant for increased Rate of Interest,  Ex.OP6 copy of website clip, Ex.C7 statement of account and closed their evidence.
5. Case had been called several times during the day. Neither the complainant nor any representative  appeared on behalf of  the complainant. Therefore, we proceed to decide the  matter on merits from the perusal of file.
6.     We have perused the complaint  and heard counsel for OP  and written arguments submitted by the complainant.
7.                  It is  an admitted fact that complainant had  taken a loan of Rs.10,35,000/- at a floating  rate of interest 9.25% in 2010 from PNB Housing Finance Limited  vide Ex.C1. The said loan was to be payable in 20 years. Later on, it increased after every two months in  span of  9 months from date of sanction at 10.75%. Complainant alleged that OP had charged 2.50% excess rate of Interest from  01.08.2011 to 01.02.2018. The complainant had paid  Rs.7,46,862 till  January 2018, through  EMI &  Part-payment to OPs. By the time,  complainant foreclosed  his  loan account with  PNB housing  Finance Ltd and went to UCO Bank in 2018.  Remaining loan amount of Rs.5,10,000/-  as mentioned  in loan closure statement vide Ex.C3 was overtaken  by UCO Bank in Feb. 2018 @ 8.35% rate of Interest. Complainant paid  total Rs.12,56,862/- to OPs against sanctioned loan amount of Rs.10,35,000/-. As alleged by  the complainant, an amount of Rs.2,47,105/- had been charged as extra amount.

Complainant placed reliance uponthe Judgement: PNB Housing FinanceLtd Vs Kulwant Kaur in FAO no.1123 of 2014 decided on 10.4.2019 by State Consumer Disputes Redressal Commission Punjab.It pointed out that PNB housing finance Limited is governed by RBI instructions and that at the time of anyincrease in therate of interest in the floatingrate of Interest loans, banks needs written consent of the borrower

8.  OPs argued that  complainant is not a consumer under this act and this Commission has no jurisdiction to try the complainant.

It is admitted fact by the OPs thatcomplainant was availing services of PNB housing finance. Any service which is provided by banks is not free of cost and there will be some percentage oftransaction feesdeducted by them. Under Section 2(42) of C.P.A-2019, Banking comesunder the definition of service. It is settled Principle of law that the  remedy Under C.P.A is  an additional remedy other than available remedies. Under Section 100 of C.P.A-2019, Provisions of the act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.  We also placed reliance upon the Judgement in Arun Bhatiya Vs HDFC Bank & Ors(2022), the Supreme Court has reaffirmed that  a person who avails any  banking service falls within the Scope of definition of remedies provided in the Act.

9.  The only defence taken by OPs is that complainant  had signed the loan agreement for floating  Apna Ghar Yojana  after reading its terms &  condition vide Ex.OP4 . As per clause-2.3 (a)  of the Loan agreement the rate of  Interest  applicable  to the said loan agreement shall be on floating  structural rate of Interest changing with the rate of Interest as declared from time to time by PNB Housing  Finance Ltd & termed as bench  mark rate called PNBHFR(PNB Housing  Finance rate) and also  stated in the  schedule. The applicability & periodicity of PNBHFR will be at Sole  discretion  of PNBHFL & its judgement  shall be final & binding upon the borrower.  At present the PNBHFL has Policy  to announce the PNBHFR at the end of each calendar quarter. Clause  2.3(b)- If the company  to be the sole judge, resolves to increase or decrease the applicable  rate of Interest any other  intervals based on the  movement of its (bench mark rate of Interest) the borrower waives the condition of  intimation and no notice will be required. The complainant had given his consent  for increased  Rate of Interest vide Ex.OP5.
10.    We are of the considered view that if one has taken a loan on floating rate of Interest, one should track the changes in interest rates and be prepared for paying a  higher EMI and or increased number  of installments in case of high rate of interest. Floating rate loan means a loan on which  interest rate does not  remain  fixed during the  tenure of the loan. It may increase or decrease. To avoid a variable EMI, one should opt for a loan at fixed rate of interest.

In judgement passed in First Appeal no.454 of 2021, titled as ICICI Bank Vs/ Vishnu Bansal by the Hon’bleNational Consumer Disputes Rredressal Commission, new Delhi where in it has been held that bankwas well within its right to increase or decrease the rate ofInterest as per the floating rate of Interest. A Bank can increase or decrease the rate of Interest under the floating rate of interest provided for in the loan agreement executed betweenthe bank& the complainant and any additional or further consent from the complainantwas not required, the same having been agreed to in the loan agreement itself. There is nothing on record to show that either the bank had fixed therate ofinterest inanyerroneous way contrary to the principles andthe guidelines applicable or had differentiated between similar situated borrower in this respect.

11.  In view of our aforesaid discussion, the present complaint fails  & its dismissed hereby with no order as to cost. Case could not be decided within time due to spread of Covid-19.  Copy of this order be sent to the complainant and the OPs as per rules. File be returned back to District Consumer Commission , Mohali, for proper consignment.

    Pronounced 2 March 2023

                                                           

                                                                      (Satish Kumar Aggarwal)

                                                                              President

                                                                    

    

                                                                                   (Shivani Bhargava)

                                                                              Member

 

                                                                                    ( Manjeet Singh Bhinder )

                                                                                                                                       Member