PER  JAGROOP  SINGH   MAHAL, MEMBER

          This is OPs’ appeal against the order dated 18.11.2010 passed by the learned District Consumer Disputes Redressal Forum-II, UT, Chandigarh (hereinafter referred to as the District Forum) whereby the complaint was allowed  and the OPs were directed to refund total amount of Rs.1,63,170/- charged from the complainant as foreclosure charges @ 2.25% along with interest @ 9 % p.a. from date of deposit i.e. 14.03.2008  till its payment alongwith  Rs.7,000/- towards litigation expenses. This order was to be complied with by the OPs within 45 days from the date of receipt of its certified copy, failing which the OPs were liable to refund the aforesaid amount i.e. Rs.1,63,170/- to the complainant along with penal interest @ 18% p.a. from the date of its deposit i.e. 14.03.2008 till its realization besides costs of litigation.

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2.                 Briefly stated, the facts of the case are, that the complainant availed two house loans for an amount of Rs.75 lacs and Rs.29 lacs vide loan agreement dated 31.01.2004 and 17.02.2005 respectively and was regularly paying the loan installments. Thereafter, he approached the Bank for prepayment of the loan amount against the said two loan accounts. It was alleged that as per the statement issued by OPs, he was asked to pay the foreclosure charges of Rs.1,14,850.60P and Rs.48,320.48 @ 2.25% (totaling Rs.1,63,170/-) on the outstanding principal amount which  were paid by him on 14.03.2008 under protest as

charging of foreclosure charges @ 2.25% on the outstanding principal amounts was against the terms and conditions of loan agreements and he was not liable to pay the same.  It was pleaded that despite requests vide letters dated 20.04.2008 and 12.01.2009 for refund of the pre-payment charges, the OPs had done nothing to redress his grievance. Ultimately a legal notice dated 12.6.2009 was served upon the OPs but to no effect.  Hence this complaint.       

3.                           The OPs in their written reply admitted advancement of loan and the schedule of repayment. It was pleaded that  as per the sanction letter, it was agreed between the complainant and the OPs that in case the complainant wanted to make prepayment of the loan amount, he shall pay a prepayment charges of 2% including the amount prepaid in last one year. Therefore, the OPs rightly charged  the amount of Rs.1,63,170/- as pre-payment charges @ 2.25% towards the loan accounts.. Pleading no deficiency in service on their part, the OPs prayed for the dismissal of the complaint.

4.                           Parties led evidence in support of their case. 

5.                           After hearing the ld. Counsel for the parties and on going through the evidence on record, the ld. District Forum allowed the complaint, as stated in the opening para of this order

6.                           Feeling aggrieved, the instant appeal has been filed by the appellants/OPs.

7.                           The impugned order was passed by the learned District Forum on 18.11.2010 and certified copy was sent to the appellant  but could not be delivered as the bank was alleged to have shifted.  It was then obtained by hand by the Counsel of the appellant on 28.3.2011.  The appeal could be filed by the appellant till 28.4.2011 but it was filed on 30.9.2011 with a delay of 156 days. The appellant submitted an application for condonation of delay alongwith the affidavit alleging that the Counsel for the appellant was suffering from Bilateral MCA territory-lacunar infracts regarding which MRI was conducted on 11.10.2010. The draft for filing the appeal was received by him on January, 2011 but due to the disease referred to above he missed to file the appeal. It is alleged that the order and the draft was misplaced by the Counsel and therefore, the appeal could not be filed in time. The papers were retrieved on 28.3.2011 but he being confined to bed from 10.4.2011 for about 2 months could not file the same. The counsel for the appellant became aware of the mistake when a notice was received in Execution Application of the case and bank was required to put in appearance on 19.8.2011.  The documents were traced out on 25.9.2011 and thereafter, the appeal was filed on 30.9.2011.

8.                           We have heard the arguments of the learned Counsel for the appellants and have perused the record as to whether the delay in filing the appeal should be condoned and the appeal should be admitted for regular hearing or not.

9.                           In para No.9 of the application the Counsel for the appellant has mentioned that the draft for filing the appeal was sent to him in the month of January, 2011 but due to his illness he missed to file the same.  It shows that the appellants had already received the copy of the order before January, 2011 and a draft for filing the appeal had already been prepared.  The Counsel for the appellants has submitted the record about his illness and treatment during October, 2010 and thereafter, on 21.2.2011, 8.3.2011 9./15.4.2011, there is however, no document to suggest if he was unwell or remained under treatment in the months of November, December and January, 2011. He got certain tests conducted in March 2011 and April 2011 also but again there is no evidence, to suggest if there was any illness or treatment during the months of May to September, 2011.  Otherwise also the learned Counsel did not produce any evidence to suggest if he had not been attending to his work as lawyer during those days or had not been preparing and filing complaints/appeals during the said period or had not been attending to the Courts proceedings.  The illness during the said period therefore, cannot be made a basis to justify the delay when there was no such disability on the part of the lawyer to file the appeal and he had all along been appearing in the courts and attending to his work as a lawyer.

10.                       It is then submitted that in March, 2011 the documents had been retrieved. Thereafter,  there was no illness or disability on the part of the Counsel during the Months of May to September, 2011. It is alleged by the Counsel for the appellant that he had misplaced the brief due to which the appeal was not filed.  This argument also cannot carry wait because it was for the appellants to pursue the matter and inquire about next date fixed in the appeal and had they adopted this procedure it would have come to light as to whether the appeal had been filed promptly or not.  The misplacing of the brief or forgetting to file appeal therefore, cannot be said to be a justification to condone the delay in filing the appeal for about 156 days.

11.                       The learned Counsel for the appellant has argued that if the delay is not condoned and the appeal is dismissed that would cause irreparable loss to the appellant and that it is necessary to ensure that a party should not suffer due to the fault of its lawyer.  This proposition of law cannot be made a ground to condone the delay and entertain the appeal, which has been filed beyond the period of limitation. Such a plea was raised before the Hon’ble National Commission in case of Mohinder Gupta Vs. Frontier Constructions Co. &Ors original petition No.146 of 1994 and was examined and rejected by the Hon’ble National Consumer Disputes Redressal Commission vide order dated 21.11.2001 as follows;

‘We would say that this is usual type of excuse which perhaps parties advance in order to get adjournment. If the complainant alleges negligence on the part of her lawyer, it can be deficiency of service on the part of the lawyer.  We cannot give much credence to the argument that a client should not suffer for the fault of his advocate. We do not think that a consumer Court should fall for such an argument. If a lawyer is negligent he can well be proceeded against for deficiency of service.

          In view of the provisions of the Consumer Protection Act, 1986 a party would no longer suffer due to the lapses of its Counsel because it can claim adequate compensation even from the lawyer for the deficiency in service on his part and therefore, virtually there would be no loss to the party due to the negligence of its lawyers.

12.                       In view of the above discussion, we are of the opinion that no grounds are made out to condone the delay of 156 days in filing the appeal and the application moved by the appellant is according dismissed.

13.                       Even if for arguments sake it is presumed that the delay is condoned, the appellant has no case on merits to admit the appeal for regular hearing.

14.                       As per para 2.7 of the agreement Annexure C-1 and C-2 the complainant was liable to pay pre-payment charges. Annexure C-3 and C-5 are the letters issued by the appellants-bank for prepayment of the loan. It is clear from these letters that no pre-payment charges were demanded from the complainant. As per Annexure C-3 and C-5 the bank rather demanded and recovered from the complainant foreclosure charges @2.25% at outstanding principal.  The learned Counsel for the appellants could not point out in the agreement Anenxure C-1 and C-2 if the complainant was liable to pay foreclosure charges. The prepayment and foreclosure charges are not one and the same thing. These denote two different situations and are not interchangeable for each other.

15.             We have examined both the terms “foreclosure” as well as “prepayment” to find out whether the two are interchangeable or synonyms. In case both these terms relate to one and the same thing, then the OPs would certainly be entitled to recover prepayment charges from the complainant. However, the factual position is otherwise.

       As per the Concise Oxford Dictionary Ninth Edition at page 529 ‘foreclose is defined as follows:

1.                 stop (a mortgage) from being redeemable or (a mortgager), from redeeming esp. as a result of defaults in payment

2.                 exclude, prevent.

3.                 shut out; bar.

       Collins Concise Dictionary Third  Edition at page 496 defines ‘foreclose’ as under :-

“Foreclose – closes, -closing, -closed

1.     Law. to deprive (a mortgagor, etc.) of the right to redeem (a mortgage or pledge). 2. to shut out; bar.

                   3. to prevent or hinder……… -foreclosure n.”

          Mitra’s Legal & Commercial Dictionary Fifth Edition 1990 at page 323 defines ‘foreclosure’ as a legal term which implies that the relief given be equity against forfeiture of the security is withdrawn. The effect of foreclosure is that the conditional conveyance in a mortgage becomes absolute and the property mortgaged vests absolutely in the mortgagee. 

          The Law Lexicon  by P Ramanatha Aiyar 2nd Edition 1997 at page 744 defines ‘foreclosure’ as follows :-

          “Foreclosure in theory, at least, is merely a decree determining the equitable right of a mortgagor to redeem after the mortgagee‘s estate has become absolute at law. [See Bonham v. Necomb, (1806 1 Vern 232; 23 ER 435; Sampson v. Pattison, (1842) 1 Hare 533; 66 ER1143; 58 RR 178; Carter v. Wake, (1877) 4 Ch D 605.]  The term is also loosely applied to any of the various methods statutory or otherwise, known in different jurisdictions, of enforcing payment of the debt secured by a mortgagee, by taking and selling the mortgaged estate.”

16.                    It is therefore, clear that foreclosure charges relate to the mortgage of immoveable property and is not synonymous for prepayment charges. The OPs could recover foreclosure charges only, if there was an agreement to recover the same but as discussed above there is no such agreement between the parties to pay/recover foreclosure charges. The OPs therefore, could not recover foreclosure charges from the complainant on the assumption that since he is liable to pay pre-payment-charges, he should therefore, pay foreclosure charges also.  The recovery of foreclosure charges is therefore, contrary to the loan agreement and the appellant had no right to recover the same.  The impugned order passed by the learned District Forum directing the appellant to refund the same is perfectly in order.

17.                    In view of the above discussion, even if the delay in filing the appeal had been condoned the OPs/appellants have no case on merits to admit this appeal for regular hearing.

18.                     We accordingly dismiss the application for condonation of delay. The appeal is consequently dismissed with no order as to costs.

                    Copies of this order be sent to the parties free of charge.

Pronounced.                                                                                      Sd/-

18.10.2011                                         [JUSTICE SHAM SUNDER]

PRESIDENT

Sd/-

[NEENA SANDHU]

MEMBER

Sd/-

[JAGROOP SINGH MAHAL]

MEMBER

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