KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAUD, THIRUVANANTHAPURAM Appeal No.79/2008 Judgment Dated: 05.05.2010 PRESENT:- JUSTICE SHRI.K.R.UDAYABHANU : PRESIDENT 1. The General Manager State Bank of Travancore, : APPELLANTS Head Office, Poojappura, Thiruvananthapuram. 2. The Assistant General Manager – III, State Bank of Travancore, Zonal Office, Region III, Kozhikode. 3. The Branch Manager, State Bank of Travancore, Perinthalmanna. (By Adv.Sri.M.Nizamudeedn) Vs Rajan.K.C., : RESPONDENT S/o.Gopalan Nair K.C., “Ramya House”, P.O.Kollam, Koyilandy, Kozhikkode, Pin.673 307. JUDGMENT JUSTICE SHRI.K.R.UDAYABHANU :PRESIDENT The appellants are the opposite parties/State Bank of Travancore in O.P.61/2004 in the file of CDRF, Malappuram. The appellants are under orders to refund a sum of Rs.7,159/- with interest at 10% per annum from the date of the complaint till realization. The case of the complainant is that he had availed a housing loan of Rs.3,60,000/- from the opposite parties and that he repaid the entire amount on19.12.2003. On repayment the opposite parties levied a sum of Rs.7,159/- as pre-closure charges. It is contented that the above charge for pre-closing loan is illegal and has sought for refund of the same. It is the contention of the opposite parties that the pre-closure charges was levied as per the terms and conditions of the loan agreement. The evidence adduced consisted of the proof affidavit of the respective parties; Exts. A1 to A3 and Exts.B1. The Forum has relied on the decision of Karnataka CDRC in M.Anees –Ur-Rahman and others Vs. Jammu and Kashmir Bank Ltd. and others 2008 CTJ95 (CP) (SCDRC). CDRC, Karnataka held that the realisation of pre closure charges amounted to deficiency in service. It is the contention of the appellants that the pre-closure charge has been levied as per Ext.B1 circular which enabled the opposite parties to collect the same and as per the terms of the agreement sanctioning the loan. We find that the appellants have no case that they are empowered to collect the pre-closure charges of 2% on the outstanding amount, as per any statutory provision or that their alleged right is authorized by law except the case that their own circular authorized the same and except that it was mutually agreed that the appellants can collect pre-closure charges. We find that an applicant for loan has no other option but to sign on the dotted line. It is not proper for the opposite party which is a nationalized bank to exploit the needy. We fully agree with the view taken by the Karnataka state CDRC in M.Anees –Ur-Rahman’s case. It is also to be noted that apart from the rate of interest charged the terms of the loan include quarterly rest as per which interest is added to the capital periodically. We find that depending on the outstanding amount due the pre-closure charges in certain cases would amount to a substantial sum although the instant case it is only Rs.7,159/-. The opposite parties/appellants have no case that they sustained loss on account of the closing of loan account before the completion of the period of repayment which in the instant case is 15 years. It also appears to us that repayment of the loan amount before the completion of the above period is also beneficial to the appellants as in certain cases the appellants would not be able to realize the loan amount on account of varied circumstances. Hence we find that the realization of pre- closure charges amounts to deficiency in service and hence illegal. In the result the order of the Forum below is sustained and the appeal is dismissed. The office is directed to forward the LCR along with the copy of this order to the Forum urgently. JUSTICE K.R.UDAYABHANU : PRESIDENT Kb. | 
