Haryana

StateCommission

A/547/2016

HDFC BANK LTD. - Complainant(s)

Versus

RAJESH KUMAR - Opp.Party(s)

H.S.KATHPAL

26 Sep 2016

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, HARYANA, PANCHKULA

 

 

                                      First Appeal No.           547 of 2016

                                                Date of Institution:       14.06.2016

                                                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

 

Rajesh Kumar son of Kali Ram, resident of Kothi No.11, Sector 15, 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. Vikas Lochab, Advocate for the respondent.

 

 

O R D E R

 

 

 

NAWAB SINGH J, (ORAL)

 

          Rajesh Kumar-complainant obtained loan of Rs.19,50,000/- from HDFC Bank Limited-opposite party (hereinafter referred to as ‘Bank’) on March 21^st, 2013 to purchase Toyota Fortuner.  The first installment was to be paid on April 05^th, 2013.  The vehicle met with an accident on January 27^th, 2014.  The vehicle was totally damaged. The vehicle was insured with the Insurance Company.  The complainant filed claim with the Insurance Company, which was settled.  He approached the bank to settle his loan account because he wanted to repay the entire amount, which he repaid.  The bank charged 2% penalty on the principal outstanding amount. 

2.      Aggrieved of the same, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986 before District Consumer Disputes Redressal Forum, Sonepat (for short ‘District Forum’) seeking relief of pre-payment/penalty charges of Rs.40,000/-, which the complainant had already paid to the bank.

3.      The bank, in its written version, did not specify the reason of charging penalty rather denied the averments made by the complainant in his complaint.

4.      The District Forum vide impugned order dated April 26^th, 2016 allowed the complaint and directed the bank to refund Rs.31,848/-. 

5.      Aggrieved of the said order, bank has filed the present appeal.

6.      It is not in dispute that loan of Rs.19,50,000/- was taken by the complainant from the bank to purchase Toyota Fortuner and he has repaid the loan in advance alongwith foreclosure/prepayment charges. 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  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”

 

7.      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.

8.      The statutory amount of Rs.16,924/- 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