Chandigarh

StateCommission

A/111/2015

Ram Lal Garg - Complainant(s)

Versus

Reliance Capital Ltd. - Opp.Party(s)

Sandeep Khunger, Adv.

27 May 2015

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

First Appeal No.	:	111 of 2015
Date of Institution	:	26.05.2015
Date of Decision	:	27.05.2015

Ram Lal Garg, House No.2202, Sector 38-C, Chandigarh.
Shashi Bala, W/o Ram Lal Garg, House No.2202, Sector 38-C, Chandigarh.

……Appellants/Complainants

Versus

Reliance Capital Ltd., SCO No.309-310, First Floor, Sector 35-B, Chandigarh through its Manager.
Reliance Capital Ltd., H-Block, First Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai – 400710 through its Managing Director.

....Respondents/Opposite Parties

Appeal under Section 15 of the Consumer Protection Act, 1986.

BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT.

SH. DEV RAJ, MEMBER.

SMT. PADMA PANDEY, MEMBER.

Argued by:

Sh. Sandeep Khunger, Advocate for the appellants.

PER DEV RAJ, MEMBER

This appeal is directed against the order dated 31.03.2015 rendered by the District Consumer Disputes Redressal Forum-II, UT, Chandigarh (hereinafter to be called as the District Forum only) vide which, it allowed the complaint filed by the complainants (now appellants) and directed the Opposite Parties (now respondents), jointly and severally, as under:-

“10] In the light of above observations, we are of the concerted view that the Opposite Parties are found deficient in service to the complainants. Hence, the present complaint of the Complainants is allowed qua OPs jointly & severally. The Opposite Parties are directed jointly & severally to pay an amount of compensation to the tune of Rs.20,000/- along with litigation expenses amounting to Rs.7000/-

The above said order shall be complied within 45 days of its receipt by the Opposite Parties; thereafter, they shall be liable for an interest @18% per annum on the amount of compensation of Rs.20,000/- from the date of this order till it is paid, besides paying litigation expenses of Rs.7000/-.”

2. The facts, in brief, are that the complainants were sanctioned loan amount of Rs.1,14,00,000/- by the Opposite Parties against property for their personal use and construction of house. loan agreement was executed between the complainants and the Opposite Parties (Annexure C-1). It was stated that the said loan was to be repaid in 180 monthly installments with rate of interest as 12.50% floating with PLR-0.50%. It was further stated that, as per the agreement, in case of foreclosure of loan, the foreclosure charges were 5% within 12 months, from the date of disbursement of loan and 2% after 12 months from the date of disbursement thereof. It was further stated that the rate of interest was increased by the RBI, from time to time, and the same was, accordingly, increased by the Opposite Parties also from 12.50% to 14.25%. It was further stated that thereafter the RBI reduced the rates of interest, but in-spite of that, the Opposite Parties did not reduce the same, though the loan obtained by the complainants was on floating rate of interest. It was further stated that the complainants obtained the statement of account on payment of Rs.200/- (Annexures C-2 & C-3) and asked the Opposite Parties to foreclose the loan, but they agreed to reschedule the same (loan) on reduced rates and got a blank document and acceptance letter signed from them (complainants).

3. It was further stated that, ultimately, the said loan was got foreclosed by making the payment of loan amount as well as Rs.2,21,345.16Ps as 2% foreclosure charges (Annexures C-6 & C-7). It was further stated that in April, 2013, when the complainants approached the Punjab National Bank for availing of some loan facility, they were informed that the CIBIL record was showing their negative credibility, as the loan account with Reliance Capital was being shown as settled and, as such, the loan could be disbursed at a higher rate of interest. It was further stated that when the Opposite Parties refused to remove the word ‘Settled’ from their accounts and updation of status of loan (Annexure C-10), the complainants served a legal notice, whereupon they were informed that CIBIL status had been updated to ‘closed’ as desired (Annexures C-11 to C-13). It was further stated that the aforesaid acts of the Opposite Party amounted to deficiency, in rendering service, as also indulgence into unfair trade practice.

4. When the grievance of the complainants was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, seeking directions to the Opposite Parties, to pay Rs.10,00,000/- on account of loss suffered due to the act of the Opposite Parties; Rs.8,00,000/- as compensation for deficiency in service, unfair trade practice and maligning the reputation of the complainants by putting their status as ‘settled’ instead of ‘closed’; and Rs.55,000/- as litigation expenses.

5. The Opposite Parties, in their written version, admitted grant of loan, in question, at floating rate of interest to the complainants, execution of loan agreement between the parties, and foreclosure of the loan by them (complainants). It was stated that the complainants themselves placed, on record, the document (Annexure C-4) wherein the terms & conditions for reduction of the rate of interest were categorically admitted and accepted by them by putting their signatures. It was further stated that the complainants applied for rescheduling of the loan, which was considered by the Opposite Parties and the rate of interest was reduced by 1% as had been mentioned in the communication. It was further stated that as part of the amended terms, which had been accepted by the complainants also, additional foreclosure charges were applicable, as had been mentioned in Annexure C-4. It was further stated that the basic dispute as had been raised by the complainants, related to the said additional foreclosure charges of 2%, which had been subsequently waived off by the Opposite Parties on their request, hence the reporting was correctly shown as ‘Settled”. It was further stated that the complaint was time barred. It was denied that the Opposite Parties, at any time, refused to foreclose the loan account of the complainants. It was further stated that neither there was any deficiency, in rendering service, on the part of the Opposite Parties, nor they indulged into unfair trade practice. The remaining averments, were denied, being wrong.

6. The complainants filed replication, wherein, they reiterated all the averments, contained in the complaint and repudiated the same, contained in the written version of the Opposite Parties.

7. The parties led evidence, in support of their case.

8. After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum allowed the complaint, as stated above, in the opening para of the instant order.

9. Feeling aggrieved, the instant appeal, has been filed by the appellants/complainants.

10. We have heard the Counsel for the appellants/complainants, at the preliminary stage, and have gone through the evidence, and record of the case, carefully.

11. The Counsel for the appellants/complainants submitted that as 2% foreclosure charges were deposited by the appellants/complainants, therefore, the respondents/Opposite Parties, were required to declare the account as closed rather than settled as found in CIBIL report, thereby causing their (appellants/complainants) negative credit worthiness. He further submitted that the amount of compensation, in the sum of R.20,000/- alongwith litigation expenses, to the tune of Rs.7,000/-, awarded by the District Forum, when the respondents/Opposite Parties, charged an exorbitant amount of Rs.2,21,345.16Ps on account of foreclosure charges over and above the loan amount and interest, were inadequate and they (respondents/Opposite Parties) were required to mention the status of the account of the appellants/complainants as closed instead of settled. He further submitted that the order of the District Forum be modified and the compensation be enhanced as claimed in the complaint.

12. After giving our thoughtful consideration, to the contentions, raised by Counsel for the appellants/complainants and the evidence, on record, we are of the considered opinion, that the appeal is liable to be dismissed, at the preliminary stage, for the reasons to be recorded hereinafter.

13. A perusal of the complaint reveals that the appellants/complainants averred that the respondents/Opposite Parties maligned their reputation by putting their status as ‘settled’ instead of ‘closed’ and it was prayed that they (respondents/Opposite Parties) be directed to pay an amount of Rs.10 Lacs, as loss suffered due to their said act and compensation in the sum of Rs.8 Lacs for deficiency in service, indulgence into unfair trade practice and maligning their reputation by showing their status as settled instead of closed. Thus, the only relief, which the appellants/complainants had sought in the complaint, was compensation of the aforesaid amount. No doubt, the District Forum in Para 9 of its order held “….Therefore, the Opposite Parties were entitled only to claim 2% of the foreclosure amount as per the foreclosure statement dated 27.7.2009 and the case of the complainants were required to be declared as “Closed” rather than as “Settled” as found mentioned in the CIBIL report, thus causing a negative credit worthiness of the complainants denying them their right to seek further loan from other financial institution. Hence, the act of the Opposite Parties in having recovered the entire amount, as per the foreclosure statement dated 27.7.2009 and not having declared the status of the complainants as “Closed” amounts to deficiency in service on their part….” but the fact remains that the appellants/complainants did not pray for directing the respondents/Opposite Parties to put their status as ‘closed’ instead of ‘settled’. In fact, it is evident that when the appellants/complainants requested to pre-close the account, the respondents/Opposite Parties vide letter dated 9.4.2009 (Annexure C-4) rescheduled the balance loan amount of Rs.11,132,082.13 @13.25% from the prevailing rate of interest of 14.25% imposing condition, which is extracted hereunder:-

“(1) Additional foreclosure charges of 2% will be applicable on the said loan over and above the normal foreclosure charges if the foreclosure of the loan is done within 24 months from the date of reschedulement of the loan.”

The appellants/complainants by appending their signatures on Annexure C-4 itself accepted the aforesaid condition. Thus, in the aforesaid communication, while rate of interest was decreased from 14.25% to 13.25%, the respondents/Opposite Parties sought additional foreclosure charges of 2%.

14. However, the loan was pre-closed by waiving off 2% pre-payment charges. Email dated 7.9.2013 (Annexure C-10) which clarifies the whole position is reproduced hereunder:-

“To:oysterpharma1 Dear Mr. Garg,

Greetings from Reliance Commercial Finance.

This is with reference to your appended mail regarding CIBIL for your loan account number RLLPCHA00003966.

We wish to inform you that your request for prepayment of the above Loan account no. was processed on 03^rd Aug’09 and your loan has been successfully pre-closed in the system on 24^th Aug’13.

As per company policy, additional prepayment charges of 2% on outstanding principal would be applicable over and above the normal prepayment charges of 2%, fi the loan is preclosed within 24 months after the reschedulement i.e. total prepayment charges of 4% on principal outstanding is applicable.

At the time of reschedulement, out customer executive had informed you as per policy, additional foreclosure charges of 2% will be applicable, the same was also mentioned in the undertaking duly signed by you.

We would like to informed you that at the time of closure of the loan, we had collected prepayment charges of 2% on outstanding principal instead of 4% and remaining pre-payment charges of 2% were waived off. Hence, the case is considered as Settled. The same is reflecting in CIBIL and cannot be removed from CIBIL list. Our executive had tried to inform you about the same over the phone, but your contact no. available with us was not reachable.

The declaration copy is attached herewith for your perusal.”

15. Thereafter, on receipt of notice from the Advocate of the complainants (Annexure C-11), the respondents/Opposite Parties sent reply vide letter dated 03.12.2013, relevant part of which is extracted hereunder:-

“…..It is stated that as communicated to your client earlier, our client was in the process of addressing the grievance of your client regarding status on CIBIL being shown as ‘Settled’ instead of ‘Closed’ in respect of Loan Account No.RLLPCHA000039663 dated 28.11.2007. That our client considered the relationship and in view of the customer oriented approach, have considered the same and the status in CIBIL has been updated to ‘Closed’ as desired. Hope the aforesaid resolution and prompt indulgence on our client’s part addresses all concerns of your client. It is, however, also made clear that the aforesaid act is sheerly out of courtesy extended by our client and a goodwill gesture in view of customer centric approach of our client and shall not in any way be taken as an admission of any fault/mistake of our client. The aforesaid reply is without prejudice to defence(s) whatsoever of our client save for this reply.

That there is no gainsaying that our client is a reputed and renowned company which strictly adheres to business practices and ethics.”

16. The appellants/complainants have not adduced any evidence, in support of their averment, that when they approached the Punjab National Bank for obtaining loan, the latter claimed higher rate of interest due to the appellants/complainants status in respect of the account, in question, in CIBIL as ‘Settled’ instead of ‘Closed’, whereas the fact is that in letter dated 3.12.2013 (Annexure C-13), the respondents/Opposite Parties informed that they had updated the status in CIBIL as ‘Closed’. In case, the status was not depicted as ‘Closed’, the appellants/complainants were required to adduce cogent evidence in support thereof before the District Forum. Had the appellants/complainants produced any cogent evidence to this effect, the position would have been different, and, in that event, it could be accepted that the compensation awarded by the District Forum was on the lower side. Therefore, the order of the District Forum, in our considered opinion, does not call for any interference.