Andhra Pradesh
Visakhapatnam-II
CC/230/2012
Boyina Murali and - Complainant(s)
Versus
REPCO Home Finance Limited - Opp.Party(s)
B. Rama Krishna Rao
02 Mar 2015
ORDER
Date of Registration of the Complaint:26-07.2012
Date of Order:03-03-2015
BEFORE THE DISTRICT CONSUMERS FORUM-II AT
VISAKHAPATNAM
P r e s e n t:
1. Sri H. Ananda Rao, M.A., L.L.B.,
President
2. Smt K. Saroja, M.A. B.L.,
Lady Member
3. Sri C.V. Rao, M.A., B.L.,
Male Member
Tuesday, the 3rd day of March, 2015.
CONSUMER CASE No.230/2012
Between:-
1.Boyina Murali, S/o (Late) Suryanarayana,
Hindu, aged 39 years, R/at D. No. 1508,
2nd Cross, 6th Main, 1st Phase, BEML, Layout
Rajarajeswari Nagar, Bangalore-98.
2.Boyina Sharmila, W/o B. Murali, Hindu, aged
about 30 years, R/o D. No. 1508, 2nd Cross, 6th Main,
1st Phase, BEML Layout, Rajarajeswari Nagar,
Bangalore-98.
….. Complainants
And:-
1.REPCO Home Finance Ltd., rep. by its
Chairman, Corporate Office at 2nd Floor,
Karumuttu Centre, No. 634, Anna Salai,
Chennai-600 035.
2.REPCO Home Finance Ltd., rep. by its
Branch Manager, carrying its business at
D. No. 47-15-10, 1st Floor, Hasan Manzil,
Opp: TSR Complex, Dwaraka Nagar,
Visakhapatnam-530016.
… Opposite Parties
This case coming on 13.02.2014 for final hearing before us in the presence of Sri Boyina Rama Krishna Rao, Advocate for the Complainants and Sri B. Srinivasa Rao, Advocate for the Opposite Parties is called absent and having stood over till this date for consideration, this Forum made the following:
ORDER
(As per Sri. H. Ananda Rao, Honourable President, on behalf of the Bench)
1. This consumer Complaint is filed by the Complainant against the Opposite Parties directing the Opposite Parties to refund the collected excess amount of the foreclosure charges Rs.78,000/- along with interest @ 24% p.a. from the date of the collection i.e., 30.06.2010 till the realization,
Rs. 60,000/- towards compensation and to pay Rs.15,000/- towards costs.
2. The case of the Complainant in brief is that the 1st Opposite Party is REPCO Home Finance Ltd., represented by its Chairman and the 2nd Opposite Party is its Branch Manager, Visakhapatnam from whom the Complainants obtained home loan on 21.05.2008 executed necessary documents, that the Opposite Parties started collecting 14% rate of interest against the terms and conditions which says that the rate of interest will not be reset before 3 years, that due to the increase of interest from the 4th month, the Complainants put a request for the foreclosure of the loan as the Complainants sought other source of the Home Finance in Life Insurance Corporation at a lower rate of interest at 8% p.a. then the officials demanded them to pay Rs.1,60,000/- towards foreclosure charges showing a condition in the agreement, which is ambiguous and meaningless and misleading and uncertain threatened by the foreclosure charges, they were forced to continue the paying of E.M.Is, after sometimes again they asked for foreclosure of the loan and the Opposite Parties’ gave written statement on 21.04.2009 stating that they have to pay Rs. 1,47,333/- towards foreclosure charges, and it is further excess amount even as per the condition and it is unfair and cheating tactic, hence amounts to deficiency of service.
3. That in the meanwhile the Complainants requested the Opposite Parties Officials orally and through E-mails for reduction of interest from 14% but the officials paid deaf-ears to their requests. Vexed with the callous approach of the Opposite Parties and due to the heavy burden of the high interest, the Complainants approached them again for the foreclosure of the Home Loan with REPCO Home Finance Ltd., after paying 27 E.M.Is. In spite of repeated requests made by them the REPCO Home Finance Officials have not reduced the foreclosure charges and collected Rs.1,3,728/- (i.e., 8.20% on balance principal amount) on 30.06.2010, in addition to principal amount of Rs.13,00,000/- and interest Rs.3,63,725/-. And they gave Loan Clearance Certificate along with the submitted relevant documents of title on 27.07.2010 which were submitted to the LIC for obtaining Home Loan at the rate of interest 8% p.a. although, there are guidelines and directions of R.B.I. with regard to the rate of interest and foreclosure charges, the Opposite Parties did not bother to comply with them. By the time, different Home Finance institutions used to collect different foreclosure charges ranging from 0% to maximum 2% on balance principal amount, but many complaints against the foreclosure charges were pouring to the RBI, subsequently the RBI ordered both the Government and private Home Finance Institutions prohibiting the collection of foreclosure charges. The REPCO Home Finance Ltd. collected unreasonable, exorbitant and unjust amount towards foreclosure charges i.e., 8.20% on remaining principal amount.
4. It is also the case of the Complainants that at the time taking loan, they asked about the foreclosure charges, but the Opposite Parties misled them by saying that they are charging just 0.5% whereas the other Home Financial institutions are charging up to 2%. And the condition with regard to foreclosure charges could not be seen while signing so many documents at a hurry movement and even if it is seen, it cannot be understood as it is ambiguous and misleading and uncertain as written in the Loan Sanction Letter and also it appears like 0.5% and hence putting such condition amounts to unfair trade practice and deficiency of service and attracts the provisions of the Consumer Protection Act. Other Home Finance Institutions used to say and write the condition unclear words, that the condition is not valid even as per the provisions of Indian Contract Act, Moreover, the condition is unreasonable and unjust, as per the condition if the Complainants want to foreclosure the loan on very next day in any circumstances, the Complainants must pay foreclosure charges Rs.1,30,000/- as their loan term is for 20 years and Rs.65,000/- if the loan term is for 10 years of Rs.2,60,000/- and if the loan term is for 40 years. Such a high charges for earlier repayment of any debt with interest is unwarranted in free and fair market and against the justice, equity and good conscience.
5. That Harassing the Complainants with high rate of interest and restricting them from repaying the loan earlier by threatening with exorbitant foreclosure charges amounts to unfair trade practice and attracts the provisions of Consumer Protection Act. Having other sources of low rate of interest, they were threatened by the demands of the Opposite Parties for exorbitant foreclosure charges whenever tried to prepay the loan and forced to pay high rate of interest for 27 months and thereby them suffered financial loss, hardship and mental agony for which they are claimed Rs.60,000/- towards compensation. Hence, this complaint.
6. The 2nd Opposite Party filed a counter and the same was adopted the 1st Opposite Party denying the material averments of the Complaint that the Complainants are not come under the consumer as defined under Section 2(g) of Consumer Protection Act, since the loan transaction between the Complainants and the Opposite Parties is a commercial one. That as per the condition No. 23 of the Loan Sanction letters dated 22.05.2008 and 24.10.2008 which was accepted and signed by the Complainants that; “Pre-closure/prepayment exceeding 10% of outstanding balance in a financial year shall attract prepayment charges of 0.5% p.a. for the remaining term of loan for the entire amount paid”. The rate of interest also mentioned in the said sanction letter i.e., 12.50% and 14.45% p.a. The said terms and conditions are binding on the Complainants since they were accepted the same and then signed. As such, the Complainants cannot deny the said terms and conditions and cannot go beyond.
7. That they have collected the rate of interest as per the terms and conditions of the loan sanction letter and also as per the guidelines of the RBI which is variable from time to time and the current rate of interest is 11% p.a. the Opposite Parties never collected the higher rate of interest as alleged in the Complaint. That after receipt of the legal notice dated 3.7.2010 the 1st Opposite Party sent a letter dated 9.7.2012 informing them that “the loans of the Complainants were closed by way of takeover by another HFC on 30.6.2010. Waiver of pre-closure charges is not applicable to the loan account of the Complainants as both the accounts were closed prior to NHB directions”. Which were issued on 18.10.2010 vide Circular No. NHB (ND)/DRS/POL No.36/2010 and thereafter the Opposite Parties bank issued a circular dated 28.10.2010 vide Circular No.15/RHFL/2010/CR-7, wherein it was directed that “not pre-closure by borrowers out of their own funds” The NHB circular was issued on 18.10.2010 which will comes into prospective effect and whereas the account of the Complainants was closed on 30.06.2010 which is prior to the issuance of NBH circular dated 18.10.2010 as such the pre-closure charges collected by the Opposite Parties is tenable under law and as per the RBI guidelines only.
8. That the opening balance relating to the Loan Account No.1321820000404 as on 31.03.2010 of B. Murali & Sharmila is Rs.1,38,983/- and the remaining term as on 30.06.2010 is 104 months. As such the pre-closure interest calculated at 0.5% which comes to Rs.5,983/-. They have collected pre-closure interest as per the terms and conditions of the loan sanction letter which was accepted and signed by the Complainants, but the Opposite Parties did not collect the said amount against to the norms of the NHB directions. The pre-closure interest was collected prior to the issuance of the directions of NHB, therefore, the Complainants are not entitled for refund of the alleged claim amount. Therefore, the question of deficiency in service on their part does not arise. The present complaint is filed only to harass them, for these reasons, the Complaint is liable to be dismissed.
9. To prove the case on behalf of the Complainants filed their evidence affidavits and reiterated the averments made by the Complainants and got marked as Exs.A1to Ex.A15. On the other hand, the officials of the Opposite Parties 1 and 2 filed evidence affidavits and reiterated the facts as mentioned in the counter and got marked Exs.B1 to B8.
10. Ex.A1 is the Loan Sanction letter issued by the 2nd Opposite Party to the Complainants dated 22.05.2008. Ex.A2 is the Certified copy of Statement of Accounts issued by the 2nd Opposite Party in favour of the 1st Complainant dated 26.02.2010. Ex.A3 is the photo copy of E-mail request for reduction of the Foreclosure Charges dated 03.06.2010. Ex.A4 is the Eenadu Paper Cut showing RBI’s Order dated 27.06.2012. Ex.A5 is the Statement of Foreclosure Charges issued by the 2nd Opposite Party in favour of the Complainants dated 21.04.2009. Ex.A6 is the photo copy of Statement of Foreclosure Charges issued by the 2nd Opposite Party in favour of the Complainants dated 05.08.2010. Ex.A7 is the Loan Payment Receipt issued by the 2nd Opposite Party in favour of the 1st Opposite Party dated 29.06.2010. Ex.A8 is the photo copy of Loan Clearance Certificate issued by the 2nd Opposite Party to the Complainants dated 27.07.2010. EX.A9 is the office copy of letter issued by the Complainants’ counsel to the Opposite Parties dated 03.07.2012. Ex.A10 is the letter issued by the 1st Opposite Party to the 1st Complainant dated 09.07.2012. Ex.A11 is the Acknowledgement Card from the 2nd Opposite Party dated 05.07.2011. Ex.A12 is the certified copy of Arrangement letter of Housing Finance issued by the SBI, Anakapalle Branch, Visakhapatnam dated 22.09.2006. Ex.A13 is the Internet copy of NBH’s Information on Prepayment. Ex.A14 is the Internet copy of HDFC information of prepayment. Ex.A15 is the Internet copy of Notification of RBI on payment dated 05.06.2012.
10. Ex.B1 is the attested copy of Loan Sanction letter along with Annexure-I for A/c No.VIZ00404 issued by the 1st Opposite Party to the Complainants dated 22.05.2008. Ex.B2 is the attested copy of the Loan Sanction letter along with Annexure-I for A/c No. VIZ00404 issued by the 1st Opposite Party to the Complainants dated 24.10.2009. Ex.B3 is the attested copy of the Statement of Account issued by the 2nd Opposite Party in favour of the 1st Complainant dated 31.08.2012. Ex.B4 is the attested copy of Statement of Account issued by the 2nd Opposite Party in favour of the 1st Complainant dated 31.08.2012. Ex.B5 is the attested copy of a letter addressed by the 1st Opposite Party to the 1st Complainant dated 09.07.2012. Ex.B6 is the attested copy of Pre-Closure Charges Calculation on Closure day. Ex.B7 is the attested copy of Circular issued by the 2nd Opposite Party dated 28.10.2010. Ex.B8 is the Photo copy of letter of Pre-payment penalty on pre-closure of housing loans issued by the General Manager dated 19.10.2011.
11. Both parties filed their respective written arguments.
12. Heard oral arguments from both sides.
13. Now the point that arises for determination is:-
Whether there is any deficiency in service on the part of the Opposite Parties and the Complainants is entitled for the reliefs asked for:
14. It is an admitted fact as per the terms agreed, if the Complainants prefers to pre-closure their loan account they shall pay 2% on the amount prepaid towards prepayment charges vide Ex.B1 coming to the issue, as per the terms agreed the rate of interest charged as per the agreement is Special Rate of Interest i.e., fixed and Floating. As per the terms agreed the interest charged on the Opposite Parties’ loan account for initial period of 24 months from the first day of the subsequent month in which the first disbursement was made fixed @ 8.5% after the expire of the afore-mentioned period of 24 months the interest rate on the loan will automatically be converted into the Variable Interest Rate (VIR) and it is applicable for the balance period/term. The rate of interest for the variable rate of interest is linked to the Retail Basic Lending Rate (RBLR).
15. As per Ex.A1 the quotation dated 16.03.2012 for pre-closure the foreclosure were not mentioned since there was no clarity by NHB in its circular NHB(ND)/DRS/Pol-No.43/2011-12 dt.19.10.2011 i.e., Ex.B2. It appears, by the time the second quotation dated 22.05.2012 i.e., Ex.A3 the NHB has issued a circular clarifying the position relied to Housing Loan relating to Special Rate of Interest vide its circular NHB (ND)/DRS/Pol-No.48/2011-12, dated 4.4.2012 vide Ex.B3. Therefore, the fore-closure Charges were included. It is evident as per Exs.B2 and B3 no foreclosure charges shall be levied on the loans bearing Variable Interest provided the loans are closed with own funds
16. The dispute in controversy is that whether the Opposite Parties acted according to the norms of their bank as well as, as per the directions of the RBI and also NHB while collected foreclosure charges from the Complainants. Ex.B2 is the agreement in between parties to the case, wherein both parties signed, therefore, the terms and conditions therein on binding of them. Clause No.23 of Ex.B2 indicates “pre-closure, pre-payment, exceeding 10% of outstanding balance in a financial year shall attract pre-payment charges of 0.5% p.a. for the remaining term of loan for the entire amount paid. Ex.B6 discloses the total foreclosure charges (Rs.5,983 + Rs.1,03,728/- = Rs.1,09,711/-. Ex.A9 is the notice got issued by Advocate for the Complainants dated 03.07.2012 to refund the collected excess amount of foreclosure charges etc. Ex.B5 is a reply letter stating the loans were closed on 30.06.2010 and further informed waiver of pre-closure charges are not applicable to your accounts as both the accounts were closed prior to NHB directions which was issued on 18.10.2010 vide Circular No. NHB (ND)/DRS/Pol-No.36/2010 and thereafter the Opposite Parties bank issued a circular dated 20.08.2010 vide Circular No.15/RHFL/2010/LR-7 vide Ex.B7; wherein it was directed for not to collect pre-closure charges for accounts are not too pre-closed by borrowers out of their own funds. NHB Circular was issued on 18.10.2010 which will come into proceedings effective and whereas, the accounts of the Complainants were closed on 30.06.2010 which is prior to the issuance of NHB circular dated 8.10.2010. Therefore, the pre-closure charges collected by the Opposite Parties are in according to the rules and as per the RBI guidelines only. Therefore, it can be held, the collection of foreclosure charges from the Complainants is genuine and as such, the question of refund of the amount as claimed by the Complainants does not arise.
17. On a careful scrutiny of the loan sanction letters dated 22.05.2008 and 24.10.2008 which was accepted and signed by the Complainants and since the Opposite Parties collected the rate of interest as per the terms and conditions of the loan sanction letter and also as per the guidelines of the RBI and in view of Exs.B7 and B8; we are of the considered view, that the Opposite Parties collected the foreclosure charges, as per the norms of the bank as well as the directions of the RBI and also NHB. For these reasons, we find no merits in the case of the Complainants. Therefore, the Complaint filed by the Complainants deserves to be dismissed.
18. In the result, this Complaint is dismissed. No costs.
Dictated to the Steno, transcribed by him, corrected and pronounced by us in the Open Forum, this the 3rd day of March, 2015.
Sd/- Sd/- Sd/-
Male Member Lady Member President
APPENDIX OF EVIDENCE
For the Complainants:-
NO. | DATE | DESCRIPTIONOFTHEDOCUMENTS | REMARKS |
Ex.A01 | 22.05.2008 | Loan Sanction letter issued by the 2nd OP to the Complainants | Original |
Ex.A02 | 26.02.2010 | Certified copy of Statement of Accounts by the 2nd OP in favour of the 1st Complainant | Certified copy |
Ex.A03 | 03.06.2010 | E-mail request for reduction of Foreclosure Charges | Photo copy |
Ex.A04 | 27.06.2012 | Eenadu Paper Cut showing RBI’s Order | Original |
Ex.A05 | 21.04.2009 | Statement of Foreclosure charges issued by the 2nd OP in favour of the Complainants | Original |
Ex.A06 | 05.08.2010 | Statement of Foreclosure Charges issued by the 2nd OP in favour of the Complainants | Photo copy |
Ex.A07 | 29.06.2010 | Loan Payment Receipt issued by the 2nd OP in favour of the 1st OP | Original |
Ex.A08 | 27.07.2010 | Loan Clearance Certificate issued by the 2nd OP to the Complainants | Photo copy |
Ex.A09 | 03.07.2012 | Letter issued by the Complainants’ counsel to the Ops | Office copy |
Ex.A10 | 09.07.2012 | Letter issued by the 1st OP to the 1st Complainant | Office copy |
Ex.A11 | 05.07.2011 | Acknowledgement Card from the 2nd OP | Original |
Ex.A12 | 22.09.2006 | Arrangement letter of Housing Finance issued by the SBI, Anakapalle Branch, VSP | Certified copy |
Ex.A13 |
| NHB’s Information on Prepayment | Internet copy |
Ex.A14 |
| HDFC Information of prepayment | Internet copy |
Ex.A15 | 05.06.2012 | Notification of RBI on payment | Internet copy |
For the Opposite Parties:-
NO. | DATE | DESCRIPTIONOFTHEDOCUMENTS | REMARKS |
Ex.B01 | 22.05.2008 | Loan Sanction letter along with Annexure-1 for A/c No.VIZ004404 issued by the 1st OP to the Complainants | Attested copy |
Ex.B02 | 24.10.2009 | Loan Sanction letter along with Annexure-1 for A/c No.VIZ00404 issued by the 1st OP to the Complainants | Attested copy |
Ex.B03 | 31.08.2012 | Statement of Account issued by the 2nd OP in favour of the 1st Complainants | Attested copy |
Ex.B04 | 31.08.2012 | Statement of Account issued by the 2nd OP in favour of the 1st Complainant | Attested copy |
Ex.B05 | 09.07.2012 | Letter addressed by the 1st OP to the 1st Complainant | Attested copy |
Ex.B06 |
| Pre-closure Charges Calculation on Closure day | Attested copy |
Ex.B07 | 28.10.2010 | Circular issued by the 2nd OP | Attested copy |
Ex.B08 | 19.10.2011 | Letter of Pre-payment penalty pre-closure of housing loan issued by the General Manager | Photo copy |
Sd/- Sd/- Sd/-
Male Member Lady Member President
Consumer Court Lawyer
Best Law Firm for all your Consumer Court related cases.
Bhanu Pratap
Highly recommended!
5.0 (615)
Bhanu Pratap
Featured RecomendedHighly recommended!
Experties
Consumer Court | Cheque Bounce | Civil Cases | Criminal Cases | Matrimonial Disputes
Phone Number
7982270319
Dedicated team of best lawyers for all your legal queries. Our lawyers can help you for you Consumer Court related cases at very affordable fee.