MRS. NEENA SANDHU, MEMBER

1.         This is an appeal filed by the appellants/OPs against the order, dated 18.8.2010 passed by District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be called as District Forum only) in complaint case No. 286 of 2010 vide which, it allowed the complaint and directed the OPs to refund the amount of Rs.12,31,905.35 paise alongwith interest @13.89% p.a. since the date of recovery of the said amount i.e. 1.8.2009 till the amount is refunded to the complainant. It was further directed that OPs shall pay Rs.5500/- as costs of litigation. 

2.         Briefly stated, the facts of the case are, that the complainants availed loan against the house/property i.e. House No.3106, Sector 32-D, Chandigarh from the OPs, to the tune of Rs.2.91 crores with interest @ 12.5% p.a. and the tenure of the loan was for 156 months (13 years). It was stated that the complainants were to pay the monthly installment of Rs.3,78,232/-. The first installment was paid in the month of August, 2007.  It was further stated that when the OPs issued the accounts statement in the month of December, 2008, the complainants came to know that the OPs had increased the rate of interest from 12.5% p.a. to 13.89% p.a, without informing them.  It was further stated that the complainants time and again made requests to the Ops to decrease the rate of interest but they did not pay heed to the requests of the complainants and continued to charge interest @ 13.89%. It was further that in the month of June, 2009, the complainants received an offer from M/s Religare Finvest Ltd. for loan against the property at lesser rate of interest i.e. 13.25% p.a. and, as such, they were constrained to transfer the loan from the OPs to M/s Religare Finvest Limited. It was further stated that on the request of the complainants, the OPs issued foreclosure statement dated 30.6.2009, in which, an amount of Rs.12,31,905.35 paise was shown as foreclosure charges and when the complainants opposed the same, they were bluntly told either to continue the loan with the OPs or to pay the foreclosure charges. The OPs indulged in monopolistic and restrictive trade practice, by charging foreclosure charges at  the exorbitant rate of 4% on outstanding principal, thereby trying to restrain the complainants from transferring the loan to the other institution, which was offering the same at lesser rate of interest. The OPs charged total prepayment charges to the tune of Rs.12,31,905.35 paise. It was further stated that vide letter dated 21.1.2010, the complainants made representation for refund of the pre-payment/foreclosure charges but the OPs rejected the representation vide letter dated 26.2.2010.  The abovesaid act of the Ops amounted to deficiency, in service and indulgence into unfair trade practice. Hence, the complaint was filed.

3.         The OPs were served for 1.7.2010 and Ms. Surinder Kaur, Advocate appeared on their behalf. Subsequently Sh. Deepak Sharda, representative appeared on behalf of the OPs and sought time to file reply and evidence but, thereafter, nobody appeared on behalf of Ops, to file reply, and evidence. Hence, they were proceeded against exparte.

4.         The complainants led evidence, in support of his case.

5.       The learned District Forum allowed the complaint, in the manner, referred to, in the opening para of the judgment.  

6.            Aggrieved against the order passed by the learned District Forum, the OPs/appellants filed the instant appeal. 

7.         We have heard Sh.Ravi Kumar, Advocate for the appellants/OPs, Sh.Sourabh Goel, Advocate for respondents/complainants and, have perused the record, carefully.

8.         There is a delay of 99 days in filing the appeal. The appellants/OPs have filed an application for condonation of delay along with affidavit. In the application, the appellants/OPs averred that due to the fault of the representative of the OPs, they were not able to appear before the learned District Forum, on the relevant date of hearing and an exparte order was passed against them. It was stated that they came to know about the impugned order on 3.9.2010 and, thereafter, they procured the certified copy of the said order on 7.9.2010, which was sent to the Head Office for getting the approval for filing the appeal.

9.       The strict principles of the Limitation Act, are not applicable to the proceedings before the Commission. It is settled principle of law that every lis should be decided, on merits, than by default. No doubt, when the representative of the OPs appeared in the District Forum, he noted down the wrong date. Due to this reason, none could appear, on behalf of OPs on the actual adjourned date. The application is, duly supported by an affidavit of an authorized representative of the OPs. These is sufficient cause for condonation of delay. Delay of 99 days is, thus, condoned and the application is allowed.

10.     On merits, the learned counsel for the appellants/OPs submitted that the learned District Forum without affording an opportunity to the OPs passed the exparte order and allowed the complaint by wrongly relying on the judgment of Hon’ble State Commission, Delhi, whereas, the facts of this case are altogether different. It was further submitted that the averments made by the complainant, in the complaint, are not only misleading but also a partial narration of the facts, as the complainant had failed to bring on record the terms and conditions and the type of loan which was sanctioned. It was further submitted that the OPs had got no opportunity to assist the learned District Forum with regard to the distinction between take-over and foreclosure/pre-payment, which is material for the adjudication of the case. It was further submitted that the passing of the impugned exparte order dated 18.8.2009 against the OPs without granting an opportunity of being heard to them is against the principles of natural justice.

11.     The learned Counsel for the respondents/complainants submitted that the complainants availed of the loan against the house/property from the OPs for Rs.2.91 crores with interest @ 12.5% p.a. and the tenture of the loan was for 156 months (13 years).  It was further submitted that the OPs increased the interest from @12.5% p.a. to @ 13.89 % without informing them and they only came to know about this fact, when they (OPs) sent account statement in the month of December, 2008. It was further submitted that in the month of June, 2009, the complainants received an offer from M/s Religare Finvest Ltd. for loan against the property at lesser rate of interest and, as such, the complainants were constrained to transfer the loan from the OPs to M/s Religare Finvest Ltd. He further submitted that the OPs transferred the loan to M/s Religare Finvest Limited. However, the OPs issued a foreclosure statement dated 30.6.2009 and demanded an amount of Rs.12,31,905.35 paise by levelling foreclosure charges @ 4% on the outstanding principal amount.

12.     After considering the facts of the case, we are of the view that for the proper adjudication of the case, on merits, certain documents were material/necessary, which the complainants had not been able to place on record.  The complainants had placed the sanction letter dated 11.8.2007 alongwith schedule of charges and general information (Annexure C-1). This document does not reflect that in case of transfer of loan from the OPs to another financial institution, they were entitled to charge any foreclosure/pre-payment charges. On the other hand, the OPs missed the opportunity of filing reply alongwith evidence and other documents, as they were proceeded against exparte.  It means that material documents relating to the controversy going to the root of the case were not produced by the complainants. The Consumer Foras are not required to decide the cases, on the basis of inchoate and incomplete evidence and documents. Even otherwise, procedure, is, in the ultimate, the handmaid of justice, meant to advance the cause thereof than to thwart the same. For effective adjudication of the controversy, the case needs to be remanded for fresh decision, after affording the OPs an opportunity to put forth their version.

13.       For the reasons recorded above, the appeal filed by the OPs is accepted subject to the payment of Rs.10,000/- to the complainants. The order dated 18.8.2010, passed by the learned District Forum, is set aside. The complaint is remanded back to the concerned District Forum to decide it afresh, in accordance with law. The parties are directed to appear before the concerned District Forum on 25.5.2011 at 10.30 AM. The records of the District Forum be sent back at once.

14.     A copy of the judgment/order be kept in the complaint.

15.          Certified copies be sent to the parties, free of cost.

Pronounced.                                                                Sd/-  

4^th May, 2011.