JUDGMENT 7.10.2010 Justice Pritam Pal, President 1. This appeal by opposite parties is directed against the order dated 17.3.2009 passed by District Consumer Forum-I, U.T. Chandigarh whereby two complaints bearing No.1008 of 2008 and 1009 of 2008 filed by the respondent/complainant were allowed with costs of Rs.5000/- each and OPs were directed to refund to the complainant Rs.73,967.22 in complaint case NO.1008/2008 and Rs.66,763.19 in complaint case NO.1009/2008 both alongwith interest @ 12% p.a. from 20.2.2008 till realization besides Rs.50,000/- each on account of compensation for adopting unfair trade practice of charging foreclosure charges and service tax from the complainant. 2. In fact complainant Om Parkash Aggarwal had taken home loan of Rs.39.00 Lacs on 7.2.2005 vide Agreement No.LBCHD00000918343 and Rs.36.00 lacs on 7.1.2005 vide Agreement No. LBCHD00000918337 against property situated at House NO.468,Sector 6, Panchkula. The complainant had filed two separate complaints before the District Forum and since the complainant was one and the same and Home Loan was availed vide two agreements from the same Bank, so the District Forum decided both complaints vide common order dated 17.3.2009. The facts of both complaints are identical. The brief facts as out in the first complaint bearing NO.1008 of 2009 are that the loan of Rs.39.00 lacs taken by the complainant was to be repaid in 162 EMIs of Rs.48,126/- and out of which, he had paid 36 EMIs as per Bank Account Statement, Annexure C-2. It was alleged that in the month of February, 2008, he paid whole of the balance amount of sanctioned loan and closed the account but OPs illegally imposed a penalty of Rs.73,967/- which was deposited on 20.2.2008 under protest. Thereafter, he made repeated requests to OPs to waive off the said penalty imposed but to no effect. He also served upon OPs legal notice calling upon them to refund the amount of penalty but no action was taken by OPs. Hence, alleging deficiency in service and unfair trade practice on the part of OPs, complainant filed complaint before the District Forum. In the second complaint No.1009/2008 similar facts were stated and the amount of penalty imposed was Rs.66,763/- 3. On the other hand, OPs filed reply before the District Forum inter-alia stating therein that the complainant had obtained a home loan against property, which was based on floating rate of interest. It was pleaded that the Loan account was closed by the Complainant at his own and the pre-payment charges were payable as per the terms and conditions of the Loan agreement and that the foreclosure charges were levied as per agreement. However, after the receipt of the legal notice, the representative of the Bank had contacted the complainant and explained the entire position. Pleading that there was no deficiency in service on the part of OPs, a prayer was made for dismissal of the complaint. Similar reply was filed by OPs in the second complaint. 4. The District Consumer Forum after going through the evidence and hearing the counsel for parties allowed both complaints through single order dated 17.3.2008 as indicated in the opening part of this judgment. This is how feeling aggrieved, opposite parties have come up in this appeal. 5. We have heard learned counsel for the parties and gone through the file carefully. It has been argued on behalf of the appellants/OPs that the learned District Forum has erroneously assumed the case to be one of ‘foreclosure’ instead of ‘pre-payment’ whereas Pre-payment implies the payment of a debt obligation prior to its due date and the bank had levied pre-payment charges in terms of clause 2.7 of the Loan Agreement. It was further argued that the service tax is payable as per the guidelines by the concerned tax authorities and the amount so collected is deposited with the State and it is not retained by the OP bank and the same can be refunded by the tax authorities. The compensation awarded by the learned District Forum was stated to be on the higher side as the complainant has been awarded both interest and compensation. However, these points have been repelled by the learned counsel for complainant. 6. The letters dated 20.2.2008 written to the complainant by the OP bank in both complaints shows the detail of amount which was payable by the complainant for prepayment of home loan. Besides other heads, the disputed amount of Rs.66,763.29 in complaint case NO.1008/2009 and Rs.73,967.22 in complaint case NO.1009/2008 have been shown on account of “foreclosure charges @ 2.25% as outstanding principal”. This amount also included service tax @ 0.25% as stated by OPs. It is true that as per clause 2.7 of the Loan Agreement the complainant was liable to pay prepayment charges but as analyzed by the learned District Forum there was no agreement for paying any fee or charges in case of foreclosure. The OPs were not levying pre-payment charges from the complainant because in the letters dated 20.2.2008 (Annexure C-3) they were mentioning foreclosure charges which were beyond the agreement and could not be levied on the complainant. The learned District Forum by referring the dictionary meaning of “foreclosure” and “prepayment” rightly distinguished that foreclosure is not synonymous with prepayment and OPs could be entitled to prepayment charges as per para 2.7 of the Loan agreement but they charged foreclosure charges @ 2% plus service tax @ 0.25% on the outstanding amount which the complainant was not liable to pay at all. 7. So far as service tax is concerned, OPs have not produced on record any notification, rule or law or the terms of loan agreement under which Service Tax was leviable if the loan amount was prepaid. Admittedly the whole amount was paid by the complainant to the OP bank directly. The OPs have also not brought on record and material or certificate that in fact they had deposited service tax with the tax authorities on the amount paid by the borrower. Had complainant been provided documentary proof/certificate of depositing the service tax with the authorities, he would have sought refund from them. Thus, the District Forum rightly directed OPs to refund the amounts of foreclosure charges levied in both complaints on account of prepayment and service tax. 8. However, as submitted by learned counsel for OPs, the award of both interest as well as compensation appears to be on the higher side in the facts and circumstances of the case. We are of the considered view that award of interest @ 12% p.a. would include the compensation also. Hence, the amount of compensation of Rs.50,000/- in both complaints awarded by the District Forum separately is not justified. Accordingly impugned order qua compensation is set aside. 9. In the result, this appeal is accepted partly and OPs are exonerated from paying Rs.50,000/- in both cases on account of penalty for unfair trade practice/harassment. However, the impugned order with regard to refund of Rs.73,967.22 and Rs.66,763,19 respectively in both complaints alongwith interest and costs as awarded by the District Forum is affirmed. In the peculiar circumstances of the case, parties are left to bear their own costs. Certified Copies of this order be sent to the parties, free of charge. The file be consigned to record room.
| | HON'BLE MRS. NEENA SANDHU, MEMBER | HON'BLE MR. JUSTICE PRITAM PAL, PRESIDENT | , | |
