Chandigarh

StateCommission

A/277/2023

SHASHI KALA GUPTA - Complainant(s)

Versus

STANDARD CHARTERED BANK - Opp.Party(s)

S K SUD

28 Mar 2024

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

[ADDL. BENCH]

 

 

 

Appeal No.	:	277 of 2023
Date of Institution	:	12.10.2023
Date of Decision	:	28.03.2024

 

 

 

1.       Shashi Kala Gupta wife of Sh. Satinder Kumar Gupta, Resident of House No.1, Sector 12, Panchkula (Haryana).

2.       Satinder Kumar Gupta son of Sh. Des Raj Gupta, Resident of House No.1, Sector 12, Panchkula (Haryana).

3.       Tarun Gupta son of Sh. Satinder Kumar Gupta, Resident of House No.1, Sector 12, Panchkula (Haryana).

4.       Tanuj Roshi Poultry Farm, having its Head Office at House No.1, Sector 12, Panchkula, through its Proprietor Smt. Shashi Kala Gupta wife of Sh. Satinder Kumar Gupta, Resident of House No.1, Sector 12, Panchkula (Haryana).

….. Appellants

 

V e r s u s

 

1.       Standard Chartered Bank, Head Office: C-38/39, G-Block Crescenzo Building, Bandra Kurla Complex – Bandra East, Opposite Mumbai Cricket Association Club, Mumbai – 400051, through its Managing Director.

 

2.       Standard Chartered Bank, SCO 137-138, Sector 9-C, Madhya Marg, Chandigarh – 160017, through its Branch Manager/ Authorized Signatory.

….Respondents

 

 

BEFORE:

MRS. PADMA PANDEY, PRESIDING MEMBER PREETINDER SINGH, MEMBER

 

 

ARGUED BY:    Sh. S.K. Sud, Advocate for the Appellants.

Sh. Rohit Goswami, Advocate for the Respondents.

 

PER PADMA PANDEY, PRESIDING MEMBER

 

 

1]                This appeal is directed against the order dated 13.09.2023, rendered by the District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (for brevity hereinafter to be referred as “the Ld. District Commission”), vide which, it dismissed the Consumer Complaint bearing no.CC/424/2020.

 

2]             For the convenience, the parties are being referred to, in the instant Appeal, as position held in Consumer Complaint before the Ld. District Commission.

 

3]                Before the Ld. District Commission, it was the case of the Complainants/Appellants that Complainants No.1 & 2 availed personal loan of ₹3,85,00,000/- from ICICI bank, Sector 9, Panchkula. Since the rate of ICICI bank on personal loan was higher and the interest rate of the Opposite Parties/Respondents (Standard Chartered Bank) were comparatively less, the Complainants No.1 & 2 applied  for personal loan of ₹3,82,00,000/ out of which ₹3,50,38,406/- was to be paid to ICICI Bank for swapping the said loan to the Opposite Parties.  The Opposite Parties vide sanction letter dated 29.08.2018 sanctioned the personal loan of ₹3,82,00,000/- in favour of the Complainants and Jai Shree Ganesh  Farms for a period of 15 years @9.20% p.a. with an EMI of ₹3,92,008/- p.m.  The Opposite Parties also charged processing charges from the Complainants and kept the title deeds of House No.1, Sector 12, Panchkula, being security of their loan amount.  As per Clause No. 2 of the loan sanction letter dated 29.08.2018  the Opposite Parties agreed not to charge pre-payment fees on floating rate loans to individuals.  Since the Poultry business of the Complainants was going through a very bad phase and they were in financial crunches, so in the year 2019 they decided to pay off the loan amount and wrote an e-mail dated 22.08.2019 to the Opposite Parties requesting for pre-payment  of the loan amount if the Complainants are not charged with any pre-payment penalty, but the Opposite Parties demanded hefty foreclosure charges. The Complainant No.1 filed a complaint with Reserve Bank of India and accordingly, the Banking Ombudsman vide order dated 25.10.2019 asked the Opposite Parties to accept  the payment in part and when the account becomes zero no foreclosure charges may be levied.  The Complainants between 25.10.2019 to 17.03.2020 made five partial payments, but the Opposite Parties levied foreclosure charges. The Complainants filed contempt before the Banking Ombudsman which asked the Opposite Parties to refund the foreclosure charges, but to no avail despite repeated requests made and legal notice sent by the Complainants.  Hence, the aforesaid Consumer Complaint was filed before the Ld. District Commission, alleging deficiency in service and unfair trade practice on the part of Opposite Parties.

 

4]                In the reply filed before the Ld. District Commission, while admitting the factual matrix of the case, Opposite Parties/Respondents pleaded that primary borrower of the loan in question was Tanuj Roshi Poultry Farm and Shashi Kala Gupta, Jai Shree Ganesh Farms, Satinder Kumar Gupta and Tarun Gupta were Co-borrower. On the basis of application form duly signed by the Complainants and upon receipt of requisite documents, the Opposite Party-Bank sanctioned a loan in favour of the Complainants on 01.09.2018 for an amount of ₹3,82,00,000/-  repayable in 180 EMIs of ₹3,92,008/- at an interest rate of 9.20% MCLR variable for 6 months. Since one of the borrower and co-borrower were non-individual and the loan was for business purpose, pre-payment charges were applicable. However, no pre-payment charges were applicable after 30 months. Thus the foreclosure charges were levied as per terms and conditions of loan and the same was not in contravention of Reserve Bank of India’s circular.  The cause of action set up by the complainant was denied and a prayer for dismissal of the complaint was made.

 

5]                After hearing the counsel for the parties and going through the record, the Ld. District Commission partly dismissed the complaint, in the manner, as stated above.

 

6]                Aggrieved against the aforesaid order passed by the Ld. District Commission, the instant Appeal has been filed by the Appellants/ Complainant.

 

7]                We have heard Learned Counsel for the parties and have also gone through the evidence and record of the case, with utmost care and circumspection.

 

8]                The core question that falls for consideration before us is as to whether the Ld. District Commission has rightly passed the impugned order by appreciating the entire material placed before it. 

 

9]                After giving our thoughtful consideration, to the contentions raised and material on record, we are of the considered opinion, that the instant Appeal is liable to be dismissed for the reasons to be recorded hereinafter.

 

10]              It is the case of the Appellant that the Ld. Lower Commission while passing the impugned order has failed to appreciate the documentary evidence available on record, which resulted into perverse finding.  It has been submitted that the on the Complaint filed by the Appellants before the RBI, the Banking Ombudsman vide order dated 25.10.2019 asked the Respondents to accept the payment in part and when the accounts became zero, no foreclosure charges may be levied, but contrary thereto the Respondents levied the foreclosure charges. This led passing another order dated 23.06.2020 by the Banking Ombudsman asking the Respondents to refund the foreclosure charges, but despite that the Respondents only waived off an amount of ₹83,040.25P towards part payment charges and ₹14,947.24P as GST on 30.06.2020, but did not refund the balance amount to the Appellants. It has been argued that by not appreciating the aforesaid orders dated 25.10.2019 and 23.06.2020, the Ld. District Commission committed a grave error and the impugned order is liable to be set-aside.    

 

11]              Per contra, Learned Counsel for the Respondents submitted that there was no deficiency in service on their part and therefore no case is made out against them under the provisions of Consumer Protection Act, 2019. It has been argued that the Respondents vide e-mail dated 28.08.2019 informed the Appellants that their request for waiver of pre-payment penalty cannot be accepted. The basis for such a decision was that the primary loan applicant, Appellant No.4 (M/s Tanuj Roshi Poultry Farm) and one of the co-borrowers i.e. Jai Shree Ganesh Farms were considered as non-individuals and therefore, pre-closure/pre-payment as well as part pre-closure/part pre-payment charges were applicable as per the terms & conditions of the MID (Most Important Document) dated 13.08.2018 and Facility letter dated 29.08.2018. However, as a service gesture, the Respondents closed the loan account of the Appellants without levying any pre-closure charges on 16.07.2020 and waived off part payment charges of ₹83,040.25/-along with GST of ₹14,947.24/- levied for the part payment made by the Appellants as an exception, which factum was duly communicated to the Banking Ombudsman.

12]              Per material available on record, the Appellants had availed a loan against property from the ICICI Bank by mortgaging its property. Subsequently, the Appellants approached the Respondents for transferring the aforesaid loan in favour of Respondents under the category of “SME – Lon Against Property”. The primary borrower for this loan was M/s Tanuj Roshi Poultry Farms; whereas, Shashi Kala Gupta, Jai Shree Ganesh Farms, Satinder Kumar Gupta and Tarun Gupta formed the cohort of co-borrowers.  Thus, the aforesaid loan was extended to the Appellants for the purpose of business expansion and their property was mortgaged in favour of the Respondents as security fo the loan.  We find that the Ld. District Commission has duly considered the contention of the Appellants and recorded a categorical finding in Para 9 to the effect that “……..it is abundantly clear from Annexure C-2 the facility letter  issued by the OPs’ bank that the purpose of loan is for balance transfer and business expansion. Meaning thereby the complainants had availed the loan for the expansion of their business. Thus, it is out of our mind that how the complainants are claiming that the loan was an individual loan”. It is thus manifestly clear that the Ld. District Commission did not find any substance in the contention of the Appellants regarding the loan being an individual loan as it is outrighlty evident from a perusal of the facility letter that the purpose of the loan is business expansion, making it a commercial loan. Further, the Ld. District Commission has observed that in view of the Reserve Bank of India guidelines dated 02.08.2019, there is no doubt that banks shall not charge foreclosure or pre-payment charges on any floating rate term loan sanctioned to individual borrowers for purposes other than those of business.

13]              Once it is proved on record that the purpose of the loan is purely a commercial one, the foreclosure/ pre-payment charges are squarely applicable. The benefit of waiver of pre-payment charges is not available where the borrowers are not individuals e.g. in case of firm etc. Since the Appellants/ Complainants had availed the loan for the purpose of expansion of their business and as such they cannot be considered as individual borrower and thus, the Respondents have rightly levied foreclosure charges as per rules and regulations and there is no deficiency on the part of the Respondents. To our mind, no case is therefore made for any interference in the well reasoned findings recorded by the Ld. Lower Commission.

14]              No other point was urged, by the Learned Counsel for the parties.

 

15]              It is demonstrable from a reading of the impugned Order of the Ld. District Commission that it is certainly not an order passed without reasons or without applying the judicious mind. The facts and circumstances of the case have been gone into, weighed and considered, and due analysis of the same has been made. It also does not appear to be an order passed without taking into account the available evidence.

 

16]              In the wake of the position, as sketched out above, we are dissuaded to interfere with the impugned order rendered by the Ld. District Commission. The appeal being bereft of merit is accordingly dismissed and the order of the Ld. District Commission is upheld.

 

17]              All the pending application(s), if any, also stands disposed off accordingly.

 

18]              Certified Copies of this order be sent to the parties, free of charge.

 

19]              The file be consigned to Record Room, after completion.

Pronounced

28.03.2024.

                                                                                                  Sd/-

Sd/-

[PADMA PANDEY]

PRESIDING MEMBER

 

 

Sd/-

 (PREETINDER SINGH)

MEMBER

“Dutt”