STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

                                         U.T., CHANDIGARH 

                                            (Additional Bench)

1. India Bulls Housing Finance Limited, M-62-63, 1st Floor, Connaught Place, New Delhi.
2. India Bulls Housing Finance Limited, through its Branch Manager, SCF No.337-338, Sector 35-B, Chandigarh-160022.

                                                                                                         …Appellants

                                         V e r s u s

1. Suram Singh Rana  son of Late Sh.Jagat Ram.
2. Neelam Rana wife of Suram Singh Rana, both residents of House No.708, Sector 22-A, Chandigarh.

                                                                                            …Respondents

Appeal under Section 41 of the Consumer Protection Act, 2019 against order dated 03.02.2023 passed by          District Consumer Disputes Redressal Commission-I, U.T. Chandigarh in Consumer Complaint No.184/2020.

BEFORE:       HON’BLE JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                        MRS. PADMA PANDEY, MEMBER

                        MR.PREETINDER SINGH,MEMBER

Present   :       Ms.Niharika Goel,   Advocate for the appellants.

                       Sh.Arvind Kumar Sharma, Advocate for respondent No.1

                       (Respondent No.2 died on 12.11.2023)(Death certificate placed on record)

 PER PADMA PANDEY, MEMBER

                       This appeal is directed against the order dated 03.02.2023, rendered by the District Consumer Disputes Redressal Commission-I, U.T. Chandigarh (hereinafter to be referred as “the Ld. Lower Commission”), vide which, it allowed the complaint bearing No.CC/184/2020 partly by directing the Opposite Parties  as under ;

1. “to refund an amount of Rs.1,44,010/- to the complainants       alongwith interest @ 9% per annum from the date of filing of this complaint till realization.
2. to pay an amount of Rs.10,000/- to the complainants as compensation for causing mental agony and harassment to them;
3.     to pay Rs.7000/- to the complainants as costs of litigation.

 This order be complied with by the OPs within thirty days from the date of receipt of its certified copy, failing which, they shall make the payment of the amounts mentioned at Sr.No.(i) & (ii) above, with interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(iii) above.”

  2.                    Before the Ld. Lower Commission, it was case of the complainants that Complainant No.1 is practicing as an advocate for the last about 30 years and  complainant No.2 (now deceased) was  wife of complainant No.2 who  was the proprietor of “Rana Law Agency”.  In the year 2004, they  purchased 20% share in H.No.708, Sector- 22-A, Chandigarh and got possession of top floor from its owners.  In the same year, the complainants  also purchased 30% share in the aforesaid house and  got sale deed executed  in respect of the said share.    By getting possession of the first floor they became the owners with 50% of share in the said property. As per averments made in the complaint, in the month of July-August 2017, the complainants were planning to carry out renovation on the top floor and during that  period, an agent of the OPs contacted them  for providing loan facility for the purpose of renovation of the top floor. However, the OPs sanctioned Rs.24,75,328/- loan on 16.09.2017 (Annexure A/1). It was further averred  that at the time of sanction of loan, the OPs had directed the complainants to deposit Rs.5900/- towards processing fee, whereas after sanction of loan the OPs  again deducted Rs.24,022/- and then took Rs.18,122/- in excess as processing fee illegally. It was alleged  that out of Rs.25 lacs, the OPs paid Rs.24,75,328/- to the complainants. It was told to  the complainants that about Rs.198/- p.m. will have to be paid as insurance and thus total amount towards insurance was payable as Rs.35,757/- in 180 installments. The complainants were required to pay Rs.27,051/- p.m. as installment of loan amount and Rs.198/- p.m. of the insurance amount and total installment was fixed as Rs.27,249/- p.m. for 180 months i.e., for 15 years. That subsequently the complainants also entered into an agreement to sell to purchase remaining 50% share  i.e. ground floor for Rs.90 Lakhs in House No.708, Sector-22-A, Chandigarh and the sale deed was to be executed on 6.6.2019. The complainants approached the OPs for extension of loan facility upto Rs.35 Lakhs but the branch manager of OP No.2 informed that they were not granting any loan to anyone as their accounts were seized by the Enforcement Directorate at Bombay in money laundering case. Later on, the complainants approached HDFC Bank for availing loan facility for home loan against 50% share and also to take over the loan amount of Rs.25 lacs taken from the OPs which had been obtained after mortgaging 20% share in the house. It was alleged that the OPs was charging interest @ 18.75% p.a.. and whereas the HDFC Bank agreed to advance loan against the 20% share @ 10.05% p.a. and also agreed to extend the loan amount upto Rs.33 lacs (Annexure A/3). It was further stated that the complainants  applied for closure of loan account with the OPs and they issued letter dated 07.05.2019 showing the principal outstanding amount of Rs.24,40,876/- and also illegally shown foreclosure charges @ 5% i.e., Rs.1,22,043/- alongwith IGST @ 18% i.e., Rs.21,967/- (Annexure C/4). Accordingly total amount of Rs.26,02,780/- was paid to the OPs (Annexure C/5) and the NOC was issued by the OPs (Annexure C/6). It  was further stated  that the National Housing Bank vide its policy dated 14.06.2014 had advised to all the banks with regard to bring uniformity in prepayment of various loans and further directed that no bank shall charge foreclosure charges/prepayment penalties on all floating rate term loans sanctioned to individual borrowers (Annexure C/8). The complainants then sent a legal notice to the OPs calling upon them to release the excess amount charged, but the OPs neither gave any reply, nor the claim of the complainants was settled.     Hence, alleging deficiency in service and unfair trade practice on the part of the Opposite Parties, a consumer complaint was filed before the Ld. Lower Commission.

3.                      Pursuant to issuance of notice, Opposite Parties appeared before the Ld. Lower Commission and  contested the consumer complaint. In their reply, it was  stated that the loan availed by the complainants was for purchasing space for making office, as mentioned in the loan application forms submitted by the complainants to the OP (Annexure OP-3).   It was stated that as per the circular in question (Annexure OP-4) if the loan was pre-closed by an individual borrower, then, foreclosure charges/prepayment penalties shall not be attracted. However, the same shall be charged/levied in case of a company, firm etc. It was  further stated  that the complainants being a commercial entity applied above said loan facilities for business expansion. It was further stated that the foreclosure/prepayment penalties were charged/ levied by the OPs in view of the terms and conditions of the loan agreement duly executed between the parties. The complainant No.2 being a proprietor of the proprietorship Firm, also the borrower of the loan, was fully aware of the terms and conditions of the loan agreement. The sanctioning of the loan, name of the borrowers and guarantors, rate of interest, terms of the repayment and such other particulars have been clearly detailed in the schedule of the loan agreement. Copy of the loan agreement is annexed as Annexure OP-5.It was further stated that the Opposite companies   do  not fall under the guidelines of the Reserve Bank of India, being a Housing Finance Company, the opposite party follows the guidelines, directions and circulars issued by the National House Bank.   Other allegations were denied and a prayer was made for dismissal of the complaint.

 4.                   On appraisal of the complaint, and the evidence adduced on record, Ld. Lower Commission allowed the Complaint of the respondents/ Complainants partly, as noticed in the opening para of this order.   

5.             Aggrieved against the aforesaid order passed by the Ld. Lower Commission, the instant Appeal has been filed by the Appellants/Opposite Parties    

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

7.              The   main ground put forth  by the appellants is that in the loan account  sanctioned to the respondents, one of the borrowers or co-borrower was a non-individual and as per loan documents the loan against property was availed by the respondents in which  M/s Rana Law Agency was a co-applicant. The loan application form was submitted by the respondents alongwith Akshay Rana, Neelam Rana and M/s Rana Law Agency as applicants & co-applicants.  Thus, it was contended that the Ld. District Commission failed to appreciate the fact that the proprietorship firm was a co-applicant and the purpose of loan as mentioned in the undertaking of the respondent  was business expansion/working capital.  Further vide Circular dated 22.07.2016 of National Housing Bank issued clarification with respect to levy of foreclosure charges/pre-payment penalties and it was clarified that the Sole proprietorship concern/firm or an HUF as borrower or co-borrower will not be treated as individual borrower for the purpose of NHB circulars.  However, the term ‘individual borrowers’ cannot be applied to the firms or companies etc.  It was further contended that the loan account was  foreclosed by the respondents out of their own freewill and without any protest. Further the respondents after closing the loan account without any protest or any evidence of coercion cannot at a later stage be allowed to file a claim.   On the other hand,  Counsel for  respondent No.1 /complainant contended that the  impugned order  passed by the District Commission is quite just & reasonable and does not call for any interference.

8.                      In the loan Application Form attached as Annexure OP-3/A-2  with the appeal the name of the applicant is mentioned as Suram Rana Son of Sh.Jagat Ram and the name of co-applicant is written as Neelam Rana daughter of Sh.Khushal Chand.    It is also evident from Loan Application Form  that  against the column of “Employer/Business Name & address”,  it is  mentioned as M/s Rana Law Agency, House No.708, Sector 22A, Chandigarh.  Further a  perusal of Loan Sanction Letter issued by the appellants  on 14.09.2017 (Annexure OP-5/A-3)  reveals that the loan was sanctioned by the appellants to Mr.Suram Rana as the name of the applicant ‘Suram Rana’ is clearly shown in the said loan sanction letter and Name of the Co-applicant/guarantor is  shown as ‘M/s Rana Law Agency, Neelam Rana, Akshay Rana’.  Though  all the pages of the said sanction letter were duly signed by the applicant Suram Rana and the co-applicants/guarantors in the capacity of proprietor of Rana Law Agency yet  the said agency does not have any relation whatsoever with the loan in dispute as the property mortgaged in favour of the said term  loan is in the personal name of the Suram  Rana and Neelam Rana. So, it is clear from Loan Application Form & Loan Sanctioned Letter that the loan was availed by the respondents   and Rana Law Agency acted in the legal capacity of guarantor in the said loan and not as borrower.  Further, End Use proof was sent to the appellants (Annexure A-5 pages 52-53 of appeal file) on behalf of Suram Rana by AKR & Associates Chartered Accountants stating therein that the end-use purpose stated by the borrower at the time of disbursement of loan was “Personal Use” and it was confirmed and certified by the said CA firm that the disbursed amount was completely utilized by the borrower and no amount thereof was left unutilized and the said disbursed amount was applied by the borrower in accordance with the purpose stated above and actual usage is Personal use. Further it was certified that the disbursed amount has not been used by the borrower for any speculative or capital market purpose.  Thus, it is clear  that the loan was taken in the capacity as individual borrower for personal use and it was not used for the purpose of expansion of business. Neelam Rana is the proprietor of Rana Law Agency but the loan was not granted to Rana Law Agency, nor it was used for explanation of business etc.  therefore, the appellants  wrongly levied foreclosure charges.  The Learned  Lower Commission rightly observed that  the loan was taken in the capacity of individual borrower and accordingly ordered refund of  foreclosure charges  which were wrongly levied.

9.                 In view of the foregoing discussion, we are of the view  that the order passed by the Ld. District Commission is based on correct appreciation of   evidence and law on the point and does not suffer from illegality and perversity warranting any interference of this Commission.   

10.             There is delay of 331 days in filing the appeal. Though an application has been moved on behalf of the application for condoning the delay of 93 days in filing the appeal whereas as per office there is delay of 331 days  but the explanation given by the appellants does not make out a case for condoning the same. It is inter-alia stated in the application that certified copy of the order was not received and then on receiving notice of execution application , permission was sought from the head office and  then case was prepared but complete file alongwith demand draft stood lost. It is settled proposition of law that each day’s delay is required to be explained.  We find no reason to allow the application and condone the delay. Accordingly the application stands dismissed..

11.                     For the reasons recorded above, the appeal is dismissed  being barred by limitation as well as being devoid of merit,     with no order as to costs. The order of the Ld. Lower Commission is upheld.

12.                 Pending interlocutory application, if any, also stands disposed of.

13.                 Certified copies of this order be sent to the parties free of charge.

14..               The file be consigned to Record Room, after completion.