Chandigarh

StateCommission

A/271/2023

INDIABULLS HOUSING FINANCE LIMITED - Complainant(s)

Versus

TARUN ARORA S/O KAJINDER KUMAR KUKI HOT SHOP - Opp.Party(s)

PARAS MONEY GOYAL ADV.

04 Apr 2024

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T. CHANDIGARH

[Additional Bench]

 

[1]

Appeal No.	:	A/271/2023
Date  of  Institution	:	09/10/2023
Date   of   Decision	:	04/04/2024

 

 

 

 

 

1.     India Bulls Housing Finance Limited, through its Managing Director, M-62 & 63, First Floor, Connaught Place, New Delhi – 110001.

 

2.     India Bulls Housing Finance Limited, Home Loans through its Branch Manager, SCO 347-348, Sector 35-B, Chandigarh.

….Appellants

Versus

 

Tarun Arora son of Late Rajinder Kumar, Kuki’s Hot Shop, Resident of House No. 3456, First Floor, Sector 23-D, Chandigarh.

…. Respondent

 

BEFORE: MRS. PADMA PANDEY   PRESIDING MEMBER

                PREETINDER SINGH     MEMBER

 

PRESENT	:	Ms. Niharika Goel, Advocate for the Appellants along with Ms. Harsimran, Legal Manager.
		Sh. Nirmal Singh Jagdeva, Advocate for the Respondent.

 

[2]

Appeal No.	:	A/211/2023
Date  of  Institution	:	01/09/2023
Date   of   Decision	:	04/04/2024

 

 

 

 

 

Tarun Arora son of Late Rajinder Kumar, Kuki’s Hot Shop, Resident of House No. 3456, First Floor, Sector 23-D, Chandigarh.

….Appellant

Versus

 

1.     India Bulls Housing Finance Limited, through its Managing Director, M-62 & 63, First Floor, Connaught Place, New Delhi – 110001.

 

2.     India Bulls Housing Finance Limited, Home Loans through its Branch Manager, SCO 347-348, Sector 35-B, Chandigarh.

 

…. Respondents

 

BEFORE: MRS. PADMA PANDEY   PRESIDING MEMBER

                PREETINDER SINGH     MEMBER

 

PRESENT	:	Sh. Nirmal Singh Jagdeva, Advocate for the Appellant.
		Ms. Niharika Goel, Advocate for the Respondents, along with
		Ms. Harsimran, Legal Manager.

 

PER PADMA PANDEY, PRESIDING MEMBER

 

 

1.         This order shall dispose of above captioned cases i.e. A/271/2023 filed by the Appellants/OPs (India Bulls Housing Finance Ltd. & Anr. Vs. Tarun Arora) and A/211/2023 filed by the Complainant (Tarun Arora Vs. India Bulls Housing Finance Ltd. & Anr.), against the order dated 25.07.2023, rendered by the Ld. District Consumer Disputes Redressal Commission-I, U.T., Chandigarh (for brevity hereinafter to be referred as ‘the Ld. District Commission’), vide which it partly allowed the Consumer Complaint bearing No. CC/428/2021, filed by the Complainant (Tarun Arora), against Opposite Parties (India Bulls Housing Finance Ltd. & Anr.), by passing the following order: -

“9]       In view of the above discussion, the present consumer complaint partly succeeds and the same is accordingly partly allowed. OPs are directed as under:-

i)        OPs are directed to issue fresh statement of account, by correcting the EMI amount as agreed in the T&C of loan sanction letter.

ii)       to pay Rs.30,000/- to the complainant  as compensation for causing mental agony and harassment to him;

iii)      to pay Rs.10,000/- to the complainant as costs of litigation.

10]     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. (ii) above, with interest @ 12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(i)&(iii) above.”

2.          Since, the issues involved in the above-said cases, except minor variations, here and there, of law and facts are the same, as such, we are of the considered opinion that the same can be adjudicated by passing a consolidated order.

 

3.         For the convenience, the parties are being referred to, in the present cases, as position held in Consumer Complaint before the Ld. District Commission.

 

4.         Before the Ld. District Commission, it was the case of the Complainant that he availed a loan of ₹24,41,798/- from the Opposite Parties. The Opposite Parties supplied no copy of loan agreement to the complainant and he was made to sign the agreement on the dotted lines. The installment of the loan was ₹30,610/- p.m. started from 05.04.2016 to be paid in 144 installments upto 05.04.2028. On 05.01.2018 due to a Scheme launched by the Opposite Parties the installment was reduced to ₹29,333/- p.m. on payment of certain amount paid in lump sum to the company and the payment schedule remained the same. The complainant was paying the regular installments of the loan, however, in the year 2020, due to Lockdown imposed by the Government, the business of the complainant closed and he could not pay the 05 monthly installments of loan. It was alleged that the Opposite Parties arbitrarily revised the installment repayment schedule from 144 to 187 and further, the amount of installment was also revised from ₹29,333/- to ₹30,971/-  and the tenure of the loan was arbitrarily extended for 03 years without taking any consent from the complainant. The complainant raised the issue with the Opposite Parties many a times and also sent legal notice dated 09.04.2021, but to no avail. Hence, the aforesaid Consumer Complaint was filed before the Ld. District Commission, alleging deficiency in service and unfair trade practice on the part of the Opposite Parties.

 

5.         The Opposite Parties contested the claim of the Complainant by filing joint reply inter alia, pleading that as per Clause 2.3 of the loan agreement they were entitled to change the applicable rate of interest at their sole discretion with prospective effect with intimation to the borrower/complainant and the same shall be acceptable to the borrower/complainant. It was asserted that that the Opposite Parties kept various factors in view while increasing/decreasing applicable rate of interest i.e. change in risk weightage, external or internal policies or unforeseen or extraordinary changes in the money market conditions and the decision taken by the Opposite Parties regarding this effect would be final and binding on Complainant. The Complainant agreed and undertook that the decision so taken by Opposite Parties would not be challenged. It was further asserted that Complainant was agreed that for administrative convenience the EMI amount is intended to be kept constant irrespective of variations in the adjustable interest rate and therefore, number of EMIs is likely vary on account of variation in adjustable rate of interest. It was pleaded that in view of this, Opposite Parties were entitled to increase or decrease number of EMIs with/without changing the EMI amount with prior intimation to the complainant. The Opposite Parties had intimated the Complainant about effective change in rate of interest in the loan account vide e-mail dated 20.04.2018, 17.08.2018, 18.06.2018, 08.10.2018 and 09.08.2018. Denying all other allegations and pleading no deficiency in service, the Opposite Parties prayed for dismissal of the Complaint.

 

6.         On appraisal of the pleadings of the parties and the evidence adduced on the record, Ld. District Commission partly allowed the Complaint and issued directions to the Opposite Parties as noticed in the opening para of this order.  

 

7.         Aggrieved against the aforesaid order passed by the Ld. District Commission, Appeal No. 271 of 2023 has been filed by the Appellants/OPs (India Bulls Housing Finance Limited & Anr. Vs. Tarun Arora) and Appeal No. 211 of 2023 has been filed by the Complainant (Tarun Arora Vs. India Bulls Housing Finance Limited & Anr.).

 

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

 

9.         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. 

 

10.         Having bestowed our anxious consideration to the matter, we are of the opinion that in the light of the material on record, answer to the question posed has to be in negative.

 

11.         It is the case of the Appellants that the Ld. District Commission while passing the impugned order has failed to appreciate the terms & conditions of the loan sanction letter and the loan agreement executed between the parties. Learned Counsel for the Appellants submitted that as per Clause 6 of the terms & conditions of the loan sanction letter the rate of interest is subject to revision due to change in reference rate, which in turn influences the EMI or tenure, but the Ld. District Commission while observing that the rate of interest is adjustable in nature wrongly held that the EMI amount to remain the same in terms of the loan documents, which resulted into perverse finding. It has been further submitted that the Ld. District Commission failed to appreciate that as per Clause 2.6 (Amortization) sub-clause (f) of the loan agreement the Appellants would be entitled to increase the EMI amount suitably if the said EMI would lead to negative amortization i.e. EMI not being adequate to cover interest in full or if the principal component contained in the EMIs is inadequate to amortize the loan within such period as determined by the Appellants and thus, the impugned order being contrary to the material available on record deserves to be set-aside.

 

12.         Record shows, the Respondent/ Complainant had applied for a loan facility and was sanctioned a loan against property amounting to ₹24,41,798/- by the Appellants vide loan sanction letter dated 31.03.2016. Accordingly, a loan agreement dated 31.03.2016 was also executed between the parties. Learned Counsel for the Respondent/ Complainant contended that he was made to sign the agreement on the dotted lines and no opportunity was extended to him to add or subtract any of the terms & conditions. We may add here that the loan agreement in question have been executed by the Respondent/ Complainant after understanding the terms & conditions thereof and as a sequel thereto had availed benefits under the said agreement, therefore, at this stage he cannot be allowed to wriggle out of the validly executed agreement. Moreover, the Respondent/Complainant who is well qualified & educated person executed aforesaid loan agreement with open eyes must accept the burdens of the said agreement along with benefits thereof. Reciprocal rights & obligations arising out of the agreement do not depend for their enforceability upon whether a party to the same finds it prudent to abide by the terms of the agreement. To our mind, by such a test no agreement would ever have a binding force. Therefore, the contention of the Complainant that he was made to sign the loan agreement on dotted line does not carry any weight and cannot be said to be one sided, harsh, oppressive and unconscionable to the complainant. Since the loan agreement explicitly specified that the home loan would be on an adjustable rate of interest with a floating reference rate, thus the Respondent was at all times aware that the rate of interest was variable. 

 

13.         It was the specific case of the Respondent that the Appellants arbitrarily revised the installment repayment schedule, amount of installment and tenure of the loan without there being any consent from him. Learned Counsel for the Appellant per force of the loan agreement refuted the said allegations. Here, it is worthwhile to refer to the relevant clauses of the loan agreement.  As per Clause 2.2 (c) of the loan agreement, the Respondent had expressly given the right to the Appellants to change the rate of interest at their sole discretion.  Additionally, in terms of Clause 2.3 of the loan agreement, the Appellants are entitled to change the applicable rate of interest with prospective effect with intimation to the borrower.  It has come on record that the due intimation was also given to the Respondent vide e-mails about effected change in rate of interest in the loan account. Further, as per Clause 2.6 (e) of the loan agreement, for administrative convenience the EMI amount was intended to be kept constant irrespective of variation in adjustable rate of interest and as a result the number of EMI is liable to be variable. Clause 2.6 (f) stipulates that the Appellants shall be entitled to increase the EMI amount suitably if the EMI amount would lead to negative amortization i.e. EMI not being adequate to cover interest in full and/or the principal component contained in the EMIs is inadequate to amortize the loan. The schedule to the loan agreement clearly states that loan was availed at floating rate of interest, the EMI amount was ₹30,610/- and tenure was 144 months at the time of executing the loan agreement. Thus, the schedule to the loan agreement also states that the number of EMIs and amount of EMI is subject to variation in terms of the loan agreement.   

 

14.         Admittedly, the Respondent has not paid 05 installments for the month of 05.04.2020 till 05.08.2020 and availed moratorium, under the guidelines of the Reserve Bank of India during COVID-19 period. A loan moratorium is a legally authorized period that delays the payment of money due on account of specific loan installments. In loan moratorium, loan repayment is not waived, instead it is only deferred. This means that as a borrower one still owe interest to the bank/financial institution. The RBI Guidelines dated 27.03.2020 annexed by the Respondent with the Complaint makes it evidently clear that all the Commercial Banks, Cooperative Banks, all India Financial Institutions and NBFCs were permitted to grant a moratorium of three months on payment of all installments falling due between March 1, 2020 to May 31, 2020. The repayment schedule for loans as also the residual tenor will be shifted across the board by three months after the moratorium period. Interest shall continue to occur on the outstanding portion of the loans during the moratorium period. The aforesaid RBI Guidelines nowhere waived off the payment of EMI during the period of moratorium opted during COVID-19.  Therefore, the change in EMI amount from 05.04.2016 initial installment was ₹30,610/- p.m. i.e. 144 installments to ₹29,333/- p.m. from 05.01.2018 was result of change in rate of interest applicable from Jan. 2018. Thereafter, during COVID-19 in terms with the RBI Guidelines the Respondent was granted moratorium for total period of 05 months, leading to increase in EMI amount to ₹30,971/- from 05.09.2020 to accommodate the outstanding dues from 05.04.2020 till 05.08.2020 and tenure was revised to 187 months. The Respondent was, at all times, aware that the rate of interest was variable. Although the Ld. District Commission recorded a categorical finding that the loan sanctioned carried adjustable interest rate and that the number of EMIs can change based on the change in the rate of interest as per rules, yet it erroneously partly allowed the consumer Complaint holding the Opposite Parties guilty of unfair trade practice and deficient in rendering proper services to the Complainant.   The impugned order passed by the Ld. District Commission is therefore based on wrong appreciation of evidence and law on the point and thus suffers from illegality or perversity. There is no deficiency in service on the part of the Appellants.   

 

15.         No other point, was urged, by the Counsel for the Appellant.

 

16.         This Commission, therefore, is of the opinion that the impugned order passed by the Ld. District Commission partly allowing the Complaint was highly erroneous and liable to be set aside. The present appeal is, therefore, allowed and the impugned order passed by the Ld. District Commission is set aside. Consequently, the Consumer Complaint is dismissed.

 

17.         In the wake of the position, as sketched out above, the Appeal No.211 of 2023 titled as “Tarun Arora Vs. India Bulls Housing Finance Ltd. & Anr.”, being bereft of merit is accordingly dismissed, with no order as to costs.

 

18.         The pending application(s), if any, also stands disposed of accordingly.

 

19.         Certified copy of this order be placed on the records of A/211/2023 – Tarun Arora Vs. India Bulls Housing Finance Limited & Anr.

 

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

 

21.         The files be consigned to the Record Room, after due completion.

Pronounced

04^th April, 2024                                                                 

                                         Sd/-                         

                                                                (PADMA PANDEY)

PRESIDING MEMBER

 

 

Sd/-

(PREETINDER SINGH)

MEMBER

“Dutt”