D.o.F: 05/08/2009

D.o.O:15/07/2010

IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD

                                               CC.181/09

                       Dated this, the 15^th      day of July 2010.

PRESENT

SRI.K.T.SIDHIQ                                          : PRESIDENT

SMT.P.RAMADEVI                                                : MEMBER

SMT.P.P.SYAMALADEVI                       : MEMBER 

1.Smt.Mohini,K, W/o Madhava Saliyan,

2.Madhava Saliyan, S/o Aithappa,

3. Vijesh Kumar, S/o Madhava Saliyan,

All are R/atVijaya Laxmi Nivas,                                      : Complainants

Udyavara, Kunjathur PO, Kasaragod.

(Adv.B.Ramakrishna Bhat,Kasaragod)

The Authorised Signatory,

Dewan Housing Finance Corporarion Ltd.

Rabby Tower, Opp. Rly.station,Kannur. 670001.               : Opposite party

(Adv.A.N.Ashok Kumar,Kasaragod)

                                                                        ORDER

SRI.K.T.SIDHIQ : PRESIDENT:

    Case of the complainants is that the opposite party has not properly accounted the amount they remitted towards the repayment of housing loan and they collected exorbitant amount with high rate of interest and thereby they sustained monetary loss.  According to complainants they applied for a loan and opposite party sanctioned a sum of  7,90,000/- rupees as loan.  Out of those 743785 rupees only was paid to the complainant after deducting an amount allegedly towards insurance premium.  Subsequently, complainants repaid 1040687/- rupees towards the closure and discharge of loan.   The recovery of amount is against the terms and conditions of agreement and it amounts to deficiency in service.  Hence the complaint.

2.   According to opposite party, complaint is not maintainable since the transaction between the complainants and opposite party is already settled and no longer there exists debtor and creditor relationship and any issue arising after settlement of accounts does not come under the purview of the Consumer Forum and the dispute and relief claimed in the complaint is in respect of settlement of account that is not maintainable under Consumer Protection Act.  On merits it is the contention of opposite party that at the time when the complainants approached the opposite party for availing loan all the terms and conditions are clearly and specifically informed to the complainants and they duly signed the letter of offer cum acceptance after having fully understood the terms and conditions therein.  As per that the complainants are liable to pay interest on loan on floating rate and not @11% as claimed by the complainants.  The complainants were highly irregular in repayment of the loan amounts Since they offered for full settlement of loan the opposite party waived the prepayment charges by 1% thereby giving maximum benefits to the complainants.  Accordingly the complainants paid 803765/- rupees towards the settlement of loan.  Out of that 8, 00,000 rupees was remitted by way of D/D and the balance 3765 rupees paid in cash on 10/3/09.  There is no deficiency in service on their part and the complaint deserves to be dismissed.

3.    On the side of complainant Exts.A1 to A19 marked.  Exts.B1 to B6 marked on the side of opposite party.  Both sides heard and documents perused.

4.    The contention of opposite party is that the complaint is not maintainable before the Forum since accounts are already settled and there is no longer exists creditor and debtor relationship.  This contention is not sustainable since the opposite party is doing financial business and it amounts to service as defined under the C.P.Act.  So whenever there is deficiency in service it can be adjudicated before the Forum.  As per Sec.2 . 1(g) deficiency’ means any fault, imperfection, shortcoming or inadequacy  in the quality nature manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed  by a person in pursuance of a contract or otherwise in relation to any service’.  This definition indicates that deficiency can be attributed to past services also.  The opposite party has no case that they have not rendered any service to the complainants.  The other contention of opposite party is that the complainant is one for the settlement of account and hence it is not coming within the jurisdiction of the Forum.  This contention is also  no legs to stand since the complaint is not for settlement of any account but against the deficiency in service rendered by the opposite party alleging that they have collected excess and exorbitant amount with high rate of interest and the amount remitted were not properly accounted.

5.   To substantiate the case, the complainants produced Exts.A3 to A16 receipts issued by opposite party.  But corresponding entries in the statement did not reflect the entire amount but it is seen that some amounts in different counts are deducted.  In Ext.A3 dtd.28/10/2008 it is shown that opposite party has received 29650/- rupees towards EMI and 50/- rupees towards service tax and 300 rupees as collection charges.  But the corresponding entry in the statement of account shows that EMI received is 29163/- rupees and service tax is 37 rupees and recovery charges 500 rupees.  As per Ext.A4 receipt dtd.4/6/08 the opposite party has seen received 40,000/- rupees towards EMI.  But in statement of account it is seen that 39750 rupees is adjusted towards EMI and 250/- rupees is towards cheque return and other charges.  Similarly as per Ext.A6 receipt dtd. 29/2/08 the opposite party is seen accepted 21000/- rupees towards EMI.  But in the statement of account it is shown that EMI received is 20750/- rupees and 250 rupees towards recovery charges.  It is pertinent to note that the said amount is directly remitted by the complainants to opposite party.  So, on what  ground they levied the collection charges is also not explained by opposite party.  Similarly this discrepancies are evident in the amounts accounted in Ext.B5 which was collected as per Exts.A7 to A15.  Apart from that as per Ext.B5 it is seen that the opposite party has collected prepayment charges!  On 29/1/09 they have collected 7260/- rupees and on 10/3/2009 3765 rupees.  On what ground the opposite party has collected the prepayment charges in quite invalid.  It is pertinent to note that the loan granted to the complainants were having a period of 20 years for repayment and the complainants have settled the account within 3 years.  Further even according to opposite party they were chronic defaulters in repayment.  Under such circumstance, their remedy available is to foreclose the loan and  in that event they cannot collect  any pre closure charges. Usually, when one pre close a loan the banker would be happy and they will give some relaxation in the interests since they can make use of the money for another loan.  In this case even for the early closure of loan the opposite party is seen collected a sum of 7260+ 3765= 11025 rupees towards the prepayment charges for which there is absolutely no justification.

6.    The Hon’ble Karnataka State Consumer Disputes Redressal Commission in the case of S.Kripanidhi Educational Trust vs. Union Bank of India reported in III (2009) CPJ 82 has held that collection of pre closure charges is illegal.  Earlier a similar view was taken in the cases reported in II (2008) CPJ 166 and III (2008) CPJ 178.  Again in the case of M Anees Ur. Rahman and others vs. Jammu Kashmir Bank Ltd and others reported in 2008 CTJ 95 (CP) (SCDRC) the Hon’ble Karnataka State Consumer Disputes Redressal Commission has held that the collection of pre payment charges without rendering any service and instead of charging interest on pro-rata basis charging interest on entire loan amount would amount to unjust enrichment.

7.   Another case of the complainant is the opposite party had illegally retained the insurance premium which was collected for insuring the house for the entire term of loan.  But as per Ext.B5 22629/- rupees is seen accounted towards the repayment of premium.  The complainant has not produced any document to show the actual balance amount to be refunded after deducting the premium during the term of pendency of loan to prove his claim that he is entitled for more refund in insurance premium.

        In the result we are of the view that the opposite party has committed deficiency in service by collecting excess and illegal amounts from the complainant which they were legally not entitled.  Thereby the complainant has suffered not only monetary loss but mental sufferings also.  Therefore the complainants are entitled for a reasonable compensation we fix a global sum of 30,000/- rupees as compensation (this includes the refund of prepayment charges also).

    Hence, the complaint is partly allowed and opposite party is directed to pay 30,000 rupees as compensation to the complainants together with a cost of 3000/- rupees.  Time for compliance of this order is limited to 30 days from the date of receipt of copy of the order.  Failing which opposite party shall  further liable to pay interest @9% per annum for 30,000/- rupees from the date of complaint till payment.

   Sd/                                                           Sd/                                                 Sd/

MEMBER                                     MEMBER                                      PRESIDENT

Exts:

A1- Letter of offer cum acceptance

A2—do-

A3-to17- receipts issued by OP

A18-16/6/09- copy of lawyer notice

A19-copy of statement of account issued by MSC Bank,Kunjathur.

B1-copy of  Power of attorney

B2-copy of Letter of offer cum acceptance

B3- copy of loan agreement

B4-20/1/09-copy of communication made by op to head office

B5- transaction details

B6-3/7/09- reply notice

   Sd/                                                                                 Sd/                                                                       Sd/

MEMBER                                         MEMBER                                      PRESIDENT

eva/

/Forwarded by Order/

SENIOR SUPERINTENDENT