Kerala

Idukki

CC/229/2017

Adv.Shajimon P Lukose - Complainant(s)

Versus

The Authorized Officer Indus Ind Bank Consumer Finance - Opp.Party(s)

Adv.Joshy George

30 May 2019

ORDER

DATE OF FILING :30/10/17

IN THE CONSUMER DISPUTES REDRESSAL FORUM, IDUKKI

Dated this the 30^th day of May 2019

Present :

SRI. S. GOPAKUMAR PRESIDENT

SMT.ASAMOL P. MEMBER

CC NO. 229/2017

Between

Complainant : Adv. Shajimon P.Lukose,

Panickaparambil House,

Karimannoor P.O.,

Karimannoor Village,

Thodupuzha.

(By Adv: Joshy George)

And

Opposite Party :1 . The Authorised Officer,

Indusind Bank, Consumer Finance Division,

Old No.115,116, New No.34 G.N.Chetty Road,

T.Nagar, Chennai – 600 017.

2 . The Authorised Officer,

Indusind Bank, Corporate Office,

8^th Floor, Tower 1, One Indiabulls Centre,

841, S.B Marg, Elphinstone Road,

Mumbai – 400 013.

3 . The Authorised Officer,

Indusind Bank Registered Officer 2401,

General Thimmaya Road, (Cantonment),

Pune – 411 001.

4 . The Branch Manager, Indusind Bank,

Vengalloor P.O., Thodupuzha,

Idukki District, Kerala, Pin – 685 584.

O R D E R

SRI. S. GOPAKUMAR (PRESIDENT)

 

The case of the complainant is that,

 

Complainant's son availed a vehicle loan of Rs.99,000/- from opposite parties with 10.5% flat interest for 3 years, where the complainant was the guarantor. The total interest for this loan was Rs. 31,176/- and the total loan amount along with interest was to be repaid is Rs.1,30,176/- @ Rs.3,616 as

(Cont....2)

-2-

monthly instalments. After paying 20 instalment the complainant closed the loan. The complainant further stated that he is bound to pay only Rs.1,15,592/- only by way of principal amount of Rs.99,000/- plus interest for 593 days @ Rs.16,892/-. Out of which Rs.72,320/- paid by the complainant towards 20 instalments. Hence the balance amount to be paid by the complainant is Rs.43,272.50/-. But the opposite parties realized Rs.52,484/- from the complainant.

 

The complainant further stated that the settlement figure includes, the initial payment of Rs.10,317/- which the complainant had already paid at the time of availing the loan as clearly seen from the schedule of payment issued to the complainant. The amount of Rs.690/- is added towards cheque return charges. The complainant had already paid this amount on two occasions @ Rs.4,100/- each. The complainant further stated that the 4^th opposite party collected 2% as pre-closure charges which the complainant is not bound to pay as the loan is closed after 20 months from the date of availing the loan. On 28/07/17, the complainant issued legal notice to the opposite parties and the opposite parties replied it stating some false averments. Hence alleging deficiency in service and unfair trade practice against the opposite parties in collecting exorbitant amount from the complainant, filed this petition seeking relief such as to direct the opposite parties to pay Rs.9,212/- together with 12% interest to the complainant along with compensation.

 

Upon notice opposite parties 1 to 4 entered appearance and filed detailed reply version admitting the sanctioning of vehicle loan in question. Opposite parties further contented that, the opposite parties bank has clearly explained about all the terms and conditions of the loan agreement including default clauses, levy of additional interest and foreclosure charges etc. Only after understanding the same, the complainant had executed the loan agreement. Opposite parties further contented that actually the loan started from 11/12/15 and will expire on 07/11/18. Opposite parties further contented that, the complainant calculated the interest and the due amount in wrong way. It is very clear and known to the complainant that including the initial EMI amounts, actually the complainant had paid only 20 EMI's to the bank and a remaining 16 EMIs are pending at that time. The 16 EMI's comes around Rs.57,856.00. If pay it on regular basis and it includes Rs.51,277/- as principal amount and Rs.6579.00/- as the agreed interest. In this case the

(Cont....3)

-3-

interest of Rs.6,579/- was waived and he was liable to pay Rs.51,277/- being the balance loan amount and Rs.1025.00 as the 2% pre-closure charge and service tax. Then opposite parties collected Rs.52,484/- from the complainant as per RBI norms.

 

The opposite parties further contented that the opposite parties had financed only Rs.99,000/- against the invoice prize of the vehicle and the said amount will not be the part of the settlement figure. In this account two cheques issued by the complainant dated 07/11/16 and 07/06/17 were returned and for clearing that amount the complainant paid Rs.4,100/- on 14/11/16 and Rs.4180/- on 09/06/17 respectively. The opposite parties charging pre-closure charges as per the norms of Reserve Bank of India and as per the agreement. The opposite parties further contented that they are keeping good customer service and keep dignity in all the transactions and they already issued a statement copy to the complainant in this regard. Hence there is no deficiency in service involved in this subject matter, which is based upon a contract between the parties.

 

Evidence adduced by the complainant by way of proof affidavit and documents. Complainant was examined as PW1 and Ext.P1 to Ext.P8 were marked. Ext.P1 is the statement of account dated 27/07/17, Ext.P2 is the receipt dated 27/07/17, Ext.P3 is the loan agreement, Ext.P4 is the receipt dated 14/11/16, Ext.P5 is the copy of legal notice dated 02/08/17, Ext.P6 is the postal receipt, Ext.P7 is the Acknowledgement cards, Ext.P8 is the reply notice dated 16/08/17.

 

From the opposite parties side, Mr.Vidhu Kumar the legal manager of the first opposite party, is examined as DW1 and Ext.R1 to Ext.R5 were marked. Ext.R1 is the statement of account of the alleged loan, Ext.R2 is the copy of capital recovery method, Ext.R3 is the loan agreement, Ext.R4 is the copy of general power of attorney, Ext.R5 is the copy of schedule of charges.

 

Heard both sides,

 

The point for consideration is whether there was any deficiency in service from the part of the opposite party, and if so, for what relief the complainant is entitled to?

(Cont....4)

-4-

The Point:- We have heard the counsel for both the parties and had gone through the evidence on record.

 

The learned counsel for the complainant argued that from the total loan amount of Rs.1,30,176/-, he paid 20 instalments @ Rs.3,616/- each and the balance amount to be repaid was only Rs.43,272.50/-. His calculation is that, the principle loan amount was Rs.99,000/- plus interest for 593 days Rs.16,892/- . Hence the actual amount which he is bound to repay it only comes Rs.1,15,592/-. Out of this amount he repaid Rs.72,320/- by way of 20 instalments and balance amount he is legally bound to pay comes only Rs.43,272.50/-. But the opposite parties realized Rs.52,484/-. Hence the opposite parties are legally bound to repay Rs.9,212/- which is illegally collected by them from the complainant.

 

For clarifying his pleadings complainant filed a detailed argument note. In this argument note complainant specifically stated that the contention of the loan agreement were not read over to the complainant. The loan agreement and related documents were more than 16 pages. The opposite parties have no right to collect the interest for full loan period. The opposite parties collected Rs.1,025/- as pre-closure charges from the complainant. The learned counsel further stated that Ext.P1 loan settlement schedule issued by the opposite parties having no clarification in the figure stated therein. In Ext.P1 there shows an amount of Rs.10,317/- as initial payment due. The same amount was collected as per Ext.P2 payment schedule issued by the opposite parties, as the total initial amount paid is Rs.15,600/- including margin money Rs.9183+ document charge 1134. There is doubling in that amount. In the same way opposite parties collected cheque return charges of Rs.690/- and Rs.230/- as collection charges as per Ext.P1. In para 4 of the proof affidavit filed by the opposite parties, it is specifically stated that two cheques were returned and Rs.4,100/- and 4,180/- were collected by way of instalment and collection charges. Hence there is again doubling in that amount. The counsel further argued that as per Ext.P1, opposite parties collected Rs.83,685/- as instalments and also collected Rs.52,483.77/- at the time of closing the loan. That is an amount of Rs.1,36,168/- is collected from the complainant by the opposite parties in total. (75,405+8280+52,483.77). The agreed amount for 36 instalments is Rs.1,30,176/-. Then the opposite parties collected Rs.5,992/- excess than the agreed amount.

(Cont....5)

-5-

On the other hand the learned counsel for the opposite parties vehementaly argued that, the total repayable amount, the complainant is agreed is that Rs.1,30,176/-. Expecting the said amount bank is providing loan to the party which is the public fund. The profit of the bank is from interest. Hence the customer agrees with the bank that he shall pay the said amount including interest towards the repayment. In case of foreclosure, the bank is suffering the loss and the profit which it would have received if provided to some other person, who would close the loan by the agreement period. But the customer is having the liberty to close the loan at any time which he wishes. But he has to pay the foreclosure charges as a part of minute compensation for the loss of expected profit sustained by the bank. The opposite parties is produced Ext.R5, which is a system generated schedule of charge issued by the Reserve Bank of India. It is very clear that the foreclosure charges can be imposed by the bank at the rate of 2% to 5% out the outstanding principle amount dues. For substantiating their plea opposite parties relied the decision of Honourable National Consumer Disputes Redressal Commission in III(2013) CPJ 679 Nitin Vasisnt and Gaugan Vasisnt Vs.Central Bank of India and others, Standard Charted Bank Vs.Krishnalal Vasisnt Juneja II(2013) CPJ – 498 (NC).

 

In Revision Petition No.1193 of 2014 ICICI Bank Vs.Bhim Sen Lekhra, the Honourable National Commission was held that if the parties have agreed that the bank is permitted to take pre-closure charges then, there is nothing illegal in charging pre-closure on the part of the opposite parties.

 

The counsel further argued that in the loan account complainant paid 20 instalments. As per Ext.R2 Capital Recovery Method Chart Rs.24,597/- has been paid by the complainant towards interest out of Rs.31,176/-. The balance interest payable is Rs.6,579/- and the same has been waived. The balance 16 EMI payable by the complainant is Rs.57,856/- including interest of Rs.6,579/-. This interest is waived in the settlement. Hence the balance amount payable by the complainant is Rs.51,277/- only. The opposite parties bank charged 2% pre-closure charges in this balance amount of Rs.51,277/- that comes to Rs.1,025/- and also collected Rs.184/- as service charges. Accordingly opposite parties bank collected Rs.52,484/- from the complainant as settlement amount, and which is absolutely legal . Hence there is no question of any

 

(Cont....6)

-6-

deficiency of service happened on the part of the opposite parties in this matter.

 

On going through the averrment in the complaint and argument note of the complainant, Forum found that even though the complainant levelled so many allegation against the opposite parties bank regarding the doubling of initial payment and cheque bouncing charges, the complainant is prayed for getting Rs.9,212/-, being the amount illegally collected towards interest and pre-closure charges, at the time of final settlement of loan amount. Complainant has no claim upon the initial amount he paid or collection of cheque bouncing charges. Even though in the complaint, complainant specifically stated that an amount of Rs.9,212/-, realised by the complainant by way of interest and pre-closure charges. In the argument notes he stated that the opposite parties collected Rs.5,992/- as excess amount than the agreed amount and Rs.1025/- as pre-closure charges.

 

On going through the Exhibit produced by both sides, Forum convinced that at the time of putting signature in the loan agreement, the complainant is well aware of the loan amount, its interest rate, total loan amount along with interest to be repaid and its monthly EMI. It is very clear that after convincing all the terms and conditions of the loan agreement, complainant entered in to the contract. Contrary argument, such as the complainant is not aware of the contention of the loan agreement etc cannot be considered, because complainant is not an ordinary person, he himself stated that he is a leading lawyer. Then regarding the realisation of excess amount from the complainant, complainant have different version. In his complaint he stated that opposite parties realized an amount of Rs.9,212/-, illegally along with pre-closure charges. But in his argument not he specifically stated that opposite parties realised Rs.5,992/- as excess amount with Rs.1025/- as pre-closure charges. On going through Ext.R1 and Ext.R2 statement of account, it is seen that the actual balance amount the complainant is liable to be paid in total 16 balance instalment was Rs.51,277/- as principle loan balance and Rs.6,579/- being the balance interest. In total he is bound to pay Rs.57,856/-. From this amount opposite parties bank waived the balance interest of Rs.6,579/-. Then the opposite parties bank collected 2% foreclosure charges in the principle balance loan amount of Rs.51,277/-. That comes to Rs.1025/-.

 

(Cont....7)

 

-7-

 

The opposite parties bank is at liberty to collect pre-closure amount in the fixed or flat individual loan as per the Circular of the Reserve Bank of India dated 24^th May 2014. Except individual floating loans, opposite parties can collect pre-closure charges as per the circular. Hence collection of pre-closure charges in this case is not illegal. In this case on appreciation of evidences on record the Forum is of a considered view that opposite parties has not committed any deficiency in service and the amount which collected from the complainant by the opposite parties is legal, nothing found to fasten any burden upon the opposite parties. Hence complaint dismissed. No order to costs.

 

Pronounced in the Open Forum on this the 30^th day of May, 2019.

 

Sd/-

SRI. S. GOPAKUMAR (PRESIDENT)

Sd/-

SMT.ASAMOL P. (MEMBER)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Cont....8)

-8-

APPENDIX

Depositions :

On the side of the Complainant :

PW1 - Shajimon P.Lukose

On the side of the Opposite Party :

DW1 - Vidhu Kumar

Exhibits :

On the side of the Complainant :

Ext.P1 - The statement of account dated 27/07/17

Ext.P2 - The receipt dated 27/07/17

Ext.P3 - The loan agreement

Ext.P4 - The receipt dated 14/11/16

Ext.P5 - The copy of legal notice dated 02/08/17

Ext.P6 - The postal receipts

Ext.P7 - The Acknowledgement cards

Ext.P8 - The reply notice dated 16/08/17.

On the side of the Opposite Party :

Ext.R1 - The statement of account of the alleged loan

Ext.R2 - The copy of capital recovery method

Ext.R3 - The loan agreement

Ext.R4 - The copy of general power of attorney

Ext.R5 - The copy of schedule of charges.

 

 

Forwarded by Order,

 

 

SENIOR SUPERINTENDENT