DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION PALAKKAD
Dated this the 13th day of April, 2022
Present : Sri.Vinay Menon V., President
: Smt.Vidya.A., Member
: Sri. Krishnankutty.N.K,Member.
Date of filing: 15/04/2021
CC/75/2021
V.C.Janardhanan,
S/o B.K.Menon(Late)
VI/205,Shantashree,Keralassery Post, - Complainant
Palakkad -678 641
(Party in person)
Vs
The Chief Manager,
Indusind Bank Ltd,Consumer Finance Division,
Jain Tower-II,Near Al-Shifa Hospital, - Opposite Party
Edapally,Kochi-682 024
(Exparte )
O R D E R
By Smt.Vidya.A., Member
Brief Facts of the complaint:-
1. The complainant availed a vehicle loan of Rs.5 Lakhs on 18/05/2019 from the opposite party for the purchase of vehicle , ‘Maruthi Dzire’ through an agreement. The loan amount was directly given to INDUS MOTORS,Ottappalam. The total liability for the said purchase was declared as Rs.6,68,750/- including the interest of Rs.1,68,750/- against which an initial amount of Rs.1,32,838/- paid as per the agreement. The opposite party allotted a car loan account with no: INDB001580000100 in the name of the complainant and the loan was agreed to be repayable on 60 EMIs which has to be paid on or before 18th of every month starting from May 2019.
The opposite party did not provide copy of the agreement to the complainant inspite of his repeated requests and mails and they furnished only a copy of statement of accounts, to him after 18 months i.e. on 28/07/2020. As the servicing and recovery pattern of the opposite party appeard to be detrimental to the complainant’s interest, he decided to foreclose the vehicle loan and approached the ESP branch office and they informed that the overdue amount is Rs.4,10,350/- as on 10/09/2020 and a cheque is drawn on SBI,Keralassery Branch in closure of the vehicle loan account.The complainant gave a complaint to the opposite party on 25/10/2020 stating that they have collected excess amount towards pre closing the vehicle loan which is in violation of the consumer rights guaranteed by the RBI circular No. RBI/2015-16/59 of 01/07/2015 and 2019-20/21 of 02/08/2019. The opposite party was requested to compute the interest from the date of sanction till the date of foreclosure and refund the excess amount. The complainant received a reply in which the opposite party admit the fact of amount recovered stating that the a sum of Rs. 73,890/- inclusive of matured interest portion and Rs.11,846/- towards foreclosure charges was collected. The reasons stated by the opposite party is that
1. As per loan agreement, it was agreed to repay the total amount inclusive of interest charges amounting to Rs.1,68,750/-
2. Waived the un matured interest charges payable for the remaining tenure of loan and
3. The rate of interest, foreclosure charges and other charges are mentioned in the first schedule of the Loan agreement and are within the ambit and norms of the Regulatory Authority.
The reasons stated by the opposite party are not binding on the complainant as there is no bar in exercising the foreclosure option despite the terms of agreement. Further, the unmatured interest charges are in any case not applicable since the Loan account is closed on 10/09/2020.
In the reply letter, the complainant demanded the opposite party to refund a total sum of Rs. 30,489/- clearly explaining the details but the opposite party did not respond to that.
The opposite party is liable for their deficiency in service. So this complaint is filed for directing the opposite party.
1.To refund the total amount of Rs. 30,489/- comprising of Rs.3,710/-(towards difference in paid/payable loan amount), Rs.11,864/-(towards fore-closure charges recovered unjustly) and Rs. 14,915/-(unexplained credit arising out of initial payment effected by the complainant)
2. To direct the opposite party to pay Bank interest @ prevalent PLR until the settlement.
3. and to pay compensation of Rs. 10,000/- towards physical and mental agony and for other inconvenience suffered by the complainant.
2. Complaint admitted and notice issued to the opposite party. Even after the receipt of notice , the opposite party did not appear before the Commission and so they were set exparte.
3. Complainant filed chief affidavit along with documents which were marked as Ext A1 to A6 and evidence closed. Heard the complainant.
4.Main Issues:-
1. Whether there is any deficiency in service on the part of opposite party ?
2. Whether the complainant is entitled to the reliefs claimed ?
3. Relief as to cost/compensation.
Issues 1,2 & 3
5. We have perused the chief affidavit and documents produced by the complainant. On perusual of the documents, it is seen that the complainant had entered into a loan agreement with opposite party bank bearing account number ESPO7231C dated 18/05/2019. The agreement was executed for purchasing a vehicle MARUTI DZIRE VXI1197CCBSIV and availed a finance for an amount of Rs.5,00,000/-. The complainant has not produced the loan agreement entered in to between the parties. He contended that the bank did not furnish him a copy of the agreement even after repeated requests and mails send by him. In the absence of the Loan agreement we are unable to verify the terms and conditions mentioned therein .
6. The Bank remained exparte even after the receipt of notice issued by this Commission. In Ext A3, reply letter dated 11/04/2020 sent by the opposite party bank to the complainant, the Bank stated that the complainant agreed to repay the loan amount of Rs. 5 Lakhs together with interest charges of Rs.1,68,750/- totalling to Rs.6,68,750/- in 60 equated monthly installments payable on or before 18th day of every month. They further contended that the complainant had remitted 15 monthly installments amounting to Rs.11,150/- each and also remitted Rs.4,10,350/- at the time of foreclosing the loan account.
7. The complainant’s grievance is that the Bank had collected excess amount on foreclosing the Loan, which is against the RBI rules and circular number RBI/2019-20/29 dated 02/08/2019.
The complaint produced the RBI circular RBI/2019/20/29 Dated 02/08/2019 relating to “Levy of Foreclosure charges/Pre payment ‘Penalty on Floating Rate Term Loans”, which is marked as Ext A4 . As point no(2), it is stated that “It is clarified that Banks shall not charge foreclosure charges/ Pre- payment penalties on any floating rate term loan sanctioned, for purposes other than business, to individual borrowers with or without co- obligants”. But the complainant has not stated any where in the complaint or affidavit , the rate of interest and whether it is fixed or floating. From Ext A6, the letter by the complainant to the opposite party Bank and Ext A1, Account statement, the finance rate is shown as 6.75 flat. In the absence of the loan agreement which is the crucial document, we cannot ascertain the rate of interest and whether it is fixed or floating.
8. In reply letter Ext A3, the Bank has stated that while appropriating the EMI towards the loan dues, the Bank has followed the prescribed accounting standard. The interest agreed and payable for extending the finance facility (i.e. Rs.1,68,750/)was distributed for the entire loan tenure and collected as part of the equated monthly installments in accordance with the Credit Recovery Method of the Bank. The Bank contented that, they collected Rs.73,890/- towards matured interest and Rs.11,864/- towards foreclosure charges and they did not collect any excess amount as alleged by the complainant.
9. The complainant claims Rs.3710/- towards difference in paid/payable loan amount. From Ext A1, it is evident that the bank collected Rs.3190/- as documentation charge and Rs.574/- its applicable GST totaling to Rs.3764/-. Such charges are normal in Banking transactions and the complaint failed to explain whether he had included these amounts in his calculation. The complainant did not produce the calculation statement showing the details as to how he arrived at this calculation as required by the Commission. Regarding the complainant’s contention of non refunding of Rs.14915/-being the difference in the amount of initial money paid i.e. Rs.1,32,838/- and margin money of Rs.1,17,923/- it is clear from the statement of account that the amount is considered in the balance shown in the statement of account. Regarding the foreclosure charges, the bank is not entitled to collect it on any floating rate term loan sanctioned for purposes other than business to individual borrowers as per Ext A4. Since the bank failed to provide the loan agreement showing the type of interest, the bank is directed to refund the foreclosure charges collected from the complainant together with interest thereon.
10. There is deficiency in service on the part of the opposite party Bank in not providing a copy of the loan agreement to the complainant. Non - clarification on the part of the Bank has caused the complainant to file this complaint. This resulted in inconvenience, physical and mental strain to the complainant. The opposite party is liable to compensate the complainant for that.
Even after receiving notice from this Commission the opposite party bank did not appear and file their version. Since they remained exparte, the evidence adduced by the complainant stands unchallenged.
In the result the complaint is allowed in part
We direct the opposite party bank to refund Rs.11,864/-(Eleven Thousand Eight Hundred and Sixty Four Only) collected as foreclosure charges together with interest at @ 9% from 10/09/2020 till payment.
We further direct the opposite party Bank to pay Rs.7500/- as compensation for their deficiency in service, inconveniences, mental and physical strain suffered by the complainant and Rs.2500/- as cost of this litigation.
Order shall be complied within 45 days from the date of receipt of the order.
Pronounced in the open court on this the 13th day of April 2022.
Sd/-
Vinay Menon V
President.
Sd/-
Vidya.A
Member
Sd/-
Krishnankutty.N.K
Member
Exhibits marked on the side of complainant
Ext. A1– Copy of Statement of account of the complainant from18/05/2019 to 05/06/2020 Dated 28/07/2020.
Ext.A2 - Copy of complaint made by complainant to the opposite party bank.
Ext.A3 - Reply by opposite party ( original)dated 11/04/2020.
Ext.A4 - RBI circular RBI/2019-20/29 Dated 02/08/2019.
Ext. A5- RBI Circular RBI 2015-16/59 Dated 01/07/2015.
Ext A6- Copy of Reply notice sent by complainant along with A/D Card .
Exhibits marked on the side of Opposite parties
Nil
Cost:
