By Smt. C.S. Sulekha Beevi, President,<br /> <br /> <br /> 1. According to complainant he availed a housing loan of Rs.3,60,000/- from 3rd opposite party<br /> <br /> Bank. He disposed off the house to another. The purchaser intended to avail housing loan from Indian <br /> Overseas Bank, Perintalmanna. Therefore Indian Overseas Bank repaid the amount outstanding on behalf of complainant on 19-12-2003. On repayment 3rd opposite party levied Rs.7159/- as pre-closure charges. Complainant alleges that the amount collected is illegal. Hence the complaint.<br /> <br /> 2. 3rd opposite party filed version on behalf of himself and other opposite parties. Collection of Rs.7159/- as pre-closure charges is admitted. It is contended that pre-closure charges was levied as per the terms and conditions of the loan agreement. There is no deficiency in service and complaint is liable to be dismissed.<br /> <br /> 3. Evidence consists of the affidavits filed by both sides and Ext.A1 to A3 marked on behalf of complainant. Ext.B1 marked onbehalf of opposite party. Both sides have not adduced any oral evidence. Due to vacancy in the post of President in 2003, there was no sitting of the Forum for a long time. This case first came up before us on 3-8-2007 and was finally heard on 17-3-2008.<br /> <br /> 4. Complainant alleges that the pre-closure charges of Rs.7159/- collected from him is illegal and prays for refund of the same with interest. Opposite party admits the collection of Rs.7159/-. It is submitted that as per terms and conditions of the loan agreement it was stipulated that if the borrower opts to pre-close, preclosure charges @ 2% will be levied on the balance outstanding. That the charges were levied as per Bank's Circular No.31/02 dated, 18-10-2002. Photo copy of this Circular is Ext.B1. Opposite party has failed to produce the agreement. In M. Anees-ur-Rahman and others Vs. Jammu & Kashmir Bank Ltd and others 2008 CTJ 95 (CP) SCDRC (Karnataka) it is held that levy of pre-closure<br /> <br /> <br /> <br /> charges amounts to deficiency in service. In State Bank of India Vs. Dr. Usha Vaid and another (Revision Petition No.2466/07 decided on 26-07-2007) Hon'ble Natonal Commission has also taken the view that Banks and Financial Institutions should not collect any pre-closure charges if the loan is discharged by the borrower before the agreed period. The consumer's right to avail loan facility at a lesser rate of interest should not be curtailed by certain clauses of the alleged agreement between the parties. Applying the principles laid in the above decisions by Higher Commissions we hold that the collection of pre-closure charges amounts to deficiency in service.<br /> <br /> 5. In, the result, complaint allowed and opposite party is ordered to pay a sum of Rs.7159/- (Rupees Seven thousand one hundred and fifty nine only) to the complainant along with interest @ 10% from the date of filing the complaint till realisation within three weeks from the date of receipt of copy of this order. In the circumstances no order as to costs.<br /> <br /> Dated this 19th day of April, 2008.<br /> <br /> <br /> C.S. SULEKHA BEEVI, PRESIDENT<br /> <br /> <br /> <br /> <br /> E. AYISHAKUTTY, MEMBER<br /> <br /> <br /> <br /> <br /> <br /> <br /> APPENDIX<br /> <br /> <br /> Witness examined on the side of the complainant : Nil <br /> Documents marked on the side of the complainant : Ext.A1 to A3<br /> Ext.A1 : Photo copy of the Pass book of Account No.4102<br /> Ext.A2 : Photo copy of the request dated, 31-12-2003 by complainant <br /> to opposite party.<br /> Ext.A3 : Photo copy of the letter sent by 2nd opposite party to complainant.<br /> Witness examined on the side of the opposite parties : Nil<br /> Documents marked on the side of the opposite parties : Ext.B1<br /> Ext.B1 : Photo copy of the Circular No.P&SB Circular No.31 of 2002 dated, <br /> 18-10-2002.<br /> <br /> <br /> <br /> <br /> <br /> C.S. SULEKHA BEEVI, PRESIDENT<br /> <br /> <br /> <br /> <br /> <br /> E. AYISHAKUTTY, MEMBER<br />