NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSIONNEW DELHIAPPEAL NO. 119 OF 2007
(Against the Order dated 24/01/2007 in Complaint No. 177/2006 of the State Commission Delhi)
1. S J S HOLDINGS LTD.F-213, H-1, MANSAROVAR GARDEN NEW DELHI - 110015 -
...........Appellant(s)
Versus
1. THE JAMMU AND KASHMIR BANK LTD.G-40, CONNAUGHT PLACE NEW DELHI - 110001 -
...........Respondent(s)
BEFORE:
For the Appellant :
NEMO
For the Respondent :
NEMO
Dated : 07 Jan 2010
ORDER
PER JUSTICE R.C. JAIN, PRESIDING MEMBER (ORAL) Aggrieved by the dismissal of its complaint no.177/2004 by the State Commission, Delhi vide order dated 24.01.2007, the original complainant SGS Holdings Limited has filed the present appeal. The consumer dispute in this case related to alleged deficiency in service on the part of the respondent Bank in not returning the title documents which the appellant had deposited with the respondent- bank as a security for the loan of Rs.20 crore which was prepaid with due interest as per the terms of the loan agreement. It appears that complaint was dismissed at the admission stage itself by the State Commission on twin grounds, firstly, that the complaint did not raise a consumer dispute and in any case there was no breach of terms and conditions committed by the bank upholding the stand after bank was entitled to levy certain charges under clause 2.5 of the terms of the loan before they can be called upon to return the title documents on payment of the loan. 2. We have heard Mr. Suhail Dutt, learned counsel for the appellant and Mr.G.M.Kawoosa, learned counsel representing the respondent and have given our thoughtful consideration to their respective submissions. 3. It would appear that during the pendency of the appeal on 16.11.2007, the Commission taking note of the facts and circumstances of the case and the nature of interim relief sought for by the appellant, made the following order: Having considered the respective contentions, we direct the respondent bank to return the title deeds to the appellant subject to deposit of amount of Rs.47 lakhs by the appellant with this Commission within four weeks. Release of this amount will be subjected to the final outcome in the appeal. Application stands disposed of. 4. In compliance of the said directions, the appellant deposited a sum of Rs.47 lakhs by means of a Fixed Deposit receipt in this Commission subject to final outcome of the appeal. However, it would appear that appeal of the appellant was dismissed on 24.07.2008 for non appearance and on an application made on behalf of the respondent Bank, this Commission allowed the respondent to withdraw the deposited amount alongwith interest accrued thereon. The appeal was subsequently revived and is taken up for hearing. 5. Mr. Dutt would assail the impugned order on the ground that it is legally unsustainable because the complaint filed by the appellant did raise a consumer dispute because the Bank was not returning the title documents to the complainant despite the payment of the entire loan amount alongwith interest and in any case the demand payment raised by the Bank was unjustified and not in accordance with the terms of the loan agreement. In this connection we may simply observe that the kind of dispute raised in the complaint was prima-facie a consumer dispute because the complainant will be deemed to be a consumer within the meaning of section 2 (1) (d) and the Bank admittedly a service provider having rendered the banking service including the loan facilities within the meaning of section 2 (1) (o) of the Consumer Protection Act, 1986. The State Commission was, therefore, not correct in dismissing the complaint at the threshold and even without issuing notice to the respondent Bank to show the justification for levying the charges of Rs.46,94,576.57 and not returning the title documents unless the said amount was paid to the Bank. 6. Now, coming to the question as to whether the Bank could levy any charges on account of prepayment of the loan by the complainant much less a sum of Rs.46,994,576.57 calculated @ 2% p.a., Mr. Dutt has invited our attention to the terms of the loan agreement more particularly to clause 2.5 which reads as under: The Borrower undertakes not to pre-pay the loan without the prior approval / consent / demand of the lenders. 7. Mr. Dutt submits that the only embargo in making prepayment of the loan to the Bank was the approval / consent of the Bank and in any case there is no provision in the said clause or any other clause to the effect that repayment of the loan would be subject to the any specified charges and, therefore, the demand of Rs.46,94,576.57 was not justified. His next submission is that the Bank had accepted the Demand Draft of Rs.20 crores on 04.01.2006 which action would signify the consent talked of in clause 2.5 of the loan agreement. Per contra, Mr. Kawoosa submits that demand of Rs.46,94,576.57 was made strictly in terms of clause 2.4 of the loan agreement which authorizes the Bank to charge penal interest @ 2% for default in non-compliance of the terms and conditions of the sanction which reads as under: Repayment Principal The Borrower undertakes to repay the entire principal amount in 24 equal quarterly installments of Rs.83.33 lacs each commencing from 01.10.2004 Interest The Borrower undertakes to pay the interest as and when charged to the account on accrual basis i.e. every month within a weeks time from the date it is debited / charged to the account and further to pay penal interest @ 2% per annum for default in : a. non-compliance of terms and conditions of the sanction. b. Delay in registration of charge with ROC & the additional interest will be charged till the delay persists. c. Non-payment / delayed payment of the interest ( beyond 7 days of actual accrual / installments of the loan. 8. Having examined the two clauses, we are of the clear view that clause 2.4 will not be attracted and could not have been invoked to determine the charge on prepayment of the loan under clause 2.5. The said clause is relevant only to the specified three conditions mentioned therein. In the present case, there is no dispute that the complainant had arranged the loan from Punjab National Bank and had pred-paid the same in the account of the respondent- Bank on 04.01.2006 with a prayer that the said amount be accepted without any prepayment / foreclosure charges. It is not in dispute that said amount was received by the authorized officer of the Bank and credited in the account of the complainant. Not only this, the complainant later paid a sum of Rs. 10 lakh towards interest which was also credited in his account and the account of the complainant with the Bank was squared up on 07.04.2006. This by itself would show that bank has given the requisite consent while accepting the said payment and squaring up the account of the complainant. However, it would appear that in February 2006, they raised the demand of the said amount based on their own interpretation of clause 2.4 readwith clause 2.5. We have already held that clause 2.5 is silent about the charges if any which could be levied by the Bank in accepting the pre-payment for giving their consent for the same but still we are of the opinion that consent talked of in clause 2.5 could be a conditional consent. In our view, the demand of Rs.46,94,576.57 calculated @ 2% is wholly untenable. However, looking into the facts and circumstances and the Bank practice levying charges on pre-payment of loans, we are of the view that at best the respondent Bank could levy charge @ 1 % on the outstanding loan amount which will be just and equitable to both sides. 9. In the result, the appeal is partly allowed and the impugned order is hereby set aside. Document of title have already been handed over to the complainant. Appellant had deposited a sum of Rs.47 lakh and some interest had accrued thereon by the time it was withdrawn by the respondent. We, therefore, direct the respondent Bank to retain only a sum of Rs.23,47,289/- and to refund back the balance amount to the complainant within a period of four weeks failing which the said amount shall carry interest @ 9% p.a. Appeal stands disposed of accordingly. Dasti to the counsel for the parties.
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