Punjab

StateCommission

CC/35/2016

Ravinder Singh Judge - Complainant(s)

Versus

The M.D. India Bulls Housing Finance Ltd. - Opp.Party(s)

Arnav Sood

14 Dec 2017

ORDER

                                                               FIRST ADDITIONAL BENCH

 

STATE  CONSUMER  DISPUTES  REDRESSAL  COMMISSION,     PUNJAB

          SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.

 

                   Consumer Complaint No.35 of 2016

 

                                                          Date of Institution   : 03.02.2016          

                                                          Order Reserved on : 12.12.2017

                                                         Date of Decision     : 14.12.2017

 

Ravinder Singh Judge son of Milkha Singh, resident of VPO Sahri, Phagwara Road, District Hoshiarpur

                                                                                                                                                                                                                                                                                                          ….Complainant

                                      Versus

 

1.      The Managing Director, India Bulls Finance Ltd., F-60,   Malhotra Building, 2nd Floor, Connaught Place, New Delhi.

 

2.      Branch Manager, India Bulls Finance Ltd, Branch Office, The           Mall, 3rd Floor, Sutheri Road, Hoshiarpur presently office     shifted to India Bulls Finance Ltd., SCO 8-9, Ist Floor, Cyrstal   Plaza, Garha Road, Above HDFC Bank, Chotti Baradari,           District Jalandhar.       

 

                                                                             Opposite parties

 

Consumer Complaint U/s 17(1)(a) of the Consumer Protection Act, 1986 (as amended up to date).

 

Quorum:-

          Shri J. S. Klar, Presiding Judicial Member.

              Smt. Surinder Pal Kaur, Member.

Present:-

          For the complainant         :  Sh. Arnav Sood, Advocate

          For opposite parties         :  Sh. P.M. Goyal, Advocate

…………………………………………………………………………………….

J. S. KLAR, PRESIDING JUDICIAL MEMBER:-

                                     

           The complainant has filed this complaint U/s 17(1)(a) of the Consumer Protection Act 1986 (in short the "Act) against OPs on the averments that he took housing loan of Rs. 46,01,000/- @ 12% from OPs, vide account no. HHEH0S00026330. He executed a mortgage deed in favour of OPs, as security of the loan amount.  He paid all loan installments without any default to OPs at their branch office Hoshiarpur and 'no due certificate' was also issued to him by it on 18.07.2014. He requested OP no.2 to supply the loan account statement to him, but it was intimated that the same has been sent to higher authorities for scrutiny and would be provided to him, as soon as it was received at branch office. After two weeks, the loan account statement was issued by OP no.2 to him for the period 22.07.2000 to 22.07.2014. The OPs have charged interest @ 24% per annum, instead of sanctioned rate of interest of 12% per annum from him. He further pleaded that he checked the website of OPs, where the interest rate for loan amount was shown  as 9.95% to 10.90% up to 75 lac. The complainant has, thus, alleged excessive charging of interest @ 12% from him by OPs. He prayed for refund of excessive interest, charged by Ops from him exceeding 12% rate of interest from the date of first installment i.e. 01.02.2008, further to pay Rs. 1 lac as compensation for mental harassment and interest @ 12% per annum w.e.f. 01.02.2018 till actual date of payment and prayed for Rs.25,000/- as costs of litigation.

2.      Upon notice, OPs appeared and filed written reply and contested the  complaint of the complainant by raising preliminary objections, that complaint is not maintainable, as complainant has no locus standi to file the  present complaint. The complainant along with other borrowers availed the loan facility from OPs for commercial activities and he is not a consumer. Any deficiency in service and unfair trade practice on the part of OPs was denied. OPs also pleaded in the preliminary objections that complainant and co-borrower Jaswant Kaur approached OPs for availing loan facility of Rs.46,01,000/- and after completing formalities, the loan was sanctioned, vide sanction letter to complainant and disbursed to him as per terms and conditions of the loan agreement. The said loan was disbursed to complainant at the adjustable interest rate of 18% (15.75 IHFFL-FRR + 2.25 (margin) and was payable in 120 installment of Rs.82,904/- against loan account no. HHEHOS00026330. The complainant opted for floating rate of interest at the time of taking loan, which is reflected from Schedule B of loan agreement, duly signed by the complainant along with his co-borrower. In case of any change in the prime lending rate (PLR) of the OPs, the rate of interest may increase or decrease from time to time and therefore amounts of installments of tenure of repayment may also change accordingly, as per amortization clause of Schedule B of the loan agreement. In term of Section 29-A of NHB Act, OPs were registered with said NHB. In term of Section 30-A of NHB, NHB is to determine the policies and issue directions in this regard to the institutions working under it. The NHB is a regulator, in so far as the business of OP is concerned. The complainant availed loan @ 18% per annum, which was floating rate of interest in nature. OPs prayed for dismissal of the complaint.

3.      The complainant tendered in evidence his affidavit Ex.CA along with copies of documents Ex.C-1 to Ex.C-5 and closed evidence. As against it, OPs tendered in evidence affidavit of Sanjeev Kumar Regional Legal Manager Ex.OP-A along with copies of documents Ex.OP-1 to Ex.OP-2(A) to OP-2(L), repayment schedule Ex.OP-3, statement of account Ex.OP-4 and closed evidence.

4.      We have heard learned counsel for the parties at considerable length and also examined the record of the case.

5.      The first point falling for adjudication in this complaint before us is as to whether complainant is consumer of OPs or not. The complainant and his co-borrower Jaswant Kaur obtained loan of         Rs. 46,01,000/- from OPs. On the other hand, OPs have pleaded that they obtained loan for commercial purposes. The matter can be determined by reference to loan agreement and other documents on the record, as to for what purpose this loan was taken by complainant. The loan agreement Ex.OP-1 dated 30.11.2007 is on the record. The complainant obtained home equity loan, vide Ex.C-2 on the record, therefore complainant is, thus, held to be consumer in this case.

6.      Now, we touch the core point of controversy, as to whether complainant is entitled to refund of the excess charged amount of interest exceeding 12% rate of interest per annum from OPs and to direct the OPs to charge only 12% rate of interest from 01.02.2008 till date of actual payment and for compensation in this case. It is an undisputed fact that complainant availed loan from OPs and also executed loan agreement and mortgage deed in favour of OPs, as a collateral security. The amount was disbursed to complainant by OPs. Ex.C-1 is mortgage deed executed by complainant in favour of OPs. Ex.C-2 is 'no due certificate' of home equity issued by OPs to complainant. Ex.C-3 is Statement of account showing the rate of interest as 24.75%  on the record, as chargeable from complainant. The rate of interest is recorded, as 24.75% in column 'rate of interest) (ROI%). Ex.C-4 is interest rates chart shown in website of OPs, wherein rates have been shown as 9.95% to 10.90% up to 75 lac. The complainant also served legal notice Ex.C-5 to OPs in this regard. The complainant also filed his affidavit on the record in support of his averments vide Ex.C-A. As against it, OPs case is that complainant opted for floating rate of interest by taking up schedule B of loan agreement. The complainant is bound by the floating rate of interest, which are variable from time to time, as he himself opted for Schedule B of loan agreement in this case. The averments and contention of OPs in this case are that it was made clear to complainant that in case of any change in the  Prime Lending Rate (PLR) of the OPs, the rate of interest may increase and decrease from time to time and therefore amount of installments or tenure of repayment may also change accordingly, as per Amortization Clause of Schedule B of the loan agreement. The complainant availed loan @ 18% , which was floating in nature and as such he is now estopped in challenging to the  contrary. The complainant was fully conversant with fact to the effect that said loan was disbursed at adjustable interest rate of 18% (15.75 (IHFFL-FRR) + 2.25 (margin)  and was payable in 120 installments of Rs.82,904/-  against loan amount no. HHEH0S00026330. The complainant got the loan from OPs on floating rate of interest and this fact was made clear to him, in case of any change in the prime lending rate (PLR) of the OPs, the rate of interest may increase or decrease from time to time.  OPs also tendered in evidence affidavit of Sanjeev Kumar Regional Legal Manager Finance Ex.OP-A. Ex.OP-1 is loan agreement executed between the parties. Ex.OP-2 is demand promissory note. Ex.OP-3 is repayment schedule dated 09.03.2016.  Ex.OP-4 is account statement and rate of interest has been shown as 24.75% in it. The complainant opted for schedule B of loan agreement to pay IHL-PLR 15.75% per annum (as on the date of execution of this agreement) and adjustable rate of interest IHFL PLR + 2.25% p.a = 18% p.a. The amortization clause of Schedule B of loan agreement further lays down that borrower will amortize loan, as stipulated below. The complainant also executed demand promissory note in favour of OPs agreeing to pay interest @ 18% p.a at such other rate as IHFL may fix from time to time. Ex.OP-2/A is document of OPs addressed to customer for change of rate of interest followed by documents Ex.Ex.OP-2/B to Ex.OP-2/K. Undoubtedly, these documents record the varying floating rate of interest, but point in dispute is whether OPs gave any notice to complainant of being heard before changing the rate of interest. There are no postal receipt or courier receipt adduced by the OPs that notices Ex.OP-2/A to Ex.OP-2/K were ever dispatched to complainant or he was actually given notice of variation in rate of interest by OPs. These notices are not proved to have been sent to complainant by OPs in our view. The complainant could have changed the Bank by taking loan from some other Bank and he remained totally deprived of this opportunity by not giving him notice to keep him abreast of changing rate of interest by OPs in this case. When complainant opted for floating rate of interest, then in that eventuality, notices must have been given to him before varying the rate of interest to his disadvantage by increasing it. No such notice has been given to complainant by OPs in this regard. No postal receipts or courier receipts has been produced on the record by OPs to instantiate this point on the record. So, we hold that, increasing rate of interest of more than 18% by OPs should have been only after giving notice to complainant and after hearing him only and not without notice to him.

7.      As a result of our above discussion, we decide this complaint by holding that OPs can increase rate of interest from 18% p.a only by giving notice to complainant and not otherwise. The OPs are at liberty to give fresh notice to complainant and thereafter to proceed in accordance with loan agreement, as agreed upon between the parties in the matter of floating rate of interest. The complainant is awarded Rs.40,000/- as compensation for mental harassment and Rs.20,000/- as costs of litigation. The above said amounts shall be paid by OPs to complainant within 45 days from the date of receipt of certified copy of this order.

8       Arguments in this complaint were heard on 12.12.2017 and the order was reserved. Certified copies of the order be communicated to the parties under rules.

9.      The complaint could not be decided within the statutory period due to heavy pendency of court cases.

 

                                                                          (J. S. KLAR)

                                                             PRESIDING JUDICIAL MEMBER

 

 

                                                                (SURINDER PAL KAUR)

                                                                                MEMBER

December  14,  2017                                                               

(ravi)