By Smt. C.S. Sulekha Beevi, President,<br /> <br /> 1. This complaint is filed seeking refund of Rs.15,000/- with interest which was collected by opposite party as pre closure charges while closing the loan. Facts are summarized as follows:-<br /> Complainant availed two housing loans from opposite party for Rs.3,00,000/- and Rs.75,000/- each. At the time of granting loan complainant was asked to submit signed blank stamp paper, seven signed blank cheque leaves, original documents of property with anterior title deeds and L. I.C. Policy Certificate. That opposite party collected interest at flat rate basis and several hidden charges, though at the time of availing loan it was assured that interest @ 11.5% per annum at diminishing rate was applicable. Complainant was thus constrained to close the loans. The loans were taken over by Indian Bank, Nilambur. While closing the loan opposite party collected Rs.15,000/- towards preclosure charges and Rs.750/- remained to be still adjusted by opposite party. Complainant alleges the collection of these amounts to be illegal and prays for refund with interest @ 19% per annum and also compensation of Rs.5,000/- together with costs.<br /> 2. Opposite party has filed version admitting the loan transactions with complainant. It is submitted that complainant along with his wife Smt. Ushakumari had availed the loans. The first loan of Rs.3 lakh was sanctioned on 29-4-1999. Thereafter complainants approached after 3 years for an additional loan of Rs.75,000/- which also was granted. That complainants are estopped from raising any contention with respect to mode of charging interest etc., since complainants had applied for the second loan after 3 years of availing the first loan and only being satisfied with the services of opposite party in dealing with the initial loan of Rs.3 lakh. The documents were executed at Kochi and preclosure was also done at Kochi. It is true that opposite party used to send agents to Malappuram for verification of details. Levy of Rs.15,000/- as preclosure charges is admitted. This amount was collected as per stipulations in the agreement and hence not illegal. There is no deficiency in service and the complaint is liable to be dismissed.<br /> 3. Evidence consists of affidavit filed by complainant and Ext.A1 to A4 marked on the side of complainant. Opposite party has filed affidavit and Exts.B1 to B8 marked on behalf of opposite party. Either side has not adduced any oral evidence.<br /> 4. The main point that poses for consideration in this complaint is whether the collection of Rs.15,000/- as preclosure charges is illegal. Opposite party relies upon Ext.B4 and B5 documents and contends that preclosure charges were levied as per the agreement entered into between the parties at the time of granting the loan. Ext.B4 is the loan agreement pertaining to loan of Rs.3 lakh and Ext.B5 is the loan agreement for Rs.75,000/-. In both these documents clause 2.8 states that opposite party is entitled to levy preclosure charges at it's sole discretion. Admittedly opposite party has collected Rs.15,000/- in total as preclosure charges for closing both the loans at the time when it was taken over by Indian Bank, Nilambur branch. Hon'ble National Commission has taken the view in State Bank of India Vs. Dr. Usha Vaid and another RP.No.2466/07 decided on 26-7-07 that Banks and Financial Institutions should not collect any preclosure 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. Similar view was taken in M. Anees-Ur-Rahman and others Vs. Jammu and Kashmir Bank 2008 CTJ 95 (CP)SCDRC (Karnataka). Applying the principles laid in the above decisions by higher Commissions we hold that the collection of pre-closure charges is illegal and amounts to deficiency in service. Regarding the other contentions of the complainant with respect to collection of excess interest and hidden charges etc., we hold that complainant has again approached opposite party after three years to get the second loan of Rs.75,000/-. Hence he is estopped from raising such contentions of collection of excess charges and flat rate interest and these claims are only to be disregarded.<br /> 5. In the result, we allow the complaint and order opposite party to repay Rs.15,000/- (Rupees Fifteen thousand only) to the complainant along with interest @ 9% per annum from the date of filing complaint till payment together with costs of Rs.1,000/- (Rupees One thousand only) within one month from the date of receipt of copy of this order.<br /> Dated this 11h day of August, 2008.<br /> <br /> Sd/-<br /> C.S. SULEKHA BEEVI, PRESIDENT<br /> <br /> <br /> Sd/-<br /> E. AYISHAKUTTY, MEMBER<br /> <br /> <br /> APPENDIX<br /> <br /> Witness examined on the side of the complainant : Nil <br /> <br /> Documents marked on the side of the complainant : Ext.A1 to A4<br /> Ext.A1 : Letter of Offer dated, 22-4-99 given by opposite party to complainant.<br /> Ext.A2 (series) : Photo copy of the receipts from opposite party to complainant. <br /> Ext.A3 (series) : Photo copy of the transaction details for the period from 01-4-03<br /> to 31-8-03 from opposite party to complainant.<br /> Ext.A4(series) : Receipts from 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 to B8<br /> Ext.B1 : Photo copy of the Power of Attorney.<br /> Ext.B2 : Individual Residential Application Form submitted by complainant<br /> to opposite party.<br /> Ext.B3 : Photo copy of the Individual Housing Loan Application Form by<br /> complainant to opposite party.<br /> Ext.B4 : Photo copy of the Loan Agreement executed between complainant <br /> and opposite party.<br /> Ext.B5 : Photo copy of the Loan Documentation Housing Loan.<br /> Ext.B6 : Photo copy of the Certificate of Registration.<br /> Ext.B7 : Photo copy of the Gazette Notification.<br /> Ext.B8 : Photo copy of the transaction details for the period from 01-4-03<br /> to 31-9-03 from opposite party to complainant.<br /> <br /> <br /> Sd/-<br /> C.S. SULEKHA BEEVI, PRESIDENT<br /> <br /> <br /> Sd/-<br /> E. AYISHAKUTTY, MEMBER<br /> <br />