DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, PALAKKAD
Dated this the 19th day of September, 2022
Present : Sri.Vinay Menon V., President
: Smt.Vidya A., Member
: Sri.Krishnankutty N.K., Member
Date of Filing: 18/03/2020
CC/46/2020
Satheesh K,
S/o.Kuttan, Kamala Nilayam,
Melemuri, Industrial Estate P O,
Puthupariyaram, Palakkad-678 009.
(By Adv.C Sivadas) - Complainant
Vs
The Branch Manager,
Punjab National Bank,
Kalpathy Branch,
Palakkad-678 003. - Opposite party
(By Adv. P M Ramesan)
O R D E R
By Sri.Krishnankutty N.K., Member
Pleadings of the complainant in brief.
- The crux of this complaint is the charging of upfront fee/processing charges/documentation charges from the complainant by the opposite party without informed consent.
The opposite party Bank took over a loan of the complainant for Rs.16,10,000/- from HDFC Bank. According to the complainant, the opposite party had promised that there won’t be any processing fee/documentation charges for this loan at the time of submitting the application for takeover. The complainant started paying the EMIs of the said loan from 29.03.2019 onwards. When the complainant received a message indicating overdue in the loan account, he verified the bank statement of the account and found that the opposite party has adjusted Rs.17098/- towards upfront fee/processing charge and Rs.1770/- towards documentation charges from the EMIs paid by the complainant. His allegation is that collection of charges as above without informing him and not incorporating it in the loan sanction letter is illegal and an unfair trade practice.
The complainant caused issuance of a legal notice on 30.12.2019 and in the reply sent by the counsel for the opposite party on 09.01.2020 , they admitted that not mentioning the details of charges in the loan sanction letter is due to over sight of the bank official, but however claimed that they are not at fault in collecting the charges.
The complainant allege that adjustment of EMI amount to the Bank charges has created over dues in the account which in turn affected his CIBIL Scoring and caused mental agony and loss of reputation to him and hence claimed the following reliefs.
a) Rs.100000/- towards compensation for deficiency in service.
b) Adjusting the amounts collected as processing/documentation charge to the loan account
and there by removing him from defaulters list,
c) Cost and other reliefs as per the discretion of this Commission.
- Notice was sent to the opposite party and they entered appearance and filed their version on 17.09.2020. Their argument is that they had informed the complainant, that no processing/ Documentation fee will be charged if the loan is a Housing loan with HDFC Bank and since this loan is a loan against mortgage of immoveable property, these charges are payable. However, the details of charges payable were inadvertently missed while issuing the sanction letter to the complainant.
- On 25.10.2021 the complainant filed proof affidavit. Proof affidavit of opposite party was filed on 11.05.2022. Exhibits A1- A7 were marked as evidence from the side of complainant and Exhibits B1-B3 were marked from the side of opposite party.
The most relevant document here is the loan sanction letter marked as Exhibit A1 issued by the opposite party to the complainant, where there is no mention about the processing/documentation charges payable for the loan by the complainant. This fact has been admitted in the version as well as in the proof affidavit filed by the opposite party. Though the opposite party has adduced the loan application submitted by the complainant (Marked as Ext.B1 ) and the format for housing loan (marked as Ext. B2) and opposite party Bank’s circular on waiver of processing and other charges (marked as Ext.B3) as evidence to prove that the loan applied for and sanctioned to the complaint was not a housing loan and the scheme for waiver of charges (2019) was applicable only for Housing Loans, not mentioning the details of charges payable by the complainant in the loan sanction letter is to be construed as a deficiency in service on the part of opposite party. So it is clear that the complainant was not informed of the processing charges that would be levied from him upon take over of the financial assistance availed by him, there by denying the complainant a chance to make an informed choice. In this connection, it is pertinent to note that the opposite party has incorporated all details including penal charges, pre closure charges and various other protective clauses in the said sanction letter. Absence of processing fee and other charges that would play a vital part in the decision making processes of the complainant, therefore, cannot be held to be an innocuous oversight.
Hence the act of the opposite party in adjusting the processing charge/ upfront fee/documentation from the EMIs paid by him without his knowledge and informed consent is a clear case of Unfair Trade Practice and hence the complainant is entitled for reliefs sought for.
In the result, the complainant is allowed partially ordering the following reliefs.
1.The opposite party is ordered to refund Rs.18868/- being the upfront fee/ processing
charges and documentation charges to the loan account of the party along with
interest @ 12% pa from the date of collection till the date of refund.
2. The opposite party is ordered to pay Rs.25000/- towards mental agony and other
inconveniences caused to the complainant.
3.Rs.10000/- (Rupees Ten Thousand only) towards cost.
All the above amounts are to be paid within 45 days of receipt of this order failing in which a solatium of Rs.250/- month or part thereof is to be paid till the date of final payment of the above said amounts.
Pronounced in open court on this the 19th day of September, 2022.
Sd/-
Vinay Menon V
President
Sd/-
Vidya.A
Member
Sd/-
Krishnankutty N.K.
Member
APPENDIX
Exhibits marked on the side of the complainant
Ext.A1 – Sanction letter issued by the opposite party dated 07.03.2019.
Ext.A2 – Statement of accounts Account No.4283000100127608.
Ext.A3 –Statement of Loan account No.428300ND00001107 dated 15.11.2019.
Ext.A4 – Registered letter issued by the opposite party dated 17.12.2019.
Ext.A5 - Copy of letter issued by the complainant to the opposite party dated 15.11.2019.
Ext.A6- Photocopy of lawyer notice issued by the counsel of the complainant dated 31.12.2019
with postal receipt and Akt card.
Ext.A7 – Reply letter issued by the counsel for the opposite party dated 09.01.2020.
Exhibits marked on the side of the opposite party
Ext.B1 – Photocopy of loan application for finance against mortgage of immovable property dated
22.10.2018.
Ext.B2 – Format for housing loan of Punjab National Bank.
Ext.B3-Bank guidelines on values of processing and other charges.
Cost : 10,000/-(Rupees Ten thousand only) allowed as cost of the proceedings.
