CONSUMER DISPUTES REDRESSAL COMMISSION-VII

DISTRICT: SOUTH-WEST

GOVERNMENT OF NCT OF DELHI

FIRST FLOOR, PANDIT DEEP CHAND SHARMA SAHKAR BHAWAN

CASE NO.CC/484/2016

          Date of Institution:-    15.11.2016

          Order Reserved on:- 02.05.2024

                  Date of Decision:-      11.06.2024

IN THE MATTER OF:

Sh. Prem Kumar Narang

46, Second Floor,

Pocket A/8, Kalkaji,

New Delhi - 110019

.….. Complainant

VERSUS

1. Union Bank of India

Through its Directors

Union Bank Bhavan, 239,

Nariman Point, Mumbai

2. The Branch Manager

Union Bank of India

SME Branch, Okhla,

173-174, D.S.I.D.C.,

Okhla Industrial Area, Phase-I,

New Delhi - 110020

.…..Opposite Parties

Suresh Kumar Gupta, President

1. The complainant has filed the complaint under section 12 of Consumer Protection Act, 1986 (hereinafter referred to as Act) with the allegations that on 08.07.2013, he has approached OP-2 for loan under Union Mortgage Scheme for a personal need and after verifying all the necessary documents OP has sanctioned loan Rs.7250000/- repayable in 120 months with instalment of Rs.111480/- each. On 28.07.2013, the loan was disbursed. In June 2016, he has boanfiedly requested for foreclosure of the loan account. OP has served a letter on 24.06.2016 by reflecting outstanding of Rs.6138910/- including interest up to 23.06.2016. On 11.07.2016, he has paid the entire outstanding amount but OP-2 has refused to hand over original papers and demanded extra 2% as foreclosure charges. He has made a representation but in vain upon which he was forced to pay extra 2% amounting to Rs.120829/- as foreclosure charges. There is deficiency of service by claiming foreclosure charges whereas but it was not due. Hence, this complaint.

2. The OPs have jointly filed the reply with the averments that complainant has approached to OP-2 to take loan under Union Mortgage Scheme for his personal needs and accordingly loan of Rs.7250000/- was sanctioned. In 2016, the complainant has a certain outstanding amount upon which certificate of outstanding loan amount vide letter dated 24.06.2016 was given. The complainant has deposited cheque no.753838 dated 30.06.2016 of Rs.6138910/- drawn on ICICI Bank against the loan amount. The complainant thereafter demanded the property documents upon which charges for closing the loan amount was demanded which were Rs.120829.26/-. The said amount was Rs.6138910/- has been taken by the complainant from ICICI Bank which is nothing but the takeover of loan by passing the process of obtaining NOC from the previous bank. There is no deficiency of service on their part.
3. The complainant has filed the rejoinder wherein he has denied the averments of written statement and reiterated the stand taken in the complaint.The parties were directed to lead the evidence.

4. Thecomplainanthas filed his own affidavit in evidence and corroborated the version of complaint and placed reliance on the documents Ex.CW1/1 to CW1/5 though exhibits are not put on the documents.

5. The OP has filed the affidavit of Sh.Sanjeev Kumar, in evidence corroborated the version of written statement and placed reliance on the documentEx.RW-1/1 which is copy of the cheque dated 30.06.2016.

6. We have heard the complainant and Ld. Counsel for OP-1 & 2 and perused the entire material on record.

7. It is clear from the material on record that OPs have sanctioned loan under Union Mortgage Scheme for a sum of Rs.72,50,000/- for personal needs as clear from documents Ex.CW1/1(though exhibit is not put on the documents). The complainant wanted to foreclose the account upon which OP-2 has issued a letter dated 24.06.2016 showing outstanding amount Rs.6138910.08/- as on 23.06.2016. The complainant has deposited the said amount on 11.07.2016, the bank deposit receipt is annexed with the complaint. The complainant has written a letter dated 19.07.2016 to waive off the foreclosure charges which was not done and accordingly the complainant has paid the amount of Rs.120829.26/- on 26.08.2016 as apparent from statement of account dated 26.08.2016.
8. The complainant has placed reliance on circular No.RBI/2013-14/582 dated 07.05.2014 to the effect that banks will not be permitted to chargeforeclosure charges on all floating rate term loan sanctioned to individual borrowers. The Circular No.RBI/2020-21/60 dated 22.10.2020 is to the same effect in which directions have been also given to the Housing Finance Co. by the RBI.

9. The circular shows that banks will not be permitted to charge foreclosure charges/prepayment penalty on all floating rate term loan sanctioned to individual borrowers with immediate effect.

10. The OPs have admitted that it was a loan for personal need.The circular shows that foreclosure charges will not be levied for loan sanctioned to individual borrowers. The loan is an individual loan so the OPs could not have levied foreclosure charges once the complainant wanted to close the account. There is deficiency of service as well as unfair trade practice on the part of OPs by levying foreclosure charges.

11. In view of our aforesaid discussion, the complaint of the complainant is allowed to the effect that OPs shall pay jointly or severally a sum of Rs.1,20,829/- along with an interest @6% from 26.08.2016 to the complainant till its realization. The complainant is entitled for compensation of Rs.30,000/- for mental harassment and agony and Rs.15,000/- for litigation expenses. The OPs are directed to comply with the order within 45 days from the receipt of the order failing which complainant will be entitled for interest @6% p.a. on the amount of mental harassment, agony and litigation charges i.e. from the date of order till its realization.

• A copy of this order is to be sent to all the parties as per rule.
• File be consigned to record room.
• Announced in the open court on 11.06.2024.