State Consumer Disputes Redressal Commission
Hardam Singh vs Housing Development Finance ... on 30 April, 2012
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, U.T., CHANDIGARH First Appeal No. : 320 of 2011 Date of Institution : 21.11.2011 Date of Decision : 30.04.2012 Hardam Singh C/o SCO 829-830, Sector 22-A, Chandigarh. Appellant/complainant V e r s u s Housing Development Finance Corporation Limited (HDFC) SCO No. 153-155, Sector 8-C, Madhya Marg, Chandigarh, through its Branch Manager. ....Respondent/Opposite Party Appeal under Section 15 of the Consumer Protection Act, 1986. BEFORE: MR. JUSTICE SHAM SUNDER, PRESIDENT. MRS. NEENA SANDHU, MEMBER.
Argued by: Sh.J.P.S. Ahluwalia, Advocate for the appellant.
Sh.Shekhar Verma, Advocate for the respondent.
PER JUSTICE SHAM SUNDER, PRESIDENT
1. This appeal is directed against the order dated 19.10.2011, rendered by the District Consumer Disputes Redressal Forum-I, U.T., Chandigarh (hereinafter to be called as the District Forum only) vide which, it dismissed the complaint, filed by the complainant (now appellant).
2. The facts, in brief, are that the complainant took a Home loan of Rs.15 lac, for the purchase of a flat at Zirakpur, from the Opposite Party, at a fluctuating rate of interest of 11.75% p.a., for a period of 20 years. One of the conditions, imposed by the Opposite Party was that, the loan was to be disbursed, to the seller of the flat, at the time of execution of the sale deed, before the concerned Sub-Registrar. It was stated that the complainant, complied with all the conditions, imposed by the Opposite Party. The Opposite Party, agreed to release the loan, in favour of the Seller (M/s Setya Builder, Promoter and Developers), subject to the conditions, duly mentioned in Paragraph number 6 of the complaint. On 06.08.2008, the complainant signed the Home Loan Agreement, with the Opposite Party. Thereafter, the Opposite Party, handed over the cheque of Rs.14.00 lacs to the sellers, upon which it (M/s Setya Builder, Promoter and Developers), issued re-allotment letter/transfer letter dated 6.8.2008, in favour of the complainant. It was further stated that the Opposite Party, took possession of the Original Agreement to sell, Original Re-allotment letter, Original possession certificate, and Original letter of the builder. The complainant started making payments of pre-EMI installments, to the Opposite Party, and deferred the execution of sale deed for a while. He started waiting for ROI to come down, in manageable limits. After some time, the complainant, approached the Opposite Party, and complained regarding big difference between ROI, being charged by other banks and the Opposite Party, upon which, he was informed that the rate of interest could be brought down to 10.25% p.a., only, if he makes payment of Rs.7,721/-, which he accordingly, made. Then also, there was a considerable gap, between the rate of interest of the Opposite Party, and other banks. For the said reason, he approached the State Bank of Patiala, which was charging interest at a lesser rate, in comparison to the Opposite Party, for taking over his Home Loan from it (Opposite Party). The State Bank of Patiala, demanded personal documents of the complainant, and foreclosure statement, to be issued by the Opposite Party, to ascertain the outstanding loan amount, alongwith the original documents of the flat. Accordingly, on the request of the complainant, the Opposite Party, issued a foreclosure statement on 11.11.2009, and, wrongly levied pre-payment charges to the tune of Rs.30,254/-.Not only this, it also lost the original documents of the flat, deposited with it, by the complainant. The complainant, thereafter, took up the matter, with the Opposite Party, and met their Senior Officer, a number of times, for waiving off the payment of pre-payment charges, but to no avail, and, he had to pay the prepayment charges. It was further stated that the loan agreement dated 6.8.2008, was completely silent, about the pre-payment charges, and no separate communication, was ever sent by the Opposite Party, to the complainant, regarding the levy of pre-payment charges, or its exact policy, regarding the pre-payment charges, at any point of time. It was further stated that even after payment of the entire outstanding payment of loan, by the complainant, with the Opposite Party, it failed to handover the Original Agreement to Sell, Original Possession Certificate and Original Transfer letter, to the complainant. It was further stated that the aforesaid acts of the Opposite Party, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), for the refund of Rs.30,085/-(infact Rs.30,254/-, as per Annexure C-3 at page 56/34 of the District Forum file), charged by the Opposite Party, on account of prepayment charges, and Rs.7,721/-, charged towards reducing the rate of interest; payment of Rs.1 lac, as compensation for mental agony and physical harassment; and litigation costs to the tune of Rs.10,000/-, was filed.
3. The Opposite Party, in its written version, pleaded that the complaint was not maintainable, as the prepayment charges and interest, charged for the loan, availed of by the complainant, were on the basis of the loan agreement dated 6.8.2008, executed between the parties. It was admitted that the loan was granted on fluctuating rate of interest. It was also admitted that a sum of Rs.7,721/-, was charged, as conversion fees, as per the policy of the bank. It was stated that the prepayment charges, is an internationally recognized, and accepted practice, and most banks in India, charge the same, which are reasonable estimates of their losses. It was further stated that the complainant was never told by the Opposite Party, that the original documents of the flat, were not on the record. It was further stated that all the documents, which were deposited by the complainant, had already been returned to him, at the time of payment of the outstanding loan amount and prepayment charges. It was further stated that since, the prepayment charges and the interest were charged, on the basis of the agreement, executed between the parties, and, also other documents deposited by the complainant, at the time of availing of the loan, were returned to him (complainant), there was no deficiency, in rendering service, on the part of the Opposite Party, nor it indulged into unfair trade practice. It was denied that the complainant was entitled to the refund of the amounts, prayed for, by him. The remaining averments, were denied, being wrong.
4. The Parties led evidence, in support of their case.
5. After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, dismissed the complaint, as stated above, in the opening para of the instant order.
6. Feeling aggrieved, the instant appeal, has been filed by the appellant/complainant.
7. We have heard the Counsel for the parties, and, have gone through the evidence, and record of the case, carefully.
8. The Counsel for the appellant, submitted that there was no specific agreement, executed between the parties, according to which, the prepayment charges, on pre-closure of loan, was required to be paid by the complainant, at a specified rate. He further submitted that, under these circumstances, the prepayment charges, levied by the Opposite Party, at the time of pre-closure of loan, by the complainant, were illegal and he was entitled to the refund of the same. The submission of the Counsel for the appellant, in this regard, does not appear to be correct. Undisputedly, the complainant applied for availing of the loan, referred to above. He was granted the loan, by the Opposite Party, and the same was also disbursed to him. At the time of grant of loan, and disbursement of the same, loan agreement dated 06.08.2008 was executed, between the parties, copy of which is Annexure C-2. Clause 2.8 of the same reads as under:-
Prepayment
- The borrower shall be entitled to prepay the loan, either partly or fully, as per rules of HDFC, including as to the prepayment charges, for the time being in force in that behalf.
9.
Since, the complainant signed this agreement, with eyes wide open, now he cannot turn round, and say that he is not bound by the same. It is evident, from the afore-extracted clause, that the complainant, made himself liable, to make payment of prepayment charges, in case, he wanted to pre-close his loan, before the expiry of the usual term, for which it was granted. So, according to the relevant Clause of the agreement, extracted above, the Opposite Party was legally entitled to levy the prepayment charges, on the complainant. The submission for the Counsel for the appellant, in this regard, thus, being without merit, must fail, and the same stands rejected.
10. The next question, that falls for consideration, is, as to, at what rate, the said charges could be claimed by the Opposite Party, from the complainant, at the time of pre-closure of loan. Annexure R-2, is the letter dated 06.08.08, bearing the signatures of the complainant, which reads as under:-
I/We have availed a loan of Rupees 15 lacs/= from you under the Adjustable Rate Home Loan scheme.
I/We are aware that, following a change in HDFC`s policy on prepayment charges, irrespective of the source of repayment of the loan, I/We will be required to pay Early redemption charges of 2% (plus applicable taxes) in case we make any prepayment in the first 3 years from the date or disbursement of the loan.
There will be no charges on part prepayments in the first 3 years of the total amount of part prepayments in a financial year is less than 25% of the financial year opening principal.
In case of commercial refinance of the loan, the charge would be payable even after the above-mentioned period of 3 years.
The above-mentioned rules have been clearly explained to me by the concerned officer of HDFC Limited.
11. The plain reading of the aforesaid letter, which was duly signed by the complainant, clearly goes to show that he was liable to pay prepayment charges, irrespective of the source of prepayment of loan @ 2% (plus applicable taxes), in case, he made any prepayment, in the first three years, from the date of disbursement of the same (loan). This letter, having been signed by the complainant, with eyes wide open, he was bound by the terms and conditions thereof, and later on, he could not turn round and say that the terms and conditions contained in this letter, which was signed by him, were not applicable to him. It was, according to the rate, which was specified, in this letter, signed by the complainant, that the Opposite Party, charged the prepayment charges. Under these circumstances, it could not be said that the Opposite Party, illegally charged the prepayment charges, at a higher rate. The submission of the Counsel for the appellant, in this regard, being without merit, must fail, and the same stands rejected
12. The next question, that arises for consideration, is, as to whether, a sum of Rs.7,721/-, as conversion charges, was rightly charged by the Opposite Party, from the complainant, or not. The complainant sought conversion of loan, from existing Negative Spread Over RPLR to Higher Negative Spread, on 17.03.2009, vide conversion application Annexure R-1 (colly.). His application was required to be processed by the bank. The bank, thus, charged conversion charges to the tune of Rs.7,721/-, as per the Rules and Regulations and the policy famed by it. Under these circumstances, it could not be said that this amount was illegally charged by the Opposite Party, from the complainant. The submission of the Counsel for the appellant, in this regard, being without merit, must fail, and the same stands rejected
13. No other point, was urged, by the Counsel for the parties.
14. The order, passed by the District Forum, being based on the correct appreciation of evidence, and law, on the point, does not suffer from any illegality or perversity, warranting the interference of this Commission.
15. For the reasons recorded above, the appeal, being devoid of merit, must fail, and the same is dismissed, with no order as to costs. The order of the District Forum is upheld.
16. Certified Copies of this order be sent to the parties, free of charge.
17. The file be consigned to Record Room, after completion Pronounced.
30.04.2012 Sd/-
[JUSTICE SHAM SUNDER] PRESIDENT Sd/-
[NEENA SANDHU] MEMBER Rg.
STATE COMMISSION (First Appeal No. 320 of 2011) Argued by: Sh.J.P.S. Ahluwalia, Advocate for the appellant.
Sh.Shekhar Verma, Advocate for the respondent.
Dated the 30th day of April, 2012 ORDER Vide our detailed order of even date, recorded separately, this appeal has been dismissed, with no order as to costs.
(NEENA SANDHU) MEMBER (JUSTICE SHAM SUNDER) PRESIDENT Rg