State Consumer Disputes Redressal Commission
Dr. Paramhans Mishra And Anr. vs Icici Bank on 28 February, 2022
C/30/2010 DR. PARAMHANS & ANR. VS. ICICI BANK D.O.D. : 28.02.2022
IN THE DELHI STATE CONSUMER DISPUTES
REDRESSAL COMMISSION
Date of Institution: 04.02.2010
Date of hearing: 07.02.2022
Date of Decision: 28.02.2022
COMPLAINT CASE NO.- 30/2010
IN THE MATTER OF
1. DR. PARAM HANS MISHRA,
S/o Shri. Ram Lakhan Mishra
2. MRS. TRIPTI MISHRA,
W/o Dr. Param Hans Mishra,
Both R/o 12-A, Citizen Enclave,
Sector-14 Extension, Rohini, Delhi-110085.
(Through: Mr. D.S. Dalal & Associates)
...Complainants
VERSUS
ICICI BANK
Videocon Tower,
Jhandewalan, New Delhi.
(Through: Mr. Kapoor and Co.)
... Opposite Party
ALLOWED PAGE 1 OF 13
C/30/2010 DR. PARAMHANS & ANR. VS. ICICI BANK D.O.D. : 28.02.2022
CORAM:
HON'BLE DR. JUSTICE SANGITA DHINGRA SEHGAL
(PRESIDENT)
HON'BLE SH. RAJAN SHARMA, MEMBER (JUDICIAL)
Present: None for the Parties.
PER: HON'BLE DR. JUSTICE SANGITA DHINGRA SEHGAL,
PRESIDENT
JUDGMENT
1. The present Consumer Complaint has been filed before this Commission under Section 17 of the Consumer Protection Act, 1986, seeking the following reliefs:-
"a. Direct the opposite party to refund the amount of Rs. 60000/- which has been charge as pre-payment charges at the time of foreclosure of loan;
b. To direct the opposite party to pay Rs. 5000/- towards the less payment made at the time of refund the EMI which was not due;
c. Compensation of Rupees forty lakhs be awarded for loss of reputation and mental agony and pain suffered by the complainant;
d. Direct the opposite party to remove the name of the complainants from CIBIL;
e. Cost of the complaint also be awarded to the complainant; f. Any other relief that this Hon'ble Forum may deem fit and proper may also be awarded to the complainant in the facts and circumstances mentioned above."
ALLOWED PAGE 2 OF 13 C/30/2010 DR. PARAMHANS & ANR. VS. ICICI BANK D.O.D. : 28.02.2022
2. Brief facts necessary for adjudication of the present complaint are that the Complainants obtained three different home loans from the opposite party of Rs. 17,28,000/- vide sanction letter dated 22.02.2005, Rs. 8,64,000/- vide sanction letter dated 22.02.2005 and of Rs. 5,00,000/- vide sanction letter dated 05.04.2006. The initial floating rate of interest was 7% which was increased to 11.5% during the course of loan repayment. The complainants were initially paying their cheques of EMI drawn at Syndicate Bank, as complainant no. 1 was working as Dy. M.S. in Sir Ganga Ram Hospital and his salary was credited directly to the bank account in Syndicate Bank but during the course of repayment of loan, complainant no. 1 left the services of Sir Ganga Ram Hospital and joined Max, Rajiv Gandhi, Sahara & ISIC Hospital as Medical Superintendent and the salary account was opened in the ICICI Bank which was duly intimated by the Complainant no. 1 to the Opposite Party. Despite that, the Opposite Party kept on sending the EMI ECS to Syndicate Bank which was returned back with a remark 'Insufficient Funds' and the complainants were forced to make the payment of bouncing cheques as well as the late fees for not depositing EMI on time. The default on the part of opposite party had adversely affected their reputation and credit worthiness. Allegedly, the consequences of the wrongful reporting of the credit history by the Opposite Party was borne by the Complainant No.1 when he subsequently applied for Credit Facility/Loan with different banks, which denied to enhance the Credit Limit of the Complainant no. 1 and also refused to give any fresh loan to the Complainant No. 1.
ALLOWED PAGE 3 OF 13 C/30/2010 DR. PARAMHANS & ANR. VS. ICICI BANK D.O.D. : 28.02.2022
3. After various requests from different banks, on 2nd February, 2008, the complainants got a loan approved from the HDFC Bank and he subsequently paid the entire outstanding amount due against the 3 loans including the bouncing penalty charges amounting Rs. 3600/- and the pre-payment charges amounting Rs. 60,000/- to the opposite party. Even after the repayment of the all the three loans, the opposite party kept on deducting the EMI from the respective accounts of the complainants. The notice was sent to the Opposite party regarding the refund of the EMI which was wrongly deducted from their account but only an amount of Rs. 25000/- out of 30,000/- was refunded by the opposite party. The complainants further stated that despite the repayment of the loan, their name still subsist in the CIBIL for default in making payments. Further, the Complainants had sent various letters to the Opposite Party demanding to remove their name from CIBIL but no action was taken by the opposite party in this regard.
4. Thus, left with no other option, alleging deficiency of service and unfair trade practice on the part of Opposite Party, the Complainants approached this Commission.
5. The Opposite Party has contested the present case and has raised some preliminary objections as to the maintainability of the complaint case. The counsel for the Opposite Party submitted that this commission has no jurisdiction to entertain the present complaint as the dispute requires complete trial including due appreciation of evidence and cross examination of the witness which can only be decided before the Civil Court. The counsel for the Opposite Party further stated that there is no deficiency of service ALLOWED PAGE 4 OF 13 C/30/2010 DR. PARAMHANS & ANR. VS. ICICI BANK D.O.D. : 28.02.2022 on the part of the opposite party. Pressing the aforesaid preliminary objections and submission, the counsel appearing on behalf of Opposite Party prayed that present complaint should be dismissed.
6. The complainants have filed their Rejoinder rebutting the written statement filed by the Opposite Party. Thereafter, both the parties filed their Evidence by way of Affidavit in order to prove their averments on record.
7. We have perused the material available on record and heard the counsel of the complainants.
8. The fact that Complainants availed of three home loans from the Opposite Party is not in dispute from the evidence available on record. Repayment of all three loans has been done by the complainants including the pre-payment charges and cheque bouncing penalty has also been made by the Complainants to the Opposite party, which is evident from the evidence filed on record by the Opposite Party.
9. Before delving into the merits of the case, we deem it appropriate to adjudicate the preliminary objections raised on behalf of the Opposite Party.
WHETHER THE CIVIL COURT HAS JURISDICTION -
JURISDICTION OF CONSUMER COMMMISSION BARRED?
10. The Opposite Party contended that the jurisdiction of this Commission would be barred in view of the fact that the present complaint involves complicated question of facts and law which can only be decided before the Civil Court.
11. The Consumer Protection Act, 1986, came into being in order to protect the interests of Consumers who are effected by the acts of ALLOWED PAGE 5 OF 13 C/30/2010 DR. PARAMHANS & ANR. VS. ICICI BANK D.O.D. : 28.02.2022 the service providers, who in order to attract the Consumers, tend to make lucrative offers but when it comes to actually providing the offered services, they take a step back.
12. The Consumer Protection Act, 1986 defines a Consumer as follows:
"(2)(1)
(d) "consumer" means any person who--
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who 'hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person but does not include a person who avails of such services for any commercial purposes;
Explanation.-- For the purposes of this clause, "commercial purpose" does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self- employment;"
13. Deficiency has been defined under section 2 sub-clause (g) which read as follows:
ALLOWED PAGE 6 OF 13 C/30/2010 DR. PARAMHANS & ANR. VS. ICICI BANK D.O.D. : 28.02.2022
"(2) (g)"deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service;"
14. Returning to the facts of the present complaint, perusal of the record shows that the Complainants availed the services of the Opposite Party for a consideration. However, the Opposite Party failed to honour the terms of the agreement, aggrieved by which, the Complainants has approached this commission. Hence, the Complainants are entitled to file the present complaint before this commission since the Complainants are aggrieved by the deficient services of the Opposite Party and it is only due to this reason, that the Complainants have approached this Commission, which this Commission is authorized to adjudicate.
15. Moreover, nothing cogent has been brought on record by the Opposite Party which reflects that some complicated questions are involved which cannot be settled on the basis of the pleadings filed on behalf of the contesting parties.
16. Consequently, we are of the view that the complaint falls within the four corners of the jurisdiction of this commission and there is no bar with respect to the jurisdiction of this commission to entertain cases related to the refund of excess/erroneous amount debited with the Opposite Party.
DEFICIENCY OF SERVICE
17. Having discussed the preliminary objections raised on behalf of the ALLOWED PAGE 7 OF 13 C/30/2010 DR. PARAMHANS & ANR. VS. ICICI BANK D.O.D. : 28.02.2022 Opposite Party, the next issue which arises is whether the Opposite Party was actually deficient in providing its services to the complainants or not. The complainants have raised three main issues in their complaint. First issue raised by the complainants are that their name has been forwarded to CIBIL for default in repayment of loan and their name exists as on date in the CIBIL which has degraded their reputation in the society and reduced their credit worthiness. Second issue is related to the pre-payment charges which are not in accordance with RBI guidelines and wrongly charged by the opposite party. Last issue related to the excess EMI amount deducted by the opposite party even after repayment of all outstanding amount against the said loans.
18. On perusal of record, it is clear that the complainants got three loan approval from the ICICI bank amounting Rs. 17,28,000/-, Rs. 8,64,000/- and Rs. 5,00,000/- with a floating rate of interest of 7% at the time when loan was sanctioned to complainants which is not disputed from the documents placed on record. It is also evident from the record that the entire amount against the above loans has been paid on 04.02.2008. It is pertinent to mention here that even after repayment of the entire amount due against the said loans, the opposite party kept on debiting the EMI amount from the account of the complainants against which the complainants duly intimated the opposite party regarding the wrong and erroneous deduction of EMI from their account. Responding to the objection for deduction of EMI, the opposite party has refunded an amount of Rs. 25000/- out of Rs. 30,000/- and failed to provide any justification for not refunding the remaining amount of Rs. 5000/- which is unfair on the ALLOWED PAGE 8 OF 13 C/30/2010 DR. PARAMHANS & ANR. VS. ICICI BANK D.O.D. : 28.02.2022 part of the opposite party. It is further stated by the complainants that their name has been sent to the CIBIL and still exists in the said list for non payment of the above mentioned loans.
19. From the above discussion, we are of the view that the loan amount along with the dues demanded by the Opposite Party, was fully paid and duly acknowledged by the opposite party. The Opposite Party is deficient for still not removing the name of the complainants from the CIBIL which has degraded the credit taking limits of the complainants.
20. Consequently, the wrongful reporting to the CIBIL by the Opposite Party has not only impacted the credit worthiness of the Complainants, but the Complainants had to undergo mental harassment over the course of time, just because of the lackadaisical attitude of the Opposite Party. In this background, the Complainants need to be compensated for the acts of the Opposite Party.
21. To resolve the last issue, we deem it appropriate to refer to the RBI circular no. RBI/2011-12/589 DBOD. No. Dir.
BC.107/13.03.00/2011-12 dated June 5, 2012 which reproduces as:
All Scheduled Commercial Banks (Excluding RRBs) Dear Sir/Madam Home Loans-Levy of fore-closure charges/pre- payment penalty Please refer to our circular DBOD. No. Dir. BC. 56/13.03.00/2006-2007 dated February 2, 2007 (https://m.rbi.org.in/scripts/NotificationUser.aspx?Id=3268& Mode=0) on reasonableness of bank charges. 2. In this context, attention is invited to paragraphs 81 to 83 (https://m.rbi.org.in/scripts/NotificationUser.aspx?Id=7136& Mode=0#P81) of the Monetary Policy Statement 2012-13 announced on April 17, 2012 with regard to home loans on floating interest rates. The Committee on Customer Service in Banks (Chairman: M. Damodaran) had observed that ALLOWED PAGE 9 OF 13 C/30/2010 DR. PARAMHANS & ANR. VS. ICICI BANK D.O.D. : 28.02.2022 foreclosure charges levied by banks on prepayment of home loans are resented upon by home loan borrowers across the board especially since banks were found to be hesitant in passing on the benefits of lower interest rates to the existing borrowers in a falling interest rate scenario. As such, foreclosure charges are seen as a restrictive practice deterring the borrowers from switching over to cheaper available source.
3. The removal of foreclosure charges/prepayment penalty on home loans will lead to reduction in the discrimination between existing and new borrowers and competition among banks will result in finer pricing of the floating rate home loans. Though many banks have in the recent past voluntarily abolished pre-
payment penalties on floating rate home loans, there is a need to ensure uniformity across the banking system. It has, therefore, been decided that banks will not be permitted to charge foreclosure charges/pre-payment penalties on home loans on floating interest rate basis, with immediate effect."
22. It is further imperative to refer to circular no. "RBI/2019-20/29 DBR.Dir.BC.No.08/13.03.00/2019-20 dated August 02, 2019 which reflects as:
All Scheduled Commercial Banks (Excluding RRBs) All Small Finance Banks All Local Area Banks Dear Sir / Madam Levy of Foreclosure Charges /Pre-payment Penalty on Floating Rate Term Loans Please refer to our circulars DBOD.No.Dir.BC.107/13.03.00/2011-12 dated June 5, 2012 and DBOD.Dir.BC.No.110/13.03.00/2013-14 dated May 7, 2014, in terms of which banks are not permitted to charge foreclosure charges / pre-payment penalties on home loans / all floating rate term loans sanctioned to individual borrowers.
2. In this connection, it is clarified that banks shall not charge foreclosure charges/ pre-payment penalties on any floating rate term loan sanctioned, for purposes other than business, to individual borrowers with or without co-obligant(s)."
23. From the aforementioned circulars, it is clear that in accordance to ALLOWED PAGE 10 OF 13 C/30/2010 DR. PARAMHANS & ANR. VS. ICICI BANK D.O.D. : 28.02.2022 RBI guidelines, the banks are not permitted to charge any foreclosure/pre-payment penalties on home loans having floating rate of interest.
24. In the present case, despite the specific guidelines given by the RBI vide its circulars, the opposite party illegally and erroneously charged an amount of 60,000/- from the complainants in the form of pre-payment charges. Therefore, the said amount deducted in the form of pre-payment charges is not justified and liable to be refunded.
25. In view of the foregoing discussions above and also keeping in view the negative impact of the lethargic attitude of the Opposite Party towards its customers specifically the Complainants, we allow the following reliefs claimed by the Complainants:
A. The Opposite Party shall ensure that the Credit History of the Complainants is rectified in the records of the Opposite Party by marking the Loan Account, which is the subject matter of the present case as "No Dues/Nil Outstanding"
and take such other measures so that the Complainants do not suffer in future due to the incorrect credit history; B. To refund an amount of Rs. 60,000/- (deducted as pre-
payment charges) and Rs. 5000/- (on account of excess EMI amount debited) alongwith an interest of 6% p.a. calculated from the date when it was actually deducted by the opposite party till 28.02.2022.
26. In addition to this, the opposite party shall pay an amount of Rs. 10,00,000/- as compensation for mental agony and harassment ALLOWED PAGE 11 OF 13 C/30/2010 DR. PARAMHANS & ANR. VS. ICICI BANK D.O.D. : 28.02.2022 suffered by the complainants. The Opposite Party shall further pay Rs. 50,000/- as litigation cost.
27. The directions mentioned in para 25 and 26 shall be complied on or before 30.04.2022. In case of failure to comply with the same before 30.04.2022, the entire amount would entail a penalty of 9% p.a. from the date of judgment till the actual realization of amount.
28. Applications pending, if any, stands disposed of in terms of the aforesaid judgment.
29. A copy of this judgment be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986. The judgment be uploaded forthwith on the website of the commission for the perusal of the parties.
30. File be consigned to record room along with a copy of this Judgment.
(DR. JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (RAJAN SHARMA) MEMBER (JUDICIAL) Pronounced On:
28.02.2022 ALLOWED PAGE 12 OF 13