National Consumer Disputes Redressal
Icici Home Finance Ltd. vs Manish Jain on 13 August, 2019
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 82 OF 2018 (Against the Order dated 25/07/2017 in Appeal No. 554/2016 of the State Commission Haryana) 1. ICICI HOME FINANCE LTD. THROUGH ITS BRANCH MANAGER, SECOND FLOOR, GT ROAD, OPP. HOTEL MIDTOWN, PANIPAT HARYANA ...........Petitioner(s) Versus 1. MANISH JAIN S/O. LT. SHRI MAHABIR PRASAD, R/O. E-17, INDUSTRIAL AREA, SONIPAT HARYANA ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Petitioner : Mr. Susmit Pushkar, Advocate
Mr. Gaurav Sharma, Advocate For the Respondent : Mr. Jawahar Narang, Advocate
Dated : 13 Aug 2019 ORDER
JUSTICE V.K.JAIN (ORAL)
The complainant/respondent No.1 had availed cash credit facility in the name and style of M/s Mahavira Enterprises from Sonepat Urban Cooperative Bank at the interest 11.5% p.a. as on 31.3.2008. His case is that he obtained a loan from the petitioner company in order to repay the loan which he had taken from Sonepat Urban Cooperative Bank. The complainant/respondent, namely, Mr. Manish Jain submitted an application to the petitioner company, seeking a loan of Rs.24,30,000/-. In the application submitted by him along with his family members Smt. Bimla Devi Jain, Mahavir Parshad Jain and Minakshi Jain as co-applicants, it was stated by the complainant as well as his co-applicants that the said facility was required for the purpose of business. Thus it is evident that the loan was taken by the complainant for business purpose. This is also corroborated from the fact that even the cash credit facility from Sonepat Urban Cooperative Bank had been taken by him for his business purposes under the name and style of M/s Mahavira Enterprises.
2. As per the sanction letter dated 26.3.2008 issued by the petitioner company, it was to charge interest at IHPLR, as publicly notified from time to time, with a margin of -1%. The IHPLR was at that time 14.75% p.a. and applying a margin of -1%, the applicable rate of interest at the time of disbursal came to 13.75% p.a. Clause 17 of the additional terms and conditions attached in the sanction letter reads as under:-
"Additional Terms and Conditions applicable for Adjustable Interest Rate:
17 (i) ICICI Home Prime Lending Rate (IHPLR) shall mean the percentage rate per annum from time to time and notified / announced by IHFC in such form and manner as deemed appropriate by IHFC from time to time as IHPLR.
(ii) Adjustable Interest Rate (AIR) means the IHPLR and the margin, if any as specified by IHFC shall be applied by IHFC on the first of the month following the month of the year (as per the English Calendar) in which IHPLR changed. AIR would change based on changes in the IHPLR (iii) EMI amount is intended to be kept constant irrespective of variation in AIR; however, IHFC is entitled to increase the EMI at its sole discretion. The tenor of the Facilities shall also change as per change in EMI's."
3. The complainant did not service the loan taken from the petitioner company and when proceedings were instituted against the borrowers, he executed a letter dated 24.12.2011 which to the extent it is relevant, reads as under:-
"l state that I have defaulted in payment of EM! Dues, which resulted in my said loan account being classified as Non Performing Asset. I hereby admit and acknowledge the liability of Rs.240082/- as mentioned in aforesaid demand notice dated 24-02-2011 received by me and, further interest, cost and charges payable thereon. I say that I am unable to pay my dues in time, as agreed. In the meantime, I requested the bank to accept part payment of Rs.1122647/- against the outstanding dues and keep the SARFAESI proceedings in abeyance. I hereby agree and undertake to repay the balance EMI's on or before their respective due dates. In the event of any defaults in payment of balance amount, the Bank may take appropriate action and/or continue its action against me including the aforesaid action initiated under the provisions of Securitization and Re-construction of Financial Assets and Enforcement of Security Interest Act, 2002."
4. Alleging overcharging of interest from him, the complainant approached the concerned District Forum by way of a consumer complaint. His co-borrowers, however, were not joined as the co-complainants.
5. The complaint was resisted by the petitioner company, which took a preliminary objection that the complainant was not a consumer, he having taken the loan for a commercial purpose. On merits it was interalia stated in the written version filed by the petitioner company that they had charged interest as per the agreement between the parties.
6. The District Forum having allowed the consumer complaint, the petitioner company approached the concerned State Commission by way of an appeal. The said appeal having been dismissed, the petitioner is before this Commission.
7. It is evident from the loan application itself that the loan was taken by the complainant for his business purpose though it was taken against mortgage of a residential house. As noted earlier, the loan was taken from the petitioner company in order to repay the cash credit facility which he had taken from Sonepat Urban Cooperative Bank in the name and style of M/s Mahavira Enterprises. Thus it can hardly be disputed that the services of the petitioner company were hired or availed by the complainant for a commercial purpose. Hence, in view of the provisions contained in the Consumer Protection Act, he cannot be said to be a consumer.
8. On merits also since the petitioner company has been charging only the rate agreed between the parties, no fault can be found with the quantum of interest claimed by it. It is evident from the terms and conditions of the sanction that IHPLR (ICICI Home Prime Lending Rate) was a floating rate of interest which the bank used to notify from time to time. The bank could charge the same rate from the complainant after making a deduction of 1% from the said IHPLR. Though the net interest rate charged from the complainant is higher than the interest which he was paying to Sonepat Urban Cooperative Bank as indicated in the letter of the bank dated 30.1.2016 filed by the complainant, he having contracted to pay the said rate is bound by the terms on which the loan was sanctioned to him. It is only the complainant who knows as to why he agreed to pay higher interest to the petitioner bank if he was paying interest @ only 11.5% p.a. to Sonepat Urban Cooperative Bank.
9. It is contended by the learned counsel for the complainant that the signatures of the complainant were obtained by the bank on blank documents and therefore, he was not aware of the interest which the bank had filled in the documents. However, there is no evidence or even allegation of the complainant having sent any letter or notice to the petitioner company, at any point of time, alleging therein that his signatures had been obtained on the blank application form. In any case, a loan cannot be disbursed without issuance of the sanction letter and the sanction letter issued in the name of the complainant and his co-applicants on 26.3.2008 which is signed by all the borrowers contains the printed terms and conditions which clearly link the interest rate to ICICI Home Prime Lending Rate. Even the rate of interest has been duly printed in the sanction letter as 13.75% p.a., calculated after making a deduction of 1% from IHPLR. It was also stated in the sanction letter that the IHPLR at that time was 14.75% p.a. Thus even at the time of sanction of the loan, the interest payable by the complainant and his co-applicants was 13.75 % p.a. much higher than the interest which he claimed to have been paying to Sonepat Urban Cooperative Bank. If the said rate of interest was not acceptable to them, the complainant and his co-applicants ought not to have availed the said loan. Having availed the loan on the terms and conditions contained in the sanction letter, they have no option but to make payment of interest accordingly, even if the said rate of interest happens to be higher than the rate at which they were paying interest to the Sonepat Urban Cooperative Bank.
10. For the reasons stated hereinabove, I hold that (i) the complainant is not a consumer he having taken the loan for a business purpose and (ii) there is no deficiency on the part of the petitioner company in rendering services to the complainant it having charged interest as per the sanction letter and the agreement between the parties. The impugned orders, therefore, cannot be sustained and the same are accordingly set aside. The complaint is consequently dismissed without any order as to costs.
......................J V.K. JAIN PRESIDING MEMBER