State Consumer Disputes Redressal Commission
Prakash Kedia vs India Infoline Housing Finance Co.Ltd. on 18 October, 2017
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR (C.G.)
Complaint Case No.CC/2017/35
Instituted on : 12.05.2017
Prakash Kedia, S/o Late Abirchand Kedia,
Flat No.601, Block B, Metro Heights,
Near Hotel Lal Bag Inn. Telibandha,
Raipur (C.G.) ... Complainant.
Vs.
India Infoline Housing Finance Limited,
In front of Hotel Punjab Palace,
A Block, 1st Floor, Nagdev Plaza,
Jail Road, Kutchery Chowk,
Raipur (C.G.) ... Opposite Party
PRESENT: -
HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT
HON'BLE SHRI D.K. PODDAR, MEMBER
HON'BLE SHRI NARENDRA GUPTA, MEMBER
COUNSEL FOR THE PARTIES:
Shri Akhilesh Pandey, Advocate for the complainant.
Shri Rakesh Puri, Advocate for the opposite party.
ORDER
Dated : 18/October/2017 PER :- HON'BLE SHRI JUSTICE R.S. SHARMA, PRESIDENT. The complainant filed this consumer complaint under Section 17 of the Consumer Protection Act, 1986 against the O.P. seeking following reliefs :-
(A) Pass an order directing the O.P. to repay the foreclosure amount of Rs.23,42,632/- (Rupees Twenty Three Lakhs Forty Two Thousand Six Hundred Thirty Two) as the foreclosure charges and Rs.3,51,394/- (Rupees Three Lakhs Fifty One Thousand Three Hundred Ninety Four) service charges on // 2 // the same to the complainant with consequential losses along with the interest @ 18% p.a. from September, 2016.
(B) Pass an order directing the O.P. to pay Rs.5,00,000/-
(Rupees Five Lakhs) against the mental compensation to the complainant).
(C) Pass any other further order(s) as this Hon'ble Commission may deem fit and proper in the facts and circumstances of the case and in the interest of justice.
2. Briefly stated the facts of the complaint of the complainant are that the complainant is a consumer as per Section 2(1)(d) of the Consumer Protection Act, 1986 and is constrained to approach this Commission against the gross illegal acts of the O.P. wherein it has committed serious deficiency in services, unfair trade practices and restrictive trade practices. The O.P. is a housing finance company incorporated under the India Companies Act, 1956 and is into the business of providing finance to the borrowers and the complainant is in need of housing loan. The complainant has approached the O.P. for a housing loan of Rs.4,74,36,800/- and the same was sanctioned on 28-11-2015 and disbursed on 01.01.2016 and subsequently a loan agreement was executed between the complainant as the main borrowers and (as complainant is one of the partners in the partnership firm M/s Kedia Realty & Infra, rest of the partners and firm has become the co-applicant) the O.P. on 30.11.2015. A loan account was opened by the O.P. The loan account No. is 736787. That // 3 // after entering into the agreement the O.P. has to disburse the loan amount but the O.P. has not released Rs.7,40,319/- out of the total loan amount and for the same complainant has written mails and letters to the O.P. on 05.02.2016, 12.02.2016, 05.03.2016, 08.03.2016 and 16.04.2016 etc. and made repeated request to release the balance loan amount but the O.P. has neither given a proper response nor did they release the said remaining amount of the loan. After several request and follow up the O.P. has given the above said amount to the complainant in parts. They have given money in part payments and they have adjusted against the monthly interest payable. But because of the non- cooperation of the O.P. complainant has to suffer a lot. The O.P. has also done malpractice and has not maintained any transparency with the complainant. O.P. has misused one of the cheque of the complainant, had collected Rs.11,450/- of cheque in favour of IIHFL towards processing fee which they had deducted already and other and for the same complainant has written a letter dated 23.06.2016 mentioning all the wrong and unfair practice done by the O.P. in detail. As the complainant was very upset with the unfair and unprofessional behaviour of the O.P., complainant has decided not to continue the loan account with the O.P. and that is why requested O.P. to intimate the outstanding amount of the loan account to foreclose the loan account by 31.07.2016, through the letter dated 23.06.2016. But even after the repeated request made by the complainant, the O.P. has not taken the due care to respond on the request of the complainant with respect to the foreclosure. Complainant has written many mails, // 4 // but the O.P. has only said the request is in progress. The O.P. has finally given reply to the above letter and has written a letter dated 29.08.2016 t the complainant and informed the due amount of Rs.4,99,39,686/- including Rs.23,42,632/- as the foreclosure charges and Rs.3,51,394/- service charge on the same. As the complainant was very upset with the unprofessional behaviour and wants to end the service of the O.P. , has paid the outstanding amount to the O.P. That after clearing all the dues for foreclosure, the complainant get to know that the same amount of foreclosure cannot be charged to an individual, but the O.P. has taken a huge amount of Rs.26,94,027/- from the complainant by keeping him in dark which is clearly an act of unfair trade practice and deficiency in service with the complainant. The whole act of the O.P. is unethical. After that the complainant has written letter dated 20.09.2016 to the Managing Director of the O.P. informing the whole matter and request to repay the foreclosure to complainant, but neither the O.P. nor the Managing Director has taken any step towards the same nor they have given any positive reply of the same. The Reserve Bank of India has issued a clear guideline / Circular through RBI Circular No.RBI/2014-1/121 DNBS (PD), CC.No.399/03.10.42/2014-15 dated and directed all banks and NBFCs, which NBFCs shall not charge foreclosure charges / pre - payment penalties on all floating rate terms loan sanctioned to individual borrowers. And inspite of that, O.P. has taken the foreclosure charges from the complainant, which is clear violation of the consumer rights of the complainant. The complainant has written // 5 // many mails and letter to the O.P. for the repayment of the foreclosure amount, but the O.P. has failed to do the same and repeatedly neglecting the request of the complainant and kept on daily-dallying the matter. Hence, the instant complaint.
3. The O.P. has filed its written statement and raised preliminary objection. The O.P. averred that the main and material allegations made in the complaint are not true, valid and binding on the O.P. The complainant is put to strict proof of those allegations by documentary evidence. Such of those allegations which are not specifically traversed herein are ought not to be deemed to have been admitted by the O.P. The loan mentioned in the complaint has been taken by the complainant with four other persons and a partnership firm M/s Kedia Realty & Infra. So, complainant is not alone, who taken loan from the O.P., but this complaint filed by the complainant and other Borrower / Co-Borrowers are not included as party. Complainant has not made party to them, so this complaint is liable to be rejected on ground of mis/non-joinder of necessary parties. The loan taken by the complainant and other Borrower/Co-Borrowers has been used for business / commercial purpose and it is Mortgage Loan. So on this ground, this complaint is liable to be dismissed. The complaint is not bona fide, legal and proper, therefore, it deserves to be dismissed. The complaint deserves to be dismissed on the principle of "Allegatio contra factum non est admittenda". The complaint is not maintainable since in the present case, one of the Borrower is Kedia Realty and Infra i.e. a // 6 // Firm therefore, as per the guiding circular/law /policy of the National House Board Circular No.NHB (ND) DRS/Misc. Circular No.17/2015-16 dated 22nd July, 2016 annexure as Annexure R1 and Second Circular NHB (ND)/DRS/Policy Circular 66/2014-15 dated 3rd September, 2014, annexed as Annexure R-2, O.P. has charge for foreclosure charges. The present complaint is misconceived groundless and unsustainable in law and is liable to be dismissed as such. The complainant was co-applicant in this transaction. As the Kedia Realty & Infra along with the complainant as the co-applicant had applied the loan for business expansion, the instant application is not maintainable and the complainant cannot be termed as a "consumer" under the definition of The Consumer Protection Act, 1986 and he has also no right to file this complaint. Annexure R-3 is End Use Letter executed by all Borrowers/Co-Borrowers including complainant where it is clearly mentioned by them the purpose of loan was Business Expansion and / or Working Capital needs. The complainant is not a consumer as per Section 2(d) of the Consumer Protection Act, 1986 since the loan in question was availed for business / commercial purpose in the nature of Loan Against Property and further the O.P. has not committed any deficiency of services, unfair trade practices and restrictive trade practices, as alleged. The complainant did not apply for housing loan, as documents produced by the complainant himself it is a mortgaged loan. The complainant was not the individual applicant as alleged, who has applied for the loan and there were three more applicants /co-borrowers. It is the // 7 // complainant who has foreclosed the loan only after six months from availing the loan against the property and therefore, the O.P. was compelled to counsel the complainant as why the complainant seeks early foreclosure and that is within 6 months of availing the loan. The O.P. has not done malpractice and has maintained transparency with the complainant. The O.P. has not misused one of the cheque for an amount of Rs.11,450/- issued towards processing fees. Since the loan was availed by the complainant in the month of January, 2016 and the complainant raised the request within 6 months to foreclose the same and therefore, concerned team was following the due process of foreclosing the loan and counselling was carried out for retention of the borrower under the circumstances. The foreclosure charges have been levied as per the guiding Circular of the National House Board Circular No.NHB (ND) DRS/Misc. Circular No.17/2015-16 dated 22nd July, 2016 annexed as Annexure R1 and Second Circular NHB (ND)/DRS/Policy Circular 66/2014-15 dated 3rd September, 2014 annexed as Annexure R2. The charges of Rs.3,51,394/- mentioned as service charges is actually service tax and the borrower / complainant is liable to pay as per the rules laid down by the Government. The information given under the para 11 with regard to RBI Circular for not charging the foreclosure/pre-payment charges is with regards to individual buyers and in the present case one of the Borrower is Kedia Realty and Infra i.e. a firm and therefore, as per the guiding circulars/law/ policy of the National House Board Circular No.NHB (ND)/Misc. Circular No.17/2015-16 dated 22nd July, 2016 annexure as // 8 // R1 and Second Circular NHB (ND)/DRS/Policy Circular 66/2014-15 dated 3rd September, 2014 annexed as R2, the O.P. has charged for foreclosure charges. There is no violation of the consumer rights of the complainant, since complainant is not an individual borrower in terms of the above said guiding circulars. The cause of action never arose in favour of the complainant and against the O.P. The State Commission has no jurisdiction to entertain the consumer complaint. The complainant is not entitled to any relief as claimed and the present complaint be dismissed in limine with exemplary cost.
4. The complainant has filed documents. Annexure 1 is R.B.I. Notification dated 14.07.2014, Annexure 2 is Notice to Branch Head IIHFL dated 23.06.2016, Annexure 3 is notice to Managing Director IIHFL, Annexure 4 is letter to IIHFL, Raipur dated 05.02.2016, Annexure 5 is Letter to Manager, IIHFL dated 12.02.2016, Annexure 6 is email to IIHFL dated 05.03.2016, Annexure 7 is letter to Branch Head, IIHFL dated 16.04.2016, Annexure 8 is letter to Branch Head, IIHFL dated 04.05.2016, Annexure 9 is Letter to Branch Head, IIHFL dated 25.05.2016, Annexure 10 is letter to Branch Head dated 06.06.2016, Annexure 11 is Final Sanction Letter dated 30.11.2015, Annexure 12 is Email from IIHFL to Kedia Realty Infra dated 05.11.2016, Annexure 13 is Email From IIHFL to Kedia Realty Infra dated 02.09.2016, Annexure 14 is Email from IIHFL to Kedia Realty Infra dated 01.09.2016, Annexure 15 is Email from Kedia Realty Infra to IIHFL dated 01.09.2016, Annexure 16 is letter to IIHFL Loan // 9 // Department dated 01.09.2016, Annexure 17 is email dated 29.08.2016, Annexure 18 is letter dated 29.08.2016 sent by IIHFL, Annexure 19 is email dated 03.09.2016, Annexure 20 is letter to IIHFL, Loan Department dated 03.09.2016, Annexure 21 is email dated 6.09.2016, Annexure 22 is email dated 04.08.2016, Annexure 23 is email dated 02.08.2016, Annexure 24 is letter to IIHFL dated 02.08.2016, Annexure 25 is email dated 18.07.2016, Annexure 26 is email dated 15.07.2016, Annexure 27 is letter to IIHFL, Loan Department dated 15.07.2016, Annexure 28 is request for foreclosure statement dated 15.07.2016, Annexure 29 is letter dated 07.07.2016 and Annexure 30 is email dated 24.06.2016.
5. The O.P. has filed documents. Annexure R-1 is Circular by National Housing Bank dated 03.09.2015, Annexure R-2 is Circular by National Housing Bank dated 22.07.2016, Annexure R-3 is Loan Agreement with End Use Letter dated 30.11.2015, Annexure R-4 is Loan Application Form dated 05.11.2015.
6. Shri Akhilesh Pandey, learned counsel appearing for the complainant has argued that the complainant is a consumer under Section 2(1)(d) of the Consumer Protection Act, 1986. The O.P. is a housing finance company incorporated under the Indian Companies Act, 1956 and is doing business of providing finance to the borrowers. The complainant has approached the O.P. for a housing loan of Rs.4,74,36,800/- and the same was sanctioned on 28.11.2015 and disbursed on 01.01.2016. The loan agreement was executed between // 10 // the complainant as the main borrower. A loan account No.736787 was opened by the O.P. The O.P. has to disburse the loan amount, but the O.P. did not release Rs.7,40,319/- out of total loan amount. The complainant sent emails to the O.P on various dates to release the balance loan amount but the said amount was not given by the O.P. to the complainant. The O.P. committed mal-practice and has not maintained any transparency with the complainant. The O.P. has misused one of the cheque of the complainant and had collected Rs.11,450/- if cheque in favour of the IIHFL towards processing fee which they had deducted already and for the same the complainant has written a letter dated 23.06.2016 mentioning all the wrong and unfair trade practice committed by the O.P. The O.P. has finally written letter dated 29.08.2016 to the complainant and informed that due amount of Rs.4,99,39,686 including Rs.23,42,632/- as the foreclosure charges and Rs.3,91,394/- is service charges on the same. The foreclosure amount cannot be charged to an individual loan, but the O.P. has taken a huge amount of Rs.26,94,027/- from the complainant by keeping him in dark. The Reserve Bank of India has issued a clear guidelines/Circular through RBI Circular No.RBI/2014- 1-121 DNBS (PD) CC No.399/03.10.42/2014-15 dated 14.07.2014 and directed all Banks and NBFCs, not to charge foreclosure charges / pre- payment penalties on all floating rate terms loans sanctioned to individual borrowers, but the O.P. malafidely charged foreclosure amount and committed deficiency in services and mal-practice, therefore, the complainant is entitled to get foreclosure amount of // 11 // Rs.23,42,632 and Rs.3,51,394/- towards service charges from the O.P. along with interest @ 18% p.a. from September, 2016 till realisation. The complainant is also entitled for compensation of Rs.5,00,000/- towards mental agony and cost of litigation. Hence the complaint be allowed and above reliefs be granted to the complainant.
7. Shri Rakesh Puri, learned counsel appearing for the O.P. has argued that the loan was sanction to the partnership firm M/s Kedia Realty Infra and the complainant is a partner in the above firm. The complainant filed the instant complaint in his individual capacity and he was not authorised by the other partners of the partnership firm to file instant complaint on behalf of other partners or co-borrowers and the complainant has not made party the other partners and co- borrowers, therefore, the complaint is not maintainable. Prakash Kedia (complainant) is one of the partner of Kedia Realty & Infra, partnership firm, therefore, the complainant is not a "consumer" under Section 2(1)(d) of the Consumer Protection Act, 1986. The guidelines issued by the Reserve Bank of India, is for individual loan, but in the instant case, the loan was sanctioned for M/s Kedia Realty Infra, which is partnership firm and all partners of the above firm are co- borrowers, therefore, the above circular is not applicable and the O.P. has rightly charged foreclosure charges, therefore, the complainant is not maintainable and is liable to be dismissed.
// 12 //
8. We have heard learned counsel appearing for both the parties and have also perused the documents filed by them in the complaint case.
9. The O.P. has filed document Annexure R-4 which is Loan Application Form. The loan application form was submitted for M/s Kedia Realty Infra , a partnership firm. In the loan application form, the name of the applicant, is mentioned Kedia Realty & Infra and current address is mentioned 03, South Avenue, Choubey Colony, Raipur. Annexure R-3 is Loan Agreement. In Loan Agreement also, the names of partners of the partnership firm Kedia Realty & Infra, are mentioned. The loan agreement was executed on behalf of Kedia Realty Infra and signature of partners are put in each page of the loan agreement. In page 38 of the Loan Agreement names of partners of Kedia Realty & Infra namely Prakash Kedia, Manju Kedia and Anupam Kediare are mentioned and their signatures were also present in the loan agreement . In the Loan Application Form also, it is mentioned that the loan was applied for by Kedia Realty & Infra and signatures of all partners of the partnership firm are present.
10. Looking to the Loan Agreement and Loan Application Form, it appears that the loan was applied for Kedia Realty & Infra, a partnership firm and the complainant is one of the partner of the above firm.
11. Order XXX Rule 1 of The Code of Civil Procedure, 1908 runs thus :-
// 13 // "1. Suing of partners in name of firm - (1) Any two or more persons claiming or being liable as partners and carrying on business in [India] may sue or be sued in the name of the firm (if any) of which such persons were partners at the time of the accruing of the cause of action, and any party to a suit may in such case apply to the Court for a statement of the names and address of the persons, who were, at the time of the accruing of the cause of action, partners in such firm, to be furnished and verified in such manner as the Court may direct.
12. Order XXX Rule 2 of The Code of Civil Procedure, 1908 runs thus :-
(2). Where persons sue or are sued as partners in the name of their firm under sub rule (1), it shall, in the case of any pleading or other document required by or under this Code to be signed, verified or certified by the plaintiff or the defendant, suffice if such pleading of other document is signed, verified or certified by any one of such persons."
13. From bare perusal of provisions of Order XXX Rule 1 of the CPC, it appears that any two or more partners may file suit in the name of the firm. In the instant case the complaint, has been filed by Prakash Kedia only in his individual capacity. In the title of the complainant, the complainant has not mentioned that he has filed the instant complaint on behalf of Kedia Realty & Infra and he is duly authorised by other partners of the firm/co-borrowers to file the instant complaint. The loan was sanctioned by the O.P. to Kedia Realty & Infra and all the partners of the firm are borrowers, therefore, Prakash Kedia, has no locus standi to file the present complaint in his individual capacity and he was not authorised by the other partners of // 14 // the firm, to file the instant complaint on their behalf, therefore, other partners of Kedia Realty Infra and co-borrowers are necessary party in the instant case and for want of necessary party, the complaint is not maintainable.
14. In para 3 of the complaint, the complainant pleaded that the loan agreement was executed between the complainant as main borrower ( as complainant is one of the partners in the partnership firm M/s. Kedia Realty & Infra and rest of the partners of the firm has become co-applicants). The complainant himself admitted that the loan was sanctioned for M/s Kedia Realty & Infra and other partners of the firm are co-applicant, but the other partners of the firm have not been made party in the instant complaint. According to the complainant loan application form was submitted to the O.P. on behalf of Kedia Realty & Infra and the loan was sanction in favour of Kedia Ralty & Infra. Prakash Kedia, Manju Kedia and Anupam Kedia are partners of Kedia Realty & Infra. It appears that the complainant has obtained loan from the O.P. for partnership firm Kedia Realty Infra, therefore, the transaction is commercial transaction and the complainant is not consumer under Section 2(1) (d) of the Consumer Protection Act, 1986, therefore, the complaint is not maintainable.
15. So far as merits of the case is concerned, the complainant has filed document Annexure 1, which is copy of Circular No.RBI/2014- 15/21 DNBS (PD).CC No.399/03.10.42/2014 dated 14.07.2014 issued by Reserve Bank of India, in which it is mentioned thus :-
// 15 // "2. As a measure of customer protection and also in order to bring in uniformity with regard to prepayment of various loan by borrowers of banks and NBFCs, it is advised that NBFCs shall not charge foreclosure charges/ pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect."
16. The O.P. has also filed copy of Circular No.NHB (ND)/DRS/Policy Circular 66/2014-15 dated 03.09.2014, issued by National Housing Board, which is marked as Annexure R-1. Document Annexure 1 is copy of Circular No.RBI/2014-15/21 DNBS (PD).CC No.399/03.10.42/2014 dated 14.07.2014 issued by Reserve Bank of India. It appears that the Circular dated 03.09.2014 was issued subsequently and it was issued for giving clarification. In para 3 of the Circular dated 03.09.2014 issued by National Housing Bank, it is mentioned that "Further the applicability of the said Circular is on foreclosure charges / pre-payment penalties in respect of all floating rate term loans sanctioned to individual borrowers. Loan in which company, firm, etc. is a borrower or co-borrower, therefore, is excluded from its purview."
17. On the basis of Circular No.NHB (ND)/DRS/Policy Circular 66/14-15 dated 03.09.2014 issued by National Housing Bank, (Annexure R-1), it appears that if loan is sanctioned for company, firm, etc. they are excluded from purview of Circular No.RBI/2014- 15/121 DNB (PD). CC No.399/03.10.42/2014-15 dated 14.07.2014 issued by the Reserve Bank of India. In the instant case, the loan was sanctioned by the O.P. in favour of Kedia Realty & Infra and Prakash Kedia, Manju Kedia and Anupam Kedia, are partners of the above // 16 // firm. It appears that the loan was taken by the partnership firm and loan was not taken by Prakash Kedia (complainant), in his individual capacity, therefore, Circular No.RBI/2014-15/121 DNB (PD). CC No.399/03.10.42/2014-15 dated 14.07.2014 issued by Reserve Bank of India, will not applicable in the instant case. The complainant is not entitled to get any benefit and foreclosure amount charged by the O.P. The O.P. has rightly charged foreclosure charges and by doing so, the O.P. did not commit any deficiency in service or unfair trade practice.
18. In view of the above discussions, we are of the firm view that for want of necessary party and the transaction between the complainant & O.P. is commercial transaction and the complainant is not "consumer" under Section 2(1)(d) of the Consumer Protection Act, 1986, therefore, the complaint filed by the complainant is not maintainable. The O.P. has rightly charged foreclosure amount to the complainant and by doing so, the O.P. did not commit any deficiency in service, therefore, the complaint is not maintainable and is liable to be dismissed.
19. Therefore, the complaint filed by the complainant against the O.P., is dismissed. Parties shall bear their own cost.
(Justice R.S. Sharma) (D.K. Poddar) (Narendra Gupta)
President Member Member
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