Monopolies and Restrictive Trade Practices Commission
Director General (Investigation & ... vs Rockland Leasing Limited on 28 February, 2002
ORDER
C.M. Nayar, J. (Chairman)
1. The present order would dispose of both the complaint as well the application filed in UTPE No. 5/92 and C.A. No. 73/92 by the DG/ applicant respectively under the relevant provisions of the Monopolies and Restrictive Trade Practices Act, 1969 (for brief the Act).
2. The respondent is a non-banking financial company carrying on the business of hire purchase, leasing and housing finance. It raised funds through floating a deposit linked housing financing scheme where the deposit of 25% of the total amount qualified the depositor for a specified sum of housing loan. The aforesaid amount paid could either be adjusted in the repayment of loan or to be refunded back to the depositor/applicant in case of loan not availed of. No interest was to be paid on the refund of the deposit before a period of 24 months. On complaints received from Shri M.L. Jain and Shri R.C. Chatrath that despite fulfilment of the conditions, the refund of the amount as deposited were not paid back, the DG carried out necessary inquiries after which a preliminary investigation report was submitted to the Commission recommending action under Section 36A of the Act. After being satisfied that the respondent has adopted and indulged in unfair trade practices within the meaning of Clauses (iv) and (vi) of Sub-section (1) of Section 36A of the Act, the Commission directed the issuance of Notice of Enquiry under Sections 36A, 36B, and 36D of the Act read with Regulation 51 of the MRTPC Regulations, 1991.
3. The respondent refuted the charges on the ground that as per the R.B.I, guidelines received after September, 1991 no interest was payable to the depositor seeking pre-mature payment. The brochure of the scheme clearly mentioned that processing fee at 2% towards one-time initial charges by the company for covering administrative expenses on processing/security of application /documents from legal and other angles, inspection, value assessment and all other expenses on correspondence/dispute, etc. would be non-refundab'e. As per the terms and conditions binding on the depositor no case is thus set out against the respondent.
On completion of the pleadings, the following issues were framed:
(1) Whether the complaint is not maintainable for the reasons stated in the reply to the Notice of Enquiry as preliminary objections ?
(2) Whether the respondent has indulged in unfair trade practices as alleged ?
(3) Whether the alleged unfair trade practices are prejudicial to public interest or interest of consumer or consumers generally ?
Affidavits/counter affidavits along with supporting documents have been filed by way of evidence. Shri M.L. Jain while admitting communication of non-refunding of 25% of the deposit before 24 months, denied the same term being printed in the brochure.
4. We have carefully considered the facts and have perused the evidence brought on record. As per the pamphlet (Ex. AW 1/R4) processing fee of 2% of the intended loan amount is to be paid along with the application. It is further provided that commitment fee at 2% of the sanctioned loan amount will be charged/deducted in the event of not availing of loan after sanction in principle.
There is a further condition, which reads as under:
"The entire scheme is subject to Govt. Rules and Regulations prescribed from time-to-time. However, the Company reserves the right to alter or modify the scheme at any time and in any manner it deems fit in public interest,"
5. The above clearly shows that the respondent had kept with it a right to alter or modify the scheme in any manner it deems fit in public interest. The respondent thus at its discretion can refund the amount before the expiry of period 24 months as done in the case of Shri M.L. Jain to whom the entire amount stood refunded. Differential treatment given to Shri R.C. Chatrath by deducting a sum of Rs. 6,000/- from an amount of Rs. 75,000/- is without any sationale. In view of these facts, it is clear case of unfair trade practice having been adopted and indulged in by the respondent as envisaged under Section 36A of the Act. The respondent is, therefore, directed to cease from carrying on such practice and desist from repeating it in future.
6. In case of C.A. No. 73/92 Shri R. C. Chatrath, applicant who is present in Court states that he has already got a sum of Rs. 69,000/- out of the amount of Rs. 75,000/-deposited by him with the respondent. The balance of Rs. 6,000/- has been deducted by the respondent stating as processing charges, whereas the entire amount of Rs. 1,35,000/- has been given to another depositor by a name of Shri M. L. Jain, who is satisfied and is not contesting the present proceedings. We, therefore, grant the relief against the respondent to pay the applicant the balance amount of Rs. 6,000/- as well as interest on the amount at the rate of 12% per annum from the date of deposit till the date of payment. The applicant shall also be entitled to the costs which will be quantified at Rs. 5,000/-. The present application is disposed of on these facts. Thus, both the complaint as well as the application are disposed of on these facts. Thus, both the complaint as well as the application filed in UTPE No. 5/92 and C. A. No. 73/92 stand allowed. The respondent is directed to file an affidavit of compliance within eight weeks of the receipt of the order.