State Consumer Disputes Redressal Commission
Sundaram Home Finance vs R M Chandrasekaran on 29 November, 2023
IN THE TAMILNADU STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, CHENNAI.
Present: Hon'ble THIRU JUSTICE R. SUBBIAH : PRESIDENT
F.A. No. 977 of 2023
(Against the order passed in C.C. No.38 of 2016 dated 25.07.2022
on the file of DCDRC, Perambalur).
Wednesday, the 29th day of November 2023
1. Sundaram Home Finance Ltd.,
PLAS Towers, II Floor
No.56, 4th Cross
Thillai Nagar. Trichy.
2. Sundaram Home Finance Ltd.,
Rep. by its Authorised
Officer R.Shanmugan
No.46, Whites Road
Chennai- 600 004.
3. Sundaram Finance Ltd.,
2nd Floor, Senthiraja Complex
No.172, Trichy Main Road
Perambalur. .. Appellants /
Opposite parties 1 to 3
Vs.
Rm. Chandrasekaran
No.43, Sanjeevirayan Koil Street
Perambalur. .. Respondent/
Complainant
Counsel for the Appellants/
Opposite parties 1 to 3 : M/s. A. Palaniappan
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Counsel for the Respondent/
Complainant : M/s.R.S. Mangala Kumar
The Respondent as Complainant has filed a complaint
before the District Commission against the opposite parties praying
for certain directions. The District Commission had passed an ex-
parte order and allowed the complaint. Against the said ex-parte
order, this appeal is preferred by the opposite parties, praying to
set aside the order of the District Commission, Perambalur dated
25.07.2022 in C.C. No.38 of 2016.
This appeal came before me for final hearing, today.
Upon hearing the arguments of the learned counsel appearing for
the appellants and the respondent, perusing the documents, lower
court records and the order passed by the District Commission, this
Commission made the following order in the open court.
ORDER
THIRU.R.SUBBIAH, PRESIDENT(Open court) The opposite parties 1 to 3 before the District Commission are the appellants herein.
2. The case of the complainant before the District Commission is that the complainant decided to construct a house in 3 the property owned by him. He approached the 1 st opposite party to avail a loan by pledging the said property. The 1st opposite party under Loan Account No.30004208 sanctioned loan for a sum of Rs.12,50,000/- with interest at the rate of 11.75%, to be repaid in 120 Equated Monthly Instalments @ Rs.17,754/- p.m. Though the complainant does not know to read English, he is capable of signing in English. Hence, he signed the Loan Agreement in English. After repaying the entire loan amount, for 120 months without any default, the complainant approached the 1 st opposite party to cancel the loan Agreement and receive back the original property documents submitted at the time of availing the loan. In this regard, the complainant visited the office of the 1 st opposite party in person and also sent letters dated 08.09.2016 and 20.09.2016. The 1st opposite party neither responded to his letters nor returned the original documents. Hence, the complainant sent a legal notice dated 26.10.2016, through his counsel to the 1st opposite party. There was no reply from the 1st opposite party. However, on 01.12.2016 the complainant received a letter from the 2nd opposite party, in reply to his letter dated 20.09.2016 addressed to the 1st opposite party. In the said letter the 2nd opposite party had stated that the complainant had signed the loan agreement in English, at the time of execution of the Agreement, if 4 he had informed the Bank that he does not know English, they would have conveyed the contents of the Agreement in the language he could understand, that the loan has been granted on variable rate of interest and hence the complainant is liable to pay the increased rate of interest, that the variations in the rate of interest was informed to the complainant then and there through letters. Hence as on 30.11.2016 a sum of Rs.5,37,519/- is due and payable by the complainant in 37 instalments and only on payment of the balance due amount the original documents would be returned to the complainant. The entire averments stated by the 2nd opposite party in the letter is incorrect. Further, the 2nd opposite party had not stated as to how many installments had not been paid by the complainant, out of the 120 EMIs. Though the complainant had paid the entire dues as per the Agreement, the opposite party is demanding more money, which is highly illegal. Since the opposite parties refused to cancel the loan agreement and return the original documents, the complainant was put to financial loss and had suffered mental agony. Hence the complaint was filed before the District Commission claiming a sum of Rs.5,00,000/- as compensation and to direct the opposite parties to cancel the loan Agreement dated 30.09.2006 and return the original property documents.
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3. The 2nd opposite party is the Corporate office and 1 st and 3rd opposite parties are the branch offices of the 2 nd opposite party. Hence, the 2nd opposite party had filed a version resisting the case of the complainant. The complainant was granted a loan of Rs.12,50,000/- on 29.08.2006. As agreed by the complainant, he has to repay the loan amount in 120 months commencing from 01.09.2006 on a monthly EMI of Rs.17,742/- under variable rate of interest. The rate of interest at the time of sanction of loan was 11.75%. Due to the change in the rate of interest, based on the RBI instructions, whenever there was a change, the complainant was informed about the revision of interest rate. Hence, the tenure of loan for 120 months increased by 39 months. But, the complainant had deliberately stopped making the balance EMIs after the original tenure of 120 months. Since there was balance amount due and payable by the complainant, the opposite parties could not return the documents, which was also clearly informed to the complainant. Thus, there is no deficiency of service on the part of the opposite parties.
4. The opposite parties appeared before the District Commission and the 2nd opposite party had filed the written version. However, the opposite parties have failed to file Proof 6 Affidavits and were not present before the District Commission. Hence the 1st and 3rd opposite parties were set ex-parte on 04.07.2017 and the 2nd opposite party was set ex-parte on 25.01.2020. Consequently, the District Commission passed an ex- parte order directing the opposite parties, to cancel the loan agreement and to pay a sum of Rs.50,000/- towards compensation for mental agony and loss. Further, the District Commission has directed the opposite parties to pay the said amount within 45 days from the date of the order failing which the opposite parties shall pay interest at the rate of 6% p.a., till the date of payment.
5. Aggrieved over the said order, this appeal is preferred by the opposite parties, praying for setting aside the order and for a chance to contest the case on merits.
6. Before this Commission, the counsel for the appellants/opposite parties submitted that the respondent/ complainant has not approached this Commission with clean hands. The District Commission had failed to note that the respondent/ complainant is liable to repay the loan under variable rate of interest as per the Loan Agreement, which was duly accepted by him, at the time of obtaining the loan. The appellants/ opposite parties have a right to take legal steps to recover the loan dues 7 and the same cannot be termed as deficiency in service or unfair trade practice as contemplated under the Consumer Protect Act, 2019. Hence, they prayed this Commission to set aside the order of the District Commission and afford them an opportunity to contest the case on merits.
7. When the case came up before this Commission on 24.11.2023, after hearing the submission of the appellants, this Commission felt that there is some force in the arguments of the counsel for the appellants/ opposite parties and therefore, in order to give a chance to the appellants/opposite parties, to agitate their right on merits, was inclined to allow this appeal by remanding the matter to the District Commission, to dispose of the case on merit. However, considering the lethargic attitude of the opposite parties in not appearing before the District Commission, this Commission imposed a cost of Rs.3,000/- to be paid to the Legal Aid Account of the State Commission. The said cost was also paid today and since the condition imposed by this Commission has been complied with, the appeal is allowed and the complaint is remanded to the District Commission for fresh disposal according to law.
In the result, the appeal is allowed by setting aside the order of the District Consumer Disputes Redressal 8 Commission, Perambalur in C.C. No.38/2016 dt.25.07.2022 and the matter is remanded to the District Consumer Disputes Redressal Commission, Perambalur for fresh disposal according to law and on merits.
Both parties are directed to appear before the District Consumer Commission, Perambalur on 29.12.2023 for further proceedings. The appellants/ opposite parties are directed to file Vakalat, proof affidavit, written arguments and documents if any on the same day itself.
The District Commission is directed to dispose of the complaint on merits within three months after hearing both parties as expeditiously as possible as per law.
Both parties shall abide by the order of the District Commission regarding the mandatory deposit already made by the appellants/opposite parties before this Commission.
R. SUBBIAH PRESIDENT Index : Yes/ No AVR/SCDRC/Chennai/Orders/November/2023