State Consumer Disputes Redressal Commission
I.I.F.L.Home Finance Ltd. Through ... vs Preetpal Singh Arora on 17 December, 2018
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
PANDRI, RAIPUR (C.G).
Appeal No.FA/2018/843
Instituted on : 07.09.2018
I.I.F.L. Home Finance Limited,
(Previously known as India Infoline Housing Finance Ltd.),
Office - 12A-10, 13 Floor, Parinee,Cresenzo,
C-38 & 39, G. Block, Bandra Kurla Complex,
Bandra East, Mumbai 400 051
Branch Office - First Floor, Lalganga City Mart,
Motibag Chowk, Raipur (C.G.) 492001
Through : Authorized Officer Shri Sumeet Singh,
Old address : Jail Road, Raipur (C.G.) .... Appellant (O.P.)
Vs.
Preetpal Singh Arora,
Ashish Bhawan, Satkar Hotel Galli,
Narmadapara,
Raipur (C.G.). .... Respondent (Complainant)
PRESENT :
HON'BLE SHRI JUSTICE C.B. BAJPAI, PRESIDENT
HON'BLE SHRI NARENDRA GUPTA, MEMBER
COUNSEL FOR THE PARTIES :
Shri Rakesh Puri, Advocate for the appellant (O.P.).
Miss. Gurpreet Kaur Chawla, Advocate for the respondent (complainant).
ORDER
DATED : 17/12/2018 PER :- HON'BLE SHRI JUSTICE C.B. BAJPAI, PRESIDENT.
This order shall dispose off the appeal filed by the appellant / O.P. being aggrieved by the order dated 13.07.2018, passed by the District Consumer Disputes Redressal Forum, Raipur (C.G.) (in brevity "District Forum") in Complaint Case No.413/2017 whereby and whereunder the concerned District Forum, has directed the appellant / O.P. to proceed under the guidelines of the Reserve Bank of India, to transfer the home loan account without taking 4% foreclosure charges, for transfer to another Bank, as per the prayer of the // 2 // respondent / complainant. The concerned District Forum, has also awarded Rs.5,000/- towards compensation for mental harassment and Rs.2,000/- towards Advocate's fees and cost of the complaint to the respondent / complainant.
2. Facts in brief are that the respondent / complainant as an individual had taken loan of Rs.96,00,000/- from I.C.I.C.I. Bank as Home Loan and thereafter he had attempted to transfer the said home loan account to another Bank. The respondent/ complainant was asked for 4% foreclosure charges. As per the respondent/ complainant, the Reserve Bank of India vide its Circular dated 05.06.2012 directed that the Banks will not be permitted to charge foreclosure charges/pre-payment penalties on home loans on floating interest rate basis, with immediate effect. Despite their Circular, as the respondent / complainant not get reliefs in the line of the said guidelines, the respondent / complainant had filed the complaint before the concerned District Forum on 14.07.2017. On 17.12.2017, the notice issued to the appellant / O.P. was served, despite service, the appellant / O.P. not took part in the proceedings before the concerned District Forum. . The concerned District Forum heard the matter ex-parte and decided the complaint case vide order as aforementioned.
3. The appellant / O.P. had filed the instant appeal against the impugned order dated 13.07.2018. On 04.10.2018, this Commission condoned the delay of 26 days in filing the appeal subject to cost of Rs.1,500/-, to be deposited in "C.G. State Consumer Welfare Fund". The appeal was admitted for final hearing. The appellant / O.P. has submitted in his Memorandum of Appeal that the // 3 // respondent / complainant not came with clean hands before the concerned District Forum and not disclosed the fact that the said loan was given to the respondent / complainant, Smt. Gurmeet Kaur Arora, Parmeet Singh Arora, Ankit Arora and a firm Hotel Welcome, and as the said loan was for the commercial purpose, hence the respondent / complainant does not fall under the category of "Consumer" under The Consumer Protection Act, 1986 (in brevity "The Act of 1986"). Also the respondent /complainant has not made parties to the above co-borrowers. With this, there is non-joinder of the necessary parties and as per the Circular of the National Housing Bank dated 03.09.2014 and 22.07.2016 only individual borrowers are exempted from any foreclosure charges/pre-payment penalties. Hence submitted that the appeal may be allowed and the impugned order passed by the concerned District Forum, may be quashed.
4. The appellant / O.P. has also filed an application under Order 41 Rule 27 of The Code of Civil Procedure, 1908 (in brevity "The Code") for taking on record the above two Circulars, issued by the concerned authorities to demonstrate the provisions ultimately for charging of foreclosure charges/pre- payment penalties on floating rate terms loans.
5. Learned counsel for the appellant / O.P. would submit that the respondent/ complainant has not stated the true facts and concealed certain facts, which is apparent from their document Annexure C-1. As per Annexure C-1, the loan was given to the respondent / complainant Mr. Pritpal Singh Arora, Gurmeet Kour Arora, Ankit Arora, Parmit Singh Arora and Hotel // 4 // Welcome as housing loan for purchase / construction of house property of Rs.96,00,000/-. Further on perusal of the document Annexure C-3 filed by the respondent / complainant himself, it appears that though the applicant is Pritpal Singh Arora, but Co-applicants are Gurmeet Kour Arora, Ankit Arora, Parmit Singh Arora and Hotel Welcome, in whose favour loan amount was sanctioned. With this, the loan is not taken by the individual borrower, but it was taken by aforementioned co-borrowers and also by a firm Hotel Welcome. The respondent / complainant has submitted false facts in para 1 of his complaint that the respondent / complainant is an individual, who had availed said loan. On the other hand, this fact is falsified from the documents filed by the respondent /complainant himself, hence the respondent / complainant only was not a beneficiary, but there are other beneficiary including the firm. With this, there is non-joinder of necessary parties as the respondent / complainant has not made all the co-borrowers including firm Hotel Welcome as complainants. Learned counsel for the appellant /O.P. would further supplement that looking to the Circular No.NHB(ND)/DRS/Policy Circular 66/2014-15 dated 03.09.2014, which is applicable for the Housing Finance Companies, in the said Circular at para 3 it is submitted that :-
"3. 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."
// 5 // Also in the Circular No.NHB (ND)/DRS/Misc. Circular No.17/2015-16 dated 22.07.2016 issued by the National Housing Bank, in para 3, it is submitted that :-
"3. Further, the issue relating to applicability of the aforesaid Circulars to a Sole Proprietorship Concern/Firm or an HUF, as a borrower/co-borrower has also been examined in the light of complaints/representations received by us. We clarify that the intent and spirit of the circular is to protect the interest of the individual borrowers. Therefore, a Sole Proprietorship Concern/Firm or an HUF, as borrower or co-borrower will not be treated as an individual borrower for the purpose of these circulars."
6. Learned counsel for the appellant / O.P. would supplement that with this, loan was not an individual loan. There are many co-borrowers and also company / firm as Hotel Welcome. Hence in the light of the aforementioned circulars, the respondent / complainant is not entitled for the reliefs. The respondent / complainant claimed reliefs and given the same by the concerned District Forum. Learned counsel would further submits that though, it appears that notice served to the appellant / O.P., but in the said service, there is no any seal and signature of the appellant / O.P. With this the service may be suspicious. That is why they have not participated with the proceedings before the concerned District Forum. As the matter is in relation with directions by the competent authorities, the matter may either be remanded back or may be disposed off in light of aforementioned Circulars and the contents therein. He placed reliance on Complaint Case No.CC/2017/35 - Prakash Kedia Vs. India // 6 // Infoline Housing Finance Ltd. decided by this Commission vide order dated 18.10.2017.
7. Learned counsel for the respondent / complainant would oppose the arguments advanced by learned counsel for the appellant / O.P., and she would submit that it is not correct to say that the respondent / complainant has not filed the complaint with clean hands before the concerned District Forum. The respondent /complainant himself filed document Annexure C-3. In the said sanction letter the name of the other co-borrowers are mentioned. Also the appeal filed by the appellant / O.P. is barred by limitation for 26 days and looking to the provisions of The Act of 1986, the appeal was not filed within its limitation. Hence the appeal filed by the appeal / O.P. may be dismissed. Learned counsel would further submits that after receipt of notice of the complaint, the appellant / O.P. has chosen not to take part in the proceedings before the concerned District Forum. After 7 hearings, the concerned District Forum had disposed off the matter, hence the matter may not be remanded back to the concerned District Forum or the appellant / O.P. is not entitled for getting any reliefs. Learned counsel would further submit that Circular No.RBI/2011-12/589 dated 05.06.2012 issued by the Reserve Bank of India is applicable and operative in the present matter. The para 3 of the said Circular is as follows :-
"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, // 7 // 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."
8. Para 2 of Circular No.NHB(ND)/DRS/Policy Circular 66/2014-15 dated 03.09.2014 issued by National Housing Bank, is as follows :-
"2. The issues have been examined by us. It is clarified that the provisions of the said Circular are applicable in respect of all floating rate term loans sanctioned to individual borrowers by HFCc, irrespective of the date of sanction, and prepaid on or after August, 14, 2014. The provisions of the said Circular cover both part as well as full pre-payment."
9. With para 2 of the Circular No.NHB(ND)/DRS/Policy Circular 66/2014- 15 dated 03.09.2014, this is applicable in the present matter. Also as they have taken home loan for renovation of house and as it is not for the commercial purposes, hence para 3 of Circular No.NHB(ND)/DRS/Policy Circular 66/2014- 15 dated 03.09.2014 would not operate, as it is for all term loans, hence the matter would not come under the category of 4% charges towards foreclosure charges / prepayment penalties. Learned counsel would submit that with this the appeal has no substance. The appeal may be dismissed.
10. Perused the record of the concerned District Forum.
11. Also perused the acknowledgement returned after alleged service. There is no seal or anything to demonstrate that the notice was received to the appellant / O.P. As the appellant / O.P. is a Housing Finance Company , only // 8 // signature of one Billu Kumar appears, which does not indicate the said Billu Kumar, under which authority to receive the notice. Even apart for sake of argument, if the appellant/O.P. has chosen not to take part in the proceeding, then also the matter has to be disposed off in accordance with law and it shall be the duty of the parties to put the Circulars, Provisions so as to enable the concerned District Forum to come to a lawful conclusion. Para 1 of the complaint says that the respondent/ complainant is an individual, who had availed loan but this fact is not as in Annexure C-1 and Annexure C-3 sanction letter filed by the respondent/ complainant himself wherein the co-borrowers names are mentioned as Gurmeet Kaur Arora, Parmit Singh Arora, Ankit Arora and Hotel Welcome. The circular on the basis of which the complaint has been filed and the concerned District Forum has relied on Circular dated 05.06.2012 issued by the Reserve Bank of India. In the said circular, it is directed that Banks will not be permitted to charge foreclosure charges/pre-payment penalties on home loans on floating interest rate basis. The other Circulars issued by National Housing Bank, as aforementioned also placed before us and are applicable in the matter. Looking to both the Circulars dated 03.09.2014 and 22.07.2016, it appears that the loan in which Company/Firm etc. is a borrower or co-borrower is excluded. Also only the individual borrowers are exempted from any foreclosure charges /prepayment penalties. With this, it appears that above two circulars have been issued after circular dated 05.06.2012 and are applicable in the matter and if read in totality, it appears that the exemption is not for any Company/Firm and floating rate term loan given to individual borrowers only are exempted from any foreclosure charges / pre-payment // 9 // penalties. In the present matter, undisputedly this is not an individual home loan, on the other hand loan have been granted to the present respondent/ complainant, Gurmeet Kour Arora, Parmit Singh Arora, Ankit Arora and Hotel Welcome, for construction of house property. With the above facts, it would be incorrect to say that the aforementioned two Circulars are not applicable in the matter and only Circular dated 05.06.2012 issued by Reserve Bank of India, would operate in the matter. Also there is no any answer as to why the respondent / complainant has not arrayed other co-borrowers and also the Hotel Welcome, a firm, as the complainant /parties in the complaint case before the concerned District Forum. As the respondent / complainant was not only sole beneficiary or otherwise affected by not charging foreclosure charges or charging foreclosure charges, as they were necessary parties.
12. Thus, in the eye of consideration, the service to the respondent /complainant is under the cloud. There is no any specific denial whether they are forged or created or not in existence. We are of the view that the matter does not require for remand of the case, as the matter may be adjudicated and disposed off in the light of additional evidence adduced and allowed by us. Also the documents i.e. Circulars aforementioned are necessary to decide the issue, hence the I.A. No.II under Order 41 Rule 27 of The Code, is hereby allowed. The Circulars are taken on record as additional evidence and also they are public documents.
13. On consideration of the entire facts, we are of the view that the existence of the aforementioned two documents i.e. Circulars were not before the // 10 // concerned District Forum, as the appellant / O.P. has not participated in the proceedings, as there is also strong suspicion for service to the appellant / O.P. and the impugned order of the concerned District Forum was passed in the light of Circular, which is not applicable to the facts of this case. As the Circular dated 03.09.2014 and 22.07.2016 are applicable and on the basis of the facts this was not an individual home loan, hence in the light of these two Circulars, the impugned order of the concerned District Forum, is not appropriate and not in accordance with law and requires interference of this Commission.
14. Consequently, on the basis of the aforementioned Circulars and other facts surfaced, we hereby allow the appeal filed by the appellant / O.P. accordingly as follows :-
(i) The appeal filed by the appellant / O.P., is hereby allowed.
(ii) The impugned order dated 13.07.2018, passed by the concerned District Forum in Complaint Case No.413/2017, is hereby quashed.
(iii) No order as to the cost of this appeal.
(Justice C.B. Bajpai) (Narendra Gupta)
President Member
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