State Consumer Disputes Redressal Commission
Housing Development Finance ... vs Harish Kumar Tageja on 7 April, 2014
2nd ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.
First Appeal No.826 of 2012.
Date of Institution: 18.06.2012
Date of Decision: 07.04.2014.
Housing Development Finance Corporation Limited (HDFC) Ltd. SCO
No.153-155, Sector 8-C, Chandigarh, through its Authorized
Representative Nandan Singh Rawat.
.....Appellant.
Versus
1. Harish Kumar Tageja S/o Sh. Ram Ditta, R/o H.No.167/5,
Gharami Parti, near Satya Narayan Mandir, Samana, District
Patiala.
...Respondent/Complainant.
2. HDFC Bank Ltd. SCF No.15, First Floor, Leela Bhawan Market,
Patiala, through its Branch Manager.
...Proforma Respondent/opposite Parties.
First Appeal against the order dated
02.04.2012 passed by the District
Consumer Disputes Redressal Forum,
Patiala.
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member.
Shri Vinod Kumar Gupta, Member.
Shri Harcharan Singh Guram, Member.
Present:-
For the appellant : Sh. Shekhar Verma, Advocate. For respondent No.1: Sh. Sanjeev Goyal, Advocate. For respondent No.2: None.
................................... First Appeal No.826 of 2012 2 GURCHARAN SINGH SARAN, PRESIDING JUDICIAL MEMBER:-
Order The appellant (In short "the appellant") has filed this appeal against the order dated 02.04.2012 in Consumer Complaint No.345 of 09.05.2011 passed by the learned District Consumer Disputes Redressal Forum, Patiala (in short "the District Forum") vide which the complaint filed by the respondent no.1/complainant (in short, "the complainant") was allowed and respondent No.2/opposite parties (in short, "the opposite parties") was directed to refund the pre-payment charges of Rs.21,601/- raised against his Account No.564910243 and Rs.8493/- realized against Account No.566046685 with interest @ 9% p.a.
2. The complaint was filed by the complainant, on the allegations that in the month of March, 2008, he applied with the opposite parties for getting housing loan and submitted all the documents and housing loan of Rs.10 lacs under Account No.564910243 was sanctioned on interest @ 10.25%. In the month of April, 2008, the opposite parties sanctioned another amount of Rs.4 lacs under loan Account No.566046685 @ Rs.10.25% floating rate of interest. Therefore, the complainant is consumer with the opposite parties. The appellant was paying all the installments to the opposite parties from time to time. However, the opposite parties increased the rate of interest in the month of March, 2010. They started charging interest @ 14% per annum, whereas from other customers, they were charging interest @ 11% per annum. The complainant approached the opposite parties and requested to charge equal rate of interest but the opposite parties did not reduce the interest rate. Therefore, he made up his mind to shift his loan and applied with DHFL Finance Corporation First Appeal No.826 of 2012 3 Ltd., Branch Chandigarh forgetting the loan, who sanctioned a loan of Rs.10,41,844/- on interest @ 10.25%. Accordingly, the complainant approached the opposite parties to close the account, as he was ready to pay the whole amount and they gave foreclosure statement dated 05.04.2010 in which they illegally charged Rs.21,601/- under loan Account No.564910243 and Rs.8,493/- under loan Account No.566046685. On approaching, the opposite parties did not listen and told that if the amount is not deposited, they will not release the sale deed. Therefore, under compelling circumstances, he paid this amount. Therefore, it was alleged that this amount has been illegally charged by the opposite parties. Hence, the complainant filed the complaint, seeking directions to the opposite parties to refund the foreclosure charges of Rs.30,094/- along with interest @ 18% p.a. from the date of deposit i.e. 05.04.2010 till realization and to pay Rs.50,000/- as compensation and Rs.5,500/- as litigation expenses.
3. The complaint was contested by the opposite parties, who filed written reply taking preliminary objections that the complaint was not maintainable; the District Forum had no jurisdiction to go beyond the contractual terms and conditions and that no cause of action had accrued in favour of the complainant to file this complaint.
4. On merits, it was stated that the opposite parties HDFC bank and HDFC Limited are two different entities. It was admitted that the complainant in 2008 applied for housing loan which was sanctioned to the extent of Rs.10 lacs and another amount of Rs.4. lacs was also sanctioned in April, 2008 with floating rate of interest @ 12.50%. The opposite parties were charging interest as per the loan agreement. Rate of interest was increased due to change in Retail Prime Lending Rate (RPLR), as the loan was at floating rate of interest. The opposite First Appeal No.826 of 2012 4 parties were ready to give the benefit of the higher spread over RPLR which reduced the rate of interest as applicable to the complainant but on payment of requite charges. However, the complainant had not come forward. The complainant had shifted his loan to DHFL Finance Corporation Ltd., Branch Chandigarh and they had taken over the loan account of the complainant. Accordingly, the pre-payment charges were charged according to the agreement between the parties. Therefore, there is no deficiency in service on the part of the opposite parties. The complaint is without any merit and the same be dismissed.
5. Parties were allowed by the learned District Forum, to lead their evidence.
6. In support of his allegations, the complainant tendered his own affidavit Ex.C-1, copy of letter dated 28.03.2008 Ex.C-2, copy of letter dated 15.04.2008 Ex.C-3, letter of offer dated 28.03.2010 Ex.C-4, terms and conditions Ex.C-5, letter of offer dated 28.03.2010 Ex.C-6, terms and conditions Ex.C-7, copies of letters dated 05.04.2010 Ex.C-8 & Ex.C-9, copies of cheques dated 31.03.2010 Ex.C-10 & Ex.C-11, payment vouchers Ex.C-12 to Ex.C-14, letter regarding prepayment of loan Ex.C-15, payment receipts Ex.C-16 to Ex.C-18, Home Loan Agreement Ex.C-19 and Home Equity Loan Agreement Ex.C-20.
7. On the other hand, opposite party has tendered affidavit of Sh. Nandan Singh Rawat Ex.R-1, letter dated 28.03.2009 Ex.R-2, letter dated 15.04.2008 Ex.R-3, copies of Home Loan Agreements Ex.R-4 & Ex.R-5 and Foreclosure Letters Ex.R-6 to Ex.R-8.
8. After going through the allegations in the complaint, written reply of the opposite parties and perusing the evidence and record, the District Forum allowed the complaint filed by the complainant, as stated above.
First Appeal No.826 of 2012 5
9. Aggrieved by the impugned order dated 02.04.2012, so passed by the learned District Forum, the appellant has filed the present appeal.
10. We have gone through the record of the learned District Forum and grounds of appeal so pleaded by the appellant/opposite parties and have heard the arguments advanced by the learned counsel for the appellant and respondent no.1/complainant. None has appeared on behalf of respondent no.1.
11. In the grounds of appeal, it has been contended by the appellant that the order so passed by the District Forum is based on the judgment reported as "Punjab National Bank Vs Chaman Kumari", 2005 (3) CLT-248. The facts of the said case were totally different, whereas under section 27 of the Indian Contract Act, 1872, the parties are bound by the terms of the agreement and in the agreement, clause 2.8 is regarding foreclosure/prepayment charges which reads as follows:-
"Prepayment:-
The borrower shall be entitled to prepayment the loan, either partly or fully, as per the rule of HDFC, including as to the prepayment charges for the time of being in force in that behalf".
12. He has also referred to another judgment reported as "M/s Dynamic Continental Private Limited Vs UCO Bank, Delhi", 2011 (1) DLT-625, wherein the version that he was aware about the rate of prepayment charges, was not admitted. Further it was submitted that the appellant is a registered financial corporation under the National Housing Bank Act, 1987 and the National Housing Bank had issued a notification dated 18.10.2010 with regard to the prepayment charges First Appeal No.826 of 2012 6 and it was observed that in case the payment is made from own sources, then there will not no prepayment charges and in case, it has been shifted to some other financial institution, then prepayment charges will be paid. Therefore, it was contended that the order so passed by the learned District Forum is not legally sustainable.
13. If we go through the judgment reported as Punjab National Bank Vs Chaman Kumari (supra), in that case, prepayment charges @ 2% were being charged on the basis of this circular, but here the position is different because there is a clause in the agreement with regard to prepayment charges i.e. clause 2.8 referred above. The agreement executed between the parties at the time of advancement of the loan has been proved on record Ex.C-19 and Ex.C-20. Both these documents relate to the prepayment charges. When at least there is agreement with regard to prepayment charges, then the parties are to be governed by that agreement. In those circumstances, the judgment relied upon by the District Forum is not applicable because in that case, there was no agreement but the same were charged on the basis of some circular.
14. It has been further contended that in the notification dated 18.10.2010, issue of levy of prepayment penalty and prepayment charges by housing finance companies and pre-closure of housing loan account by the customers out of their own sources, has been considered and it has been decided that the Housing Finance Companies should not charge pre-payment charges or penalty in such cases. "Own Sources" have been defined in the circular dated 19.10.2011 which reads as under:-
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx First Appeal No.826 of 2012 7 The expression "own sources" for this purpose means any source other than by borrowing from a bank /HFC/NBFC and/or a financial institution."
15. Here the complainant is not closing the account by making payment form his own sources but he is shifting his loan account to DHFL Finance Corporation, therefore, he is closing the account by not making payment of loan from his own sources. In case, there is an agreement regarding prepayment charges, this proposition has been upheld in a latest case by the Hon'ble Delhi High Court in case "M/s Dynamic Continental Private Limited Vs UCO Bank, Delhi" (supra).
Therefore, we are of the opinion that in case the complainant is shifting his account to some other financial institution, then the appellant/ opposite parties were within their right to claim prepayment charges as per terms and conditions of the loan agreement and the findings so recorded by the District Forum that the opposite parties were not entitled to charge prepayment charges are not the correct findings and are liable to be set aside.
16. In view of above discussion, we accept the appeal and set aside the impugned order. The complaint so filed by the complainant is dismissed. No order as to costs.
15. The appellant had deposited an amount of Rs.17,910/- with this Commission at the time of filing of the appeal. This amount with interest accrued thereon, if any, be remitted by the registry to the appellant by way of a crossed cheque/demand draft after the expiry of 45 days.
First Appeal No.826 of 2012 8
16. The arguments in this appeal were heard on 01.04.2014 and the order was reserved. Now the order be communicated to the parties.
17. The appeal could not be decided within stipulated timeframe due to heavy pendency of court cases.
(Gurcharan Singh Saran) Presiding Judicial Member (Vinod Kumar Gupta) Member (Harcharan Singh Guram) Member April 07, 2014.
(Gurmeet S)