State Consumer Disputes Redressal Commission
L&T Finance Ltd. vs Anil Mittal on 30 January, 2023
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STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T., CHANDIGARH
(Additional Bench)
Appeal No. : 105 of 2021
Date of Institution : 07.12.2021
Date of Decision : 30.01.2023
1. L & T Finance Ltd.(formerly known as L&T Housing Finance Ltd.)4th Floor,
Brindavan, Plot No.177, C.S.T Road, Kalina, Santacruz (East), Mumbai
400098/Director
2. The Branch Manager, L & T Finance Ltd.(formerly known as L&T Housing
Finance Ltd.), Plot N.174, 4th Floor, Industrial Area, Phase-II, Chandigarh.
...Appellants
Versus
Mr.Anil Mittal son of Sh.Prem Chand Mittal, Resident of House No.288, Sector 8,
Panchkula. ---Respondent
Appeal under Section 41 of the Consumer Protection Act, 2019 against
order dated 24.9.2021 passed by District Consumer Disputes
Redressal Commission-II,U.T. Chandigarh in Consumer Complaint
No.293/2018.
BEFORE: JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT
MRS. PADMA PANDEY, MEMBER
Argued by: Sh.Devinder Kumar,Advocate, proxy Counsel for Sh.Mohit Garg,Advocate for the appellants.
None for the respondent.
PER PADMA PANDEY, MEMBER This appeal is directed against the order dated 24.9.2021, rendered by the District Consumer Disputes Redressal Commission-II, U.T. Chandigarh (hereinafter to be referred as "the Ld. Lower Commission"), vide which, it allowed the complaint bearing No.CC/293/2018 and directed the Opposite Parties in the following terms;-
"In view of the above, the present complaint is allowed with directions to the Opposite Parties to refund the prepayment charges of Rs.3,18,086/- to the complainant with interest @9% p.a. from the date of payment i.e. 2 20.6.2017 till it is paid along with compensation amount of Rs.20,000/- and Rs.10,000/- for thrusting avoidable litigation.
This order shall be complied with by the Opposite Parties jointly and severally within a period of 30 days from the date of receipt of certified copy of this order, failing which they shall be liable to pay additional cost of Rs.25000/- apart from the above relief."
2. Before the Ld. Lower Commission, it was case of the complainant/respondent that he took loan against property from the Opposite Parties vide Loan Offer Letter dated 19.1.2016, having Loan Account No.CHDHL 16000004 of Rs.1,10,00,000/- repayable in 180 equated monthly installments of Rs.1,28,501/- per month at Floating Rate of Interest @11.50 % per annum. The installment period was from February, 2016 to February, 2031. However, the complainant decided to foreclose the loan account by prepaying the remaining loan amount. Accordingly the complainant got the loan account closed by prepaying the remaining loan amount on 20.6.2017 and he was issued 'No Dues Certificate' dated 29.6.2017 by the Opposite Parties. It was averred by the complainant that as per 'Loan Offer Letter' dated 19.1.2016 the type of interest applicable to the complainant was Floating Rate of Interest and in case of prepayment of loan amount, no charges were applicable in floating rate of interest. However, the Opposite Parties unlawfully charged an amount of Rs.3,18,086/- from the complainant towards prepayment charges @3% on principal outstanding. It was further averred that the complainant agitated this issue with the Opposite Parties and also sent a legal notice to them, but to no avail. Alleging deficiency in service and unfair trade practice on the part of the Opposite Parties, a consumer complaint was filed before the Ld. Lower Commission.
3. The Appellants/Opposite Parties appeared before the Ld. Lower Commission and contested the complaint. In the written reply, the Opposite Parties 3 while admitting the factual matrix of the case, stated that the complainant applied for loan facility in individual capacity whereas said loan was availed by the complainant i.e. Mr.Anil Mittal, along with Co-Borrowers Sunita Mittal and Manohar Lal Satpal which is Partnership Firm and comes under non-individual loan facility. Thus, the complainant obtained non-individual loan facility and as per schedule of fee and charges in case of non-individual loan facility, in loan against property, the foreclosure charges for non-individual Borrower were @3% on principal outstanding for a period less than 1 year from disbursement and @ 2% on Principal outstanding for a period post 1 year of disbursement. Accordingly the Opposite Parties rightly charged prepayment charges @3% on principal outstanding from the complainant as per Schedule. It was further stated that as per Section 30A of the National Housing Bank Act,1987 ( for short NHB Act) , NHB is to determine the policies and issue directions in regard to the institutions working under it. It was further stated that various circulars were issued by the NHB from time to time with regard to levy of foreclosure charges, and in the present case, NHB Circulars dated 14.8.2014 and 3.9.2014 are applicable, and the prepayment charges have been deducted correctly. The remaining allegations were denied and a prayer was made for dismissal of the complaint. The Opposite Parties also questioned the maintainability of the complaint, on the ground of pecuniary jurisdiction of the Lower Commission, as well as arbitration clause under the Loan Agreement.
4. On appraisal of the pleadings, and the evidence adduced on record, Ld. Lower Commission allowed the complaint of the Respondent/Complainant, as noted in the opening para of this order.
5. Aggrieved aainst the aforesaid order passed by the Ld. Lower Commission, the instant Appeal has been filed by the Appellants/Opposite Parties No.1&2. 4
6. We have heard Learned Counsel for the appellants, and have gone through the evidence and record of the case with utmost care and circumspection.
7. The core question that falls for consideration before us, is as to whether, the Ld. Lower Commission has rightly passed the impugned order by appreciating the entire material placed before it.
8. After giving our thoughtful consideration, to the contentions raised and material on record, we are of the considered opinion, that the instant Appeal is liable to be dismissed for the reasons to be recorded hereinafter.
9. It is pertinent to mention here that earlier the consumer complaint was decided by the Ld. Lower Commission vide its order dated 15.11.2019, which was challenged before the State Consumer Disputes Redressal Commission, U.T. Chandigarh in Appeal No.12 of 2020. As some technical issue regarding quorum of the District Commission-II was involved therein, accordingly the impugned order was set aside and the matter was remanded back to the Ld Lower Commission vide order dated 16.8.2021 with a direction to decide the same afresh, after hearing the parties. The Ld. Lower Commission allowed the complaint vide order dated 24.9.2021 granting the relief as noted in the opening para of this order. Now in appeal, the main ground taken by the appellants is that as per directions of the State Commission, the matter was required to be adjudicated afresh but the Ld. Lower Commission dismissed their application dated 10.9.2021 moved for seeking permission to place on record amended written reply alongwith copy of Annexure OP-7, as during the course of proceedings, the appellant company acquired some facts in respect of the present case which were not within their knowledge earlier. Further the appellants by virtue of the application intended to place on record Annexure OP-7 for proving that the document Annexure C-1 filed by the complainant was a forged and fabricated 5 document as the Loan Offer Letter dated 19.1.2016 was never issued by the appellants. The other ground taken is that the loan facility was wrongly obtained by the respondent in individual capacity whereas the said loan was availed by M/s Manohar Lal Satpal which is a partnership firm and the loan obtained was Non- individual loan and the appellants have rightly and legally charged prepayment charges @ 3% on principal outstanding as per Schedule of Fee and charges.
10. The State Commission vide its order dated 16.8.2021 by setting aside the earlier impugned order dated 15.11.2019 passed by the Ld. Lower Commission remanded back the matter to the Lower Commission with a direction to decide the same afresh after hearing the parties. A perusal of the said order would reveal that necessity arose to remand back the matter for deciding afresh as there was some technical snag regarding signing of the impugned order. Thus, the purpose for remanding the matter back was limited. Even otherwise, the appellants did not take any objection regarding Annexure C-1 in their written reply filed before the Ld. Lower Commission. They also relied upon the said document while giving reply to para No.2 in parawise reply. Loan Offer Letter dated 19.1.2016 (Annexure C-1)was very much in the knowledge of the appellants but they did not raise any objection in the written reply filed to the complaint before the lower Commission. Thus, the application moved by the appellants seeking permission to file amended reply with annexure OP-7 before the Lower Commission was rightly rejected, being not maintainable at the belated stage.
11. The appellants, alongwith their reply to the complaint before the Ld. Lower Commission attached Annexure OP-4, which is copy of Loan Application Form:
Individual. It is signed by Anil Kumar as Individual Applicant and his wife Sunita Mittal as Individual Co-Applicant/Guarantor. Thus, Annexure OP-4 proves that the loan facility was availed by the respondent/complainant in Individual Capacity. The Ld. 6 Lower Commission while placing reliance on Loan Sanction letter dated 19.1.2016, rightly observed as under;
"The Opposite Parties have not incorporated such a condition in the Loan Sanction Letter dated 19.1.2016 and mentioned contrary to those conditions, incorporating "Prepayment : Floating Interest Rate - Nil Charges" and it is admitted that the complainant availed & granted loan on Floating Interest Rate. There is also no mention about individual borrower or co-borrower in the Loan Offer Letter.
It is opined that had the Opposite Parties mentioned about the pre-payment charges to be charged from the complainant in the Loan Sanction Letter dated 19.1.2016 even on Floating Interest Rate, the complainant might have given a second thought to opt for the loan. The express terms & conditions always prevail over other terms & conditions. Thus, in our considered opinion, the Opposite Parties cannot go beyond the terms & conditions of the loan sanction letter and are not entitled to charge any prepayment charges in contravention to the loan sanction letter. The OPs cannot take benefit of their own wrong and cannot be allowed to cause any wrongful loss to the complainant. Therefore, the act of the Opposite Parties in illegally demanding & charging prepayment charges from the complainant to the tune of Rs.3,18,086/- while closing the loan account in contravention to Loan Sanction Letter, amounts to gross deficiency in service as well as indulgence into unfair trade practice."
12. The complaint before the Ld. Lower Commission was filed under Section- 12 of the Consumer Protection Act,1986, challenging the charging of prepayment/foreclosure charges of Rs.3,18,086/- alongwith other allied reliefs, and as such, the complaint was maintainable before the District Forum at that time. As regards, existence of Arbitration Clause in the loan agreement, the Ld. Lower Commission rightly observed that in view of Section 3 of the Consumer Protection Act,1986, and Section 100 of the Consumer Protection Act,2019, provisions contained 7 in the Consumer Protection Act are in addition to and not in derogation of any other law for the time being in force.
13. After going through the contents of appeal and the impugned order passed, we are of the view that the Ld. Lower Commission rightly observed that the appellants acted illegally and arbitrarily, in demanding & charging prepayment charges from the respondent/complainant to the tune of Rs.3,18,086/- while closing the loan account which amounted to deficiency in service and indulgence into unfair trade practice on their part.. The appellants could not show anything contrary which may persuade us to interfere in the order, under challenge.
14. In view of the above discussion, we are dissuaded to interfere with the impugned order rendered by the Ld. Lower Commission. The appeal, being bereft of merit, is accordingly dismissed, and the order of the Ld. Lower Commission is upheld.
15. Certified copies of this order be sent to the parties free of charge.
16. The file be consigned to Record Room, after completion.
Sd/-
(JUSTICE RAJ SHEKHAR ATTRI) PRERSIDENT Sd/-
(PADMA PANDEY)
Pronounced MEMBER
30th Jan.,2023
Js
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