State Consumer Disputes Redressal Commission
The Vice President Weizmann Homes Ltd., ... vs Mrs. S. Renuka W/O. Shanmugam Arason ... on 25 March, 2005
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI Present Hon'ble Thiru Justice M. THANIKACHALAM PRESIDENT Tmt. Vasugi Ramanan, M.A.,B.L., MEMBER I Thiru S. Sambandam, B.Sc., MEMBER II F.A.NO.489/2005 (Against order in O.P.NO.99/2003 on the file of the DCDRF, Dindigul) DATED THIS THE 25th DAY OF MARCH 2010 1.
The Vice President Weizmann Homes Ltd., Centenary Building IV Floor 28, M.G.Road Bangalore 560 001
2. The Manager Weizmann Homes Ltd., Plot No.8, Flttr Padma Enclave, Trichy Road, Dindigul 624 005 Appellants/Opposite parties Vs. Mrs. S. Renuka W/o.
Shanmugam Arason Real Estate 3/2, Krishnasamy Pillai Street R.S. Road, Dindivul 624 001 Respondent/Complainant The Respondent as complainant filed a complaint before the District Forum against the Appellants /opposite parties, praying for the direction to the opposite party to pay Rs.93,406/- being the processing charges, reschedulement charges and preclosure charges, and to pay Rs.50000/- towards the compensation, Rs.50000/- and to pay cost. The District Forum allowed the complaint. Against the said order, this appeal is preferred praying to set aside the order of the District Forum dt.12.7.2004 in COP No.99/2003.
This petition coming before us for hearing finally on 09.03.2010. Upon hearing the arguments of the counsel on either side, this commission made the following order:
Counsel for the Appellants/Opposite parties: Mrs. V. Annalakshmi, Advocate Respondent/ Complainant: Mr. Sivam Sivanandaraj, Advocate M. THANIKACHALAM J, PRESIDENT
1. The opposite parties having failed in their attempt, to resist the claim of the complainant, successfully, have come to this Commission, as appellants
2. The complainant obtained a loan of Rs.20,00,000/- on 29.2.00, from the 2nd opposite party, for the construction of the house. After that, the complainant settled the loan, by paying the entire balance on 21.10.2002. At the time of raising the loan, the opposite party deducted 3%, as processing charges, and thereafter, for re-scheduling the loan, the complainant paid a sum of Rs.30,795/- Further at the time of pre-closure of the loan, another sum of Rs.71,019/- was collected. The opposite parties are liable to return the pre-closure charges, to the tune of Rs.42,611/-, in addition to other amounts also, since they have collected excess amount, such as processing charges, etc. Claiming the amount, notice issued also failed to yield any positive result. Hence the complainant is constrained to move the Fora, for the recovery of the above said amount.
3. The opposite parties/ appellants, admitting the loan, borrowed by the complainant, would contend that they have collected, processing fees only @ 2%, as agreed, for rescheduling the loan, which originally carried 17% interest, then reduced to 13.5%, for the outstanding amount was collected, which are all reasonable. It is further said, originally pre-closure charges was levied at 2%, and thereafter it was levied at 5%, of the outstanding loan amount, which is also in accordance with the loan agreement dt.9.3.00, which cannot be termed at any cost, as deficiency in service, or violation of the agreement, and in this view, the opposite parties are not liable to pay any compensation, thereby praying for the dismissal of the complaint.
4. The District Forum, considering the rival contentions of the parties, perusing the documents relied on by either side, came to the conclusion that the complainant is not entitled to refund of any amount, as excessive processing fees, that collection of Rs.30.795/- also is not liable to be refunded, since the opposite parties are liable to collect the said amount, as reschedule charges. Thus the two claims of the complainants were negatived. At the same time, the District Forum, came to the conclusion that originally for pre-closing the loan, the charge fixed was only 2% of the outstanding loan amount, whereas the opposite parties have collected 5%, as pre-closure charge, that too without notice, which was the violation of the loan agreement. Thus deducing, the District Forum came to the conclusion that the excess amount collected by way of pre-closure charges should be ordered to be refunded, and in this way, a direction came to be issued, only for the return of a sum of Rs.42,611/-, with interest thereon at 12% p.a., from 21.10.02, till realization, with cost of Rs.1000/-, thereby causing grievance to the opposite party, resulting this appeal.
5. As said above, the complainant had claimed return of excess processing charges of Rs.20000/-, reschedulement charges of Rs.30,795, in addition to compensation of Rs.50000/-. These three claims are negatived by the District Forum, which should have given grievance to the complainant, if genuine, but aggrieved by the same, the complainant has not preferred any appeal, and therefore, the finding had reached the finality. Thus in this appeal, we are constrained to give a decision, only regarding the pre-closure charges of Rs.42,611/-.
6. Heard the learned counsel for both parties, perused the written submissions, lower court records and the order passed by the District Forum also.
7. The learned counsel for appellant, urged before us, that the lower forum has not properly considered the terms and conditions available in the loan agreement, as well as the circular of the opposite party dt.22.10.01, which should be read alongwith the loan agreement, if read, the unquestionable conclusion should be that the opposite parties are entitled to pre-closure charge of 5%, which was not properly taken into account and considered by the Fora, in its proper perspective, leading to erroneous conclusion, liable to be disturbed, which was opposed by the respondent, as if the District Fora, did correct things, not warranting interference.
8. In this case, the complainant approached the opposite parties, availed loan facilities to the extent of Rs.20 lakhs, for the construction of a house. At the time of borrowing, if the parties have entered into an agreement, incorporating the terms and conditions therein, then those conditions are binding upon the parties, and no one is entitled to agitate the same, at later point of time, as penalty in nature, or excessive in nature, in the sense, regarding rate of interest, collection of other fees etc., that too before the Consumer Fora. When the parties have openly, with conscious, entered into an agreement, which is not against the public policy, then whatever may be the onerous condition available therein, that should be enforced, the terms and conditions should be given effect, otherwise, there is no meaning in entering into a contract, which should have a binding force, against the parties concerned. Having this principle in mind, the documents relied on by the parties, should be scanned.
9. Ex.B1, is the loan agreement. In this agreement, many conditions are available, which were agreed by the parties, being the signatories. As far as pre-payment is concerned, it is available under clause 2.8, which reads:
WHL may in its sold discretion and on such terms as to pre-payment charges etc., as it may prescribe, permit acceleration of EMI or pre-payment at the request of the borrower.
10. Agreeing to this condition alone, the complainant has signed in this document.
The above clause gives, discretion to the opposite party, to impose conditions, as to pre-payment charges etc., where no percentage has been fixed. Because of that fact, as seen from Ex.A1, offer letter, the printed form, it is written In the event of the foreclosure of the loan, you are liable to pay to the company foreclosure charges equal to 2% of the outstanding loan amount. There is no dispute, as per Ex.A1, the opposite parties are entitled to collect only 2%, on the outstanding of the loan amount, as pre-closure charge. If this document is alone available, no other document is available, where we could find some terms, binding upon the parties, the case of the complainant could be accepted. As pointed out above, it is the sole discretion of the opposite party to vary the pre-closure charge, and in this view they have varied, the pre-closure charge at 5% per annum, probably w.e.f. 1.11.01. The debt was discharged, after the change had taken place, regarding the pre-closure charge. In the loan agreement, where the complainant had agreed to vary the pre-closure charge, when its varied from 2% to 5%, as seen from Ex.B4, no notice need be given to the complainant, as incorrectly held by the District Forum, and in this way varying the pre-closure charge, admittedly, the opposite parties have collected on the outstanding of the loan, 5% as pre-closure charge, which is in our opinion, cannot be construed, as violation of any agreement, or deficiency in service, as the case may be.
11. For the violation of the agreement generally, the Consumer Forum, may not have jurisdiction. If the complainant had felt that the contract had been varied to the advantage of the opposite parties, and to the disadvantage of the complainant, the Forum must be elsewhere, since there is no element of service ,in the variation of the rate of pre-closure charges. Therefore, that cannot be brought within umbrella of deficiency in service, or even unfair trade practice, since it is admitted by the complainant himself, that he was willing for the variation of the pre-closure charge, at the discretion of the opposite parties viz. loaner. When the same was questioned, it was well explained by the reply notice also.
Therefore, as rightly submitted by the learned counsel for appellant, if Ex.A1 is read with Ex.B4, the irresistible conclusion that could be drawn by the Forum, should be the opposite party had the discretion, which cannot be termed as deficiency in service, which was not properly considered. Taking into account of Ex.A1, alone the District Forum went wrong, since Ex.A1 contemplates 2%, and collection of 5% was excess, which can not be the cured approach, when the parties are signatory to the agreement viz. Ex.B1, which empowers the opposite party to issue Ex.B4.
For these reasons, the appeal deserves acceptance.
12. In the result, the appeal is allowed, setting aside the order of the District Forum, in OP.No.99/2003 dt.12.7.2004, and the complaint is dismissed. Considering the facts and circumstances of the case, there will be no order as to cost, throughout.
Registry is directed to handover the Fixed Deposit Receipt, made by way of mandatory deposit, to the appellant, duly discharged.
S.SAMBANDAM VASUGI RAMANAN M. THANIKACHALAM MEMBER II MEMBER I PRESIDENT INDEX : YES / NO Rsh/d/mtj/FB/ Builders