State Consumer Disputes Redressal Commission
Hdfc Bank vs Harbans Singh on 10 November, 2015
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
First Appeal No.479 of 2012
Date of institution : 19.04.2012
Date of decision : 10.11.2015
1. H.D.F.C. Bank Ltd., having its office at 28, Industrial Area,
Phase-1, Chandigarh (and also at Leela Bhawan Branch,
Patiala).
2. H.D.F.C. Bank Ltd., through its Retail Asset Division, 2nd Floor,
Hind Rajasthan Chamber 6, Oak Lane, behind Mumbai
University Fort, Mumbai-400 001 through Shri Rajesh Bhatia,
Manager, Legal.
.......Appellants- Opposite Parties
Versus
1. Harbans Singh son of Shri Partap Singh,
2. Mrs. Iqbal Kaur w/o S. Harbans Singh and
3. Manpreet Singh son of S. Harbans Singh,
Residents of H.No.44-A, DLF Colony, Patiala and now r/o
H.No.30, Phulkia Enclave, Patiala.
......Respondents- Complainants
First Appeal against the order dated
11.1.2012 of the District Consumer
Disputes Redressal Forum, Patiala.
Quorum:-
Hon'ble Mr. Justice Gurdev Singh, President.
Shri Vinod Kumar Gupta, Member.
Present:-
For the appellants : Shri H.S. Bhatia, Advocate. For the respondents : Shri D.R. Bansal, Advocate. JUSTICE GURDEV SINGH, PRESIDENT :
The appellants-opposite parties have preferred this appeal against the order dated 11.1.2012 passed by District Consumer First Appeal No.479 of 2012. 2 Disputes Redressal Forum, Patiala (in short, "District Forum"), vide which the complaint filed by the respondents-complainants under Section 12 of the Consumer Protection Act, 1986 (in short, "the Act") was accepted with Rs.5,500/-, as costs and the opposite parties were directed to return the amounts of Rs.41,250/-, Rs.1,200/-, Rs.1,577/- and Rs.2,700/-, along with interest at the rate of 9% per annum from the date of charging of the same.
2. The complainants alleged, in their complaint, that they had been enjoying the facility of "Variable Rate Home Loan" of Rs.25,00,000/- from Bank of Punjab Limited, Patiala, which was sanctioned, vide letter dated 25.2.2005. That Bank was merged with the Centurion Bank in the year 2008 and after that merger the same was known as Centurion Bank of Punjab Limited. That Bank further merged into the opposite parties-Bank and all the assets and liabilities thereof were transferred to it in April 2009. After the said merger, they had been paying the instalments towards the home loan regularly. They were also availing over draft facility of Rs.19,00,000/- from the opposite parties and were having sufficient balance in that account from 2.2.2009 to 4.2.2009. They had drawn cheques on that account in favour of M/s Mamta Babby Products, M/s Sheetal Enterprises, M/s Shikha Enterprises and M/s Khanna Sales Agencies; which were dishonoured on the ground "Sanction Limit expired in system". As per the certificates issued by the opposite parties, there were other cheques, which were so dishonoured and all those find mention in the letters dated 16.2.2009, 18.3.2009, 11.4.2009 and 1.5.2009 issued by the First Appeal No.479 of 2012. 3 opposite parties. In respect of those cheques, they deducted Rs.2,700/-, as bounced charges from their savings account. Those cheques should not have been dishonoured, as they had sufficient amount in their over draft facility. On 30.3.2009 they issued cheque of Rs.3,75,000/- in favour of the opposite parties-Bank and that amount was to be adjusted, as part payment of Loan Account No.91451785 but it did not transfer/adjust the amount towards that Loan Account and, as such, it illegally charged interest of Rs.2,824/- on the balance loan amount without adjusting the amount of that cheque in that account. Letter dated 6.4.2009 was issued by the opposite parties to Harbans complainant, in which the principal amount outstanding was mentioned as Rs.19,55,129.08P, late penalty charges Rs.1,577/-, cheque bouncing charges as Rs.1,200/-, interest till date of prepayment as Rs.2,824/-, prepayment charges as Rs.41,250/- calculated at the rate of 1.65%, pending instalment as Rs.25,260/- and total amount payable as Rs.20,27,240.08P. All these amounts, so mentioned in the letter, are illegal and they were not liable to pay the same as the cheques should not have been dishonoured, as they had sufficient funds in their account and there was no question of the prepayment charges at the rate of 1.65%, as it was due to the non-cooperative attitude of the opposite parties, deficiency in service on their part and unfair trade practice that they were compelled and forced to shift to State Bank of India on 7.4.2009, after making payment of the outstanding housing loan account No.91451785. They had been enjoying that house loan facility and for the same the opposite parties had been charging the First Appeal No.479 of 2012. 4 interest at the rate of 13% even though the interest on housing loan was reduced by the Banking Industry. That also shows unfair trade practice on their part. They prayed for the issuance of following directions to the opposite parties:-
i) to pay Rs.1,200/-, charged on account of dishonouring of the cheques;
ii) to pay Rs.1,577/-, charged as penalty for the late payment;
iii) to pay Rs.2,824/-, charged as prepayment interest;
iv) to pay Rs.41,250/-, charged as foreclosure of the housing loan account;
v) to pay Rs.2,700/-, charged as cheque return charges;
vi) to pay interest at the rate of 18% per annum on all the above said amount till realization thereof;
vii) to pay Rs.50,000/-, as compensation for causing irreparable loss, mental agony and harassment to them;
and
viii) to pay Rs.11,000/- on account of the counsel fee.
3. The complaint was contested by the opposite parties, who filed joint written reply before the District Forum. In that written reply they did not dispute that the complainants were enjoying the facility of "Variable Rate Home Loan" of Rs.25,00,000/- from Bank of Punjab Limited, which merged in Centurion Bank and thereafter the latter Bank was merged in them in April 2009. They admitted that the cheques, so issued by the complainants and which were drawn on over draft facility, were dishonoured and letters, as mentioned in the First Appeal No.479 of 2012. 5 complaint, were written to them and that the bouncing charges of the cheques were deducted from the said account. They also admitted that Rs.41,250/- was charged, as pre-payment charges on the repayment of the housing loan at the rate of 1.65%. While denying the other allegations made in the complaint, they averred that the complainants were not regularly paying their home loan instalments. The sum of Rs.41,250/- was charged from them as per the Loan Agreement, the terms of which were binding upon the parties and they cannot re-agitate the matter after the closure of that account. The said amount was deposited by them with their free will and after verification of accounts at that time. The complainants failed to maintain the overdraft limit properly by providing the necessary documents and, as such, they were not at fault while dishonouring the cheques, so drawn on that account. The cheques failed due to the fault of the complainants themselves and were dishonoured due to the expiry of the sanction limit in the Bank system. The same was on account of the negligence and carelessness on the part of the complainants, who were requested a number of times to provide the documents in order to make the limit O.K. There is no question of sufficient funds in the account, on account of the expiry of limit itself. Therefore, the complainants are not entitled to the charges, which were deducted on account of the bouncing of the cheques. No amount was ever charged as interest illegally and the amount of the cheque of Rs.3,75,000/- was duly adjusted in the Loan Account. The detail of the amount due from the complainants was mentioned in the letter dated 8.4.2009. No cheque issued by the complainants First Appeal No.479 of 2012. 6 was dishonoured on account of "insufficient funds". The amounts so deducted were payable by the complainants and there was no illegality in making those deductions. There was no such deficiency in service or adoption of unfair trade practice by them. The complainant is not a 'consumer' as he had not purchased anything from them and rather had obtained the loan. The District Forum has no jurisdiction to entertain and try the complaint. The dispute relates to the accounts and, as such, only the Civil Court has the jurisdiction to determine the question in dispute. The complainants have not come to the District Forum with clean hands and the complaint is liable to be dismissed with special costs of Rs.50,000/-; being false, frivolous and vexatious.
4. Both the sides produced evidence in support of their respective averments before the District Forum, which after going through the same and hearing learned counsel on their behalf allowed the complaint, vide aforesaid order.
5. We have heard learned counsel for both the sides and have carefully gone through the records of the case.
6. It was submitted by the learned counsel for the opposite parties that the complaint was bad for misjoinder of causes of action. The complainants had two independent causes of action; one, regarding the Home Loan Account and the other pertaining to the Overdraft facility. Both those causes of action could not have been joined in one complaint and the complaint was liable to be dismissed on that score alone. It was wrongly concluded by the District Forum, by placing reliance on the judgment of Delhi State Commission First Appeal No.479 of 2012. 7 reported in 2005(3) CLT 248 (Punjab National Bank v. Chaman Kumari and another), that the complainants were not liable to pay the pre-payment charges on account of the foreclosure of the Home Loan Account. At the time of obtaining that loan, they had executed the Loan Agreement, which was proved on the record as Ex.R-3 and as per Article 8 thereof, they had undertaken to pay the pre-payment charges, in case of the repayment of the Home Loan by some other Bank. Therefore, the finding recorded by the District Forum that the opposite parties were not entitled to deduct Rs.41,250/- as the prepayment charges is liable to be set aside. All other reliefs claimed by the complainants are regarding the overdraft facility and in respect of that facility they cannot be held to be the 'consumers' as the overdraft facility was obtained by them for running their business; which is a "commercial purpose". The complaint regarding that cause of action is liable to be dismissed on that ground alone. Moreover, from the evidence produced on the record, it stands proved that the cheques were not dishonoured on account of "insufficient funds" but were dishonoured on account of the non- extending of the facility. Every year the complainants were required to get the limit renewed by furnishing requisite documents but they failed to do so and the cheques bounced/dishonoured due to the expiry of the sanction limit. In these circumstances, the opposite parties were very much justified in deducting the cheque bouncing charges from the complainants. In support of his arguments he relied upon the judgment of the Hon'ble National Commission First Appeal No.479 of 2012. 8 reported in 2015 (1) ISJ (Banking) 56 (Shishir Tiwari v. M/s Dewan Housing Finance Corporation Ltd.).
7. On the other hand, it was submitted by the learned counsel for the complainants that after thoroughly scrutinizing the evidence produced by the parties correct findings were recorded by the District Forum and there is no ground for upsetting those well reasoned findings. It has been held in Chaman Kumari's case (supra) that the Banks are not entitled to the pre-payment charges in case of the foreclosure of the loan account and, as such, the opposite parties were not entitled to deduct the sum of Rs.41,250/- from the account of the complainants. The position was made further clear by the Hon'ble National Commission in Housing Development Finance Corporation Ltd. v. Surendra Mohan Arora (N.C.) [2012(4) CPJ 525 wherein it was held that the prepayment charges cannot be claimed at the rate more than 1% whereas the opposite parties deducted those prepayment charges at the rate of 1.65%. Keeping in view the facts of the case it cannot be said that there was misjoinder of causes of action as the Home Loan and the Overdraft facility were so connected with each other that only one complaint was competent. No such evidence has been produced by the opposite parties for proving that the sanction of limit had expired and the cheques were dishonoured on that account. It is very much clear from the documents proved on the record that there was some fault in the system of the opposite parties and it was on account of that fault that the cheques were dishonoured. Therefore, the opposite parties were not justified in deducting the bouncing charges from the First Appeal No.479 of 2012. 9 account of the complainants and they were also not entitled to deduct any amount as overdue interest. There is no ground for upsetting the well reasoned findings so recorded by the District Forum.
8. We have not been able to find any such similarity in the Home Loan obtained by the complainants and the Overdraft facility availed by them on the basis of which it may be said that only one complaint was competent. Those were two independent causes of action and independent complaints were required to be filed in respect thereof. However, keeping in view that the Consumer Protection Act, 1986, has been enacted for the better protection of the interest of the consumers, so we do not want to go into the said technicality and to dismiss the complaint on that ground.
9. The District Forum relied upon Chaman Kumari's case (supra) while recording the findings that the complainants are not liable to pay any prepayment charges. Their counsel himself has relied upon Surendra Mohan Arora's case (supra) in which it was held by the Hon'ble National Commission that the prepayment charges are payable on the prepayment of the housing loan. There is catena of judgments of the Hon'ble National Commission, which makes it clear that prepayment charges are payable by the loanees in case of prepayment of their home loans.
10. So far as the Home Loan, so obtained by the complainants, is concerned, they had executed Loan Agreement Ex.R-3 containing all the terms and conditions. Article 8 thereof relates to "Prepayment" and is reproduced below:-
First Appeal No.479 of 2012. 10
"ARTICLE 8 : PREPAYMENT 8.1 The Borrower may, prepay the whole or any part of the outstanding Loan Facility. The Borrower shall, at the time of such prepayment, not be liable to pay any prepayment charges if the loan has been repaid from his own savings and/or by his employer. However, if the Loan Facility is prepaid by any other bank, financial institution, housing finance company taking over the loan facility, the Borrower agrees to pay prepayment charges at such rates as applicable from time to time."
It is not the case of the complainants that they had cleared the Home Loan by making the payment from their own savings and they themselves have alleged in their complaint that they have switched over to the State Bank of India so far as that Home Loan is concerned. Therefore, as per above said Article, they were liable to pay prepayment charges.
11. The question arises, as to at what rate those prepayment charges were payable? Vide the said Agreement, the complainants had agreed to pay the prepayment charges at such rate, as applicable, from time to time. The opposite parties recovered those prepayment charges at the rate of 1.65% but no evidence has been produced by them to prove that this was the rate applicable at the time the Home Loan was prepaid by the complainants. However, it was made very clear in Surendra Mohan Arora's case by the Hon'ble National Commission that these prepayment charges cannot be for First Appeal No.479 of 2012. 11 more than 1% and that too on the total amount outstanding on the date of prepayment. Therefore, the opposite parties could not have deducted the prepayment charges at the rate of 1.65% on the total Loan Amount of Rs.25,00,000/-. The complainant has placed on record the letter dated 8.4.2009 of the opposite parties as Ex.C13 in which details of the amount outstanding and the final payment made by him are given. Calculated at the rate of 1% on the total amount outstanding i.e. Rs.19,60,730.08P (Rs.19,55,129.08P as Principal Outstanding + Rs.1,577/- as Late Payment Penalty Charges + Rs.1,200/- as Cheque Bouncing Charge + Rs.2,824/- interest till date of Prepayment) the same comes to Rs.19,607/- (rounded off to Rs.19,600/-). Therefore, the opposite parties claimed Rs.21,650/- (Rs.41,250/- minus Rs.19,600/-) in excess from the complainants and it is liable to pay that amount to them.
12. So far as the Overdraft facility is concerned, it is very much clear from the allegations made in the complaint itself that it was obtained for running the business, which is a commercial transaction. It has recently been held by the Hon'ble National Commission in ORIENTAL BANK OF COMMERCE v. SUSHIL GULATI [I(2015) CPJ 326 (NC)] that the Cash Credit Facility obtained by the complainant for running the business falls within the purview of commercial transaction and the complainant does not fall within the purview of the 'consumer'. Therefore, the complainants cannot be said to be the 'consumers' so far as the overdraft facility is concerned. The District Forum before going into the merits of the case, so far as that overdraft facility is concerned, was required to First Appeal No.479 of 2012. 12 record a finding as to whether the complainants were 'consumers' or not but it failed to do so, although specific objection was taken by the opposite parties in their reply that the complainants are not 'consumers'. Therefore, the complaint filed by the complainants pertaining to the overdraft facility was not competent before the District Forum and was liable to be dismissed on that ground alone.
13. In the result, this appeal is partly accepted. The order passed by the District Forum is modified to the effect that the opposite parties are directed to return the amount of Rs.21,650/- to the complainants along with interest at the rate of 9% per annum from the date of deduction thereof till the date of payment and they are also directed to pay Rs.3,300/- as costs of litigation.
14. The sum of Rs.25,000/- deposited at the time of filing of the appeal along with interest which has accrued thereon, if any, shall be remitted by the registry to the respondent/complainant by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the District Forum and the appellants.
15. The arguments in this case were heard on 30.10.2015 and the order was reserved. Now, the order be communicated to the parties.
16. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE GURDEV SINGH)
PRESIDENT
(VINOD KUMAR GUPTA)
November 10, 2015 MEMBER
Bansal
First Appeal No.479 of 2012. 13