foreclosure charges was illegal. He further
submitted that, the District Forum, after considering the true interpretation
of the words foreclosure charges and prepayment charges, came ... prepayment, and, on all
amounts tendered by the borrower, towards prepayment of loan, during the last
one year, from the date of final prepayment
defendant (hereafter called "the bank") as
repayment, or prepayment charges.
2. The plaintiff is involved in the real estate business, particularly ... from the buyers
and depositing the same in the bank.
...... ...... .........
5. Prepayment charges shall be levied only when a company prepays our loans by
borrowing
involved in considering the request of the borrower for prepayment of loan, fixing of prepayment charges, collection of the same and closure of loan. These ... decreases with the increase or decrease of these charges. Thus, the reset charges and prepayment charges can be considered as the cost incurred
earlier bank and did not amount to
foreclosure/prepayment of loan and, as such, prepayment charges were illegally
charged. Accordingly, the complaint of
the consumer ... charged prepayment charges on
foreclosure/prepayment of loan. Thus,
the State Commission held that that prepayment charges were wrongly charged
and, thus, ordered the refund
complainant company decided to prepay
the loan in lumpsum. He further
submitted that the OPs could not charge prepayment charges @ 4.41% on the
outstanding principal ... complainant wanted to prepay the loan, according to the terms and conditions of
the agreement Annexure C-3, prepayment charges @4.41% could be charged
prepayment penalty. A prepayment penalty that applies
to refinancing only is called a "soft" prepayment penalty.
lnvestopedia explains Prepayment Penalty
Lenders write prepayment ... prepayment penalty i.e.
3. When the prepayment was done by the borrower to the banks from its
own account/sources no prepayment charges / penalty
cash with the OP towards full and final
prepayment of loan, including prepayment
charges. It was decided that the said amount ... when the complainant
approached it for prepayment of loan wherein, the detail of amount due,
including prepayment charges @ 2.21% at o/s principal was mentioned
full and final
amount of Rs.59,92,127.16 including the prepayment charges of Rs. 2,52,574.53/- , under protest, in
order to close ... closing the
loan account. It was further stated that the
prepayment charges were charged, as per the terms and conditions of the
sanction letter, which
borrower(s) at the time of such prepayment shall be liable to
pay prepayment charges as may be specified in the schedule of charges ... from the OPs/respondents, to another bank, and not
prepayment of loan, no prepayment/foreclosure charges could be levied. The facts of the aforesaid cases
made a
representation to OP No.1, for giving waiver of prepayment charges but the same
was not given. The complainant had paid ... said Society stating therein that there would be no
prepayment charges after 2 years of payment made from own sources. It was also admitted that
