Chandigarh

DF-I

CC/520/2016

Daljit Singh - Complainant(s)

Versus

Cholamandalam Investment and Finance Co. Ltd. - Opp.Party(s)

Vandana

05 Jun 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

============

Consumer Complaint  No	:	520 of  2016
Date  of  Institution	:	15.7.2016
Date   of   Decision	:	5.6.2017

 

 

 

 

 

Daljit singh s/o Sh. Gurdial Singh r/o 1524 Sector 42 B, Chandigarh.

 

….Complainant

Vs.

 

Cholamandalam Investment and Finance Company Ltd. SCO No.2423-2424 Sector 22C, Chandigarh through its Signatory Authority/Manager/MD.

 

…… Opposite Parties 

 

BEFORE:  

 

DR. MANJIT SINGH                  PRESIDENT

MRS.SURJEET KAUR             PRESIDING MEMBER

SH. SURESH KUMAR SARDANA     MEMBER

 

 

 

For Complainant	:	None for the complainant.
For OP	:	Sh. Aman Singla, Adv.

 

 

PER SURJEET KAUR, PRESIDING MEMBER

 

 

 

                The facts, in brief, are that the complainant availed loan from the OP for an amount of Rs.46,15,904/- on 31.3.2014.  The complainant opted for foreclosure of the said loan  on 24.1.2015. The grouse of the complainant is that at the time of foreclosure of the loan on 24.1.2015 the OPs charged foreclosure charges @4% from the complainant. The complainant had to pay the same under compulsion.  It is alleged that the OP by charging foreclosure charges from the complainant violated paragraph 3 of guidelines on fair practice on 4NBFCs(non banking financial companies) issued vide circular DNBS(PD) CC NO.80/3.10.042/2005/2006 dated September 28/2006 and paragraph 2(a)(3) of master circular DNBS (PD) CCNO.388/03.10.042/2015 dated July 1 2014 issued by Reserve Bank of India, whereby it has been declared by RBI that NBFCs non banking financial companies shall not charge foreclosure charges/prepayment penalties.  When the grievance of the complainant was not redressed he got served a legal notice upon the OP but to no avail. Alleging that the aforesaid acts amounted to deficiency in service and unfair trade practice on the part of the opposite Party, the complainant has filed the instant complaint.

2.                      Notice of the complaint was sent to Opposite  Party, seeking its version of the case.

3.                      The OP filed its written statement while admitting the factual matrix of the case stated that the complainant is not a consumer as he has availed the loan for commercial purpose. It is averred that the RBI has not issued any guidelines to banking and NBFC’s not to charge foreclosure charges in  case the loan is taken for commercial purposes. The complainant had taken the loan for use in business. As such the OP is justified in charging pre closure charges which in the present case have been charged as per the agreed terms of the loan agreement.  The complainant has misinterpreted the notification so issued by the RI. The remaining allegations were denied, being false. Pleading that there is no deficiency in service on its part, a prayer for dismissal of the complaint has been made.

4.                 The complainant has filed a rejoinder, wherein he has reiterated all the averments, contained in the complaint, and repudiated those, contained in the written version of Opposite Party.

 

2.                      Parties were permitted to place their respective evidence on record, in support of their contentions.

 

3.                 We have heard the learned counsel for the Opposite parties and have perused the record carefully.

 

4.                      The grouse of the complainant is that the OP has wrongly charged amount of Rs.2,11,408/-  from the complainant as foreclosure charges, which is in violation of RBI instructions  dated 14.7.2014 (Annexure C-3).

 

5.                      The stand taken by OP is that the RBI has not issued any guidelines  for not charging the foreclosure charges in case the loan is taken for commercial purpose. As the complainant has taken the loan for his business, therefore, the complainant is not a consumer. It has also been contended that the present case must be referred to Arbitrator and also RBI is a necessary party to the present case.

 

6.                       A bare perusal of Annexure  C-3 make it crystal clear that as a measure of customer protection and also in order to bring in uniformity with regard to prepayment of various loans by borrowers of banks and NBFCs, it has been advised by RBI  that  NBFCs shall not charge foreclosure charges/pre-payment penalties  on all floating rate term loans sanctioned to individual borrowers with immediate effect i.e. from 14.7.2014.  This notification does not have any mention of commercial transaction. Even otherwise also the onus to prove that the present transaction or loan agreement between the complainant is a commercial transaction  is upon the shoulders of the OP only. But there is no evidence on record, which proves this assertion of the OP.  We are of the opinion that the OP are not allowed to charge the foreclosure charges as there is no specific clause  in the notification ibid regarding the fact of commercial transaction.  As such this plea of the OP being devoid of merit is rejected.

 

7.                      So far as the objection of the OP that the present case be referred to Arbitrator  is concerned, we are of the considered opinion that since the remedy provided to the consumers under the Consumer Protection Act, 1986, is an additional remedy under Section 3 of the Act, therefore, it is immaterial if the complainant instead of getting the dispute referred to the Arbitrator has been filed the present complaint. Thus, this plea of the complainant is rejected.  

 

8.                      The next objection of the OP that complainant did not array the RBI as a necessary party to the instant complaint.  This objection of the OP is not sustainable as neither any allegations has been leveled against the RBI nor any  relief has been sought from the RBI. The complainant merely placed on record the notification issued by the RBI which does not amount to make it a necessary party to the instant complaint.

9.                      In the light of above observations, we are of the concerted view that the Opposite Party is found deficient in giving proper service to the complainant and having indulged in unfair trade practice by charging foreclosure charges from the complainant despite the RBI Notification. Hence, the present complaint of the Complainant deserves to succeed against the Opposite Party, and the same is allowed, qua it. The Opposite Party is directed  to:-

 

[a]  To refund Rs. 2,11,408/- to the complainant being charged by it on account of foreclosure charges.  

 

[b]  To make payment of 15,000/- to the complainant towards compensation for causing mental and physical harassment.

 

[c]  To make payment of Rs.10,000/- to the complainant as litigation expenses.

 

 

10.              The above said order be complied with by the Opposite Parties, within 30 days from the date of receipt of its certified copy, failing which the amounts at Sr. No.[a] & [b] shall carry interest @12% per annum from the date of filing of the present Complaint, till actual payment, besides payment of litigation costs.

 

11.                   The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

 

Announced

5.6.2017                             DR. MANJIT SINGH

PRESIDENT

 

 

Sd/-

 (SURJEET KAUR)

PRESIDING MEMBER

 

Sd/-

 (SURESH KUMAR SARDANA)

MEMBER