Chandigarh

StateCommission

A/337/2018

Area Manager, LIC Housing Finance Limited - Complainant(s)

Versus

Harbhajan Singh Minhas - Opp.Party(s)

Piyush Sharma, Adv.

15 Nov 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

 

Appeal No.	:	337 of 2018
Date of Institution	:	13.11.2018
Date of Decision	:	15.11.2018

 

Area Manager, LIC Housing Finance Limited, SCO 2445-46, Sector 22-C, Chandigarh.

…….Appellant/Opposite Party.

 

Versus

 

1.  Harbhajan Singh Minhas s/o Late Sh. Randhir Singh, Resident of H. No.637, Phase-3-A, Mohali.

2.  Harjeet Kaur Minhas w/o  Sh. Harbhajan Singh Minhas, resident of H. No.637, Phase-3-A, Mohali.

 

                                                         ...Respondents/Complainants.

 

Appeal under Section 15 of the Consumer Protection   Act, 1986 against   order dated 24.09.2018 passed by District   Consumer Disputes Redressal Forum-I, U.T. Chandigarh   in Consumer Complaint No.171/2017.

 

BEFORE:  JUSTICE JASBIR SINGH (RETD.), PRESIDENT.                                  MRS. PADMA PANDEY, MEMBER

                 MR. RAJESH K. ARYA, MEMBER.

 

Argued by:  Sh. Piyush Sharma, Advocate for the appellant.

 

PER  RAJESH  K.  ARYA, MEMBER

                Appellant/opposite party has filed this appeal against order dated 24.09.2018 passed by District Consumer Disputes Redressal Forum-I, U.T., Chandigarh (in short ‘the Forum’ only), vide which, complaint No.171 of 2017 filed by the respondent/complainant was partly allowed in the following manner:-

“11.     In view of the above, the complaint deserves to be allowed. Accordingly the complaint is partly allowed against Opposite Party and it is directed as under:-

                                                        i.            To issue a fresh accounts statement to the Complainants by effecting the revised rate of floating interest w.e.f. 1st Jan and 1st July every year and refund, the excess amount charged, if any;

                                                     ii.            To pay Rs.50,000/- to each Complainant, for mental agony and physical harassment caused to them and also for deficiency in providing service and adopting unfair trade practice.

                                                   iii.            To pay cost of litigation, to the tune of Rs.15,000/- to the complainants.

 12.        The above said order shall be complied within 30 days of its receipt by the Opposite Party. In default, the Opposite Party shall be liable for an interest @12% p.a. on the directions at Sr. No. (ii) & (iii) above from the date of institution of this complaint, till it is paid, apart from compliance of the directions as at Sr. No. (i) above.”

2.              Before the Forum, it was case of the complainants that they were sanctioned two Housing Loans i.e. (i) No.014009028 for Rs.10,000,00/- on 31.12.2003 at a floating interest rate of 7.75% p.a. and (ii) No.014011187 for Rs.7,000,00/- on 31.10.2005 at a floating interest rate of 7.25% p.a. by the opposite party based on the then prevailing market rates. It was further stated that till 31.12.2016, the complainants had paid to the opposite party a total amount of Rs.18,15,314/- against the first loan account and Rs.11,57,942/- against the second loan account. It was further stated that the opposite party acted unfairly and had arbitrarily increased the interest rates to 11.70% & 11.75% p.a. on both the aforesaid loan accounts and thereby had been charging 2.75% excess rate of interest than the prevailing market rates. It was further stated that the opposite party had failed to reduce the interest rate of loans of the complainants whenever the prevailing market rates had fallen.  It was further stated that the complainants served a legal notice dated 24.05.2016 upon the opposite party but to no avail. Hence, a consumer complaint was filed before the Forum. 

3.             The opposite party, in its reply, specifically stated that the complainants were never charged excess rate of interest than the prevailing market rate of interest. It was further stated that the rate of interest was being charged as per the terms & conditions of the loan agreement. It was further stated that as the rate of interest vary as per the market conditions, so whatever was the market condition at that time of sanctioning of the loan, the customer has to pay the rate of interest as per the loan agreement entered into at that very time. It was further stated that on number of occasions, the rate of interest was decreased, so the opposite party had charged the decreased rate of interest from the complainants. It was further stated that neither there was any deficiency, in rendering service, on the part of the opposite party nor it indulged into any unfair trade practice. The remaining averments, were denied, being wrong.

4.             The complainants filed replication, wherein they reiterated all the averments, contained in the complaint, and repudiated those, contained in the written version of the opposite party.

5.            The parties led evidence in support of their case. The Forum, on analysis of pleadings of the parties, documents on record, and the arguments addressed, partly allowed the complaint. When forming above opinion, the Forum, in Paras 8 to 10, observed as under;

“8.        While dealing with the issue no. (i) above, we find that Opposite Party has produced a letter dated 27.09.2016 written by the Chief Manager (Marketing), LIC Housing Finance Ltd., addressed to all the Regional Manager, Dy. Regional Managers, Managers (Operation), Area Managers & Business Managers, wherein rewriting fees of Rs.1000/- + plus have been mentioned for rewriting of loan amount upto Rs.75 Lacs. Since the Complainants had taken loan less than Rs.75 Lacs, we are of the concerted view that the Opposite Party was justified in charging the rewriting fees from them.

9.         Regarding the issue no. (ii) above, we find that the loan request was made on floater basis, based on the request made by the Complainants themselves. Moreover, the Complainants have failed to adduce any cogent, convincing and reliable piece of evidence to show that the Opposite Party had failed to follow the RBI Guidelines or violated the terms and conditions of the Agreement interse them.

10.        For adjudicating the issue no. (iii) above, we have perused the terms & conditions of the Loan Offer Letter issued by the Opposite Party. Para 4(a)(iii) of the said terms & conditions provide that the revised floating rate of interest will be applicable w.e.f. 1^st Jan or 1^st July as the case may be and shall be reviewed every 6 months (January & July) based on the prevailing market conditions. On perusal of Annexure OP-1, which is a loan-wise detail of interest movement, we find that the revised rate of interest has been made applicable w.e.f. 31^st Jan or 31^st July every year, rather than effecting the same w.e.f. 1^st Jan or 1^st July of every year as provided in the terms & conditions. The said act of the Opposite Party to our mind, amounts to deficiency in service and their indulgence into unfair trade practice, which certainly has caused unprecedented physical and mental harassment to the Complainants and forced them to indulge in the present unnecessary litigation.” 

6.             After going through the evidence on record and submissions of the Counsel for the appellant, we are of the opinion that the appeal is liable to be dismissed at the preliminary stage for the reasons to be recorded hereinafter.

7.             Challenge to the order dated 24.09.2018 passed by the Forum has been laid on the ground that the Forum wrongly held that as per para no.4(a)(ii) of terms and conditions of the loan offer letter issued by the appellant, the floating rate of interest would be applicable w.e.f. 1st January or 1st July as the case may be and shall be reviewed every 6 months based on the prevailing market rate. It was submitted that the Forum failed to appreciate that there was no violation of any term and conditions of the said loan offer letter and further the monthly installment for the month of January or July, as the case may be, is payable in the successive month like February or August. It was further submitted that the Forum had taken strict view while imposing compensation and litigation expenses. It was prayed that the appeal be allowed and the impugned order be set aside.

8.               Qua the first issue of charging of an amount of Rs.1,125/- for changing the Scheme of Loan from Fixed Rate of Interest to Floating Rate of Interest, the Forum, in our considered opinion, while placing reliance on letter dated 27.09.2016, rightly observed that since the loan taken by the complainant was less than Rs.75 Lakhs, therefore, the opposite party was justified in charging the aforesaid rewriting fees from the complainants. We find no error with the finding given by the Forum qua the aforesaid issue.

9.             As regards the second issue qua charging of excess rate of interest above the prevailing market rate of interest at the relevant point of time from the complainants, we again concur with the finding given by the Forum in its order. It was on the request of the complainants that the loan request was made on floater basis. In the absence of any contrary evidence to contradict the above finding of the Forum, we uphold the view expressed.

10.           Now coming to the principal issue as regards the opposite party effecting change of floating rate of interest on different dates instead w.e.f. 1^st of January and 1^st July every year as per the Agreement/Terms & Conditions, it is not out of place to mention here that as per Condition No.4(a)(iii) of Terms & Conditions forming part of Loan Offer Letter (Annexure C-3), the revised Floating rate of Interest was to be applicable with effect from 1^st January or 1^st July, as the case may be. Not only this, the aforesaid condition further stipulate that where the loan is under Floating Rate of Interest, the interest stipulated in the Schedule of the Loan Offer Letter was to be reviewed every 6 months (January & July), based on the prevailing market conditions as judged by LIC Housing Finance Limited and the revised Floating rate of interest could increase, decrease or remain the same. The appellant/opposite party, rather adhering to the aforesaid term and conditions forming part of Loan Offer Letter, made the revised rate of interest applicable w.e.f. 31^st January or 31^st July every year. Instead, the revised rate of interest should have been made applicable w.e.f. 1^st January or 1^st July of every year as per the aforesaid Condition No.4(a)(iii). The Forum, in our opinion, has rightly held so in its order and we do not find any infirming in the said finding.  

11.           In view of the above discussion, it is held that the order passed by the District Forum, being based on the correct appreciation of evidence, and law, on the point, does not suffer from any illegality, warranting the interference of this Commission.

12.           No other point was raised by the Counsel for the appellant.

13.           For the reasons recorded above, this appeal being devoid of any merit, is dismissed in limine with no order as to costs. The impugned order passed by the District Forum is upheld. Consequently, the application for condonation of delay in filing the present appeal stands disposed of having become infructuous.

14.           Certified copies of the order be sent to the parties free of charge.

15.           File be consigned to the Record Room after completion.

Pronounced

15.11.2018.

[JUSTICE JASBIR SINGH (RETD.)]

PRESIDENT

 

 

 

(PADMA PANDEY)

MEMBER

 

 

(RAJESH K. ARYA)

MEMBER

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