1. Heard Mr. Sukumar Pattjoshi, Sr. Advocate, assisted by Mr. Akshay Dev, Advocate, for the complainant and Mr. Aniruddha Choudhury, Advocate, for the opposite parties. 2. Rajesh Monga has filed above complaint for directing Housing Development Finance Corporation Limited and others (the opposite parties) to (i) refund Rs.17402465/-, with interest, the excess amount realized from the complainant, (ii) pay Rs.150000/-, as the compensation for mental agony and harassment, (iii) to pay Rs.150000/-, as the costs of the litigation and (iv) any other relief, which is deemed fit and proper, in the facts of the case. 3. The complainant stated that Housing Development Finance Corporation Limited (opposite party-1) (for short the HDFC) was a financial institution, incorporated under the Companies Act, 1956, Mr. Chandra Shekhar (opposite party-2) and Mr. S. Ganapathi (opposite party-3) were its Direct Sales Agent and Resident Manager, respectively. The complainant was in need of home loan. Mr. Chandra Shekhar approached the complainant, in last week of August, 2005 and thereafter, continuously followed up with the complainant in convincing that the rate of interest on home loan of the HDFC was lesser than ICICI Bank. Mr. Chandra Shekhar, vide email dated 05.10.2005, posted a chart, depicting charges on prepayment, interest calculation, delay payment, reschedulement tenure, bounce and rate of interest, on home loans of the HDFC and ICICI Bank and by this chart he represented that home loans from the HDFC was cheaper than ICICI Bank in all respect. He assured also that rate of interest would be changed on change of Prime Lending Rate by Reserve Bank of India. Believing upon the representation of Mr. Chandra Shekhar, the complainant applied for home loan for Rs.35000000/- to the HDFC, which was sanctioned and Loan Agreement was executed on 11.01.2006. The said amount was disbursed to DLF Universal Limited/DLF Limited in instalments from January, 2006 to December, 2007. Loan Agreement provided for an interest @7.25% and margin of 3.5%. It was contrary to the promise made by Mr. Chandra Shekhar. Opposite party-1, vide letter dated 01.05.2006, informed that rate of interest was revised to 8.25%, although Reserve Bank of India did not change Prime Lending Rate during 11.01.2006 to 01.05.2006. The complainant approached Mr. S. Ganapathi on 29.05.2006 and raised his protest to the letter dated 01.05.2006. Mr. S. Ganapathi asked the complainant to call again on 02.06.2006 and on that day he would explain letter dated 01.05.2006. On 02.06.2006, Mr. S. Ganapathi asked the complainant to talk with one Mr. P.C. Srivastava. Then, the complainant tried to talk with Mr. P.C. Srivastava several times and all the times, he was informed that Mr. P.C. Srivastava was on leave. The complainant gave a written protest, vide letter dated 12.06.2006, against enhancement of interest without any change in Prime Lending Rate. The HDFC revised the rate of interest to 8.75%, vide letter dated 01.08.2006, again revised the rate of interest to 9.25%, vide letter dated 01.02.2007, again revised the rate of interest to 10.5%, vide letter dated 03.05.2007, although Reserve Bank of India did not change Prime Lending Rate. The complainant gave a legal notice dated 27.09.2007, to return the amount of interest charged above 7.25% per annum. The HDFC, vide notice dated 09.10.2007, replied that under Loan Agreement, the complainant had opted for ‘Adjustable Rate of Interest’ as such the rate of interest was varying as per Retail Prime Lending Rate of the HDFC. The complainant filed CC/338/2008 before District Consumer Disputes Redressal Forum-II, New Delhi, for directing the HDFC to return/adjust the amount of interest realized above 7.25% per annum. The HDFC filed its written reply and evidence in this complaint. Reserve Bank of India issued Circular No. DBOD.No.Dir.BC.5/13.03.00/2011-12 dated July 1, 2011, consolidating earlier directives for the rate of interest on advances. During pendency of the aforesaid complaint, the HDFC again and again revised interest and enhanced up to 13.25% per annum from 01.04.2013. The revision/enhancing rate of interest by the HDFC was arbitrary and not based upon change of Prime Lending Rate on loan by Reserve Bank of India. By enhancing interest arbitrarily, the HDFC forcefully realized extra amounts on EMI. The complainant paid all the dues in March, 2018 and closed the loan account but the HDFC did not provide pre-payment benefit. District Consumer Disputes Redressal Forum-II, New Delhi, vide order dated 20.09.2018, came to the conclusion that the amount receivable by the complainant was more than its pecuniary jurisdiction, as such, returned the complaint for filing before appropriate forum. Then this complaint was filed on 22.10.2018. 4. The opposite parties filed their written reply on 01.03.2019 and contested the case. The opposite parties stated that on the date of filing this complaint, the complainant had already closed the loan account and right and liability under the loan agreement stood terminated, as such, the complainant was not a consumer of the HDFC. The rate of interest was revised, vide letter dated 01.05.2006. Two years limitation for filing the complaint expired on 30.04.2008, while the earlier complaint was filed on 17.06.2008, before District Forum, which was barred by limitation. It has been denied that opposite parties-2 and 3, played any role in convincing the complainant to take loan from the HDFC or represented that the loan of the HDFC was cheaper that the loan of other institutions. The complainant was in need of home loan, as such, he himself approached opposite party-2 for understanding the procedure and formalities for taking loan and getting his loan application processed. It has been denied that the opposite parties ever represented the complainant that the HDFC was only NBFC, which was offering rate of interest, directly linked to PLR of Reserve Bank of India. The HDFC used to provide loan on ‘fixed rate of interest’ and on ‘adjustable rate of interest’. In case of ‘adjustable rate of interest’, rate of interest used to vary according to ‘Retail Prime Lending Rate’ as fixed by the HDFC time to time. Sometimes, the borrower gets benefit, when ‘Retail Prime Lending Rate’ goes down. As a matter of commercial bargain, the complainant opted for ‘monthly adjustable rate of interest’ in his loan application form dated 16.09.2005. After sanction of the loan, the complainant was informed in this respect vide email dated 05.10.2005. Loan Agreement dated 11.01.2006, executed between the parties, explicitly provided for ‘Retail Prime Lending Rate’ which was adjustable rate, both upward and downward, depending on the applicable interest rate announced by the HDFC, time to time. The complainant did not question the validity of any clause of the Loan Agreement. Article 2.2 of Loan Agreement provides Interest Rate Reset Revision Cycle as 3 months. The loan was advanced on variable rate of interest as such EMI amount could not be a fixed amount and liable to vary on revision of rate of interest. The Circular of Reserve Bank of India i.e Circular No. DBOD.No.Dir.BC.5/13.03.00/2011-12 dated July 1, 2011, is not applicable to the HDFC, which is a non-banking finance company. In the HDFC, the rate of interest is decided by an internal committee, which takes the decision based on broad economic situation, prevailing time to time. ‘Retail Prime Lending Rate’ as fixed by the HDFC is uniformly followed by all the branches for all such borrowers and there was no unfair trade practice. The interest was charged from the complainant on the basis of ‘Retail Prime Lending Rate’ fixed by the HDFC and revised at an interval of more than three months. When the rate of interest went down, the complainant was given its benefit. It has been denied that change in interest depends upon change in interest by Reserve Bank of India. 5. The complainant filed Rejoinder Reply on 29.04.2019, in which, the facts stated in the complainant has been re-iterated. The complainant filed Affidavit of Evidence, Affidavit of Admission/ Denial of documentary evidence of Rajesh Monga and documentary evidence. The opposite parties filed Affidavit of Evidence and Affidavit of Admission/Denial of documentary evidence of Aju Ashok and documentary evidence. The complainant filed IA.19996/2018 for filing additional documentary evidence i.e. Loan Application Form dated 16.09.2005, for loan and copy of the complaint filed before District Consumer Disputes Redressal Forum, New Delhi. 6. The complainant relied upon judgment of Maharashtra State Consumer Disputes Redressal Commission in Narayanrao Mahadeo Manjrekar Vs. Sangli Bank Ltd. 1995 (1) CPC 588, in which, it has been held that the Sangli Bank committed deficiency in service in not sanctioning loan within reasonable time and forcibly encashing the securities and diverted them to the quarterly payment of EMI. The complainant further relied upon the judgments of this Commission in Rohit Bajaj & Ors. Vs. ICICI Bank Ltd. & Ors., (2008) 2 CPJ 271, in which, it has been held that ICICI Bank Ltd. committed on unfair trade practice in assuring after various discussions that the rate of interest to be charged on the loan facility which was to be given by pledging the KVPS would be only 6.4% and the bank would not charge any processing fees, but in spite of aforesaid assurance of processing fee of Rs.669465/- was charged, which was unfair trade practice. It has been further observed that dealing with such standardized contracts the Law Commission of India in its 103rd Report, May 1983, termed it as unfair, requiring protection of the consumer. The Law Commission observed that these standardized contracts are really pretended contracts. That has only the name of the contract and the individual signing on the dotted lines does not really represent his substantial agreement with the terms in it. To provide relief to the consumers in case where the document is drafted unilaterally and signed on dotted lines, the Consumer Protection Act, 1986 makes provision in case the contract is unfair or is by way of unfair trade practice. In M/s. IDBI Bank Ltd. & anr. Vs. Subhash Chand Jain Mayank Jain, 2012 SCC OnLine NCDRC 741 in which it has been held that in the home loan agreement there was not mentioned on reference to the interest rate being floating or fluctuating and thereafter charging interest at floating rate was on unfair trade practice. In Action Construction Equipment Ltd. Vs. Santosh Babanrao Gande & anr. 2016 SCC OnLine NCDRC 1568, in which, it has been held that the consumer cannot be liable for the misdeeds of the dealer. The principal is equally liable for the deficiency on the part of its authorised agent. In RP/2884/2017 India Bulls Housing finance Ltd. & anr. Vs. Boota Singh Sidhu & anr., decided on 17.11.2017, in which, relying upon notification of RBI No.DBBS/204/CGM(ASR)-2009 dated 02.01.2009, it has been held that rate of interest should be annualised so that the borrower is aware about the exact rate to be charged in his account by NBFCs. In ICICI Bank Ltd. Vs. Karam Chand and anr., 2019 SCC OnLine NCDRC 1229, it has been held that if the loan was sanctioned at fixed rate of interest then on subsequent stage floating interest cannot be charged. In ICICI Bank Ltd. & anr. Vs. Manoj Kumar & anr. 2019 SCC OnLine NCDRC 696, this case relates to agricultural loan and it has been held that the loan sanctioned at the interest of 8% p.a. could not be enhanced to 15% p.a. subsequently. 7. We have considered the arguments of the counsel for the parties and examined the record. Preliminary objections raised by the opposite parties have no merit. Supreme Court, in Wg. Cdr. Arifur Rahman Khan Vs. DLF Southern Homes Pvt. Ltd., (2020) 16 SCC 512, held that a home buyer continued to be consumer of the builder even after taking possession and execution conveyance deed in his favour. The “consumer” as defined under Consumer Protection Act, 1986, is a person, who buys any goods for consideration or avails any service for consideration. He will not cease to be consumer after purchasing the goods or availing service. As such closing of loan account in March, 2018 has no effect upon maintainability of the complaint as the complainant has availed banking service from the HDFC and is a consumer. It is admitted by the opposite parties that rate of interest were revised on 01.05.2006, 01.08.2006, 01.08.2006, 01.02.2007, 03.05.2007 and several other times. Each revision/enhancement of rate of interest gives fresh cause of action to the complainant. The complaint was filed before District Forum on 18.06.2008 as such it cannot be said that the complaint was time barred to challenge revision of interest as on 01.08.2008 or on subsequent dates. 8. The opposite parties took plea that the Circular of Reserve Bank of India i.e Circular No. DBOD.No.Dir.BC.5/13.03.00/2011-12 dated July 1, 2011, is not applicable to the HDFC, which is a non-banking finance company. Circular dated 01.07.2011 has been addressed to all “scheduled commercial banks” excluding Regional Rural Banks, which are governed by Regional Rural Banks Act, 1976. Section 2(e) of the Reserve Bank of India Act, 1934 defines “scheduled bank” means a bank included in the Second Schedule. Although HDFC Bank Ltd is included in the second schedule of this Act, HDFC, which is a non-banking financial company, and is a separate legal entity from HDFC bank, is not included in the second schedule of the Act. As such, circular dated 01.07.2011 is not applicable and binding upon HDFC, the opposite party in this case. Circular No.DNBS.PD/CC NO.95/03.05.02/2006-07 dated May 24, 2007 and Notification DNBC.204/CGM(ASR)-2009 dated January 2, 2009 have been issued by RBI on the subject of excessive interest charged by NBFCs. These Circulars/Notifications are addressed to all Non-Banking Financial Companies. According to own admission the HDFC is a non-banking financial company, as such, it is applicable upon it. Clause-c of notification dated January 2, 2009 provides that the rate of interest should be annualised rates so that the borrower is aware of the exact rates that would be charged to the account. However, this notification is issued after the date of sanction of loan/signing of loan agreement in the present case, hence will have prospective application. 9. The complainant filed Loan Application Form dated 16.09.2005, along with IA.19996/2018, which is same as filed by the opposite parties. In this application form, the complainant opted for Rest Frequency- Monthly and Rate Option- Adjustable. The complainant stated that Mr. Chandra Shekhar approached him, in last week of August, 2005 and thereafter, continuously followed up with him in alluring that the rate of interest on home loan of the HDFC was lesser than ICICI Bank. Mr. Chandra Shekhar, vide email dated 05.10.2005, posted a chart, depicting charges on prepayment, interest calculation, delay payment, reschedulement tenure, bounce and rate of interest, on home loans of the HDFC and ICICI Bank and by this chart he represented that home loans from the HDFC was cheaper than ICICI Bank in all respect. Loan Application Form was filed on 16.09.2005, as such, it is not correct to say that the complainant applied for loan to the HDFC, being misguided by email dated 05.10.2005 and the papers attached to it. 10. Loan Agreement is headed as “Adjustable Rate Home Loan”. Article-1-Definitions-Clause 1.1 (e) provides that the expression “rate of interest” means the rate of interest referred to in Article-2.2 of this agreement and as varied from time to time. Article-2-Loan Interest etc. Clause-2.7. (f) provides that HDFC may vary its retail prime lending rate from time to time in such manner including as to the loan amounts as HDFC may deem fit in its own discretion. 11. The opposite parties took plea that in the HDFC, the rate of interest is decided by an internal committee, which takes the decision based on broad economic situation, prevailing time to time. ‘Retail Prime Lending Rate’ as fixed by the HDFC is uniformly followed by all the branches for all such borrowers. The interest was charged from the complainant on the basis of ‘Retail Prime Lending Rate’ fixed by the HDFC and revised at an interval of more than three months. When the rate of interest went down, the complainant was given its benefit. Supreme Court in Indian Bank Vs. Blue Jaggers Esates Ltd., AIR 2010 SC 2980, held that the arguments of the learned counsel for the respondents that the rate of interest is unconscionable, expropriatory and contrary to law also merits rejection because at no stage the respondents had questioned the terms on which loan and other financial facilities were extended by the appellant. ORDER In view of the aforesaid discussions, complainant is bound by the terms and conditions of the agreement dated 11.01.2006. At the same time HDFC is bound by various instructions/directions issued by RBI to NBFC which were in force at the time of signing of loan agreement dated 11.01.2006. Guidelines dated 02.01.2009 and previous guidelines dated 24.05.2007 were issued subsequent to the date of loan agreement which is 11.01.2006. Hence these two circulars/guidelines are also not applicable in the present case. Accordingly, the complaint is dismissed. |
