M/s India Bulls Housing Finance Limited V/S Vinay kumar - Consumer Court Case

Punjab

Ludhiana

CC/21/570

Vinay kumar - Complainant(s)

Versus

M/s India Bulls Housing Finance Limited - Opp.Party(s)

Gurcharan Singh Pahwa

12 Nov 2024

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, LUDHIANA.

Consumer Complaint No: 570 dated 27.12.2021. Date of decision: 12.11.2024.

Vinay Kumar aged about 51 years son of Late Sh. Suresh Kumar, resident of Village No.56, Sun View Enclave, Village Ayali Kalan, Ludhiana, also resident of 131, Country Home East, Ludhiana. M. 98140-35643. Email –

Versus

M/s. India Bulls Housing Finance Ltd., At M/s. India Bulls Finance Centre, 4^th Floor, Tower-1, Elphinstone Road, Mumbai, Maharashtra-400013, Through its Managing Director/Directors/Incharge.
M/s. India Bulls Housing Finance ltd. SCO-16-17, 1^st Floor, Fortune Chamber, Feroze Gandhi Market, Ludhiana, Punjab-141001 Through its Branch Head/Manager/Incharge. Email Id:

Complaint Under Section 47 of Consumer Protection Act.

QUORUM:

SH. SANJEEV BATRA, PRESIDENT

MS. MONIKA BHAGAT, MEMBER

COUNSEL FOR THE PARTIES:

For complainant : Sh. Manish Midha, Advocate

For OPs : Sh. Anand Sabherwal, Advocate.

ORDER

PER SANJEEV BATRA, PRESIDENT

1. Shorn of unnecessary details, the facts of the case are that as the complainant was in requirement of loans and as such, he approached the OPs for getting loan facilities who assured the complainant that their rates of interest on loan are low. Upon believing the assurance of the OPs, the complainant agreed to get loan from the OPs and he submitted titled documents and other documents with them. The complainant stated that he availed several loans from the OPs vide agreements No.HHLUD00377419, HHELUD00466917, HHLLUD00292761, HHLLUD00466892, HLAPLUD00199636 on the assurance that the interest charged by them is very low as compared to other financial institutions. However, upon regularly paying the loan installments, the complainant noticed that the rate of interest charged by the OPs was arbitrary and was higher side. According to the complainant, he used to pay the total EMI of Rs.4,10,544/- per month on all the loan accounts. He came to know that Reserve Bank of India decreased the interest rate upon the loans but the OPs never reduced interest rate and the complainant had to pay the EMI according to that. However, the complainant approached the OPs and brought the matter into their notice, but the officials of the OP office at Ludhiana treated in disrespectful manner which caused trauma and harassment to the complainant as well as health problems to him. The complainant further stated that at the time of advancement of loan, the OPs stated that they shall not charge any foreclosure charges on payment of remaining loan amounts. The complainant approached ICICI Bank Ltd. To take over the loan and they offered the installments in all as Rs.3,66,223/- as compared to EMIs being paid by the complainant to the OPs. As such, the complainant got the loans closed with the OPs by paying the entire outstanding in his loan accounts but the OPs charged excessive amount of foreclosure from him. The OPs charged foreclosure of Rs.97,313.40P in loan account No.HHLLUD00377419, Rs.1,17,484/- in loan account No.HHLLUD00466892, Rs.2,62,924.80P in loan account No.HLAPLUD00199363, Rs.2,80,499.37P in loan account No.HHLLUD00292761 and Rs.1,99,993.59P in loan account No.HHELUD00466917. Whereas as per the guidelines issued by the Reserve Bank of India to the banks/NBFCs/Finance Companies not to charge the foreclosure charges from the customers who are the individuals and not the companies. Charging of foreclosure charges by the OPs amounts to deficiency in service and unfair trade practice. The complainant further stated that earlier he filed complaint No.417 of 2019 before this Commission which was returned vide order dated 14.11.2019 to present the complaint before appropriate authority. The complainant claimed to have suffered heavy loss and mental tension etc. for which he is entitled for compensation as well as reimbursement of amount of Rs.9,58,215/-. In the end, the complainant prayed for issuing direction to the OPs to reimburse the amount of Rs.9,58,215/- along with interest as well as compensation of Rs.10,00,000/- and litigation expenses of Rs.33,000/-.

2. Upon notice, the OPs appeared and filed joint written statement and in the column preliminary submissions, the OPs stated that from the year of 2014 to 2018 the complainant Vinay Kumar along with Mrs. Sukhjeet Kaur and M/s. Longman Knit Parts MFG. Co. had approached them time to time with a request for availing loan facility. Accordingly, five loans facility of Rs.3,99,00,000/- were sanctioned and disbursed to the complainant and the Co-borrowers. Details of the five loans are reproduced as under:-

Sr. No.	Loan Agreement No.	Agreement Date	Nature of Loan	Loan Amount	Borrower	Co-Borrower
1.	HLAPLUD00199636	28-Aug-14	LAP	10,000,000.00	Longman Knit Parts MFG Co	Sukhjeet Kaur & Vinay Kumar
2.	HHLLUD00292761	9-Sep-16	Home Loan	15,000,000.00	Vinay Kumar	Sukhjeet Kaur & Vinay Kumar
3.	HHLLUD00377419	14-Oct-17	Home Loan	5,000,000.00	Vinay Kumar	Sukhjeet Kaur & Vinay Kumar
4.	HHLLUD00466892	21-Aug-18	Home Loan	5,890,000.00	Vinay Kumar	Sukhjeet Kaur & Vinay Kumar
5.	HHELUD00466917	21-Aug-18	Home Equity	4,010,000.00	Longman Knit Parts MFG Co.	Sukhjeet Kaur & Vinay Kumar

The OPs further stated that the complainant and the co-borrowers at the time of sanction of the Loan Facility were duly informed/apprised of the terms of sanction of the Loan Facility. The terms of sanction have always been within the knowledge of the complainant and the co-borrowers. Further the parties signed and executed the loan agreements in respect of the above said loan facilities agreed to be sanctioned and all the five loan agreements were signed and executed on 28.08.2014, 09.09.2016, 14.10.2017, 21.08.2018 and 21.08.2018 respectively and entailed all the terms that were to govern the loan transaction in question. The above said agreements were signed by the complainant and all the co-borrowers. The OPs further stated that the complainant and other co-borrowers informed that they want to foreclose all the loan accounts and accordingly the OP as per the clauses of agreement levied foreclosure charges. Even no protest was raised by the complainant and the other co-borrowers at the relevant time. The complainant along with other co-borrowers themselves opted to foreclosure the loan accounts and having signed the loan agreements with open eyes. The OPs further stated that they levied the foreclosure charges as per guidelines, various circulars as well as notifications issued by the Housing Finance Company as well as Reserve Bank of India.

Under the column preliminary objections, the OPs assailed the complaint on the ground of maintainability; lack of cause of action; lack of jurisdiction; mis-joinder and non-joinder of necessary parties etc. The OPs stated that earlier the complainant had filed the same complaint as CC No.417 of 2019 against them on same cause of action before this Hon’ble Commission, which was returned vide order dated 14.112019 on the ground of lack of pecuniary jurisdiction. Then the complainant filed another complaint before the Hon’ble State Consumer Disputes Redressal Commission, Punjab bearing CC No.173 of 2020 which was withdrawn on 23.12.2020 with liberty to file a fresh complaint on same cause of action with better particulars. The Hon’ble State Commission pleased to dismiss the complaint as withdrawn with liberty to file fresh complaint on same cause of action with better particulars, in accordance with law. The OPs further stated that the complainant contrary to his own statement and order dated 23.12.2020 passed by the Hon’ble State Commission and order dated 14.11.2019 of this Commission, filed the present complaint with improved version before this Commission. As such, the complaint is not maintainable and is liable to be dismissed on the ground of limini. The complainant has filed this complaint being a tool to harass and pressurize the OPs. Further as per the resolution dated 14.08.2014 had been issued by the NHB as a measure to protect the customers and to facilitate the prepayment of various loans by borrowers who are "individual borrowers". It is submitted that the intent of the circular is to protect the interest of the "individual borrowers" and business entities like "HUF", "sole proprietorship concern", "company", "firm", etc. are excluded from the ambit of the said circular. The same is apparent from the subsequent circular dated September 03, 2014 and the clarification circular dated July 22, 2016 which had been issued pursuant to several enquiries received to the applicability of the circular. Vide the said circular it has been categorically held that loans in which "company, firm, etc." is a borrower are excluded from the ambit of the circular dated August 14, 2014. It is most respectfully submitted that the clarification dated September 03, 2014 and the circular dated July 22, 2016 to the circular dated August 14, 2014 makes it apparent that loan facilities availed with business entities as co-borrowers are excluded from the ambit of the circular dated August 14, 2014.

The OPs further stated that in the sanction letter, the terms pertaining to prepayment charges applicable on the loan have been duly mentioned in clause 6 and clause 5, which is reproduced as under:-

"... The prepayment of loan shall be made and accepted as per policy and rules of IHFL and in accordance with statutory guidelines, issued from time to time........ Where there is no policy, rules and guideline then the prepayment fees and charges shall be applicable as per the terms of the loan agreement and mutually agreed prepayment charges, more particularly mentioned in the Schedule of the Loan Agreement..."

Further, in clause no. 2.9 (c) of all Loan Agreement duly executed between the complainant, Co-borrowers & the OP, the terms relating to the prepayment has been more mentioned in detail. The relevant clause is reproduced as under:-

"..... That in case it is other than Home Loan facility then the borrower shall be entitled to repay the loan either partly or fully, as per rules of IHFL, including as to the prepayment charges, for the time being enforce in that behalf. However............. in the schedule as per IHFL Policy"

The OPs further stated that in the Schedule of Loan Agreement, the terms relating to the prepayment/foreclosure charges have been mentioned in detail, which is reproduced as under:-

"... Such prepayment charges shall be levied at 5% during the initial 2 years from the date of first disbursal and 3% then-after on the principle outstanding (POS) as on the date of payment..."

Further the complainant has sought refund of amount which has been levied against the foreclosure of loan account. Further as per the circular dated August 14, 2014, September 03, 2014 and the clarification circular dated July 22, 2016 apply only to "individual borrowers", whereas the Complainant herein are the borrowers with a corporate entity. The fact that the circular is applicable to only individuals is substantiated by the fact that the NHB vide its circular dated July 22, 2016 has clarified that "sole proprietor", "Firm" and “HUF” are exempted from the purview of the circular dated August 14, 2014 and September 03, 2014. According to the OPs, the complainant is not entitled to the reliefs as sought through this complaint. Moreover, the complainant has not made the co-borrowers Mrs. Sukhjeet Kaur and M/s. Longman Knit Parts MFG. Co. as party to the present complaint. Further this Commission has no pecuniary jurisdiction to decide the present complaint as the value of subject matter exceeds 50 Lakhs.

On merits, the OPs reiterated the crux of averments made in factual submissions and preliminary objections. The OPs have denied that there is any deficiency of service and have also prayed for dismissal of the complaint.

3. In evidence, the complainant tendered his affidavit as Ex. CA and reiterated the averments of the complaint. The complainant also placed on record documents Ex. C1 to Ex. C7 as well as Ex CX1 to Ex. CX3 and closed the evidence.

4. On the other hand, the counsel for the OPs tendered affidavit Ex RA of Sh. Sanjeev Kumar, authorized representative of OPs along with documents Ex. R1 to Ex. R23 and closed the evidence.

5. We have heard the arguments of the counsel for the parties and also gone through the complaint, affidavit and annexed documents as well as written statement, affidavit and documents produced on record by both parties.

6. Admittedly, the complainant Vinay Kumar along with co-borrowers namely Sukhjeet Kaur as well as M/s. Longman Knit Parts MFG. Co. (Non-complainants) availed five Housing Loans/Loan Against Property vide sanction letters Ex R2 to Ex. R6. The detail of loans has been given hereinbefore para No.2 of this judgment. The loan agreements Ex. R1 to Ex R6 which bears the signatures of the complainant and other co-borrowers along with seals of M/s. Longman Knit Parts MFG. Co. Ex. C5 are the five foreclosure letters dated 24.102018 wherein the request of the complainant to foreclose was accepted by the OPs mentioning the respective prepayment amounts as well as foreclosure charges:-

Sr. No.	Loan Agreement No.	Loan Amount	Foreclosure charges
1.	HLAPLUD00199636	10,000,000.00	Rs.2,62,924.80
2.	HHLLUD00292761	15,000,000.00	Rs.2,80,499.37P
3.	HHLLUD00377419	5,000,000.00	Rs.97,313.40P
4.	HHLLLUD00466892	5,890,000.00	Rs.1,17,484/-
5.	HHELUD00466917	4,010,000.00	Rs.1,99,993.59P