Chandigarh

StateCommission

A/156/2022

M/s Home Credit India finance Pvt. Ltd. - Complainant(s)

Versus

Suresh Kumar - Opp.Party(s)

Simranjit Singh Sidhu & Irvanneet Kaur Adv.

16 Dec 2022

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Appeal No.	:	156 of 2022
Date of Institution	:	02.12.2022
Date of Decision	:	16.12.2022

 

 

 

 

 

M/s Home Credit India Finance Private Limited, SCO 3019-20, FF, Sector 22-D, Chandigarh having their Head office at DLF Infinity Tower, Tower C, 3^rd Floor, DLF Cyber City, Phase II, Gurgaon-122002.

 

……Appellant/Opposite Party.

Versus

Suresh Kumar S/o Sh. Phullu Ram R/o House No.987, FF, Housing Board Colony, Sector 19, Panchkula, Haryana-134113.

…..Respondent/Complainant.

 

BEFORE:    JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT

                   MRS. PADMA PANDEY, MEMBER

                  MR. RAJESH K. ARYA, MEMBER

                   MR. PREETINDER SINGH, MEMBNER

 

Argued By:-      

Ms. Irvaneet Kaur, Advocate for the appellant.

 

 

 

 

 

PER  RAJESH  K.  ARYA, MEMBER

          This appeal has been filed by the opposite party, namely, M/s Home Credit India Finance Private Limited (appellant herein) against order dated 12.10.2022 passed by District Consumer Disputes Redressal Commission-I, U.T., Chandigarh [in short ‘District Commission’], whereby consumer complaint bearing No.1010 of 2019 filed by the complainant, namely, Sh. Suresh Kumar (respondent herein) has been partly allowed by the said Ld. District Commission in the following manner:-

“8.           In the light of the aforesaid discussion, the present consumer complaint succeeds and the same is accordingly partly allowed. OPs are directed as under :-

1. to immediately remove the incorrect remark “written of settled” from the complainant’s credit report in their record and show the remark “closed” and intimate the same to bureau like CIBIL etc.
2. to pay an amount of Rs.10,000/-  to the complainant as compensation for causing mental agony and harassment to him;
3. to pay Rs.5,000/- to the complainant as costs of litigation.

9.            This order be complied with by the OPs within thirty days from the date of receipt of its certified copy, failing which, they shall make the payment of the amount mentioned at Sr.No.(ii) above, with interest @ 12% per annum from the date of this order, till realization, apart from compliance of remaining directions.”

2.      Briefly stated the facts, as culled from the impugned order passed by Ld. District Commission, are as under:-

“1.     The present consumer complaint has been filed by Sh.Suresh Kumar, complainant against the opposite parties (hereinafter referred to as the OPs).The brief facts of the case are as under :-

a.       It transpires from the allegations as projected in the consumer complaint that the complainant is resident of Panchkula whereas OP-1 is a company having its corporate office at DLF Infinity Towers, Gurgaon and runs the business of financing throughout India and OP-2 is the local branch office of OP-1 in Chandigarh.  In the month of October 2015, the complainant intended to purchase a mobile for which he applied for loan to OP-1 and the same was disbursed on 29.10.2015. The complainant had to pay six EMIs for the said loan which were got deducted from his account in favour of OP-1.  Out of the aforesaid six EMIs, complainant had paid first four EMIs as per schedule till February 2016 and thereafter as the industrial unit in which the complainant was working was wound up, as a result complainant lost his job and became unemployed in the month of March 2016. Due to the aforesaid reason, complainant could not pay the balance EMIs to the OPs from March 2016 to March 2018.  In the month of March 2018, when the complainant was having sufficient amount with him, he contacted OP-1 in order to know about the status of the aforesaid loan account and then he was provided with information that an amount of ₹5,900/- inclusive of principal amount and penalty was outstanding against him.  Accordingly, the aforesaid balance amount was deposited by the complainant on 15.4.2018 with respect to which entry was also reflected in the record of OPs on 16.4.2018. Thereafter, OP-1 had also issued No Due Certificate dated 6.8.2019 in favour of the complainant.  The complainant, being a skilled person, in order to run his own unit, applied for a fresh loan with Punjab National Bank, Baddi, District Solan, but his loan was declined with the remarks “One write off A/c” “Not Eligible” in the credit report of the complainant. Thereafter, the complainant again contacted OP-1 by calling at its customer care helpline number on 3.8.2019 and requested them to remove the remarks “write off” and also that the No Due Certificate has already been issued to him, but, they had put the remark “Written Off Settled instead of “Closed” in their record. Due to the aforesaid act of the OPs, complainant had suffered a lot as no loan was sanctioned in his favour by the banker where he had applied for fresh loan in order to run his unit.  The complainant repeatedly requested the OPs to remove the said remark of “written off settled”, but, with no result.  Hence, the present consumer complaint.”

b.       OPs resisted the consumer complaint, filed their written reply and admitted that the loan was sanctioned in favour of the complainant by the OPs, but, denied that wrong remark “written off settled” was made by the OPs in the account of the complainant.  It is alleged that in fact the complainant had failed to pay the EMIs from March 2016 till March 2018 and thereafter in the month of March 2018 when the complainant contacted the OPs, an amount of ₹5,900/- was deposited by him on 15.4.2018 and accordingly the No Dues Certificate was issued to him on 6.8.2019.  It is further alleged that in fact “written off settled” would take into picture a circumstance wherein the customer has not paid any EMI for the last 360 days.  However, at a later stage, when the customer subsequently pays the due amount, the status becomes “written off settled” and is accordingly reported to the bureau like CIBIL etc. and the remark “closed” as a status would capture a scenario wherein the customer duly pays all his EMIs as per the loan terms and conditions.  In the case of the complainant, as he could not make the full payment within the stipulated period, rather he made default in the part payment after a gap of more than 360 days, the remark “written off settled” was rightly entered by the OPs and was accordingly informed to CIBIL.   The cause of action set up in the consumer complaint is denied. The consumer complaint is sought to be contested.

c.       In rejoinder, the complainant re-asserted his claim put forth in the consumer complaint and prayer has been made that the consumer complaint be allowed as prayed for.”

3.      By filing this appeal, the appellant has prayed for setting aside of the impugned order and dismissal of the complaint mainly on the grounds that the Ld. District Commission has completely ignored the fact that the CIBIL Bureau Report is something which is directly linked and affected by the conduct of the Borrower towards repayment of the borrowing. It has further been stated that the Ld. District Commission also did not consider that the respondent never produced his Credit report which was prayed by the appellant Company and further failed to appreciate Prescreen Credit Score filed by the respondent generated on 31.07.2019, which clearly reflects the Account Status as “Post Written Off Settled”, which in layman’s language means nothing but “a loan account which has been settled at the request of borrower after being written off by the company)’ for the consumer Loan availed by the appellant company. It has further been stated that the Ld. District Commission also did not consider that as per the prescribed guidelines, once a customer is not able to make payments against the outstanding loan/credit card amount for more than 360 days, the lender then proceeds to report this to the CIBIL Bureau agency as “Written off” and it is the set procedure which needs to be followed by any financial institution as the said borrowing becomes nothing but a loss asset for the company and becomes non-recoverable in the books of the Lending Institution.  It has further been stated that the Ld. District Commission also failed to consider that the account of the respondent was delinquent with the amount for more than 730 days and hence, after expiry of 360 days from February 2016, the respondent’s loan account was Written off and the same was reported in the Credit Information linked with the respondent’s PAN. It has further been stated that the respondent did not have any locus standi to file the complaint before the Ld. District Commission as he cannot be permitted to take benefit of his own wrong.

4.      After hearing the Ld. Counsel for the appellant and going through the record and the impugned order carefully, we are of the considered view that the appeal is liable to be dismissed at the preliminary stage, for the reasons to be recorded hereinafter. Undisputedly, loan for purchase of a mobile was disbursed by the appellant in favour of the respondent on 29.10.2016, which was to be repaid in six EMIs as per the agreement. Out of six EMIs, the respondent deposited four EMIs till March 2016 and thereafter, he could not pay the balance loan amount from March 2016 to March 2018, which was then deposited on 15.4.2018 and No Dues Certificate was issued on 6.8.2019. Once the entire loan amount stood deposited by the respondent and No Due Certificate had been issued to him by the appellant, then the appellant was required to update his loan record as “closed” instead of “written of settled”. In simple words, the remark “written of settled”  is detrimental to the health of the borrower’s CIBIL score as it means that the borrower was unable to pay his dues on a given loan or line of credit and the lender had to 'write-off' the loan amount. When there is no outstanding liability of the respondent and the loan was fully repaid and No Due Certificate issued on 06.08.2019, Annexure C-1, the appellant was duty bound to put remark “account closed” and not “written off settled”, which affected the CIBIL score of the respondent and further made him ineligible for fresh loan from any other financial institution. The appellant did not remove the said remark “written off settled” despite repeated requests of the respondent from its record, which definitely amounted to deficiency in service and unfair trade practice on the part of the appellant. Thus, the plea of the appellant that the account of the respondent was delinquent with the amount for more than 730 days and hence, after expiry of 360 days from February 2016, the respondent’s loan account was Written off is not sustainable in view of the fact that once No Due Certificate was issued on clearance of loan account, the appellant was having no authority to spoil the CIBIL record of the respondent by still reflecting the remark “Written off”. Moreover, the respondent/borrower has fully repaid the outstanding loan amount. Thus, there is no settlement or any relief given by the appellant to the respondent/borrower by reducing the outstanding loan amount. So, it does not come under the term “settlement”. Therefore, it is wrong on the part of the appellant to classify the account as “settled”. As per the set procedure, to clear the status “Written off settled” from the CIBIL report, the borrower needs to pay the outstanding amount of loan and get a NOC (No Objection Certificate) from the lender, which in the present case was issued by the appellant on 06.08.2019. Once it was issued, the lending institution was under stern bounden duty to confirm as regards the same to the Credit Bureau qua the change of status from “Written off settled” to “closed” within 30 days, which the appellant failed to do and thus, its act of such a grave deficiency was detrimental to the rights of the respondent as consumer, who became ineligible for further borrowing from any financial institution. As regard the plea that the respondent did not have any locus standi to file the complaint before the Ld. District Commission as he cannot be permitted to take benefit of his own wrong, it may be stated here that there was nothing wrong done on the part of the respondent and the balance loan amount, which he failed to pay for the period from March 2016 to March 2018, was duly paid & cleared by him on 15.4.2018 and No Dues Certificate was issued on 6.8.2019. Thus, once there is a set procedure to clear the loan account with penal interest etc. to be charged on the balance loan amount, then it cannot be termed as a failure on the part of the respondent or a wrong doing in fully repaying the loan amount. Moreover, it was the appellant, who despite issuing No Due Certificate, failed to update the CIBIL record of the respondent as “closed” and put the remark “Written off settled’, which closed all the future borrowing opportunities for the respondent. Thus, the Ld. District Commission while passing the order impugned has rightly appreciated the evidence and documents available on record and also rightly directed the appellant/opposite parties to remove the incorrect remarks “written of settled” from the respondent’s credit report in its record and show the remark “closed” and intimate the same to the CIBIL authorities. Thus, the order impugned does not suffer from any infirmity or material irregularity and is based upon true appreciation of facts.

5.      For the reasons recorded above, the appeal filed by the appellant is dismissed at the preliminary stage with no order as to costs. Pending miscellaneous applications, if any, stand disposed of accordingly.

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

7.      File be consigned to Record Room after completion.

Pronounced

16.12.2022.

[RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

 

 (PADMA PANDEY)

         MEMBER

 

 

 

(RAJESH K. ARYA)

MEMBER

 

 

 

(PREETINDER SINGH)

MEMBER

 

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