Date of Filing: 15/09/2015
Date of Order:18/11/2017
ORDER
BY SRI.SYED ANSER KHALEEM, PRESIDENT
1. This is the complaint filed U/S 12 of the Consumer Protection Act 1986 alleging the deficiency in service on the part of the O.P and prays for orders to direct the O.P for the following reliefs:
i) To pay Administrative charges/administrative fee collected for Rs.70,225/- and interest at 18% per annum simple rate w.e.f., 29.6.2013 to 31.8.2015 for Rs.24,495/- ,
ii) And to pay Pre–closure charges collected @ 2.2472% for Rs.2,76,097/- with interest at 18% per annum w.e.f 10.10.2013 to 31.8.2015 for Rs.93,660/- to pay compensation for causing inconvenience and mental agony to the complainant i.e. Rs.1,00,000/-.
2. The brief facts of the complaint are that the complainant approached ICICI Bank for a Home Loan Finance as per their application No.7779401239. In response to the application of the complainant the O.P sanctioned a loan of Rs.1,25,00,000/- as per their sanction letter dated 28.06.2013, wherein the O.P informed the complainant on the following lines: “Thanking you for choosing ICIC Bank Home Loan and we are pleased to inform you that with reference to the above application we have in principle sanctioned the facility.” The copy of the offer letter dated 28.6.2013 with all sanctioned conditions and the copy of the loan account details which was issued on 3.1.2014 and these two documents indicates the sanctioned conditions such as rate of interest is floating, administrative charges, Pre-closure charges etc., thus the complainant availed the home loan finance from the opponent bank with an intention to avail the services of the O.P and thereby a relationship of consumer and service provider/customer is established and the complainant has become the customer of the O.P bank. It is further stated that a business executive of the O.P bank called the complainant to the hospital premises at west of chord road and obtained signatures on a set of blank loan documents including loan agreement. As such the complainant admits its signature on all the loan papers and denies having knowledge of the contents in the loan agreement and other connected papers as there was neither time to read nor the contents of the same were explained to the complainant immediately after the negotiation and thereafter sent the loan communication. It is stated that on perusal of the loan sanction communication and sanction letter details, the complainant was upset regarding the administrative charges and pre-closure charges. This was the second loan availed from ICICI Bank as an additional loan to already availed Rs.3.50 crores loan vide application No. 778848826 availed on 14.11.2011. As such the complainant was upset and annoyed with the unusual charges by the O.P and decided to shift the loan to India bulls and the loan was shifted to India Bulls during October-2013. It is further stated that the said loan was under floating rate of interest and the complainant recently learnt while discussion about the home loan finance from some of their friends that the bank cannot charge pre-closure charges and other administrative charges except a nominal processing charges. The complainant has also learnt that the banks should not deviate from the laid down practice of banking and hence this complaint for having collected the administrative charges and pre-closure charges on the complainant’s home loan loan account. It is stated that the ICICI bank has collected the following charges from the complainant.
a). Administrative charges/administrative fee collected on 29.06.2013 Rs.70,225/- (of which Rs.62,500/- being the administrative charges and Rs.7,725/- is towards service tax)
b). Pre – closure charges of Rs.2,76,097/- which includes fore closure penalty of Rs.2,45,726.66 and foreclosure penalty (Service tax) Rs.30,371.82.
3. These two charges are collected by the ICICI Bank on 10.10.2013. It is further stated that on coming to know that the charging of administrative charges and pre-closure charges in case of loan account where floating rate of interest charged is against the prevailing practice in the banking norms and also the guidelines of RBI. The complainant caused the legal notice to the O.P on 8.4.2015 the notice was duly served and O.P chose to write a letter to the complainant directly vide letter dated 30.04.2015. In the said reply the ICICI bank has defended its position that the above charges were collected as per the sanctioned condition and agreement signed by the complainant and these charges are non-refundable and the same has been mentioned in the sanction letter. As such the O.P has given untenable reply and advised the complainant to approach Banking Ombudsman for redressal his grievance and whose services are offered at free of cost. Accordingly the complainant choose to approached banking ombudsman vide complaint dated 23.05.2015 and same was sent by RPAD on 25.05.2015. The said complaint was received by banking ombudsman on 27.05.2015 and the banking ombudsman has disposed the said complaint and sent a mail communication on 14.07.2015 rejecting the claim of the complainant without an appeal provision and advised “The office of banking ombudsman is only an alternative/ optional forum and if you so desire, may approach any other alternatives/ redressal forum / court for received of your grievance.” But in the said communication of the ombudsman there were no details of account charges collected, loan amount sanctioned etc., As such the authorised representative of the complainant has personally visited the Ombudsman office on 16.07.2015 and met one Mr. Gokul an officer incharge of complaints and informed about the grounds on which the complainant has approached the ombudsman and requested for sending reply in respect of another complaint and also brought to the notice of officer incharge about the grounds of the complaint, but till this day no reply is received from ombudsman though a promise was given at the time of visit of the complainant representative. Being aggrieved by the order of the Ombudsman and in pursuance of the advise of the Ombudsman the complainant preferred to approach the Hon’ble Forum for redressal of the grievance of his complaint on the following points administrative charges was collected for a sum of Rs.70,225/- and interest was charged at 18% per annum with effect from 29.6.2013 to 31.18.2015 and pre-closure charges collected at 2.2472% amounting to rs.2,76097 along with interest at 18% per annum from 10.10.2013 to 31.8.2015 and O.P in their reply letter to the legal notice as stated that the policy is applicable to individuals and not to the companies and the complainant being a company the said guidelines in respect of pre-closure charges are not applicable to the complainant. And further complainant states that it is true that the complainant is a company and the company is a eye of law is a legal entity and as legal entity is entitled to be treated as an artificial person and bank cannot differentiate on the basis of company and individuals. And complainants states that according to HFCS and NBFCs shall not charge foreclosure charges/repayment charges on all floating rate of terms loan. And hence the complainant being aggrieved by the act of the O.P has filed this present complaint.
4. Upon issuance of notice O.P. entered its appearance through its advocate and filed its version. In the version of O.P., it is contended that the present complaint is purely contractual and commercial in nature and as such it is stated in the statement of accounts i.e. loan against property. Since the purpose of loan was towards commercial property, hence contended that complaint is not maintainable the same is barred according to the Consumer Protection Act and also contended that complaint is also barred by limitation. It is admitted that complainant having taken the loan facility and the same having been foreclosed is not in dispute. The loan sanction letter issued in favour of the complainant as the primary borrower and it also discloses that the same is not a home loan but it is a top up loan. A top up loan is nothing but a additional loan facility on an existing loan and it is also a commercial loan. Hence contended that, the complaint does not fall within the purview of consumer dispute. Further it is contended that complainant is a company and no doubt their representatives has interacted with the O.P and terms and conditions of the loan was clearly explained to them. The sanction letter has also been signed by the complainant clearly showing the terms and conditions of the facilities have been read and understood by the complainant. It is contended that, waiver of foreclosure charges can be made only to individuals and not otherwise. Further contended that collection of admission charges, service tax and towards providing a loan facility is mandatory under law and is customary procedure of any bank and the bank being a service provider has mandate to enforce the same. The administrative charges is charged for the processing for the loan application and it also covers the cost involved in sanctioning the loan application. Since the complainant application has gone through the sanctioned process, fee for the same is also applicable. The fee is non-refundable and the same has been mentioned in the sanctioned letter issued to the complainant, which was duly signed and accepted by the complainant at the time of disbursement. The circulars filed by the complainant clearly supports to O.P wherein it is clearly stated that the waiver of foreclosure charges is for individual borrowers but the complainant is not the individual borrower but it is a company as stated by the complainant himself. Further by denying all other allegations O.P prays for dismissal of the complaint with cost.
5. In order to substantiate the case of the parties and both parties have filed his affidavit evidence and also heard the arguments.
6. On the basis of the pleading of the parties, the following points will arise for our consideration is:-
(A) Whether the complainant is a consumer?
(B) Whether the complainant has proved
deficiency in service on the part of the O.P?
(C) Whether the complainant is entitled to
the relief prayed for in the complaint?
(D) What order?
7. Our answers to the above points are:-
POINT (A) : In the negative.
POINT (B) & (C) : In the negative.
POINT (D) : As per the final order
for the following:
REASONS
POINT No. (A):-
8. On perusing the pleading of the rival parties, it is not in dispute that the complainant by availing the service of the O.P bank has taken the loan amount of Rs. 1.25 crores agreeing to pay floating rate of interest. Further it is not in dispute the complainant foreclosed the borrowed loan and paid administrative charges and pre-closure charges.
9. The sole allegation of the complainant is that the O.P bank unethically charged the administrative charges and Pre-closure charges contrary to the banking norms and RBI guidelines.
10. Per-contra O.P contended that the complainant himself agreed to terms and conditions of the bank and the same has been mentioned about the administrative charges and pre-closure charges and the complainant by knowing well signed the documents.
11. The crux of the matter is to consider, whether the O.P bank is entitled to collect the pre-closure charges and administrative charges and at the time of foreclosing the loan account and the same is justifiable?
12. In order to prove the case of the parties and both parties filed their affidavit evidence and on perusal of the same and both parties reiterated the facts pleaded in their complaint and in the version. Further it is not in dispute that the complainant availed the loan amount of Rs.1.25 crore on 29.6.2013 and also it is not in dispute that the complainant also availed another loan of Rs.3.50 crores on 14.11.2011 and hence the present loan transaction in question was taken in addition to the above said loan. It is worth to note that complainant is a M/S Prestine Hospitals and Research Centre Pvt. Ltd. represented by its executive director Dr.Manjunath and hence obviously the loan taken by the complainant is not a potential consumer and the same is taken in order to develop their research center. Therefore, to know whether the complainant is a consumer as defined in the Act in the context of the definition of consumer.
13. On perusal of the Section 2(d) of the Consumer Protection Act it reads thus:
“Consumer” means any person who-
(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or
(ii) hires or avails of any services for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such services other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payments, when such services are availed of with the approval of the first-mentioned person but does not include a person who avails of such services for any commercial purpose.”
Explanation-For the purposes of this clause, “Commercial Purpose” does not include use by a person of goods bought and used by him and services availed by him exclusively for the purposes of earning his livelihood by means of self-employment”
14. As per Section (2) (ii) of the provisio clearly states that when such services are availed but does not include a person who avails of such services for any commercial purpose. In the present case, as per the saying of the complainant earlier he has taken loan amount of Rs.3.50 crore during the year 2011 and in addition to that the complainant also borrowed the loan amount of Rs. 1,25,00,000/- on 29.6.2013. On careful reading of the complaint we found that there is a face of commercial transaction. Therefore without any hesitation we reached to conclusion that complainant is not a consumer. Accordingly, we answered Point No.(A) in the Negative.
Point No.(B) and (C):
15. On the basis of the available evidence on records, the complainant borrowed the loan amount of Rs.1,25,00,000/- on the floating rate of interest. The complainant is also foreclosed the amount and the O.P charged the foreclosing charges and administrative charges and hence complainant by filing this complaint questioned the same. On perusing the Doc.No.1 produced by the complainant loan is borrowed by the Prinstine Hospitals and Research Centre Pvt. Ltd. and hence it cannot be deemed that it is a housing loan but it is a commercial one. Further On perusal of Doc.No.3 it also discloses that complainant obtained loan amount of Rs.1,25,00,000/- and the term of loan is for the period of 100 months and the rate of interest is shown as floating rate of interest and also discloses that the administrative charges is of Rs.70,787/- out of which Rs.62,500/- is towards administrative fee and Rs.7,225/- is towards Service Tax and the complainant is also signed the document No.3. The complainant being an educated it cannot be again said that the complainant has signed the blank papers. Hence the allegations of the complainant cannot be acceptable. Therefore, as per the O.P bank rules and regulations complainant has paid the administrative and service tax and the said charges are non-refundable. As a matter of fact advancing the loan by the O.P bank is an asset to the bank, whereas, deposits made to the bank is liability to the bank. The O.P bank will lend the amount and invest the same to the people in order to gain interest and profits and in turn to pay interest to the deposit holders and to maintain the bank. However, the complainant obtained the huge amount of loan during the year 2013 and foreclosed it and hence naturally the O.P bank will charge on foreclosure if it is not individual loan. As per the evidence placed on record the loan borrowed and foreclosed is not by individual but it is by the Private Company Limited and hence the circular clearly states that the waiver of the foreclosing charges is for individuals only and not for any other purpose. Furthermore on perusal of the decision cited by the complainant is not applicable to the present case on hand. In the said case, the loan was undertaken by other bank against the higher rate of interest and levying foreclosure charges does not arise on transferring loan from one bank to another bank. Hence the decision cited by the complainant is not applicable to the present case on hand. Furthermore, the complainant also already approached the banking ombudsman to settlement dispute but ultimately the banking ombudsman rejected the claim. It is worth to note that after closing the loan the complainant cannot turn around and question the same and on closing the loan by paying foreclosure charges without any protest it is as good as accepting the terms and conditions of the bank. Viewing from any angle we reached to conclusion that complainant failed to prove deficiency in service on the part of the O.P and hence complainant is not entitled for the relief as sought in the complaint. Accordingly, we answered the Point No. (B) & (C) in the Negative.
POINT No. (D):
16. On the basis of answering the Points (A) to (C), in the result, we proceed to pass the following:-
ORDER
- The complaint is hereby dismissed. No order as to cost.
- Send a copy of this order to both parties free of cost.
(Dictated to the Stenographer, transcribed and computerized by him, corrected and then pronounced by us in the Open Forum on this the 18th Day of November 2017)
MEMBER MEMBER PRESIDENT
*RAK
