VIKAS JAIN & ORS. vs RELIANCE CAPITAL LTD. & ANR.

This revision petition has been filed by the petitioner against the order dated 16.05.2012 passed by the State Consumer Disputes Redressal Commission, U.T., Chandigarh (in short, ''the State Commission'') in Appeal No. 50 of 2011 - M/s. Reliance Capital Ltd. & Anr. Vs. Vikas Jain & Ors. by which, while allowing appeal, order of District Forum allowing complaint was set aside. Brief facts of the case are that Complainants/Petitioners applied for the housing loan to the opposite parties/respondents. It was stated that the opposite parties sanctioned loan of Rs.2,37,00,000/- to the complainants, for the purchase of H.No.28, Sector 7, Panchkula. The loan was granted on floating rate of interest of 11.90% per annum. It was further stated that the loan was to be repaid in 204 equated monthly installments (EMIs). It was agreed between the parties that the opposite parties shall take over the vehicle loan of BMW Car, obtained by the complainants from ICICI Bank. At the time of finalization of the loan, it was also agreed between the parties, that the opposite parties would charge 2.35% less interest, than the prevailing PLR (Prime Lending Rate). It was further agreed that, in case of foreclosure of loan account, no foreclosure charges would be charged. The complainants had issued post-dated and un-dated cheques, to the opposite parties against the said disbursed loan. Thereafter, the complainants requested the opposite parties, many times, to take over the BMW Car loan and to increase the loan from Rs.2.37 Crores to Rs.3.00 Crores, and also reduce interest rate to 9.75% p.a., but they did not comply with their request. It was further stated that thereafter the complainants shifted their loan from the opposite parties, to AXIS Bank, which agreed to grant the same to them at interest @ 9.75% p.a. The complainants, thereafter, requested the opposite parties to close the loan account, and release the conveyance deed of the plot. It was further stated that on foreclosing the loan, the opposite parties illegally charged Rs.11,70,829/- as foreclosure charges @5% of the loan amount. The complainants had to pay the foreclosure charges under compulsion. The complainants then requested the opposite parties to refund this amount, since it had been illegally charged which was not refunded. Alleging deficiency on the part of Ops, complainant filed complaint before District Forum. OP/respondent resisted complaint and submitted that the loan granted to the complainants was on floating rate of interest and as per the loan agreement, in case of cancellation of loan, within one year, the opposite parties could claim foreclosure charges, from the complainants/loanees. It was further stated that there was no agreement, between them, and the complainants, to take over the auto loan as alleged by complainants. It was further stated that that as per the loan agreements, floating rate of interest and the PLR were to be decided by the lender. It was further stated that as per sanction letter, the PLR of the opposite party was 14.25%, hence the complainants were required to pay interest at 11.90% p.a. which was 2.35% less than the PLR as per the terms of the agreement. Since the complainants got the loan account closed within 12 months from the date of sanction of the loan, the foreclosure charges, were charged accordingly and prayed for dismissal of complaint. Learned District Forum after hearing both the parties allowed complaint and directed OP to refund Rs. 11,70,830/- and further directed to pay Rs.20,000/- as penalty and Rs.5500/- as litigation expenses. OP filed appeal along with application for condonation of delay before State Commission and learned State Commission vide separate order on the same day condoned delay and vide impugned order allowed appeal and set aside order of District Forum against which, this revision petition has been filed along with application for condonation of delay of 3 days.

Heard learned Counsel for the parties finally at admission stage and perused record.

Learned Counsel for the petitioner submitted that learned District Forum rightly allowed complaint, but learned State Commission committed error in allowing appeal on the pretext that prepayment charges and foreclosure charges are interchangeable and further submitted that learned State Commission committed error in condoning delay without any reasonable explanation; hence, revision petition be allowed and impugned order be set aside. On the other hand, learned Counsel for the respondent submitted that order passed by learned State Commission is in accordance with law; hence, revision petition be dismissed.

As there is delay of only 3 days in filing revision petition, delay stands condoned.

Learned Counsel for the petitioner submitted that as per application for condonation of delay filed before State Commission only ground given for condonation of delay was that original copy of order of District Forum along with DD was misplaced in office of the Counsel which was traced on 16.3.2011 and afterwards appeal was filed on 18.3.2011. District Forum passed order on 20.12.2010, but DD deposited with State Commission for 25,000/- bears date of 4.11.2010 for filing appeal which was of before pronouncement of order by District Forum cannot be believed and learned State Commission committed error in condoning delay of 49 days. On the other hand, learned Counsel for the respondent submitted that as there was delay of only 49 days in filing revision petition with reasonable explanation, learned State Commission has not committed any error in condoning delay.

Learned Counsel for petitioner has placed reliance on judgment of this Commission II (2007) CPJ 312 (NC) - Ramanand Dhaka Vs. Haryana Urban Development Authority in which order not condoning delay of 278 was upheld. In the case in hand, there was delay of only 49 days and facts of aforesaid case are totally distinguishable as in the aforesaid case petition was ready for filing in April, 2006 but it was filed on 9.1.2007. He has also placed reliance on II (1992) CPJ 500 (NC) - Lucknow Development authority Vs. Sharad Chandra in which application for condonation of delay was dismissed as it was not supported by affidavit of responsible officer, but only affidavit of Clerk of Advocate was filed. In the present case affidavit of Clerk of Counsel was filed before State Commission, but in the light of latest judgments of Hon''ble Apex Court - (1) Civil Appeal Nos. 10120-10121 of 2014 - Jeevanti Devi Vs. Commercial Motors & Anr., (2) Civil Appeal No. (s) 10289 of 2014 - A.T.S. Govindarajane Vs. Chief Manager, State Bank of India, (3) Civil Appeal No. 5071 of 2014 - Taipen Traders Ltd. & Anr. Vs. M/s. Bhawani Cold Storage & Ors. by which delay of 135 days, 149 days and 218 days, respectively, in filing revision petition was condoned. I do not find any illegality in condoning delay of 49 days in filing appeal before State Commission.

Learned Counsel for the petitioner submitted that had OP charged prepayment charges there would have been no objection, but OP had no right to collect foreclosure charges and learned State Commission had committed error in observing that prepayment charges and foreclosure charges are interchangeable. I agree to this extent that prepayment charges and foreclosure charges are not interchangeable and learned State Commission committed error in observing that both charges are interchangeable and one and the same thing.

Learned Counsel for the respondent submitted that by inadvertence foreclosure charges have been mentioned in the letter whereas only prepayment charges as per loan agreement have been charged which have been deposited by complainant without any protest; hence, order passed by learned State Commission is in accordance with law.

Perusal of sanction letter dated 26.8.2008 reveals that foreclosure charges will be charged at 5% + service tax within 12 months of disbursement and 2% + service tax thereafter, mandatory whereas loan agreement defines prepayment charges under clause 1.24 which runs as under : "1.24. The term " Prepayment " means premature repayment of the Loan as per the terms and conditions laid down by the Lender in that behalf and as in force at the time of prepayment" whereas 2.9 (b) runs as under:

"2.9 (b) The Borrower agrees that no pre-payment shall be made during the first 6 (six) months from the Effective Date or till the Loan is fully disbursed, whichever is later. IF the Borrower pre-pays only a part of the amount payable by the Borrower to the Lender, the Lender shall be entitled to adjust the amount pre-paid against the amount payable by the Borrower in such manner as the Lender thinks fit. Save and except as mentioned above, the Borrower shall not be entitled to make any pre-payment. Notwithstanding the above, if the Borrower pays any amount to the Lender before the Due Date the Lender shall be entitled to appropriate the same in such manner as it deems fit. And the Lender will give the Borrower credit for the same only on Due Date and not before".

Schedule attached with loan agreement provides details of prepayment charges according to which prepayment charges are payable @ 5% for the first year and thereafter 5% + service tax. Admittedly, as per letter dated 9.6.2009, only 5% on O/s principal, Rs.1,170,829.88 have been demanded by OP, but in this letter foreclosure charges have been mentioned. It appears that by inadvertence foreclosure charges has been mentioned instead of prepayment charges because had foreclosure charges been charged, they would have been @ 5% + service tax within 12 months of disbursement and admittedly, prepayment was made within 12 months i.e. on 9.6.2009 and in such circumstances, OP was required to collect service tax also. As service tax has not been collected it appears that OP has collected only prepayment charges which is in accordance with the agreement which is binding on both parties. Learned Counsel for the petitioner during course of arguments also submitted that they had no difficulty in making prepayment charges. In such circumstances, order passed by learned State Commission allowing appeal is in accordance with law except to the extent observed above.

Perusal of record further reveals that complainant deposited aforesaid demanded amount without any protest and for the first time by e-mail dated 27.7.2009 requested for waiving of foreclosure charges and complaint was filed after 6 months i.e. dated 25.1.2010. Once complainant deposited amount without any protest, he was estopped from challenging demand of disputed amount.

Learned Counsel for the petitioner has also drawn my attention towards some judgments of State Commission passed by the Bench comprising of Member, Mrs. Neena Sandhu in which it was observed that foreclosure charges and prepayment charges are not interchangeable whereas in the impugned order the same Member observed that both terms are changeable. No doubt, Member can change its view, but cogent reasons should be assigned while taking different view from earlier judgment. But, as in the case in hand by inadvertence word ''foreclosure'' has been used instead of ''prepayment'' charges and prepayment charges have been collected by OP as per terms and conditions of loan agreement, this argument loses significance though same Member has taken different view without any reason.

In the light of aforesaid discussion, I do not find any illegality, irregularity or jurisdiction error in impugned order and revision petition is liable to be dismissed.

Consequently, revision petition filed by the petitioners is dismissed at admission stage with no order as costs.