THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MOGA. CC No. 90 of 2017 Instituted on: 27.09.2017 Decided on: 05.01.2018 1. Mandeep Singh s/o Harbans Singh 2. Sarabjit Kaur w/o Mandeep Singh, both r/o W. No.20, Kaka Furniture Wali Gali, Old Sardar Nagar, Akalsar Road/Sarafan Bazar, Moga, District Moga. ??? Complainant Versus 1. The Manager, Indiabulls Housing Finance Ltd. India Bulls Home Loan, Branch Feroze Gandhi Market, Ludhiana, Tehsil and District, Ludhiana. 2. The Manager, Indiabulls Housing Finance Ltd. India Bulls Home Loan, Branch G.T. Road, near ICICI Bank, 3rd Floor, Moga Tehsil and District Moga. ???.. Opposite Parties Complaint U/s 12 of the Consumer Protection Act, 1986. Quorum: Sh. Karnail Singh Ahhi, President Smt. Bhupinder Kaur, Member Present: Sh. Jagdish Bawa, Advocate Cl. for complainant. Sh. Ashok Goyal, Advocate Cl. for opposite parties. ORDER : (Per Karnail Singh Ahhi, President) 1. Complainant has filed the instant complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as the "Act") against The Manager, Indiabulls Housing Finance Ltd. India Bulls Home Loan, Branch Feroze Gandhi Market, Ludhiana, Tehsil and District, Ludhiana and others (hereinafter referred to as the opposite parties) directing them to return/pay the amount of Rs.21,143.77p and Rs.26,236.82p on account of illegal foreclosure charging of Home loan account no.HHLMOG00267159 and HHEMOG00267176 respectively alongwith interest @ 12% per annum till the final decision of the case or any other relief which this Forum may deem fit or proper be granted to the complainant. 2. Briefly stated the facts of the case are that the complainants had got Home Loans-IHFL of Rs.10,94,731/- vide loan account no.HHLMOG00267159 and of Rs.5,41,087/- vide loan account no.HHEMOG00267176 and returned the same in full and No Dues Certificates dated 10.08.2017 have been issued to complainants by opposite parties. As per the instructions of the opposite parties, the complainants have to deposit Rs.17,615/ per month as installment of the loan and in total Rs.2,11,380/- was paid in 12 installments by the complainants with opposite parties. After depositing the abovesaid 12 installments complainants deposited Rs.5,61,713/-, through cheque no.361634 dated 30th June 2017 and Rs.10,80,000/- was deposited through cheque no.361633 dated 30th June 2017. Beside this Rs.4077/- and Rs.19429/- were also paid in cash by the complainants to opposite parties. Hence total Rs.18,76,599/- were paid by the complainants to opposite parties. The complainant deposited all the amount of loan alongwith interest and foreclosure charges @ 2% and 5% on the principal amount with opposite parties. Under the pressure and threat of opposite parties, the complainants have to deposit the aforesaid amount alongwith foreclosure charges with them, for which the opposite parties have no right. The complainants served a legal notice on dated 21.08.2017 to opposite parties with a request to refund/pay back the foreclosure charges, but to no effect. Alleging the aforesaid act of opposite parties deficiency in service, a prayer for acceptance of the complaint has been made. 3. Upon notice, opposite parties appeared through counsel and filed written reply taking preliminary objections that the opposite party being Housing Finance Company is engaged in the business of inter-alia offering financial services; the contents of the complaint are denied unless specifically admitted in the reply set out hereunder. On merits, it is submitted that in May 2016 the complainant, Mandeep Singh, Sarbjit Kaur approached the opposite parties for availing loan facilities i.e. Rs.10,94,731/- vide loan account no.HHLMOG00267159 and Rs.5,41,087/- vide loan account no.HHEMOG00267176 respectively, thereby totalling to Rs.16,35,818/- and accordingly, deposited loan application forms. The complainant though being a proprietorship concern is not carrying on a business for merely to earn his livelihood by engaging in a trade/occupation which is of a larger scale in nature, rather, is merely to earn huge profit. The complainant is a manufacturer, supplier of gold and silver and other related accessories. It seems that the complainant being engaged in such different kinds of business activities, thereby earning huge profits is not carrying the said business for merely livelihood. Hence in view of the said submissions, the complainant cannot be termed as a Consumer under section 2 (d) of the Consumer Protection Act, 1986. The complainants failed to establish any deficiency in service on the part of opposite parties. Further no question of any alleged consumer dispute arises and gives way for entertaining the present complaint. There is no privity of contract between the complainant and opposite parties. The privity of the contract came to an end the moment complainant closed the loan without any protest. Once the complainant closed the loan account, by paying the entire loan amount, then he ceases to be a consumer. Further submitted that on September, 2014 the National Housing Bank issued a circular on levy of foreclosure charges/pre-payment penalties on loan facility availed by borrower. As per the said circular the loan pre-closed by an individual borrower, then, foreclosure charges/pre-payment penalties shall not be attracted. However, the same shall be charged/levied in case of a company, firm etc. The complainant being a commercial entity applied above said loan facilities for business expansion. The present complaint is liable to be dismissed, being frivolous in nature. The foreclosure/pre-payment penalties are charged/levied by the opposite parties in view of the terms and conditions of the loan agreements duly executed between the parties. The complainant being a proprietor of the Proprietorship Firm, also the borrower of the loan, was fully aware of the terms and conditions of the loan agreements. The sanctioning of the loan, name of the borrowers and guarantors, rate of interest, terms of the repayment and such other particulars has been clearly detailed in the Schedule of the loan agreement. It has been further submitted that during the pendency of the loans, the complainant had approached the opposite parties and requested to foreclose the two loans. As the complainant was intending to close the loans, the opposite parties provided the details of payment required to pay for foreclosing the loans. After having accepted the figures shown in the foreclosure statements, the complainant had paid the sums mentioned in the Foreclosure Statements dated 20.07.2017. The said payments were made without reserving any protest. The complainant made the payment with free consent. The complainant has taken the loans alongwith the proprietorship firm, therefore being a Non-Individual Entity a foreclosure charges of Rs.268813.88p has been collected in terms of the agreement and the policy circular bearing no.NHB(ND)DRS/Policy circular no.66/2014-15 dated 3.9.2014 issued by the National House Bank. The opposite party does not follow the guidelines of the Reserve Bank of India and being a Housing Finance Company, the opposite parties follows the guidelines, directions and circulars issued by NHB. In the circular NHB(ND)/DRS/Misc. Circular no.17/2015-16 dated 22 July 2016; The NHB has further clarified that "a Sole Proprietorship Concern/Firm or an HUF, as borrower or co-borrower will not be treated as an individual borrower". In parawise reply, all other allegations made in the complaint have been denied and a prayer for dismissal of the complaint has been made. 4. Complainant tendered into evidence his affidavit as Ex.C-1 and copies of documents Ex.C-2 to Ex.C-13 and closed the evidence. 5. Opposite parties tendered into evidence affidavit of Sh.Sanjeev Kumar, Regional, Legal Manager as Ex.OPs-1 and copies of documents Ex.OPs-2 to Ex.OPs-6 and closed the evidence. 6. We have heard learned counsels for the parties and have also gone through the file. 7. Sh. Jagdish Bawa, ld. counsel for complainant argued that complainants got home loan to the tune of Rs.10,94,731/- and Rs.5,41,087/- and complainants returned full and final dues On deposit opposite parties issued No Due Certificates dated 10.08.2017. No installment was due, but opposite parties charged excess amount of Rs.Rs.21,143/- and Rs.26,236/- towards illegal foreclosure against home loan. The said amount received by the opposite parties, amounts to deficiency in service on their part, the complaint be allowed and opposite parties be directed to refund the said amount alongwith interest. 8. Sh. Ashok Goyal, ld. counsel for opposite parties argued that it is admitted fact that the complainants obtained home loan and it was to be returned with monthly intstallments. Proposal forms were filled up. Loan amount was advanced, but the complainants returned the entire amount within few months against the terms and conditions settled between the parties. When complainants made complete payment then opposite parties as per terms and conditions mentioned in Ex.OPs-5 that Pre-payment charges should be levied at 5% during the initial two years from the date of first disbursal and 3% then-after on the principal outstanding, which amounts to foreclosure charges. By referring said terms and conditions, opposite parties' counsel prayed that neither there is deficiency in service nor the charges are excess, rather charges are as per terms and conditions, which was paid by the complainants without any objections and lastly prayed to dismiss the complaint with costs. 9. The complainants obtained home loan, which is admitted by opposite parties. The complainant is resident of Moga, whereas opposite party no.2 has its office at Moga and opposite party no.1 has its office at Ludhiana. Advancement of the loan and its return is not disputed. The only dispute is regarding the foreclosure charges. So, it is a consumer dispute and complaint is maintainable. 10. Coming to the controversial point, which is whether opposite parties has rightly charged Rs.21,143/- and Rs.26,236/- or the said charges are improper. The complainants in support of the claim has tendered the affidavit of Mandeep Singh as Ex.C-1, legal notice Ex.C-2, postal receipt Ex.C-3, besides No Due Certificates Ex.C-4 and Ex.C-5, there are copies of other documents Ex.C-6 to Ex.C-13, besides this there is no document on file. Opposite parties relied upon proposal forms Ex.OPs-3, copy of circular dated 3rd September 2014 for Levying of foreclosure charges/pre-payments (Clarification) Ex.OPs-4 and policy's terms and conditions agreement Ex.OPs-5, where at page no.32, clause 2.9 (b and c) speaks that in case there is pre-payment, the foreclosure charges should be levied. Further at page no.42 at point no.2.3 there are articles, which is reproduced as under:- "For pre-payment charges kindly refer Article 2.8, 2.9 and 10.6 of this agreement. Such pre-payment charges shall be levied at 5% during the initial 2 years from the date of first disbursed and 3% then- after on the principal outstanding (POS) as on the date of pre-payment." In the abovesaid clause in consonance to article 2.8, 2.9 and 10.6, if there is pre-payment then charges shall be levied at 5% during the initial 2 years from the date of first disbursal and 3% then-after on the principal outstanding as on the date of pre-payment. To rebut these terms and conditions agreed by the complainants, the complainants have not shown any law or condition. If complainants itself admitted for the filling up of proposal forms that in case there is pre-payment of the loan amount, then opposite parties will be right to charge 5% as foreclosure charges. So, the complainants remain failed in proving deficiency in service on the part of opposite parties. So, complaint is without merit. 11. In the light of discussion made above, the complaint stands dismissed leaving the parties to bear their own costs. Copy of order be issued to the parties free of costs as per law. File be consigned to record room. Announced in Open Forum. Dated: 05.01.2018. (Bhupinder Kaur) (Karnail Singh Ahhi) Member President