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Judgment
Heard Mr. Brijender Chahar, Sr. Advocate, assisted by Mr. Nithin Saravanan, Advocate, for the complainant and Mr. Sanjeev Singh, Advocate, for the opposite parties.
Solaimalai Enterprises has filed above complaint for directing Religare Finvest Limited and others (the opposite parties) to (i) refund Rs.20999796/-, with interest @18% per annum, the pre-collected amount from the complainant, or (ii) adjust Rs.20999796/-, towards future monthly instalments or principal or towards interest, and (iii) pay Rs.50/- lakhs, as the compensation for mental agony and harassment, (iv) pay Rs.40/- lakhs as punitive damages, (v) pay Rs.50000/-, as the costs of the litigation and (iv) any other relief, which is deemed fit and proper, in the facts of the case.
The complainant stated that Religare Finvest Limited (opposite party-1) (for short the RFL) was a financial company, incorporated under the Companies Act, 1956 and engaged in the business of providing loans against property, home loans, financial assistance etc. to the general public. The complainant applied for loan of Rs.25/- crores, vide loan application, bearing ID no.631063 dated 30.06.2015 to the RFL, for purchasing immovable property from Mr. G. Nagarajan and Mrs. N. Chandra, which was approved and Facility Agreement dated 30.06.2015 was executed. The RFL opened Loan Account No.XMORS AI 00061394 and made an entry of credit of an amount of Rs.20.05/- crores out of which Rs.2285700/- was shown as charged for processing fee on 23.07.2015. Monthly instalment of Rs.2285700/- has been fixed for this amount, which was revised to Rs.3113093/-. The complainant executed simple mortgage deed of its immovable property on 16.12.2015, vide Document No.57/2016 in favour of the RFL. Then this loan amount was actually credited in the loan account of the complainant on 19.12.2015. The RFL opened another Loan Account No.XMORS AI 00061404 and made an entry of credit of an amount of Rs.5/- crores out of which Rs.570000/- was shown as charged for processing fee on 23.07.2015. Monthly instalment of Rs.776333/- has been fixed for this amount. The complainant executed simple mortgage deed of its immovable property on 22.02.2016, vide Document No.790/2016, in favour of the RFL. Then this loan amount was actually credited in the loan account of the complainant on 23.02.2016. Equated Monthly Instalments (EMI) were payable from 01.08.2016 to 01.05.2025. The RFL took 109 Post Dated Cheques from the complainant relating to its account in UCO Bank, for realising EMI. The RFL handed over Xerox copies of following cheques to the complainant on 01.07.2015 and 13.10.2015:-
SI.No.
Date
Bank
Particulars
Cheque No.
Amount
In favour of
1.
01.07.2015
Axis Bank
New Delhi Branch
184306
49409986
Solaimalai Enterprise
2.
01.07.2015
Axis Bank
New Delhi Branch
184310
100000000
G.Nagarajan
3.
01.07.2015
Axis Bank
New Delhi Branch
184311
97735758
N.Chandra
Total
247145744
Sl.No.
Date
Bank Particulars
Cheque No.
Amount
In favour of
1.
13.10.2015
Axis Bank, Karol
Bagh Branch West Delhi
334990
97735758
Solaimalai Enterprises
2.
13.10.2015
Axis Bank, Karol
Bagh Branch West Delhi
334991
28041851
Solaimalai Enterprises
3.
13.10.2015
Axis Bank, Karol
Bagh Branch West Delhi
334987
35368383
G.Nagarajan
4.
13.10.2015
Axis Bank, Karol
Bagh Branch West Delhi
334988
36589766
N.Chandra
5.
17.02.2016
HDFC Bank, New
Delhi Branch, New Delhi
061035
49409986
Solamalai Enterprises
Total
247145744
At the time of crediting loan amount on 19.12.2015, in Loan Account No.XMORS AI 00061394, the RFL realised following amount from the account of the complainant in UCO Bank:-
S.No.
Date
Interest
Principal
Total
1.
04.08.2015
2339167
773926
3113093
2.
01.09.2015
2330138
782955
3113093
3.
01.10.2015
2321003
792090
3113093
4.
02.11.2015
2311762
801331
3113093
5.
01.12.2015
2302413
810680
3113093
Total
11604483
3960982
15565465
At the time of crediting loan amount on 23.02.2016, in Loan Account No.XMORS AI 00061404, the RFL realised following amount from the account of the complainant in UCO Bank:-
S.No.
Date
Interest
Principal
Total
1.
04.08.2015
583333
193000
776333
2.
01.09.2015
581082
195251
776333
3.
01.10.2015
578804
197529
776333
4.
02.11.2015
576499
199834
776333
5.
01.12.2015
574168
202165
776333
6
01.01.2016
571809
204524
776333
7.
01.02.2016
557221
219112
776333
Total
4022916
1311415
5434331
At the time of disbursement of loan the RFL realised Rs.15565465/- up to 19.12.2015, against the loan of Loan Account No.XMORS AI 00061394 and Rs.5434331/- up to 01.02.2016, against the loan of Loan Account No.XMORS AI 00061404. The complainant wrote letters dated 05.08.2015, 03.10.2015, 09.12.2015 and 25.02.2016 to the General Manager and Vice President, RFL raising its protest against realization of EMI before actual disbursement of the loan. The complainant gave emails dated 29.05.2015, 25.06.2016, 23.11.2016, 29.11.2016, 04.12.2016 and 17.12.2016, requesting to adjust the amount realised before actual disbursement of the loan towards principal/EMI but the RFL did not respond to any letter/email. The complainant then gave a legal notice dated 30.01.2017 and reminder dated 21.03.2017, for adjusting the amount realised before actual disbursement of the loan towards principal/EMI. Then the RFL replied through legal notice dated 17.03.2017 that the loan was sanctioned on 30.06.2015 as such EMI was started w.e.f. 01.08.2015; as the complainant had blocked the payment to the transferor of the property on 01.07.2015 as such payment were made later on. Alleging that the complainant never blocked payment to the transferor and the RFL has committed unfair trade practice in realising EMI before actual disbursement of the loan, this complaint has been filed on 12.02.2018.
The opposite parties put appearance through counsel on 05.12.2018 but did not file their written reply within statutory period of 45 days from the date of service of notice as provided under Section 13 (2) of the Consumer Protection Act, 1986, as such, their right to file written reply was closed vide order dated 19.09.2019.
The complainant filed Affidavit of Evidence of P. Pitchai and documentary evidence. The complainant filed IA/7539/2021, showing its willingness for “One Time Settlement”, of both the loans. Both the parties have filed their short synopsis of arguments.
We have considered the arguments of the counsel for the parties and examined the record. The RFL raised preliminary objection relating to the maintainability of the complaint relying upon the judgment of this Commission in Samdariya Builders Pvt. Ltd. Vs. State Bank of India and others., 2016 (1) CPR 208 and submitted that complainant is not a consumer. The complainant has stated that it has taken the loan for purchasing the property, from the RFL. The banking services are included in the service as defined in Consumer Protection Act, 1986. The purpose of taking loan was for purchasing the property which itself cannot be said to be a commercial purpose. The preliminary objection in this respect is not liable to be accepted.
Other preliminary objection has been raised by the RFL that the complaint is barred by limitation as provided under Section 24 (A) of the Consumer Protection Act, 1986, inasmuch as the EMI which is being challenged by the complainant was started on 04.08.2015, while this complaint was filed on 12.02.2018. We are not convinced by this argument also inasmuch as admittedly the complainant had taken loan from the opposite parties. It is only when request of the complainant for adjusting the EMI amount realised by the RFL before actual disbursement towards amount was refused by reply notice dated 17.03.2017, then the cause of action arose for filing the complaint. Supreme Court in Transport Corporation of India Vs. Veljan Hydrair Ltd. (2007) 3 SCC 142, held the cause of action for filing the complaint arose on refusal of right by the opposite party.
Admittedly the loan was actually disbursed on 19.12.2015 in the first loan Account No.XMORS AI 00061394 and on 23.02.2016 in second Loan Account No.XMORS AI 00061404. The dispute between the parties is as to whether the EMI would be charged from the date, after one month of the sanction of the loan or from the date of actual disbursement of the loan. The RFL in its reply notice dated 17.03.2017 has taken the defence that loan was actually credited to the loan accounts of the complainant on 01.07.2015, but its payment to the transferor of the property, was blocked in the interest of the borrower. As against it, in the written submission, the RFL pleaded that although loan was sanctioned, but its disbursement was not done as the complainant took time in execution of mortgage deeds in favour of the RFL in terms of Facility Agreement.
In Facility Agreement “effective date” has been defined under Clause- (l) relating to Definitions and Interpretation in Clause, which is quoted below:-
“(l) “Effective Date” shall mean the date on which the cashier’s cheque/pay order is made by RFL for disbursement of the Facility (or its first tranche) to the Borrower (s).”
Admittedly the mortgage deeds were executed on 16.12.2015 and 22.02.2016 respectively, therefore, the disbursement of the loan amounts were delayed, although it were sanctioned on 30.06.2015 but actually disbursed to the complainant on 19.12.2015 and 23.02.2016. According to above definition, effective date is the date on which the cashier’s cheque/pay order made by RFL for disbursement to the borrower is the effective date. Under Clause-3.2 of the Facility Agreement, interest would begin to accrue from the effective date. In one loan account, disbursement was made on 19.12.2015 and in other disbursement was made on 23.02.2016. As such, prior to these dates, the interest could not be accrued. Therefore, RFL was not entitled for realising EMI or charging interest prior to disbursement of the loan.
The complainant in IA/7539/2021 has shown its willingness to clear all outstanding dues by way of “One Time Settlement”. As such the RFL may realise all of its outstanding dues settling the loan account by way of “One Time Settlement”. While settling the loan account, the full amount which have been realised in two loan accounts prior to 19.12.2015 and 23.02.2016 respectively are liable to be adjusted towards the principal amount of loan on the date of disbursements and after reducing this amount towards principal money, the RFL shall count interest on the remaining amount as per Facility Agreement.
ORDER
The complaint is partly allowed. It is held that the RFL was not entitled to realize EMI and charge interest, prior to 19.12.2015 and 23.02.2016 respectively and the amounts collected prior to these dates are liable to be deducted from the principal amount of the two loans on the dates of its disbursement. The RFL shall prepare the statement of account relating to final settlement of the loan in terms of Facility Agreement within a period of one month from the date of this judgment and thereafter give one month time to the complainant to clear all its dues. After clearance of dues the RFL shall issue “No Dues Certificate” to the complainant for both loan accounts.