Ramkrishan Upadhyay
Tribune News Service
Chandigarh, October 8
The State Consumer Disputes Redressal Commission, Chandigarh, has directed a finance company to refund Rs 65,796 that was charged as foreclosure amount to a consumer.
The Commission also directed the firm to pay a compensation of Rs 50,000 for causing harassment and litigation cost.
Ravinder Singh Barara, a resident of Ambala, approached the Commission with a complaint that he took a loan of Rs 24,14,478 from India Infoline Finance Limited. The rate of interest was fixed at 10 per cent with monthly instalment of Rs25,946. The loan period was fixed from August 5, 2016 to July 5, 2031.
Barara said he approached the firm to clear all outstanding dues on July 2, 2019. However, the company asked him to deposit Rs65,796.41 as foreclosure charges through a letter dated June 4, 2019. He asked the company not to take foreclosure charges, but to no avail. Eventually, he had to deposit the entire amount under compelling circumstances.
The company, however, denied all charges. It claimed that a loan agreement was executed between the complainant, co-borrowers and the company. The agreement contained a clause with regard to pre-payment charges in case of foreclosure of loan by the borrower.
The company said the foreclosure charges/pre-payment penalty on the untimely closure of the loan was correctly charged from the complainant and his co-borrowers.
After hearing the arguments, the Commission, comprising president Justice Raj Shekhar Attri and members Padma Pandey and Rajesh K Arya, said the Reserve Bank of India issued a notification on August 2, 2019. As per the notification, NBFCs shall not take foreclosure charges/pre-payment penalties on any floating rate term loan sanctioned for purposes other than business to individual borrowers with or without co-obligant(s).
The Commission said the action of the opposite party (company) in taking foreclosure charges/pre-payment amount from the complainant was contrary to the RBI circular of foreclosure charges. Being an NBFC, they were liable to reimburse/payback the foreclosure charges collected illegally from the complainant.
In view of this, the Commission directed the company to refund Rs65,796 to the consumer along with interest @ 9 per cent. The Commission also directed the company to pay Rs50,000 as compensation and litigation cost within a month.
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