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2025 Supreme(SC) 533
SUPREME COURT OF INDIA
VIKRAM NATH, SANJAY KAROL, JJ.
Akshay Gupta and Others – Appellants
Versus
ICICI Bank Limited and Others – Respondents
Civil Appeal No. 1708 of 2023, Civil Appeal No. 1709 of 2023, Civil Appeal No. 2828 of 2023, Civil Appeal No. 4336 of 2023
Decided On : 25-03-2025
For the Appellant(s) : Mr. Abhishek Malhotra, Sr. Adv. Ms. Srishti Gupta, Adv. Ms. Sonali Jain, AOR Mr. Alakh Alok Srivastava, AOR
For the Respondent(s): Mr. Sumit Goel, Adv. Ms. Sreeparna Basak, Adv. Ms. Swati Bhardwaj, Adv. Ms. Pratyusha Priyadarshini, Adv. Ms. Garima Khanna, Adv. M/S. Parekh & Co., AOR Mr. Viraj Kadam, Adv. Mr. Soumya Dutta, AOR M/S. D.S.k. Legal, AOR Ms. Smriti Churiwal, AOR
IMPORTANT POINT
Banking – Loan once repaid to Bank should be certified as “Repaid” and not “Settled”.
Headnote:
Consumer Protection Act, 1986 – Section 23 [Consumer Protection Act, 2019 – Section 67] – Banking – Loan Recall Notice – Alleged unfair trade practices and violation of Reserve Bank of India Guidelines – Consumer complaints rejected by National Consumer Disputes Redressal Commission – Full compliance of terms and conditions undertaken by parties has been done satisfactorily – Bank had extended discounts, builder had discharged its obligations of payment of its share of pre-EMI and borrowers had discharged their obligations by making deposits with Bank of outstanding amount and also paying to builder 5% of sale consideration which was outstanding – Bank has no further claim or right whatsoever against appellants with respect to facilities provided for respective apartments – Loan account should be closed treating it as repaid or fully paid up – Bank, which had initiated recovery proceedings before Debt Recovery Tribunal or before any other Forum with respect to loan in question of appellants (Flat buyers), shall forthwith withdraw the same, in view of loan having been satisfied in all cases. (Paras 4, 5, 7 and 8)
Facts of the case:
This is a classic case where wisdom dawned upon three parties in a commercial arrangement to settle dispute amicably, with a little effort by Court. Three parties, being borrower/flat owners, builder and Bank – lender. Under agreement between parties, there were respective obligations on each of the parties to be fulfilled, in which there were defaults at the end of each of parties to some extent. Present appeals have been preferred under Section 23 of Consumer Protection Act, 1986 against common judgment and order dated 02.01.2023 passed by National Consumer Disputes Redressal Commission rejecting consumer complaints of appellants (Flat buyers). Relief claimed in complaints before NCDRC was for quashing of loan recall notice issued by Bank alleging unfair trade practices and violation of Reserve Bank of India guidelines.
Findings of Court:
All matters between the parties stand closed and there shall be complete quietus to the litigation. The appeals stand disposed of accordingly.
Result : Directions issued.
Key Points: - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!)
What is the proper treatment of a bank loan that has been repaid in full: should the loan account be labeled as "Repaid" rather than "Settled"?
How to handle the settlement of outstanding principal, pre-EMI, and interest among borrowers, the builder, and the bank to close all litigation?
What are the directions and mechanisms required to withdraw recovery proceedings and issue No Dues Certificates once the loan is repaid in full?
JUDGMENT :
VIKRAM NATH, J.
1. This is a classic case where wisdom dawned upon the three parties in a commercial arrangement to settle the dispute amicably, of course, with a little effort by the Court. The three parties, being the borrower/flat owners, the builder and the Bank the lender. Under the agreement between the parties, there were respective obligations on each of the parties to be fulfilled, in which there were defaults at the end of each of the parties to some extent. The present appeals have been preferred under section 23 of the Consumer Protection Act, 1986 against the common judgment and order dated 02.01.2023 passed by the National Consumer Dispute Redressal Commission1 [NCDRC] rejecting the consumer complaints of the appellants (Flat buyers). The relief claimed in the complaints before the NCDRC was for quashing of the loan recall notice issued by the Bank alleging unfair trade practices and violation of Reserve Bank of India2 [RBI] guidelines.
2. We need not mention detailed facts as the same have been appropriately recorded in two orders of this Court dated 23.10.2024 and 06.11.2024. In the order dated 23.10.2024, broadly, the settlement had been arrived at, however, instructions were to be taken on certain issues, for which time was granted. Finally, in the order dated 06.11.2024 all the terms of the settlement with respect to all the four appeals had been recorded. Both the orders as such are reproduced hereunder:
“ORDER (DATED: 23.10.2024)
1. Learned senior counsel appearing for the ICICI Bank Ltd. (for short, ‘the Bank’) has submitted a chart showing the outstanding amount payable by the appellants as on 16.10.2024. The details of which are as under:
| Case No. | Outstanding Principal (INR) | Total Interest including PEMI (INR) | Outstanding Charges (INR) | Total Receivable (INR) As on 16.10.2024 |
| CA 1708/2023 Akshay & Anr. vs. ICICI Bank Ltd. & Ors. | 1,26,35,131.00 | 57,09,527.00 | 29,71,443.33 | 2,13,16,101.33 |
| CA 4336/2023 Muringassril Jacob Kuruvilla & Anr. vs. ICICI Bank Ltd. & Ors. | 1,85,38,453.00 | 71,79,478.00 | 31,44,604.73 | 2,88,62,535.73 |
| CA 2828/2023 Jignesh Tapiawala & Anr. vs. ICICI Bank Ltd. & Ors. | 1,66,55,259.00 | 64,68,114.00 | 27,47,829.65 | 2,58,71,202.65 |
2. Insofar as the appellants in three appeals mentioned in the table are concerned, the appellants have agreed to settle the outstanding principal amount upfront subject to certain adjustments under which they would be entitled to benefits from the Bank as also the Builder - Rajsanket Realty Ltd. (for short, ‘the Builder).
3. Mr. Ritin Rai, learned senior counsel appearing for the Bank, upon instructions, submits that the Bank would completely waive the outstanding charges and will give a discount of 30% on the pre-EMI provided the entire outstanding principal amount is settled upfront and the remaining pre-EMI amount is also paid within any reasonable time granted by this Court.
4. Learned counsel for the appellants submitted that the 30% discount, which the Bank has extended on the pre-EMI amount, should be credited to the benefit of the appellants and as the Builder has agreed to pay 50% of the pre-EMI amount, the same would be paid by the Builder either to the appellants and thereafter the appellants may transfer it to the Bank or the Builder may directly deposit with the Bank subject to directions being issued to the Bank to accept the same from the Builder in the loan account of the appellants.
5. A further request has been made by the learned counsel appearing for the appellants in Civil Appeal Nos. 2828 of 2024 and 4336 of 2023 that the appellants have paid certain amount towards pre-EMI, after the Builder defaulted in making the said payments, and as such the 5% outstanding amount, which they have to pay to the Builder towards club charges and other balance consideration, the same may be waived or the Builder
