Mr. Justice R.N. Mittal, President — Briefly the facts arc that the complainants applied for a loan of Rs. 5 lacs to M/s. Rockland Leasing Limited—respondent, for purchasing a residential flat in NOIDA. It is alleged that before making an application for loan by the complainants the terms and conditions, under which the loan was to be advanced by the respondent, had been discussed by complainant No. 1 with Mr. Chawla; the Managing Director of the respondent and that the latter had assured that the loan would be given before 10th March, 1991.

2. In accordance with the terms on which the loan was to be advanced, a qualifying reserve of Rs. 1,25,000/- alongwith processing charges of Rs. 10,000/- was deposited by the complainants with the respondent as detailed below : —

(1) Rs. 50,000/- vide receipt No. 21076 dated 24th December, 1990.

(2) Rs. 20,000/- vide receipt No. 21087 dated 9th January, 1991.

(3) Rs. 65,000/- vide receipt No. 21097 dated 18th January, 1991.

3. It is pleaded by the complainants that the respondent did not give the loan before 10th March, 1991 between the parties, on the ground that the documents of title pertaining to the flat to be purchased did not meet their criteria for sanctioning the loan.

4. It is further pleaded by them that they requested the respondent to refund the said amount of Rs. 1,35,000/- but they did not do so inspite of service of notice on them. Ultimately they wrote to the complainants that they would refund the amount of Rs. 1,25,000/- after 25 months alongwith interest @ 12% per annum and that the amount of Rs. 10,000/- was taken by them as processing charges and as such that was not refundable. Consequently, it is prayed that the respondent be directed to pay Rs. 1,35,000/- alongwith interest @ 36% per annum.

5. The complaint was contested by the respondent company. It is pleaded by them that the complainants were not consumer as defined in the Consumer Protection Act, hereinafter referred to as ‘the Act’ and therefore, the amount cannot be claimed under the Act.

6. On merits it is pleaded that the respondent is a Public Limited Non-Banking Financial Institution and is governed by the Reserve Bank of India Rules, hereinafter referred to as the Rules. According to the Rules, the complainants cannot get the refund of the amount of Rs. 1,25,000/- before 25 months. It is further pleaded that the company did not advance the loan, as the property which was offered as security, could not be mortgaged in favour of the company and therefore, the loan could not be advanced to the complainants. The amount of Rs. 1,25,000/- was deposited by the complainants according to the terms and conditions on the basis of which they could be advanced loan. In addition they were required to pay 2% of the loan amount as processing fee which was non-refundable. That amount was spent for verification of the title of the property, site inspection, obtaining valuation report etc. and therefore not refundable.

7. In the first instance the complaint was filed by Maj. Gen. K.S. Dahiya alone. An objection had been taken in the written statement that both the complainants had applied to the respondent for the loan and, therefore, the complaint was not maintainable by Maj. Gen. K.S. Dahiya alone. In view of the said objection an application for amendment of the complaint was filed on behalf of Maj. Gen. K.S. Dahiya stating that he did not make Mrs. Saroj Dahiya as a party through oversight. He prayed that she may be allowed to be impleaded as a co-complainant. After hearing the arguments on the application it was allowed vide order dated 3rd June, 1992. Consequently, the amended complaint was filed by the complainants.

8. The first question that arises for determination is whether the complainants are consumers. The words ‘Consumer’ and ‘Service’ have been defined in Section 2(d) & Section 2(o) of the Act as follows : —

2(d)”Consumer” means any person who, —

(i) xxx Xxx xxx xxx xxx

(ii) hires any services for a consideratio