Charging foreclosure fees without legal basis violates consumer protection laws, necessitating refunds and compensation.

Headnote:(A) Consumer Protection Act, 1986 - Sections 2(d) and 2(r) - Allegation of unfair trade practices by the Opposite Party in levying foreclosure charges - The Opposite Party charged Rs.18,88,000 as pre-payment penalty despite no legal basis and failed to honor terms of the sanction letter; RBI circulars prohibit such charges to individuals. (Paras 25, 37, 46)

(B) Interest and Compensation - The Complainant is entitled to a refund of charges along with interest for wrongful deductions and for mental harassment faced due to failures in disbursal of credit facilities. (Paras 42, 43, 47)

Facts of the case:
The Complainant, a self-employed individual running a business, incurred wrongful redundancy by the Opposite Party when banking services were not disbursed as per agreement, leading to unnecessary financial strain and mental anguish.

Findings of Court:
The Opposite Party was found to have violated consumer rights and the invoices raised. Total claims were substantiated by evidence presented by the Complainant.

Issues: Core issues include legality of the foreclosure charges applied and compliance with prior agreements in the contract between parties.

Ratio Decidendi: The court asserts that the Opposite Party's actions constituted unfair trade practices and a lack of due diligence breaches consumer laws. The court emphasized bond agreements supersede prior documents, and any deductions made were invalid without mutual consent.

Result: Complaint allowed.

Table of Content
1. initial complaints regarding wrongful banking charges. (Para 1 , 6 , 10)
2. the impact of unauthorized foreclosure charges on consumer rights. (Para 25 , 27 , 29)
3. relying on precedent to support claims against unfair practices. (Para 28 , 30 , 38)
4. entitlement to refunds based on established banking responsibilities. (Para 37 , 40 , 41)
5. decree outlining payment orders and compensation awarded. (Para 46 , 50)

1. The Complainant has filed the complaint against the Opposite Party on 8.5.2019 seeking the following reliefs:
B. Pass an order directing the Opposite Party to refund the sum of Rs.4,80,110 (Rupees Four Lakhs, Eighty Thousand, One Hundred and Ten only) wrongly charged as interest on 31.12.2017, 31.1.2018 and 28.2.2018, along with interest at the rate of 18% per annum thereto till the date of actual realization of the said money;
C. Pass an order directing the Opposite Party to pay the sum of Rs.4,00,000 (Rupees Four lacs only) to the Complainant as compensation towards the undue mental harassment and agony caused by the Opposite Party to the Complainant;
D. Pass an order directing the Opposite Party to pay the sum of Rs.2,52,833 (Rupees Two Lakhs Fifty Two Thousand, Eight Hundred Thirty Three only) to the Complainant as damages for causing wrongful loss of the income to the Complainant, along with interest at the rate of 18% per annum thereto till the date of actual realization of the said money;
E. Pass an order restraining the Opposite Party from deducting any amount from the bank account of the Complainant bearing No. 50200001647389 without obtaining prior written consent of the Complainant;
F. Pass an order directing the Opposite Party to pay the actual legal costs incurred by the Complainant towards prosecution of the present complaint;
1a. Briefly stated the case of complainant is that the Complainant is a self - employed individual running a sole proprietorship "M/s Bhai Pardhan Singh & Sons" and is in the business of importing dry fruits, spices and allied products. The Complainant had availed 'banking services' from the Opposite Party for valuable consideration between the years 2013-2017 exclusively for the purpose of earning his livelihood by means of self - employment. Prior to availing banking services from the Opposite Party, the Complainant had availed credit facility from Punjab & Sind Bank. Since Complainant needed credit facility to the tune of Rs.8,00,00,000 to earn his livelihood, it was agreed between the parties that Opposite Party shall take over the credit facilities provided to the Complainant by Punjab & Sind Bank.

2. On 30.5.2013 Opposite Party sanctioned credit facilities, being a floating interest rate term loan, for amount of Rs.8,61,14,000 by way of a sanction letter in favour of the Complainant for a period of one year at rate of interest equivalent to Base Rate plus 2.40% totalling to 12% per annum at the time of issuance of the sanction letter. The interest rate was subject to changes in the Base Rate from time to time.

3. The Complainant had opened current bank accounts bearing account No. 50200001647389 and 50200001661705 with the Opposite Party for availing the said credit facility. Complainant had duly made repayment to the utmost satisfaction of the Opposite Party in terms of the sanction letter dated 30.5.2013. No defaults were committed by the Complainant in making repayment. The said credit facility was renewed by the Opposite Party every year until 2017.

4. In the year 2017 Complainant had applied for enhancement of the existing credit facilities of Rs.8,61,14,000 to Rs.20,61,14,000 (Rupees Twenty Crores, Sixty One Lakhs, Fourteen Thousand only) from the Opposite Party.

5. On 1.9.2017, 8.9.2017 and 13.9.2017 Opposite Party sought additional documents from the Complainant in order to process the request for enhancement and the same were duly provided by the Complainant.

6. On 23.10.2017 Opposite Party issued fresh sanction letter dated 23.10.2017 enhancing the pre - ex

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2022 Supreme(Online)(Del) 7190

DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHIMr. O.P. Gupta, Member JudicialCharanjit Singh v. HDFC Bank Ltd.Complaint Case No. CC/474 of 2019

Charging foreclosure fees without legal basis violates consumer protection laws, necessitating refunds and compensation.

DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Mr. O.P. Gupta, Member Judicial
Charanjit Singh v. HDFC Bank Ltd.
Complaint Case No. CC/474 of 2019