PUNE: The District Consumer Forum has ordered a financial services company to hand over ‘no dues certificate’ and pay Rs 45,000 compensation to a man who had repaid all installments of home loan but the company insisted on more payments citing change in interest rates. The company was ordered to return the mortgaged property’s documents, which it had withheld.
Manik Khedkar moved the forum in 2017 as the companies City Financial Consumer Finance India Ltd and Citi Bank NA, Koregaon Park branch, did not return his papers and certificate even after issuing legal notice.
COMPLAINANT’S CASE
According to the complainant, he had taken a housing loan from City Financial Consumer Finance India Ltd, by mortgaging his property. The company disbursed the Rs 4.35 lakh loan amount on November 9, 2006. The company charged interest at the rate of 13.99% per annum. He paid all installments regularly.
“In October 2015, I received a letter from Citi Bank NA, that they have taken over some portfolio from the City Financial Consumer Finance India Ltd. The letter demanded Rs 2.57 lakh along with interest of 17% per annum, which is the due amount. The opposite parties despite request, failed to reconcile the account as per agreed terms,” the complaint states.
COMPANY VERSION
After getting notice from the forum, City Financial Consumer Finance India Ltd submitted its version, stating that as per loan agreement the company reserved the right to revise interest rates with due intimation to the complainant because the complainant opted for floating rate of interest.
“The initial rate of interest was at the rate of 14% per annum, and not 13.99%. The complainant was sent interest reset letters starting the month of March 2007, July 2008 and so on and so forth. However, the complainant never raised any issue in relation to change in interest. In fact complainant signed the loan agreement. Amount has been charged according to terms and conditions.”
The Citi Bank NA submitted copies of letters sent to the complainant, and demanded dismissal of the case.
FORUM’S OBSERVATION
In their common judgement dated January 24, Forum President Umesh Jawalikar, Members Kshitija Kulkarni and Sangita Deshmukh held the companies responsible for deficiency in service.
“The companies produced records of letters sent to the complainant but not the receipt that he accepted those letters. Even though there are certain clauses in loan agreement which are not in conformity with the RBI guidelines, these clauses constitute, ‘unfair trade practice’ on the part of opposite parties”, the judgement states.
