(Navin Sinha and R. Subhash Reddy, JJ.)
Civil Appeal No. 6380/2010
Union Bank of India _______________________________ Appellant;
v.
Krupanidhi Educational Trust and Another __________ Respondent(s).
With
Civil Appeal No. 6382 of 2010
Krupanidhi Educational Trust and Another __________ Appellant(s);
v.
Union Bank of India ____________________________ Respondent.
Civil Appeal No. 6380/2010 and Civil Appeal No. 6382 of 2010, decided on July 13, 2021
The Order of the court was delivered by
Order
1. The present appeals arise from a common order dated 22.05.2009 of the National Consumer Disputes Redressal Commission (hereinafter referred to as the “National Commission”). They have, therefore, been heard together and are being disposed by a common order.
2. The facts of the case shall be noticed succinctly to the extent necessary for the purposes of the present order. The parties shall be referred to by their respective positions before the State Commission.
3. The complainant took a term loan of Rs. 21,60,00,000/- from the Respondent-Bank. An agreement was signed between the parties on 10.05.2006, read with the Circular dated 19.11.2001. It provided that a pre-closure charge of 2% shall be levied on the pre-paid amount for the unexpired period. The Complainant closed the loan before the stipulated date by its letters dated 21.01.2008/28.01.2008. Asserting that there could be no charges for pre-closure of the term loan, the complainant moved the State Commission. The Complaint was allowed and the respondent-Bank was directed to pay a sum of Rs. 66,49,299/- with interest @ 12% p.a. apart from cost of Rs. 10,000/- to the Complainant. The appeal preferred by the Respondent-Bank was partly allowed by the National Commission but the pre-payment charges payable under the agreement was scaled down. Thus the two appeals.
4. We have heard the learned counsel for the parties at length.
5. Though an issue was sought to be raised by the Complainant that the clause with regard to pre-payment penalty was introduced subsequently by way of a rubber stamp and did not form part of the original agreement, the State Commission returned a nebulous finding, inconclusive in nature. The complainant did not carry this aspect further in appeal. However, the State Commission allowed the complaint opining that the Circular dated 19.11.2001, did not have the force of a Rule or Regulation and therefore levying of pre-closure charges was unsustainable.
6. The National Commission noticed that the Respondent-Bank, the beneficiary of the pre-closure clause had already scaled down the levy of premium to 1% instead of 2%. It nonetheless opined that the Respondent-Bank ought to give further concession to the complainant and directed the Complainant to pay a lesser amount of Rs. 36,00,000/- only in lieu of Rs. 64,80,000/- as claimed by the Respondent-Bank.
7. We are of the considered opinion that once a loan agreement was signed between the parties, a concluded contract came in to being incorporating pre-payment charges. The agreement would bind the parties. The Respondent-Bank was the beneficiary of the pre-closure charges and therefore if it opted to waive a part of the benefit by reducing the pre-closure charge from 2% to 1%, it was their discretion and jurisdiction which obviously inures to the benefit of the Complainant. But in no case could the pre-payment charge be lowered beyond that waived by the Respondent-Bank under the agreement. The National Commission opined that the respondent-bank ought to have given further concession. This opinion was not based on any reasoning or law, except to state that the complainant was an educational trust, without any reference to the contract signed between the parties and which binds both of them. We are, therefore, of the considered opinion that the National Commission erred in introducing a third case very different from that as contained in the agreement signed between the parties by reducing pre-payment charges further. This could not have been done.
8. However, considering the submissions made on behalf of the Complainant that pre-payment charges would be at a lesser amount than Rs. 64,80,000/- alleging errors in calculation, we grant liberty to the Complainant to approach the Respondent-Bank for consideration of the limited grievance of the complainant. This shall also include the grievance of the Complainant that renewal charges could not have been levied for the unexpired period after closing the loan account. Learned counsel for the Respondent-Bank has however disputed that any renewal charges have been levied for the unexpired period. Suffice it to observe that if pre-closure charges have already been levied for the unexpired period, it shall not be appropriate for the Respondent-Bank to levy renewal charges also for the unexpired period arrogating a double bonanza to itself.
9. The amount deposited by the Respondent-Bank before the State Commission may be returned to it along with accrued interest.
10. Resultantly, the appeal filed by the Respondent-Bank is allowed and the appeal filed by the Complainant is dismissed with observations as referred above. It is made clear that the present order has been passed in the peculiar facts and circumstances of the present case. No order as to costs.
Civil Appeal No(s). 6380/2010
Union Bank of India _________________________________ Appellant
v.
M/s. Krupanidhi Educational Trust and Another ________ Respondent(s)
WITH
C.A. No. 6382/2010 (XVII-A)
Date : 13-07-2021 These appeals were called on for hearing today.
(Before Navin Sinha and R. Subhash Reddy, JJ.)
For Appellant(s) Mr. Rajesh Mahale, AOR
Mr. Shanth Kumar V. Mahale, Adv.
Mr. O. P. Gaggar, AOR
Mr. Aditya Gaggar, Adv.
For Respondent(s) Mr. O. P. Gaggar, AOR
Mr. Aditya Gaggar, Adv.
Mr. Rajesh Mahale, AOR
Mr. Shanth Kumar V. Mahale, Adv.
UPON hearing the counsel the Court made the following
ORDER
11. C.A. No. 6380 of 2010 is allowed and C.A. No. 6382 of 2010 is dismissed in terms of signed order.
12. Pending application(s) shall also stand disposed of.
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