Consumer Protection Act, 1986: Grievance of consumer regarding processing fees charged by Bank – In the instant case, the consumer-respondent by its letter dated 15.10.2011 requested for credit facility to the appellant-Bank with concession of 50% on LC charges, processing charges, inspection charges etc. and full waiver of DD charges and commitment charges – However, consumer, subsequently, revised its credit requirement three times – On 30.12.2011, the Bank debited the account of consumer by Rs.27.41 lacs being 50% of the applicable processing fees including the TEV study and service tax charges – Consumer sought refund of said amount on the ground of suffering losses, owing to the alleged delay of the Bank in sanctioning the credit facilities – On 17.03.2012, the credit facilities were sanctioned – When Bank approached the consumer with the sanction letter for credit facilities, consumer showed sanction letters issued by other Banks – Consumer filed an application under s.17 of the Consumer Protection Act, 1986 – This application was allowed by the SCDRC directing the Bank to pay Rs.27.41 lacs – Appeal before the NCDRC against said order remained unsuccessful – Appeal by Bank – Plea of Bank that the procedure for sanction of loan detailed in the Bank’s Circular dated 20.04.2005 is available on the website of the Bank which provides that it is mandatory to obtain a TEV study report in all new industrial projects, diversification projects and accounts where restructuring (other than CDR) is proposed and where the total fund based limits/exposure (including liabilities likely to get devolved in the case of existing accounts) is equal to and above the threshold limit of Rs. 500 lacs; the term “Total Fund Based Limits” includes both term loan and Working Capital Limit – It further pointed out that appraisal fees for TEV study is different from the “Processing Fees” and is required to be charged in applicable cases over and above the processing fees – Held: As per the tariff mentioned in the sanction letter, TEV charges were Rs.18.25 lacs whereas processing charges were to the tune of Rs.49.63 lacs – The consumer had to pay charges for availing credit facilities of which the consumer was in knowledge of and, therefore, sought a waiver of 50% of the charges in letter dated 15.10.2011 – It is the consumer who revised the requirement of credit facilities three times and the Bank sanctioned credit facilities on 17.03.2012 i.e. within almost three months from the final modified request – The ignorance of the procedure and the circular of the Bank dated 20.04.2005 cannot be accepted – The consumer was aware of the processing charges and had sought a waiver thereof and, therefore, the processing charges had been debited by the Bank on 30.12.2011 in terms of authority given by the consumer on 19.01.2011 – Though, the Bank agreed to refund Rs.9.16 lakhs from the processing charges through email but the consumer had not accepted such proposal – Therefore, the consumer is entitled to refund of Rs. 9.16 lakhs only in terms of the decision of the Bank communicated to the consumer rather than waiver of TEV charges in its entirety – The request was to give concession of 50% of all charges, therefore, it is the cumulative amount of charges which is to be taken into consideration and not the charges under a particular head – Orders of SCDRC and NCDRC suffer from patent illegality and are set aside. Allowing the appeal, the Court
HELD: 1. The reasoning given by the NCDRC is de hors the proposal as well as circular of the Bank and is, in fact, based on ipse dixit of the NCDRC. The consumer had sought a waiver of 50% of all charges in the request letter dated 15th October, 2011. The total charges payable were Rs. 68,83,000/- plus service tax. Even if, the 50% concession is conceded to the consumer, still the amount to be charged is much more than Rs. 27,47,165/-. As per the tariff mentioned in the sanction letter, TEV charges are Rs. 18,25,000/- whereas processing charges are to the tune of Rs. 49,63,000/-. Obviously, the consumer had to pay charges for availing credit facilities of which the consumer was in knowledge of and, therefore, sought a waiver of 50% of the charges. It is the consumer who revised the requirement of credit facilities three times and the Bank sanctioned credit facilities on 17th March, 2012 i.e. within almost three months from the final modified request. [Paras 16-17][1080-D, F-H]
2. The consumer admittedly was an old customer of the Bank who applied to avail credit facilities of more than Rs.40 crores and it is unbelievable that it was unaware of the procedure and the circulars of the Bank. The ignorance of the procedure and the circular of the Bank dated 20 th April, 2005 cannot be accepted. The consumer was aware of the processing charges and had sought a waiver of the processing charges, therefore, the processing charges had been debited by the Bank on 30th December, 2011 in terms of authority given by the consumer on 19th January, 2011. [Para 18][1081-A-B]
3. The orders passed by the NCDRC and SCDRC suffer from patent illegality and are liable to be set aside. Though, the Bank agreed to refund Rs.9.16 lakhs from the processing charges through email dated 29th June 2012 but the consumer had not accepted such proposal in its e-mail dated 24 th July, 2012. Therefore, that the consumer is entitled to refund of Rs.9.16 lakhs only in terms of the decision of the Bank communicated to the consumer rather than waiver of TEV charges in its entirety. The request was to give concession of 50% of all charges, therefore, it is the cumulative amount of charges which is to be taken into consideration and not the charges under a particular head. [Para 19] [1081-C-D]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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