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TMI Blog2018 (12) TMI 1858X X X X Extracts X X X X X X X X Extracts X X X X ..... sam and the petitioner being an individual borrower under the relevant guidelines issued by the Reserve Bank of India, the respondent no. 1 is not entitled to levy any foreclosure charges. In support of such contention learned Advocate for the petitioner has relied upon a Circular dated May 7, 2014 issued by the Reserve Bank of India. Learned Advocate for the petitioner, in his usual fairness has drawn the attention of the Court to All India Report 2018 Calcutta page 185 (M/s. SPPL Hotels Pvt. Ltd. & Anr. v. Allahabad Bank & Ors.) and has submitted that, the decision of rejection of the writ petition therein assailing the imposition of prepayment charges on such petitioner prepaying the credit facilities, is not attracted in the facts of the present case. The terms and conditions of the sanctioned credit facilities obtaining in the present writ petitioner are different to that obtaining in M/s. SPPL Hotels Pvt. Ltd. (supra). Relying upon 2016 Volume 11 Supreme Court Cases page 720 (Gangotri Enterprises Limited v. Union of India & Ors.) he has submitted that, the unadjudicated claim for damages, for breach of contract does not amount to money due until adjudicated and ordered by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince 2014. The respondent no. 1 by a sanction letter dated January 15, 2016 had sanctioned four diverse fund based credit facilities in favour of the petitioner in the name of the sole proprietorship firm. The credit facilities are cash credit hypothecation of stocks and books debts and three term loans. The relevant term of the terms and conditions governing such credit facilities is as follows:- "Pre-payment charges will be applicable @ 2.00% p.a. on the balance amount of Term Loan and for the residual period of pre-payment." In consideration of the respondent no. 1 granting and continuing to grant the credit facilities, the petitioner had executed diverse banking documents in favour of the respondent no. 1. One of such documents executed is the general undertaking. By such document, the petitioner had agreed to allow the bank to charge penal interest at the rate of 2% above the rate applicable to cash credit amount on the entire outstanding in working capital facilities under the circumstances mentioned therein. The relevant clause of the general undertaking executed by the petitioner in favour of the respondent no. 1 is as follows:- "9. To allow Bank to charge penal inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision to foreclose within a stipulated period of time. Applicability of the Reserve Bank of India circulars dated June 5, 2012, April 1, 2014 and May 7, 2014 have been questioned in the present writ petition. Reserve Bank of India was considering reasonableness of bank charges from time to time. It had issued a circular dated February 2, 2007 in such context. By a circular dated June 5, 2012, Reserve Bank of India noted the requirement of abolishing foreclosure charges/prepayment penalty on home loans across the banking system to bring about an uniformity. It therefore directed that, the banks will not be permitted to charge foreclosures/prepayment penalties on home loans on floating interest rate basis with immediate effect. In its first bi-monthly monetary statement of 2014-15 dated April 1, 2014, Reserve Bank of India was of the view that, consumer protection is an integral aspect of financial inclusion. It stated that, instead of levying penal charges for non-maintenance of money balance in ordinary savings bank accounts, bank should limit services available in such account to those available to basic savings bank deposit accounts and restore the services when the balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Forum established under the provisions of the Consumer Protection Act, 1993 complaining of deficiency in services in view of the restrictive definition of 'consumer' in the Act of 1993. The Act of 1993 restricts the definitions of 'consumer' to persons who buys any good or service for personal use and leaves out purchases for commercial activity. Such restrictive definition has nexus to the objects sought to be achieved by the Act of 1993, that is, to provide a forum for expeditious disposal of disputes relating to deficiency in services or quality of goods consumed by a person for his/ her personal use. Laxmi Engineering Works (supra) has considered the definition of 'consumer' as obtaining in the Consumer Protection Act, 1993. Consumer Protection Act, 1993 limits the category of consumers who can approach the Consumer Protection firm established under the provisions of the Consumer Protection Act, 1993 in lodging a complaint under the Act of 1993. It is in that context that, Laxmi Engineering Works (supra) has held that, a person who has purchased goods for commercial activity, cannot be held to be a consumer within the meaning of the Act of 1993. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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