PNB Housing Finance Liable For Delaying Loan Foreclosure Statement, Cannot Charge Interest For Delay Caused By Itself: Thrissur Consumer Commission
The District Consumer Disputes Redressal Commission, Thrissur, comprising Sri C.T. Sabu (President), Smt. Sreeja S. (Member) and Sri Ram Mohan R. (Member), has held PNB Housing Finance Ltd. liable for deficiency in service for unjustifiably delaying the issuance of a loan pre-closure statement and thereafter charging interest for the period of delay caused by its own conduct. Brief Facts...
The District Consumer Disputes Redressal Commission, Thrissur, comprising Sri C.T. Sabu (President), Smt. Sreeja S. (Member) and Sri Ram Mohan R. (Member), has held PNB Housing Finance Ltd. liable for deficiency in service for unjustifiably delaying the issuance of a loan pre-closure statement and thereafter charging interest for the period of delay caused by its own conduct.
Brief Facts
The complainant, Siju Raj A., had availed a home loan from PNB Housing Finance Ltd. During the subsistence of the loan, he submitted an application on 05-01-2023 seeking a pre-closure statement and paid the requisite fee of ₹885. According to the complainant, the housing finance company was required to issue the pre-closure statement within 21 working days but failed to do so despite repeated follow-ups made from the local branch level up to senior management.
The complainant alleged that although the fee was collected and the cheque was encashed on 07-01-2023, the pre-closure statement was issued only on 20-02-2023. Due to this delay, he was allegedly charged interest for an additional period of 18 days at the rate of 11.97%, resulting in an extra financial burden of ₹18,342. He claimed that sufficient funds were already available in his account to close the loan and that the delay was solely attributable to the finance company.
According to the opposite party, the delay occurred because it had offered the complainant a reduced interest rate of 8.75% to retain the loan account, and discussions regarding the revised terms were underway. However, the complainant contended that these negotiations could not justify withholding the pre-closure statement or charging additional interest.
Alleging deficiency in service, unfair conduct and financial hardship caused by the delay, the complainant approached the District Consumer Disputes Redressal Commission, Thrissur, seeking refund of the excess interest charged along with compensation and litigation costs.
Observation and Decision
The Commission observed that the complainant had validly applied for a loan pre-closure statement and paid the required fee, yet PNB Housing Finance failed to issue the statement within the prescribed 21 working days. It held that the company's attempt to negotiate a reduced interest rate could not justify delaying the pre-closure process.
The Commission further observed that PNB Housing Finance had chosen to engage in negotiations regarding a reduced interest rate for its own commercial interest and that such interest could not prejudice the complainant's right to obtain a pre-closure statement after paying the prescribed fee. It noted that mere negotiations could not override a valid and subsisting request for issuance of a loan pre-closure statement. Since the delay was caused solely by the opposite party, charging interest for the delayed period amounted to deficiency in service.
Accordingly, the Commission allowed the complaint and directed the finance company to refund ₹18,342 towards excess interest charged, pay ₹25,000 as compensation for the agony, hardship, inconvenience and financial strain suffered by the complainant, and ₹10,000 towards litigation costs, along with 9% annual interest from the date of filing of the complaint until realization.
Case Title: Siju Raj A. v. PNB Housing Finance Ltd.
Case No.: CC/116/23