P KRISHNA REDDY Vs. YAGNESH UPADHYAY

JUDGEMENT

(1.) -OFTEN we are coming across complaints relating to forfeiture of "service Charges" by financial institutions taking advantage of unreasonable clause in contracts despite non-release of loan amount for one or the other reason. In case loan is in crores of rupees the service charges itself would be a substantial sum. Therefore, forfeiture of service charges is nothing but unjust enrichment by financial institutions. The loanees will have no option but to accept unreasonable terms if they are badly in need of loan. In fairness the financial institutions should charge reasonable service charges commensurate with the charges involved in processing loan papers instead of blindly charging some percentage and they should refund a portion of the service charges to the loanee if loan is not released after deducting the actual charges. In the case on hand service charges to the tune of Rs. 3,00,000 has been forfeited.

(2.) THE complainants have filed this complaint seeking for direction to the opposite parties (for short, "o. Ps. ") to pay Rs. 13,86,630 with interest at 24% per annum from the date of the complaint till the date of realisation.

(3.) THE case of the complainants is that they have paid a sum of Rs. 3,00,000 to O. P. 1, who is the proprietor of M/s. Surya Finance as he promised to advance loan of rupees one crore to the complainant. On the request of the complainants a loan of rupees one crore was sanctioned by the O. Ps. as per letter dated 24. 2. 2000, which is marked as Exhibit 'c-3'. But the grievance of the complainants is that even though the complainants have satisfied all the requirements for release of the loan, the loan amount was not released. Therefore, the complainants have filed this complaint seeking for a direction as stated above.