Housing finance companies harassing consumers had better mend their ways, else they would end up paying huge sums as compensation for violation of their rights.
Hearing a recent case against a leading government housing finance company, the consumer court asked the company to pay a 'satisfactory' fine to the complainant and also ordered to set up an inquiry to ensure action against the officials responsible for undue harassment of the applicant.
Notably, in 1998 RK Jain, a government employee, had taken a housing loan to the tune of Rs. 4.75 lakh from the LIC Housing Finance Limited. As per norms, he submitted the original sale deed documents with the company as 'equitable mortgage.'
However, after Jain repaid the loan in 2002 he was told that the company had 'misplaced' the documents.
"The company informed me through a letter that the mortgage deed was misplaced. Since they didn't say that they had lost it, I was expecting to get it back anytime," Jain told HT.
After pleading the case with the finance company for 10 years, Jain approached the State Consumer Disputes Redressal Commission in January this year.
When asked, by the court, to return the deed documents, the company expressed its inability in complying with the order. It, however, helped Jain in getting a certified copy of the deed from the registry office. But this could not be used for seeking more loans.
Finally in its latest order, the commission, blaming the company with 'deficiency of services', asked it to pay 85% of the current market price of the property as damage compensation with 18 % interest. An earlier evaluation, carried out in 2006, had put the price of the property at Rs. 39.93 lakh. The court has given two months time to the company for returning the documents, failing which the company would have to pay the compensation.
"Besides the company has been asked to pay Rs. 5 lakh as punitive damages to the victim. The market price of the property would be evaluated at the time of the compliance of the order," Sarvesh Kumar Srivastava, the lawyer of the complainant said.
"This order will definitely serve as a deterrent for the companies while handling consumers," Srivastava added.