Valid Ex-Parte Interim Order, Delhi State Commission Dismisses Punjab Housing Finance Ltd.’s Appeal

Brief Facts:

Mrs. Menka Sawhney and Mr. Manoj Sawhney (“Complainants”) filed a complaint against PNB Housing Finance Ltd. (“PNB/Appellant”) regarding loans for housing and non-housing purposes. They received a non-housing loan of 2 Crore and 45 Lakhs at a floating interest rate of 9.5% per annum with an Equated Monthly Instalment (“EMI”) of Rs. 2,55,836. They also obtained a housing loan of 2,27,000/- at an interest rate of 8.65% per annum with an EMI of 2,25,536. Allegedly, the complainants' signatures were obtained on blank forms.

In 2019, PNB increased the non-housing loan EMI by Rs. 3,527, resulting in a new EMI of Rs. 2,59,353. Similarly, they raised the housing loan EMI by Rs. 1,272, leading to a new EMI of Rs. 2,26,808. The complainants claim that these actions were arbitrary. Aggrieved, the complainants filed a consumer complaint in the District Consumer Disputes Redressal Commission-VI, New Delhi (“District Commission”), arguing that PNB is charging them higher interest rates compared to other customers in both non-housing and housing loans, despite a significant decrease in interest rates across the banking sector. They claim that this differential treatment is illegal and arbitrary. The District Commission passed an interim order in favour of the complainants and directed PNB to accept EMI according to the current rate of interest till the disposal of the complaint.

Aggrieved by the District Commission’s order, PNB filed a first appeal in the Delhi State Consumer Disputes Redressal Commission (“State Commission”), contending that the District Commission directed PNB to comply with an interim order without providing an opportunity to be heard on their review application. They claim that the initial interim order was passed against them without considering their review application. Secondly, the District Commission was causing delays in the case by addressing issues related to the delay in filing a written statement and scheduling arguments on the application for condonation of delay.

Observations by the Commission:

The State Commission, in light of Regulation 17 of the Consumer Protection Regulations 2019, held that the District Commission has the power to issue ex-parte interim orders and can choose to extend them if necessary. The State Commission further observed that the order issued by the District Commission was not final or conclusive; it was a routine procedural step in the ongoing case and was of a directory nature. Thus, PNB’s appeal was held to be premature and could not be maintained because PNB failed to identify any specific irregularity in the District Commission’s order.

The State Commission held that since the issue is prima facie triable in nature if the complainants are forced to pay the increased EMIs until the final order, it could cause them undue hardship. Therefore, it was held that the District Commission appropriately issued the ex-parte interim order based on the current interest rate to avoid causing undue hardship to the Complainants. It was also held that the District Commission did not deviate from the procedure established by law, at any step.

Consequently, the first appeal filed by PNB was dismissed and the District Commission-VI, New Delhi was directed to decide the Complaint on merits after providing due notice and hearing to the parties.

Case Title: M/S PNB Housing Finance Ltd. vs. Mrs. Menka Sawhney and Anr.

Case No.: FIRST APPEAL NO. 13/2023

Advocate for the Appellant: Ms Aditi Tomar

Advocate for the Respondent: Mr. Nikhlesh Jain

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