TaxTMI 
TaxTMI 
2024 (11) TMI 1003
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....ndiabulls Housing Finance Ltd. Ms. Ravneet Kaur Chairperson, Mr. Anil Agrawal Member, Ms. Sweta Kakkad Member AND Mr. Deepak Anurag Member Order under Section 26(2) of the Competition Act, 2002 1. The present Information has been filed by Mr. Anil Bansal, director of M/s Karmyogi Hotels & Buildcon Ltd ('Informant') under Section 19(1)(a) of the Competition Act, 2002 ('Act') alleging contravention of the provisions of Section 3(1), 3(2), 4(2)(a)(ii) and 4(2)(c) of the Act by Indiabulls Housing Finance Limited ('OP-1') and its officers (OP-2 to OP-20), all collectively referred to as 'other OPs'. OP-1 and other OPs are collectively referred to as 'OPs'. 2. OP-1 is stated to be a company that claims expertise in providing loans against property. Other OPs are the ex-Chairman, Chairman, Vice Chairman, Managing Director, Executive Director, Financial Officer, and other officers of OP-1 and are/were responsible for the day-to-day business operations of OP-1. These individuals are alleged to have been directly involved in the promotion, sales and marketing activities of OP-1. Facts and Allegations as stated in the Information 3. The Informant has alleged that it was indu....
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....e number of instalments. 9. The Informant has averred that the last instalment on 03.03.2023 was duly paid but OP- 1 failed to issue no-dues certificate or acknowledgment letter of the loan. The Informant sent an email on 25.03.2023 in this regard. The Informant has alleged that OP-1 is unlawfully demanding further EMIs for additional months without providing any justification. It is further threatening the disposal of the mortgaged property if these additional payments are not made. On 27.03.2023, OP-1 provided repayment schedule for the Loans indicating increase in EMIs by several additional months as against the repayment schedule shared alongwith the letter dated 16.03.2013 and 20.06.2013 shared with the Informant. The Informant lodged another criminal complaint for financial fraud on 27.03.2023. 10. The Informant has averred that according to the RBI Circular dated 24.05.2007 and the master circular dated 02.07.2012, the interest rate cannot be modified, reviewed, or altered without prior notice and consent from the borrower. Moreover, in line with the RBI Guidelines dated 22.01.2009, the interest rate should be expressed on an annualized basis to ensure the borrower'....
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.... the Informant by providing initial lower interest rates, OP-1 undertook a pattern of increasing the interest rates despite reduction in repo rates which led to increase in its profits. OP-1's objective is to retain customers and prevent them from opting for other alternative arrangements which has stifled competition amongst banks, financial institutions and finance companies leading to lack of innovation in new products. Further, it restricts the ability of new banks or institutions to offer lower interest rates to attract new business opportunities. In the event an individual wishes to transfer their accounts to another bank, they are constrained to pay a foreclosure penalty on their loans and thus, gets dissuaded from pursuing other options. A customer cannot shift from one bank to another on account of pre-payment penalty and new financial companies are unable to get customers which is stifling competition in home loan market. The Informant has stated this to be an unfair trade practice. The imposition of frequently high rate of interest and lack of pre- payment support (imposition of pre-payment penalty) results in creation of barrier for new entrants in the market, thus caus....
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....es for loan foreclosure, constitutes an anti- competitive action, rendering it void in accordance with the provisions of Section 3(1) and 3(2) of the Act. 18.2. In violation of Section 4 of the Act, OP-1 is engaging in unfair trade practices, taking advantage of its dominant position over the Informant. They are imposing unjust, excessively high rates of interest which not only contravene fairness but also exhibit discriminatory tendencies. 19. The Informant has filed an application under Section 33 of the Act, inter alia, alleging irreparable loss to the Informant on account of the imposition of unfair and discriminatory conditions in their services by OP-1. It has averred that the balance of convenience lies in its favour and the acts of the OPs are causing irreparable loss to it. Thus, it has prayed as under: 19.1. Direct the Opposite Party to tender all the records forming the basis of continuous increase of the lending rate and not to increase the rate of interest till the disposal of the present case without any prior information; 19.2. Direct the Opposite Party to stop deducting additional EMIs; 19.3. Direct the Opposite Party not to mi....
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....nother bank. Therefore, the conduct of OP-1 allegedly amounts to be in violation of Sections 3(1) and 3(2) of the Act. It is also alleged that imposing unjust and excessively high rates of interest contravene provisions of Section 4 of the Act. 24. The Commission observes that in the past cases containing similar allegations were filed against OP-1 [(Case No. 06 of 2018 Mr. Chirag S. Shastri & Others Vs. Indiabulls Housing Finance Limited & others (decision on 02.01.2019) and Case No. 43 of 2016 Onicra Credit Rating Agency of India Limited Vs. Indiabulls Housing Finance Limited. (decision on 03.02.2017)]. 25. For the purpose of analysis of conduct of OP-1 under the ambit of Section 4 of the Act, the Commission deems appropriate in the present matter to delineate relevant market as 'provision of loan against property in India'. The Commission notes that the Informant has suggested that OP-1 has the biggest share in the area of Delhi and NCR and therefore is dominant. The Commission also notes from the information available in public domain that OP-1 is a housing finance company which is India's third largest non-bank mortgage lender in the country and is regulated by the Reser....