The Supreme Court held that Housing Development Finance Corporation (HDFC) being an NBFC and a corporate body was bound by its policies and procedures with regard to lending and recovery.

A homebuyer had filed a loan application with the institution which indicated the ‘Rate option’ as ‘Adjustable,’ and disclosed that the ‘Adjustable Rate of Interest’ would depend on the increase or decrease of the rate of interest.

The resident manager of the institution had assured the home buyer that the rate of interest on home loans would be charged based on the Prime Lending Rate (PLR) of RBI. However, the institution revised the rate of interest from 7.25% to 8.25 %, despite RBI not having changed the PLR. Moreover, the institution further increased the interest from 8.75 % to 9.25% and again to 10.5% though there was no change made by RBI with regard to the PLR.

The National Consumer Disputes Redressal Commission, New Delhi (NCDRC) had held that the homebuyer was bound by the terms and conditions of the agreement at the time of signing the agreement.

Similarly, the Supreme Court also remarked that the home buyer was “not an illiterate person to take the benefit of the precedents relied upon.

Justice A.S. Bopanna and Justice M.M. Sundresh observed, “Having executed the agreement; having agreed to the terms and conditions; having received the loan amount, the appellant cannot raise any objection for the first time when the rate of interest was increased after having acquiesced by signing the agreement. Further, the appellant having repaid the loan amount with interest as per the terms of agreement cannot make out a grievance in hindsight and seek refund of the amount paid.

Sr. Advocate Vikas Singh represented the appellant, while AOR Tushita Ghosh appeared for the respondents.

The Court had to determine whether the Adjustable Rate of Interest would be based solely on the rate set by the RBI or if the rate set by the institution would apply to the loan transaction.

The appellant had contended that he had the option of securing financial assistance from other institutions but was lured by the resident manager of the institution through an email which amounted to unfair trade practice.

To this, the Court stated that “there is no material on record or evidence tendered to establish that the appellant had in fact approached any other financial institution which had agreed to sanction loan or to demonstrate that it was a better bargain and if taken from such institution the appellant was in a better position.

The Court held that the agreement signed between the parties and the email exchanged between them cannot override the policy decisions of the institution. “In order to contend that the appellant has been misled or that the earlier representation will constitute unfair trade practice, the appellant ought to have raised such contention when the agreement was to be signed.

The Court observed that a home buyer having repaid the loan amount with interest as per the terms of the agreement could make out a grievance in hindsight to seek a refund of the amount paid.

Accordingly, the Supreme Court dismissed the appeal.

Cause Title: Rajesh Monga v. Housing Development Finance Corporation Limited & Ors. (Neutral Citation: 2024 INSC 162)


Appellant: Sr. Advocate Vikas Singh; AOR Nitin Saluja; Advocates Varun Singh, Akshay Dev, Mohammad Atif Ahmad, Deepika Kalia, Shivani Luthra Lohiya, Pinky Dubey, Vaishnavi, Keshav Khandelwal, Pankaj Kumar Modi and Pranya Madan

Respondents: AOR Tushita Ghosh

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