12.8.08<br /> Sri.K.Gopalan,President<br /> This is a complaint filed under section 12 of the consumer protection Act for an order directing the opposite party to pay a sum of Rs.99.000/- towards the damages.<br /> The case of the complainant in brief is as follows:<br /> The complainant had obtained a housing loan of Rs.5, 50,000/- with interest @6.75% on diminishing basis. There is standing instruction to the opposite party to recover the Equal Monthly Installments (EMI) from the account of the Mother of the complainant. Accordingly opposite parties have been collecting an amount of Rs.4.950/- from other’s account from 10-11-2004 till 10-4-2005. In April 2005 the loan was split up and converted first half of the loan amount into floating rate of interest @8.75% p.a and the other half in to fixed rate 9.25%p.a. There after opposite party has been collecting Equal Monthly Installment @1989/- till the month of May 2006.The complainant requested to the opposite parties to collect the actual EMI for the entire loan amount from his mother’s account right from the month of April 2005. Opposite parties failed to recover the amount as per the standing instructions given by the complainant. They have collected only much less amount. They did not care to collect the actual EMI. On 14.10.05the opposite parties have withdrawn Rs.24, 732/- from the complainants personal account without the knowledge and consent of the complainant and has remitted in his loan account. When complainant objected, the amount re-deposited in complainant’s personal account. It is a violation of rules and superseding standing instruction and is a deficiency in service. Complainant is a person who has issued cheques to his various customers and if the cheque happened to be dishonored he might have been prosecuted. Complainant has met trouble of paying a total amount of Rs.29691/- in a short span of time. This type of latches is not expected from a responsible officer. The opposite party took fire insurance to the complainant’s house for a period of 10 year without complainant’s consent and knowledge and recovered the premium amount of Rs.2411/- from him by debiting his loan amount. The complainant has already been taken fire insurance for his house. This unilateral act of the opposite party resulted financial losses to the complainant.<br /> Opposite parties jointly filed version contending as follows: - The complainant has not come forward with clean hands. Complainant suppressed material facts that the complainant’s mother Nalini was a guarantor to the loan facility. It is not the complainant, but Mrs.Nalini, the mother of the complainant who had given standing instruction. The s rate of interest at the time of availing loan was 9% and not 8.75%. Fire insurance policy taken is not without theconsent. In April 2005 at the request of complainant half the loan was split up into floating rate of interest at the rate of 8.75% p.a and on the other half under fixed rate of interest at the rate of 9.25% p.a and the EMI was also changed proportionately to Rs.2430/- and Rs.2529/-. The complainant and guarantor are jointly and severally liable to repay the loan. It is true that the guarantor has given standing instruction to transfer EMI from her SB account and accordingly it was recovered up to April2005. There after, due to some system problem which arose due to the implementation of core/banking facilities in the branch there was some omission in updating the standing instructions of some of the clients of the opposite party-bank. Thus the loan installments from the Guarantors account were not effect. As per the standing instructions given the opposite party is relieved from all claims for loss which may accrue through error or omission or delay in making such remittance. The complainant knew that EMI was not paid by him but in spite of this he failed to remit the EMI. The allegation that the complainant approached the opposite party several time and informed collection of lesser EMI is false. By collecting less EMI no loss is caused. As EMI was not paid Rs.24732 from the complainant’s SB account was adjusted as stipulated in the loan agreement. As requested by the complainant the said amount was subsequently reversed. <br /> The allegation that the opp0oste party has taken fire insurance without knowledge and consent is false. The house of the complainant was insured as per the provisions contained in clause 7 of the agreement letter accepted by the complainant and as per clause “A” of the loan Agreement at Concessional rate and a copy of the policy was furnished to the complainant. The complainant never informed the opposite party that he had taken insurance policy nor was the policy handed over to the Opposite party. The comprehensive insurance policy contemplated in the loan agreement has to be taken jointly in the name of the complainant and this opposite party Bank. The fire policy, if any taken by the complainant is not the policy stipulated in the loan agreement. The allegation that the complainant was not provided with a copy of the loan statement is false. Copy of the statement is provided to all the customers on request and the complainant was also provided with copies of statement from time to time. Pass book are not issued to housing loan customers.<br /> As per the terms of the loan agreement the complainant was to remit a total sum of Rs.1, 03,950/- being 21 EMI @ 4,950 so far. Against this, the complainant remitted sums aggregating to Rs.90, 727/-resulting in repayments overdue amount to Rs.13, 226/-. Opposite party is entitled to charge penal interest on the said overdue amount. This shortfall in the EMI was adjusted in the loan account of the complainant by transfering the said sum from the guarantors account on 9.1.2007 as requested by the complainant. The notional excess interest Rs.2, 429/- has also been adjusted. The allegation that complainant suffered a loss of Rs.99, 000/- is false. The complainant is not entitled for any relief.<br /> On the above pleadings the following issues have taken for consideration.<br /> 1. Whether there is any deficiency on the part of opposite parties?<br /> 2. Whether the complainant is entitled for the relief as prayed in the complaint?<br /> 3. Relief and cost.<br /> The evidence consists of the oral evidence of PW1, Exts.A1 to A13 on the side of the complainant and Exts.B1 to B8 on the side of the opposite parties.<br /> <br /> Issue Nos.1 to 3<br /> Admittedly the complainant obtained a housing loan of Rs.5, 50,000/- with interest at the rate of 6, 75% on 7.4.2004 There is a standing instruction to transfer the loan installments from the account of the mother of the complainant; the guarantor. Complainant alleges that the rate of interest at the time of availing the loan was 8.75% but the opposite party denied it and stated in version that the loan advanced at the rte of 9%p.a and to repay EMI of Rs.4950/-. In cross examination PW1 admitted that at the time of taking the loan the rate of interest was 9%. Ext.B4 is the standing instruction which is signed by Nalini the mother of the complainant, the guarantor. This letter of standing instruction carries the clause” In undertaking to make these remittances it is expressly understood that the bank is relieved from all claims for loss which may accrue through error, omission or delay in making such remittance”.<br /> In April 2005the loan was split up and first half converted into floating rate of interest @8.75% and the other half into fixed rate @9.25%. Thereafter the opposite party started collecting the installment amount EMI only@ 1989/- instead of Rs.4950/-. It continued up to May 2006. Even after repeated request to collect the full amount from time to time the same practice continued further. Ext.A1 letter sent by the complainant proves that this error was pointed out on May 2006.Ext.A2 reply letter shows that the discontinuance of house loan recovery omission has been admitted by opposite party and promised to rectify the same thereafter and asked the complainant to remit a sum of Rs.10,791/- to make the position up to date. On 14th October 2005 the opposite party has withdrawn an amount of Rs.24732/- from the personal account of the complainant without consent and remitted to his loan account. In the cross examination complainant admitted that even if EMI are not deducted from another’s account he is bound to pay the installments. Complainant objected withdrawing such a lump sum amount at a time. Complainant stated that due to this complainant has put to heavy financial loss, tension and harassment. In cross examination but he answered that by collecting less EMI no loss caused to him and on the contrary carried interest in his account. The complainant also admitted that the opposite party has reversed the above payment to his own account. Hence it is seen financial losses has been balanced with respect to the payment of installment is concerned. The short fall of monthly installment was adjusted in the loan account of the complainant by transferring the said amount from the complainant mother’s account on 9.1.2007. The complainant has no case that bank has taken any excess amount. Opposite party has refunded the excess interest recovered from the complainant. Ext.B5 is the intimation letter. The clause in the standing instruction cannot be ignored. Bank is relieved from all claims for loss which may accrue through error. It is true that Bank has committed an error. The explanation of opposite party with respect to the omission to make remittances is that it is due to system failure as part of the introduction of core banking in opposite parties’ branch. This aspect cannot be ignored especially in the light of non-liability clause incorporated in Ext.B4, standing instruction. The fact of error rectification and absence of evidence for the actual loss also if taken into consideration together, it is difficult to cast liability of deficiency of service up on opposite party in the case of omission happened on the part of opposite parties in recovering the equal monthly loan installments from the account of the mother of the complainant.<br /> The complainant also alleged that the opposite party has taken Fire insurance of the complainant’s house for a period of 10 years without his consent paying a huge amount as premium and thereby sustained financial loss since he has already taken insurance. In the cross examination complainant admits that as perExt.B2 clause (2) (n) the bank has liberty to take insurance policy. As per Ext.B2 clause (2) (n) it is seen that the house shall be insured in the joint names at the cost of complainant. In cross examination the complainant has admitted that as per Exts.B1 and B2 the insurance policy should have been in the joint names of bank and himself. Ext.B1 clause 7 specifically makes it clear that the house shall be insured comprehensively for the market value covering fire; flood etc in the joint names of the Bank and the Borrower. The complainant’s averments is that the house is insured already by the complainant and hence there is no need for the opposite party to insure the house again and to make him to pay Rs.2411/-. The complainant admitted in cross examination that he has taken policy but not produced. The policy taken by the complainant is not in the joint names of bank and complainant. Hence there is no deficiency of service on the part of the bank in insuring the house in the joint names since it is legally sustainable as per provisions accepted by the complainant in Exts.B1 and B2 document.<br /> The complainant further alleged that the opposite parties have-not cared to furnish him a copy of the statement of accounts even after receiving lawyer notice and in spite of the fact that the complainant has personally approached the opposite party for the statement of account. Exts.A12 dt.13.5.06 is the statement of accounts MNo.01190/055141 in the name of Mrs.Nalini.PO., Sabari, House No.14, NITHYANANADA COLONY, Pallikkunnu, Kannur” She is the mother of the complainant. Ext, A13 dt.13.5.06 is the statement of account No.01190/025668 in the name of complainant. Complainant in cross examination admitted that Exts.A12 and 13 were given by the Bank. Thus it can be considered that complainant s served with the statement of account. In view of the above discussion, we are of the opinion that the opposite parties cannot be held liable for deficiency of services. Hence the issue Nos. 1 to 3 found against the complainant.<br /> In the result, the complaint stands dismissed. No order as to cost.<br /> <br /> Sd/- Sd/- Sd/-<br /> President Member Member<br /> APPENDIX<br /> Exhibits for the complainant<br /> A1.Copy of the complaint dt.23.5.06given to OP <br /> A2.Reply dt.27.5.06 sent by OP<br /> A3.copy of the complaint dt.31.5.06 sent to OP<br /> A4.letter dt.10.6.06 sent by OP<br /> A5.copy of the lawyer notice dt.26.6.06sent to OPs<br /> A6. & A7 Postal receipts.<br /> A8 & A9.Postal acknowledgement cards<br /> A10. Reply notice<br /> A11.Letter dt.12.4.05 sent to OP<br /> A12.Statement of accounts of account No.55141 of P.Nalini dt.13.5.06<br /> A13. Statement of accounts of account No.25668 of T.P.Prejith dt.13.5.06<br /> Exhibits for the opposite parties<br /> B1, Copy of the agreement letter executed by OP2 in favour of the complainant <br /> dt.4.10.04.<br /> B2. Copy of the Term Loan Agreement for Housing Loan executed by P.Nalini <br /> in favour of OP2.<br /> B3.Photocopy of the guarantee Agreement executed by P.Nalini in favour of OP2.<br /> B4.Letter of standing instructions executed by P.Nalini in favour of OP1 <br /> dt.10.11.06<br /> B5. Letter dt. 10.11.06writenby OP1 to complainant<br /> B6. Letter dt.20, 11, 06 written by the complainant to OP1.<br /> B7. Computer printout of HTL floating Interest A/c.No.10643531243 maintained <br /> by OP in the name of complainant dt.7.10.04 to 4.4.08<br /> B8. Computer printout of HTL fixed Interest A/c.No.10643531254 maintained <br /> by OP in the name of complainant dt.7.10.04 to 4.4.08<br /> Witness examined for the complainant<br /> PW1.Complainant<br /> Witness examined for the opposite parties<br /> Nil<br /> <br /> /forwarded by order/<br /> <br /> Senior Superintendent<br /> <br /> <br /> Consumer Disputes Redressal Forum, <br /> Kannur<br /> <br />