ORDER

BY SRI.H.R.SRINIVAS, PRESIDENT.

This is the Complaint filed by the Complainant U/S Section 12 of Consumer Protection Act 1986, against the Opposite Party (herein referred in short as O.P) alleging the deficiency in service in making illegal demands for payment of amount towards the loan and also down grading the CIBIL score of the complainant and directions to the OP to release the original title deeds of the property which was offered in order to obtain the loan and for other reliefs as the Commission deems fit.

2.      The brief facts of the complaint are that;

The complainants availed a Rs.25,00,000/- housing loan on 09.07.2005 and Rs.5,00,000/- further loan and in all Rs.30,00,000/- from OP payable in regular equated monthly installment.  The last EMI in respect of the first loan was Rs.24,783/- payable on 31.08.2019 and Rs.5,000/- to be payable in respect of the second loan. They have been prompt and regular in paying the EMIs without there being a single default and the entire loan amount with interest has been paid.  Inspite of it, OPs did not return the documents given to them at the time of obtaining the loan and were also not replying to the correspondences made with them in this regard.  Afterwards they demanded Rs.15,00,000/- to be paid to release the document, for which they are not liable to pay the same as when they have already paid the regular EMIs without any default.  In view of not paying Rs.15,00,000/- as demanded by OPs, their CIBIL rating has been decreased.  There is no reason for OPs to claim Rs.15,00,000/- from them.  There is deficiency in service on the part of the OPs in demanding Rs.15,00,000/- though they have paid the entire amount with interest as a honest customer.  Unnecessarily and illegally OPs are demanding for the payment of the amount and also reporting to the CIBIL regarding nonpayment of the said amount down grading their score.  OP cannot claim more amount then what was agreed and fixed EMIs. In view of the OPs complaining to the CIBIL their CIBIL rate was downgraded.  They are unable to obtain loan from any other banking institutions.  Act of OPs are liable to be compensated.

3.      It is contended that they are regular customers of OPs having 15 accounts both for themselves and of institutions for the last 20 years and they have cardinal business relations. The bank used to deduct EMI from the savings account of the complainant. At no point of time, OPs intimated, informed or communicated about the deductions made by them the ground on which they are making claim for interest.  Inspite of repeating request to furnish the account details for over last six months, OPs failed to provide the same. They are making to be claim secretly without the knowledge of the customers to their whims and fancies. In view of this there is deficiency in service and unfair trade on the part of OPs and hence prayed to allow the complaint.

4.      Upon the service of notice, OP1 and 2 appeared before the Commission through their advocate.  Version signed by OP2 is filed which was adopted by OP1. In the objection filed it is contended that the present complaint is not maintainable either in law or on facts and OPs not entitled for the relief claimed in the complaint unless they clear the outstanding principle amount along with interest.

5.      It is contended that on 09.07.2005 the complainant obtained Rs.25,00,000/- as terms loan towards housing loan and Rs.5,00,000/- as additional term loan on 29.12.2005 from OP2 branch, agreeing to pay 8% p.a., floating rate in respect of the first loan and 8.5% p.a., floating rate in respect of the second loan.  Complainants were paying EMI in respect of the said loans regularly without default.  Though they were paying regularly the EMIs, it was not sufficient to cover the entire dues in view of change in the rate of interest.  As and when the interest rate changes, the major portion of the amount paid i.e., Rs.24,783/- and Rs.5,000/- in respect of respective loans, major portion goes to the interest portion and the remaining amount goes towards the principal. The rate of interest agreed to be paid by the complainant i.e., 8% and 8.5% never fell down from the said rate at any point of time.  The interest calculation sheet produced by them clearly shows the amount paid, the adjusted, and the outstanding.  As per their book of accounts in respect of first loan as on 31.12.2019 the complainant is due Rs.15,07,547.84 ps., and in respect of second loan a sum of Rs.2,45,899.36 ps., hence since the complainant did not pay the said amount their CIBIL score has decreased, for which OPs cannot be held responsible. The demand made by them is proper, legal valid and enforceable.  It has denied the contention of the complaint that OPs cannot claim more amount than what was agreed and fixed EMI. As per the sanction letter the rate of interest was floating i.e., as and when the interest got varied, the amount of EMI will also change or the regular EMI adjustment will be varied. The EMI cannot be fixed /certain for all the fifteen years. The complainants are fully aware of the said fact and also the rate of change of interest as and when it got changed.  OP has not at all harassed the complainant at any point of time and further OPs are not liable for release of the title deed without paying the loan and further they are not liable to pay any compensation to the complainants in that respect.  The contention of the complainant that OP bank used to deduct EMI from the savings account of the complainant (other than term loan EMIs are wholly incorrect) however as per the standing instruction given by the complainant, EMIs to the term loan account were being deducted from the savings account. There is no illegal deduction of any kind. There is no basis for the complainant to claim Rs.15,00,000/- from Ops. The very claim makes it clear the intention of the complainants for filing this complaint. There is no deficiency in service, no unfair trade practice, no bonafides in the complaint and in view of the above prayed the commission to dismiss the complaint.  

6.      In order to prove the case, both the parties filed their affidavit evidence and produced documents. Arguments Heard. The following points arise for our consideration:-

1) Whether the complainants have proved deficiency in service on the part of the Opposite Party?

2)        Whether the complainants are entitled to the relief prayed for in the complaint?

7.     Our answers to the above points are:-

POINT NO.1:            In the Affirmative

POINT NO.2:            Partly in the affirmative.

                                For the following.

REASONS

8.     POINT No.1:-

   Perused the complaint, version, affidavit evidence and the documents produced by respective parties.  It is not in dispute that the complainants are the account holders and valuable customers of OP having more than 15 accounts and also they borrowed housing loan of Rs.25 lakhs and 5 lakhs from OP under floating scheme of paying interest.  It is the contention of the complainants that though they were prompt and regular in paying the EMIs and cleared the entire loan amount, but still, OPs are demanding to pay a sum of Rs.15,07,547.84 ps., towards the first loan of Rs.25,00,000/- and Rs.2,45,899.36 ps., in respect of the second loan of Rs.5,00,000/- and unless and until the said loan is cleared, they are not going to return the documents of title deposited with the OP.

9.     It is also their contention that since they have cleared the entire amount, they are not liable to pay any of the amount whereas, it is the contention and demand of the OP that they calculated the interest as per the agreed rate of interest in the loan sanction letter and agreement executed by the complainant, whereas as per the guidelines and monitory policies of the government of India and that of RBI with reference to the change of rate of interest in respect of the home loans, as from the date of the complainant borrowing the loan, the rate of interest have gone up and the same was not taken into consideration while calculating the interest to be paid by the complainant and hence there is difference in the rate of interest and hence they had to pay the amount as demanded by them as mentioned above.

        10.   It is the duty of the OP to bring to the knowledge of the each and every borrower regarding the raising or lowering of the interest in respect of the floating rate of interest of home loans. It is held by the Hon’ble High Court of Karnataka in writ petition No.42815/2019 that notice has to be given to each and every party in respect of change of rate of interest and also without waiting for the request to get the interest reduced, the bank has to reduce the rate of interest as per the policy of the RBI and the Government of India. 

        11.   It is true that for the floating rate of interest for the home loans, the quantum of equated monthly installments and the number of installments will not be constant throughout the loan period.  If the interest on the loan is raised by the RBI /Government of India,then the amount per installment will increase, if the number of installments to be retained to the original number of EMIs.  In case, the borrower wants to keep the same amount of installment, then the number of monthly installments has to be extended.  Complainant has an option either to raise the amount per installment by retaining the number of months of installments or he can retain the same amount by increasing the number of months of installments.  If the number of installment is raised, it will be advantage for the bank as it would get the interest for the whole period.  On the other hand, if the complainant raises the quantum of amount to be paid every month within the number of EMIs, he will be benefitted, though it will be an additional burden to him to pay higher amount per installment.

        12.   Be it as it may, in this case, the burden of informing the complainants regarding the change of rate of interest and providing opportunity to the complainant’s either to enhance the amount per installment or to retain the same amount by extending the number of installment, has not been provided to the complainants.  It is to be noted here that complainants are the valued customer of OPPOSITE PARTY having 15 accounts of their education institutions, besides their personnel accounts.  They have clearly stated that they would not have minded paying more amounts per installment to cover the additional burden of interest when it was raised, had they were informed regarding the change of rate of interest, throughout the period of loan, OP did not inform them regarding the change of rate of interest and through they cleared the entire loan amount as per the agreement within the prescribed EMIs, OP refused to return the documents.  Hence they have approached this Commission.

        13.   Both the parties have admitted the correspondences that had taken between them and further the exchange of notices and the replays. 

        14.   During the pendency of the proceedings, this commission directed the OP to files a fresh memo of calculation as to the amount due from the complainant.  On 01.03.2021 counsel for OP filed a Memo stating that Rs.10,00,323/- is due towards the difference in interest and principal of Rs.6,60,405/- in respect of loan No.1 and Rs.1,31,494/- is being the interest difference and Rs.1,35,149/- towards the principal in respect of second loan and in all Rs.19,27,371/- due from the complainants.  This memo of calculation is filed in response to the direction issued by this commission to file the calculation memo adjusting the interest portion out of the EMI paid by the complainant on the raise or fall in the rate of interest every time and to strike out the balance at the end of the tenure of the loan. 

15.   Further OP has produced the details accounts in respect of the loan transaction of the complainant and further a Memo of calculation by the branch office of OP dated 01.03.2021, Wherein it is mentioned that

16.   When this is taken into consideration, it becomes clear that the interest charged in respect of first loan as per system based EMI is in excess of the interest arrived on the assumption that borrower has paid the revised EMI and the excess interest charged by the system is Rs.10,00,323/- and as per the same the amount to be paid in the system is Rs.16,60,728/-. In respect of second loan the excess interest charged by system is Rs.1,31,494/- and the interest arrived based on the assumption that the borrower has paid revised EMI based on interest charges was Rs.4,69,920/-.

17.   Along with the said memo of calculation, OP has also filed a detailed calculation in respect of the complainant’s two loan accounts calculated and verified by YCRJ and associates, chartered accountants, wherein it has been clearly mentioned that the total excess interest in both the loans(10,00,324/- + 1,31,495/- = 11,31,819/-). The loan working sheet is also produced, wherein, in respect of first loan the difference in EMI amount due is mentioned as Rs7,97,328/- and in respect of second loan Rs.91,952/-, which is the difference in the EMIs to be paid by the complainant.  This has been calculated upto 01.01.2021, whereas this complaint is filed on 14.11.2019 and the entire loan amount was payable on 31.08.2019. 

18.   When this calculation is taken into consideration, as on 01.01.2021, a sum of Rs.7,97,328/- was due towards the difference in EMI in respect of first loan and Rs.91,952/- is the difference in EMI in respect of the second loan.

19.   Further as per the say of the complainant they have cleared the EMIs as on 31.08.2019.  In view of the calculation filed by the OP himself that too got calculated from their chartered accountants, it becomes clear that they have charged Rs.11,31,819/- as excess interest in respect of both the loan accounts which is a clear unfair trade practice and further not informing personally the change of rate of interest as and when the interest rate was changed and not resetting the rate of interest in the EMIs as and when there was a change in the rate of interest amounts to deficiency in service and hence we answer point NO.1 in the affirmative.

20.   POINT No.2

        As pointed above, OPs have calculated excess interest of Rs.11,31,819/- in respect of both loan accounts.   OPs have also mentioned in the version that the complainants are due a sum of Rs.15,07,547.84 in respect of first loan and Rs.2,45,899.36 ps., in respect of the second loan which when summed up amounts to Rs.17,53,447.20 ps.  In the calculation list produced by the chartered account in respect of first loan it has been calculated up to 01.01.2021, wherein a sum of Rs.7,97,328/- is the balance /difference in EMI to be recovered.  As per the calculation of, as per the version, if the cutoff date is taken as 31.12.2019, then a sum of Rs.2,21,458/- has been taken extra.  When this is deducted it comes to about Rs.5,75,870/-.  Similarly, in respect of second loan the difference in EMI amount due is shown as Rs.91,952/- and if the cutoff date is taken as 31.12.2019 then a sum of Rs.64,087/- has been taken extra.  Which when deducted amounts to Rs.27,865/-.

21.   When these two figures are added, it amounts to Rs.6,03,735/- which according to us is the difference in EMIs to be paid due to the change of rate of interest from the inception of the loan till 31.12.2019 as OPPOSITE PARTY did not carryout the changes in the rate of interest as and when changed.  Though the complainant claims that they have cleared the loan amount on 31.08.2019.   Complainants have in unequiable terms have stated that they are ready to pay the balance of amount provided the calculation is properly made.  In view of this we are of the opinion that the complainants are due a sum of Rs.6,03,735/- being the difference in interest to be paid to the OPs.  Further we add here that the said sum may be less if calculated as on 31.08.2019, for which OPPOSITE PARTY has to file fresh memo of calculation. 

22.   Further, OPs ought to have settled the matter amicably by sitting across the table and should have considered the genuineness of the complainants request. In view of the negligence on the part of the OPs in not informing calculating by adding the change of rate of interest as and when the same has been changed raised the issue without any justification which made the complainants to approach this commission by spending their time money and energy besides undergoing mental agony, physical hardship and financial loss.

23.   Under the circumstance, we direct the complainants to pay a sum of Rs.6,03,735/- or a lesser amount to be calculates till the end dated on 31.08.2019 to the OPs and OPs to receive the same and return the documents with the complainants have offered as security towards the said loan amount and also to inform the CIBIL regarding the payment of the same after the payment is received and to set right the CIBIL score of the complainants.  We direct OPs to pay a sum of Rs.50,000/- as compensation for putting the complainants under mental agony, strain, physical hardship and further direct to pay a sum of Rs.10,000/- towards litigation expenses and answer point No.2 partly in the affirmative and pass the following;

ORDER

1. Complaint is allowed in part with cost.
2. Complainants are directed to pay a sum of Rs.6,03,735/- or a lesser amount to be calculates till the end dated on 31.08.2019 to the OPs and OPs are directed to receive the same and return the documents with the complainants have offered as security towards the said loan amount and also to inform the CIBIL regarding the payment of the same after the payment is received and to set right the CIBIL score of the complainant.
3. OPs are further directed pay a sum of Rs.50,000/- as compensation and Rs.10,000/- towards litigation expenses to the complainants.
4. Both the parties are directed comply the above order within 30 days from the date of receipt of this order and submit the compliance report to this forum within 15 days thereafter.
5. Send a copy of this order to both parties free of cost.

Note:You are hereby directed to take back the extra copies of the Complaints/version, documents and records filed by you within one month from the date of receipt of this order failing which the same will be weeded out/destroyed.

(Dictated to the Stenographer over the computer, typed by him, corrected and then pronounced by us in the Open Forum on this 24^TH DAY OF FEBRUARY 2022)

MEMBER                                PRESIDENT

ANNEXURES

1. Witness examined on behalf of the Complainant/s by way of affidavit:

Copies of Documents produced on behalf of Complainant/s:

Ex P1: Copy of the letter written by me on 21.10.2019, 07.06.2019,  30.09.2019, 03.10.2019, 24.10.2019

Ex P2: Copy of the letter received y OPPOSITE PARTY dated 04.10.2019

Ex. P3: Copy of the account statement regarding the loan

Ex P4: Copy of the account statement in respect of loan borrowed to the extent of Rs.5 lakhs and 25 lakhs

2. Witness examined on behalf of the Opposite party/s by way of affidavit:

RW-1: Smt.N.Nagarani – OP2

Copies of Documents produced on behalf of Opposite Party/s

Ex R1: Copies of sanction letter in respect of housing loan for Rs.25 lakhs and in respect of housing loan for Rs.5 lakhs (2 in Nos.)

Ex R2: Account statement in respect of the said loan (2 in Nos.)

Ex R3: Interest calculation sheet (2 in Nos.)

MEMBER                                        PRESIDENT

HAV*