DISTRICT CONSUMER DISPUTES REDRESSAL FORUM PALAKKAD
Dated this the 17th day of May 2016
Present : Smt.Shiny.P.R. President
: Smt.Suma.K.P. Member Date of filing: 17/06/2015
: Sri.V.P.Ananatha Narayanan, Member
(C.C.No.87/2015)
1.Manual Koldy,
S/o.Mathew Manual Koldy,
2.Beena Joe,
W/o.Manual Koldy
Both residing at
Koldy House,
Near Gayathri Motors,
Chandranagar Post,
Palakkad – 678 007 - Complainants
(By Adv.K.A.Stanly James)
Vs
1.LIC Housing Finance Limited
Represented by its
Area Manager
Shani Towers, Iyyatil Junction
Ernaulam – 682 011
2.Branch Manager
LIC Housing Finance Ltd.,
Palakkad Branch,
Mannil Arcade, 2nd Floor,
Shornur Road, Palakkad. - Opposite parties
(By Adv.M.Krishnadas)
(As per additional affidavit filed in IA No.361/15 OP2 included in the list of Opposite parties)
O R D E R
By Shri.V.P.Anantha Narayanan, Member.
Brief facts of complaint.
The complainant availed a housing loan A/c No.20004566 from the opposite party on 10/7/1999. According to the complainant the loan was availed with floating interest facility. The interest rate at the time of availing the loan was 14.75%. At the time of granting the loan the opposite parties made the complainants believe that the loan was granted and the loan facility will be continuing finally complying the norms and directions of the RBI. According to the complainants, the opposite parties assured them that since the loan was on floating interest rate, the rate of interest would vary according to the norms and directions of the RBI from time to time and the complainants could enjoy the fruits of reduced interest rates when the interest rates were reduced according to the RBI policy made from time to time. According to the complainants they were making the repayments promptly. Several repayment installments were remitted with the 2nd opposite party who charged 14.75% interest.
Though the housing loan interest rates were reduced considerably several times after 10/7/99 till date the opposite parties never had given any reduction in the interest rates to the complainants. The complainants made several communications to the opposite parties and higher authorities requesting them to give reduced interest rate to them on their loan but their efforts were in vain. Letters were sent by the complainants to Ernakulam office and Chennai Regional Office of LIC housing Finance ltd. to adjust the excess amount collected from them towards the loan amount. Lawyer notices were also sent to the opposite parties on 7/10/13 to give the concession of the reduced interest rates and to adjust the excess amount collected from the complainant towards the loan amount. But the opposite parties did not adjust the excess amount collected and send any reply to the lawyer notice of the complainant. The opposite parties charged very high interest for a short delay in paying the loan installments violating RBI norms in this regard. According to the complainant the loan account would have been closed by now if the opposite parties adjusted amount collected on the fixed interest rate from the complainant and the amount charged exorbitantly as penal interest. Complainant further pleads that the housing loan has been availed believing the words of opposite parties that interest would be calculated on floating rate basis and the complainant would get the benefit of interest rate reduction when announced by the RBI. By calculating the interest always at 14.75% and not giving the benefit of reduced interest rates to the complainants and charging exorbitant amount as penal interest, the opposite parties collected excess amount from the complainants which amounts to deficiency of service and unfair trade practice on the part of opposite parties.
On 7/6/14 the complainant sent an application under the RTI act seeking information on the variation of interest on floating housing loan from July 1999 to 7/6/2014, number of times the rate of interests had gone down below 14.75% during the above mentioned period and the rate of penal interest calculated by opposite parties for defaulted payment and the parameters for the calculation. The opposite parties did not provide the sought information and gave an excuse that applicability of RTI Act to LIC housing Finance Ltd. is subject to subjudice and hence they could not supply the necessary information. According to the complainant denial by opposite parties to furnish the details sought by complainant amounts to covering up of the malpractice. Complainants plead that they have suffered huge financial loss and mental agony due to the unfair trade practice and deficiency of service on the part of opposite parties.
Hence the complainants pray to the Forum that a judgment may be passed directing the opposite parties to calculate the interest at a lower rate whenever interest on housing loan is reduced below 14.75%, according to the RBI directions and to adjust excess amount collected by the opposite parties from the complainants by way of excess interest and penal interest towards the loan amount. Further the complainants pray for compensation for damages for Rs.2 lakhs, which is caused to the complainants for the mental agony and hardships suffered by them because of deficiency of service and unfair trade practice on the side of opposite parties along with litigation cost of Rs.5,000/-.
Being noticed on the complaint, the opposite parties entered appearance through their counsel and filed their detailed version and chief affidavit. The opposite parties contend that the complaint is not maintainable and hence should be dismissed because the complainants are not consumers. Why they are not considered as consumers is because they have taken a housing loan from LIC housing finance Ltd. and the rights, duties and obligations of the parties are strictly governed by the terms and conditions mentioned in the loan agreement entered into between the complainant and opposite parties.
The opposite parties admit that the complainants have availed a housing loan of Rs.9 lakhs from them on 10/7/1999 as per account No.20004566 but deny the averment of the complainants that the availed loan is with floating interest facility. The opposite parties admit that at the time of granting the loan they made complainants believe that the loan facility was granted to them and would continue fully following the norms and directions of the RBI. They also denied giving of assurance to the complainants that the availed loan facility was with floating rate of interest and the rate of interest will vary according to the terms and conditions of the RBI policy made from time to time. The opposite parties also denied the allegations of the complainants that the latter had made many communications to the opposite parties and higher authorities requesting for interest calculation according to the reduced rates but with no results. But according to opposite parties it is true that the complainants had sent a lawyer notice to the opposite parties requesting them to provide the complainants the applicable concession of the reduced interest rates and to adjust the excess amount collected from the complainants towards the loan amount. The opposite parties made it clear in their affidavit that as they did not collect any excess amount the request made by the complainants could not be met and this fact was informed to the first complainant over phone. Hence no reply to the complainant’s letter was sent. The opposite parties also denied the complainants allegations that the housing loan was availed by them believing the words of opposite parties that interest will be calculated on floating rate basis and they can be benefited by interest rate reduction announced by RBI. The opposite parties therefore contend that there is no deficiency of service or unfair trade practice on their part because they did not collect excess amount from the complainants and the complainants are not entitled for the benefit of reduced interest rates and claimed by them.
The opposite parties admit that on 7/6/14 the first complainant sent an application under the RTI act seeking information regarding rate of interest etc. Since the LIC housing finance ltd. does not come within the purview of the RTI act, the information has not been supplied to the complainant, according to opposite parties.
Hence, the opposite parties contend to the Forum that the allegations of the complainants that they have suffered huge financial loss and mental agony by the unfair trade practice and deficiency of service of the opposite parties are false and baseless and hence denied by them. The complainants are not entitled for any relief, according to the opposite parties.
Both parties filed their respective proof affidavits. Ext.A1 to A7 were marked from the side of the complainant. Ext.B1 series to B4 were marked from the side of the opposite parties. PW1 and DW1 were also cross examined.
The points that will arise for consideration are
1.Whether there is any deficiency in service on the part of opposite parties?
2.If so, what is the relief and costs ?
Issues 1 & 2
In this case the complainant opted for the facility of fixed rate of interest on their loan so that the rate of interest applicable to the loan availed by the complainant is same throughout the period of the loan whether or not interest rate varies in the market. The loan was granted to the complainant on the basis of an application submitted by the complainant. The opposite parties also issued to the complainant loan offer letter vide Ext.B1series stating the terms and conditions of the loan. It is mentioned in Ext.B1 series that the rate of interest is 14.75% p.a. and the rate of interest is applicable throughout the tenure of the loan. The complainants would have read and understood the terms and conditions and agreed to avail the loan of Rs.9,00,000/- on the terms and conditions in the loan offer letter by signing the loan offer letter on 21/6/1999. The 1st opposite party sanctioned the loan on 10/7/1999 on the basis of the acceptance of loan offer letter by the complainants and issued a demand promissory note vide Ext.B2 which stated clearly the rate of interest as 14.75% per annum. Hence it is clear that the loan availed by the complainants carries fixed rate of interest and the rate of interest applicable on the loan availed is 14.75% throughout the tenure of the loan vide Ext.B1 series.
The 1st complainant on finding that the interest rate is falling, wrote to 1st opposite party three letters mentioned as Ext.A2 to A4 to reduce the rate of interest retrospectively from the date of loan to date and the amount of interest thus reduced may be adjusted to his loan account. As per Ext.B4 the opposite parties informed the complainant No.1 that the repayment of his loan account at 14.75% rate of interest can be reduced by fulfilling certain conditions, namely
1)make the loan account upto date without any dues
2)submit an application for reducing the rate of interest from the old to new rate
3)Submit an affidavit on Rs.25/- stamp paper in the prescribed proforma
4)Submit the latest premium receipt of the LIC policy assigned towards collateral security
5)Make a payment of Rs.4500/- towards rewriting charges for which no action was taken by the complainant.
It is also mentioned in Ext.B4, if the complainant complies with the conditions mentioned above his loan can be rewritten and brought down to the present rate. From the above it is observed that no action has been taken by the complainant in this regard.
It is observed that the complainants have not fulfilled the conditions mentioned in the letter marked as Ext.B4 and hence they are not allowed the benefit of lower interest rate facility on the housing loan taken by them from LIC housing finance Ltd. Further as per Ext.B1 series it is made clear by the opposite parties that the rate of interest shall be altered prospectively and not retrospectively. Hence the benefit of lower interest rate will accrue to the complainant only in future not from the past i.e. from the date of taking the loan. The opposite parties agree that on 7/6/2014 the opposite party No.1 sent an application under the RTI act for getting information regarding rate of interest etc. The information was not supplied by LIC hosing finance ltd. to the complaiantnt because the company in question does not come within the purview of the RTI act and the applicability of RTI Act for LIC housing finance ltd. is under subjudice, according to the opposite parties.
It is observed that the complainant should have satisfied the conditions mentioned in the letter sent by opposite party No.1 marked as Ext.B4 and obtained the benefit of a lower interest on their housing loan. There is no documentary evidence on the part of the complainant to support their argument that the housing loan availed by them carried floating rate of interest. While cross examining the complainant, the complainant had remarked that he had taken housing loan not on floating rate of interest. However, the opposite parties should consider the fact that the complainants have been regularly remitting loan installments at a higher rate of interest (14.75%) since 10/7/1999. Hence concession in interest can be given and penal interest can be waived as a special case in appreciation of prompt repayment of their loan by the complainants.
Hence we partly allow the complaint and direct the opposite parties jointly and severally to give Rs.10,000/-(Rupees Ten thousand only) towards concession in interest and to waive penal interest charged by opposite parties on the housing loan taken by the complainant and Rs.1,000/- (Rupees One thousand only) should be allowed as litigation cost to the complainants.
Order shall be complied within a period of one month from the date of receipt of the order, failing which complainant is eligible for 9% interest per annum for the whole amount from the date of order, till realization.
Pronounced in the open court on this the 17th day of May 2016.
Sd/-
Shiny.P.R.
President
Sd/-
Suma.K.P.
Member
Sd/-
V.P.Anantha Narayanan
Member
Appendix
Exhibits marked from the side of complainant
Ext.A1 – Photocopy of letter sent by the complainant to opposite party
Ext.A2 - Photocopy of letter sent by the complainant to opposite party
Ext.A3 – Photocopy of letter sent by the complainant to opposite party
Ext.A4 - Copy of lawyer notice sent to opposite party by complainant’s advocate
Ext.A5 – Postal acknowledgement card
Ext.A6 – Photocopy of RTI application sent by the complainant to opposite party
Ext.A7 – Reply to RTI letter sent by the complainant dated 20/6/14
Exhibits marked from the side of complainant
Ext.B1 series – Housing loan terms and conditions and loan offer letter
Ext.B2 – Promissory Note dated 10/7/99
Ext.B3 – Application for Housing Loan
Ext.B4 – Letter dated 10/3/2003 sent by opposite party to complainant
Witness examined on the side of complainants
PW1 – Manual Koldy
Witness examined on the side of opposite parties
DW1 – K.G.Anilkumar
Cost
Rs.1,000/- as cost of the proceedings.
