Haryana

Panchkula

CC/64/2015

MRS.VANDANA THORPE - Complainant(s)

Versus

BANK OF INDIA - Opp.Party(s)

MANOJ KUMAR.

26 Aug 2015

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,  PANCHKULA.

                                                         

Consumer Complaint No	:	64 of 2015
Date of Institution	:	07.04.2015
Date of Decision	:	26.08.2015

 

1.       Mrs. Vandana Thorpe w/o Sh.Showick Thorpe, R/o H.No.452, Sector-21, Panchkula.

2.       Showick Thorpe s/o Sh.Edgar Thorpe, R/o H.No.452, Sector-21, Panchkula.

                                                                                      ….Complainants

Versus

 

1.       Bank of India, Sector-20, Panchkula through its Chief Manager/Branch Incharge.

2.       Bank of India, Star House, SCO 76-82, Dakshin Marg, Sector 31A, Chandigarh 160030 through its zonal Manager.

3.       Bank of India, Star House, C-5, “G” Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051 through its Managing Director/Incharge.

                                                                    ….Opposite Parties

 

COMPLAINT UNDER SEC. 12 OF THE CONSUMER PROTECTION ACT, 1986.

 

Quorum:               Mr.Dharam Pal, President.

              Mrs.Anita Kapoor, Member.

              Mr.S.P.Attri, Member.

 

For the Parties:     Mr.Manoj Kumar, Adv., for the complainant. 

Mr.Anil Malhotra, Adv., for the OPs.

 

ORDER

(Anita Kapoor, Member)

 

1. The complainants-Vandana Thorpe & Showick Thorpe has filed the present complaint against the Ops with the averments that they obtained house loan of Rs.83,00,000/- with IDBI Bank for 20 years and EMI of Rs.85,403/- was fixed. The authorized representative for the OP No.1 approached the complainants and offered lower interest rate & lower EMI from that of the existing running home loan without any changes in tenure. The complainants submitted all the requisite documents for balance transferring of existing home loan to the Op No.1 and after confirmation of approval/sanction of loan by the Ops, the complainants were asked to come at the office of Op No.1 for necessary execution of home loan agreement. The complainants visited the office of OP No.1 and there sanction letter as well as legal documents/home loan agreements were shown to the complainants and they were surprised to see that offered EMIs of Rs.92,088/- which was greater than the existing running EMIs with IDBI Bank and contrary to the commitment of representative of Op No.1. The complainants objected for signing/execution of such documents, thereupon, the Branch Manager after checking & verifying the record as well as the system/computer, told the complainants that due to technical error or system error EMIs of Rs.92,088/- have wrongly been printed instead of Rs.79,674/- on the sanction letter as well as legal documents. Thereafter, the representative for the Op No.1 manually incorporated with corrected EMI & counter signed the sanction letter/legal documents. On believing upon the action of the representative of the Op No.1 towards manually incorporation with correct EMIs of Rs.79,674/- for 209 months for the home loan of Rs.83,00,000/-, the complainants executed the loan documents. The Ops started raising EMIs of Rs.79,674/- on every calendar months from the bank account of complainants towards repayment of installments of home loan. When the complainants went to the Op No.1 for interest & principal certificate for filing income tax return, they were surprised to know that major portion of installments were adjusted towards interest component and only small part of principal component was deducted from the EMIs. The complainants inquired from the representative of the Op No.1 about the lesser deduction towards principal components who told the complainants that principal components were not reducing and he further told that they might see the changes towards reducing of principal in due courses. Thereafter, the complainants visited the Op No.1 who checked the record from the system/computer and told the complainants that EMI for the home loan was Rs.92,088/- whereas the Ops were raising EMI of Rs.79,674/- only every month so the principal component was not being reduced from the home loan account. The Op No.1 further told the complainants that if they have any grievances, they might write to the Ops No.2 & 3. The complainants wrote a letter dated 28.11.2014 but they did not get any response from the Ops. The complainants also approached the OP No.2 directly for redressal of their grievances but to no avail. Thereafter, whenever the complainants approached the Ops for any issue in respect to their home loan, they did not get any response. The complainants also sent legal notice dated 12.01.2015 to the Ops which was replied by the Ops denying all the allegations set out in the legal notice which act and conduct of the Ops amounts to deficiency in service on their part. Hence this complaint.
2. The Ops appeared and filed reply and submitted that the complainants approached the Op No.1 for taking over of the existing housing loan, availed by them from IDBI Bank. It is submitted that while processing the takeover proposal, there was a deviation with regard to Bank’s standard Housing Loan norms in net take-home funds. On considering all deductions, existing at the time of processing of takeover of loan for facilities already availed by the complainants and the proposed EMI, take home funds worked out to 31.74% of the total earnings against the Bank of India’s standard norms of 40% of total earnings. It is submitted that the deviations in standard norms for housing loan was got approved from the competent authority, in order to facilitate complainants for takeover of their loan. It is submitted that a concession of 50% of applicable rate in Proposal Processing Charges was also allowed to the complainants. It is submitted that a concession of 0.50% in applicable rate of interest was sanctioned by the Competent Authority of OP-Bank on 19.07.2013. It is submitted that the rate of interest was reduced from 0.75% above base rate to 0.25% above base rate of the OP-Bank. It is further submitted that the OP-Bank has also sanctioned other facilities that:-

Cash Credit Limit of Rs.8.00 lacs to M/s V&S Thorpes Education Inc.

Term Loan of Rs.4.00 lacs to M/s V&S Thorpes Education Inc.

Loan against property of Rs.20.00 lacs to Mr.Showick Thorpe.

Loan of Rs.8.00 lacs for the renovation of the office to M/s V&S Thorpes Education Inc.

It is submitted that the OP-Bank sanctioned the total credit facilities of Rs.127.00 lacs and the complainants were also satisfied with the services provided by the OP-Bank and also opened another current deposit account no.671520110000384 of their sister concern namely M/s ETI company on 27.10.2012. It is denied that the Ops made any promise not to claim processing fee. It is denied that the Ops take any hidden charges and all the charges were mentioned in the sanction letter. It is submitted that the complainants executed all the documents required for sanctioning of loan and they never negotiated regarding rate of interest and rate of interest offered by the Ops was also agreed by the complainants. It is denied that there were differences between the commitments & offer and terms & conditions mentioned in the sanction letter. It is submitted that the monthly installment of Rs.92,088.00 was rightly calculated for loan of Rs.83.00 lacs repayable in 209 EMI’s alongwith interest @ 11.50% per annum. It is submitted that on the request of the complainants, the monthly installments of Rs.92,088.00 was modified and reduced to Rs.79,674.00. It is submitted that inadvertently, the number of installments remained unchanged but the complainants could not take undue benefit of the said omission of changing the number of installments because the rate of interest payable on the loan availed by the complainants which was clearly mentioned in the sanction letter and the same was unchanged. It is denied that the complainants raised any objection rather they requested the Op No.1 to reduce the EMI which was accepted. It is denied that due to any technical error or system error EMIs of Rs.92,088.00 was wrongly printed instead of Rs.79,674.00 on the sanction letter. It is submitted that first of all contents were explained to the complainants, who after going through and understanding the same, executed the required documents wherein the rate of interest was mentioned as under:-

1. Sanction letter dated 01.12.2011.
2. Demand Promissory Note dated 01.12.2011.
3. Agreement of Home loan dated 01.12.2011.

It is submitted that the loan was availed by the complainants in December, 2011. It is submitted that every housing loan borrower obtains interest certificate for every financial year to avail income tax rebate on the interest and the principal repaid in the housing loan account so the certificates were issued to the complainants for the period from December, 2011 to 31.03.2012, 01.04.2012 to 31.03.2013 and 01.04.2013 to 31.03.2014. It is submitted that in the certificates, the amount of interest and the principal received by the bank were clearly and separately mentioned and the complainants never raised any objection of charging of higher rate of interest. It is submitted that it was not acceptable that the complainants came to know about the rate of interest being charged by the OP-Bank only in the year 2014 i.e. 3 years after the sanctioning of loan. It is submitted that letter dated 28.11.2014 was received by the OP No.1 and the same was forwarded to the Zonal Office, Retail Banking Centre and C & IC Department for guidance. A meeting was also arranged with the Chief Manager C & IC Department, Bank of India, Zonal Office, Chandigarh Zone and the Deputy Zonal Manager, Zonal Office, Chandigarh Zone with the complainant No.2 at Zonal Office, Bank of India, Chandigarh and all the queries of the complainants were answered. It is submitted that the Bank complied with the terms and conditions of the agreement. It is submitted that the allegations leveled in the legal notice dated 12.01.2015 were replied through reply dated 05.02.2015. It is submitted that non-changing of number of installments was an inadvertent mistake and could not be termed as deficiency in providing services to the complainant as they did not suffer any monetary loss. It is submitted that the Op-Bank worked in accordance with the guidelines issued by the Reserve Bank of India from time to time. It is denied that the OP-Bank forced the complainants to shift the account which caused the complainants huge monetary loss. Thus, there is no deficiency in service, unfair trade practice on the part of the Ops and prayed for dismissal of the complaint with costs.

3. Replication to the written statement has been filed by the counsel for the complainants.
4. The counsel for the complainant has tendered the evidence by way of affidavit Annexure C-A alongwith documents Annexure C-1 to C-5 and closed the evidence. On the other hand, counsel for the Ops has tendered the evidence by way of affidavit Annexure R-A alongwith documents Annexure R-1 to R-7 and closed the evidence.
5. We have heard the learned counsel for the parties and have carefully gone through the record including written arguments submitted by the counsel for the complainants.
6. The contents of the documentation relied upon by the OPs notwithstanding, the complainants deserve to succeed in accord with the age-old adage of ‘men may lie, but the circumstances do not’. For appreciation of this observation of ours, we must keep in view the natural human conduct. In this case, the complainants had already raised a house building loan (of Rs.83 lacs) from IDBI Bank Ltd. and they had been paying the equated monthly installments (EMI) @ Rs.85403/-. The EMIs were payable for a duration of twenty years. That banking institution is also a governmental instrumentality. Thus, it had to be for an understandable cause why the complainants opted to switch over to the OP Bank. The only purpose of the switch over could be the comparatively lower rate of interest and the consequential lowering of the EMI amount. The OPs have not controverted (in the course of pleadings) the averment by the complainants that the initially agreed EMI payable by them was @ Rs.92088/- and that it was reduced to Rs.79674/- per month. The averment in the course of Para No.8 of the complaint (that the EMI was reduced on the request of the complainant) was not controverted by the OPs in the corresponding para of the written statement (“The EMI was reduced at the request of the complainants and accordingly the installment of Rs.79674/- was entered in the system”).
7. In the circumstances of the case, there is validity in the grouse of the complainant that the OPs wrongly adjusted the larger part of the EMI towards the payment of interest and only a much lesser part of the payment was adjusted towards the principle facet of the loan. No individual, with even the minimum measure of prudence, would have agreed to that arrangement on point of appropriation of the amount towards the principle amount and the interest liability. Though every loanee would be in the know of the fact that the entire principle loan amount and the interest accrued there upon is payable, there is no reason why the loanee would append consent to the appropriation of the larger measure of EMI towards the interest payment. The normal and understandable anxiety of a loanee would be to pay up the larger part of the EMI towards the principal amount in order to ensure that the interest liability would get diluted with the clearance of the principal loan amount. Insofaras the documentation is concerned, it is a matter of common observation that a loanee would never be in a position to call the shots while raising a house building loan of that level. It, thus, becomes compulsive for a loanee to sign the available documentation which (documentation) would always be favourable to the banking institution, even at the cost of being un-conscionable. Thus, the OPs cannot appropriately rely upon their pleadings to outweigh the normal human conduct reflective of even the minimum measure of prudence on the part of a loanee. Moreover, the Ops have not placed on file any document which has been agreed upon by the complainant to the effect that on what ratio the interest and principle is to be adjusted from the amount of EMI paid by the complainant.
8. While, thus, allowing this complaint by upholding grievance of the complainants that there was deficiency on the part of the OPs in rendering services to the former, we would direct the OPs to re-calculate the payments made by the complainants from time to time and to calculate the liability by appropriating atleast more than 60% of the EMI amount towards the principal loan amount. On the conclusion of the calculation (which the OPs may ideally undertake in the presence of the complainants or a duly authorized representative of the latter), if any amount is found to have been excess charged as interest, it shall be refunded to the complainants. The OPs shall also be liable to a sum of Rs.5,000/- to the complainants as the cost of litigation and a sum of Rs.25,000/- for the mental agony and harassment caused to them due to the apparently un-conscionable appropriation of the larger part of the EMI amount towards the interest liability.                
9. OPs shall comply with this order within a period of one month from the date its communication to it comes about. A copy of this order shall be forwarded, free of cost, to the parties to the complaint and file be consigned to record room after due compliance.

 

 

Announced

26.08.2015           S.P.ATTRI       ANITA KAPOOR       DHARAM PAL

                             MEMBER        MEMBER                    PRESIDENT

 

Note: Each and every page of this order has been duly signed by me.

 

    

                                 

                                                         ANITA KAPOOR

                                                          MEMBER