Before the District Consumer Dispute Redressal Commission [Central], 5th Floor ISBT Building, Kashmere Gate, Delhi
Complaint Case No.113/02.11.2021
Rajesh Yadav
R/O 7/25, Geeta Colony, Delhi-110031. …Complainant
Versus
M/s Capri Global Capital Ltd., 502, Tower 'A' Peninsula Business
Park Senapati Bapat Marg Lower Parel, Mumbai-400013.
Branch Office - 2nd floor, 3-B, Pusa Road,
New Delhi-110005. ...Opposite Party
Date of filing 02.11.2021
Date of Order: 21 07.2023
Coram: Shri Inder Jeet Singh, President
Ms. Shahina, Member -Female
Shri Vyas Muni Rai, Member
Inder Jeet Singh, President
ORDER [final]
1.1. (Introduction to case of parties) - The complainant/borrower had filed a complaint on 02.11.221 under the Consumer Protection Act by alleging deficiency in services and unfair trade practice against OP/lender and he seeks directions against OP to reschedule his account as per terms and conditions of agreement i.e. to reduce the amount of EMI as per original schedule of Rs. 64,3551- for EMI 180 months, to refund the excess amount collected from complainant from July 2019 and compensation of Rs.5 lakhs , litigation costs and other appropriate relief, since OP had unilaterally revised/enhanced rate of interest and also number of EMIs against agreed fixed interest & corresponding 180 EMIs of Rs.64,355/- in August 2018 to 254 EMIs of Rs 68,065/- and then in July 2021 the same were increased to 455 EMI of Rs. 75,2771-. It is unfair trade practice and deficiency of services by OP.
1.2. But OP opposed the complainant that neither there is any deficiency of services or unfair trade practice but the OP has been within terms and conditions agreement. The complainant along-with Mrs. Rita Yadav and M/s R H Garment being co-borrower availed loan facility from the applicant/OP but failed to maintain the financial discipline by making default in EMIs of loan account, they also failed to adhere to terms and conditions of loan agreement. The EMIs and interest were revised within the terms of agreement.
1.3. It is relevant to mention, that when the complaint was at the stage of final hearing, the OP had filed an application on 20.4.2023 under Order VII rule 11 CPC to reject the complaint (on the ground of lack of jurisdiction of the Consumer Commission as jurisdiction lies with the DRT, Delhi since OP had issued notice u/s 13(2) of SARFAESI Act, 2002) and that application was also heard along-with final arguments on the complaint. The application u/O VII rule 11 CPC is dismissed by separate reasoned order today, since it raised an independent issue on point of jurisdiction in that application, which was never the plea/case of OP in its written statement/or in evidence or in written arguments.
2.1. (Case of complainant) - On 31.08.2018 the complainant had availed loan from OP under written agreement and documents after negotiations. The loan amount was Rs.50,87,014/-. It was repayable in agreed 180 EMIs of Rs.64,355/- each w.e.f. 15.10.2018 to 05.9.2033 and interest rate agreed was fixed 13% pa. The complainant started paying installment through ECS by making necessary arrangement to clear ECS.
2.2. However, in July 2019, the ECS of EMI was bounced. When complainant contacted OP, it was revealed that OP has revised amount of installment from Rs.64,355/- to Rs.68,065/-, which shocked complainant that how it could be, when there is fixed rate of interest. The complainant explored and it was disclosed that interest rate was increased to 15.5% pa from 13%pa. It was also revealed that EMIs have also been revised to 254 EMI of Rs.68,065/- from original 180 EMI of Rs.64,355/-. The complaint asked OP that there was 180 EMI and fixed rate of interest, then how both can be revised/increased, there was no satisfactory reply. Since it was in violation the terms and conditions of the agreement and such revision of interest rate and tenure of repayment from 180 to 254 months was without any intimation and knowledge of complainant, he wrote letter to OP to do needful but of no avail. The complaint was constraint to maintain his credit score and under such compulsion, he started paying the EMIs. The complainant has been pursuing OP to confine and collect 180 EMI of Rs.64,355/- being in agreement, but OP is paying no need. The OP is intending to take unnecessary shelter and benefit under the garb of protection of public money but that protection is not for financial institution indulging in unfair trade practice and misusing the process of law. The OP has violated the agreement by doing its business unfairly, which amounts to unfair trade practice.
The complaint got issued legal notice dated 22.11.2019 to OP to reschedule the account of complainant as per terms and conditions within 07 days of receipt of notice, by terms of 180 EMI of Rs.64,355/- each and to refund excess amount collected from July 2019, failing which the complainant will initiate legal action, however, there was no reply nor any compliance despite service of notice on OP. Thus, the complainant had filed a complainant CC no.30/2020 u/s 12 of the Consumer Protection Act but because of point of pecuniary jurisdiction, the complaint was returned by the Forum by order dated 18.3.2020 to be presented before the competent forum having pecuniary jurisdiction. However, the present Tribunal/Commission has pecuniary jurisdiction under new the Consumer Protection Act and it could not be filed earlier because of massive Covid-19 pandemic across the country.
2.3. In July 2021, the complainant received a message on his mobile phone from OP it has revised/increased the amount of installment from previous revised amount of Rs.68,065/- to Rs.75,277/- of each EMI, apart from total EMIs are also increased from 254 to 455 EMI of Rs.75,277/- each. It again shocked and surprised, as the complainant had opted for fixed rate of interest. Moreover, the acts of OP are illegal and unlawful. The complainant suffered harassment, humiliation, inconvenience and also mental agony. There is gross negligence and deficiency of services by OP. The complainant is to be compensated thereof by damages of Rs.5 Lakhs apart from other relief claimed. That is why the complaint.
2.4. The complaint is accompanied with copies of loan agreement along-with demand promissory note, welcome letter dated 31.8.2018, copy of amount schedule report, copy of loan account statement, copy of notice dated 22.11.2019 with postal receipts, its reply dated 04.03.2020, copy of order dated 18.3.2020 of return of complaint filed.
3.1 (Case of OP)- The OP opposed the complaint by filing its reply under the pen of its authorised representative Shri Sushil Gupta. The complaint is mala-fide, vexatious, counterfeited, fabricated, therefore, it deserves dismissal. There were irregular payments by the complainant and he was aware of all EMIs that were bounced. As per loan sanctioned letter, the rate of interest was semi-fixed, thus rate of interest was not fixed rate as alleged in the complaint. The complainant alongwith co-borrower have read, accepted and signed the documents, they have also created a valid mortgage qua subject property. The OP has issued notice as well as SMS of increased in rate of interest in the loan account and the increased interest increased the tenure of loan account but complainant is misleading in the complaint. The complainant failed to analyse that loan disbursed is public money, OP is answerable to RBI being Regulator for non-recovery of loan amount as well as to report about the measures taken for recovery of loan amount. The complainant admits that he availed the loan facilities and also created valid mortgage in respect of subject property. There is no deficiency of services.
3.2. Factually, the complainant alongwith Smt. Rita Yadav and M/s R H Garment through its proprietor had approached OP for financial facilities and OP had sanctioned loan of Rs.50,87,014 on 31.8.2018. Subsequently, they understood the terms and conditions of sanction letter and agreed the same appending signatures. The loan account no. LNMEGNR000021136 was executed and sanctioned amount was disbursed.
3.3. But the complainant failed to maintain financial discipline and there have been several bounces in the payment of EMIs. The complainant also availed the moratorium facility as permitted by Hon'ble Supreme Court of India & RBI, its impact was extended to the complainant, it was from March 2020 to August 2020 [i.e. complainant did not pay EMI for 05 months]. But complainant failed to mentioned them.
Initially the complainant availed loan for a tenure of 180 months with an EMI of Rs.64,355/- and interest was semi-fixed as per sanction letter and agreement but it was not fixed rate of interest. The OP refers and reproduces clause 2.3 (c ) of loan agreement.
3.4. The OP admits that there was revised of EMI but it was owing to increase in the rate of interest and agreement permits OP to increase or modify the rate of interest of the loan account, on that account including the revision of the rate of interest. The complainant had agreed thereto in terms and conditions of agreement. The increase in rate of interest was informed to the complainant. The OP admits that it had increased the interest to 15.5% but the tenure from 180 to 254 is denied by OP. At the time of increase of rate of interest at this instance, the EMI stood revised. Therefore, the complainant is liable to make payment to his account as such rates in terms and conditions of agreement. There is no unfair trade practice or misuse of process of law.
The complainant availed the loan and took the financial advantage but now he is attempting to shrug the responsibilities of repaying the loan under frivolous ground of increase of rate of interest. The complainant continues to feign ignorance on the ground that he had no knowledge of increase in the rate of interest, whereas he was informed by SMS on 22.6.2019, which is much prior to EMI due date. The OP had received the notice dated 02.11.2019 and it was responded by reply dated 04.03.2020. The complainant is taking all benefits being given by OP but false complaint was filed by him, it is liable to dismissed.
3.5. The reply/written statement is supplemented with authority letter, application form, sanction letter, letter dated 1.10.2018 (regarding increase of interest by company to 14.% w.e.f. 1.10.2018 and EMI stand revised from 180 to 220), letter dated 1.1.2019 (regarding increase of interest by company to 14.5.% w.e.f. 1.9.2019 and EMI stand revised from 220 to 255), letter dated 1.7.2019 (regarding increase of interest by company to 15.5.% w.e.f. 1.7.2019 and EMI from Rs.64,355/- to Rs.68,065/-; but number of EMIs are not mentioned) and letter/loan account as on 19.4.2022 showing tenor of 484 EMI of Rs.90,690/-., showing last EMI due on 5.1.2059.
4. (Replication of complainant) - The complainant filed detailed replication to reply of OP, he opposes and denies all the allegations of written statement. The complainant re-affirm the facts, figures and documents of complaint. The complainant was not informed of increase in the rate of interest or its basis. The complainant also denies creation of valid mortgage of property. The rate of interest agreed was fixed of 13% pa, which the complainant is not denying and is always willing and continuing to pay it. The revise in rate of interest is illegal. Moreover, the complainant was not allowed to go through the terms and conditions of loan agreement, he was just shown schedule by officials of OP, wherein fixed rate of interest of 13%pa was mentioned, the other conditions were briefed orally and complainant had agreed to avail loan at interest of 13%pa. There was no such terms and conditions nor explained that OP may revise the rate of interest or revise number of EMI nor there was any occasion for him to accept them. The OP has violated the terms and condition of agreement and wrongly charged the increased rate of interest, despite there was fixed rate of interest. The OP has turned dishonest and wrongly increased the rate of interest with ulterior motive to extort money from the complaint under the guise of manipulating the RBI guidelines. The complainant cannot be permitted to increase rate of interest and it cannot enhance the EMIs. The rate of interest agreed was fixed of 13% pa, which the complainant always willing to pay it being agreed.
5.1. (Evidence)- The complainant Shri Rajesh Yadav led his exclusive evidence by filing detailed affidavit coupled with documents filed with the complaint.
5.2. OP led its evidence by filing affidavit of Shri Sushil Gupta, Zonal Legal Manager, coupled with documents filed with the reply.
It is relevant to mention a new document of loan agreement is also annexed with the affidavit of Shri Sushil, it was not filed earlier with pleading nor permission of Commission was taken by OP. On the other side complainant has filed complete copy of loan agreement along-with its most important terms and conditions [MITC]; these MITC were not annexed with copy of agreement filed by OP with affidavit. No SMS record was filed by OP, although so mentioned in the affidavit, it was also not filed with reply. These record are in fact beyond the pleadings, a party can lead evidence, what was plead and not beyond it.
6. (Final hearing)- Both the sides filed their respective written arguments, followed by oral submission by Shri Harish Kumar Mehta, Advocate for the complainant and Shri Gaurav Srivastava, Advocate for the OP. It does not require to reproduce their submissions, since there are reiteration in detail of their respective cases. The juxtaposition case of parties is regarding enhanced rate of interest and number of EMIs. The OP in its written arguments justifies that rate of interest is semi-fixed (floater) as per loan sanction letter, which complainant opposes.
7.1 (Findings)- The rival contentions of both the sides are considered, analysed and assessed keeping in view the case of parties, their evidence and provisions of law. In fact, there is written loan agreement between the parties and documentary records, it would suffice to determine the issues. Since parties have referred some common clauses of agreement, therefore, in order to appreciate their cases, those relevant terms & condition are being reproduced from the agreement and declaration-
"Facility Agreement -
1 - Definitions
(i) "Equated Monthly Installments (EMI) shall mean the amount of periodic payments to be made by the Borrower at such intervals as specified in the Schedule hereunder written, towards repayment of the Outstanding Dues in terms of this Agreement.
2.2. Interest (a) - The facility will carry interest at the interest rate specified in the Schedule hereto. The EMI comprise of principal and interest calculated on the basis of reducing balance of principal at the interest rate applicable and is rounded of to the next rupee. Interest and any other charges shall be computed on the basis of a year of 365 (Three hundred and sixty five) days. The Repayment Schedule of the EMI in, respect of the Facility is provided in the Schedule hereunder
written.
The Lender in its sole discretion would be entitled to modify and vary the interest Rare EMI cycle due from time to time including on account of changes in interest rates made by regulatory/ statutory authority as the case may be, from time lo time. The Lender shall be entitled to revise the Interest at any time and from time to lime as per its policy. market conditions and/or applicable laws and regulations, if any, during the tenor of the Loan at its sole discretion which will be effective only prospectively. Any change in variation in the EMI cycle date / rate of Interest would be duly communicated in advance to the Borrower at the contact details available with the Lender through SMS/ E-mail/. Courier or any other electronic/physical mode prevalent for the time being.
The ascertainment of rate of interest, besides other factors is based on risk analysis of the Borrower and that of the Security. offered for repayment of the loan amount, as per Lender rules, policy and sanction conditions. In case of change in any risk profile of the Borrower during the continuity of the Loan, due to external and/ or internal factors, Lender may change the applicable rate of interest, at its sole discretion, with prospective effect with prior written communication and shall be acceptable to the Borrower. The decision of Lender lo this effect will be final and binding on the Borrower.
2.3 Computation of Interest:
(a). For Fixed Rate of interest
The EMI comprises of both principal and interest calculated on the basis of the Schedule and is rounded off to the next rupee. The ratio/ proportion of the principal and interest constituting the MI would vary in every EMI though the EMI may remain the same every month. Interest and any other charges shall be computed on the basis of a year of three hundred and sixty five days. Lender may at its, discretion stipulate the periodicity of computation of Interest.
Provided that in an event the Lender changes. the Interest rate prior to the disbursement of the entire Loan amount, the weighted average of the different Interest rates applicable to the different tranche of the disbursed amount shall be applicable to the Loan, forthwith from the date of such increase decrease.
It is hereby further clarified that any interest rate as may be agreed between the Lender and the Borrower is always applicable for the disbursed amount only.
Provided further that from time to time Lender may in its sole and absolute discretion alter the rate of interest suitably and prospectively subject to written communication to the Borrower as per its internal policies or any changes in the money market conditions and the same shall be effective once communicated. The Borrower agrees that Lender shall have sole discretion to determine whether such conditions exist or not.
(b). For Floating Rate of Interest
The EMI comprises of principal and interest calculated on monthly basis rests at the CGCL-RR and is rounded off to the next rupee and any other charges shall be computed on the basis of three hundred and sixty five days.
Provided all future/ further CCL-RR applicable for the amount of loan lent by Lender to the Borrower shall be applied by Lender on that basis of Interest Rate Reset Revision Cycle
(IRRRC) which is quarter of English calendar year beginning from 1st day of January, April. July and October of each year.
All computation of and subsequent variation in Floating Interest Rate shall be based on the "Reference Rate preferred and agreed by the Borrower in the Schedule hereto and calculated by aggregating the spread specified by the Lender and the CGCL-RR applicable from time to time.
In an event Lender changes Floating Interest Rate prior to the disbursement of the full Loan, the weighted average of the different Floating interest Rate shall be applicable to the loan forthwith from the date of such increase or decrease till the first day of the quarter following the month in which the Reference Rate is changed.
In case of Pre-EMI, all future/ further Floating Interest Rate applicable to the Borrower shall be applied by the Lender on the first day of the quarter following the month in which the Reference Rate is changed.
The Floating Interest Rate applicable to the Loan shall be on the basis of the "Reference Rate" prevailing on the date of final disbursement:
The Floating. Interest Rate prevailing on the date of this Agreement or as changed from time to time shall be applied as follows :
i. In the event of the. Borrower having already commenced payment of EMI before the beginning of the month in which the Reference Rate has been revised on the outstanding principal-amount of the Loan as at the beginning. of next. month, or
ii. In the event of the Borrower not having commenced payment of MI on the total amount of the Loan drawn prior to revision of the Reference Rate.
In the events (i) and (ii) above, any pre-payments made by the Borrower during the financial year shall be taken into account.
( c) For Semi-Fixed Rate of Interest
The applicable rate for fixed and variable rate of interest will be as mentioned under respective heading in the Schedule.
Further the applicable period for fixed and variable rate of interest will also be mentioned in the Schedule.
Computation of interest and the EMI for the Fixed Rate Interest shall be as per provisions of clause on Interest above.
Computation of interest and the EMI for the Floating Rate of interest will be computed on the rate of interest as on date of switch and as per the provisions for CCL-RR under clause mentioned above.
2.4 Details of Disbursement and Conditions for Disbursement:
a. The Lender In its sole and absolute discretion, may disburse the Loan either in lump sum or in suitable installments having regard to the needs of the Borrower. The Borrower shall acknowledge the receipt, in the form required by the Lender, of each amount disbursed under the Loan.
b. All the payments to be made by Lender to the Borrower under or in terms of this Agreement and charges, if any, in respect of all such transmission of amounts will have to be borne by the Borrower and interest on the disbursed Loan will begin to accrue in favour of Lender from the date of disbursal of Loan and the Borrower shall be charged interest accordingly.
c. That wherein the Loan is disbursed to the Borrower in installments and only Interest is payable ill the complete disbursal of the entire Loan, Lender, shall be at liberty to start EMI on the disbursed amount any time after 12 months from date of commencement of first Pre-EMI at its sole discretion and the Borrower shall have no objection lo the same.
d. The Loan/ Facility may be reappraised on legal, technical and financial terms during the continuity of Loan/ Facility or is not drawn down fully from the date of sanction. Upon such reappraisal the Lender may hold, suspend, down size, cancel and/ or recall disbursement of the loan facility, at its own sole discretion. Notwithstanding anything to the contrary, the Lender may by notice to the Borrower suspend or cancel further disbursements of the Facility if the Facility shall not have been fully drawn within such period from the date of the Sanction Letter as the Lender may specify.
2.6 Repayment - (a) At the request of the borrower, and if agreed by the Lender, the Borrower shall pay EMI to the Lender every month from the date of commencement of EMI as specified in the Facility Agreement and also Pre-EMI till the payment of the first EMI..
Most Important Terms And Conditions (MITC)
The Most important Terms and Conditions (MITC) of loan between (he Borrower and Capri Global Capital Limited having is registered office al 502. Tower A. Peninsula Business Park. Senapati Bapal Marg, Lower Parel, Mumbai 400 013 (hereinafter referred as "ÇGCL") are agreed upon and mentioned below.
1. Loan :- Loan is sanctioned basis a combination of several factors like re-payment capacity, collateral security. past and present credit
2.Interest:.
history and other risk parameters. Borrower is/ are advised lo refer lo the loan agreement to know the loan amount sanctioned.
(i) Type (Fixed or Floating -or Semi-Fixed).: CGCL offers either Floating/ Semi-Fixed rate loans to all its Borrowers. Semi-Fixed rate loan is of fixed rate of interest during initial years and floating rate of Interest thereafter. Borrower is/ are advise to refer to the loan agreement to know the period of fixed and variable rate period of loan sanctioned.
(ii). Interest Chargeable:- Floating Rate of Interest is computed with reference to the CGCL-RR of CGCL together with the margin.
if any, as specified in detail in the loan agreement.
xxxx
3.Instalment types :- Monthly/ Quarterly/ as agreed between the parties.
4. Loan Tenor:- CGCL offers a wide range of loan tenors starting from 1 year upto 20 years depending on a combination of various parameters like age of Borrower, loan product; collateral security etc. Borrower is/ are advised to refer the loan agreement to know the loan tenor sanctioned.
5. Purpose of Loan :- CGCL offers a variety of loan options depending on the requirement of the Borrower like MSME term Loan for
Business. Personal Needs. Balance, personal need, balance transfer, debt consolidation or Purchase/ Construction/ Renovation of Property etc. Borrower is/ are advised to refer the loan agreement sanction letter lo know the Purpose of Loan sanctioned" .
7.2. Thus by comparing the rival contentions of the parties and by assessing them with the records, the following conclusions are drawn -
(i) The facility agreement is appended with Schedule, it is part of agreement. Its 6th row is regarding interest and terms of payment. It specifies ' in clause (a) Fixed rate of Interest - 13%pa'. The other clause (b) of floating rate of interest is …..'blank'… Clause (c) is regarding EMIs, it mentions - Semi-fixed rate of interest : Terms of repayment under fixed rate of interest = 136 & Terms of repayment under floating rate of interest = 37.
The next 7th row is regarding Amortization (subject to variation in terms and condition of this agreement), which specifies (a) terms of repayment = 180; (b) EMI Rs.64,355/-; (c) No. of EMI = 180; (d) Date of commencement of EMI = 05.10.2018 and (e) Due date of payment of last EMI - 05.09.2033.
(ii) In the MITC, it defines 'semi-fixed rate of interest' which means 'fixed rate of interest' during the initial years and 'floating rate of interest' thereafter. Thus as per schedule of agreement [its 6th and 7th row is already reproduced above], the terms of loan agreed by the parties was of 'semi-fixed interest', for which first 137 EMIs were of fixed rate of interest and thereafter 37 were of floating rate of interest {Its total comes 136+37= 173, however, parties does not dispute that total EMIs agreed were 180}. Thus, OP's stand of floating rate of interest as well as specifically mentioning in written argument that it was semi fixed [floating interest] is contrary to its own document, its terms and conditions and sanction letter, also is also showing 'semi-fixed'. The complainant does not dispute the agreed terms of repayment under fixed rate of interest = 136 & terms of repayment under floating rate of interest = 37.
(iii) the definition of semi-fixed rate given in the documents and terms & conditions, it clear case of 136 EMIs at semi-fixed (fixed rate of interest) of 13% pa and thence after 136 EMIs it will be case of semi-fixed (floater rate of interest).
(iv) As per Schedule to loan agreement, the tenure of loan was for 15 years, which was up-to 05.09.2033 being last EMI.
7.3. With regard to the enhancement of rate of interest and number of EMIs, its answer is also in the documentary record. As per letter dated 01.10.2018, the OP revised the rate of interest to 14% pa with effect from 01.10.2018, since company revised the rate of interest & number of EMI were increased from 180 to 220. Similarly, by letter dated 01.01.2019, the OP revised rate of interest to 14.5% pa with effect from 01.01.2019, since company revised the rate of interest & number of EMI were increased from 220 to 255. By letter dated 01.07.2019, the OP further revised rate of interest to 15.5% pa with effect from 01.07.2019, since company revised the rate of interest & amount EMI was revised from Rs.64,355/- to Rs.68,065/-. As per letter dated 19.4.2022 the tenure/ number of EMI were increased to 454, which were 254 on last revised. It is analyzed with other record and following conclusions are drawn :-
(a) Initially the tenure of loan was for 15 years (i.e.180 EMIs being upto 5.9.2033), it was increased to 18 years & 4 months (i.e. 220 EMIs), then to 21 years & 2 months (i.e.254 EMIs) and then 37 years & 11 months (i.e. 454 EMIs being upto 5.11.2059), and each increase was at short intervals. There is no provision in the loan agreement to permit the OP to restructure and increase number of EMIs unilaterally.
(b) It is apparent that revision of rate of interest and EMIs were effected from the date of letters and there is no record proved by OP about its information to the complainant, except one SMS narrated by OP. The OP has not proved the record of such revised information in advance to the complainant, or by what mode it was informed, and letters also do not reflect the mode by which letters were actually sent and served upon the complainant; it also violates the clause (a) of interest component of agreement, already reproduced in sub-paragraph 7.1 above.
(c) As per definition of 'fixed rate interest' (under semi-fixed clause) along-with definition of EMI, the firsts 136 EMIs of Rs.64,335/- were accordingly mentioned in the Schedule, the definitions given also supports it. But the letters were issued by exercising the option of 'floating rate' (under semi-fixed rate of interest), but that stage will come after 136 EMIs. Otherwise, by charging floating rate of interest for fixed rate, would mean there is no fixed rate of interest, and it is against the very spirit of loan agreement of concept of semi-fixed rate of interest (consisting firstly fixed rate of interest and then floating rate of interest). The letters issued by OP are breach of those terms and conditions,
(d) Further, under 7th row of schedule to loan agreement, any change in the number of EMI or tenure beyond 15 years will be by way of 'variation in the terms and conditions of agreement', there is no supplementary agreement between the parties to vary its tenor.
(e) As per MITC (clause no.4) the maximum tenor of loan will be up-to 20 years period, however, the OP unilaterally increased the tenor from initial period of 15 years ending on 05.09.2033 to more than 37 years ending on 05.01.2059. The agreement does not provide it nor it can be varied without variation in the loan agreement by parties vis a vis this unilateral act of OP is against its own principle scheme as well as against the loan agreement.
(f) There is provision that the lender may modify and vary the interest on account of changes in interest rates made by regulatory/ statutory authority as the case may be, from time to time but it applies in floater rate of interest and in all the letters filed by OP of revision of interest narrates just LTRR of company has increased. There is no reference or any notification of modification or vary of rate of interest by Regulatory or Statutory Authority.
Moreover, when 'fixed rate of interest' is determined and agreed (either under semi fixed or otherwise), that rates are determined fixed, keeping in view all factors or prospective factors including market trends & risks, it cannot be disturbed. Otherwise, what difference will remain between 'fixed rate of interest' and 'floating rate of interest'?
The OP refers 'ICICI Bank Vs Vishnu Bansal in written arguments (without citation) that if loan has been taken on 'floating rate of interest', get ready to pay valuable EMI and bank is not required to inform its borrower about increase or decrease in the interest rates in such cases. However, the feature of present case are distinguishable since there are initial 136 EMI of specified amount at 'fixed rate interest', the OP cannot invoke 'floating rate of interest'. In fact, record and the circumstances are confirming that OP has invoked 'floating rate of interest' against and during the phase of 'fixed rate of interest (of 136 EMIs)', which is gross violation of terms and conditions of loan agreement.
(g) the OP also contends, which also find mentioned in written arguments, that OP is permitted under loan agreement to increase rate, including revision by rate of interest by RBI, however, there is no proof of such revision by RBI nor agreement permit OP to revise 'fixed rate of interest' without variance in agreement by the parties. There is no such agreed variance of agreement between the parties.
(h) there is moratorium period of about 5 months, will it permit the complainant to vary the tenor of loan for more than 37 years from original period of 15 years? The answer is 'No'.
The conclusion drawn clearly establish that OP has treated and invoked 'floating rate of interest' by increasing the interest rate at short intervals in place of agreed 'fixed rate of interest (under semi fixed clause)', besides increasing the amount of each EMI from Rs.64,355/- to Rs.75.277/- unilaterally, apart from number of EMIs from 180 to 454 (i.e. from 15 years tenor to more than 37 years), which is clearly against the terms and conditions of loan agreement, MITC and other record. The terms and conditions are equally binding on the OP as on the complainant.
7.3. The OP pleaded and contended that subject property was mortgaged with OP, which is opposed by the complainant. There is a column in the application form for address and description of property. However, the OP failed to prove mortgage of immoveable property vis a vis mortgage of immoveable property is subject to provisions of the Transfer of Property Act, 1882 the Indian Registration Act 1908 and the Indian Stamps Act, 1899, there is no proof such compliances in this complaint.
7.4. Thus, the facts, features and circumstances established by the complainant proves the case of unfair trade practice and deficiency of services on the part of OP, which caused immense harassment, agony and trauma to the complainant. The complainant is entitled for appropriate relief.
8.1 The complainant is held entitled for reschedule of his account and accordingly OP is directed that his account be re-scheduled for total 180 EMIs of Rs.64.385/- each as initially agreed between the parties, however, out of them the first 136 EMIs will be of fixed rate of interest @ 13%pa. The floater rate (under semi-fixed) of interest will commence after 136th EMI as per agreement clearly stated in schedule appended thereto. The moratorium of 5 months EMIs will be as per guidelines issued, which will be scheduled by the OP by written communication to complainant.
8.2. Since complainant has been paying, from July 2019, as per revised higher EMIs invoked by the OP, whereas there is 136 EMIs under fixed rate of interest, therefore, the complainant is held entitled for refund of excess amount collected from complainant and paid by the complainant from July 2019, onwards subject to directions in 8.1 above.
8.3. The complainant claims damages of Rs. 5 Lakhs on account of agony, harassment, humiliation, inconvenience and it is apparent that despite provision of fixed rate of interest, OP has admittedly invoked 'floating rate of interest' and also justifying the same, apart from extending the tenor for more than 37 years of period. The complainant is garment businessman and he took loan for self-employed business, therefore, it is appropriate to compensate him; thus compensation of Rs.50,000/- is determined in his favour and against OP, it would meet both ends.
8.4 The complainant deserves costs since he was constraint to file the complainant, preceded by legal notice, to secure his right and there was no heed to his genuine grievances by OP and notice was replied much after filing of earlier complaint and then again fresh complaint was filed. The cost is quantified as Rs.20,000/-in favour of complainant and against OP.
8.5. It is ordered accordingly and compliance will be done by OP within 30 days from the receipt of this Order.
9. Announced on this 21st July 2023 [30 आषाढ़, साका 1945].
Copy of this Order be sent/provided forthwith to the parties free of cost as per rules for necessary compliance.
[Vyas Muni Rai] [ Shahina] [Inder Jeet Singh]
Member Member (Female) President
