BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

========

Shashi Bhushan Shori, Proprietor, M/s Bhushan Fashion, SCO No.3, Sector 1, Panchkula, Haryana

 ….…Complainant

V E R S U S

1]   Chairman-cum-Managing Director, Indian Overseas Bank, Central Office, 763, Anna Salai, Chennai 600002.

2]   Regional Manager, Indian Overseas Bank, SCO No.11, Sector 7-C, Madhya Marg, Chandigarh.

3]   Indian Overseas Bank, through its Branch Manager, SCO No.26, Sector 7-C, Madhya Marg, Chandigarh.

.…..Opposite Parties

CORAM:    SH.P.D. GOEL                      PRESIDENT

SH.RAJINDER SINGH GILL            MEMBER

DR.[MRS]MADANJIT KAUR SAHOTA      MEMBER

Argued by:    Sh. Krishan Gopal Sharma, Counsel for

Complainant.

     Sh.C.S.Pasricha, Counsel for OPs.

PER DR.[MRS]MADANJIT KAUR SAHOTA, MEMBER

          The complainant, having cash credit account, with OP bank, was sanctioned Credit Facility of Rs.245.00 lacs at 14% rate of interest vide letter dated 3.2.2011 (Ann.C-1), duly secured by way of equitable mortgage of House No.189, Sector 4, Panchkula.  Subsequent to sanctioning of credit facility, the OP also procured additional security vide letter dated 12.2.2011 (Ann.C-2), thereby obtained two self-drawn cheques of Rs.One Lakh & Rs.10.00 lacs each from the complainant for issuance of F.D.Rs., but the copy of the same have not been supplied to the complainant, despite request  (Ann.C-3).  It is averred that as per the statement of accounts, it revealed that the OPs have been debiting some of the amount to the loan account without any authority, as detailed in Para 4 of the complaint.

          It is also averred that scrutiny of account statement (Ann.C-4) further revealed that the OPs have debited into the loan account, rate of interest much higher to what had been agreed upon between the parties, as detailed in Para No.5 of the complaint.  It is pleaded that the complainant had been requesting the OPs vide letters Ann.C-5 to C-7, sent through post as well as fax (Ann.C-8 to C-11), to regularize the account by reversing the unauthorized debits raised in the account and also reimburse the amount of excess interest amount recovered from the account, but they did not pay any heed.  Not only this, the OPs also got encashed all 13 insurance policies, detailed in Para No.7 of the complaint, belonging to the complainant having life cover and thereby jeopardized the life cover available to the complainant, besides the maturity benefit. The matter was brought to the notice of the OPs many times, but they did nothing. Ultimately, a legal notice (Ann.C-12) was sent to the OPs, but it too had no effect.

2]        OPs filed joint reply stating therein, that the complainant is not maintaining Cash Credit Account with OP-3.  In fact, the Cash credit Limit had been sanctioned, but the complainant was not routing the sale proceeds through the Bank Account i.e. Cash Credit Hypothecation Account and the Account had been declared as NPA and action/notice under Securitization Act has been issued by OP-3 for recovery of the outstanding dues (Ann.OP-3/2).  The account right from the inception had not been operated as per the financial discipline of the bank and also as per the terms & conditions of the sanction letter dated 17.2.2011 (Ann.OP-3/1).  The sanction of Credit Facilities to the extent of Rs.245 lacs has been admitted as a matter of record.  The rate of interest was in accordance with the sanction and terms & conditions of the agreement and was variable in accordance with the change of rate of interest from time to time.  It is denied that OPs obtained two self drawn cheques of Rs.1.00 lacs and Rs.10.00 lacs each from the complainant for issuance of FDRs.  The cheques were self cheques duly signed by the complainant and paid in cash on 15.2.2011 for Rs.1.00 lacs and on 4.3.2011 for Rs.10.00 lacs.  The insurance policies had been assigned by the complainant of his own accord in accordance with the stipulation of the Regional Office. The policies were securities in addition to the security of Residential House. The bank at the first instance invoked the other securities which were liquid securities available with the secured creditor i.e. OP-3 and the same had also been encashed prematurely after giving advance notice to the Borrower/Complainant. The charges as mentioned in Para No.4 of the complainant was on account of different facilities & services availed by the complainant, such like cheque book, processing charges, folio charges, vetting charges, inspection charges and insurance charges etc. which were informed to the complainant vide letter dated 9.2.2012 (Ann.OP-3/4).  Pleading no deficiency in service on their part and denying rest of the allegations made by the complainant, the OPs have prayed for dismissal of the complaint.

3]        Parties led evidence in support of their contentions.

4]        We have heard the learned counsel for the parties and have also perused the record.

5]        The contention of the complainant, in the present complaint, is that the OP Bank had charged & debited to his account the higher rate of interest than agreed in writing.  Such an act reveals unauthorized debit raised in the account of the complainant. Therefore, the request for reimbursement of excess amount charged by the OP Bank was made, which was not acceded to.

6]        The OPs termed the complaint, an after thought and a patent misuse of the process of law, with the sole motive of delaying the process of recovery.  Moreover, the complainant is guilty of suppressing material particular/information, as the rate of interest was in accordance with the sanction dated 17.2.2011 (Ann.OP-3/1) as per the terms & conditions of the agreement and was variable in accordance with the change of rate of interest of the bank. Moreover, it is denied that the OPs subsequent to the sanction of the Credit Facility, arbitrarily procured the additional security, rather it was the complainant, who himself had offered it.   

7]        Going through the pleadings of the parties, facts & circumstances of the case as well as perusing the documents on record; in order to clinch the matter in question, it has logically been made out that the interest on the credit facility of Rs.245/- lacs granted to the complainant as per “CREDIT SANCTION ADVICE” (Ann.OP-3/1 – Page NO.22) was not having fixed interest rate, rather, it was a variable rate of interest. 

8]        In Ann.OP-3/1 at Page NO.23, the relevant clauses 2.h.1 and 2.h.2 reads as under:-

“2.h.1    In the case of borrowal……………………………… “Notice” to you about the revisions effected in the interest rates.

2.h.2.    the applicable interest rate/s will be charged with monthly/ quarterly/ half yearly/ annual rests, or such other rates and rests as may be notified by the Bank from time to time.”

9]        A bare reading of the above Clause No.2.h.2., established that the rate of interest was to be charged with monthly/quarterly/half yearly/ annual rests or such other rates and rests notified by the OP Bank from time to time.  This clause further establishes that the rate of interest on the Credit Facility granted to the complainant was not fixed and it was to be charged as per the rates and rests notified by the bank from time to time on monthly/quarterly/half yearly and annual rests.

10]       Furthermore, the Rate of Interest at the time of grant of Credit Facility to the complainant was “B.R.+4.50 i.e. 14.00% [being present BR is 9.50” vide Ann.OP-3/1, which was later on changed.  The same was intimated to the complainant vide Demand Notice, dated 5.3.2012 (Ann.OP-3/2), wherein the Rate of Interest is mentioned as “Base Rate + 4.75% i.e. 15.25% at present”. 

11]       In this very notice Ann.OP-3/2, it has been specified that:-

*Further interest at contractual rates+ penal interest ie; 17.25% will be charged from 12.12.2011 and will become payable from the date mentioned above till date of payment.

12]       More so, it has also been clarified in Demand Notice Ann.OP-3/2, under Para NO.3 & 4 that:-

“3.  Consequent upon defaults committed by you in payment of principal debt and interest as per terms, your loan account has been classified as non-performing asset on 01.03.2012 in accordance with the Reserve Bank of India directives and guidelines.  Despite our repeated requests and demands you have not repair the overdue loans including interest thereon.

4.   Since you have failed to meet your liabilities in respect of the credit facilities duly secured by various securities mentioned above, and classification of your account as a non performing asset, we hereby recall our advances to you and give you notice under sub-section (2) or section 13 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, and call upon you to pay in full and discharge your liabilities to the bank aggregating Rs.245.00 lacs (Rupees Two Hundred and forty Five Lacs Only), as detailed in Para 1 above, with further interest @17.25% p.a., with monthly rests, from the date mentioned above i.e. 12.12.2011, within 60 days from the date of notice.  We further give you notice that failing payment of the above amount with interest till the date of payment, we shall be exercising all or any of the rights vested in us, under sub-section(4) of section 13 of the said Act.” 

13]       Having gone through the above specific details, the factual position has become clear beyond doubt that the interest rate on the credit facility granted to the complainant was not fixed one, rather it was variable, to be charged with monthly/quarterly/half yearly and annual rests and such other rates and rests as may be notified by the Bank from time to time.  It also became clear that as the complainant had failed to repay the overdue loans including interest thereon, therefore, Demand Notice (Ann.OP-3/2) was sent to him by the OP Bank and consequently, the policies assigned to the Bank had been encashed for regularization of the account.

14]       Henceforth, we have no hesitation in coming to the conclusion that the complainant has not been able to prove any deficiency in service on the part of OPs.  Instead, the OPs have been able to assail the allegations leveled against them by the complainant. Therefore, we do not find any merit, weight and substance in the present complaint. The same is accordingly dismissed.

          Certified copies of this order be sent to the parties free of charge. The file be consigned.