CONSUMER DISPUTES REDRESSAL FORUM, PALAKKAD
Dated this the 26th day of September, 2016
PRESENT : SMT. SHINY.P.R, PRESIDENT
: SMT. SUMA. K.P, MEMBER Date of filing: 11/4/2016
: SRI.V.P.ANANTHA NARAYANAN, MEMBER
CC /52/2016
Ibrahimkutti.S : Complainant
S/o.Sidhiq, J.J.Manzil,
Erattakulam P.O,
Anjumurthy Via, Alathur,
Palakkad, Pin – 678 682
(Party in person)
Vs
Chief Manager,
Kerala Financial Corporation,
Branch Office, First Floor,
Century Complex,
Matha Kovil Street, Sulthanpeta,
Palakkad : Opposite party
(By Adv.S.M.Unnikrishnan)
O R D E R
By Sri. V.P.Anantha Narayanan, Member,
Brief facts of the case:- The complainant took in March 2010 a Pravasi loan from Kerala Financial Corporation, Palakkad Branch office of Rs.2,50,000/- at 7% interest. His family consists of himself, his wife and two daughters. For the purpose of starting a tailor shop for the livelihood of his family the loan was taken. In Alathur town an establishment namely “Sain Tailoring and Garments” was started. The said loan was to be repaid in 54 monthly installments starting from 2010 September and ending on 31/12/2015. In case of default of any monthly installment, 2% penal interest also should be paid as per the order which sanctioned the loan. The Chief Manager’s order in this connection was marked and filed. The house of the complainant was given as security for the above loan. With income obtained from the tailor shop, the complainant and his family had to make a living. Although the income from the shop was not satisfactory, controlling the expenses, the complainant started repaying the said loan form 2010 March. According to the loan sanctioning order only from September 2010 the loan repayment needs to be started.
In the meanwhile his daughter’s marriage fixing ceremony was conducted. Inorder to raise funds for his daughter’s marriage he thought of repaying the loan taken form KFC, getting back the title deed and getting funds from some other banks by mortgaging the title deed. If title deeds were not received back on time conduct of marriage would be difficult. Thus ornaments in his house including “Thalimala” were pledged on 16/10/2015 and repaid fully the loan with 7% interest; he repaid Rs.3,13,850/-. The loan repayment statement was marked. The complainant submits that he will produce a copy of the receipt of pledging the ornaments with opposite party. After sometime when he asked the opposite party for the title deed, the Chief Manager told the complainant “നിങ്ങളുടെ അക്കൌണ്ടില് കുറേ പണം കയറിവന്നിട്ടുള്ളതായി കാണുന്നു. ഇതുപോലെ മറ്റു പല അക്കൌണ്ടുകളിലും കാണുന്നു. കുറച്ച് ദിവസം കഴിഞ്ഞ് വരു എന്ന് പറഞ്ഞു.”
After a few days the complainant again asked for the title deed from the opposite party; then the latter told the former that his account has been blocked and asked him to come after two days. After two days, when the complainant asked the Chief Manager to return the title deed, he told the complainant that after giving him the loan, when one year expired interest rate increased to 14.5% + 2% and arrears of increased interest of Rs.70,582/- should also be remitted. Then the complainant told the Chief Manager his inability to remit this big amount. At that time zonal Manager of Kerala Financial Corporation, was also present. The two Managers (Chief Manager and zonal Manager) told the complainant “നിങ്ങള് തിരുവനന്തപുരത്ത് പോയി ഫിനാന്ഷ്യല് കോര്പ്പറേഷന്റെ മാനേജിംഗ് ഡയറക്ടറെ കാണുക അദ്ദേഹം വല്ലതും ചെയ്തുതരും”.
Accordingly the complainant went to Trivandum and met the Managing Director and told him all his grievances. The Managing Director told the complainant to do the necessary by consulting the Chief Manager of the Palakkad Branch. After some days, when he met the Chief Manager, the Chief Manager asked the complainant to prepare an affidavit in 100/- Rupees stamp paper and get it signed by a notary public and bring the same to his office. When the complainant told the Chief Manager his lack of knowledge to write an affidavit, in the presence of the Chief Manager an office clerk wrote a copy of the affidavit for him. The same was marked. Then the complainant wrote the affidavit in Rs.100/- stamp paper , got it signed by a notary public and handed over the same to the Chief Manager. The same was also marked. After two days when the complainant asked for the title deed, he was told by the Chief Manager that only after remitting the interest fully the title deed would be returned to him. At that time the complainant understood that the receipt of affidavit from him was for some other purpose. The loan which was to be repaid from September 2010 was remitted by the complainant from March 2010 and before the end of the loan period on 31/12/2015, on 16/10/2015 he repaid the loan with 7% interest. According to the complainant 7% interest rate was charged on the loan and after signing the agreement it was a wrong step on the part of opposite party to charge increased interest with retrospective effect. In the step of the Chief Manager deficiency of service was observed. The complainant was not informed of the increased interest. In the statement of the loan remitted with serial number 168, on 9/7/2015 in his account Rs.70,582/- was excessively entered. After that the complainant on 24/3/2016 remitted the loan amount with interest fully, that the title deed be returned that otherwise legal steps would be taken – mentioning all these the complainant wrote a letter to the chief Manager this letter was marked. In the reply letter dated 1/4/2016 given by the Chief Manager, it was mentioned that the complainant had to repay Rs.81,424/-, in repaying the loan the complainant committed deficiency and the complainant was neglecting notifications to the best of his knowledge. A copy of the letter of the Chief Manager was also marked.
According to the complainant Chief Manager’s reply was not based on real facts. Up to 16/10/2015, the complainant was not informed of the increased in interest. In some months, when the complainant delayed in remitting the loan installments as mentioned in the agreement, 2% penal interest was remitted. The complainant only after going to the office of the Kerala Financial Corporation several times for getting back the title deed the complainant knew that interest was increased with retrospective effect. To validate the argument of the Chief Manager, ignorance of the complainant was taken advantage of by getting the affidavit in writing from the complainant.
It is prayed to the Honourable Forum that chief Manager should be ordered to return the title deed of his house which was retained by the opposite party contrary to existing rules. The complainant suffered losses, difficulties, mental problems in this case. He lost his employment for many days and went to opposite party’s office for getting back his title deed several times. The complainant prays that for this a compensation of Rs.60,000/- should be recovered from the concerned parties and given to him.
In his version and affidavit, opposite party contends that the averment in the 3rd paragraph of the petition that on 16/10/2015 the petitioner closed the loan account by remitting Rs.3,13,850/- is incorrect. As per the statement accounts an amount of Rs.75,585/- was due in the loan account of the complainant and it carried interest at 14.5% per annum + 2% penal interest for the defaulted amount from 01/05/2011, since the loan account was included in the NPA category from May 2011 onwards. Also the averment in the 4th paragraph of the complaint that the opposite party contended that certain defects were found in the loan account were not correct. Whenever the complainant approached the Kerala Financial Corporation, he was informed of the amount due in his loan account and of the enhancement of the rate of interest to 14.5% p.a. + 2% penal interest for the defaulted amount. He was also proved that his document could be released only on remitting the arrears mentioned in the loan account. He was also informed of the concessional scheme of the corporation.
The averments in para 5 of the complaint that opposite party told the petitioner that he would release the title deed on filing an affidavit is not correct. According to the opposite party, the said affidavit was filed by the petitioner to know whether any concessional scheme of the Kerala Financial Corporation was available including settlement. The averment in para 7 of the complaint that the complainant was not aware of the enhancement of the rate of interest till 16/10/2015 is false. As and when the interest rate was enhanced by the corporation the complainant was informed of the same. The averment in para 7 that the Chief Manager called for the affidavit from the complainant exploiting his ignorance and illiteracy is wrong. According to opposite party there was no deficiency of service from their part and the complainant being a defaulter is not entitled to the benefit of the scheme.
Opposite party also contends that the complainant is not entitled to get any relief from the opposite party and no mental agony was caused to him due to the act of the corporation. As per the rules of the corporation the tilte deed can be released only after remitting the balance outstanding in the loan account. As on 4/5/2016 Rs.82,641/- was the balance outstanding.
A detailed statement of arrears regarding the complainant’s loan had been sent to the complainant on 5/11/2012. The complainant thereafter sent request letters dtd.27/11/2013, 8/8/2014 and 4/9/2015 for extension time for repayment of the loan and requesting not to increase the rate of interest accrued on default in repayment of the loan.
Hence the opposite party prays that complainant’s petition should be dismissed with cost to the opposite party.
The complainant filed chief affidavit, from the part of the complainant Ext.A1-A6 were marked. From the part of the opposite party Exts.B1-B5 were marked. Opposite party also filed affidavit and IA 303/16 to reopen evidence. The IA was allowed in the interest of justice. Counter in IA was also allowed. Both parties were heard.
The following issues come up in this case.
- Whether there is any deficiency in service/negligence/unfair trade practice from the side of the opposite Party?
- If so, what is the relief?
ISSUES 1 & 2
In this case the complainant took in March 2010 a Pravasi Loan of Rs.2,50,000/- from Kerala Financial Corporation, Palakkad branch; this loan carried interest at 7% p.a. and was taken for starting a tailor shop for earning livelihood of his family. According to Ext.A1, it was a short term loan sanctioned to the complainant under special package to NRKs for meeting the cost of purchasing sewing machinery, furnishing the shop room and for meeting a part of working capital expenses. The short term loan facility was for a maximum period of 60 months. According to the complainant the loan was to be repaid in 54 monthly installments starting from September 2010 and ending on 31/12/2015. According to Ext.A1 the repayment of the principal of the short term loan will be monthly and the 1st installment will be started 6 months after disbursement of the 1st installment of the loan. A demand promissory note for Rs.2,50,000/- was to be given along with personal guarantee of the proprietor; the proprietor should hand over 54 post dated cheques being the monthly installments of principal. The rate of interest was 7% p.a. compounded on monthly rest and 2% additional interest would be charged for the defaulted amount for the defaulted period and the interest was payable on monthly basis which would fall due on the 1st day of every month. The collateral security offered for the loan was 6.17 cents of land in resurvey number 284/2 of Kavassery I village with residential building which was mortgaged to the Corporation. The entire assets should be insured with New India Assurance Company Ltd and should be renewed every year. According to the complainant, he started repaying the above loan from March 2010, although only from September 2010 the loan repayment needed to be started. According to the complainant the amount repaid towards loan was Rs.3,13,850/- on 16/10/2015. As per Ext.A2 series amount due as on 1/6/2015 was Rs.46,224/-. After sometime when the complainant demanded back the title deed mortgaged the opposite party told him arrears of increased interest of Rs.70,582/- should also be remitted because interest rate increased to 14.5 % + 2%. The affidavit filed by the complainant requesting the opposite party to return the title deed given as security for the loan taken from the opposite party was marked as Ext.A3 and the same prepared in Rs.100/- stamp paper noted by a Notary public was marked as Ext.A4. After two days when the complainant asked for the title deeds opposite party told him that only after remitting fully the interest the title deeds would be returned to him. But according to the opposite party, on 16/10/2015 that the complainant close the loan account by remitting Rs.3,13,850/- was incorrect. As per the statement of accounts, Rs.75,585/- was due in the loan account of the complainant and it carried interest at 14.5% p.a. together with 2% penal interest for the defaulted amount from 1/5/2011, since the loan was included on the NPA category from May 2011. The complainant appeals that although the end of the loan period was 31/12/2015, he had foreclosed his loan account on 16/10/2015 with 7% interest ; it was a wrong step on the part of the opposite party to charge increased rate of interest with retrospective effect and further he was not informed of the increase in interest. Also on 9/7/2015 with serial number 168 in the loan account statement, Rs.70,582/- was excessively entered. On 24/03/2016 the complainant remitted fully the loan amount and interest. Mentioning this, for the return of the title deeds and initiation of legal action against opposite party the complainant wrote a letter dated 24/3/2016 to opposite party which was marked as Ext.A5. But the opposite party contends that when the complainant approached the opposite party he was informed of the amount due in his loan account, the increase in the interest rate to 14..5% p.a. + 2% penal interest for the defaulted amount and his documents could be released only on remitting the arrears in his loan account. He was also informed of the concessional scheme of the Kerala Financial Corporation. According to opposite party the said affidavit (vide Ext.A4) was filed by the complainant to know any concessional scheme available with the Kerala Financial Corporation including settlement; as and when the interest rate was increased by the corporation the complainant was informed of the same. To the letter dtd.24/3/2016 sent by the complainant to the opposite party, the opposite party wrote a reply letter dtd.1/4/2016 to the complainant (vide Ext.A6) stating the amount due in his loan as on 1/4/2016 was Rs.81,224/-.
It was also mentioned in the said letter that the complainant did not make prompt repayments in his loan account and as such the title deed could not be returned to him.
From the above we understand that the complainant was asked to clear the arrears in his loan account. But at the same time the complainant has given two affidavits which clearly mentioned the pathetic financial situation. Even in this condition we note that he has repaid the loan fully thinking that the interest of loan was only 7%. For a complainant who is a non resident Kerallite who is making his livelihood by using his income from tailoring 16 ½ % interest imposed is beyond his capacity and instead of giving him concession in rate of interest and incentive to make proper repayments, the opposite party has imposed on him a liability to repay Rs.81,224/-. In this connection his request letters to the Chief Manager should have been considered by opposite party favourably.
We also view that the opposite party should take note of para 6 (2) of the loan agreement in which it is mentioned that in the event of the corporation increasing during the subsistence of this agreement, the rate of interest payable on loan advanced by it and giving notice by a general notification of the same in any vernacular daily having circulation in the district where the office of the industrial concern is situated or otherwise as stated hereinafter to the borrower of such increase or increases, the borrower shall pay from the date of such notice interest on the said principal sum or any part thereof remaining undischarged with him for the time being, at the increased rate in force from time to time, not with standing anything herein before contained. As per the point mentioned in para 6 (2) of the loan agreement, the opposite party has not issued any notification in the local vernacular daily of the increase in the rate of interest payable on loans advanced by it.
Hence we observed that there is deficiency of service from the part of opposite party.
Therefore the complaint is allowed.
The opposite party is ordered to give maximum possible concession the rate of interest charged on the loan taken by the complainant so as to enable him to settle as early as possible the repayment of his loan and interest. The opposite party is also ordered to return the title deeds as early as possible to the complainant to enable him to conduct the marriage of his first daughter. We also order the opposite party to pay the compensation of Rs.5,000/- (Rupees Five thousand only) to the complainant for mental agony suffered by him and his family along with Rs.1,500/- (Rupees One thousand Five hundred only) towards litigation expenses expended by him.
The afore said amount should be paid within 1 month from the date of receipt of this order failing which the complainant is entitled to get 9% interest for the said amount from the date of the order till realization. .
Pronounced in the open court on this the 26th day of September, 2016.
Sd/-
Shiny.P.R
President
Sd/-
Suma. K.P
Member
Sd/-
V.P.Anantha Narayanan Member
A P P E N D I X
Exhibits marked on the side of complainant
Ext.A1- Letter dtd. 11/02/2009 issued by Chief Manager, KFC in the name of complainant (Original)
Ext.A2 – Demand notice (6 nos.)
Ext.A3- True copy self attested copy of affidavit
Ext.A4- Notary sealed 100/-rupees stamp paper true copy self attested copy of affidavit
Ext.A5- Regd. true copy of self attested copy of letter dtd.24/3/2016
Ext.A6- Regd.Letter dtd. 1/04/2016 issued by Chief Manager, KFC in the name of complainant (Copy)
Witness marked on the side of complainant
Nil
Exhibits marked on the side of opposite party
Ext.B1- True copy of letter dtd.05/11/2012 issued by Chief Manager, KFC in the name of complainant
Ext.B2- Copy of letter dtd.27/11/13 /
Ext.B3- Copy of letter dtd.4/9/2015
Ext.B4- Copy of letter dtd.8/8/2014
Ext.B5- True copy of loan agreement
Witness examined on the side of opposite party
Nil
Cost Allowed
Rs.1,500/- as cost.
