Date of Filing: 29-12-2014 Date of Final Order: 10-08-2016
Sri Debangshu Bhattacharjee, Member.
The gist of the complaint as culled out from the record is that the Complainant, Sri Chunilal Sarkar intended to construct a house approached to the O.P, State Bank of India, Cooch Behar Bazar Branch for financial assistance (sanction of loan) and on his application the O.P pleased to sanction House Building Loan of Rs.3,00,000/- in favour of the Complainant with an agreement under A/c No.10394366109. The Complainant opted fixed rate of interest through the said agreement and on proper appreciation, the O.P has accepted the said option of the Complainant for fixed rate of interest and allowed the Complainant to repay the loan amount by 120 equated monthly installments of Rs.3,639/-. Against such loan the Complainant had to keep collateral securities.
Be it stated that the Bank had two options e.g. Fixed Rate of Interest and the other one is Floating Rate of Interest and the Complainant specifically opted the Fixed Rate of Interest option.
On the basis of such agreement entered between the parties, the Complainant was going on payment of the EMI of Rs.3,639/- regularly as agreed without any default and when the Complainant has already cleared almost all the dues and meager amount was lying unpaid and when the Complainant was almost at the verge of liquidation of his loan amount, the Complainant has been served a letter by the O.P vide letter under reference Br./Misc/14-15/60 dated 21-05-2014 claiming clearance of outstanding loan amount of Rs.83,203.63/- by remaining 6 EMIs.
It is pertinent to mention here that the Complainant at the time of taking loan specifically opted for fixed rate of interest as per the then terms and policy of the Bank and rate of interest has been assessed @8% per annum on highest monthly reducing balance at a monthly rests and in this way the Complainant was clearing up his entire outstanding amount.
On receiving such letter from the O.P, the Complainant became mentally upset. Practically, when he has almost cleared up his loan amount and a meager amount was lying unpaid at that time the Bank served the said notice intimating payment of Rs.83,203.63/- though in fact Bank was entitled to only a meager amount. On getting such notice the Complainant forthwith replied vide his letter dated 31-05-2014 appraising the Bank of the entire scenario, where the Complainant clearly mentioned that he is not supposed to pay the said amount and requested the O.P bank to recall the letter. The said letter was duly received by the Bank authority. After receiving such letter when the Bank did not intimate anything, the Complainant by this time cleared up his agreed EMIs and cleared up all the loan amount and as he has cleared up the entire loan amount i.e. 120 numbers of EMIs as per his agreement, the Complainant requested the Bank to issue Clearance Certificate in his favour vide letter dated 15-11-2014. Instead of issuance of any Clearance Certificate the O.P, State Bank of India, Cooch Behar Bazar branch by their letter under reference Br./Misc/14-15/353 dated 21-11-2014 claimed further outstanding amount to the tune of Rs.66,185.63/- as on 21-11-2014 plus other admissible charges and withheld the Clearance Certificate till now. From the said letter it transpires that the Bank have switched over from fixed rate of interest to floating rate without intimating anything to the Complainant. No intimation whatsoever has given to the Complainant before such switching over from the agreed fixed rate of interest to the floating rate of interest. Such action on the part of O.P Bank is totally uncalled for an unwarranted and the Bank has perpetrated unfair trade practice and the Complainant is not supposed to oblige illegal demand of the O.P Bank. As per the agreed rate of interest, the Complainant has cleared up the entire loan amount. In this context the Complainant stated that when the Bank at the discretion of the customer opted the decision of the loanee about charge of fixed rate of interest, in such situation the O.P bank has no right to switch over from fixed rate of interest to floating rate of interest and claiming the same from his customer.
Subsequently the O.P Bank by their letter under reference Br./Misc/14-15/353 dated 21-11-2014 again sent a notice claiming a sum of Rs.66,185.63/- as on 20-11-2014 plus admissible charges before issuance of Clearance Certificate. By the said letter the Bank authority has taken a plea that mismatch of EMI happened due to Bank Policy of switching over from fixed rate regime to floating rate regime and misquoted some portion of the agreement and pressurizing the Complainant for such amount. Against such notice of the Bank, the Complainant through his Ld. Advocate served a reply upon the Bank vide notice dated 13-12-2014 stating inter-alia that the complaint is not suppose to oblige the illegal demand of the Bank and requested to issue Clearance Certificate in favour of the Complainant but the Bank Authority without issuing any Clearance Certificate in favour of the Complainant vide their letter dated 16-12-2014 most arbitrarily and illegally pressurized the Complainant to pay of Rs.66,185.63/- with a threat to invoke SARFAESI Act, 2002. In fact, the Complainant is not at all bound to oblige the Bank illegal demand. The Complainant as per terms of agreement cleared up the entire loan amount, the Bank is bound to issue Clearance Certificate in favour of the Complainant and the Bank is not entitled to get the said amount any further. The Bank further issued a letter vide letter dated 17-12-2014 against the Complainant's Advocate letter reiterating their earlier claim.
The Bank authority is not entitled to charge at its own discretion enhanced rates of interest on the outstanding in the loan accounts and further, the amount of equated monthly installment flouting the agreed rate as claimed by the Bank. Once the party opted the specific mode of repayment of his loan amount, the Bank is bound to oblige such agreement.
The Bank Authority surreptitiously served a notice dated 17-02-2015 under Section 13(2) of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 against the Complainant and threatened the Complainant with dire consequences to pay an amount of Rs,69,541.63/- within 60 days otherwise they will disposed of the secured assets of the Complainant. The said notice has been served under No. BR/Misc/14-15/465 dated 17-02-2015. Thereafter the Complainant against such notice submitted a representation by his letter dated 27-02-2015 but the Bank did not pay any heed.
The Bank is not entitled to invoke such provision of the SARFAESI Act in the instant case and if the Bank Authority be succeed to invoke such provision and to attach and sell the property of the petitioner in that case the petitioner shall suffer irreparable loss. Accordingly, in such situation the Bank Authority are required to be restrained by an order of injunction restraining them from invoking any provision of the SARFAESI Act upon the Complainant and/or to attach the property of the petitioner in any way.
Due to such activities of the O.P bank, the Complainant is in hard –up and facing hindrance as well as suffer irreparable loss. The Complainant also suffered from acute mental pain and agony, pecuniary loss. There was also deficiency in service and unfair trade practice adopted by the O.P bank.
Hence, the Complainant filed the present case praying for issuing a direction upon the O.P to issue Clearance Certificate in favour of the Complainant against his House Building Loan A/c No.10394366109 and an order directing the Bank authority that the O.P is not entitled to get any further amount of Rs.66,185.63/- from the Complainant against the said loan of the Complainant and restraining the O.P from taking any action against the Complainant and also to pay (i) Rs.60,000/- for unfair trade practice, (ii) Rs.30,000/- as compensation for mental pain and agony and sufferings and (iii) Rs.10,000/- towards litigation costs, besides other relief(s) as the Forum deem fit, as per law & equity.
The O.P, Chief Manager, State Bank of India, Cooch Behar Bazar Branch has contested the case by filing Written Version denying all material allegation of the complaint contending inter-alia that the case is not maintainable and the Complainant has no cause of action to bring the case. The main contention of the O.P bank is that the Complainant applied housing loan before this answering O.P Bank on 12-11-2004 and upon their application this answering O.P. bank sanctioned the Hosue Building loan of the Complainant and the Complainant has also accepted all the terms and conditions of the Arrangement letter dated 17-11-2004. Thereafter accepting all the terms and conditions of the House Building Loan, the Complainant has also signed upon the Term Loan Agreement.
It is pertinent to mention here that in last para of Term Loan Agreement where from it transpires that answering O.P Bank shall be entitled to charge at its own discretion enhanced rates of interest on the outstanding in the loan accounts or a portion thereof or for any default or irregularity. As per the said Term loan agreement this answering O.P bank has charged interest upon the Complainant’s outstanding loan amount.
The Complainant has also deposited a sum of Rs.67,400/- on 16-04-2015 of outstanding loan amount. If on the part of O.P Bank there is any gross negligence, unfair trade practice and deficiency in service, why the Complainant has deposited the said outstanding amount. Therefore, there is no gross negligence, unfair trade practice and deficiency in service on the part of the O.P Bank.
Ultimately, the O.P Bank prayed for dismissal of the case with costs.
In the light of the contention of both parties, the following points necessarily came up for consideration.
POINTS FOR CONSIDERATION
- Is the Complainant a Consumer as per Section 2(1)(d)(ii) of the C.P. Act, 1986?
- Has this Forum jurisdiction to entertain the instant complaint?
- Has the O.P any deficiency in service by repudiating the claim of the Complainant and are they liable in any way?
- Whether the Complainant is entitled to get relief/reliefs as prayed for?
DECISION WITH REASONS
We have gone through the record very carefully, peruse the entire documents in the record also heard the argument by both parties at a length.
Point No.1.
The Complainant has a Home Loan Account bearing No. 10394366109 lying with the O.P/ Chief Manager State Bank of India, Cooch Behar Bazar Branch, NN Road, Police station Cooch Behar. Thus, he is a genuine customer as well as consumer of OP/Bank.
Point No.2.
The O.P Bank is situated within the jurisdiction of this District as well as under the jurisdiction of this Forum and total valuation of this case (1,66,185.63) is far less than maximum limit of Rs.20,00,000/-.
So, this Forum has territorial as well as pecuniary jurisdiction to try this case.
Point No.3 & 4.
Both points are taken up together for convenience of discussion.
In a speech in South Africa in 1890 Mahatma Gandhi said this:
“A customer is the most important visitor on our premises. He is not dependent on us. We are dependent on him. He is not an interruption of our work. He is the purpose of it. He is not an outsider of our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us the opportunity to do so”.
In this case the OP bank ruled out /smashed the philosophy /ethics of the “Father of our Nation”. After payment of all EMI by the complainant without any irregularities or default, the OP Bank served a notice to the complainant dated 17/02/2015 under section 13(2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI act 2002)to pay an amount of Rs. 69,541.63 within 60days and make bound the complainant to pay the amount.
On going through the upper mentioned facts and circumstances the following facts are reveals –
The petitioner or the complainant took a home loan of Rs.3000.000/- from the OP bank on 17/11/2004 in connection of his A/C No. 10394366109. According to the document produce by the OP (Annexure-E) it is clear that the Rate of interest of the loan (8% pa), the EMI (Rs. 3639) and number of EMI (120) was fixed. The complainant in his evidence on affidavit said that he regularly paid the EMI without any default. The OP Bank never admitted in any document that the complainant was irregular or default in payment of his Home loan EMI. The problem starts between the complainant and the OP bank when he complainant almost paid the 95% (114 EMI out of 120 EMI) of the total number of EMI. On 21/05/2014 the OP bank served a letter (Ex-4) claiming clearance of outstanding loan amount of Rs. 83,203.63/- by remaining 6 EMIs. In this case bank never consulted with the complainant. On 31/05/214 the complainant wrote a letter to the OP bank ((EX-5) by mentioning the terms and conditions of the home loan and to resolve the problem. Bank never replied to the complainant. Within this time the complainant cleared up the entire loan amount i.e. 120 numbers of EMIs according to his agreement with the OP Bank.
In their Written Version, Evidence on Affidavit and Written Argument the OP Bank Stated that “ in the last Para of Term Loan Agreement (Annexure- 7) where form it transpires that we shall be entitled to charge at its own discretion enhanced rates of interest on the outstanding in the loan accounts or a portion thereof or for any default or irregularity.” The complainant make payment of all EMI by the without any irregularities or default. The correspondences made by the OP Bank with the Complainant on 21/05/2014 and 21/11/2014 (EX- 4 and EX-7) the OP bank stated that “The mismatch of EMI happened due to Banks policy of switching over from fixed rate regime to floating rate regime as per Reserve Bank of India guidelines and we regretted for not having intimated the same to you before”. But, the OP bank never produces any document /guideline to establish their claim and they admitted the fact that they never intimate the Complainant about their policy change.
According to RBI /FAQ view “Banks generally offer either of the following loan options: Floating Rate Home Loans and Fixed Rate Home Loans. For a Fixed Rate Loan, the rate of interest is fixed either for the entire tenure of the loan or a certain part of the tenure of the loan. In case of a pure fixed loan, the EMI due to the bank remains constant. If a bank offers a Loan which is fixed only for a certain period of the tenure of the loan, please try to elicit information from the bank whether the rates may be raised after the period (reset clause). You may try to negotiate a lock-in that should include the rate that you have agreed upon initially and the period the lock-in lasts.
Hence, the EMI of a fixed rate loan is known in advance. This is the cash outflow that can be planned for at the outset of the loan. If the inflation and the interest rate in the economy move up over the years, a fixed EMI is attractively stagnant and is easier to plan for. However, if you have fixed EMI, any reduction in interest rates in the market, will not benefit you”.
In the present time the government is taking so many initiatives to encourage the small loans through banks. In the light of the present case we must say that this kind of attitude of the OP Bank demoralize the common people to take any type of loan from a bank. The case may value added when the OP bank is a Pioneer bank of India. (State Bank of India)
In the light of the foregoing discussion and materials to its entirety it is already proved that OP illegally received the amount of Rs.66,185.63/- from the complainant, thus, we hold that the OP is liable to compensate the complainant for adopting unfair trade practice which caused severe mental pain and agony of the complainant. So, have no hesitation but to hold that the Complainant has been able to prove the deficiency in service, unfair trade practice of the O.P. Bank and it is also established that the complainant suffered mental pain and agony within this time for which the Complainant is entitled to get relief. Furthermore, the allegations of the Complainant against the O.Ps stand proved.
The Ld. Agent for the Complainant referred some rulings as follows –
2013(1) CPR 301(NC), 2013(3) CPR382 (NC), 2013(3) CPR125 (NC) Perused and considered but not totally related with this case.
Hence,
it is ORDERED that,
The present Case No. CC/89/2014 be and the same is allowed on contest with cost of Rs.5,000/- against the O.P.
O.P is directed to refund Rs 66,185.63/- which he illegally claimed from the complainant and issue a clearance certificate in favour of the Complainant against his house building Loan Account No.10394366109. The O.P is further directed to pay Rs.40,000/- as compensation for mental pain & agony also unfair trade practice. The aforesaid amount shall be paid to the Complainant within 45 days from the passing of this order, in default, the O.P shall pay Rs.100/- for each day’s delay and the amount to be accumulated shall be deposited to the State Consumer Welfare Fund, West Bengal.
The order restraint the OP from taking any step to classifying the Complainant’s account as a Non-performing Asset and reporting to CIBIL.
Let a plain copy of this Order be supplied to the parties concerned by hand/by Registered Post with A/D forthwith, free of cost, for information & necessary action, as per rules.
