This is an application u/s.12 of the C.P. Act, 1986.

           Complainants by filing this complaint has submitted that for construction of dwelling house at Sonarpur applied for Home Finance Loan to the OP, Citi Financial Consumer Finance India Ltd. having its registered office at Kolkata and after proper scrutiny of the documents in respect of the land of the complainant the OP granted a loan in favour of the complainants for a sum of Rs.2,55,000/- after mortgaging the said landed property  against Loan Account No.9152220 and in the letter of the OP it is specifically mentioned that the rate of interest would be 13% inclusive of 2% interest tax, where applicable for a term of 180 months and at the time of disbursement of the loan amount EMIs was fixed for 180 months and chart of EMI was also issued by the OP annexed with the complaint and first EMI date was 05-06-2006 for Rs.2,847/- and complainants without any fail deposited the said amount through his banker by ECS.  Complainants further stated that OP did not hand over any copy of the Loan Agreement, though assured to be sent by Registered Post with AD within 7 days.     

          Surprisingly, all of a sudden complainant noticed that complainants’ banker credited Rs.2,966/- in two months instead of Rs.2,847/- for the month of September, 2008 and October 2008 and on enquiry from the OP complainants came to know that without any prior intimation to the complainants, the OP arbitrarily increased the rate of interest from 13% to 16.,05% and has also enhanced number of instalments of repayment of loan.

          So, on 24-06-2011 complainants made a written representation to the OP with a request to furnish the agreement paper which the complainants signed at the time of obtaining loan and asked how the rate of interest and period of repayment has been arbitrarily enhanced when specifically the complainants were assured by the officials of the OP that there shall be no enhancement of rate of interest as well as period of repayment but specifically in the month of October, 2012 complainants requested the OP for getting rid of making interest for a prolonged period and what amount is required for settling the above loan account but in spite of several verbal requests the OP failed to inform the complainants the amount and thereafter the complainants on 31-10-2012 made a written representation to the OP by speed post with A/D and also through E-mail to intimate him in writing within 10 days the amount what the complainants shall have to pay to clear the dues, failing which he shall stop payment of instalment and shall not be liable to pay any interest and till further nothing has been intimated by the OP.

          On 05-11-2012 OP informed via E-mail that the term of re4payment is enhanced from 180 months to 325 months fixing rate of interest at 16.5% in place of existing 13% p.a. and the rate of EMI has been changed to Rs.2,966/- per month instead of Rs.2,847/- per month and a copy of Loan Agreement is sent to the complainants which has been received by the complainant on 08-11-2012.

          Thereafter, complainant went through the documents and found that entire act of the OPs is arbitrary and if the loan agreement would be sent to the OP within 7 days from the date of execution of the same in that case complainant shall not have to obtain such loan and practically for non furnishing the policy is a deficiency of service and granted loan keeping him in the dark about such illegal arbitrary enhancement and increase of interest and period of repayment are not justifiable and is nothing but an unfair trade practice.

          Fact remains on good faith complainant borrowed the said loan from the OP for constructing dwelling house after mortgaging the immovable property to the OP on the verbal assurance of officials of OP but ultimately complainant has been cheated for the overact of the OP and also for adopting unfair trade practice and in the circumstances complainant has prayed for relief and redressal and for adopting unfair trade practice and for negligent and deficient manner of service.

          Against that OP by filing written version has submitted that entire allegation is false on the ground in the agreement it is specifically mentioned that the rate of interest was floating and variable and the rate of interest was subject to reprised from time to time and same was well intimated to the complainant vide letter dated 23-02-2007 and 01-06-2007 and during disbursal of the said amount the rate of interest charged was 13% and at present rate of interest after increase is 16.5% as such the increase in the rate of interest and the EMI amount was also rescheduled and reprised accordingly and copies of this said letter was also sent to the complainants.

          Further it is submitted that complainants never raised any objection to the reprisal letters nor did the complainants raise any objection at the time of signing of the Loan Agreement regarding the floating rate of interest and it is further submitted that the said loan agreement was executed in the year 2006 and since then till 2012 complainant did not raise any objection to the same and as such the complainants are barred from making any such plea and present complaint is barred by limitation. 

          It is further submitted that the loan agreement was supplied to the complainant at the time of disbursal of the loan so complainant’s allegations are false and concocted when it was supplied and practically complainant is an well informed educated person and he went through the document and he was satisfied then he entered into the loan agreement and at this stage complainant cannot raise such a false story and allegation against the OP and there was no intention of the Bank Authority to squeeze money or interest from the complainant if it is not within the four corners of the agreement and practically Bank is guided by principles and norms of RBI and in the circumstances the complaint should be dismissed.

Decision with Reasons

After hearing of the Ld. Lawyers of both the parties and also considering the entire materials and practically the sanctioned letter issued by the OP on 09-08-2006 it is clear that amount of loan was disbursed Rs.2,25,000/-(Rupees Two lakhs twenty five thousand only) rate of interest was 13% (inclusive of 2% interest tax where applicable) and application and processing fee 2% of the loan amount non refundable and payable upfront term of EMIs 180 months.    

          Complainants allegation is that as per sanctioned letter rate of interest was fixed rate of interest because there is no such assertion in the sanctioned letter that it was floating or changeable as per change of the interest in future but OP has tried to convince that as per RBI Guidelines they have changed the home loan from 13% to 16.05% then question is whose version is correct.

          In this regard we have gathered after hearing Ld. Lawyers of both the parties and after consulting the sanctioned letter issued by the OP on 09-08-2006 that rate of interest was fixed at 13% having no clause of change of any interest and there was no clause that rate of interest is floating or changeable then under any circumstances OP has no legal right to increase rate of interest @16.05% in place of fixed rate of interest 13% then it is clear that OP has followed the terms and condition of the agreement.  At the same time it is mandatory on the part of the Financier (Bank) to intimate to the complainant (borrower) before enhancement of any rate or change of EMIs and that is the mandatory provision of RBI Rules and Guidelines and all the undertaking banks are following this matter but the private banks are not complying the same.

          In this case it is proved that before change of the interest from 13% to 16.05% no such intimation was made to the complainant asking him to submit whether he is accepting the change of rate of interest and if complainant does not agree in that case OP has no other alternative but to report the complainant (borrower) to clear entire dues and close the loan account and that is the provision of law and if it is not complied by the Financier (Bank) (OP) in that case the standing sanctioned letter clause shall prevail all along.  So, considering the sanctioned letter we are confirmed that the OP Bank has acted illegally and beyond the terms and condition of the policy and violated the guideline of the RBI and in so many cases we have gathered that the private bank institutions are not following the guidelines of RBI and they are taking interest on their own which is just like Kabuliwala whatever it may be, the complainant has been able to prove beyond any manner of doubt as per sanctioned letter that no further interest above 13% over that amount can be charged and there was no question of change of EMIs from 180 to 325 and that has been illegally done by the OP Bank and the procedure as adopted by OP is no doubt unfair and for which we are convinced that OP Bank went against the admitted position that is the rate of interest and also term of payment of EMIs and no doubt the EMIs was Rs.2,847/- and more than that the OP cannot claim from the complainant.  In the above situation we are convinced to hold that OP bank has adopted unfair trade practice and acted in deficient and negligent manner as per whims the rate of interest from 13% to 16.05% was increased and also increased term of EMIs from 180 to 325 and that is uncalled for and against the spirit of sanctioned letter issued by the OP on 08-09-2006.

          Fact remains complainant paid first EMIs on 05-06-2006 @Rs.2,847/- so complainant shall have to pay similar amount of monthly EMIs for 180 months and no doubt the complainant shall have to deposit the same within term of 180 months and OP shall have to accept it till 180 months expires.  So, considering the fact we are allowing this compliant holding that entire action is nothing but the overact of the OP and by their act OP has adopted unfair trade practice and tried to squeeze more money which is arbitrary, uncalled for and for which the OP cannot impose any new condition, term, interest etc. from the complainant and complainant shall have to act by the terms and condition as laid down in the sanctioned letter dated 08-09-2006 and OPs shall not be permitted to increase any interest or terms of period of payment of EMIs and complainants shall have his liability and legal right to pay the said loan amount by 180 monthly EMIs and rate of EMIs shall be in all occasions Rs.2,847/- and OP shall have to receive it.;

In the result, the case succeeds.

Hence,

Ordered

That the case be and the same is allowed on contest with a cost of Rs.5,000/- against the OP.

          OP is directed to receive the EMIs @Rs.2,847/- by 180 instalments (180 months) starting from 05-06-2006 and complainant shall have to clear the sum immediately without any fail. 

          If any excess amount is deducted other than the admitted EMIs of Rs.2,847/- that shall be adjusted during payment of the future EMIs of the complainant and in that case the bank shall have to regularize the matter within one months and send a fresh statement of account to the complainant and complainant shall have to pay it by clearing any dues if any for such litigation.

           OP is directed to comply this order and submit a fresh statement of account as per sanctioned letter and showing the payment by EMIs by the complainant @2,847/- and month wise payment till todate and as and when complainant shall have to pay it OP shall have to receive and continue it accordingly and such a statement shall be submitted before this Forum within one month form the date of this order by the OP failing which for OPs illegal act OP shall be imposed a punitive damages of Rs.50,000/-

          For adopting unfair trade practice OP is imposed a penal damages of Rs.25,000/- which shall be deposited to this Forum and it is imposed to check the future unfair trade practice of the OP Bank.

          OP is directed to comply the order very strictly and complainant shall have to follow the spirit of the order in true sense otherwise banking authority may take such step for violation of the terms and condition as laid down in the sanctioned letter.