Order-17.

Date-22/06/2015.

In the present complaint, the case of the complainant is that due to financial crisis, complainant took a Consumer Loan of Rs. 2,20,000/- in the year 2005 and tenure of payment of EMI was 120 EMIs month by month.But op handed over a sum of Rs. 1,90,000/- in place of Rs. 2,20,000/- and EMMI amount of Rs. 3,933/- although op wrote the installment amount of Rs. 3,824/- and after payment of 11 EMIs, op Top-up the complainant loan amount a sum of Rs. 3,05,000/-, Tenure-120, interest – 16 percent on December-2006 and EMI was fixed at Rs. 5,109/-.

Complainant in time paid 95 installment, but op demanded huge amount in place of 120 fixed EMI and op claimed a sum of Rs. 2,18,921/- against 25 EMI balance amount.Complainant is still ready to pay the balance amount as per EMI dues amount, but due to unfair trade practice on the part of the op, complainant has suffered much and in the above circumstances, complainant prayed for directing the op immediately to accept the exact claim amount and also direct the op to pay compensation for harassing the complainant and also for unfair trade practice.

On the other hand op by filing written statement submitted that the present complaint is not maintainable, complainant is a defaulter.

It is specifically mentioned on or about December-2005, complainant approached the op for loan of Rs. 2,20,000/- and agreed to mortgage his property towards security of loan amount.Accordingly a Home Equity Loan Agreement being No. 7270705 was entered between complainant as borrower one Mrs. Krishna Saha as Co-borrower and op as lender and total loan amount along with interest was repayable in 120 installments at the rate of Rs. 3,824/- each.

Thereafter making payment of some installments in terms of the aforesaid agreement, the complainant approached op and made a request of some more funds and made application that effect and on the basis of the request of complainant, op agreed to sanction a top-up loan of Rs. 3,05,000/- to complainant.op made some adjustment to previous loan account of complainant and said loan account being No. 7270705 was closed and pursuant to sanction of aforesaid loan of Rs. 3,05,000/- another loan agreement being No. 10491379 dated 27.12.2006 was entered between the both parties and aforesaid loan amount was repayable along with interest in 120 monthly installments at the rate of Rs. 5,109/- each.At the time of sanction of the loan the rate of interest was 16 percent p.a. and same was at the floating rate of interest and it is pertinent to mention here that complainant has been well aware about the rate of interest since the beginning as the complainant had put his signatures on the said loan agreement after he had read and fully comprehended all the terms and conditions of the loan amount agreement No. 10491379 including the repayment and the rate of interest was increased in several occasion in accordance of terms and conditions of the said loan and complaint was duly informed of such revision of rate of interest.

Due to revision of rate of interest, to keep EMI amount constant, tenure of the said loan amount increased to 155 instead of 120 and installment rate was fixed at Rs. 5,109/- and rate of interest was fixed 18.70 percent and complainant was aware of all the above matter.So, the entire complaint is vexatious and false and fabricated and complainant has suppressed the truth.

It is specifically mentioned that complainant never paid 95 installments as per Home Equity Loan Agreement bearing no. 10491379 and op never demanded any extra sum.But complainant is a habitual defaulter, so the complaint should be dismissed.

Decision with reasons

On proper consideration of the complaint and written version and after hearing the argument of the Ld. Lawyers of both sides and after proper assessment and evaluation of the documents, it is found that complainant initially took loan on the basis of a Home Equity Loan Agreement on 23.12.2006 and in the said agreement, complainant and Krishna Saha as borrower both the complainants submitted an application for sanction further loan and accordingly Amortization Schedule was fixed and in that case the same loan amount was Rs. 3,05,000/-.

But considering the schedule, it is found that it was also of the dated 23.12.2006 and Home Equity Loan Agreement was also of dated 23.12.2006.Considering that fact, it is clear that op took somehow or otherwise secured their signatures in Amortization Schedule and other.But practically loan was sanctioned in respect of Rs. 2,20,000/- and subsequent sanctioned of Rs. 3,05,000/- is found not correct.But it was prepared by the op in which op managed to secure the signatures of the complainant and Krishna Saha and it was included in the Home Equity Loan Agreement and it is shown that after sanction of Rs. 2,20,000/-, it was increased to Rs. 3,05,000/-.But that is not the fact and truth is that on 23.12.2006, complainant only took loan for Rs. 2,20,000/-, not Rs. 3,05,000/-.But op somehow or otherwise managed to procure the said Amortization Schedule on 23.12.2006 but that cannot be.

At the same time there is no such application subsequent to 23.12.2006 that complainant and Krishna Saha prayed for further loan.But all the documents which are produced by the op are of dated 23.12.2006, but op has not admitted on 23.12.2006 complainant took any loan of Rs. 2,20,000/-.When that is the fact, then it is clear that some blank documents in which op managed to secure the signatures of complainant and it was included and now they are submitting that complainant agreed and prayed for loan for which the amount was increased to Rs. 3,05,000/-.But that is completely false and fabricated.

Moreover op has not anywhere stated that on which date complainant and co-borrower prayed for extension of loan.But no such document is produced by the op.But we have gathered that all the matters were fabricated by the op, but no such document is produced by the op to show that in the month of December-2005 complainant was sanctioned loan of Rs. 2,20,000/-.But no such sanction letter was also produced by the op to show that in the month of December-2005, complainant was sanctioned initial loan of Rs. 2,20,000/-.But we have gathered that op has submitted the papers in respect of loan of Rs. 3,05,000/- and moreover this op has not produced the document in support of sanction of loan in the month of December-2005 for a sum of Rs. 2,20,000/-.But straightway op has filed all the documents in support of sanctioned loan of Rs. 3,05,000/- on 28.12.2006.So, considering that we are convinced to hold that the entire matter and the allegation as made by the complainant is to some extent correct.At the same time op has failed to produce any document to show that Rs. 3,05,000/- was transferred in the account of the complainant in any branch of bank when anyhow the complainant admitted in his evidence-in-chief that op has sanctioned loan of Rs. 3,05,000/-, tenure 120 installments, interest 16 percent p.a. on December-2006 and EMI of Rs. 5,109/- and complainant has admitted that he already paid 95 installments and he is ready to pay the balance amount at a time.But op refused to accept it.On the other hand op has admitted that complainant has paid 97 installments and 57 installments is due and payable on previous rate of interest.But it is specific provision of law that if any customer wants to foreclose the loan, in that case, the bank shall have to foreclose it and balance amount shall be paid along with interest as on the date of foreclosure without taking any penalty or other charges as per RBI guideline and in case of foreclose, no penalty and other charges shall be charged as per order of the RBI of 2012 and when complainant is walking to foreclose the same, in that case, there is no other alternative but on the part of the op to foreclose by accepting the balance loan amount with previous rate of interest as on the date of foreclosure without charging any further interest, penalty or etc.

In the present case, complainant wants to foreclose it, then op is bound to foreclose it as per RBI guideline and shall have to receive the entire amount along with interest as assessed as on the date of foreclosure, no penalty or other charges can be charged by the op and when complainant wants to foreclose it, in that case op must have to receive it charging interest at the rate of 16 percent p.a., not more than that.Moreover as per RBI guideline in respect of consumer loan within the limit of Rs. 5,00,000/- maximum interest shall be charged up to 14 percent p.a..But op already charged interest at the rate of 16 percent p.a. but as per RBI guideline, there is no such provision and this city bank cannot charge any excess interest because 16 percent was fixed at the time of agreement.Already all the banking institutions either nationalized or non-nationalized banks are guided by RBI guideline.As per RBI guideline in respect of loan up to Rs. 5,00,000/- interest must not exceed up to 14 percent p.a. in any circumstances.Only in respect of commercial loan when the loan amount is more than Rs. 1,00,00,000/- the interest rate shall be assessed up to 18 percent p.a. but that has not been followed.It is completely uncalled for and in the above circumstances, considering the conduct of the op, we find that op cannot force the customer to continue the payment of EMI who wants to foreclose the entire loan because foreclosure is a right to the consumer and bank is bound to accept it and in view of the above findings, we are directing the op to accept the prayer of the complainant to foreclose the loan account after receiving the balance amount and assessing interest at the rate of 16 percent p.a. as on the date of foreclosure and no further interest and penalty can be charged by the op as per RBI guideline.

Accordingly the complaint succeeds.

Hence, it is

That the complaint be and the same is allowed on contest with cost of Rs. 500/-.

Op Bank is directed to accept the foreclosure prayer of the complainant and to receive the amount which is still due in respect of that loan account of the complainant charging interest at the rate of 16 percent p.a., not more than that and without charging any further interest service charge etc. or any penalty and as and when complainant shall have to pray for foreclosure of the said loan, op shall have to report the complainant the balance amount showing the balance portion of the loan amount and the interest at the rate of 16 percent p.a. and ask the complainant to deposit the balance amount for foreclosure and it must be done by the op within two months from the date of receipt of said prayer for foreclosure and it must be completed by the op within two months from the date of receipt of the foreclosure application made by the complainant and as per spirit of this order and if op fails to comply that order, in that case op cannot claim any amount from the complainant except the foreclosure as would be fixed as on the date of foreclosure, in that case penal action shall be started against the op and for such disobeyance of the Forum’s order, op shall be imposed penal damages to the extent of Rs. 15,000/- which shall be paid to this Forum.

Even if it is found that op is unwilling to comply the order, in that case, op shall be prosecuted u/s 25/27 of C.P. Act 1986 for which further penalty and fine may be imposed.