IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated this the 30th day of September, 2023
Present: Smt.Bindhu.R, President(In Charge)
Sri.K.M.Anto, Member
CC No. 59/2020 (Filed on 17/03/2020)
Complainant : K.A. Sudhakaran S/o Anandan,
Kariplavil House,
Chittady P.O, Chotty,
Mundakayam, Kanjirappally,
Kottayam - 686 512.
(By Adv: Roy George)
Vs.
Opposite parties : 1. The Managing Director,
Federal Bank Limited,
Head Office,
Aluva P.O, Pin - 683 101.
2. The Branch Manager,
Federal Bank Limited,
Mundakkayam Branch,
Mundakkayam P.O,
Kanjirappally, Kottayam - 686 513.
(Both by Adv: C.J. Jomi)
O R D E R
SRI.K.M. ANTO, MEMBER
The case is filed under Section 12 of the Consumer Protection Act 1986. The brief of the complainant’s case is as follows.
The complainant had availed a home overdraft loan vide Account No.13975600001232 from the second opposite party on 26/03/2008 for an amount of Rs 6,50,000/-. As per the loan agreement, the maximum interest was 15.50%. The opposite parties had charged 19.5% interest from the complainant by violating the conditions. On verification of the transactions, it was found that the opposite parties had realized excess amount violating the loan agreement conditions and the Reserve Bank of India rules. The complainant had to remit Rs.1,60,513/- additionally in the loan repayment. The opposite parties are liable to refund the excess amount collected with interest from the date of closing of the loan. The opposite parties had never intimated the change in the interest rate of the loan to the complainant. Even though the complainant had requested the opposite parties to refund the amount, they failed to take any steps. The act of the opposite parties amounts to deficiency in service and unfair trade practice. This complaint is filed for getting a refund of Rs 1,60,513/- with interest from the opposite parties along with a compensation of Rs 1,00,000/-.
Upon admission of the complaint copy of the complaint was duly served to the opposite parties. The opposite parties appeared and filed their version contending as follows.
The complaint is not maintainable before the Hon’ble Commission, as the complaint is barred by limitation. The complainant had availed the loan from the opposite parties on 26/03/2008 and closed the loan account on 29/01/2016. This complaint was filed on 06/03/2020 after a period of 4 years. If the complainant had any grievance against the service availed from the opposite parties it should have been filed within 2 years from 29/01/2016. Also, the complaint is bad for the non-joinder of necessary parties. The other borrowers in the loan agreement are not impleaded as parties to the complaint. The allegation that the opposite parties had charged 19.5% interest against the 15.60% throughout the loan’s pendency is incorrect. The complainant had availed a home overdraft loan for Rs 6,50,000/- from the opposite party on an agreement. The opposite party charged only the agreed rate during the period of the loan. As per the Loan Agreement, the complainant had agreed to repay the loan amount with interest at 15.50% (BPLR rate 14.75% + 0.75%) per annum, inclusive of interest tax with the monthly rest subject to revision in interest rates. It was further agreed to repay the loan amount with interest by 108 monthly instalments of Rs.11,119/- starting from 26/04/2008. The complainant undertook to pay additional interest at such rates as may be fixed by the bank from time to time, in case the borrower defaults in paying the instalments, interest, or other charges or in the event of any violation of the terms and conditions of the agreement. The opposite party had given a proper reply to the letter of the complainant. The allegation that the bank reduced the interest rate to 14.65% from the previous interest of 15.60% on the complainant’s request is incorrect. The rate of interest applied was in accordance with the BPLR rate for the relevant period.
The complainant filed proof affidavit and marked documents Exhibits A1 to A12. On the application of the complainant, an Expert Commissioner was appointed and the report of the Expert Commissioner is marked Exhibit C1. The opposite party filed proof affidavit and marked documents Exhibits B1 and B2.
On the basis of the complaint, version of the opposite parties and evidence adduced we would like to consider the following points :
(1) Whether there is deficiency in service or unfair trade practice on the part of the opposite parties ?
(2) If so, what are the reliefs and costs?
For the sake of convenience, we would like to consider point number 1 and 2 together.
POINTS 1 & 2 :-
On going through the complaint, version of the opposite parties and evidence on record it is clear that the complainant had availed a home overdraft loan from the opposite parties for an amount of Rs.6,50,000/- vide loan account No.13975600001232 on 26/03/2008. The Loan was closed on 29/01/2016.
Ext. A1 is the statement of account for the period from 26/03/2008 to 29/01/2016 of loan Account No.13975600001232 of the complainant, which shows that the total withdrawals as of 29/01/2016 is Rs 14,50,436/- and total deposits as of 29/01/2016 is Rs 14,50,436/-.
Ext.A2 is the statement of account for the period from 26/03/2008 to 29/01/2016 prepared by the complainant with an interest rate of 15.5% p.a throughout the loan period.
Ext.A3 is the letter from the complainant to the second opposite party dated 2/03/2015 requesting the refund of the additional amount of interest charged by the opposite party.
Ext B1 is the loan agreement dated 26/03/2008 sanctioning an overdraft facility of Rs.6,50,000/-. The complainant had agreed that the complainant shall pay the interest on the loan at the rate of benchmark prime lending rate/0.75% above/below the prime lending rate of the bank, as fixed by the bank from time to time, plus interest tax applicable, subject to a minimum interest rate of 15,50% per annum with monthly rest. The present BPLR of the bank is 14.75% and accordingly, the complainant shall pay interest at the rate of 15.50% per annum inclusive of interest tax, with monthly rests subject to the revision in rates of interest.
Ext B2 is the interest history of the Federal Bank for the period from 2008 to 2016.
Ext C1 is the report of the Expert Commissioner. The Expert Commissioner reports that the bank had charged different interest from time to time, which is more than the interest rate of 15.50%, and an amount of Rs 1,50,343/- has been charged as extra interest over and above the 15.50% interest rate.
The Expert commissioner further reports that the bank is correct in charging the interest rate in accordance with the loan agreement by applying the BPLR rate of the bank as on the date of opening of the loan account together with 0.75% additional interest agreed as per the loan agreement in accordance with the interest history produced by the bank by applying interest rate applicable on compound basis with monthly rest basis as per the loan agreement. Also certifies that there is no arithmetical mistake in the statement of Account No.13975600001232.
On going through the Ext B1 Loan agreement and report of the Ext.C1 report of the Expert Commissioner it is evident that the act on the part of the opposite party in charging different interest rates above the initial interest rate of 15.5% is in accordance with the loan agreement.
The complainant had availed the loan from the opposite parties on 26/03/2008. The complainant had closed the loan account on 29/01/2016. As per Section 24A of the Consumer Protection Act 1986, the period of limitation is two years. It is evident that the complainant failed to file this complaint within two years from 29/01/2016.
In the Ext B1 loan agreement, it is clearly stated that the complainant had agreed that the complainant shall pay the interest on the loan at the rate benchmark prime lending rate/0.75% above/below the prime lending rate of the bank, as fixed by the bank from time to time, plus interest tax applicable, subject to a minimum interest rate of 15,50% per annum with monthly rest.
The claim of the complainant that the interest rate applicable for the loan is 15.5% throughout the loan period is not in accordance with the Ext B1 Loan agreement. Hence the complainant is not eligible for the amount of Rs.1,50,343/- calculated by the Expert Commissioner as additional interest collected if the interest applicable to the loan is 15.5%.
On the basis of the above discussion, we do not find any deficiency in service or unfair trade practice on the part of the opposite parties. The complaint is liable to be dismissed.
The complaint is dismissed.
Pronounced in the Open Commission on this the 30th day of September, 2023
Sri.K.M.Anto, Member Sd/-
Smt.Bindhu.R, President (In Charge) Sd/-
APPENDIX :
Exhibits from the side of the Complainant :
A1 - Copy of Statement of Account for the period
26/03/2008 to 29/01/2016
A2 - Copy of Statement of Account for the period
26/03/2008 to 29/01/2016 prepared by the
complainant with 15.5% interest
A3 - Copy of complainant’s letter dated 02/03/2015
addressed to the 2nd opposite party
A4 - Copy of reply to Ext.A3 letter issued by the 2nd
opposite party dated 13/03/2015
A5 - Copy of complainant’s letter dated 10/12/2019
addressed to the 2nd opposite party
A6 - Copy of reply to Ext.A5 letter issued by the 2nd
opposite party dated 18/01/2020
A7 - Copy of 2nd opposite party’s letter dated 05/02/2015
addressed to the complainant
A8 - Copy of 2nd opposite party’s letter dated 12/12/2019
addressed to the complainant
A9 - Copy of complainant’s letter dated 29/01/2016
addressed to the 2nd opposite party
A10 - Copy of complainant’s letter dated 05/02/2020
addressed to the 2nd opposite party
A11 - Copy of 2nd opposite party’s letter dated 18/01/2020
addressed to the complainant
A12 - Copy of BPLR History
Exhibits from the side of Opposite Parties :
B1 - Copy of Loan Agreement dated 26/03/2008
B2 - Copy of Interest history of Federal Bank Limited
for the period 2008-2016
Commission Report :
C1 - Expert Commission Report
By Order,
Sd/-
Assistant Registrar
