SMT. RAVI SUSHA: PRESIDENT
Complainant filed this complaint U/S 12 of Consumer Protection Act 1986 against Opposite Party seeking to get an order directing OP to refund Rs.2,60,970/- to the complainant along with12% interest and cost of this complaint.
OP sanctioned educational loan under Vidhya Bharathi Scheme of Rs.375000/- to the complainant. At the time of granting the loan 10% per annum which was yearly rest and repayment was after 8 years. Complainant’s father Baby Jacob, his mother Aniyamma and one Ulahannan stood as sureties for payment of loan. The title deed in the name of his father has been hypothecated with OP. On 08/05/2015 complainant approached 2nd OP, and requested statement of account for the loan till that day. In the statement of account, issued by OP it is noticed that the OP bank adopted monthly rate of interest calculating methods in the loan account of the complainant where as the bank calculated interest on interest as well as penal interest in the educational loan of the complainant. As per the norms the bank has no right whatsoever to calculate interest on interest, Penal interest from the complainant. It is submitted that the though the complainant raised objection before the 2nd respondent no positive steps were taken by the OP instructed that if at all amount of Rs. 788045/- (Rupees seven lakhs eighty eight thousand and forty five only) is not remitted the title deeds will not be released from the bank. The 2nd respondent also refused to reduce the subsidy amount of Rs.107222 from the loan account of the complainant which was the subsidy allotted by the Central Government. As such the complainant constrained to remit Rs.7880456 to the closing the loan transaction. The complainant issued a letter to the 2nd respondent requesting him to return the education loan subsidy of Rs. 107222 and Rs.153748/- which was the extra interest collected by the bank. Instead refund the amount sent a reply 25/05/2015 stating that the bank is having right to calculate interest on interest and Penal interest and recovery charges etc. from the complainant from the date of loan transaction itself. The act of the OP is defecting service deficiency in service and dereliction of duty. The complainant made grievances before the banking Ombudsman Trivandrum the complaint was closed since the complainant remitted amount before the bank. Hence filed this complaint to get back the additional amount of Rs.260970 received by OP with interest.
OP resisted the plea contending the complainant had filed a complaint before the Banking Ombudsmen and it was properly adjudicated and dismissed. The complainant could have filed an appeal against the order of Ombudsmen if he is aggrieved the same. Instead of that he filed this complaint before their Hon’ble Forum. The allegations made in the complaint are not a consumer dispute within the definition of Section 2(e) of Consumer Protection Act 1986. OPs admits that the complainant has availed an Education Loan of Rs.375000 as per Vidhya Bharathi Scheme to the education of MBA, 2 year course. The interest which the complainant has to pay at the time of sanctioning of the loan was 12.5% and it was quarterly rests, failing which the complainant agrees that such of the interest which remains unpaid shall be added to the loan account and shall be treated as principal amount and interest will be calculated on that some total. The interest payable by the complainant on the loan amount shall be varied as per the RBI directions and the complainant agreed to pay the interest at such rate fixed by the Bank from time to time and do not run counter to the guidelines of the Reserve Bank of India. As per the Reserve Bank directions the Bank is entitled to calculate interest on monthly rest system in all transaction except for agricultural loans.
Further submitted that the averments made that the payment of the loan amount with interest was after 8 years etc. are all absolutely incorrect statements made by the complainant. In all Educational loans the repayment must be started after 1 year from the completion of the course or 6 months from obtaining a job whichever is earlier. The complainant has to start repay of the loan at least from the year 2010. The complainant has to start repay of the loan at least from the year 2010. The complainant approached the Bank only in the year 2015, that is even after repeated demands from the bank. The Bank has not done by unfair banking transactions and there is no defective service from the part of the OPs. Subsidies which are allotted to the complainant was added to his loan account and he enjoyed that benefit also. The OP No.2 has only collected the amount from the complainant which the Bank is legally entitled for. The complainant has completed the course in the year 2009 itself and now he is working Abroad. The complainant is not entitled for any relief as he claimed in the complaint. Hence prayed for dismissal of complaint.
The father of complainant has filed chief affidavit and marked Ext. A1 to A7. On behalf of the OP bank, the manager of 2nd OP Mohanan K has filed his affidavit and the documents Ext. B1 to B5.
The Learned counsel for the OPs has filed their written arguments. Both Learned counsel for the complainant and OPs made oral submissions before us.
The point for consideration
- Whether the complaint is maintainable?
- Whether there is any deficiency in service on the part of the OP bank?
- If so what relief can be granted to complainant?
The undisputed fact in this case is that complainant had obtained a sum of Rs.375000 sanction as educational loan by the OP.
Point NO.1
The 1st plea raised by the OP is that this complaint is not maintainable in law on facts because, the complainant had filed a complaint before the banking Ombudsman and it was properly adjudicated there and dismissed. Further the allegations made in the complaint are not a consumer dispute within the definition of Sec.2 (e) of consumer Protection Act. 1986.
Here complainant also admitted that he has filed complaint before Banking ombudsman. He stated that the said complaint was closed as the complainant remitted entire loan amount before the OP bank.
For clarifying the real fact ie whether the said complaint has been adjudicated and decided or it was closed, none of the parties produced the said order of Banking Ombudsman before us. Further the complainant in this case alleged deficiency in service and unfair practice of OP bank in receiving extra interest and non-payment of subsidy amount entitled to the loanee. Considering the said allegations, this complaint is maintainable before this commission under section2 (e) of Consumer Protection Act 1986. Hence the 1st point found in favour of complainant.
Point No.2 and 3
The case of complainant the bank calculated calculating interest on interest as well as penal interest in the education loan of the complainant and as per the norms the bank has no right to calculate interest on interest, penal interest. As such OP collected Rs.153748/-from him. Another allegation is the central government allotted Rs.107222 as subsidy for the education loan. But OP bank refused to reduce the subsidy amount of Rs.107222/- from his loan account.
On the other hand OP bank submitted that the bank has charged rate of interest which are allowable and variable form time to time as per the guidelines of the Reserve Bank of India. It is further stated that in Ext.B1 agreement it self the rate of interest is 12.5% and subject to variations in the interest a rate as per the norms of the Reserve Bank of India. Further the party is also liable to pay overdue rate of interest at 2% above in case of also liable to pay overdue rate of interest at 2% above in case of default. Further Learned counsel submitted that on Ext.B1, loanee Tittu Baby, guarantors Baby Jacob, Aniyamm and Ulahannan were made signature on each pages and also on the portion of loan amount and mentioning of interest rate. In Ext.B1, it is seen that the interest payable is 12.5% p.a quarterly in each year failing which the borrower agree that such of that interest which remains unpaid shall be added to the loan account and shall be treated as principal amount and interest will be calculated on that sum total. It is also stated that interest payable shall the subject to the changes in the interest rate made by the Bank from time to time and borrowers agree to pay interest at such rate fixed by the bank. In second schedule portion, the rate of payable interest in future till the date of repayment is also mentioned. Ina addition to that during cross-examining Pw1, the father of complainant guaranter, identified all the signatures of the loanee and guarantors put in ext. B1. Further in Ext.B1 agreement nowhere stated that the repayment will be after 8 years from the loan date.
Here complainant produced Ext.A7 document ie guide lines for educational loan from central government for providing relief on interest outstanding component as on 31/12/2013 for all educational Loans sanctioned/availed up to 31/03/2009 and outstanding as on 31/12/2013.
This is with reference to the announcement made by Finance Minister in para 64 of the Budget Speech 2014-15 in which, in order to provide relief to students who were sanctioned / disbursed educational loans up to 31/03/2009 and outstanding as on 31/12/2013, the central government will take over the liability for outstanding interest as on 31/12/2013 and the borrower will have to pay the interest for the period after 01/01/2014.
In this case as far as complainant is concerned he has taken loan on 18/08/2007 and outstanding as on 31/12/2013. Then as per Ext.A7 Annexure 9.59, complainant is entitled to get the benefit mentioned in that guidelines because, this is a special benefit provided to students who are taken educational loans by the central government. Then, this complainant will have to pay the interest for the period after 01/01/2014. In the instant case we can see from Ext. A3 OP bank statement, OP has taken interest from 30/11/2007 onwards. While existing guidelines of Central Governments like Ext.A7, taken of interest prior to 01/01/2014 from students, who availed educational loan before 31/03/2009 is deficiency in service on the side of OP bank. Since complainant has remitted the entire loan outstanding amount of rs.788045/- he is entitled to get refund of interest up to 01/01/2014from the OP. ie Rs.153748 as claimed by the complainant.
The other allegation of complainant is OP bank has refused to deduct the subsidy amount of Rs.107222 from his account, allotted by the central government in Education loan scheme. For clarifying this allegation the available document before us is Ext.A3 the OP bank statement pertaining to the education loan in question produced by the complainant himself. On careful perusal of Ext.A3, it can be seen that on 26/12/2014 educational subsidy Rs.10722 has been credited in the balance outstanding amount of the complainant’s loan account. The said fact is admitted by pw1 during his cross-examination. Hence the allegation of the complainant about denial of subsidy amount of Rs.107222 towards his loan account by the OP bank cannot be accepted.
On Testimony of Dw1 the manager deposed that in education loan up to Rs.4 lakhs, security need not be submitted. But we can see that OP bank hypothecated the title deed of the father of complainant. This action of OP also amounts to dereliction of duty.
In the result complaint is allowed in part. OPs are directed to refund Rs.153748/- received from complainant as interest against the guideline of central government Ext.A7. OP is also directed to pay Rs.10000/- as cost to the proceedings of this case. The OPs shall comply the order within one month from the date of receipt of this order failing which the amount Rs.153748 carries interest @ 9% Per annum from the date of order till realization. Complainant is at liberty to file execution application against OPs for realizing the award amount as per the provision of Consumer Protection Act 2019.
Exts.
A1 - Power of Attorney
A2 - Bank Passbook
A3 - Bank Statement
A4 - Payment Receipt dated 08/05/2013
A5 - Letter to OP
A6 - Reply from OP
A7 - Guidelines for Education Loan from Central Government
B1 - Agreement
Sd/ Sd/ Sd/
PRESIDENT MEMBER MEMBER
Ravi Susha Molykutty Mathew Sajeesh K.P
(mnp)
/Forward by order/
Senior Superintendent
