DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KOZHIKODE

PRESENT: Sri. P.C. PAULACHEN, M.Com, LLB    : PRESIDENT

Smt. PRIYA.S, BAL, LLB, MBA (HRM) :  MEMBER

Wednesday the 12^th day of June 2024

CC.382/2005

Complainant

Radhakrishnan. P,

Pavoor (HO),

Tharopoyil. P.O,

Ponmeri (Via), Vatakara.

Opposite Parties

General Manager,

Kerala District Co-operative Bank Ltd,

Kallayi Road, Kozhikode.

ORDER

By Sri. P.C. PAULACHEN  – PRESIDENT              

            This is a complaint filed under Section 12 of the Consumer Protection Act, 1986.

2. The case of the complainant, in brief, is as follows:

The complainant has availed loans from the Ayanchery and Vatakara branches of the opposite party bank.Loan No. CLD 334 for Rs. 2,00,000/- availed from Ayanchery branch was closed on 25/11/2004. The said loan was to be repaid in 60 months and the rate of interest was 16% per annum. As per the loan agreement, the interest was subject to variation based on the periodic revision of the interest rate from time to time. The complainant was bound to pay interest at higher ratewhenever the interest rate was raised and he would get the benefit of lower interest, whenever the interest rate was reduced. Though the interest rate was reduced during the loan period, the complainant was not extended the benefit of the same. The bank had collected 16% interest throughout.

3. The complainant had availed loan No. CLD 1124  from Vatakara branch of the opposite party bank. The loan amount was Rs. 1,40,000/-, which was to be repaid in 60 months and the interest rate was 12% per annum. The complainant has been in regular repayment of the loan amount without any default. But he was not given the benefit of the interest variation. The bank is charging 12% interest even now even though the rate of interest has been reduced. Moreover, a sum of Rs. 350/- was levied as service charges at the time of sanctioning the loan, which is illegal.
4. The complainant had availed housing loan No. 316/2001 from the Vatakara branch. The period of loan was 15 years. The rate of interest was 13% per annum. He has been in regular repayment of the loan. For this loan also, the benefit of interest variation was not provided to him, whenever the interest rate was reduced.
5. The prayer in the complaint is to refund Rs. 10,000/- to the complainant being the excess amount charged towards interest and to adjust the excess interest levied towards the loan account and to re-fix the interest rate as per the loan agreement.
6.  The opposite party has resisted the complaint by filing written version wherein all the allegations and claims made in the complaint are denied and disputed. According to the opposite party, the complainant had availed a loan of Rs. 2,00,000/- from  Ayanchery Branch of the  bank for a period of 60 months at 16% interest and it was repaid on 25/11/2004. When the loan is in arrears, the revised interest will not be applicable to the said loan. For such loans, the interest as per loan agreement is to be levied. Even if the revised interest was made applicable, in case of any default in repayment, the interest as per the loan agreement will become applicable. The complainant failed to repay the loan arrears either before 31/03/2004 or thereafter. When the loan was closed on 25/11/2004, the arrear due to the bank was Rs. 30,900/-. For the above reasons, the complainant is not entitled to get the benefit of reduced interest.
7. It is untrue that the repayment of loan No. CLD 1124 of Vatakara branch is regular. In fact, the said loan has been in arrears since August 2005. Though on 2/01/2006 the complainant had remitted Rs. 3,247/- towards principal and Rs. 8,743/- towards interest, still an amount of Rs. 3,536/- is due towards principal. When there is arrears, the new interest rate is not applicable. The bank has every right to levy service charge.
8. Regarding the housing loan availed by the complainant from the Vatakara branch, the arrears were cleared on 25/11/2004 and hence the interest now levied is only 11% per annum and not 13% per annum, as alleged. The allegation that 13% interest is being levied for the said loan is false.
9. The present complaint has been filed raising baseless allegations and hence according to the complainant, the complaint is only to be dismissed.
10. The points that arise for determination in this complaint are;

1. Whether there was any unfair trade practice or deficiency of service on the part of the opposite party, as alleged?
2. Reliefs and costs.

11.  The evidence in this case was recorded by our learned predecessors-in-office, which consists of the oral evidence of PW1, RW1, RW2 and CW1 and documentary evidence of Exts A1 to A7, B1 to B6 and X1.
12. Both sides filed brief argument note.
13. Point No.1:-   The complainant has approached this Commission alleging unfair trade practice and deficiency of service on the part of the opposite party for the reason that the benefit of interest reduction consequent up on revision of interest rate was not extended to him and that service charge was levied by the bank for one of the loans.
14. PW1 is none other than the complainant, who has filed proof affidavit and deposed in terms of the averments in the complaint and in support of the claim. CW1 is a witness examined by the complainant and he is the concurrent auditor of Kozhikode District Co-operative Bank. RWs 1 and 2 are the Managers (Inspection) of the Kozhikode District Co-operative Bank. They have filed proof affidavit and deposed supporting and reiterating the contentions in the version.   
15. It is not disputed that the complainant had availed the loans in question from the opposite party. Going by the pleadings, it is seen that the allegations of the complainant are twofold. The first allegation is that the complainant was denied the benefit of interest reduction as and when the interest rate was slashed.  The second allegation is that service charge was levied from him by the bank for one of the loans availed.
16. Regarding the first allegation, the case of the complainant is that as per the loan agreement he is entitled to get the benefit of interest reduction for the loan whenever the interest rate for the loan is reduced. It is not disputed that the interest was subject to variation consequent on revision of interest rate. This has been specified in clause 5 of Ext A2 housing loan sanction order also. However, Ext B3 circular dated 30/04/2004 issued by the General Manager of the opposite party bank shows that interest rate was reduced and benefit was available only to those who was in regular repayment of the loan without any default and to those who cleared the dues before 31/07/2004. Admittedly, loan No.  CLD 334 availed by the complainant was in arrears. The complainant had not cleared the arrears before 31/07/2004, whereas he paid the arrears  only on 25/11/2004 as on which date Rs. 30,900/- was the arrears. The fact that the loan was not  repaid in time as per the agreement is admitted by PW1 during cross examination. That being so, the complainant cannot claim the benefit of interest reduction when the interest rate was reduced by the bank as far as loan No. CLD 334 is concerned.
17.   In the case of  Loan No.  CLD 1124, it is also in arrears. It is the case of the opposite party that the said loan has fallen in arrears since August 2005 and though on 02/01/2006 the complainant had remitted some amount, the loan is still in arrears. That being the position, the benefit of reduction of interest claimed by the complainant is not applicable to the said loan as well.
18. Coming to loan No. 316/2001, the agreed rate of interest was 13% per annum. The case of the opposite party is that they have reduced the rate of interest to 11% per annum since the complainant had paid the arrears on 25/11/2004. So it is evident that the opposite party has extended the benefit of interest reduction to the complainant and so there is no room for any such complaint.
19. From the above discussion, what emerges is that no unfair trade practice or deficiency of service can be attributed against the opposite party with regard to the interest and in respect of providing the benefit of interest fluctuation on the loan as and when the interest rate is revised. 
20. Another grievance of the complainant is that service charge of Rs. 350/- was levied from him while disbursing  the amount covered by loan No. CLD 1124. In this context, it is worthwhile to have a glance set Ext B2 which is the decision of the Administrative Committee of the bank. As per Ext B2, it was decided to levy 0.25%  service charge  for the loans. The levying of service charge is justified by Ext B2 and the same cannot be said to be illegal. 
21. At the time of evidence, the complainant has suggested to the witnesses that some of the remittances made by him and certain amounts eligible to him are not reflected in the accounts. But the said allegation is not supported by any satisfactory evidence. Moreover, the complainant has no such allegation in the complaint or in the proof affidavit filed by him. There is no whisper either in the complaint or in the proof affidavit that the amounts remitted by him or eligible to him were not given credit to by the bank.  It is a new case developed at the time of evidence which does not find a place in the complaint.
22. To sum up, we hold that there is no proof of any deficiency of service or unfair trade practice on the part of the opposite party as alleged and consequently the complaint must fail.
23. Point No. 2:- In view of the finding on the above point, the complainant is not entitled to claim and get any relief.  

In the result, the complaint is dismissed. However, no order as to costs.

Pronounced in open Commission on this, the  12^th day of June,  2024.

Date of Filing:   18/11/2005. 

                 Sd/-                                                                                              Sd/-

         PRESIDENT                                                                                   MEMBER                                      

APPENDIX

Exhibits for the Complainant :

Ext A1 - Copies of the loan agreements, promissory notes etc.

Ext A2 - Copy of the loan sanction order dated 22/11/2001.

Ext A2(a) – Copy of the ledger of loan No. HSG-D-316/2001.

Ext A3 -  Statement showing interest rate on loans.

Ext A4 – Bylaw of the Kozhikode District Co-operative Bank.

Ext A5 – Copies of the loan ledger.

Ext A6 – Statement of accounts.

Ext A7 – Copy of order dated 01/02/2014 of the Kerala State Farmers’ Debt

                 Relief Commission.  

Exhibits for the Opposite Party

Ext B1 – Table showing interest rate.

Ext B2 – Decision of the Administrative Committee.

Ext B3 – Copy of the circular dated 30/04/2004 of the Kozhikode District Co-

                 operative Bank.

Ext B4 – Copy of the statutory inspection report of NABARD.

Ext B5 – Copy of letter dated 11/11/2011 of the Kerala State Co-operative

                    Bank.

Ext B6 – Copy of the memo dated 04/08/2000 issued by the General Manager,

                 Kozhikode District Co-operative Bank.

Exhibits for the Third Party  

Ext X1 – Copies of the various circulars regarding rate of interest.

Witnesses for the Complainant

PW1 -  Radhakrishnan  (Complainant)

Witnesses for the opposite party

RW1 – Vasu. V.N (Manager (inspection), Kozhikode District Co-operative Bank.)

RW2 – Subash Chandran. N.V (Manager (inspection) Kozhikode District Co- operative

              Bank.) Commission Report.

Witnesses for the Commission

CW1 – Velayudhan. M, Concurrent Auditor of  Kozhikode District Co-operative Bank.

                 Sd/-                                                                                              Sd/-

            PRESIDENT                                                                                   MEMBER                                      

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