Order-18.
Date-03/09/2015.
This is an application u/s.12 of the C.P. Act, 1986.
Complainant by filing this complaint has submitted that complainant for his need for purchasing a flat prayed for loan to the OP and OP being satisfi9ed approved the loan application, issued sanctioned letter dated 31-05-2005 releasing a loan amount of Rs.10,24,000/- and it was disbursed through Home Loan Account No.031-266778-220 and the tenure of the loan was 180 months, interest rate type was floating, current interest rate was 7.75 percent p.a. and date of first instalment was 15-06-2005 and last instalment was 15-05-2020 and accordingly bank fixed EMI and complainant after availing of the loan continued to pay EMI regularly as per demand of the OP and lastly OP sent a letter on 21-05-2008 intimating the complainant of the tenure of repayment of loan has been increased to 202 months but the tenure of repayment of loan was 180 months and nowhere in the Section letter as well as in the Home Loan Legal kit it was mentioned that the tenure of loan would be altered or changed and in fact, OP Bank by letter dated 21-08-2008 whimsically without any knowledge and consent of the complainant reduced the tenure of months from 180 to 202 intimating the complainant that the tenure being reduced to 202 which means only 202 months are left for repayment of the loan amount. Thereafter, complainant made several correspondence with the OP regarding enhancement of the tenure of loan but no satisfactory explanation came from the OP and ultimately the complainant had to foreclose the loan account by making payment of Rs.9,51,512/- to the OP on 03-02-2014.
Thereafter, complainant applied for loan account details along with repayment interest structure and same was supplied by the OP in the first week of March, 2014 and the complainant placed the said statement of loan account details to his Chartered Accountant and after calculation thoroughly that said Chartered Account(CA) handed over its report to the complainant showing that the OP has realized extra Rs.1,26,827/- from the complainant against the Home Loan account illegally, unlawfully and without complying with the standard norms of the RBI.
In the situation complainant issued a demand notice dated 09-09-2014 through his Advocate to the OP enclosing the report of the CA and requested them to refund the extra amount of Rs.1,26,827/- which they illegally and unlawfully realized from the complainant but the OP did not bother to send any reply to that demand notice nor they have remitted that extra amount as demanded and only to suppress their misdeeds and deficient activities OP was completely silent and for such sort of illegal act and adopting unfair practice complainant has filed this complaint for redressal.
On the other hand, OP by filing a written statement submitted no doubt complainant was granted a loan of Rs.10,24,600/- vide sanctioned letter dated 31-05-2005 under Loan A/c. No.031-266778-220 along with conditions has imposed.
Further the subject loan was sanctioned at a floating rate of interest which was linked to HSBC Mortgage Lending Rate (MLR) and was subject to revision from time to time and the revision in MLR would impact the rate of interest of the subject loan and as per terms of the sanctioned loan it must be paid by 180 equal monthly instalments at the rate ofRs.9,644/- which was subject to variation due to change in MLR and complainant duly availed and utilized the said loan amount for purchasing a property that is Flat No.69B lying and situated at B.T. Road, P.S. Baranagar, Dist – 24 Parganas (N), Kolkata – 700 090 and created equitable mortgage in favour of the OP and complainant and complainant prayed for floating rate of interest which is dependent on MLR, which is effected by external business environment and from time to time the rate of interest increased. The OP Bank vide its letter dated 02-07-2008 informed the complainant that the retail lending rate increased from 13.75 percent to 14.25 percent w.e.f. 02-08-2008 leading to revision of the rate of interest applicable to the complainant. Due to such revision, the amount of EMIs were increased to Rs.11,582/- keeping the tenure unchanged.
In fact, in January, 2014 complainant approached the OP Bank for foreclosure of the loan account and the OP vide its letter dated 31-01-2014 informed the complainant that as on the date the sum of Rs.9,49,431-69 was required to be paid by the complainant for foreclosure of the loan account and vide its letter dated 13-02-2014 the Bank informed the complainant that he had duly paid the foreclosure amount and his loan account was closed and accordingly No Dues Certificate was issued but after passing of more than one year from foreclosure of the loan account of the complainant, the instant complaint has been filed alleging that Bank has realized extra amount of Rs.1,26,827/- and the allegation of the complainant is wholly vexatious, frivolous, afterthought and baseless.
It is specifically mentioned by the OP that OP Bank never whimsically and without the knowledge of the complainant reduced the EMIs from 180 to 202 months. And in fact, as per agreement there was no need or requirement to take consent of the complainant prior to increase of tenure of EMIs.
In fact complainant has no cause of action and his entire complaint is vexatious and for the purpose of grabbing some money the false case is filed.
Decision with Reasons
On comparative study of the complaint and the written version and also considering the admission of the complainant and OP it is undisputed fact that loan was sanctioned and that loan was sanctioned as per prayer of the complainant because complainant intended to purchase a flat being No.69B, B.T. Road, Block – B, Baranagar, Kolkata – 90 and no doubt it was a housing loan. Truth is that complainant paid the EMIs regularly and against that there was no grievance of the Bank but fact remains complainant had been paying monthly instalment of Rs.9,644/- per month against total loan amount of Rs.10,24,600/-.
Undisputed fact is that vide letter dated 02-07-2008 complainant was informed that interest rate was increased from 13.75 percent to 14.25 percent with effect from 02-08-2008 and EMI was increased to 11,582/- and tenure of payment shall be increased. Therefore, complainant paid EMIs but ultimately in January, 2014 complainant approached the OP Bank for foreclosure of the loan account and OP vide its letter dated 31-01-2014 informed the complainant that a sum of Rs.9,49,431.69 was required to be paid by the complainant for foreclosure of the loan. Complainant paid it and his loan account was foreclosed and no doubt no objection certificate was issued but practically no detail loan account was submitted or handed over to the complainant for which complainant asked the OP for filing the details of the loan account and thereafter complainant verified the same by a Chartered Accountant wherefrom it is found that there is discrepancy in assessment of interest etc and after assessment by a Chartered Account it was detected that OP has realized Rs.1,25,894-80 excess. So, complainant asked the OP to repay the sum but OP did not pay any heed and they kept silent. So, before us the consumer dispute is in relation to determination of foreclosure amount and admittedly complainant starting from 31-05-2005 up to 05-02-2014 paid Rs.21,64,847-98 which is evident from the details of the loan account of the complainant as submitted by the OP.
In this context, we have found that interest rate was increased time to time initial payment of EMI was Rs.7,344/-. Thereafter, it was increased to Rs.9,237/-, thereafter, it is increased to Rs.10,336/- and lastly from September, 2008 EMI is found Rs.11,373/- and subsequently it was increased day by day. Thereafter, from 29-08-2011 increased EMI was Rs.12,914/- and practically it is found against loan amount of Rs.10,24,600/- complainant has paid Rs.21,64,849-98 within the period from 31-05-2005 to 05-02-2014. In fact, initially rate of interest was 7.75 percent and OP has tried to convince that floating rate was included and it was increased time to time and that is noted in the agreement. In this regard OP bank suppressed the material fact because consumer does not know what is the guideline of RBI in respect of Housing Loan. Fact remains in this case we have already considered the present loan as the housing loan up to 01-04-2014. RBI has one guideline issued in the year 2012 in respect of housing loan interest rate and as per RBI guideline in case of housing loan above 2 lakh upto 25 lakhs the rate was declared by the Reserve Bank of India and from that order of RBI it is clear total rate of interest in respect of housing loan shall not be more than 12.75 percent in case of loan amount of Rs.25,00,000/- and after considering the said post rate structure of RBI it is clear that at any point of time in respect of housing loan in between Rs.2 lakhs to Rs.25 lakhs interest rate shall not be above 12.75 percent but if the housing loan amount is above Rs.25 lakhs in that case the interest rate may be increased up to 15 percent. No floating rate shall be charged in case of housing loan but in the present case OP bank has violated the guideline of the RBI though they are guided by the RBI and moreover, National Housing Bank also vide their guidelines on Fair Practices Code for Housing Finance Companies vide their circular of the year 2011-2012 ordered that as a measure of customer protection and also in order to bring the uniformity with regard to prepayment of various loans by borrowers of banks, NBFCs and HFCs, it is advised that no penal cost or charges or penalty shall be charged in case of foreclosure or prepayment but considering the details of the loan account as issued by the OP it is clear that OP not only charged excess interest rate above 12.75 percent and also charged penal damages including foreclosure charges but in respect of housing loan foreclosure charges or no penalty can be charged under any circumstances. So, considering that fact it is clear that the assessment of interest foreclosure charges and etc. are beyond the scope of the OP to impose but that has been imposed. At the same time OP has admitted that they increased rate of interest from 7.75 percent to 13.75 percent and thereafter, up to 14.25 percent but under any circumstances, as per RBI guideline and National Housing Bank policy circular order OP cannot impose any interest above 12.75 percent in respect of housing loan when sanction of loan amount is below 25 lakhs and in this case loan was sanctioned to the extent of Rs.10,24,600/- that means within the limit of 10 to 11 lakhs and there is no legal ground of the OP to assess any interest rate as floating rate above 12.75 percent but considering the EMI as assessed from 2007, interest rate was increased time to time and it was increased up to 14.25 percent. So, it is clear that OP not only charged extra interest above 12.75 percent for many years and such a charging of interest by the OP is illegal as per RBI guideline and also as per National Housing Bank guideline of the year 2011-2012 etc. of fact National Housing Bank by their letter and circular being No.MHB/ND/DRS/Pol. No.48/2011-12 dated 4th April 2012 and prior to that vide Pol No.34/2010-11 circular the matter regarding prepayment penalty on pre-closure of housing loan etc. and interest rate shall not exceed 12.75 percent under any circumstances, in case of housing loan. So, apparently it is proved that OP has charged excess interest rate against the housing loan account of the complainant which is no doubt against the RBI guidelines and there was no scope on the part of the OP to impose such interest and at the same time there was no scope to impose any penalty for foreclosure but that has been charged. So, apparently it is clear that OPs have violated the guideline of the National Housing Bank and at the same time the RBI Guideline of the year 2011-12 and also subsequent years. Further fact is that from the said details it is not apparent why OP deducted Rs.11,03,666-62 as interest and why on 05-02-2014 OP deducted against interest a sum of Rs.68,737-38. So, considering all the above facts it is clear OP adopted unfair practice, violated the guideline of RBI and National Housing Bank regarding pre-payment penalty on foreclosure against housing loan and charging of interest above 12.75 percent and no doubt such sort of act on the part of the OP is completely illegal, uncalled for, arbitrary and considering all these facts and further deduction of interest at the rate of13 percent starting from 15th August, 2008 and till 2nd February, 2014 at the rate of15.45 percent are against guideline of RBI. Moreover, after calculating the details of deduction as issued by the OP and the calculation as made by the Chartered Accountant appointed by the complainant it is clear that there are several defects and errors in calculation of interest. So, considering all these above facts and also considering the guideline of RBI of the year 2011-2012 regarding housing loan and also National Housing Bank regulations regarding foreclosure of housing loan and direction not to impose any penalty in such case and fixing of interest up to 12.75 percent in respect of housing loan up to 25 lakhs as fixed by the RBI we are confirmed that entire assessment of loan account by the OP is no doubt with errors violating terms and condition guidelines of the RBI and National Housing Bank. Peculiar factor is that Ld. Lawyer for the OP submitted one ruling of National Commission being No.1(2014) CPJ 90 NC and tried to convince that National Commission has already confirmed that the repayment scheduled are likely to change in view of the floating interest. So, as per agreement housing finance company or bank may impose such floating rate of interest but in this regard this Forum wants to say that if any judgment is passed against Law of the Land in that case law of the land shall prevail over the judgment. In view of the fact legal friction has not been decided in that case. Peculiar factor is that in the said judgment of the National Commission not a single order of RBI or the National Housing Bank has been discussed. Only the fact was discussed and loan agreement was treated as a contract but that is not the position of the law. In this regard we want to ventilate the legal position and in this regard it is to be mentioned that all Banks or non-banking financial institution are guided by the RBI and National Housing Bank authorities and they are guided by their Regulations time to time published if it is found that any Bank by violating all that guidelines of the RBI and National Housing Bank sanctioned any housing loan upto 25 lakhs in that case there is no scope on the part of such bank or non-banking financial institution to impose any interest above 12.75 percent by violating RBI Guideline even if any such agreement is tagged with the sanctioning authority and it is signed by the loanee member. In that case loanee member is entitled to get his relief on the basis of RBI guideline or National Housing Bank or non-banking financial institution on the ground Law of Land shall prevail over any sort of verdict of any banking institution or non-banking financial institution and loanee member shall have to get relief as per guideline of National Housing Bank Regulation and RBI guidelines because bank and financial institutions are guided by RBI and National Housing Bank but these factors are not at all discussed in the present judgment of National Commission. Practically, in the eye of law it is a precedent but in so many words it is not the judgment. Judgment means legal friction is properly decided and declared otherwise on the basis of facts only if any judgment is passed by National Commission or State Commission it is nothing but a precedent. We have gathered from the judgment of National Commission that National Commission has observed that loan agreement is an agreement. So, parties cannot go outside the agreement. Already Supreme Court by the Judgment of the year 2002 reported in AIR 2002 834-36 passed by Justice Arjit Passwat and others that if in any judgment proposition of law is not discussed but if any higher authority passes any judgment considering only fact without determining the legal proposition in that case such judgment cannot be relied practically in the present ruling said matter is not properly discussed and whether the agreement was considered by the National Commission on the basis of the RBI guideline and National Housing Bank Regulation but that chapter is silent. No doubt legal friction must be in the judgment but in the reformed ruling same is absent. In this context it is to be mentioned that in the present case regulation or notification of RBI or National Housing Bank are involved and Supreme Court has also decided that Fora shall have to rely the guideline which is the guideline for controlling the financial institution in India. So, we have relied upon the guidelines and regulation of RBI and we have decided the same on merit and on the basis materials we have collected and that is the gazette notification of the Central Government in view of the above fact we find that this precedent or judgment passed by the National Commission is not applicable in this regard. In the light of the above observation and after calculating both the details loan account of complainant and the calculation has made by J.C. Chakraborty, Chartered Accountant we find that amount as assessed by the OP at the time of foreclosure is completely erroneous and no doubt at the time of preparation of the details of foreclosure loan account OP has suppressed many things and that has not been shown separately but everything was included in the interest head but that is not the procedure for preparing loan account in the case of foreclosure though it is mandatory provision and guideline of the RBI and also the National Housing Bank that at the time of foreclosure detail shall be given not only month by month but also the portion of penalty, fine and other charges which shall be shown separately and whether any penalty as charges is imposed or not but OP has adopted unfair practice and penal charges etc. has been included in the interest rate but that is not the condition of assessment of the interest and penal charges etc. jointly. So, as per OPs statement of loan account the assessed total interest is Rs.11,03,656/- but it is not shown how much amount has been charged as penal interest for foreclosure and penalty, fine etc. whatever it may be after calculation of the interest rate as imposed by the OP up to 15.75 percent from the period 16-07-2007 to 06-02-2014 is completely excess but rate would be 12.75 percent so, excess interest as deducted from the complainant is completely illegal and against the guideline of the RBI.
In view of the above findings and materials complainant is directed to reasses interest at the highest rate of 12.75 percent up to 06-02-2014 from 16-07-2007 and prepare a detail of interest accordingly against the total loan amount up to the date of foreclosure without assessing any penalty or any oher charges and that shall be prepared separately in detail and said amount shall be deducted from the total payment of the complainant that is Rs.21,64,847-98 and after said deduction the balance amount shall be paid to the complainant but it must be paid within one month from the date of this order as per guideline made in the body of this judgment and to repay the same within one month from the date of this order if OP fails to pay it we are directing the OPs to pay the claimed amount of the complainant that is Rs.1,26,827/- along with compensation of Rs.25,000/- for assessing such higher rate of interest violating the guideline of the National Housing Bank and the RBI.
In view of the above findings the complaint succeeds.
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 hereby directed to prepare such new detailed account of the housing loan which has been foreclosed afresh fixing interest at the rate of12.75 percent with effect from October, 2007 and without charging any sort of penalty for foreclosure or any purpose and thereafter that total amount shall be deducted from the total deposited amount of the complainant and balance amount shall be paid to the complainant within one month from the date of this order if OP fails to comply the order in that case OP shall have to pay entire amount as claimed by the complainant that is Rs.1,26,827/- and further OP is directed to pay a compensation for harassment to the complainant in such a manner and for adopting such an unfair practice for violating the RBI guideline and also National Housing Bank Guideline and illegal assessment of interest against any housing loan.
OP is directed to comply this order within one month from the date of this order failing which penal damages at the rate ofRs.200/- shall be assessed till full satisfaction of the decree and if it is collected it shall be deposited to this Forum.
OP is directed to comply the order within stipulated period failing which penal action shall be started against them for which further penalty and fine shall be imposed u/s.25 read with Section 27 of the C.P. Act.
