Chandigarh

DF-II

CC/145/2018

Ashwani Bhalla - Complainant(s)

Versus

ICICI Bank Limited - Opp.Party(s)

In Person

11 Apr 2019

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

 

Consumer Complaint  No	:	145 of 2018
Date  of  Institution	:	07.03.2018
Date   of   Decision	:	11.04.2019

 

 

 

 

 

Ashwani Bhalla s/o Sh.S.K.Bhalla, resident of House No.5024, Sector 38-West, Chandigarh.  HaryaHarHar      

 

             …………….Complainant

Versus

 

ICICI Bank Limited, SCO No.9-10-11, Sector 9-D, Chandigarh, previously situated at SCO No.174-175, 2^nd Floor, Sector 9, Chandigarh through its Branch Manager. 

………. Opposite Party

 

BEFORE:  MR.RAJAN DEWAN        PRESIDENT

MRS.PRITI MALHOTRA    MEMBER

                    MR.RAVINDER SINGH     MEMBER

           

 

For Complainant   :     Complainant in person.

 

For OP(s)         :     Sh.Jatin Khullar, Advocate

                       

 

RAVINDER SINGH, MEMBER

 

                    The case of the complainant is that he availed loan of Rs.16.00 lacs from OP Bank against property  and the term of loan was finalized as : Term Period : 120 months, ICICI Floating reference rate (FRR): 10.25%, Adjustable interest rate = FRR + Margin of 0.25%, Processing fee: Nil (Ann.C-2).  The EMI of the loan was calculated at Rs.21,590/- per month for a period of 120 months as per agreed terms (Ann.C-2). 

         It is averred that from the first EMI onwards, the OP Bank changed the agreed terms unilaterally by applying 11% Rate of Interest against agreed 10.5% ROI (Ann.C-3).  It is also averred that the OP bank changed the Rate of Interest on the loan account from time to time unilaterally i.e. 11% in March, 2017, 12% in April, 2007, 13% in May & June, 2008, 13.75% in July,2008 and 14.50% in August, 2008 (Ann.C-3).  It is submitted that the OP bank kept on changing the rate of interest without any intimation/consent/justification for the same and it was increased upto as high as 16% during Sept., 2011    (Ann.C-3).  It is also submitted that when the complainant asked the Opposite Party to reduce the rate of interest automatically, they charged an amount of Rs.3740/- and then reduced the rate of interest from 15.75 to 13.75 w.e.f. 11/2012 only after receiving the said amount in Sept., 2012.  However, the Opposite Party Bank again increased the rate of interest to 14% within 10 months in Sept., 2013.  It is submitted that the complainant suffered badly due to arbitrary increase in Rate of Interest and had to pay exorbitantly increased amount to bank.  As per agreement, the loan tenure of 120 months was to be completed in Jan., 2017, but due to illogical and illegal increase in Rate of Interest by the OP bank, the tenure period was extended to 194 months by keeping EMI amount unchanged. It is also submitted that when the complainant asked the official of OP bank that the rate of interest should have been changed in accordance with some changes in the RBI lending rate and it should have been applicable on all borrowers across the board, no satisfactory reply was given by them. It is further submitted that due to said wrong act of OP Bank, the complainant foreclosed his loan account by making payment of Rs.8,86,931/-. It is pleaded that due to frequent and unjustified increase in rate of interest by OP bank, at least 15 times during the term, the complainant had to pay approx. Rs.10.00 lacs extra on said Home Loan account.  Alleging the said act & conduct of the Opposite Party as gross deficiency in service and unfair trade practice, hence this complaint has been filed.

 

2]       The Opposite Party has filed reply and while admitting the factual matrix of the case, stated that as per sanctioned letter and loan agreement duly signed & accepted by the complainant, the rate of interest is mentioned as “floating rate of interest” and adjustable interest rate applicable to the complainant loan account is subject to changes. It is submitted that the specific term has been used as Floating Reference Rate (FRR), which is used to determine the rate of interest for floating rate loans and it is linked to ICICI Bank cost of funds and appropriate cost of operations for the relevant period, credit charge and margin.  The cost of funds is one of the components of FRR and any change in cost of funds would therefore impact all the customers/borrowers whose loan are linked to FRR.  It is also submitted that the spread between the FRR and the actual rate of interest offered to the borrower is called as margin and any change in the rate of interest is on account of the changes in the FRR. It is further submitted that the margin remain constant throughout the loan and appropriation of EMI towards interest and principal depends upon rate of interest applicable to the borrower. It is further submitted that there was no excess interest levied to the complainant loan account at any point of time. It is stated that whenever there is an increase in rate of interest, bank increased tenure of loan of the borrower subject to permissible limits in order to avoid burdening the customer with higher EMI and the same has been mentioned in the loan agreement. It is also stated that the complainant was time to time informed regarding an increase or decrease interest rate, change in tenure and EMI’s by way of reset letters by the bank at the communication address of the complainant towards the intimation of the same.  It is further stated that the complainant had done conversion of his loan account for which he paid conversion fee of Rs.3720/- and thereafter he closed his loan account in Jan., 2018 by making balance payment of Rs.8,86,931/-.  It is further stated that bounce charges of Rs.5010/- and late payment charges of Rs.3427/- were levied/charged in the loan account of complainant. Denying all other allegations and pleading no deficiency in service, the Opposite Party has prayed for dismissal of the complaint.

 

3]       The complainant filed rejoinder reiterating the contentions made in the complaint.  The complainant in his rejoinder has specifically refuted the contention as raised by the Opposite Party regarding giving any intimation of every reset of rate of interest. It has been specifically stated by the complainant that the Opposite Party has never given him any intimation about change of rate of interest. The complainant has relied upon judgment of Hon’ble Punjab State Consumer Disputes Redressal Commission, in consumer case  “Prem Singh Badwal Vs. ICICI Bank, Appeal No.422 of 2016, decided on 2.6.2017, whereby it has been observed that FRR is governed by the instructions No.2.4, 2.6 and 2.11 issued by RBI and “As per the instruction number 2.4, 2.6 and 2.11 written consent is required to be taken by bank whenever they reset the floating rate of interest applicable to the loan account of their customers.” 

 

4]      Parties led evidence in support of their contentions.

 

5]       We have heard the ld.Counsel for the parties and also carefully examined the entire evidence on record.

 

6]       After careful examination of complete evidence on record and pleadings by the parties, it is noticed that the complainant took housing loan of Rs.16 lakh from ICICI Bank/Opposite Party on 15/12/2006 on interest @10.25%. The loan amount was to be paid back in 120 equated monthly installments of ₹21,590/-. The loan agreement was signed and executed by the complainant and his wife on 16/12/2006   (Annexure C-1). The loan was advanced on adjustable interest rate that is floating rate of interest.  As per clause 30 A (e) (1) of the Loan Agreement, upon any change in the adjustable interest rate, the ICICI bank shall have to intimate the borrower about the information as to the applicable adjustable interest rate. The complainant has denied receipt of any intimation about change of adjustable interest rate from the Opposite Party.  The ICICI Bank/Opposite Party has failed to produce copy of any letter in proof of their being given any information/intimation about change of rate of interest on the loan advanced to the complainant. In the absence of any substantial supporting evidence, an adverse inference is drawn and it is established as such that the ICICI Bank has never intimated the complainant before or after change in levy of rate of interest and as such violated the terms of their agreement. The ICICI Bank/Opposite Party has increased the rate of interest over and above the agreed rate of interest without any intimation or consent of the complainant and as such found to have indulged into unfair trade practice and as such all the charges over and above 10.25 % rate of interest imposed and collected by ICICI Bank are quashed being untenable and in violation of provisions of loan agreement.

 

7]       The ICICI Bank/Opposite Party has also failed to produce any document in proof of whether the enhanced rate of interest was compatible with the rate of interest as prevalent during the said period in question or whether enhanced rate of interest as imposed was permissible under any guidelines of the Reserve Bank of India.

 

8]       The complainant would have paid only Rs.25,90,800/-(Rs.21590/-EMI*120 Installments), but he actually paid Rs.39,11,608/- i.e. excess amount of Rs.9,90,800/- to the OP Bank i.e. ICICI Bank, which is not fair and required to be reimbursed to the complainant.

 

9]       The ICICI Bank however has a valid charge over;

Conversion of loan charges₹ 3720

Bounce charges₹ 5000

Late payment charges₹ 3427

•  
• ₹ 12,157
•  

        

1. Keeping into consideration the entire facts, as discussed in the preceding paragraphs, the complainant is allowed with direction to the Opposite Party to pay back Rs.9,78,643/- (9,90,800-12,157) to the complainant within 30 days from the date of receipt of copy of this order.

The copy of this order be forwarded to the parties as per rules.

Announced

11^th April, 2019                                                                       Sd/-

 (RAJAN DEWAN)

PRESIDENT

                                                                                               

Sd/-

                                                                    (PRITI MALHOTRA)

MEMBER

 

Sd/-

(RAVINDER SINGH)

MEMBER