JUSTICE J. M. MALIK, PRESIDING MEMBER(ORAL)

1.      Learned counsel for the petitioners present.  Arguments heard.

2.      The petitioners, Shri Gian Chand Garg, Smt. Santosh Garg and Shri Gaurav Garg took five home loans against the property from ICICI Bank Ltd.  The loan accounts had been running smoothly since 2003.  It is vaguely explained that under the directions of Reserve Bank of India, whenever the interest rates were increased, the opposite party-bank immediately without any intimation/notice hiked the same against the loan account of the complainants but the petitioners have failed to produce any evidence in this respect.  It is also pointed out that after October, 2008 when the interest rates were decreasing. the interest of the petitioners/complainants was never decreased.  The complainants made number of requests to the opposite party-Bank to give benefit of lower interest rates.  It was put off on one pretext or the other.

3.      Seeing the bizarre conduct of the bank, the petitioner decided to preclose the loan.  The petitioners were served with a notice directly to pay a sum of Rs.1,24,333/- on account of prepayment charges.  It is also pointed out the petitioners had taken loan wherein the lower interest was being charged from another institution.  The account was closed by the complainant on 15.11.2011 for which pre payment penalty of Rs.52,389/- was charged.  The petitioners have filed this complaint requiring the bank to pay back Rs.1,24,333/- and Rs.52,389/- charged as pre payment penalty foreclosure charges alongwith interest @18% per annum, Rs.5,00,000/- as compensation for mental agony and harassment and litigation expenses.  The District Forum dismissed the complaint. 

4.      Aggrieved by this order, first appeal was filed before the State Commission, which also dismissed the complaint.  It is thus clear that both the fora have decided the case against the complainants. 

5.      Learned counsel for the petitioners submits that, as a matter of fact, in view of principle of equity, the petitioners’ money should be returned with interest and they should be granted compensation.  He has also invited our attention towards the latest RBI circular dated 5.6.2012.  Its relevant portion runs as follows:

“3. The removal of foreclosure charges/prepayment penalty on home loans will lead to reduction in the discrimination between existing and new borrowers and competition amongst banks will result in finer pricing of the floating rate home loans.  Though many banks have in the recent past voluntarily abolished pre-payment penalties on floating rate home loans, there is a need to ensure uniformity across the banking system.  It has, therefore, been decided that banks will not be permitted to charge foreclosure charges/pre-payment penalties on home loans on floating interest rate basis, with immediate effect.”

          It is difficult to fathom as to how this circular is applicable to the case of petitioners.  It clearly, specifically and unequivocally mentions that it is applicable to new borrowers.  The circular must be read as a whole.  This has a prospective effect.  It does not apply retrospectively.  Consequently, we are of the considered view that this circular does not come to the rescue of the petitioners.  It is settled law that opposite party can charge payment charges as per the terms and conditions of the agreement.  This is well settled that this Commission as well as both the parties are bound by the agreement.  There cannot be any deviation from that.  The petitioners must have signed the agreement with open eyes.  They have now turned back and challenged the agreement itself.  They cannot wriggle out the liability by saying that they are not liable to pay off the loan as per the agreement.  While dismissing the complaint, the State Commission has citied the following authorities, Hotel Vrinda Prakash vs. Karnataka State Financial Corporation AIR 2007 Kant 187; C.S. NO. 513 of 2001-Hatsun Agro Products Chennai vs. Industrial Development Bank of India, Chennai decided on 14.10.2009 in order to buttress their judgment and Vishal Roadways vs. Economic Traders (Gujarat) Ltd. III (1998) CPJ 9 (NC), New Delhi and Bihar State Housing Board vs. Chairman-cum-Managing Director and Ors. 1(1996) CPJ 228(NC) decided by more than two members.  By no stretch of imagination, the petitioners can say that the interest or the other terms and conditions agreed by them should not be read against them.

          The revision petition is without merits, therefore, the same is dismissed.