Per Mr.S.R.Khanzode, Hon’ble Judicial Member

1.       The consumer disputes which are the subject matter of these three consumer complaints are settled by this common order since they involve identical facts and common question of law.

2.       Mr.Rahul J. Joshi, his wife Maya and son Harmesh are respectively complainants in consumer complaint nos.10/173, 10/174 & 10/175 and herein after referred by their first name. The complaints which were initially brought against opponent no.1-ICICI Bank Ltd. (herein after referred as the ‘Bank’), opponent no.2-United Financial Services described is a franchisee commonly known as ‘Direct Selling Agent’ (in short a franchisee) of opponent no.1 to secure the business mainly in Loan against Shares/Government of India Bonds/K.V.P. i.e. Kisan Vikas Patra/ NSC/Mutual Funds and LIC policies.  It is also alleged by the complainants that the activities which are the subject matter of these complaints were carried by opponent no.2 for gaining commercial advantage (commission/incentives/otherwise) from opponent no.1 as per their mutual business arrangement/agreement.  Originally, the Reserve Bank of India, officials of the National Savings Institute and National Savings, as well as Director –Ministry of Finance, Government of India; were impleaded as parties but, subsequently, deleted by the complainants.  It is the grievance of the complainants Rahul, his wife Maya and son Harmesh that the bank offered loans/funding facility for purchasing/acquiring ‘Kisan Vikas Patra’ (in short ‘KVP’) to them in the third week of March 2005 through opponent no.2-‘Franchisee’.  They presented a very lucrative scheme, whereby complainants were lured to accept and act upon the same. As per the said scheme, the bank was to grant overdraft facility to cover the amount to the extent of 90% funding to purchase KVP and rest of the money i.e.10% of the said requirement is to be kept by the complainants as margin money. The scheme was offered if `4 crores investment is made in this manner. It was also presented to the complainants that the funding/loan is to be offered by the bank on interest @ 6.75% p.a.  The interest rate as applicable and payable on KVP was 8.41%.  Thus, generating higher yield for the Rahul and his family than what is payable to the bank @ 6.75% for such funding/loan by them. Agreements were accordingly executed by the Rahul, Maya and Harmesh with the bank.  The funding/loans were made as under:-

          Account No.                    Name                    Amount

       001105011376                 Rahul Joshi                    `4,00,00,000/-

       001105011377                 Maya R  Joshi                `4,00,00,000/-

      001105011375        Harmesh Joshi                `2,00,00,000/-

3.       Thus, complainants Rahul and his wife Maya made investment in KVP to the extent of `4 crores each and their son Harmesh made an investment of `2 crores.  However, the dream of the complainants Rahul, Maya and Harmesh shattered when the bank gradually raised the rate of interest payable for such funding/loan from 6.75% to 10.75% in less than two years and, thus, according to complainants they started incurring losses. The complainants complained that the bank and the franchisee deceived them.  The protest made from time to time failed on deaf ears of the bank officials and, therefore, they filed these consumer complaints inter-alia claiming reliefs as under:-

1.        “That the Opposite Party No.1&2, be directed to immediately reverse excess interest charged to complainant and charge interest at 6.20% p.a., on the Funding Amount granted to complainant for Loans availed for acquisition of KVPs (Amounting to over `15,00,000/- (Rupees Fifteen lakhs only).

2.        That, Opposite Party No.1&2 be directed to pay compensation `15,00,000/- (Rupees Fifteen lakhs only), towards, loss of opportunity to invest the margin money blocked and also interest amount paid to the Opposite Party No.1, in most attractive investment options, and also towards mental harassment and towards expenses incurred in this matter.”

4.       At the stage of admission itself, the bank and its franchisee appeared and opposed the admission. Both the parties are heard at length.

5.       The grievance of the complainants as narrated earlier finds reflection not only in the complaints but earlier correspondence entertained into between complainants, the bank and the franchisee.  One of such correspondence is a letter 25/02/2008, (annexure 4 to the complaint) in which in the following words the complainants raised their protest for alleged arbitrary increase of rate of interest by the bank:-

“It is illogical on the part of Bank to continuously increase the interest rate, while the yield on the underlying security was fixed. Further bank was also aware that there were no possibilities of premature closure of KVPs.  With such information available  with them, the Bank should have given proper professional advice to the clients, instead of focusing only on making money. We felt that we were taken for a ride by the Bank by marketing such a product, where the customer is always the loser.

I am enclosing the particulars of the loans, the interest charged and the interest received in KVPs. The calculations clearly show that we have lost very badly due to the improper advice and service given by the Bank. We have also been informed that we still have to pay `7445296.00 as on 01/02/2008 to the Bank.”

6.       After complaining about the charging of interest at higher rate, the complainants requested as per the prayers made in these complaints to revert back to original interest rate i.e. @ 7% p.a.  Their such anxieties are further reflected in subsequent communication dated 19/7/2008 (Annexure 6 of the complaint).  The bank perhaps given some relief but to which the complainants Rahul and his family were not satisfied and insisted upon reverting back to the original rate of interest, supra.

7.       Considering totality of the circumstances, it is revealed that the complainants Rahul and his family entered into the scheme to purchase/acquire KVP (funded by the bank to the extent of 90%) to expect lucrative returns i.e. the difference between interest to be received on KVP at 8.41% p.a. and the interest payable by them loan/funding by the bank.  It comes to almost @ 1.66% p.a. and considering the total investment of `4 crores out of which complainants Rahul and his family’s contribution by way of margin money is only 10%, it appears quite lucrative. Such investment made by the complainants Rahul and his family is, certainly, a commercial activity to earn the profit (and losses, if any, through a calculated risk).  Therefore, the complainants are not consumers within the meaning of section 2(1)(d) of Consumer Protection Act, 1986 (herein after referred as ‘Act’ for brevity).  As such, all the three complainants being not a consumer, the present complaints cannot be entertained.  A useful reference on the point can be made to a decision of the apex court in the matter of Economic Transport Organization v/s. Charan Spinning Mills Pvt. Ltd.& Anr. 2010 CTJ 361(SC)(CP).

8.       Assuming for the time being that if these complaints presents a consumer dispute, then it can be further seen that to raise the grievance to the effect that bank arbitrarily and illegally started charging interest at higher rate and within a period of two years raised interest rate from 6.75% to 10.75%, they rely upon alleged oral assurance given by the bank and franchisee at the time of selling this product, however, they failed to substantiate the same and their such case cannot be accepted in view of written agreement between them on one part and the bank on the other part.  These agreements are dated 30/3/2005 and the interest clause therein reads as under:-

“INTEREST:

The facility shall carry interest at the rate(s) specified in the Schedule written hereto or such other rate(s) as may be decided by the Bank from time to time. The interest rate/s decided by the Bank from time to time to be applicable to the facility may be subsequently intimated to the Borrower and shall be binding upon the borrower; the Borrower shall not be entitled to dispute or question the same on any ground whatsoever.”

9.    The contractual agreement stipulated between the parties which is binding upon them shows that bank was right to charge interest as applicable from time to time and the complainants specifically submitted that they will not raise any dispute over the same on any ground whatsoever.  Considering these contractual clause relating to interest chargeable by the bank against the funding/loan given to each one of the complainants, it cannot be said that the bank was deficient in service in any manner.  In short, the grievance of the complainants for charging escalating rate of interest and alleging deficiency in service on the part of the bank on this count do not hold good.  Similarly, it is certainly not a case of unfair trade practice on the part of the bank or franchisee since the complainants with open eyes entered into this deal and even executed the relevant documents referred earlier.  These complaints on this count also liable to be rejected.

        For the reasons stated above, we hold accordingly and pass the following order:-

                                      ORDER

Consumer complaint nos. 10/173, 10/174 & 10/175 stands rejected.

In the given circumstances, both the parties to bear their own costs.

Copies of the order be furnished to the parties.