DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION-II
Udyog Sadan, C-22 & 23, Qutub Institutional Area
(Behind Qutub Hotel), New Delhi- 110016
Case No.301/2017
Smt. Poonam Manshani
D/o Late Sh. N.S. Manshani
R/o A5C/28A, Janakpuri
New Delhi-110058.
….Complainant
Versus
ICICI Bank Ltd.
S-13, Green Park Main
New Delhi.
Through Manager ….Opposite Party
Date of Institution: 25.08.2017
Date of Order: 05.12.2022
Coram:
Ms. Monika A Srivastava, President
Sh. U.K. Tyagi, Member
ORDER
Sh. U.K Tyagi, Member
Complainant has requested to pass an award directing ICICI Bank Ltd (hereinafter referred to as OP) (i) to refund excess charge of money Rs.14,67,255/- alongwith interest 15% from the date of receipt (ii) to pay compensation of Rs.1,00,000/- for mental agony etc; (iii) to pay litigation charge of Rs. 50,000/- etc.
Brief facts of case are as under:-
The complainant was sanctioned loan of Rs.16,15,000/- by OP-Bank for the purchase of property. The Complainant stated that he was charged rate of interest @10.75% p.a on floating rate reference (FRR) though prevalent rate of interest on housing loan was 8.5% p.a. Thereafter, OP-Bank further imposed additional interest @ 0.50% p.a. Copy of Loan agreement No.7776715701 is annexed herewith as Annexeure C-1. The OP-Bank made EMI of Rs.20,485/- for the repayment of loan in 144 months. No default was made till 123 installments from January, 2007 to April, 2017. As such, he paid Rs.20,485 x 123 = 25,19,655/- to the OP-Bank. The complainant contended that the OP-Bank never intimated any increase or decrease in the rate of interest. On April, 2017, the Complainant has got arrangement of money and decided to make full & final payment of remaining installments. The OP-Bank intimated the outstanding amount of Rs.13,19,995/13 vide letter dated 17.04.2017 in case of pre-payment. Copy of the same is enclosed as Annexure C-2. The Complainant requested for copy of statement of payment made from January, 2007 to April, 2017. The Complainant got copy of statement of payment in respect of loan. On receiving the same, the Complainant was shocked to know that the existing rate of interest on home loan in January, 2007 was 8.5% per annum. But OP-Bank had charged excessive rate of interest 10.75% p.a and also additional rate of interest @0.50% in contravention of RBI guidelines. Copy of statement is enclosed as Annexure- C-4. Further it is seen that OP had charged rate of interest upto @16.25% p.a instead of 10.75% p.a without any consent of the complainant.
Initially, EMIs were determined 144 but it was enhanced from 144 to 259 without any intimation. The Complainant complained to the OP-Bank vide its letter dated 19.04.2017 why rate of interest was being charged @15.5% p.a, whereas it was around 8.5% at that time of sanction of loan. The same is enclosed as Annexure –C-5. To avoid further exorbitant rate of interest, the complainant paid Rs.13,19,995/13 by cheque No.471293 dated 01.05.2017 as full and final payment. Copy of the same is enclosed as Annexure-7. The Complainant was liable to make payment in 116 installment and liable to repay total amount of Rs.23,72,395/- including principal amount Rs.16,15,000/- + Rs. 7,57,395.04 @8.5% p.a, whereas OP-Bank had charged total Rs.38,39,650/- (Rs.25,19,655/- + Rs.13,19,995.13/-) of 123 EMIs of Rs. 20,485/-. From the statement of payment, OP-Bank had charged Rs.14,67,255/- in excess. The exorbitant rate of interest upto 16.25% p.a was in violation of RBI guidelines. The Complainant also referred the case of Hon’ble Supreme Court & CCI. The copies of above cases are annexed as Annexure C-10 to C-11.
OP on the other hand, filed its written statement asserting that-
- No cause of action ever arose in favour of Complainant and failed to disclose the same.
- Many questions of facts cannot be decided here in this Commission because of the nature of the complaint.
- The Complainant availed the loan facility and cleared the outstanding willfully, hence no ground to file the instant complaint.
As stated above, the loan of Rs. 16,15,000/- was sanctioned for 12 years. It is denied that rate of interest was 8.5% per annum. However, the complainant had mentioned that said loan was on the floating rate of interest and same is mentioned in document that rate of interest to be charged is FRR 10.75 % + 0.50% =11.25% p.a. It is further mentioned that whenever there is an increase in rate of interest, the OP-Bank will increase the tenure of loan of the customer in order to avoid burdening the customer with enhanced EMI. The same is mentioned in Loan Agreement which is duly signed by Complainant. In case the customer wish to reduce the tenure he/she opt for increase in EMI, or make part pre-payment or combination of both. Copy of sanctioned letter & loan agreement are annexed as Annexure-‘A’. OP denied the stand of complainant with respect to this fact that the complainant was informed every time about the change in rate of interest. It is also denied that the complainant was well aware about the Floating Rate of Interest i.e 16.75% + 0.50% and further (depending) changing rate of interest. It is also denied that the number of EMIs from 144 to 259 was increased deliberately. The OP-Bank was authorised to increase installment subject to permissible limit, in case of increase in rate of interest. The OP-Bank further stated that the grounds of complainant are denied in toto except where the OP has accepted specifically. In view of these facts, the Complainant failed to disclose deficiency in service.
Both the parties have filled evidence-in-affidavit & written submissions. Written statement is on record so is rejoinder. Oral arguments were heard & concluded.
This Commission has gone into entire gamut of issues and due consideration was given to oral arguments. The grievance of complainant had been primarily around three grounds namely firstly-inspite of prevalent rate FRR i.e 10.75% p.a, the OP has unfairly charged additional interest of 0.50% without intimation. Secondly, OP had charged interest upto 16.25% p.a unilaterally. And thirdly, EMIs were fixed 144 but later on were increased 259 unilaterally, without any intimation or consent of the complainant.
The Complainant has further stated that he was liable to make payment to the tune of Rs.23,72,395/- (principal amount Rs.16,15,000/- + Rs7,57,395.04/- @ rate of interest 8.5%) whereas he was charged total amount of Rs.38,39,650/-. As such, he was wrongly charged Rs.14,67,255/- in excess. It was added by complainant that OP has not applied principle of FRR correctly and charged higher interest, in terms of judgment of Hon’ble Supreme Court upholding. The view taken by Hon’ble State Commission in case ICICI Bank Ltd Vs Maharaj Krishan Datta dated 03.08.2015 as under:-
“1 (e) the state commission held that in view of the agreement between the parties, payment of interest @ minus 1.5% of the prevalent FRR, which could be reset by the bank based on the guidelines issued by the RBI. It was further held that the intimation of such resetting should be given to the complainant/constituents. The State Commission also affirmed the payment of compensation as well as the cost of litigation as assessed by it. In these circumstances, the appellant bank filed a revision petition before the National Commission and the National Commission dismissed the said petition. The respondent bank can charge interest at FRR 1.5% on the loan amount.”
As mentioned by the OP-Bank, this Commission is of the view that facts of instant case are different from the facts mentioned in above case. The judgment of Hon’ble Competition Commission of India is that of dissenting Member.
The attention of this Commission was drawn towards the Clause (b) of Para 9 of the Facility Agreement which run as under:-
(b) Adjustable rate of interest
(i) FRR 10.75%
(ii) The borrower will pay rate of interest = 11.25% p.a (FRR + Margin of 0.5%)……………
- The borrower shall pay EMI at 11.25% p.a.
The sanction letter also states as under:-
Loan amount sanctioned = Rs.16,15,000/-
Type of interest = Floating
Effective rate = 11.25%
Term = 144
Rate at which EMI is calculated = 11.25%.
In nutshell, after having considered the facts & circumstances in the case, this Commission is of considered view that the OP Bank has not rebutted the contention of the complainant to this effect that whenever the rate of interest was enhanced the intimation was not given to the complainant. No shred of evidence was advanced by the OP Bank. However, as per facility agreement, the OP Bank should have provided this information, at least, at the end of financial year but same was no adhered to. To this account, this Commission is of the opinion that OP Bank is found short of obligation. Accordingly, OP is directed to pay Rs.50,000/- as compensation for the deficiency of service and negligence on its part. This order should be given effect within three month from the date of receipt of the order. Failing which, the rate of interest @6% p.a. shall be levied till its realization.
No order as to cost.
File be consigned to the record room after giving a copy of the order to the parties as per rules. Order be uploaded on the website.
