Punjab

Ludhiana

CC/15/5

Som Nath - Complainant(s)

Versus

ICICI Bank - Opp.Party(s)

N.D.Chopra

03 Mar 2017

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

                                                            Complaint No:  5 of 02.01.2015.

                                                            Date of Decision: 03.03.2017.

 

Som Nath aged 56 years S/o. Sh. Shiv Ditta Mall, r/o. 3721, Sector 32-A, Chandigarh Road, Ludhiana.

                                                                                ..… Complainant

                                                  Versus

ICICI Bank Ltd. Feroze Gandhi Market, Ludhiana through its Manager.

…..Opposite party 

                              Complaint under the Provisions of Consumer Protection Act, 1986

QUORUM:

SH. G.K. DHIR, PRESIDENT

SH. PARAM JIT SINGH BEWLI, MEMBER

COUNSEL FOR THE PARTIES:

For complainant               :         Sh. Devan Verma, Advocate junior to Sh. N.D.                                                   Chopra, Advocate.

For OP                             :         Sh. Alok Mohindra, Advocate.

ORDER

PER G.K. Dhir, PRESIDENT

1.                 Complaint under Section 12 of the Consumer Protection Act (hereinafter referred as Act) filed by complainant by pleading that he availed loan from OP after acceptance of his proposal bearing No.7569318. Loan of Rs.14,00,000/- was sanctioned for purpose of higher education of daughter of complainant. The loan amount was repayable in 15 years with interest at the rate disclosed as 12.25%. First of the 180 installments in which loan repayable was to commence from 21.02.2017. Letter dated 23.02.2017 was again issued by OP for disclosing that disbursal of amount of Rs.2,83,860/- for payment of university fee for higher studies to take place. OP promised to pay Rs.11,21,340/- on 22.02.2007. Subsequently, OP issued letter dated 22.04.2008 without consulting anything with complainant and without disclosing anything to complainant for informing him that tenure of the loan installments changed from 180 to 185 and then to 201. Even EMI was changed despite the fact that complainant never approached OP bank for submitting request for enhancement of time or of change of EMIs. By doing so, OP has caused great loss to complainant, despite the fact that he has been regularly depositing installment with hope that loan will be finished in 180 installments. Loan as per agreed rate alone can be charged by OP from complainant. Maximum part of the loan amount has been repaid by the complainant. Despite numerous requests of complainant to OP not to change the schedule and despite service of legal notice dated 13.08.2014, OP has not done anything and as such, by pleading deficiency in service on the part of OP, prayer made for directing OP to pay compensation of Rs.1 Lac to complainant. Even direction sought against OP to receive and complete the loan within term of 180 installments.

2.                 In the written statement filed by OP, it is pleaded interalia as if terms and conditions of the contract are binding on the parties; complainant has misrepresented and misstated the facts; complainant has no cause of action; there is no deficiency in service on the part of OP; in view of the involvement of intricate question of law and facts, matter can be decided by Civil Court only after appraisal of oral and documentary evidence to be adduced by the parties. It is claimed that OP has been extremely efficient in providing services to the complainant and as such, complaint is not maintainable. Admittedly on approach by complainant, loan was sanctioned against mortgage of property by complainant, but on execution of loan documents and completion of formalities. Complainant undertook to maintain financial discipline and abide by the terms and conditions of the loan agreement. Education loan was availed for payment of fees of daughter of complainant after sanction of loan of Rs.14 Lac. Smt. Santosh Rani, wife of complainant signed as co-applicant and thereafter, the loan was disbursed on 21.02.2007 in favour of complainant. As per terms and conditions of loan agreement, complainant was liable to pay interest @ 0.5% above the floating reference rate of bank. At the time of inception of the loan, the floating reference rate was 11.75%, but the effective rate of interest was 12.25%. Complainant was liable to pay the loan with interest in 180 installments of Rs.17,029/- per month. As complainant opted for availing the loan on floating rate of interest and as such, same was liable to be increased or decreased with the passage of time, on account of the various factors including the change of repo rate, reverse repo rate and cash reserve ratio as determined by Reserve Bank of India. The policies and guidelines of the bank governed by Reserve Bank of India instructions. In case there is any change in FRR, then consequent change in the rate of interest payable by borrowers including complainant, bound to occur. OP through letter dated 22.04.2008 sent to complainant informed him that floating rate of interest has been increased by 1% in February 2007, due to which EMI payable by him has increased from Rs.17,029/- to Rs.17,432/- in April 2007. Thereafter, on account of feedback from the customers like complainant, the bank reduced the amount of EMI, but increased the tenure of loan. As per policy of the bank, EMI was again decreased to Rs.17,029/-, but tenure was increased to 201 months from April 2008 onwards. Any increase in rate of interest will result in increase of EMI or increase in tenure or increase in both. Complainant cannot show ignorance to these facts after receipt of letter dated 22.04.2008. All credit and debit entries had been duly incorporated in account of complainant. Amount of Rs.4,40,491/-  is outstanding against complainant as on 25.03.2015. Complainant with intent to avoid payment of outstanding amount has filed this false and frivolous complaint without any basis. Sanction letter has to be read in totality. The mandate for increase or decrease in the rate of interest had already been given by the complainant, while agreeing to pay the floating rate of interest. In view of this there was no need for complainant to approach OP for enhancing the time or change of tenure of  installment amount. Each and every other averment of complaint denied by claiming that there is no deficiency in service on the part of OP. Rather OP acted as per terms and conditions of written contract and complainant bound to pay the entire loan amount as per those terms and conditions.

3.                 Complainant to prove his case tendered in evidence his affidavit Ex. CA along with documents Ex.C1 to Ex. C8 and thereafter closed evidence. 4.                 On the other hand, counsel of OP tendered in evidence affidavit Ex. RA of Sh. Jaswinder Singh along with documents Ex. R1 and Ex. R2/A to Ex. R2/D and Ex. R3 and then closed evidence.

5.                 Written arguments not submitted by any of the parties. Oral arguments heard and record carefully gone through.

6.                 Undisputedly, the loan in question was availed by the complainant by executing facility agreement Ex. C1 = Ex. R1 relied upon by both parties. After going through facility agreement, it is made out that as per terms of adjustable interest rate, FRR was fixed at 11.75% per annum on the date of agreement. Further as per clause b(ii) of clause 2 of Tranche-1, borrower to pay adjustable rate of interest equivalent to 12.25% per annum (i.e. FRR+ margin of 0.5%) + applicable interest or other statutory levies. So it is obvious that floating rate of interest was chargeable from complainant as per terms of the facility agreement Ex. C1 = Ex. R1. Terms of repayment of the loan specified as 180 monthly installment of Rs.17,029/- each. As floating rate of interest is chargeable as per agreement itself and as such, certainly the bank entitled to charge interest as per rate of interest fixed by Reserve Bank of India from time to time. Terms of the contract binding on the parties because court not to add, delete or subtract any words thereto. In holding this view, we are fortified by law laid down in Suraj Mal Ram Niwas Oil Mills (P) Ltd. Vs United India Insurance Co. 2011(1) CLT 485 (SC); Vijay Kumar and another Vs Punjab Financial Corporation and another 2002(3) RCR(C) 226 (Punjab and Haryana High Court); Subodh Choudhary Vs New India Assurance Co. Ltd and another 2012(3) CLT 49 (NC). It is so because a person signing a document is presumed to have signed after reading and understanding the document properly unless there is proof of force or fraud as per law laid down in case Grasim Industries Ltd. and another Vs Agarwal Steel 2009(4) Civil Court Cases 598 (SC). Complainant is not claiming that the facility agreement Ex. C1 = Ex. R1 was got signed by him per force or by playing of fraud with him and as such terms of this agreement certainly are binding on complainant. FRR means fixed reference rate. That FRR to be determined as per notification/instructions or guidelines to be received from Reserve Bank of India from time to time and as such, certainly in view of FRR clause incorporated in Ex. C1 = Ex. R1, rate of interest liable to be changed from time to time. It is on account of this that the intimation of these changes qua revision in rate of interest given to complainant through letters Ex. R2/A to Ex/ R2/D. In view of notification of the revision in rate of interest, complainant bound to pay these revised interest rates, even though he is opting for paying entire due amount within 180 installmetns. In view of the option given by the complainant through oral submission advanced by counsel for complainant, Ops can enhance EMI, but by fixing time of repayment of entire loan amount in 180 installments. However, OP will have to reschedule the balance installments in such a way that entire recoverable amount will be payable by complainant in 180 installments in all with effect from due date of first installment. Amount may be enhanced in such rescheduling and intimation of same be given by OP to complainant. This rescheduling on further revision of interest rates may further take place, but with a rider that entire repayable amount will be payable by complainant to Ops within 180 installments. On the revised reschedule, note may be given by the OP to the effect that reschedule provided to the complainant is as per rate of interest chargeable on the date of issue of reschedule, but variation in rescheduled EMI will take place as and when further revision in rate of interest takes place. As the entire loan amount has not been repaid till date and as such, question of harassment by OP to complainant does not arise, even if the revised reschedule sent by OP to complainant for calling upon him to pay 180 or 185 and 210 EMIs. It is so because a person liable to pay loan amount has to pay the same.

7.                 As a sequel of above discussion, complaint allowed only to the extent that Ops will send reschedule of the balance installments in such a way that entire recoverable amount will be payable by complainant in 180 installments in all with effect from due date of first installment. Amount may be enhanced in such rescheduling and intimation of same be given by Ops to complainant within 30 days from the date of receipt of copy of this order. No orders as to costs. Copies of order be supplied to the parties free of costs as per rules. File be indexed and consigned to record room.

 

                                         (Param Jit Singh Bewli)                      (G.K. Dhir)

                                         Member                                              President

Announced in Open Forum.

Dated:03.03.2017.

Gobind Ram.