Before the District Consumer Disputes Redressal Commission, Rohtak.

                                                                    Complaint No. : 229

                                                                    Instituted on     : 13.04.2022

                                                                    Decided on       : 24.08.2023

1. Kapoor Singh Pannu age-68 years son of Sh. Dalip Singh resident of House No. 111, PLA, Sector-15-A, Hisar.
2. Arun Kumar age-42 years S/o Sh. Sube Singh R/o H.No. 800/27, Model Town, Rohtak.
3. Murti Devi Pannu age-62 years wife of Sh. Kapoor Singh Pannu R/o House No. 111, PLA, Sector-15-A, Hisar.

                                                                             .......................Complainants.

Vs.

1. India Bulls Home Loans, Ist Floor, above Punjab National Bank opposite Myna Tourist Complex, Civil Road, Rohtak through its Manager.
2. India Bulls Housing Finance Ltd. Corp. Office: India Bulls House No. 448-451, Udyog Vihar, Phase-V, Gurugram-16, through its Manger.

                                                                             ……….Opposite parties

          COMPLAINT U/S 12 OF CONSUMER PROTECTION ACT,1986.

BEFORE:  SH.NAGENDER SINGH KADIAN, PRESIDENT.

                   DR. VIJENDER SINGH, MEMBER

Present:       Sh. Mahinder Kumar Khurana, Advocate for complainant.

                   Sh. Rajesh Sharma, Adv. for opposite parties.

ORDER

NAGENDER SINGH KADIAN, PRESIDENT:

1.                Brief facts of the case as per complainants are that complainants required some money for running their business of construction work and for earning their livelihood by making a family firm  and by employing themselves.

The opposite parties contacted the complainants and offered them finance loan @ 12%  per annum and loan was sanctioned in the loan account no. HHEGRG00269307 for the amount of Rs.70,00,000/-(seventy lacs) with a monthly installment of Rs.1,01,558/- for a period of 120 months. It is further submitted that complainants have been paying the installments regularly without any failure. On 04.03.2020 the complainants casually visited the office of the opposite parties at Hisar and came to know that the monthly instalments of the loan has been increased from 120 to 169 without any intimation to the complainants by the opposite party. The complainants were also surprised to know that the rate of interest has been enhanced by the opposite party from 12% per annum to 17.5% p.a. without any consent and intimation to the complainants. The complainants had written so many letters to the opposite parties to withdraw the enhanced rate of interest but the opposite party did not consider the same. The complainants were forced by the opposite parties to deposit the loan installments on the enhanced rates and the complainant suffered the loss as follows: On 05.02.2021 the opening principle amount was to be Rs.4793074.18 as per original rate 12% of interest and original number of installments i.e. 120 but as per revised rate of interest as shown by opposite parties the principle amount as on 05.03.2021 is Rs.5613151.90. Therefore an amount of Rs.820077/- has been extra charged by the opposite party from the complainants. An amount of Rs.1.50 lacs has also charged illegally as overhead charges to transfer the loan to ICICI Bank. The complainants have got loan of same nature from ICICI Bank @8.35% per annum which also proves that there is unfair trade practice on the part of opposite parties.  Due to act and conduct of the opposite party, complainants have suffered a huge financial loss and mental pain. The act and conduct of the opposite party is illegal and amounts to deficiency in service. Hence this complaint and it is prayed that opposite parties may kindly be directed to pay an amount of Rs.820077/- as illegally over charged and also to pay Rs.1.25 lacs as charges for forecloser charges and Rs.1.50 lacs as over head charges illegally to transfer this loan to ICICI Bank i.e. total amount of Rs.1095077/-  with interest @ 20% per annum. The opposite parties be also directed to pay a sum of Rs.2,00,000/- as harassment and Rs.50000/- as litigation expenses to complainant.

2.                After registration of complaint, notice was issued to the opposite parties. Opposite parties in their reply has submitted that complainant has taken loan on floating rate of interest, which rate of interest was however variable in nature. On account of variation in rate of interest, the EMIs, in value or in number, were liable to be changed. Both the Loan Sanction letter and loan agreement state that the opposite party has the sole discretion with respect to the rate of interest. Therefore, the change of rate of interest by the opposite party is in consonance with the circulars and the Loan Agreement which has been carefully read and signed by the complainants.  It is submitted that in terms of the aforesaid clauses as mentioned in the loan agreement, the opposite party      is entitled to change the applicable rate of interest at its sole discretion with prospective effect with prior written communication and the same shall be acceptable to the complainant. In view of this, the opposite party no. 1 increased the rate of interest and number of EMIs without changing the EMIs amount in the view of increase/decrease in benchmark/IHFL of the opposite party no. 1 with prior intimation to the complainant. It is denied that the rate of interest was increased without any intimation to the complainants. It is submitted that due intimation in this regard were sent to the borrowers through email on their registered mail id. As on date of the execution of the Loan agreement dated 01.04.2016, the rate of interest applicable was 12%. However, it is very clearly laid out in the loan agreement that the same might vary from time to time. Since the floating rate of interest is applied in the present case, as and when the interest rate varied there was possibilities of alterations in the repayment schedule. The complainant did not lodge a single complaint or any protest in respect of charging of alleged higher rate of interest before clearing the loan liability. It is denied that any amount has been charged by the opposite parties on account of extra charges, forclosure charges or overhead charges from the complainant.  Complainant alongwith other borrowers requested the opposite parties for foreclosure of loan account and for allowing to switch the loan from the opposite parties to the ICICI Bank Ltd.. Upon their request the loan account was closed and allowed to be switched to another bank on  receipt of outstanding amount which was inclusive of prepayment charges as well as other charges which have been received by the opposite parties as per loan agreement and the guidelines and instructions received from NHB/RBI.  No illegal or wrong amount  has been charged from the borrowers. All the other contents of the complaint were stated to be wrong and denied and opposite party prayed for dismissal of complaint with costs.

3.                Learned counsel for the complainant in his evidence has tendered affidavits Ex.C-1, documents Ex.C2 to Ex.C18 and has closed his evidence on dated 31.08.2022. on the other hand, learned counsel for Ops tendered affidavit Ex. RW-1/A, documents Ex. R-1 to Ex. R-8 and closed his evidence vide order dated 05.12.2022 of this Commission.

4.                We have heard learned counsel for the parties and have gone through the written submissions filed by ld. counsel for the opposite parties as well as material aspects of the case very carefully.

5.                 In the present case it is not disputed that complainants had taken loan from the opposite parties and as per letter Ex.C5 dated 15.04.2016, the loan amounting to Rs.7092574/- was disbursed to the complainant and the same was to be repayable in 120 instalments and rate of interest is 12% and the interest type is AIR i.e Adjustable Interest Rate.  The grievance of the complainants is that the monthly instalments of the loan have been increased from 120 to 169 without any consent to the complainants and the rate of interest has been enhanced from 12% per annum to 17.5% p.a. without any consent and intimation to the complainants. We have perused the documents placed on record by both the parties. As per loan agreement Ex.C4, in the condition no.2.2( c) under the head interest, it is clearly mentioned that : “In case of change in risk weightage during the loan facility, due to external and internal factors, breach of the covenants, terms and conditions as stipulated therein, IHFL may change the applicable rate of interest, at its sole discretion, with prospective effect with prior written communication and shall be acceptable to the borrowers.” On the other hand, as per the reply filed by opposite parties, due intimation regarding the change of rate of interest was sent to the borrowers through email on their registered mail id. 

6                 We have perused the documents placed on record by both the parties. In the present case no notice was ever issued to the complainant at the time of increase of interest.  It is also observed that the loan was taken by the complainant on floating rate of interest, which means that if the rapo rate increases, the interest will be increased and if the rapo rate decreases, the interest will be automatically decreased as the floating interest rates are linked with the repo rate, which is the interest rate at which the Reserve Bank of India loans money to commercial banks in the country. It is also observed that as per schedule given in loan agreement annexed with Ex.R5, at the time of sanctioning of loan, the Adjustable interest rate was (a)(IHFL-LFRR) i.e.18.75% less 6.75% = 12% p.a. But in the present case, opposite party has not placed on record any document/data regarding change of rapo rate after the date of sanctioning of loan i.e. 15.04.2016 to prove that whether the rapo rate was increased or decreased by the RBI.  On the other hand, complainant has placed on record a document ‘Annexure-JN-A’  which shows the date of increase or decrease in rapo rate of RBI during the period 2010 to 2023 but the opposite parties have only increased the rate of interest in the loan account of complainant whereas it should have been decreased when the rapo rate was decreased by the RBI. The opposite parties itself has mentioned in condition no.2.2( c) of loan agreement under the head interest that : “In case of change in risk weightage during the loan facility, due to external and internal factors, breach of the covenants, terms and conditions as stipulated therein, IHFL may change the applicable rate of interest, at its sole discretion, with prospective effect with prior written communication and shall be acceptable to the borrowers.”  Conditions of agreement itself shows that in what conditions, the rate of interest can be changed. When no breach of condition or any negative change occurred, why the rate of interest was increased. This is a breach of condition of agreement on the part of opposite party and falls under unfair trade practices.  Moreover, opposite party has stated that complainant has not raised any objection due to increased rate of interest whereas Ex.C8 clearly shows that the complainant was compelled to send  the letter by post to raise his objection and pleadings regarding the increased rate of interest as before that he was continuously trying to sort out the objections orally on the telephone connection with the Indiabulls’ Agent Ashok Kumar at phone no.09034074443 and he also tried to deposit the letter by hand but they refused to take the letter and to entertain the objection. That is why he was compelled to send a letter by post. Afterwards a legal notice has also been served by the complainant in this regard before foreclosing of account.   We have also placed reliance upon the judgment cited by ld. counsel for the complainants in complaint no.163/2019 decided on 11.05.2021 by the Hon’ble Delhi State Commission in case  titled as Mr. Vishnu Bansal Vs. ICICI Bank Ltd., whereby Hon’ble State Commission while relied upon the judgment of Hon’ble Supreme Court of India on 03.08.2015 in  ICICI Bank Ltd. Vs. Maharaj Krishan Datta & Ors,  has held that: “Relying upon the dicta of the Hon’ble Apex Court we can conclude that in cases of floating rate of interest, the rate of interest on the loan keeps fluctuating to the benchmark which is adopted being the Floating Reference rate. These interest rates are changed only after the Reserve bank of India directs the bank to do so”. Hon’ble State Commission has also relied upon the judgment of Hon’ble National Commission in ICICI Bank Limited Vs. Karam Chand and Ors., decided on 27.08.2019 bearing Revision Petition No.2954 of 2015, wherein the National Commission has held that: “In case there was change in the floating rate of interest on loans then the above said formula was to be adopted, while fixing the rate of interest and taking the consent of the concerned borrower whether he wants to continue the loan with the enhanced rate of interest or he could adopt for other option i.e. closing of the account or shifting of the account, therefore, information/consent of the borrower is the predomiant clause while changing the floating rate of interest”. Hence the Hon’ble State Commission relying on the above mentioned dicta of Hon’ble National Commission, has held that “It flow that even if the opposite party has been given the right to change the rate of interest charged on the loan, it does not automatically confer a power upon the opposite party to increase or decrease of interest without apprising the borrower/complainant about the change in interest charged or the number of EMIs. In simple terms, an opportunity must be afforded to the borrower before changing the floating rate of interest”. It is further held that : “Increase or decrease in the interest rates by the opposite party without taking the consent from the borrower/complainant amounts to Unfair Trade Practice”. We have also placed reliance upon the order of Hon’ble National commission, New Delhi in revision petition no.2954 of 2015 decided on 27.08.2019 titled as ICICI Bank Limited Vs. Karam Chand & Anr., whereby Hon’ble Commission has relied upon its judgment in 2012(4) CPJ 415(NC) IDBI Bank Ltd. Vs. Subhash Chand Jain & Anr. whereby it has held that : “Concept of floating rate of interest flows from the regulation of rate of interest by the RBI guidelines and not arbitrarily by the service provider without informing or telling the reasons for increasing the rate of interest in general terms and not that there is inflationary  market.  Every discretion has to be exercised judicially so as to make persons understand fully as to the reasons and ground for increasing the rate of interest and not  arbitrarily under the garb of floating rate of interest”. The law cited above are fully applicable on the facts and circumstances of the case as in the present case also, opposite party has levied increased rate of interest upon the complainant under the garb of floating rate of interest without giving any opportunity to the borrower/complainants before changing the floating rate of interest. Moreover the rate of interest was not decreased when the rate of interest/rapo rate was decreased by the RBI. Moreover, opposite party is giving loan on lower rate of interest to the new customers/loanees and at the same time charging interest at the higher rate from the old customers, which shows that just to attract the new customers, opposite parties give loan on lower rate of interest and when the customers become old, they charge higher rate of interest. Hence there is deficiency in service as well as unfair trade practice on the part of opposite parties and  opposite parties are liable to refund the excess amount of interest and other expenses  charged illegally from the complainant. As per the calculation given in ‘Annexure-JNA’, the extra amount of Rs.820117/- has been paid by the complainants on account of increased rate of interest. As per the original repayment schedule placed on record Ex.C6, as per 57^th EMI the closing balance/Principal was Rs.4793074/- but as per revised rate of interest, as shown in repayment schedule Ex.C7, the interest was increased from 12% to 12.5% w.e.f. 05.04.2018, 12.7% w.e.f. 5.7.2018, 13% w.e.f. 05.09.2018, 15% on 05.12.2018 and 17.5% w..f. 05.01.2019 and therefore, closing principal shown as per as on 05.02.2021 was Rs.5613151/-, which shows that opposite party has charged an extra amount of Rs.820117/-(Rs.5613151/- less Rs.4793074/-) without any notice from the complainant. As the rate of interest was on higher side, so the complainants under compelling circumstances had chosen to foreclose their loan account and had paid an amount of Rs.125000/-as foreclosure charges. As such there is deficiency in service on the part of opposite parties and opposite parties are liable to refund the amount of Rs.820117/- on account of interest, Rs.125000/- on account of foreclosure charges i.e. total Rs.945117/-

7.                In view of the facts and circumstances of the case, we hereby allow the complaint and direct the opposite parties to refund the Rs.945117/-(Rupees nine lac forty five thousand one hundred and seventeen only) alongwith interest @ 9% p.a. from the date of foreclosing the account i.e.05.02.2021 to till its realization and shall also pay Rs.10000/-(Rupees ten thousand only) as compensation on account of deficiency in service and Rs.10000/-(Rupees ten thousand only) as litigation expenses to the complainant within one month from the date of decision.

8.                Copy of this order be supplied to both the parties free of costs.

9.                File be consigned to the record room after due compliance.

Announced in open court:

24.08.2023

                                                         .....................................................

                                                          Nagender Singh Kadian, President

                                                                        ……………………………….

                                                          Vijender Singh, Member