Rajasthan

StateCommission

A/589/2016

Majahar Ilahi Shamshi s/o Moh. Umar - Complainant(s)

Versus

India Bulls Housingh Fianance Lt.d - Opp.Party(s)

Ramchandar Sharma

11 May 2017

ORDER

BEFORE THE CONSUMER DISPUTES REDRESSAL COMMISSION,RAJASTHAN,JAIPUR BENCH NO.1

 

 

FIRST APPEAL NO: 589/2016

 

Sh.Majhar Ilahi Shamsi r/o 1236 A, Imamudeep Dalal Ki Gali, Ghat Gate, Jaipur.

Vs.

India Bulls Housing Finance Ltd., F 60 Malhotra Building, 2^nd floor, Cannaught Palace, New Delhi through Manager & ors.

 

Date of Order 11.5.2017

 

Before:

Hon'ble Mrs. Justice Nisha Gupta- President

 

Mr. Ram Chandra Sharma counsel for the appellant

Mr.Pramod Kumar counsel for the respondents

 

BY THE STATE COMMISSION ( PER HON'BLE MRS. JUSTICE NISHA GUPTA,PRESIDENT):

 

This appeal has been filed against the order passed by the

2

 

District Forum, Jaipur 4^th dated 11.5.2016 whereby the complaint has been dismissed.

 

The contention of the appellant is that a loan of Rs.20,26,000/- was sanctioned to him on 13% interest. Monthly installment was of Rs. 25123/- and total installments were 192. Till 2011 he has paid Rs. 15,38,576/- inspite of this the due amount is shown to be Rs. 93,96,900/- which is unfair. The respondents are not entitled to raise the interest rate arbitrary and when he deposited Rs. 25,000/- on 20.12.2011 the rate was reduced from 21.22% to 13.50% but the Forum below has not considered the facts hence, the claim should have been allowed.

 

Per contra the contention of the respondent is that the loan was sanctioned on floating rate of interest and whenever interest rate was increased, intimation was given to the appellant. Loan was sanctioned in 2006 and the appellant has paid the installments after accepting the increased interest rate. Now he cannot agitate against it and the claim has rightly been disallowed.

 

Heard the counsel for the parties and perused the

 

3

 

impugned judgment as well as original record of the case.

 

The loan agreement has been submitted as Anx. R 1 which clearly shows that the loan amount is Rs. 20,26,000/- and monthly installment is Rs. 25,123/- and interest means the rate of interest as referred to in schedule – A. Loan agreement is the admitted document between the parties. Two parts of schedule-A has been submitted, one is for fixed rate of interest and other is for floating rate of interest. Both are get signed by the appellant. The contention of the appellant is that borrower is on the mercy of the financial institute. He was forced to sign both the parts and part 'I' which is for fixed rate of interest is blank one which shows the flowed working of the respondents. Part 'II” of the agreement is for floating rate of interest and interest rate mentioned is 13%. There is a reference of floating rate but it has been shown as '0' . Term of payment is 192 months and EMI is Rs. 25123/- subject to variation as per terms of the agreement. Hence part II of the agreement clearly shows that the loan was sanctioned on floating rate of interest but floating rate has been sanctioned as + - '0' and rate of interest which was agreed between the parties was 13%.

 

It may be noted that the appellant was get to sign part I

4

 

and II of the agreement which relates to different rate of interest and the reason for the same has been explained by the respondent that it is complete agreement. Both parts are being signed by the borrower and accepted rate of interest would be signed by the bank and which is evident in the present case that only part II was signed on behalf of the respondent. This practice of getting signed both the agreement is unfair trade practice on the face of it. When borrower is bound to sign different conditions for the rate of interest it cannot be said to be fair on the part of the respondent and it may also not in the notice of the borrower that on which rate of interest the amount has been sanctioned as after getting the documents signed by the borrower housing company is free to accept any of the part as regard to the terms of the interest even without knowledge of the borrower. Here in the present case it cannot be taken that the appellant is not knowing about the rate of interest which is floating as he is paying the interest on the increased rate. Hence, it can very well be concluded that the loan was sanctioned on floating rate of interest but getting signed part I and II both of the schedule- A is unfair trade practice on the part of the respondent.

 

The further contention of the appellant is that he signed

5

 

the Demand Promissory Note in which also he agreed for 13% interest only but this contention is not sound one as there is a specific narration that 13% interest or at such other rate as IBHFL may fix from time to time. This also indicates that floating rate of interest agreed between the parties.

 

The other contention of the appellant is that taking it true that the appellant agreed for the floating rate of interest but still increase of rate of interest from 13 to 21% is without any basis and guidelines of National Housing Bank has not been followed.

 

The respondent has rightly contended that time to time they have informed the appellant for increase in the interest rate and Anx. R 3 which contain letters dated 10.10.2006 to 1.2.2011 has been submitted which shows that floating rate of interest is increased upto 20.25%. Hence, the appellant cannot agitate the fact that he was not having information about the increase of interest rate.

 

The other contention of the appellant is that as per rate of RBI in 2006 the rate of interest was 7.25% and till 2014 it increased only upto 9% and some time it decreased upto 4.75%

6

 

hence, imposing of interest rate of 20.25% is arbitrary on the part of the respondent and his further contention is that as per Money Lenders Act,1963 only 14% interest could be charged. He has also submitted the notification of RBI for housing finance and stated that the interest should be as per guidelines of the RBI but the respondent has rightly contended that housing financial institutions are not governed by the guidelines of RBI but they are covered by guidelines of National Housing Bank and guidelines dated 2.6.2009 issued by the National Housing Bank marked as Ex. A is submitted which clearly says that from the various complaints about charging of excess interest a direction has been issued which reads as under:

 

“ HFCs are advised to ensure adequate disclosure about interest rates and charges keeping in view the guidelines indicated in the 'Fair Practices Code' vide circular No. NHB (ND)/DRS/POL-No. 16/2006 dated September 5,2006 regarding transparency in respect of terms and conditions of the loans.”

 

A bare perusal of above direction says that adequate disclosure should be made to the consumer about interest rate and fair practices code should be adhered to but here in the

7

 

present case the respondent could not show the guiding principles which justified the increase of interest rate from 13% to even 23% have not been placed on record. Inspite of this specific query the counsel for the respondent could not furnish any information to this Commission that how rate of interest are being determined by the respondent and what are the governing factors which could justify the increase in the interest rate and whether in compliance of the direction issued by the National Housing Bank in 2009 they have revisited their policies on interest rate determination. Hence, in view of the above it can very well be concluded that increase in interest rate is arbitrary on the part of the respondent and definitely could be termed as unfair trade practice.

 

In this regard one fact could also be noticed which has been agitated by the appellant and accepted by the respondent also that on 20.12.2011 Rs. 25,000/- were collected as switch/part payment and thereafter interest rate was reduced from 23% to 13% which on the face of it shows arbitrariness on the part of the respondent.

 

The contention of the respondent is that this fact has not been brought in the notice of the Forum below hence, cannot be

8

 

agitated now and reliance has been placed on the judgment of Supreme Court in M/s. Modern Insulators Ltd. Vs. Oriental Insurance Co. where it has been held that in appeal new facts cannot be urged. There is no dispute about this preposition but here the very fact has not been disputed by the respondent hence, the contention is of no avail.

 

The other contention of the respondent is that parties are bound by the agreement and reliance has been placed on AIR 1996 Supreme Court 2508 Bharathi Knitting Co. Vs. DHL Worldwide Express Courier Division of Airfreight Ltd., II (2004) CPJ 43 (NC) Maruti Udyog Ltd. Vs. Mrs.Vanita Sapra and III (2013) CPJ 679 (NC) Nitin Vashisth & ors. Vs. Central Bank of India & ors. where the court has held that agreement between the parties would prevail. There is no dispute that agreement between the parties would prevail but here in the present case the respondents are guilty of unfair trade practice.

 

The respondent has further relied upon III (2011) CPJ 356 Birbhan Goyal Vs. ICICI Bank Ltd. where the interest rate was raised as per RBI guidelines but here in the present case the respondent could not show that the interest rate were raised

9

 

by the guidelines of National Housing Bank which is the regulatory for housing finance companies.

 

The respondent has further relied upon AIR 2010 Supreme Court 2980 Indian Bank Vs. Blue Jaggers Estate Ltd. & ors. where on the facts of the case the apex court has held that debtor cannot challenge rate of interest as he was declared as non -performing asset which is not the case here.

 

The appellant has further submitted statement of account dated 24.2.2011 of the impugned loan wherein the initial loan which was for 192 months is increased to 349 months and EMI was also increased which shows unfair trade practice on the part of the respondent.

 

As already been considered that the respondent could not show the grounds on which interest rate has been increased from time to time, it shows deceptive practice on the part of the respondent and further the guidelines issued by the National Housing Bank has not been complied with. Hence, the findings of the Forum below are perverse and liable to be set aside and the respondents are entitled to charge only 13% interest which was agreed between the parties as per Schedule-A of the

10

 

 

 

agreement which contains 13% interest and increase 0% meaning thereby the appellant is bound to pay only 13% interest.

 

The appellant has submitted that he has paid Rs.7,96,622/- extra till the filing of the complaint. This figure has not been disputed by the respondent.

 

Hence, the appeal is allowed and it is ordered that the respondents are entitled to charge only 13% interest on the due amount and extra money which has been paid by the appellant alongwith 13% interest from the date of payment be adjusted in future installments. The revised statement of account be issued to the appellant showing the above adjustment within one month. The respondents are guilty of unfair trade practice hence Rs. 1 lakh compensation is also awarded to the complainant alongwith Rs. 20,000/- as cost of proceedings. Compensation and cost of proceedings be paid within one

 

 

 

 

11

 

 

month failing it will carry 9% interest from the date of order.

 

In above terms this appeal is allowed.

(Nisha Gupta )

President

nm