BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

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Shiv Kumar son of Sh.Aiya Swami, R/o H.No.2311, Sector 28-C, Chandigarh

…..Complainant

                                V E R S U S

1]        Indiabulls House, 448-451, Udyog Vihar, Phase-VI, Gurgaon (Head Office)

2]        Indiabulls Credit Services Limited, Regd. Office. F-60, IInd Floor, Malhotra Building, Cannaught Place, New Delhi 110001

3]        Indiabulls, Sector 22-C, Chandigarh.

4]     The State Bank of Patiala, Punjab & Haryana High Court, Chandigarh.

                        ……Opposite Parties

CORAM:          SH.LAKSHMAN SHARMA                         PRESIDENT

                    SH.ASHOK RAJ BHANDARI            MEMBER

Argued by:        Sh.Vijay Mangla, Adv. for the complainant.

Sh.Sandeep Suri, Adv. for OPs No.1 to 3.

Sh.P.D.Mehta, Adv. for OP-4

PER SHRI ASHOK RAJ BHANDARI, MEMBER

               Succinctly put, the complainant was granted a loan of Rs.67,747/- by OPs.  But on the contrary, they issued a cheque of Rs.63,675/- only in his favour vide Ann.C-1.  It is stated that the rate of interest was not informed to the complainant by the OPs.  He was only told to pay 36 equated monthly installments of Rs.2816/- against the aforesaid loan amount. As such complainant issued one ECS cheque in favour of the OPs.  He paid all 36 installments but inspite of that the OPs are still deducting the amount from his salary account. When he took up this matter with OPs, they shocked him by saying that he has to pay 60 EMIs of Rs.2816/- in repayment of said loan amount and hence the total amount comes to Rs.1,68,960/- and rate of interest comes to44% p.a. per Ann.C-2.   It is averred that the conduct of the OPs amounts to gross deficiency in service and indulgence in unfair trade practice as he was told that the EMIs for loan of Rs.63,675/- shall be Rs.2816/- and hence the interest on the principal amount comes out to be 27% p.a. whereas he is being charged 60 installments and the interest comes to 44% p.a. on the principal amount.  Moreover, at the time of advancing the loan, the complainant was told to repay in 36 installments only.  The complainant also requested his bankers i.e. OP No.4 to stop the payment through ECS from his account but they refused.  Ultimately, a legal notice was sent to OPs but they did not give any satisfactory reply.  Hence, the present complaint has been filed alleging the above act of OPs as gross deficiency in service and unfair trade practice due to which the complainant is suffering great mental agony, physical harassment and financial loss.

2]             OPs No.1 to 3 filed joint reply stating that the complainant had availed a loan from them in Aug., 2005 and have entered into an agreement of loan  which shows that the complainant had a loan of Rs.67,747/- repayable in 60 installments of Rs.2816/- each at an rate of interest of 29.88% and the processing fee agreed being Rs.4,072/-.  It is submitted that an amount of Rs.63,675/- was disbursed to the complainant after deducting processing fee of Rs.4,072/-.  It is denied that the complainant was agreed to repay the loan in 36 installments. It is stated that the complainant is bound by the written agreement entered into between the parties.  It is also stated that as 24 installments are still due and payable as with agreement, the OP rightfully has continued to deduct the ECS for clearance.  It is also denied that the rate of interest come to 44% as has been alleged.  Rest of the allegations have been denied with a prayed to dismiss the complaint.

3]             The OP No.4-State Bank of Patiala filed short reply stating therein that there was no deficiency in service on their part.  It is submitted that ECS monthly installments  are being recovered and remitted to OP No.2 as per standing instructions given by the complainant to them, which have not been cancelled or withdrawn by OPs No.1 to 3.  It is also submitted that OP No.4 could not unilaterally stop payment of ECS installments to Op No.3 without the written consent of OP No.3. It is admitted that complainant is having account with OP No.4.  Other allegations have been denied and it is prayed that complaint qua OP No.4 be dismissed.   

4]             Parties led evidence in support of their contentions.

5]             We have heard the ld.Counsel for the parties and have also perused the record.

6]             The basic facts of the case in respect of the complainant having taken a loan of Rs.67,747/- from the OPs No.1 to3 on 20.8.2005 against which the Ops No.1 to 3 had issued a cheque of Rs.63,675/- in favour of the complainant after deducting the processing fee of Rs.4072/- and that the said loan was a personal loan taken by the complainant from the OP, have all been admitted.

7]             It is also a fact that the EMI fixed for repayment as agreed upon by the parties was Rs.2816/-.  The only dispute between the parties i.e. the complainant and the OPs especially OPs No.1 to 3 is that whereas as per the complainant, the said personal loan was repayable in 36 installments @Rs.2816/- per month and that the complainant had already paid more than 45 installments i.e. 9 EMIs in excess of 36 installments. 

8]             On the contrary, the contention of OPs No.1 to 3 has been that as per the loan agreement (Page No.15 &16 of the paper book), the said loan was repayable in 60 EMIs at the rate of Rs.2816/- per month and the rate of interest mentioned is 29.88% p.a.  It is also clear that the since EMIs are repayable every month, the calculation of interest has to be made only on the Reducing Balance, which varies from month to month.  The complainant says that in case the contention of the Ops No.1 to 3 is accepted that the said loan is repayable in 60 equated monthly installments at the rate of Rs.2816/- per month, the reducing balance rate of interest will become as high as 44.18% per annum with the flat rate of interest @29.88% p.a. as agreed between the parties.

9]             The complainant had issued one ECS cheque in favour of OPs No.1 to 3 in the beginning and subsequently, he paid all 36 installments but despite that the OPs No.1 to 3 are still deducting the amount of EMI from his salary account and not issuing him a No Due Certificate. 

10]            As per the complainant, in case the contention of OPs No.1 to 3 is accepted that 60 installments are to be paid at the rate of Rs.2816/- per month, the total amount will come to Rs.1,68,960/- and the rate of interest on reducing balance basis will be as high as 44.18% p.a. whereas the agreed rate of interest is clearly 29.88% p.a. on reducing balance basis for which flat rate of interest comes out to be about 17% p.a. 

11]            The complainant further says that at the time of sanction of the loan, he was told that the EMI will be for the loan of Rs.63,675/- and the same shall be Rs.2816/- and hence the interest on the principal amount will be further reduced to 27% instead of 29.88%.  Now when the complainant has paid all the 36 installments, the OPs No.1 to 3 say that the number of installments will be 60 per month and as such the reducing balance interest rate comes to 44.18% p.a. on the principal amount which is not what has been agreed upon between the parties.

12]                 From the documents placed on record, it is quite clear that at the time of sanctioning the loan to the complainant, he was probably provided only the sanction letter (Page No.13 of the Paper book).  The copy of the loan agreement appears to have been procured by the complainant only subsequently from the OPs when the dispute arose between the parties.  This is corroborated by the fact that in the sanction letter, the amount of loan has been shown as Rs.63,675/- and not Rs.67,747/- and the installment amount as Rs.2816/-.  Neither there is any mention of the rate of interest both as flat rate of interest as well as reducing balance rate of interest nor even the number of installments (EMIs).  Therefore, there is a clear cut contradiction between the two important loan documents, the one the Sanction Letter and the other Loan Agreement.  It is also well known that there is a common practice of the banks that they get blank loan documents signed from the prospective loanee and the same are only filled-up at a later date as per the whims and fancies of the lending bank. 

13]            Even if the contention of the OP Bank is accepted for a minute that the rate of interest on the said amount was Rs.29.88% per annum, by no stretch of imagination, the bank could charge the EMI of Rs.2816/- for 60 months.  This can be verified by a simple arithmetic calculation.

14]            During the course of arguments, it was stressed to the OPs No.1 to 3 time and again to prove the detailed calculations as to how the 60 EMIs at the rate of Rs.2816/- have been calculated at the interest rate of 29.88% p.a. for a total loan of Rs.67,747/-.  On the contrary, the contention of the complainant is correct that the Op Bank has arbitrarily raised the reducing balance rate of interest to as high as 44.18% p.a.  with flat rate @29.88% p.a.  In case the OP Bank had the intention to charge 60 EMIs instead of 36 EMIs while keeping the interest rate as 29.88% p.a. as agreed between the parties, the EMI would have gone down to Rs.2182/- per month and not Rs.2816/- whereas the complainant has been paying the EMI of Rs.2816/- for more than 36 months and still doing so, which means that he had been charged far more in excess than required under the loan agreement. 

15]            It is also a fact that the complainant had  tried hard to stop the ECS payments, which were being deducted at Op No.4 Bank, which is the parent bank of the complainant where his salary account is being maintained but the OP No.4 bank did not accede to his request and continued deducting EMIs even after completion of the payment of 36 installments as scheduled.  OP No.4 declined the request of the complainant to stop the deduction of EMIs through ECS on the ground that such deduction could be stopped only with the consent of both the complainant as well as OP NO.3.  Since, the consent of OP NO.3 was not available, the ECS could not be stopped.

16]            It is quite likely that OP No.4 Bank must be deducting the EMIs of Rs.2816/- per month even now because 60 months period will be over only after September, 2010.  From the account statement as provided by OPs No.1 to 3 and also the one provided by OP No.4 (Salary Account Statement), it is quite clear that the complainant had already paid as high as 45 installments till the month of June, 2009.

17]            From the above detailed analysis of the entire case, it is quite evident that the loan advanced by OPs No.1 to 3 to the complainant was Rs.67,747/- out of which they had made a further deduction of Rs.4072/- as processing charges and disbursed to him only the balance amount of Rs.63,675/-.  The principal amount of Rs.67,747/- was repayable in 36 installments at the rate of Rs.2816/- per month with interest rate of 29.88% p.a. on reducing balance rate of interest basis.  As per the fresh calculations made by the complainant, the amount of EMI comes to Rs.2872/- per month by applying reducing rate of rates of 29.88% p.a. instead of Rs.2816/-.  If this amount is multiplied by 36, the total amount payable by the complainant comes to Rs.1,03,392/- only and against this amount, as per the Account statement supplied by OPs No.1 to 3, the complainant has already paid Rs.1,26,720/- till June, 2009, which means that the complainant has already paid more than what was required to be paid at the end of 36^th month to the extent of Rs.23,328/- as 26.6.2009. 

18]            Moreover, by not settling the loan account of the complainant even after payment of 36 installments and non-issue of No Due Certificate to the complainant, the OPs No.1 to 3 have indulged in unfair trade practice and by charging wrong rate of interest as well as excess EMIs/amount, there is gross deficiency of service on their part.  Therefore, the OPs No.1 to 3 were not only deficient in rendering proper service to the complainant but also indulged in unfair trade practice. 

19]            It is quite obvious that OPs No.1 to 3 have tried to juggle with the figures and played with the loan documents with a view to cause not only financial loss to the complainant but also lot of physical harassment, mental agony and pain.

20]            Keeping in view of the above, in our considered opinion, the present complaint has a lot of merit, weight and substance and it deserves acceptance.  We, therefore, allow the complaint in favour of the complainant and against OPs No.1 to 3.  The OPs No.1 to 3 are directed to make the following payments jointly and severally to the complainant:-

i)         To refund all the excess EMIs/ other amounts taken from the complainant till date beyond 36 months from the starting date of repayment of the loan calculated at the rate of Rs.2872/- per month i.e. total Rs.1,03,392/- which was the only amount payable by the complainant to OPs No.1 to 3.

ii)        To pay a sum of Rs.25,000/- as compensation for causing financial loss, physical harassment, mental agony and pain to the complainant on account of non-settlement of his loan account despite his having paid all loan amount installments (EMIs). 

iii)       To pay Rs.5000/- as cost of litigation.

21]            The aforesaid amounts shall be paid by the OPs No.1 to 3 jointly and severally within a period of 45 days from the date of receipt of certified copy of this order, failing which they shall pay the aforesaid amounts (except litigation cost) along with interest @18% per annum as calculated from the date of filing this complaint i.e. 01.4.2009 till the date of actual payment, besides paying the litigation cost of Rs.5,000/- to the complainant.

22]            Since the complainant has not asked for any specific relief against OP No.4, who were to pay the ECS installments to the remaining OPs under Tripartite Agreement between the complainant and the remaining OPs, OP No.4 is not at fault and there is no deficiency of service or indulgence in an unfair trade practice on the part of OP No.4 as the instructions issued by the complainant in respect of ECS could be stopped only with the mutual consent of the complainant and OP No.3.  Since, such mutual  consent was not available with OP No.4, it was not in a position to stop the deductions of the ECS.  Therefore, the complaint qua OP No.4 is dismissed.

23]            Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

5^th Aug., 2010                                                 Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

                                                                Sd/-

                                                        (ASHOK RAJ BHANDARI)

MEMBER

 “Om”