Date of Filing     03.11.2023

                                                                                                             Date of Disposal: 18.07.2024

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

THIRUVALLUR

BEFORE TMT. Dr.S.M. LATHA MAHESWARI, MA. ML, Ph.D (Law),                                         …….PRESIDENT

               THIRU.P.VINODH KUMAR, B.Sc., BL.,                                                                             ...….MEMBER-I

CC.No.120/2023

THIS THURSDAY, THE 18^th DAY OF JULY 2024

Mr.V.E.Arun,

S/o.Late Vairavan,

Residing at Plot No.15,

G-1, 1^st Main Road,

Kumaran Nagar, Koyambedu,

Chennai 600 092.                                                                                   ......Complainant.

                                                                             //Vs//

1.The Regional Manager,

    Indian Overseas Bank,

    Karaikudi Region, Karaikudi 630 002.

2.The Branch Manager,

    Indian Overseas Bank,

   Kottaiyur Branch, Sivaganga.

3.The Branch Manager,

    Indian Overseas Bank,

   Old No.8, New No.21

   Kaliamman Koil Street,

   Koyambedu, Chennai 600 092.                                                .…..Opposite Parties.

Counsel for the complainant                                      :    M/s.V.Jayakumar, Advocate.

Counsel for the opposite parties 1 to 3                    :    M/s.K.M.Murali,  Advocate.

This complaint coming before us on various dates and finally on 04.07.2024 in the presence of M/s.V.Jayakumar, counsel for the complainant and M/s.K.M.Murali, counsel for the opposite parties and upon perusing the documents and evidences of both sides this Commission delivered the following

ORDER

PRONOUNCED BY TMT.Dr.S.M. LATHA MAHESWARI, PRESIDENT

1. This complaint has been filed by the complainant u/s 35 of the Consumer Protection Act, 2019 alleging deficiency in service against the opposite parties with regard to loan along with a prayer to direct the opposite parties to return back the property documents, to pay a sum of Rs.15,00,000/- towards compensation for the mental agony and hardship caused to the complainant along with cost of the proceedings to the complainant.

Summary of facts culminating into complaint:-

2. Complainant was a co-applicant to the housing loan availed by his son borrowed for construction of building in his land at Palaiyur, Kandanur. The loan was sanctioned on 14.12.2006 for Rs.20,00,000/-and the loan tenure was 14 years, which was to commence from January 2008 to end by December 2021.  The rate of interest for the loan was floating rate of interest. Complainant was made as co-applicant to the loan, since he had retired from Indian Overseas Bank, as an Assistant Manager from Koyambedu Branch and the complainant’s pension was credited to Indian Overseas Bank, Koyambedu Branch. Complainant’s son lost his employment in USA during the mid of 2016 and complainant undertook to pay the loan EMI from September 2016.  The complainant had permitted the Indian Overseas Bank to detect the monthly EMI from the pension account of IOB, Koyambedu Branch. Before December 2021 a sum of Rs.21,600/- was deducted towards monthly EMI from the pension amount.  Thereafter from December 2021, the Indian Overseas Bank started deducting the entire pension amount which was credited in his account.  The complainant submits that his entire pension of Rs.35,226/- was totally deducted for the loan account without properly accounting for the same. Complainant sought for continuing with the actual amount of Rs.21,000/- to be deducted till the issue was resolved by the Indian Overseas Bank.  But the Bank did not send any reply to the notice nor stopped deducting the entire pension amount. Deduction of entire pension amount by the opposite parties without any notice was totally arbitrary and illegal.  The complainant suffered mental agony and was put irreparable loss because of the conduct of the opposite parties. The opposite parties had deducted the entire pension amount received by the complainant for nearly 17 months. Thus aggrieved by the act of the opposite parties the complainant filed the present complaint to direct them to pay a sum of Rs.15,00,000/- towards compensation for the mental agony and hardship caused to the complainant and to return back the property documents along with cost of the proceedings to the complainant.

  The crux of the defence put forth by the opposite parties:-

3. The opposite parties filed version disputing the complaint allegations contending inter alia that this commission has no jurisdiction to entertain this complaint since entire transaction took place out of the jurisdiction of this commission. It was submitted that the complainant was a co-applicant to the housing loan availed by his son Mr.Arun Alexander Lakshman, who was working in USA at the time of availing loan. It was true that the complainant had undertook to pay the loan EMI form September 2016 and had permitted the Indian Overseas Bank to detect the monthly EMI from the pension account of Indian Overseas Bank, Koyambedu Brach. Under the floating rate of interest, the monthly EMI, varies upon the directions issued by RBI and it was utter false that the loan tenure of 14 years got expired on December 2021.  Opposite party admits that it was true that the loan amount sanctioned to the complainant’s son was Rs.20,00,000/- and the repayment ended by December 2021 and also submits that the rate of interest was floating rate of interest. The power of attorney holder Mrs.Lalitha Arun had deposited the title deed on 02.01.2007 and also had executed the Memorandum of Deposit of title deeds on 04.01.2007 in the name of Indian Overseas Bank.  Hence for non-joinder of necessary parties, the complaint is not maintainable.  The opposite party admits that it was true that the complainant had given authorization letter dated 27.03.2017 to debit the loan from his SB AccountNo.166501000001111 for repayment of loan and the complainant also well known about the recovery process regarding overdue loan account and NPA loan account since he was an Assistant Manager of Indian Overseas Bank. The loan account became NPA on 02.04.2022. The complainant came to Indian Overseas Bank, Kottaiyur Branch for his account operations and he had orally informed that he was going to sell the property, with that amount, he would repay the loan amount.  Even though the loan account became NPA on 02.04.2022 this opposite party issued the demand notice after 8 months on 17.12.2022 to all the borrowers as required under the law. The complainant came to the branch on 01.06.2023 and repaid the entire loan by paying the amount of Rs.6,61,770.56/- and closed the loan account voluntarily and requested to return the loan document orally.  Since the documents were in the name of Mr.Arun Alexander Lakshman and his power of Attorney Mrs.lalitha Arun had deposited the title deed, this opposite party had requested the complainant to submit the authorization letter. The opposite party had received letter from Mr.Arun Alexander lakshman from USA stating that he has not yet authorized anyone as his legal representative in Indian to collect the documents with regard to the loan account No.162103350700001 and requested the opposite party to inform about the collecting procedure for the documents deposited by him through is power agent. Thus they sought for the dismissal of the complaint.

4. On the side of complainant Proof Affidavit was filed along with documents marked as Ex.A1 & Ex A2. On the side of opposite parties proof affidavit was filed along with documents marked as Ex.B1 to Ex.B5.

Points for consideration:-

1. Whether the complaint as filed before this Commission is hit by territorial jurisdiction?
2. Whether the complaint is bad for non joinder of necessary parties?
3. Whether the complaint allegations alleged by complainant against the opposite parties has been successfully proved by him?
4. If so to what relief the complainant is entitled?

Point No.1:-

            5. Heard both.

Maintainability:-

6. The preliminary objection raised by the opposite parties is that this Commission does not possess the territorial jurisdiction to try the complaint.  However it is an admitted fact that the EMI’s were deducted from the complainant’s Account at Koyambedu, Chennai Branch from 2016 onwards until the loan was cleared in entirely by one time settlement made by complainant.  Hence, when issue arises with respect to deduction of increased EMI amount from complainant’s Bank Account situated within the territorial jurisdiction of this commission, it could be held that the cause of action for the complaint arose within jurisdiction of this commission.  Thus, we hold that this commission has the territorial jurisdiction to adjudicate the present complaint.

Point No.2:-

Non-Joinder of Necessary Party:-

7. It is alleged by the opposite parties that the wife and son of complainant who are the Power of attorney and borrower was not made a party to the proceedings and hence complaint was bad for non-joinder of necessary parties.  However it is seen that the complaint allegations were made by the complainant only with respect to the deduction of EMI’s from his own Account.  There is no dispute over the loan borrowed or the property mortgaged for the loan.  Hence we are of the view that even in their absence, the complaint could be effectively adjudicated and their absence will not affect the merits of the case in any manner.  Therefore, it could not be said that they are necessary parties and the complaint has to fail for non-joinder of necessary parties.

Point No.3:-

8. On perusal of the entire pleadings, material evidences and arguments, the factum of availment of loan by the NRI son of the complainant, repayment of loan by EMIS, deduction of EMIs from 2016 till entire loan repayment from the complainant’s Account not disputed by either of the parties.  As EMIs were admittedly deducted from complainant’s Account it could be presumed that bank had rendered service to the complainant in the matter of repayment of loan availed by his son.  It could not be alleged by the opposite parties that they rendered no service to the complainant and are not answerable.

9. Further, the complainant had given written confirmation for deduction of EMIs from his pension Account was also not disputed.  However, at the time of giving authorization, the EMI deductable was only around Rs.21,000/-.  But from the Statement of Accounts produced, it could be seen that, from December 2021 the entire pension amount i.e., 35,626/-, 35,226/-, 36,741/- were deducted until the entire repayment made on 01.06.2023 by paying an amount of Rs.6,61,770/-.  The grievance of the complainant is that he was not made aware of the increase in the amount deducted made by the opposite parties.  The interest opted for is floating rate of interest which aspect was not disputed by the complainant.  But the question here arises as to whether based on the principles of natural justice, the complainant who repays the EMI and the original borrower should be put on notice about the increase in EMI amount or not?

10. On perusal of the RBI Guidelines issued from time to time it is found that even for floating rate of interest loan, the lender is required to inform the borrower about any increase in the EMI’s as lenders are expected to be transparent about the terms and conditions of the loan, including any changes to the EMI amount.  Thus atleast a minimum notice period should be given to the lenders as they could exercise their option to either increase in EMI or to extend the tenure of EMI’s. Therefore, when the EMI’s are deducted that too from the pension account of complainant, which amount is mostly required for his livelihood, the opposite parties should have informed him about the increase in EMI amount resulting in deduction of the entire pension amount of the complainant.  We could see that after deduction of EMI’s the balance left was only Rs.58/- which fatally affects his rights for spending for even day to day expenses.  In such facts and circumstances we conclude that the non intimation of increase in EMI amount and the deduction of the entire pension amount of the complainant amounts to clear deficiency in service as it is against the RBI Master Circular dated July 1, 2011 with respect to loan.  It is not the case of opposite parties that any notice was given even to complainant’s son.  Thus point is answered accordingly in favour of the complainant.

Point No.4:-

11. As we have held above that as the opposite parties had acted against the RBI Guidelines by not intimating the complainant who is Pensioner and Senior citizen about the change in EMI and had deducted the entire pension amount violating the principles of natural justice we award Rs.1,00,000/- as compensation for the sufferings undergone by the complainant.  With respect to return back of documents, we are not rendering any finding no proper authorization of Power of Attorney of the property was submitted.  Cost of Rs.5,000/- towards litigation expenses was also awarded.

In the result, the complaint is partly allowed against the opposite parties 1 to 3 jointly and severally directing them

a) To pay a sum of Rs.1,00,000/- (Rupees one lakh only) towards compensation for the mental agony and hardship caused to the complainant within six weeks from the date of receipt of copy of this order;

b) To pay a sum of Rs.5,000/- (Rupees five thousand only) towards litigation expenses to the complainant.

Dictated by the President to the steno-typist, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this 18^th day of July2024.

        -Sd-                                                                                                                   -Sd-                                                                                                                 

 MEMBER-I                                                                                                        PRESIDENT

List of document filed by the complainants:-

List of documents filed by the opposite parties:-

       -Sd-                                                                                                                     -Sd-

MEMBER-I                                                                                                           PRESIDENT