BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, AMRITSAR.
Consumer Complaint No. 896 of 2017
Date of Institution: 14.12.2017
Date of Decision: 20.2.2019
M/s. Nav Nirman & Associates (Client A/c) 382, Opp. DAV Police Public School, Behind :Police Lines, Shastri Nagar, Amritsar through its Prop. Sh. Sunil Saini
Complainant
Versus
Indian Overseas Bank, SCO 7, District Shopping Centre, Ranjit Avenue, Amritsar through its Branch Manager
Opposite Party
Complaint under section 12 & 13 of the Consumer Protection Act, 1986
Present : For the complainant : Sh.Karanbir Singh Oshan,Adv.
For the opposite party : Sh.Alok Seth,Chief Manager
Coram:
`
Order dictated by:
Sh. Charanjit Singh, President
1. Present complaint has been filed by M/s. Nav Nirman & Associates through its Prop. Sh. Sunil Saini under section 12 & 13 of the Consumer Protection Act, 1986 on the allegations that the complainant is having current account bearing No. 154502000000053 with the opposite party bank. On 24.7.2007 the complainant availed cash credit limit sanctioned amount of Rs. 10,00,000/ which account was very much regularly operated by the complainant. On 1.12.2011 the opposite party gave demand notice requiring the complainant to deposit balance outstanding amount of Rs. 6,21,688/- as the account have become irregular and non performing asset. After receipt of notice on 28.12.2011 the complainant deposited Rs. 5,00,000/- in the account leaving balance amount of Rs. 1,21,688/- . Upto June 2013 the complainant deposited whole amount outstanding in the account and the account came in credit. Thereafter on 24.7.2013 opposite party debited Rs. 1,84,715/- alleging to the overdue interest but no detail was given by the opposite party to the complainant. The complainant against the said debited amount deposited Rs. 1,85,000/- upto 21.11.2016 against the abovesaid overdue amount. On 27.9.2016 the opposite party again debited Rs. 47,186/ in the account of the complainant , but no detail was given by the opposite party. At the time of sanction of the cash credit limit, the rate of interest was mentioned as 13.25% p.a. in the sanction ticket. Thereafter w.e.f. 1.7.2008 interest rate was revised to 12% p.a. vide letter dated 14.7.2008 whereas the interest is being debited in the account of the complainant more than 16% p.a. without any reason. It is pertinent to mention here that in the year 2010 the base rate of interest was reduced to about 10% p.a. which fact was bit disclosed to the complainant and instead the rate of interest was being charged at the rate of16% p.a. The complainant is having FDR No. 1545Q4000000769 for Rs. 1,50,000/- in the personal name of the complainant which was illegally prematurely closed and adjusted against the interest illegally debited in the account of the complainant despite the fact that in the sister concern of the complainant M/s. Nav Nirman & Associates is having credit balance of approx. Rs. 1,00,000/- which was sufficient to meet the liability, if any instead of closing the FDR. The opposite party is causing illegal harassment to the complainant on one pretext or the other by way of debiting the amount of interest in the account off and on without disclosing the rate, period and amount on which the said amount of interest was charged and on request made by the complainant the opposite party refused to give any information to the complainant.. The complainant has written number of letters making request to the opposite party for furnishing the information about the amounts debited in the account , but to no avail rather flatly refused to accede to the genuine request of the complainant. The act of the opposite party is illegal, wrong, arbitrary and the complainant is entitled to recover the amount of interest illegally debited in excess than the agreed rate in the sanction ticket and thereafter reduced from time to time. Vide instant complaint, complainant has sought for the following reliefs:-
(a) Opposite party be directed to refund and credit the amount of interest charged in excess in the account of the complainant to the tune of Rs. 2,50,000/- ;
(b) Compensation to the tune of Rs. 1,00,000/- alongwith litigation expenses to the tune of Rs. 11000/- may also be awarded to the complainant.
Hence, this complaint.
2. Upon notice, opposite party appeared and filed written version in which it was submitted that complainant was enjoying CC limit of Rs. 10,00,000/- from the opposite party and the same was to be renewed every year. The complainant was also empanelled valuer of replying opposite party and his name was deleted from the bank empanel valuer reason best known to him. Upto 2009 CC limit got renewed and after that he did not get it renewed the same. He had been advised that his limit is to be renewed and he acknowledged the same vide letter dated 31.7.2010 but till date he did not pay any heed towards the request of the replying opposite party and preferred to put the matter before Bank Top Management, Bank’s Ombudsman and Ministry of Finance and everywhere his complaint was found wrong. Infact on 31.7.2010 he enclosed one letter support with letter of renewal of his empanelement for approved valued in bank approved valuer but due to his adamant behavior his name was not empanelled by the head office . The procedure of declaring NPA is not in the hands of replying opposite party and same is computer generated and guided by RBI when an account exceed limits or limit not renewed within 180 days it automatically declares as NPA and the same was declared in his CC loan account. If the complainant renewed his limit well within time his limit must remain regular. The public money is involved in the matter and replying opposite party is custodian of public amount and amount has rightly been adjusted from his FDR in his loan account because at that time an amount of Rs. 1,19,000/- was receivable from the party and there were no sufficient amount in his account, specific intimation has been served upon the complainant. On merits, it was submitted that complainant availed cash credit limit of Rs. 10,00,000/- on 24.7.2007 but it was denied that his account was very much regularly operated by the complainant. The limit of complainant was not regularly operated . As per sanctioned terms borrower has to submit stock/book debt statement before 7th of every month otherwise penal interest @ 2% is payable. The complainant never submitted said statement on time and in non compliance of that overdue charges were received by the opposite party and the same are computer generated as per the guidelines of RBI. It was mentioned here that complainant was very much aware about his irregular limit and same was also acknowledged by him in his request letter . It was admitted that opposite part gave demand notice dated 1.12.2011 requiring the complainant to deposit balance outstanding amount of Rs. 6,21,688/- as the account have become irregular and non performing asset. The amount mentioned in the notice was the balance outstanding on the date of NPA. In addition interest on accrual basis ie. Interest cannot be debited in the loan account without actual recovery and hence undebited interest is parked in separate account and the same is transferred to loan account only when actual recovery is done in the account. It was admitted that Rs. 5,00,000/- was deposited by the complainant but it was wrong that he left balance amount of Rs. 1,21,688/- upto June 2013. It was incorrect that complainant deposited whole amount outstanding in the account and his account came in credit. Infact as per RBI guidelines once any loan account declared NPA bank cannot book interest on accrual basis and hence undebited interest is parked separately and can be booked only after actual recovery as mentioned above. It was admitted that Rs. 1,84,715/- was debited by the opposite party but it was denied that no detail was given by the opposite party to the complainant. As mentioned above the rest amount was the regular interest on contractual rate of (BPLR +0.50 i.e. 16%) alongwith penal interest @ 2% with monthly compounding for the period Nov. 2010 to Dec. 2012 the information in this regard was supplied to the complainant. It was admitted that complainant deposited Rs. 1,85,000/- against overdue amount on various dates upto 21.11.2016 i.e. in the span of more than three years but as per RBI guidelines once any loan account declared NPA bank cannot book interest on accrual basis and hence undebited interest is parked separately and can be booked only after actual recovery and interest of same was payable by the complainant. It was admitted that opposite party debited Rs. 47,186/- in the account of the complainant against overdue amount which is the regular interest alongwith penal interest for the period Oct. 2013 to Sept.2016. However, it was denied that opposite party refused to give any detail of the interest debited in the account. It was submitted that interest is to be varied from time to time as per instructions of RBI and same is computer generated . As per RBI directives interest charging system had been migrated from BPLR to base rate w.e.f. 1.7.2010. As per extent guidelines the base rate system would be applicable for all new loans and for those old loans that come up for renewal. Existing loans based on the BPLR system shall run till their maturity. In case any borrower wants to switch over to the base rate system before the expiry of the existing contract he has to contact the branch for exercising the option. Accordingly, notices were sent to the borrowers also vide publicity had been done by all the banks by displaying notices in the branches and other prominent places alongwith bank’s website. The limit of complainant had not been renewed on its due date i.e. March 2020 and hence turned NPA as on 31.10.2010. As the renewal had not been done after 1.7.2010, the account is still linked with BPLR. As such interest linked to BPLR has been charged in the account which was increased substantially over the period of time . The opposite party had sent a notification of migration to base rate on 12.8.2010, but complainant did not pay any heed towards the request of the opposite party. It was admitting that complainant was having FDR of Rs. 1,50,000/- on his personal name . It was denied that same was illegally prematurely closed and adjusted against the interest illegally debited in the account of the complainant despite the fact that in the sister concern of the complainant is having balance of Rs. 1,00,000/- which was sufficient to meet the liability , if any instead of closing FDR. Seeking the reputation of complainant the amount was not debited from his current account and he may have issued cheques to some people for clearance and clash may occurred and at that time an amount of Rs. 1,19,000/- was to be recovered from the complainant and he was not having sufficient balance in his current account and applying right to set off the opposite party preferred to recover the same from his FDR. It was denied that complainant has been approaching from time to time and made requests to credit the amount of interest illegally debited in account and to furnish all details of the interest debited in the account of complainant . While denying and controvering other allegations, dismissal of complaint was prayed.
3. In his bid to prove the case Sh.Jasmit Singh,Adv.counsel for the complainant tendered into evidence affidavit of Sunil Saini, Prop. Of Nav Nirman & Associaties Ex.CW1/A alongwith documents Ex.C-1 to Ex.C-28 and closed the evidence on behalf of the complainant.
4. To rebut the aforesaid evidence Sh.Alok Seth,Chief Manager Indian Overseas Bank tendered into evidence his duly sworn affidavigt Ex.LOP1/A alongwith documents Ex.OP1 to Ex.OP18 and closed the evidence on behalf of the opposite party.
5. We have heard the ld.counsel for the parties and have carefully gone through the record on the file.
6. Ld. Counsel for the complainant has vehemently contended that complainant is having current account bearing No. 154502000000053 with the opposite party bank. On 24.7.2007 the complainant availed cash credit limit sanctioned amount of Rs. 10,00,000/ which account was very much regularly operated by the complainant. On 1.12.2011 the opposite party gave demand notice requiring the complainant to deposit balance outstanding amount of Rs. 6,21,688/- as the account have become irregular and non performing asset. After receipt of notice on 28.12.2011 the complainant deposited Rs. 5,00,000/- in the account leaving balance amount of Rs. 1,21,688/- . Upto June 2013 the complainant deposited whole amount outstanding in the account and the account came in credit. Thereafter on 24.7.2013 opposite party debited Rs. 1,84,715/- alleging to the overdue interest but no detail was given by the opposite party to the complainant. The complainant against the said debited amount deposited Rs. 1,85,000/- upto 21.11.2016 against the abovsaid overdue amount. On 27.9.2016 the opposite party again debited Rs. 47,186/ in the account of the complainant , but no detail was given by the opposite party. At the time of sanction of the cash credit limit, the rate of interest was mentioned as 13.25% p.a. in the sanction ticket. Thereafter w.e.f. 1.7.2008 interest rate was revised to 12% p.a. vide letter dated 14.7.2008 whereas the interest is being debited in the account of the complainant more than 16% p.a. without any reason. It is pertinent to mention here that in the year 2010 the base rate of interest was reduced to about 10% p.a. which fact was not disclosed to the complainant and instead the rate of interest was being charged at the rate of 16% p.a. The complainant is having FDR No. 1545Q4000000769 for Rs. 1,50,000/- in the personal name of the complainant which was illegally prematurely closed and adjusted against the interest illegally debited in the account of the complainant despite the fact that in the sister concern of the complainant M/s. Nav Nirman & Associates is having credit balance of approx. Rs. 1,00,000/- which was sufficient to meet the liability, if any instead of closing the FDR. The opposite party is causing illegal harassment to the complainant on one pretext or the other by way of debiting the amount of interest in the account off and on without disclosing the rate, period and amount on which the said amount of interest was charged and on request made by the complainant the opposite party refused to give any information to the complainant.. The complainant has written number of letters making request to the opposite party for furnishing the information about the amounts debited in the account , but to no avail rather flatly refused to accede to the genuine request of the complainant. The act of the opposite party is illegal, wrong, arbitrary and the complainant is entitled to recover the amount of interest illegally debited in excess than the agreed rate in the sanction ticket and thereafter reduced from time to time.
7. On the other hand opposite party has repelled the aforesaid contention of the Ld.counsel for the complainant on the ground that complainant availed cash credit limit of Rs. 10,00,000/- on 24.7.2007 but it was denied that his account was very much regularly operated by the complainant. The limit of complainant was not regularly operated . As per sanctioned terms borrower has to submit stock/book debt statement before 7th of every month otherwise penal interest @ 2% is payable. It was submitted that complainant never submitted said statement on time and in non compliance of that overdue charges were received by the opposite party and the same are computer generated as per the guidelines of RBI. It was admitted that opposite part gave demand notice dated 1.12.2011 requiring the complainant to deposit balance outstanding amount of Rs. 6,21,688/- as the account have become irregular and non performing asset. The amount mentioned in the notice was the balance outstanding on the date of NPA. In addition interest on accrual basis ie. Interest cannot be debited in the loan account without actual recovery ad hence undebited interest is parked in separate account and the same is transferred to loan account only when actual recovery is done in the account. It was admitted that Rs. 5,00,000/- was deposited by the complainant but it was wrong that he left balance amount of Rs. 1,21,688/- upto June 2013. It was incorrect that complainant deposited whole amount outstanding in the account and his account came in credit. Infact as per RBI guidelines once any loan account declared NPA bank cannot book interest on accrual basis and hence undebited interest is parked separately and can be booked only after actual recovery as mentioned above. It was admitted that Rs. 1,84,715/- was debited by the opposite party but it was denied that no detail was given by the opposite party to the complainant. As mentioned above the rest amount was the regular interest on contractual rate of (BPLR +0.50 i.e. 16%) alongwith penal interest @ 2% with monthly compounding for the period Nov. 2010 to Dec. 2012 the information in this regard was supplied to the complainant. It was admitted that complainant deposited Rs. 1,85,000/- against overdue amount on various dates upto 21.11.2016 i.e. in the span of more than three years but as per RBI guidelines once any loan account declared NPA bank cannot book interest on accrual basis and hence undebited interest is parked separately and can be booked only after actual recovery and interest of same was payable by the complainant. It was admitted that opposite party debited Rs. 47,186/- in the account of the complainant against overdue amount which is the regular interest alongwith penal interest for the period Oct. 2013 to Sept.2016. It was submitted that as per RBI directives interest charging system had been migrated from BPLR to base rate w.e.f. 1.7.2010 and the same would be applicable for all new loans and for those old loans that come up for renewal. Existing loans based on the BPLR system shall run till their maturity. In case any borrower wants to switch over to the base rate system before the expiry of the existing contract he has to contact the branch for exercising the option. Accordingly, notices were sent to the borrowers also vide publicity had been done by all the banks by displaying notices in the branches and other prominent places alongwith bank’s website. The limit of complainant had not been renewed on its due date i.e. March 2020 and hence turned NPA as on 31.10.2010. As the renewal had not been done after 1.7.2010, the account is still linked with BPLR. As such interest linked to BPLR has been charged in the account which was increased substantially over the period of time . The opposite party had sent a notification of migration to base rate on 12.8.2010, but complainant did not pay any heed towards the request of the opposite party. It was admitting that complainant was having FDR of Rs. 1,50,000/- on his personal name . It was denied that same was illegally prematurely closed and adjusted against the interest illegally debited in the account of the complainant despite the fact that in the sister concern of the complainant is having balance of Rs. 1,00,000/- which was sufficient to meet the liability , if any instead of closing FDR. Seeking the reputation of complainant the amount was not debited from his current account and he may have issued cheques to some people for clearance and clash may occurred and at that time an amount of Rs. 1,19,000/- was to be recovered from the complainant and he was not having sufficient balance in his current account and applying right to set off the opposite party preferred to recover the same from his FDR. It was denied that complainant has been approaching from time to time and made requests to credit the amount of interest illegally debited in account and to furnish all details of the interest debited in the account of complainant .
8. From the appreciation of the facts and circumstances of the case, it was not denial the fact that the complainant availed cash credit limit sanctioned amount of Rs. 10,00,000/- from the opposite party on 24.7.2007. It was the case of the complainant that he has been operating the account regularly.However, on 1.12.2011 opposite party gave demand notice requiring the complainant to deposit balance outstanding amount of Rs. 6,21,688/- out of which the complainant deposited Rs. 5,00,000/- leaving the balance amount of Rs. 1,21,688/- which was again deposited by the complainant upto June 2013. But, however, again on 24.7.2013 opposite party debited Rs. 1,84,715/- alleging to the overdue interest but no detail of the said amount was given by the opposite party. Again the complainant deposited Rs. 1,85,000/- upto 21.11.2016 against the said overdue amount. On 27.9.2016 opposite party again debited Rs. 47,186/- in the account of the complainant without providing any detail thereof. The case of the complainant that at the time of sanction of CC limit the rate of interest was mentioned as 13.25% which was revised to 12% w.e.f. 1.7.2008, whereas the opposite party has been charging the interest more than 16% P.A. . The opposite party has also not disclosed the fact of reducing the base rate of interest to the tune of 10% and instead thereof has been charging the interest @ 16% p.a. In this regard the plea of the opposite party is that interest is to be varied from time to time as per instructions of RBI and same is computer generated . As per RBI directives interest charging system had been migrated from BPLR to base rate w.e.f. 1.7.2010. As per extent guidelines the base rate system would be applicable for all new loans and for those old loans that come up for renewal. Existing loans based on the BPLR system shall run till their maturity. In case any borrower wants to switch over to the base rate system before the expiry of the existing contract he has to contact the branch for exercising the option. Accordingly, notices were sent to the borrowers also vide publicity had been done by all the banks by displaying notices in the branches and other prominent places alongwith bank’s website. The limit of complainant had not been renewed on its due date i.e. March 2010 and hence turned NPA as on 31.10.2010. As the renewal had not been done after 1.7.2010, the account is still linked with BPLR. As such interest linked to BPLR has been charged in the account which was increased substantially over the period of time . The opposite party had sent a notification of migration to base rate on 12.8.2010, but complainant did not pay any heed towards the request of the opposite party. But, however, no notice was ever served upon the complainant to make him aware regarding the migration from BPLR to base rate . Opposite party has also failed to produce any notice which they displayed in their branch for publicity for making the customer aware regarding the migration from BPLR to base rate w.e.f 1.7.2010. Moreover before increasing the rate of interest from 13.25% to 16%, the opposite party has not taken the written consent of the complainant. Therefore without consent of the borrower and without any intimation to the borrower, the bank of its own cannot resettle the interest . In this regard Ld.counsel for the complainant has placed reliance upon India Bulls Housing Finance Ltd. & Anr. Versus Boota Singh Sidhu & Anr.1(2018) CPJ 141 (NC) of the Hon’ble National Consumer Disputes Redressal Commission, New Delhi wherein it has been held that “It is admitted that the EMIs were increased by 120 to 141 without the consent of the complainant. The District Forum has basically decided that the EMIs could not have been increased by the opposite party without the consent of the complainant and that is why it has asked to take the consent of the
complainant for increased number of EMIs. The capacity to pay the amount of EMI and span of repayment are interlinked and persons in different circumstances may choose different sets of EMI instalment and the span for repayment.” Further reliance can be placed upon Punjab National Bank Vs L.N. Navetia 2006(3) CLT 692 of the Hon’ble National Commission in which it has been held that “As regards circular dated 18.11.1995 issued by Punjab National Bank, there was sudden upward revision. But two things are notable in this regard. Firstly in terms of Syndicate Bank Vs. R. Veerana (Supra), the bank’s circulars about instructions given by H.O. are only for their guidance and to safeguard their interest. These instructions cannot be deemed to modify the terms of agreement between the parties. Secondly, this very circular provided that the upward revision of rate of interest should be intimated to the borrowers without fail as per the draft letter enclosed as Appendix A. Undisputedly, no such intimation was sent to the borrower. Thirdly question of charging interest @ 21.25% even under this circular would not arise for the petitioner has not left 15 adequate evidence to prove that the complainant/respondent had not complied with any of the parameters to justify charging interest @ 21,25%.”. Recently our own Hon’ble State Commission, Punjab Chandigarh in ICICI Home Finance Vs.Jarnail Singh in First Appeal No. 667 of 2017 decided on 12.2.2018 that without sending the reset letter and consent of the borrower, the interest rate cannot be resettled by the opposite party. Same view has been held by the Hon’ble Supreme Court of India in ICICI Bank Versus Maharaj Krishan Datta & Ors Civil Appeal No. 5928 of 2015 decided on 3.8.2015 as has been cited by the Hon’ble State Consumer Disputes Redressal Commission,Punjab, Chandigarh in case ICICI Home Finance Vs. Jarnail Singh (Supra) Therefore, in case the rate of interest has been increased by the opposite party without any notice/consent of the complainant, the same is not legal. However the authority submitted by the opposite party is not applicable to the present case as the same is based on the other facts and circumstances.
9 The above-said law squarely covers the case of the complainant from all its fours as the opposite party has also not proved on record that the complainant was ever informed regarding the increase in the rate of interest from time to time which has been charged by the opposite party. No evidence regarding intimating the complainant at any stage has been
brought on record by the opposite party. So due to this act of the opposite
party, the complainant has suffered such a huge financial loss by paying
huge rate of interest instead of the prevailing rate of interest.
10 Consequently, we partly allowed the complaint and directed the
opposite party to restructure the account of the complainant by charging the agreed rate of interest between the complainant and opposite party. In case the opposite party has received the excess amount by calculating the excess interest than agreed between the complainant and opposite party, then the opposite party is liable to refund the same to the complainant within a period of 30 days from the receipt of copy of the order. Opposite party is further directed to pay Rs. 5000/- as compensation while litigation expenses are assessed at Rs. 2000/-. Compliance of the order be made within a period of one month from the date of receipt of copy of this order ; failing which the complainant shall be entitled to get the order executed through the indulgence of this Forum. Copy of order be supplied to the parties free of costs as per rules. File be consigned to record room. Case could not be disposed of within the stipulated period due to heavy pendency of the cases in this Forum.
Announced in Open Forum
Dated : 20.2.2019
