KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAUD, THIRUVANANTHAPURAM.

      APPEAL  NO.323/10

                                   JUDGMENT  DATED: 10.01.2013

PRESENT:

SHRI. K. CHANDRADAS NADAR           : JUDICIAL MEMBER

SMT. A. RADHA                                       : MEMBER

The Secretary,

Kerala State Housing Board,                    : APPELLANT

Thiruvananthapuram.

(By Adv: Sri. Saji.S.L)

          Vs.

Sri. Jose Nedumaruthuymechalil,

Pakkannikkadu,                                         : RESPONDENT

P.O.Cherupuzha, Kannur.

(By Adv: Sri. P.K. Padmakumar)

                                      JUDGMENT

SHRI. K. CHANDRADAS NADAR: JUDICIAL MEMBER

          Appellant was the 1^st opposite party in CC.16/05 in the CDRF, Kannur.  The respondent was the sole complainant.  He approached the Forum on the following allegations.  The complainant was a small agriculturist with limited income.  Hence he is included in the category of weaker section of the community for financial assistance by way of housing loan.  The 2^nd opposite party sanctioned a loan of Rs.3.lakhs.  On 9.4.1996 the complainant signed necessary papers for the loan transaction as required by the 2^nd opposite party.  The loan was granted and the complainant executed mortgage deed in favour of the Kerala Housing Board with respect to 54 cents of property comprised in resurvey No.87/104 of Thirumeni Amsom and Desom.  The loan was repayable with interest at the rate of 17.75% per annum.  The amount was agreed to be released in 3 instalments.  The repayment schedule was fixed as 168 EMI’s and each EMI was Rs.4870/-.   In case of default penal interest was payable at the rate of 21.25% per annum.  The maximum penal interest payable as per the RBI guidelines is 2% per annum and the opposite parties charged exorbitant rate of interest.  This was against the principles of natural justice.  The EMI calculated was not correct.  The actual amount of EMI would come only to Rs.4018/-.  As a result the opposite parties claimed an excess amount of Rs.1,30,000/-.  The opposite parties are bound to follow the circulars and guidelines of RBI and HUDCO while lending advances to priority sector.  The complainant is entitled for service from the opposite party as directed by RBI and HUDCO.  The opposite parties fraudulently violated the mandatory directions of RBI and HUDCO.  The complainant claimed that his annual income was Rs.56,000/- and he had to execute loan agreement for repayment of Rs.4870/- per month which would come to Rs.58440/- annually.  Thus the amount to be repaid by him was in excess of his annual income.  Such an agreement is void abinitio.  The repayment starts only after the 3^rd instalment of loan obtained by the complainant but the opposite parties deducted interest upon the 1^st instalment from the 2^nd instalment and interest upon 1^st and 2^nd instalments from the 3^rd instalment.  That was also in violation of the terms of the agreement.  The non-disbursement of the entire loan sanctioned also amounted to deficiency in service.  Hence the complaint.

          2.      The opposite parties filed joint version.  They admitted that the complainant had availed a housing loan of Rs.3.lakhs but contended that it was under the higher income group scheme after producing necessary documents including income certificate for Rs.56,000/-.  The loan was sanctioned from the Kannur office of the Kerala State Housing Board on 19.4.1996.  The loan was disbursed in 3 instalments.  The 1^st instalment of Rs.60,000/- was disbursed on 21.5.96, the 2^nd instalment of Rs.1.2.lakhs was disbursed on 5.7.96 and the 3^rd instalment of Rs.1.2 lakhs was disbursed on 25.9.1996.  The loan was repayable with interest at the rate of 17.75% per annum in 168 monthly instalments.  EMI amount was fixed as Rs.4870/-.  Sixteen instalments were not repaid on due dates.  Penal interest was payable for the defaulted instalments at the rate of 2.5% per annum apart from the normal interest for such defaulted instalments. As on 30.4.2004 he had remitted 88 monthly instalments.  When the Board implemented one time settlement scheme, the complainant requested on 27.5.2004 to allow him to settle the loan and the loan was finally settled on the said date by extending the benefits under the one time settlement scheme.  The mortgage was released and the document produced for sanctioning the loan was returned to the complainant on 28.6.2004.  The conditions stipulated in the loan agreement were in accordance with the guidelines of the NABARD and NHB.  The complainant is legally bound to comply with the terms and conditions of the agreement.  The various cash loan schemes were implemented by the Board with the assistance of financial institutions like HUDCO and nationalized banks.  Hence the Board is bound to abide by the rules and regulations laid down by such financial institutions.  The Board has reduced the rate of interest from 1.5.2003 as per the direction of the Government and accordingly the rate of interest was reduced to 1.5% per annum from 1.5.2003.  The loan ledger is correctly maintained by the opposite parties.  Every loanee has the right to check and verify their account.  The repayment schedule was fixed as per guidelines.  He had received the 1^st instalment on 21.5.1996 and the last instalment on 25.9.1996.  Hence he had to start repayment from 10.10.1996.  There was no deficiency in service on the part of the opposite parties.  As per the conditions applicable to the complainant service tax was recoverable from the 1^st instalment disbursed.  Interest was also recovered from the instalments disbursed as per agreement and guidelines.  The complainant is not entitled to get compensation.  Hence the complaint was liable to be dismissed.

          3.      Before the Forum, the complainant gave evidence as PW1.  Exts.A1 to A6 were marked on his side.  One witness was examined on the side of the opposite parties.  Exts.B1 to B6 were marked on their side.

          4.      The Forum held that there was deficiency in service on the part of the opposite parties in as much as they had collected an excess amount of Rs.88,881/-.  Accordingly the Forum directed refund of the said amount with interest.  Further compensation of Rs.5000/- and costs of Rs.2000/- were allowed.  The said order of the Forum is challenged by the 1^st opposite party.  The only question that arises for consideration is whether the Forum rightly found that there was deficiency in service on the part of the opposite parties.

          5.      It is admitted that the complainant had availed a housing loan of Rs.3.lakhs from the opposite parties.  The loan amount was disbursed in 3 instalments of Rs.60,000/-, 1.2 lakhs and 1.2 lakhs respectively on 21.5.1996, 5.7.96 and 25.9.96.  The complainant has executed necessary security documents for repayment of the loan and immovable property of the complainant was also mortgaged to the opposite parties.  The execution of security documents is admitted.  So, it is pertinent to notice the nature of the transaction between the parties.  A Forum gets jurisdiction only when service is availed for consideration.  In a loan transaction even if it can be said that sanctioning of the loan is availing of service, repayment of the money exists should be taken as consideration.  Normally deficiency in service can only be in respect of the loan transaction, repayment being the consideration.  It is also a fact that a Consumer Forum is not entitled to settle accounts between the parties.  It is also an admitted fact that mutual agreement governs the loan transaction and a party availing the loan is normally bound to honour the mutual agreement between the parties.  The complainant has a case that the entire loan amount of Rs.3 lakhs was not disbursed to him but the definite contention and the agreement is that the loan amount was payable in 3 instalments and that was what was done by the opposite parties.  The purpose of availing the loan was construction of a house.  As per the agreement, the first instalment was payable on completing construction of the foundation and basement of the building.  2^nd instalment was payable after completing the construction up to roof level and storing materials required for construction of roof and on starting finishing work. The 3^rd and last instalment was payable after completing the construction of roof and finishing work.  The complainant admitted in the box that he availed the loan after accepting all the conditions stipulated by the Board.  It appears that he has also availed one time settlement scheme implemented by the Board for setting loans and only after settling the loan he has approached the Forum alleging deficiency in service.

          6.      One of the arguments raised is that the agreement is void abinitio in as much as he was made to pay as instalments more than his annual income, but really the loan was availed after furnishing Ext.B5 income certificate and furnishing immovable property as security and after availing the loan there cannot complaint about the repayment.  No circumstances making a mutual agreement void abinitio is alleged by the complainant.  Not only that validity of an agreement can be adjudicated only by a Civil Court and merely because the annual income of the complainant is less than what he has to repay deficiency of service on the part of the opposite parties cannot be found.  Though the complainant has contended that the EMI calculated was more than the actual amount of EMI, the Forum itself found that the EMI was calculated as per the prescribed formula.  But the Forum found deficiency in service on the part of the opposite parties on the conclusion that excess amount was collected from the complainant.  The Forum held that the complainant had paid total 94 instalments out of 168 EMIs as on 31.5.2004 the date of settlement.  A balance amount of Rs.21,174.469/- was payable as on 31.5.2004.  But an amount of Rs.1,09,139/-, was paid.  So an excess amount of Rs.88,266.31 was paid.  The data relating to the repayment are appended to the order of the Forum.  It shows that all the payments were effected beyond the due dates.  In some cases,  the default was for more than seven months.  So penal interest was payable for those amounts.  Then the Forum went on to calculate interest at the rate of 15.5% per annum.  It is pertinent to notice that what the Forum did was substituting its own agreement for the mutual agreement of the parties and go for settlement of accounts for which it had no jurisdiction.  The first opposite party is a statutory Board.  The complainant ought to have shown by evidence that the calculation of the amount repayable made by the opposite parties was erroneous as per the agreement between the parties.  There is absolutely no such evidence.  The Forum went on to find deficiency in service by substituting its own calculation of the amount to be repaid without any basis. As mentioned earlier in matters of repayment, deficiency of service cannot be found that easily the first opposite party being a statutory board.  The statement of accounts maintained by the opposite parties will have to be respected and only in case of purposeful violation of guidelines and rules deficiency of service can be found.   There is no such evidence available in this case.  Hence the Forum went wrong in directing refund of the amount legally collected by the opposite parties/ appellants in repayment of the amount availed by the complainant as loan that too after he voluntarily opted to avail the one time settlement scheme of the opposite parties and settling the loan accordingly.  Therefore the appeal is liable to be allowed.  The complaint is not sustainable.

          In the result the appeal is allowed.  The order of the CDRF, Kannur in CC.116/05 dated:29.03.2010 is set aside and the complaint is dismissed.  Having regard to the facts and circumstances of the case parties are directed to suffer their respective costs in the appeal.

K. CHANDRADAS NADAR  : JUDICIAL MEMBER

A. RADHA : MEMBER

VL.