This complaint coming up before us for final hearing on                      24-09-10 in the presence of Consumer Care Center, Counsel representing on behalf of complainant, and of Sri G.Erukala Reddy, Advocate for opposite party, upon perusing the material on record, hearing both sides and having stood over till this day for consideration, this Forum made the following: 

O R D E R

Per Sri M.V.L.Radha Krishna Murthy, Incharge President:

                This complaint is filed under section 12 of Consumer Protection Act, 1986 by the complainant praying to direct the opposite party to pay a sum of Rs.11,120/- with subsequent interest at 24% p.a. thereon and for costs.

The averments of complaint in brief are as follows:

                The complainant is a policy holder of policy bearing No.673340367 along with her husband P.Venkata Subba Rao, policy holder bearing No.671924251 and she has applied for a loan against policy bearing No.673340367 and opposite party sanctioned loan of Rs.22,000/- and issued a cheque bearing No.643499 on corporation bank with covering letter dt.15-05-09. As per the said covering letter, the complainant has to pay the loan amount with advance interest of Rs.990/- for the period from 28-06-09 to 28-12-09 even before paying the loan.  Interest has to be paid on completion of said period that to with a grace period of 15 days and the question of broken period does not arise at any point, which is illegal and against the rules in force.   The opposite party high handedly collected Rs.990/- from the complainant ignoring the laws in force and it attracts deficiency of service.  When asked to show the rules, opposite party failed to supply the same.  Banks or any public service institute could not collect interest in this manner, which is illegal and opposite party has to return the same with interest at 24% p.a. for Rs.100/- as the same is being utilized for business development.  The complainant sent a notice to opposite party requesting to return the said amount of Rs.990/- with interest.  But opposite party gave a false reply stating that they are collecting the same as per rules in force. But they have not supplied the copy of rules.  In a similar case, the husband of complainant gave a cheque towards payment of advance interest on loan but they refused to pay the same.    Thus it is clear that there is no such procedure for collecting broken period interest.  The illegal collection and threats of opposite party caused much inconvenience in loss of time, money and mental agony.  The complainant is entitled for compensation of Rs.10,000/- along with above amount with interest @ 24% p.a.  Hence, the complaint.

                The opposite party filed its version affidavit, which is brief as follows:

                The complaint is not maintainable either under law or on facts and the same is liable to be dismissed.   Complainant is not a consumer and the dispute is not a consumer dispute.  Hence, this Forum has not jurisdiction to entertain the complaint.  

                The opposite party corporation has sanctioned loan of Rs.22,000/- to the complainant who is contesting about charge of minimum 6 months interest on the loan amount. As per the rules minimum charge of 6 months interest will be levied for the loan that was sanctioned by the corporation.  The opposite party has sent reply notice to the Consumer Care Center explaining the conditions with regard to payment of interest on loan amount.  As per condition No.8(ii) of page 2 of condition of the policy bond.  It is clearly stated that interest is charged for a minimum period of 6 months.  Accordingly interest is collected from the complainant.  There is no deficiency of service on the part of opposite party. As per the rules we have to collect interest of Rs.990/- and there is no threat or harassment or illegal collection. Hence, the complaint may be dismissed with costs.   

                The complainant filed affidavit in support of his complaint reiterating the same. On behalf of complainant Ex.A1 to A5 are marked. On behalf of opposite party Ex.B1 and B2 are marked.

                Ex.A1 is the copy of letter issued by opposite party to the complainant on 15-05-09 while sanctioning loan.  Ex.A2 is the copy of receipt for repayment of loan made by complainant to opposite party on 26-06-09.  Ex.A3 is the copy of notice got issued by the complainant through Consumer Care Center to the opposite party. Ex.A4 is the copy of postal acknowledgement.  Ex.A5 is the copy of reply registered notice issued by opposite party to Consumer Care Center.

                Ex.B1 is the copy of policy of the complainant.  Ex.B2 is the copy of circular issued by opposite party corporation to its offices/branches.  

Now the points for consideration is that

1. Whether there is any deficiency of service on the part of opposite party?
2. To what relief the complainant is entitled to?

POINTS 1 & 2

                The case of complainant is that she was holding a policy with the opposite party and that she applied for a loan against her policy.  The opposite party has sanctioned a loan of Rs.22,000/- on her policy and communicated a letter under Ex.A1 while sanctioning the loan, that as per the said letter she has to pay interest of Rs.237/- for the broken period upto 28-06-09 and thereafter she has to pay interest of Rs.990/-, payable half yearly by 28/06 and 28/12 every year.  When she repaid the entire loan amount on 26-06-09, the opposite party collected interest of Rs.990/-, which is against the condition mentioned in Ex.A1 and that thereby opposite party committed deficiency of service.

                It is the case of opposite party that the complainant is not a consumer and that there is no consumer dispute and this Forum has no jurisdiction.  Further it is the case of opposite party that they have collected interest of Rs.990/- as per terms and conditions of the policy, that as per condition 8(ii) of the policy interest is charged for a minimum period of 6 months and that as the complainant paid the entire amount they have collected Rs.990/- towards half year interest and that there is no deficiency of service on their part since they have acted as per the condition of policy.          

                The complainant purchased a policy from opposite party and obtained loan thereon from the opposite party.  Therefore, the complainant is a consumer within the meaning of CP Act and the dispute is the consumer dispute and that therefore, this Forum has got jurisdiction to entertain the same.

                The opposite party sanctioned a loan of Rs.22,000/- on the policy of complainant at her request and while sanctioning the loan, they have communicated the terms of repayment of loan under Ex.A1.  According to Ex.A1, the complainant has to pay interest of Rs.237/- for the broken period upto 28-06-09 and thereafter she has to pay Rs.990/- for every half year by June and December.  It is the case of complainant that even though the complainant had chosen to repay the entire amount of loan on 26-02-09, the opposite party has collected Rs.990/- as against the term mentioned in Ex.A1.  She contends that as per the letter, the opposite party has to collect only Rs.237/- towards interest upto 28-06-09 since she has paid the entire loan amount on 26-06-09 but as against the same, they have collected Rs.990/-.  The said letter under Ex.A1 was given as repayment schedule. As the complainant has chosen to repay the entire loan amount as against the repayment schedule under Ex.A1 the opposite party has collected Rs.990/- towards interest for half year as per the condition of policy, even though it was mentioned in Ex.A1 that the interest for the broken period payable is Rs.237/-.  The opposite party corporation has collected Rs.990/- towards the interest as per the condition 8(ii) of Ex.B1 policy.  The condition 8(ii) of policy is as follows:

                “Interest on the advance (s) shall be paid compounding half yearly to the corporation at the rate to be specified by the corporation when the relative advance is made, the first payment of interest to the made on the next policy anniversary or on the date six months before the next policy anniversary whichever immediately follows the date on which the relative advance is made and every half year thereafter, interest is charged for a minimum period of six months.”   

                   Since the complainant has repaid the entire loan amount on 26-06-09, the opposite party collected Rs.990/- towards half year interest as per the above said condition of policy since the condition stipulates minimum interest payable is for six months.  Therefore, in the circumstances of case, we find that there is no deficiency of service on the part of opposite party.  Therefore, the opposite party is not liable to pay any compensation to the complainant.

                In the result, the complaint is dismissed.  In the circumstances of case, each party shall bear their own costs.    

Typed to my dictation by the Junior Steno, corrected by us and pronounced in the open Forum, this the 28^th day of September, 2010.

         Sd/- x x x                                                           Sd/- x x x

     MEMBER                                                                PRESIDENT I/C 

APPENDIX OF EVIDENCE

No oral evidence is adduced on either side

DOCUMENTS MARKED

For Complainant:

For Opposite Party:

                                                                                             Sd/- x x x                                                                                               PRESIDENT I/C