cBEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

VAZHUTHACAUD : THIRUVANANTHAPURAM

PRESENT:

SHRI. G. SIVAPRASAD : PRESIDENT

SMT. BEENA KUMARI .A : MEMBER

SMT. S.K. SREELA : MEMBER

C.C. No. 166/2005 Filed on 27/05/2005

Dated: 16..05..2011

Complainant:

N. Ramakrishna Pillai, Sree Ragom, NRAB-1, K.P.XI/674, Prabhath Lane, Peroorkkada – P.O., Thiruvananthapuram.

(By Adv. G.S. Prakash)

Opposite parties:

1. Union Bank of India, represented by its Managing Director, Central Office, 239, Vidhan Bhavan Marg, Nariman Point, Mumbai – 400 021.

2. The Chief Manager, Union Bank of India, Statue, Thiruvananthapuram.

(By Adv. Thomas P. Jacob)

This O.P having been heard on 16..04..2011, the Forum on 16..05..2011 delivered the following:

ORDER

SHRI.G. SIVAPRASAD, PRESIDENT:

The facts leading to the filing of the complaint are that, complainant and his wife jointly availed a housing loan of Rs. 7,50,000/- on 16/7/2003 from the opposite parties for taking over their then existing housing loan of Rs.3,67,482/- with State Bank of India, Althara Branch and also for the construction of existing building with interest @ 8.5% per annum, that opposite parties had offered free insurance cover for the building and personal accident cover for the borrower upto the loan amount, that on 8/12/2003 complainant had given a letter to the opposite parties with a request for an encashment of the loan amount to a further sum of Rs. 2,25,000/- in addition to the availed loan as the balance amount after the said take over was insufficient to complete the building construction, that opposite parties rejected the said request thereby complainant was compelled to approach M/s. Can Fin Home Ltd and they sanctioned a sum of Rs. 10,00,000/- with interest @ 7.5% per annum, that on 26/12/2003 opposite parties issued a certificate with a direction to remit Rs. 7,89,806/-, that complainant remitted the said amount by way of pay order issued from the Can Fin Homes for taking over the existing loan and releasing the original document, that on verification of the statement of account issued by the opposite parties complainant had noticed that certain discrepancies in the statement of account, that opposite party had charged excess amount of Rs. 18,995/- from the complainant, that opposite party had charged 8.5% of principal amount while closing the loan. Complainant sent a lawyer's notice on 29/12/2004 to opposite parties for which opposite parties had sent an evasive reply. Hence this complaint to direct opposite parties to refund the excess amount of Rs. 18,995/- with interest from 5/1/2004 along with compensation and cost.

2. Opposite parties entered appearance and filed version contending inter alia that complainant availed the loan at the interest rate of 9.5% and not for 8.5% as alleged in the complaint, that the enhancement request was rejected due to Bank's policy matter, that complainant paid the amount after fully satisfying with the statement of account given by opposite parties, that there is no discrepancy or error in the statement of account given by the opposite party, that the house loan was availed on 16/7/2003 and the rate of interest applicable at that time for home loan was 9.5%, that from 1/1/2004 the interst rate came down to 9.25%. Hence there is no excess amount as alleged in the complaint, that opposite party did not charge any pre-closure charge nor collected excess amount of Rs.18,995/-. Opposite party sent reply to lawyer's notice, that there is no deficiency in service. Hence opposite party prayed for dismissal of the complaint.

3. The points that arise for consideration are:

1. Whether opposite party has collected excess amount from the complainant?

2. Whether there is deficiency in service on the part of the opposite parties?

3. Whether complainant is entitled to compensation and cost?

In support of the complaint, complainant has filed affidavit and has marked Exts. P1 to P9. In rebuttal, opposite party has filed affidavit and has marked Exts. D1 to D8.

4. Points (i) to (iii): Admittedly, complainant had availed loan of Rs.7,50,000/- from the opposite parties for taking over the then existing housing loan of Rs. 3,67,482/- with State Bank of India, Althara Branch, Thiruvananthapuram and also for the construction of the 1^st floor of the existing building. There is point in dispute regarding the rate of interest charged. According to complainant the aforesaid loan was availed with interest @ 8.5% per annum while opposite party ascertained that complainant availed loan at the interest rate of 9.5%. It has been the case of the complainant that opposite party had issued a certificate with direction to remit Rs. 7,89,806/- and complainant remitted the said amount by way of pay order issued from the Can Fin Homes for taking over the existing loan and releasing the original document. The very case of the complainant is that there is discrepancy or error in the statement of account issued by opposite parties, that opposite party had charged interest at the rate of 8.5% per annum on principal amount for the entire period and again charged 1% of the principal amount while closing the loan. Complainant's evidence consisted of his oral testimony and Exts. P1 to P9. Ext. P1 is the advertisement notice issued by opposite party for home loan. It is not clear from Ext. P1 when did opposite party publish the said advertisement. Ext. P2 is the copy of the certificate issued by opposite party to complainant to remit Rs. 7,89,806/- for closing his liability. Ext. P3 is the sanction letter issued by M/s. Can Fin Homes to complainant. Ext. P4 is the copy of the letter dated 7/7/2004 to opposite party requesting the latter to refund an amount of Rs. 18,995/-. Ext. P5 is the letter dated 16/08/2004 to Chief Manager, Union Bank of India requesting the latter to take necessary steps to refund the aforesaid amount. Exts. P6 & P7 are the acknowledgement cards. Ext. P8 is the copy of the Advocate notice dated 29/12/2004 issued by complainant to opposite party. Ext. P9 is the reply sent by opposite parties. Opposite parties' evidence consisted of their oral tstimony and Exts. D1 to D8. Acording to opposite parties it is on the request of the complainant the loan has been taken over from State Bank of India, Althara Branch to opposite party bank, that complainant availed loan from opposite party for an amount of Rs.7,50,000/- subject to interest at the rate of 9.75% per annum with monthly rests for value received. Opposite party denied the statement that complainant had availed the housing loan from the opposite party with interest @ 8.5% per annum. Further, it is contended by opposite parties that complainant had executed documents including Demand Promissory Note for the same. Ext. D1 is the Demand Promissory Note executed by the complainant promising to pay a sum of Rs. 7,50,000/- together with interst on such sum subject to a minimum of 9.75% per annum with monthly rests for value received. Ext. D2 is the copy of Instruction Circular dated 19^th November 2001 showing the conditions of pre-payment. Ext. D3 is the copy of the Housing Loan Application Form. Ext. D4 is the copy of the Instruction Circular dated 24^th April 2003 which was marked subject to objection. Ext. D5 is the statement of account issued by opposite party for the period from 17/11/2003 to 17/12/2008. Ext. D6 is the copy of the housing loan A/c No.220911 dated 11/7/2003 issued to opposite party dealing with loan amount interst rate – 9.75%, repayment period, monthly installments, delayed repayment charges and preclosure charges @ 2%. On perusal of Ext. D6 it is seen that though the Senior Manager affixed his signature, the said conditions are not seen accepted by the borrower by signing in it. Ext. D7 is the copy of Instruction Circular No. 6689 dated 24/6/2003 issued by opposite party. Ext. D8 is the copy of Instruction Circular No. 6666 dated 20/5/2003 issued by Union Bank Bhavan, Mumbai. Complainant has been cross examined by opposite parties. In his cross examination complainant has deposed that he has not read the documents of the opposite parties and he does not know at what rate of interest has he availed the loan. But he has deposed that opposite parties informed him that rate of interest is at 8.5%. The grievance of the complainant is that opposite party has collected an excess amount of Rs. 18,995/-. It is rebutted by opposite party by virtue of documents. Ext. P1 itself shows the fact that complainant has agreed to pay interest @ 9.75% per annum with monthly rests for value received, the Promissory Note (Ext.P1) is seen executed by complainant, on 14/07/2003 which will be contrary to the deposition of the complainant that he does not know the rate of interest at the time of drawing the said loan. Further there is provision for pre-payment charges by virtue of Ext. D2. On perusal of the loan application by Ext. D3 it appears that the Manager concerned has recommended to sanction the loan amount of Rs.7,50,000/- at 9.75% rate of interest per annum. Opposite party has been cross examined by the complainant. In his cross examination opposite party has agreed that he can furnish Circulars issued by opposite party in the year 2003, that accordingly opposite party has produced documents as Exts. D6 to D8. Ext. D6 shows the housing loan details in connection with account No.220911. On perusal of the same it is seen that loan amount of Rs.7,50,000/- was sanctioned to complainant at interest rate of 9.75%. It is further stated therein that the delayed repayment will be charged penal interest @ 2% per annum and pre-closure charges of 2%. Ext. D6 is seen issued to the complainant by opposite parties. Exts. D7 & D8 are 2 Instruction Circulars dated 20/5/2003 and 24/6/2003 issued by Union Bank Bhavan, Mumbai. As per Ext. D7 Circular Instruction was given by the Head Office to all branches of Union Bank to charge the rate of interest with effect from 1^st July 2003 as stated there in. On perusal of Ext. D7 Instruction Circular it is seen informed the branches that loan above 10 years has been revised from existing 10 years to 9.75%. Admittedly, opposite parties sanctioned the aforesaid loan amount for a tenure of 15 years. As such it can be inferred from Ext.D3 loan application and Exts D1, D2 & D7 that complainant has availed loan @ 9.75%. Opposite party has furnished materials to substantiate their contention of collection of pre-closure charges. According to opposite parties they have act0ed as per guidelines permitted by Reserve Bank of India and instructed by the Head Office of the opposite parties' bank. On going through the version and evidence on records we are of the view that opposite party has acted as per guidelines and instructions of the Higher Authority. Further no material furnished by the complainant to prove that opposite party has acted against the Promissory Note executed by the complainant. The onus is on the part of the complainant to substantiate their contention with cogent and relevant documents that opposite party has violated the terms and conditions of the loan. Complainant miserably failed to prove that aspect. Inview of the above we find there is nothing to attribute deficiency on the part of opposite party. Complaint has no merits at all which deserves to be dismissed.

In the result complaint is dismissed.

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.

Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the open Forum, this the 16^th day of May, 2011.

G. SIVAPRASAD : PRESIDENT

BEENA KUMARI .A : MEMBER

S.K. SREELA : MEMBER

ad.

C.C.No: 166/2005

APPENDIX

I. Complainant's witness:

PW1 : N. Ramakrishna Pillai

II. Complainant's documents:

P1 : Pamphlet of Union Bank of India on Home Loan rates

P2 : Photocopy of the certificate dated 26/12/2003 issued by opposite parties.

P3 : Original letter of CAN FIN Homes Ltd., Bangalore dated 2/1/2004.

P4 : True copy of letter dated 7/7/2004 sent by the complainant and his wife.

P5 : True copy of letter dated 16/8/2004 sent by the complainant

P6 : Original acknowledgement card addressed to the Chief Manager, Union Bnk of India, Thiruvananthapuram.

P7 : Original acknowledgement card addressed to the Assistant General Manager,Union Bank of India,Thiuvananthapuram.

P8 : Photocopy of the legal notice dated 29/12/2004 sent by G.S. Prakash, Advocate to opposite parties.

P9 : Reply notice on advocate notice sent by opposite parties dated 27/01/2005.

III. Opposite parties' witness:

DW1 : P.G. Prasanna Kumar

IV. Opposite parties' documents:

D1 : Demand Promisory Note dated 14/7/2003

D2 : Guidelines prescribed by Union Bank of India on Term Loan Agreement dated 19/11/2001.

D3 : Declaration given by complainant on individual housing loan application form.

D4 : Instruction circular dated 24/4/2003 on levy of processing charges on review.

D5 : Statement of Accounts dated 17/12/2008

D6 : Loan sanctioning letter of Union Bank of India dated 11/7/03.

D7 : Internal Circular of Union Bank of India dated 24/06/2003.

D8 : Internal circular of Union Bank of India dated 20/05/2003.

PRESIDENT