JUSTICE V.K. JAIN, PRESIDING MEMBER

        The complainants availed home loan to the extent of Rs.13,35,100/- from the petitioner-ICICI Bank for purchase of a flat in Zirakpur.  The loan was sanctioned vide letter dated 14.11.2005 and according to the complainants it carried interest @ 7.25% per annum.  According to the complainants, the petitioner bank later confirmed that with effect from April, 2006, the loan would carry interest @ 7.75% per annum.  An additional loan of Rs.3,00,000/- was sanctioned to the complainants on 30.10.2006 and the said loan, according to the complainants,  carried an obligation to pay interest @ 8.75% per annum.  Expressing a grievance that instead of charging interest at the agreed rate, the bank had charged the same @ 11.25% p.a. for the period from 01.4.2007 to 31.3.2008, besides charging interest during pre-EMI period @ 9.5% per annum, the complainants filed a complaint before the concerned District Forum, alleging deficiency in the service provided to them by the petitioner-Bank.

2.     The complaint was resisted by the bank on the ground that the loan was sanctioned on the floating rate of interest, which at the time of sanction was 8.75% per annum and could be enhanced as per the guidelines issued by the Reserve Bank of India and in accordance with the agreement between the parties.

3.     The District Forum vide its order dated 10.07.2009, directed the petitioner-bank to charge interest from the complainant @ 7.25% per annum upto 31.3.2006, 7.75% per annum for the period from 1.4.2006 to 30.10.2006 and thereafter, @ 8.75% per annum.  It was also directed that the enhanced rate of interest shall not be more than the rate at which loan is advanced to the new borrowers.  The petitioner bank was also directed to pay Rs.10,000/- as compensation to the complainant, alongwith interest @ 12% per annum.

4.     Being aggrieved from the order of the District Forum, the petitioner bank preferred an appeal before the State Commission, Union Territory of Chandigarh.  Vide impugned order dated 19.03.2010, the State Commission permitted the petitioner bank to vary the rate of interest only as per the variation allowed by the Reserve Bank of India from time to time, granting the complainant benefit of minus 1.5% of the FRR.  In passing this order, the State Commission took the view that the agreement between the parties envisaged payment of interest @ minus 1.5% of the prevalent FRR, which could be reset by the bank based on the guidelines issued by the Reserve Bank of India.  It was further held that the intimation of such resetting had to be given to the complainant.  The State Commission however, upheld the payment of compensation amounting to Rs.1,00,000/- to the complainant, along with cost of litigation amounting to Rs.5,000/-. The appeal filed by the complainant, seeking enhancement of the compensation was therefore, rejected.   Being aggrieved from the order of the State Commission, the petitioner-bank is before us by way of this Revision Petition.

5.     The interest Clause in the Loan Agreement executed between the parties, to the extent it is relevant, reads as under:

(a)    ICICI Bank Floating Reference Rate: 8.75% per annum (as on the date of execution of this Agreement),

(b)     Adjustable Rate of interest: ICICI Bank Floating Reference Rate = -1.5% p.a. = 7.25% p.a.

(v)     The Adjustable Interest Rate applicable to the LOAN shall be on the basis of FRR prevailing on the date of final disbursement.

6.     It is quite clear from a conjoint reading of the aforesaid clauses of the Loan Agreement that though the complainant was liable to pay and the Bank was entitled to recover Adjustable Rate of Interest which, in turn, would depend upon the ICICI Bank Floating Reference Rate(FRR), and the bank was also entitled to revise its Floating Reference Rate from time to time, this could be done only till the date of final disbursement of loan, as far as the case of the complainant was concerned.  It has come in the order of the State Commission that final disbursement of loan to the complainant was made on 30.11.2006 and on that date admittedly the FRR was 10.25%.  Therefore, upto 30.11.2006, the bank was entitled to charge interest at Floating Reference Rate (FRR), per annum minus 1.5% per annum, depending upon the FRR at the relevant time upto 30.11.2006, but the bank could not have recovered interest at a rate higher than 8.75%, which was the rate arrived at after deducting 1.5% from the FRR of 10.25% prevailing on the date of last disbursal of the loan.

7.     If I accept the contention of the bank, that it was entitled to charge interest at Adjustable Rate, arrived at by deducting 1.5% per annum from the FRR prevailing from time to time, even after 30.11.2006, that would make Clause C (v) of Schedule B of the Loan Agreement wholly redundant.  The various Clauses contained in the Loan Agreement, including Clause C (v) of the Schedule B, cannot be interpreted in the manner suggested by the petitioner-bank.  It is settled legal proposition that while interpreting various clauses in an agreement, the attempt of the Court should be, as far as possible, to give effect to all the clauses contained therein and no clause should be interpreted in such a manner, which would defeat or render redundant, another clause contained in the agreement.

8.     For the reasons stated above, the revision petition is disposed of with an order that upto 30.11.2006, the bank was entitled to charge interest at Floating Reference Rate (FRR) per annum minus 1.5% per annum, whereas w.e.f. 01.12.2006, the bank would charge interest @ 8.75% per annum, irrespective of any increase or decrease in the FRR.

9.     Since admittedly, the bank charged interest higher than 8.75% per annum even after 30.11.2006, it was clearly negligent in rendering services to the complainants and therefore, the order passed by the State Commission does not call for any interference.

        For the reasons stated above, the revision petition is accordingly dismissed.