District Consumer Disputes Redressal Commission ,Faridabad.

Consumer Complaint  No. 390/2021.

 Date of Institution:10.08.2021.

Date of Order:03.08.2023.

1.                Mrs. Sujata Khanna residing at 163, Ground floor back side, Ashoka Enclave Part-1, Sector-34, Faridabad – 121003.

2.                Mr. Kamal Khanna, Residing at 163, Ground floor back side, Ashoka Enclave Part-1, Sector-34, Faridabad – 121003.

                                                          …….Complainants……..

                                                Versus

ICICI Home Finance, Registered office at ICICI Bank Tower, Bandra Kurla Complex, Mumbai – 400 051.

                                                                              …Opposite party

BEFORE:            Amit Arora……………..President

Mukesh Sharma…………Member.

Indira Bhadana………….Member.

PRESENT:                   Complainant in person with Shri Nischal Tandon Advocate.

                             Sh. Sagar Bhatia, counsel for opposite party.

ORDER:

                             The facts in brief of the complaint are that the complainants who were the consumer under the Consumer Protection Act, 1986, had availed home loan of Rs. 9,85,000/- and top-up loan of Rs.9,07,842/- from opposite party. To avail the said loan facility, Complainant No.1 & 2 executed Loan Agreement dated 23.02.2004 for the home loan and loan agreement dated 06.10.2005 for the Top-Up loan on the terms and conditions as mentioned therein. It was specifically agreed by both the Complainants that the said loan amount including interest charges, overdue payments and any other payments payable under the loan agreement would be secured by way of mortgage of the property situated at 163 Ground Floor, Ashoka Enclave-1, Faridabad. The Home loan was to be paid back by way of 228 EMIS each amounting to a sum of Rs.8118/-and the Top-up loan was to be paid back by 216 EMIs each amounting to a sum of Rs.8932/- . Out of the total 228 EMI's the Complainant has paid Rs. 20,53,283/- i.e. 198 instalments to the Opposite Party for a loan of Rs. 9,85000/- (Rupees Nine Lakh Eight Five Thousand Only) and in the Top up loan out of 216 EMIS the complainant had paid Rs. 19,57,207/- i.e.,179 instalments to the Opposite Party for a loan of Rs. 9,07,842/- (Rupees Nine Lakh Eight Seven Thousand Eight Hundred Forty Two Only). Thereafter the opposite Party had sent the letter dated 17.11.2004 regarding change in Interest on the Home Loan and further informed that "ICICI Bank floating reference rate for home loan had been increased by 50 basis points with effect from November 17th 2004. The same would be applicable to their loan from next reset date i.e., January 1st, 2005. Consequently, the revised adjustable interest rate on their  loan would be 8%.

Similarly the opposite Party had sent the letter dated 16.06.2005 regarding change in Interest on the Home Loan Consequently, the new adjustable interest rate was 8.5%. However the opposite party had once again increase the tenure of the term loan from 232 month to 256 month in loan account LBGUR00000739160. Despite the new adjustable rate of 8.5% the opposite party/ bank had started rising the interest to 15.75% in home loan and 16.75% in the case of top up loan and the same was charged till 2017 without any prior intimation and knowledge to the Complainant. Being aggrieved from such an inaction on the part of the opposite Party/ bank the Complainant had once again sent the request letter for conversion of existing interest rate in both loan account and the Opposite party vide letter dated 15.07.2017 and 24.07.2017 had approved the request and revised the interest rate from 14.6 % to 8.35% in loan account LBGUR00000739160 with the balance loan tenure was 177 and 15.85% to 8.6% in loan account LBFDB00001163197 with the balance loan tenure was 172.  Thereafter to check out the exact status of the loan account No. LBFDB00001163197 the Complainant had approached opposite party for the bank statement and the Complaint was shocked to see the balance instalment which was showing 134 future instalment i.e., Rs. 11,17,927/- despite the payment of 196 instalment i.e., Rs. 20,022,991/-. The bank/opposite party without informing the Complainant increase the tenure of loan from 172 (as per their letter dated 24.07.2017) to 331. Similarly, the statement of the another loan account LBGUR00000739160 showing 129 balance future instalment i.e., Rs. 10,72,670/- despite the payment of 179 instalment i.e Rs.19,07,245/-.  In this loan account also the bank/opposite party increase the tenure of loan from 177 (as per their letter dated 15.07.2017) to 308 without informing the Complainant.  It was pertinent to mention here that the opposite party on the request of the Complainant revised the interest in the year 2017 and as per which the balance loan tenure is 177 in loan LBGUR00000739160 and 172 in loan account LBFDB00001163197. Despite that the opposite party/Bank has increases the tenure without any prior information and direction. The complainant had paid the sum of Rs.20,53,283/- against the loan amount of Rs.9,85,000/- in the loan account No. LBGUR00000739160 and Rs. 19,57,207/- against the loan amount of Rs 9,07,842/- in the Loan Account LBFDB00001163197. The RBI in the master circular DBOD.No.Dir.BC.5/13.03.00/2006-07 dated July 1, 2006 on interest rates on advances. Para 2.5 of the circular clarified the Floating Rate of Interest on Loans i.e., 2.5.1. Banks have the freedom to offer all categories of loans on fixed or floating rates, subject to conformity to their Asset-Liability Management (ALM) guidelines. In order to ensure transparency, banks should use only external or market-based rupee benchmark interest rates for pricing of their floating rate loan products. The methodology of computing the floating rates should be objective, transparent and mutually acceptable to counter parties. Banks should not offer floating rate loans linked to their own internal benchmarks or any other derived rate based on the underlying. This methodology should be adopted for all new loans. In the case of existing loans of longer / fixed tenure, banks should reset the floating rates according to the above method at the time of review or renewal of loan accounts, after obtaining the consent of the concerned borrower/s.

That in para 2.10 of the Circular the the RBI clarified that the rate should be charged at monthly rest (With monthly rest, interest is calculated based on the outstanding balance of the loan. As you pay down your outstanding loan amount every month, the interest also reduces over time. Monthly rest is commonly used for home loans.)

Charging of interest at monthly rests

2.10.1. Banks were required to switch-over to the system of charging interest at monthly rests with effect from April 1, 2002. While switching over to the new system, banks were required to ensure that the effective rate does not go up merely on account of the switch-over to the system of charging / compounding interest at monthly rests and increase the burden on the borrowers. The aforesaid act of opposite party amounts to deficiency of service and hence the complaint.  The complainant has prayed for directions to the opposite party to:

a)                refund the amount paid by the complainant to the tune of Rs.18,00,000/-.

 b)                pay Rs.18,00,000/- as compensation for causing mental agony and harassment .

c)                fix the tenure/EMI of both the loans accounts as mentioned in the sanction letter.

d)                 Cost of litigation may also be awarded suitably.

2.                Opposite party put in appearance through counsel and filed written statement wherein Opposite party refuted claim of the complainant and submitted that  there was no cause of action ever arose in favour of the Complainants against the answering Respondents to file the present Complaint. The Complainants had miserably failed to disclose the date on which alleged cause of action firstly accrued in favour of the complainants to file the captioned complaint.It was submitted thatt Smt. Sujata Khanna and Sh. Kamal Khan approached ICICI Bank Ltd .for Loan Against Property under Equitable Mortgage by mortgaging Property bearing House No. 163, Ground Floor, Ashoka Enclave Part-1, Sector-34, Faridabad. After processing Credit Facility Application and assessing their cliphility and Technical and Legal issues, ICICI Bank had sanctioned loan amount

Post execution of Credit Facility Agreement dated 23 February 2004, Property Mortgage Agreement and Other necessary Documents between ICICI Bank  Ltd and Complainants, Loan amount of Rs. 9.85.000.00 was disbursed to the

Complainants on 25 March 2004 under Loan Agreement Number LBGUR00000739106 with applicable Adjustable Interest Rate 7.50% pa ie. ICICI Bank Floating Reference Rate of Interest 7.75% pa minus (-) Margin 62% (FR8 1.79% -0.29%) The Applicable Adjustable Interest Rate, Term of Repayment, EMI amount, Amortisation of Loan apart Som other terms and conditions of loan, were duly mentioned in Facility Agreement, which was duly accepted by the Borrowers- Complaints by signing each page of the Agreement. Further, the Complainants approached the OP for Top-Up Loan in continuity of aforementioned Loan Account. After processing Credit Facility application and assessing their eligibility and Technical and Legal issues, ICICI Bank had sanctioned Top-Up Loan .Post executive  of Credit Facility Agreement dated 06 October 2005, and Other necessary Documents between ICICI Bank Ltd. and Complainants, Loan amount of Rs. 9,07,842.00 was disbursed to the Complainants on 14 October 2005 under Loan Agreement Number LBFDB00001163197 with applicable Adjustable Interest Rate 9,75% p.a i.e ICICI  Bank Floating Reference Rate of Interest 8.75% Plus (+) Margin 1% i.e. (FRR 8,75% 1% ). The Applicable Adjustable Interest Rate, Term of Repayment, EMI amount, Amortisation of Loan apart from other terms and conditions of loan, were duly mentioned in Facility Agreement, which was duly accepted by the Borrowers- Complainants by signing each page of the Agreement.

 In reply to contents of Sub Para (c), it was submitted that as on 11th July 2022, the Complainants have paid following amounts under the following loan account and the same was duly credited towards Interest and Principal Amount as per Amortisation of Loan:

It is submitted that in Annual Policy Statement for the Year 2005-06 held on 28th April 2005 by Reserve Bank of India. Repo Rate increased by 25 basis points to 5 per cent. Accordingly, the O.P. Bank increased its Floating Reserve Rate of Interest by 50 basis points (0.50%) with effect from June 16, 2005 applicable from July 1 2005, resulting in revised Adjustable Interest Rate to 8.5% p.a. and intimation of same was sent to the Complainant vide Letter dated June 16th 2005.It is submitted that for the convenience of the Complainants, Equated Monthly Installment (EMI) at Rs. 8,118.00 maintained while increasing the term of loan. It is submitted that as per Terms & Conditions of Loan Facility Agreement, the Bank maintains the EMI amount same but increases the Term of Loan due to increase in Repo Rate/FRR as long as the EMI amount is adequate to cover interest payment in full but in case, the EMI amount is not adequate to cover interest payment in full, then the Bank at its sole discretion shall be entitled to increase the EMI amount suitably. It was submitted that the Complainants were totally aware about Increase Or Decrease in Number of EMIs due to Increase Or Decrease of Adjustable/Floating Interest Rate and therefore, the Complainants requested for Conversion of Rate of Interest to I-MCLR IY for both the aforesaid Loan Accounts. Accordingly, the O.P. accepted the request and Rate of Interest was linked with applicable ICICI Bank 1-MCLR- 1Y w.e.f 13.07.2017 for LAN LBGUR00000739106 and w.e.f. 17.07.2017 for LAN LBFDB00001163197, leading to reduction of applicable Rol from 14.06% to 8.35% rescheduling EMI to 177 and from 15.85% to 8.6% rescheduling EMI to 172, respectively. The aforementioned acts and conducts on the part of the Complainants shifting to I-MCLR IY clearly shows that the Complainants were totally aware of the fact that Increase/Decrease in Adjustable/Floating Interest Rate Increases/Reduces Number of EMI but despite that the Complainants with malafide intentions have filed the captioned complainant alleging excess payment of EMI.The amount of EMI paid under both the accounts were duly credited towards Interest and Principal amounts and the Complainants took Tax Benefit under Section 80C(2)(xviii) & 24(b) of Income Tax Act, 1961, in respect of Interest amounts paid towards both the Loan Accounts. On one hand, the Complainants took benefit under Income Tax Act by paying the Interest Amount as per Changes in Adjustable/Floating Interest Rate and on other hand, the Complainants alleged paying increased number of EMI claiming refund of Rs. 18,00,000.00. As such, the Complainants cannot be allowed to blow hot and cold in one breath.

It was submitted that the Complainants applied to the O.P. for shifting/linking to I-MCLR-IY in July 2017 for both the aforesaid loan accounts and accordingly, the O.P, accepted the request and linked both the Loan Account No. LAN LBGUR00000739106 w.e.f 13.07.2017 for and LAN LBFDB00001163197 w.e.f

17.07.2017. It was submitted that as on 11th July 2022, the Complainants have paid following amounts under the following loan accounts and the same was duly credited towards Interest and Principal Amount as per Amortisation of Loan:

Opposite party denied rest of the allegations leveled in the complaint and prayed for dismissal of the complaint.

3.                The parties led evidence in support of their respective versions.

4.                We have heard learned counsel for the parties and have gone through the record on the file.

5.                In this case the complaint was filed by the complainant against opposite party–ICICI Home Finance  with the prayer to: a)  refund the amount paid by the complainant to the tune of Rs.18,00,000/-.  b) pay Rs.18,00,000/- as compensation for causing mental agony and harassment . c) fix the tenure/EMI of both the loans accounts as mentioned in the sanction letter. d)  Cost of litigation may also be awarded suitably.

                    To establish his case the complainant  has led in his evidence,  Ex.CW-1A- affidavit of Sujata Khanna,, Ex. C-1 – Loan agreement,Ex.C-2 & 3 – letters regarding change in rate of interest on your home loan, Ex.C-4 – letter dated 15.07.2017 regarding change in repayment schedule for home loan account LBGUR00000739106, Ex.C-5 – loan account statement for  LBGUR00000739106, Ex. C-6 – loan account statement LBFDB0000163197, Ex.C-7 – Loan account statement for LBGUR00000739106, Ex.C-8 – repayment schedule, Ex.C-9 -  loan account statement LBFDB0000163197, Ex.C-10 – Repayment schedule, Ex.C-11 – letter dated May 05,2006 regarding ICICI Bank hike home loan interest rates, Ex.C-12 – letter dated 13.12.2006, Ex.C-13 – letter dated Feb .6,2007, Ex.C-14 – letter dated March 31, 2007 regarding ICICI Bank hike lending rates, Ex.C-15 – letter dated 30.06.2008 regarding ICICI Bank hike  deposit and lending rates, Ex.C-16 – letter dated July 31,2008 regarding ICICI Bank hikes deposit and lending rates,, Ex.C-17 – letter dated 31.12.2008 regarding ICICI Bank cuts lending and deposit rates, Ex.C-18 – letter  dated April 21,2009, Ex.C-19 – letter dated 16.08.2010 regarding change in prime lending rate,, Ex.C-20 – letter dated October 5. 2010 regarding change increase rate and deposit rates, Ex.C-21 – letter dated 04.12.2010 regarding change in deposit rates and prime lending rate, Ex.C-22 – letter dated 31.12.2010 regarding change in base rate and prime lending rate,Ex.C-23 to 28 – letters, Ex.C-29 to 31– letters regarding reduction in base rate, Ex.C-32  - letter dated 15.05.2017,, Ex.C-33 – Major monetary policy rates and reserve requirements – bank rate LAF (REPO, Reverse REPO and MSF) Rats, CPR & SLR, Ex./C-34 – letter dated July 08,2004 regarding master circular –interest rates on advances, Ex.C-35 -  lending rates of scheduled commercial banks (excluding RPBS).

          On the other hand counsel for the opposite party strongly agitated and opposed.  As per the evidence of the opposite party  Ex.RW1/A – affidavit of Kewal Krishan Verma, Chief Manager-Collections, ICICI Bank Ltd. DCM Plaza-2, Central Square, Madan Lal Khurana Marg, Bara Hindu Rao, Delhi,, Ex.OP1/1 – loan application ,, Ex.OP1/2 – loan agreement, Exc.OP1/3 – loan account statement for  LBGUR00000739106,, Ex.OP1/4 – loan documentation home equity loan,, Ex.OP/5 – loan account statement for LBFDB00001163197,, Ex.OP1/6 – Statement of Dr. Y.Venugopal Reddy, Ex. OP1/7 – letter dated July 15,2017 regarding change in repayment schedule for home loan account LBGUR00000739106, Ex.OP1/8 – letter dated July 24,2017 regarding change in repayment schedule for home loan account LBFDB00001163197, Ex.OP1/9(colly) – letter dated November 17,2004  regarding change in rate of interest on your home loan.

6.                In this case, the complaint was filed by the complainant with the prayer to refund the amount paid by the complainant to the tune of Rs.18,00,000/-.

7.                As per the complaint,  the complainants had availed home loan of Rs. 9,85,000/- and top-up loan of Rs.9,07,842/- from opposite party. After availing loan facility, Complainant No.1 & 2 executed Loan Agreement dated 23.02.2004 for the home loan and loan agreement dated 06.10.2005 for the Top-Up loan.  As per the complainants, they have paid all the EMI’s without any defaulter   Out of the total 228 EMI’s the complainant has paid Rs.20,53,283/- i.e 198  installments to the opposite party for a loan of Rs.9,85,000/- and in the Top up loan out of 216 EMIs the complainant has paid Rs.19,57,207/- i.e 179 installment to the opposite party for a loan of Rs.9,07,842/-.  The complainants have paid approx.40 lacs of above mentioned loans to the opposite party.   As per RBI vide Ex.C8 page 51 to 61 and Ex.C11 enhancement of rate of interest in 2007, opposite party has charged rate of interest @ 15.50% which is not chargeable as per RBI instructions given in page 51 to 61 vide Ex.C8.  After paying Rs. 40 lakhs for the total amount of loan  amount of Rs.19,00,000/- and outstanding payment is still approximate more than Rs.20,00,000/- is due against the opposite party.  As per letter  dated 7.2.2015 vide Ex.C-29, reduction after falling the rate of interest is not given by the opposite party.  After going through the Justified calculations for  loan A/c No. LBGUR00000739106 vide Ex.C-35 Mark A & Justified calculations for loan account LBFDB00001163197 vide Ex.C-35 Mark B and also correspondence done by the complainant time to time. which shows the bonafide of the complainant.  As per the evidence led by the complainant  from Ex.C1 to C35, it shows the total amount of Rs.19,00,000/-, opposite party has already paid approx. Rs.40,00,000/- and approximate Rs.20,00,000/- is outstanding which shows this is double of the principal amount already taken by the opposite party and the complainant is paying the EMI without any fault.  As per the allegations of the complainant, the opposite party is not charging the rate of interest as per the agreement dated 23.02.2004 for the home loan and loan agreement  dated 06.10.2005 for the Top-Up Loan which shows the deficiency in service on the part of the opposite party.

8.                After going through the evidence led by both the parties, the Commission is of the opinion that as per Ex.C35 (colly), the calculations submitted by the complainant and in the complaint the complainants are demanding refund of Rs.18,00,000/-. On the other hand , the opposite party submitting the outstanding amount and demanding regularly. Keeping in view of the above submissions, the Commission is of the opinion that the complaint is allowed, Opposite party is directed to:

a)                over haul the account  with the settled rate of  interest in agreement executed on 23.02.2004 for the home loan   for the total 228 EMI’s and loan agreement dated 06.102005 for the Top-Up Loan for the total 216 EMIs and refund the excess amount to the complainant , if any.            

b)                to explain the reason for the increase of EMIs and also explained with notification of RBI of increase rate of the interest and other charges taken by the opposite party.

c)                to send  the up- dated statement of account of  the complainant  for the compliance  of this order to the complainant for their execution purpose.

d)                After taking the balance payment, if any, opposite party is directed to issue NOC in favour of the complainant of both of the loan accounts.

e)                to pay Rs.11,000/- as compensation on account of mental tension, agony and harassment to the complainant..

f)                  to pay Rs.11,000/- as litigation expenses to the complainant.

 Compliance of this order be made within 30 days from the date of receipt of copy of order Failing which the concerned official will directed to pay Rs.10,000/- from his own pocket to the complainant.  Copy of this order be given to the parties  concerned free of costs and file be consigned to record room.

Announced on: 03.08.2023                                  (Amit Arora)

                                                                                  President

                     District Consumer Disputes

           Redressal  Commission, Faridabad.

                                                           (Mukesh Sharma)

                Member

           District Consumer Disputes

                                                                                          Redressal Commission, Faridabad.

                                                         (Indira Bhadana)

                Member

          District Consumer Disputes

                                                                            Redressal Commission, Faridabad.