Delhi

New Delhi

CC/903/2008

Jagmohan Singh Bagga - Complainant(s)

Versus

M/S. Citi Bank N.A. - Opp.Party(s)

08 Feb 2019

ORDER

 

 

CONSUMER DISPUTES REDRESSAL FORUM-VI

(DISTT. NEW DELHI), ‘M’ BLOCK, 1^STFLOOR, VIKAS BHAWAN,

I.P.ESTATE, NEW DELHI-110002.

 

Case No.CC.903/2008                                Dated:

In the matter of:

             Jagmohan Singh Bagga,

           S/o  Late Sardar Sunder Singh Bagga,

           R/o  6299, Kolhapur Road,

         Subzi Mandi, Kamla Nagar,

        Delhi-110007.

                 ……..COMPLAINANT

VERSUS

1.     Citi  Bank Pvt. Ltd.,

Citi Bank Home Loan,

Citi Bank N.A. Jeevan Bharti Building,

            124, Connaught Circus, New Delhi.

          Through Manager, Authorized Signatory.

 

2.      Citi Bank N.A.,

Mall Road, 766, Anna Salai,

Shakthi Towers, Chennai-600002.

Opposite Parties.

 

Case No.CC.302/2010                                 

1.        Jagmohan Singh Bagga,

                S/o  Late Sardar Sunder Singh Bagga,

                R/o  6299, Kolhapur Road,

                Kamla Nagar, Delhi-110007.

 

2.    Jaswant Kaur,

W/o Sh. Jagmohan Singh Bagga,

            R/o  6299, Kolhapur Road,

            Kamla Nagar, Delhi-110007.

                 ……..COMPLAINANTS

VERSUS

1. Citi  Bank Pvt. Ltd.,

Citi Bank Home Loan,

Citi Bank N.A. Jeevan Bharti Building,

            124, Connaught Circus, New Delhi.

             Through Manager.

 

2.      Citi Bank N.A.,

Mall Road, 766, Anna Salai,

Shakthi Towers, Chennai-600002.

Opposite Parties.

ARUN KUMAR ARYA, PRESIDENT

 

ORDER

 

By way of this order, we are disposing of two connected complaints bearing CC/No.903/2008 and CC/No.302/2010.  These complaints are filed by the complainants under section 12 of the Consumer Protection Act, 1986, alleging the deficiency in services against OPs.  The complainant-1 has availed  Home loan for a sum of Rs.8,95,000/- from OP Bank to be repaid in 120 monthly instalment of Rs12,584/ each at a fixed rate of 11.5%  interest p.a. and complainant-2 stood guarantor for complainant-1 in the loan sanctioned by OP.   

2.     It is alleged that the instalments were regularly paid by him but OP Bank charged the interest arbitrarily at higher rate. It is submitted that  he requested the bank to refund the  amount charged by it more than the agreed rate of interest.  He also sent a legal notice upon the bank but bank continuously charged the interest at higher rate under the pretext that such an increase was on the basis of RBI Instructions, which amounts to unfair trade practice on their part.    It is also prayed that the directions be given to the OP for striking off the name of the complainant from CIBIL  and update their CIBIL Record.

3.     Both the complaints have been contested by OP.   OP denied any unfair trade practice  on its part.  It is stated by OP that the complainant had entered into the loan agreement with the OP and the terms and conditions of the said agreement were mutually accepted by both the parties.  The complainant has opted for variable/floating rate of interest in the alleged loan agreement, in which the interest was revised in accordance with changes in the CPMR.  It is further stated that the loan can be closed by the complainant any time subject to payment of pre-payment penalty charges and service tax as mentioned in the loan agreement. 

4.     Both the parties have filed their evidence by way of Affidavit. 

5.     We have heard the arguments advance at the Bar and have perused the record.

6.   It is argued on behalf of complainant that the instalments were regularly paid by him but OP Bank charged the interest arbitrarily at higher rate. It is also argued on behalf of complainant that on the directions of predecessor Bench dated 12.2.2009 he has paid a sum of Rs.6 lacs to the OP, whereas, the total outstanding was Rs.5,66,895.53p. as per the complainant, statement of account prepared by him at the rate of 9.25% p.a. agreed between the parties. It is further argued that the complainant is entitled to receive a sum of Rs.32,105/- and compound interest on it @ 9.25% which comes to Rs.17,924/- till 31.5.2011, hence, he is entitled to receive a total sum of Rs.51,029/- from OP along with compensation to the tune of Rs.15,000/-.

7.     It is argued on behalf of OP that the loan was sanctioned at variable/ floating rate of interest to the complainant.  The interest rate changes due to the change in CMPR i.e. City Bank Mortgage Prime Rate and the same was communicated to the complainant by way of letter dt. 23.9.2005, 18.3.2006, 19.9.06, 8.3.2007, 8.3.2008 and 19.9.2008.   It is further argued that EMIs up to November 2008 were paid by the complainant and after the Interim order dated 6.11.2008 no further EMI has been paid by the complainant. It is admitted that a sum of Rs.6 lacs was paid by the complainant by way of cheque vide order dated 12.2.2009.  It is further argued that due to Interim order since nothing has  been paid by the complainant to the Bank, there was an outstanding of more than Rs.7 lacs to be paid by the complainant to  the OP and further prayed for dismissal of the complaint.

8.     The account statement prepared and placed by the complainant along with his additional affidavit shows that the complainant has charged the interest @ 9.25% whereas as per the loan agreement as well as the customer copy of loan terms  attached with the complaint  mentioning the details of the loan terms also clarified that the rate of interest was @11.50%. Moreover , the complainant  has himself admitted in his complaint at Para-1 that the loan was disbursed to him with the fixed rate of interest of 11.50% p.a., hence, the contention of the complainant claiming the refund of Rs.33,105/- was on wrong   footing / calculation  which does not have any legs to stand. 

9.     Perusal of the statement of account, placed on record shows that on 26.3.2008, the complainant has an outstanding balance  of Rs.7,68,069/- on his loan account, out of which he paid a sum of Rs.6 lacs to the OP during the court proceedings, hence, still there was an outstanding of  Rs.1,68,069/-(Rs.7,68,069-Rs.6,00,000) on his loan account to be paid by him. 

10.    Admittedly, the loan agreement was signed between the parties, the loan agreement bears signatures of both the parties. The loan was granted at a variable rate of interest.  The complainant himself admitted during the course of arguments, that he had paid 48 EMIs out of 120 EMIs and later on paid a lump sum of Rs.6 lacs as per the directions of this Forum.  The complainant is bound to pay the balance outstanding loan to the OP, as per the contract, agreed between the parties.

11.    On the issue of floating rate of interest, we are guided by Hon’ble Supreme Court in case titled as  ICICI  Bank Vs. Maharaj Krishan Dutta & Others (2015) 17 SCC 535 in which it was held that- it is settled law that a contract has to be read as a whole and the terms of the contract cannot be read or construed in isolation.  The Bank has to follow the RBI Guidelines especially Schedules A and B thereto, and the Bank must be given liberty to act in the matter in accordance with the guidelines so issued by RBI from time to time. Fixed rate, floating rate and other rates which have been mentioned in the Guidelines and the right which has been given to the banks in respect of floating reference rate (FRR) has also to be followed in all cases by the Bank. 

12.    In view of the above judgement, we are of the considered view  that the charging of interest at variable rate by OP does not amount to unfair trade practice as it had done so as per RBI’s guidelines and the terms of the loan agreement signed between the parties.   Therefore, we are inclined to hold that the complainant failed to establish the case of unfair trade practice as alleged against the OP.

 

13.    We, accordingly, disposed off CC/No.903/2018  with the direction to the complainant to pay a sum of Rs. 1,25,840/- on account of over dues EMIs vide letter dated 1.2.2010 of OP  in two equal instalments  for the months of March and April 2019 on or before the 5^th day of these months.

 

14.    While disposing CC/NO.302/2010, we direct OP to correct the CIBIL Record of both the complainants after receiving the balance amount.

 

 A copy each of this order each be sent to both parties free of cost by post.  This final order be sent to server (www.confonet.nic.in ). File be consigned to Record Room.

Announced in open Forum on 08/02/2019. 

 

 

                        (ARUN KUMAR ARYA)

                                PRESIDENT

                           (NIPUR CHANDNA)                                        (HM VYAS)

                                MEMBER                                                      MEMBER