Delhi

New Delhi

CC/1046/2010

P. Ram Bhadran - Complainant(s)

Versus

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

05 Sep 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. 1046/2010                                                                 Dated:

In the matter of:  

         Sh. P. Rama Bhadran,

        S/o Sh. Purshottam Rama Bhadran,

        R/o D-2A/75B,

         Janakpuri, New Delhi                                                                                                                                                                                                                                                                                                                        ……..COMPLAINANT

 

VERSUS

 

M/s Citi bank N.A.

4^th Floor, Jeevan Bharti Building,

124, Connaught Circus,

New Delhi-110001

                                                                                                                              ….......OPPOSITE PARTY

 

  

ORDER

H.M. VYAS- MEMBER

Complaint under section 12 of the Consumer Protection Act, 1986 has been filed. It is alleged by the complainant that loan of Rs. 10,40,000/- was taken from the OP Bank and an agreement dated 24/04/2010 was executed. In the schedule 1 of the said agreement and as per clause 15.6, it was agreed to repay the loan in 105 monthly installment of Rs. 13,538/- alongwith 7.5% interest per annum in terms clause 2.2 (a). The complainant paid 67 installment regularly out of 105 EMIs. It came to knowledge of complainant that the OP had changed the agreement and the number of installments has been increased from 105 to 125 EMIs and also varied the rate of interest from 7.5% to 13%. The complainant has impugned the action of the OP.  It is also  alleged that the OP without knowledge of the complainant determined the balance payment amount of Rs. 6,24,427.08/- payable till 34 EMIs and charged interest @ 11% per annum and the installment of Rs. 21,861/- was fixed. The complainant alleged the said change in agreement to be void and against settled principle of law. The complainant sent legal notices including dated 09/02/2010, 20/02/2010, 20/03/2010 and 19/04/2010. On receiving of no response, final reminder dated 04/06/2010 was sent to OP. The OP at one point of time vide letter dated 28/05/2010 in response to legal notices dated 19/04/2010 conveyed the outstanding dues of  Rs. 76,677.80/- besides alleging about irregular payments by the complainant. Following prayer has been made:-

 

1. “The impugned demand so set up by the OP in recovering the amount of the loan through 125 installments instead of 105 installments, is wholly illegal and without jurisdiction and the said demand is not enforceable and the complainant cannot be held liable to make any payment unless and until the dispute is mutually settled and the various penalties and interest so raised are set aside
2. The OP be directed to pay Rs. 10 Lacs on account of damages so suffered by the complainant on account of mental tension, agony, harassment etc.
3. The OPs are also liable to pay the expenses of the proceedings along with interest.”

 

The OP filed reply/version to the complaint and denied all allegation leveled against it.  It is stated that the loan agreement dated 26/04/2004 was executed and signed by the parties and, therefore, the same does not constitute any deficiency in service on the part of OP. It is stated that the complainant was to pay loan amount in 105 installment as per the agreement but he paid only 67 installment. The complainant was aware of re-pricing of loan agreement which was duly informed. The payment of 67 EMIs @ Rs. 13,538/-, interest rate of 7.5% per annum and clause 2.2 of the loan agreement have been admitted by OP. It is stated that clause 2.2 makes it clear that in case variable rate of interest, the rate of interest will be linked with the applicable “Citi Bank Mortgage Prime Rate” (in short EMPR) which the bank shall determine as applicable rate from time to time. It is also stated that EMPR is either revised Quarterly, Half yearly or annually. In case of variable rate of interest, the customer could expressly contractually opt for any one of them vide schedule 1 to the loan agreement. The complainant opted for the revised CMPR on half yearly basis as per the signed loan agreement. Reference to clause 3.6 has also been made, which stipulates about alternative and rescheduling of MMR. It is also stated that due to such rescheduling, the amount of EMI was kept unchange which consequently increased the number of EMI/period. It is mentioned that complainant did not pay any amount after December, 2009 i.e. after paying only 67 installment out of 105. It is also stated that the reply to legal notices were sent by the OP to the complainant and the OP tried to settled the matter amicably, but, the complainant did not. Denying all the allegations, the prayer to dismiss the complaint has been made.

The complainant filed rejoinder and evidence by way of affidavit reiterating  his contention. The OP also filed its evidence in affidavit disputing the complainants content and supporting its version.

The complainant has also filed an application praying for permission to cross examination the OP witness. The reply to said application was filed by the OP.

 

Both the parties have also  addressed oral arguments.  

 

During the course of arguments both the parties have referred the schedule 1 of the Home Loan Agreement. In schedule 1 in clause no. 2.2 The complainants had option either for fixed rate of interest on the loan or “Citi Bank Mortgage Prime Rate” as here by selected by the borrower. On fixed interest option clauses signature of 1^st named borrower and on the other option “Citi Bank Mortgage Prime Rate” the Co-borrower has signed.

 

It was argued on behalf of complainant that once the fixed rate of interest on loan has been accepted and signed by the first named borrower, therefore, signatures on variable rate acceptance are of no consequence.

 

Per contra, the Ld. Counsel for the OP argued that the interest on fixed rate of 7.5% per annum was charged till it was increased and that both the borrower have the equal status to accept the terms regarding floating rate variable rate and as such the complainants are liable to make the payment of outstanding dues in terms of agreement as demanded.

 

We have considered the material placed before us and the arguments of the parties. The undisputed facts regarding loan amount, execution of the loan agreement, payment of 67 installment out of 105 by the complainant and initially, the rate of interest 7.5% have been relied by both the parties. The only dispute thus survive is regarding variable rate/floating rates of interest from time to time, as a consequence of which the OP revised the period and number of installment from 105 to 125. The last payment of EMI @  Rs. 13,538/- was made in December 2009. The effective date mentioned in schedule 1 is 24/04/2004. The complainant has also placed on record the statement of bank of loan amount issued by OP showing the payment of installments commencing from the month of June,2004 and the last one is December,2009. The said statement also mentioned bounced cheque charges penal interest charged by the OP bank at various places. There is also mention of interest rate as 11.75% in the statement for the month of March,2010.

From the above, it would be clear that the complainant stopped making payment of installment after payment of 67 EMIs and even at the same rate of interest i.e. 7.5% per annum alleging accepted by them. The present complaint was filed on 27/08/2010 i.e. after about 8 months of the last EMI paid in December,2009.

 

Schedule 1 to the loan agreement clearly stipulates “current variable rate of interest on the loan as 7.50% per annum to be charged per month” and “ applicable Citi Bank Mortgage Prime Rate 9.25% per annum to be charged per month. The signature of the borrower at the bottom and the bank official are also there on the said schedule.

In view of above discussion, it is amply clear that the complainant though was liable to continue the payment of EMIs at last up to 105 installments even as per the complainants own contentions, which he did not adhere to even after the receipt of the reply  to his legal notices by the OP. The complainant cannot evade the liability to repay the loan amount taken from the bank in our considered view. The complainant cannot be allowed to enjoy the fruits of his own fault and therefore we hold that the complaint has not merit and accordingly dismissed with no order as to cost.

 

A copy each of this order each be sent to both parties free of cost by post.

Orders be also sent to www.confonet.nic.in.

File be consigned to record room.

Pronounced in open Forum on 05/09/2019.          

 

 

      (ARUN KUMAR ARYA)

      PRESIDENT

                       (NIPUR CHANDNA)                                                                         (H M VYAS)

                             MEMBER                                                                                      MEMBER