Pondicherry

StateCommission

A/14/2015

State Bank of India, RASMECC Branch, Rep by its Manager & 1 other - Complainant(s)

Versus

Nayana Prasad - Opp.Party(s)

R. Sivaraman

09 Jun 2016

ORDER

Heading1
Heading2
 
First Appeal No. A/14/2015
(Arisen out of Order Dated in Case No. CC/15/2014 of District Pondicherry)
 
1. State Bank of India, RASMECC Branch, Rep by its Manager & 1 other
No.208, Anna Salai (Opp to Botanical Garden), Puducherry-1.
Puducherry
...........Appellant(s)
Versus
1. Nayana Prasad
A/5 B/4 Industrial Estate, Thattanchavady, Puducherry-9
Puducherry
...........Respondent(s)
 
BEFORE: 
 HON'BLE MR. JUSTICE K.VENKATARAMAN PRESIDENT
  S. TIROUGNANASSAMBANDANE MEMBER
 
For the Appellant:
For the Respondent:
Dated : 09 Jun 2016
Final Order / Judgement

BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT PUDUCHERRY

 

THURSDAY, the 9th day of June, 2016

 

FIRST APPPEAL No. 14/2015

 

1 State Bank of India,

   RASMECC Branch,

   Rep. by its Manager,

   No.208, Anna Salai,

   Puducherry    

 

2. State Bank of India,

    SME Branch,

    Rep. by its Manager,

    Kamaraj Salai, Puducherry              ………….                                         Appellants

 

                                                                        Vs.

 

Nayana Prasad,

A/5 B/4, Industrial Estate,

Thattanchavady, Puducherry                …………..                                     Respondent

 

 

(On appeal against the order passed in C.C.No.15/2014, dt.29.04.2015 by District Forum, Puducherry)

 

C.C.No.15/2014

 

Nayana Prasad,

A/5 B/4, Industrial Estate,

Thattanchavady, Puducherry                …………..                                    Complainant

 

                                                                              Vs.

 

1 State Bank of India,

   RASMECC Branch,

   Rep. by its Manager,

   No.208, Anna Salai,

   Puducherry    

 

2. State Bank of India,

    SME Branch,

    Rep. by its Manager,

    Kamaraj Salai, Puducherry              ………….                                Opposite Parties

 

 

BEFORE:

 

HON’BLE THIRU JUSTICE K.VENKATARAMAN,

PRESIDENT

 

THIRU.S.TIROUGNANASSAMBANDANE,

MEMBER

 

FOR THE APPELLANT:

 

Thiu R.Sivaraman,

Advocate, Puducherry.

 

FOR THE RESPONDENT:

 

Party-in-Person

 

 

 

O   R    D    E    R

(By Hon'ble Justice President)

 

            This appeal is directed against the order passed by the District Consumer Disputes Redressal Forum, Puducherry in consumer complaint No.15/2014 on 29.04.2015.

            2. The opposite parties therein are the appellants herein and the complainant before the District Forum is the respondent in this appeal.

            3. The parties are referred in the same position in the District Forum for the sake of convenience.

            4. The complainant has filed the complaint before the District Forum claiming a sum of Rs. 41,600/- with interest at 12% p.a. which was debited from her account towards interest with retrospective effect; to pay a sum of Rs.1,00,000/- as compensation and also to pay Rs.50,000/- as compensation for spending time to meet the authorities, to write letters, to make phone calls and for litigation expense.

            5. The case of the complainant before the District Forum, in nutshell, is sated hereunder:

            The complainant has availed a loan for a sum of Rs.15,00,000/- on 31.01.2007 from the opposite parties and agreed to repay the same at Rs.21,315/- p.m. i.e. with interest at 10.25 % p.a.  She was regularly paying the amount to the opposite parties.  However, in June, 2012, a sum of Rs.41,600/- was debited from her account. When she enquired, they informed that the rate of interest has been increased as per the rules and regulations and hence the said debit. She expressed displeasure since she has not been informed. Therefore, she foreclosed the loan immediately. Thus, the complainant has filed the claim before the District Forum claiming the aforesaid amount.

            6. Reply version has been filed by the 1st opposite party which was adopted by the 2nd opposite party. The averments in the reply version, in nutshell, are as follows:

            The interest was originally charged at 10.25% p.a., which was later enhanced as per the rules and regulations. There is no written communication for the enhancement of interest. It has been made very clear to the complaint even at the time taking the loan that the rate of interest is as fixed by the State Bank of India for the loan obtained her.  Due to technical reasons, the same could not be intimated. Therefore, the reply version sought for the dismissal of the complaint.

            7. Before the District Forum, the complainant examined herself as CW1 and marked Exs.C1 to C8. On the side of the opposite parties, none have been examined and no document has been exhibited.

 

            8. Following three points were raised and answered by the District Forum:

1. Whether the complainant is the consumer?

 

2. Whether any deficiency in service attributed by the opposite parties?

 

3. To what relief the complainant is entitled for?

 

            8. As regards point No.1, the District Forum found that the complainant is a consumer as per the Consumer Protection Act, 1986. As far as the second point is considered, the District Forum has held that there is deficiency in rendering service by the opposite parties to the complainant. As far as the point No.3 is concerned, the District Forum found that the opposite parties have to refund a sum of Rs. 32,926/- to the complainant with interest at 12% p.a. from 31.05.2012 till realization and awarded a sum of Rs.5,000/- as costs.

            9. As stated already, the opposite parties have preferred the appeal challenging the said order.

            10. Before us, it has been contended  on behalf of the opposite parties  that though the original rate of interest was 10.25%, the same can be varied or modified by the Bank as per the regulations and the same has been accepted by the complainant. It is also stated that there need be no notice to the complainant about the same when the rules and regulations are such that, which has been accepted by the complainant.

            11. On behalf of the complainant, it has been submitted that the interest rate could be varied only after due notice to the person taken the loan and unilateral decision cannot be taken.  It has been further contended that the rate of interest has been suddenly raised without any notice and a sum of Rs.41,600/- was debited from her account without any authority.

            12. We have carefully considered the averments of the parties contained in the complaint, reply version and documents filed before the District Forum.  The facts which are not disputed are that the complainant availed loan from the opposite parties for a sum of Rs.15,00,000/- on 31.01.2007. It is also not in dispute that both the parties entered into an agreement on 31.01.2007 under Ex.C1. It is also not in dispute that the complainant has to repay the loan at Rs.21,315/- per month with interest at 10.25% till 31.01.2014. However, the question that arises for consideration is whether unilaterally the opposite parties could  revise and enhance the rate of interest without due notice to the complainant.  In this regard, it is stated on behalf of the opposite parties that rate of interest can be increased as per Ex.C1, the agreement executed between the parties. It would be useful to extract the clause 4 of the agreement which deals with Rate of Interest.

4. Rate of Interest:

Fixed Rate of interest:

Interest on the loan will be charged at 10.25% on daily reducing balance at monthly rests. Subject to interest rate reset at the end of every two years on the basis of fixed interest rates prevailing then. SBI may at its discretion stipulate the periodicity of computation of interest. Further, SBI may at its sole discretion alter the rate of interest suitably and prospectively in the event of major volatility in interest rates during the period of the agreement. Thenceforth the rate of interest varied as aforesaid shall be applicable to the Loan.  SBI shall be the sole judge to determine whether such condition exists or not.  If the Borrower is not agreeable to the revised interest rate so fixed, the Borrower shall request SBI, within 15 days of receipt of the notice intimating change in interest rates from SBI, to terminate the loan and the Borrower shall repay the Loan and any other amount due to SBI in full and final settlement in accordance with the provisions of this Agreement relating to prepayment.

 

            13. The said clause clearly states that SBI shall be the sole judge to determine whether such condition exists or not. It also clearly reveal that the rate of interest could be revised by the opposite parties bank. But, however, the above clause reads that if the Borrower is not agreeable to the revised interest rate so fixed, the Borrower shall request SBI, within 15 days of receipt of the notice intimating change in interest rates from SBI, to terminate the loan and the borrower shall repay the loan and any other amount due to SBI in full and final repayment.  This will clearly shows that the person who availed loan is at liberty to request the bank within 15 days of the receipt of notice intimating the change in interest rates, to seek termination of loan.

            14. That apart, it has to be seen in Ex.C5, the reply letter of the opposite parties to the letter of the complainant dated 01.08.2012 under Ex.C4, the bank has replied that the recovery of interest was effected after a delay due to technical  reasons which is deeply regretted. The delay is not one month or two months but running for years. Further, what is the technical reason has not been explained. In our considered view, the opposite parties have not explained the delay properly.

            15. Moreover, it has to be seen that the loan was taken in the year 2007 and the rate of interest was changed from 10.25% to 11.25% by a letter dated 23.05.2012 of the opposite parties under Ex.C7.  In that letter, it has been stated that the change of interest has been effected from 2009.  In our considered view, the opposite parties first of all cannot increase the interest without due notice to the borrower and secondly with retrospective effect from 2009. We are constrained to hold that the opposite parties have increased the rate of interest from 10.25% to 11.25% without any notice and that too retrospectively which is not valid in the eye of law.

            16. It has been contended by the complainant that had the opposite parties intimated about the increase of interest at once, the complainant would have  
pre-closed the loan and would have availed a loan from any other bank for a lesser interest. Because of the non-intimation of  the increase of interest by the opposite parties in time, the complainant had sustained a loss  Therefore, we feel that definitely there is deficiency in service on the part of bank. In fact, after hearing the matter and after posting the matter for orders, we have asked the bank authority to appear before us along with the counsel appearing for the appellant.         We have straightaway put a question to the bank official about as to how the interest could be varied without notice and that too retrospectively from 2009 when the letter itself was addressed to the complainant only on 23.05.2012.  Absolutely, the bank official could not give any convincing reason for the same.

            17. For all the reasons set out, we are of the view that there is deficiency in service provided to the complainant.

            18. Thus, we are of the view that the District Forum has rightly found that the opposite parties have to pay Rs. 32,926/- to the complainant with interest at 12% p.a. from 31.05.2012 till realization and also a sum of Rs.5,000/- as costs. Thus, the  order of the District Forum made in C.C.15/2014, dated 29.04.2015 is hereby confirmed and the appeal stands dismissed   The opposite parties are directed to pay the amount ordered by the District Forum with interest at 12% p.a. from 31.05.2012 till realization and the cost of Rs.5,000/- and a further cost of Rs.10,000/- in this appeal within two weeks from the date of receipt of this order.

Dated this the 9th day of June, 2016

 

(Justice. K.VENKATARAMAN)

                                                                                           PRESIDENT

 

 

 

 

                  (S.TIROUGNANASSAMBANDANE

MEMBER

 
 
[HON'BLE MR. JUSTICE K.VENKATARAMAN]
PRESIDENT
 
[ S. TIROUGNANASSAMBANDANE]
MEMBER

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