District Consumer Disputes Redressal Commission, Hooghly
PETITIONER
VS.
OPPOSITE PARTY
Complaint Case No.CC/118/2018
(Date of Filing:-26.07.2018)
- Sri Abhoy Kumar Bit,
village:-Dighara (Natun Bazar)
P.O. Bally Dewanganj, P.S. Goghat, District:- Hooghly
Versus
- Paschim Banga Gramin Bank,
represented by one of its Principal Officer ,
The Branch Manager, Bally Dewanganj Branch
Village and P.O. Radhaballavpur, P.S. Goghat,
District:- Hooghly, Pin:- 712616.…..opposite party
MR. DEBASISH BANDYOPADHYAY, PRESIDENT
MR. DEBASIS BHATTACHARYA, MEMBER
MRS. BABITA CHOUDHURI, MEMBER
Dtd. 27.12.2023
Final Order/Judgment
DEBASIS BHATTACHARYA:- PRESIDING MEMBER
Brief Facts of the Case:-The instant consumer case filed under section 12 of the Consumer Protection Act 1986 originates from the grievances of the complainant arising out of OP Bank’s alleged indifference and reluctance to offer elaborate clarification regarding the policy of fluctuating rate of interest and fixing of EMI in the matter of a loan of Rs.9,45,000/- taken by the Complainant for purchasing a route bus and refusal to release the LIC Policies taken as collateral security at the time of granting the loan.
The fact of the case is that the complainant reportedly approached to the OP Bank on 15.02.2010 for a loan of Rs.9,45,000/- for purchasing a route bus (stage to stage carrier) and the OP Bank on being satisfied, granted the said loan and intimated the same to the applicant by issuing a sanction advice dtd.25.02.2010.
It is claimed that in the said sanction advice, it is clearly and specifically mentioned that the loan is to be repaid within 66 (sixty six) months in 63 (sixty three) equal monthly installments of Rs.20,941/- each.
However, besides hypothecation of the vehicle, the Complainant in pursuance of the demand of the OP Bank had to mortgage two LIC Policies of his own to the OP Bank as collateral security.
The Complainant claims to have paid installments from time to time on different dates and as on 23.11.2016total repayments the Complainant made was to the extent of Rs.14,19,000/-.
Reportedly in course of repayment of the loan ‘some discrepancies and anomalies’ came to the notice of the Complainant and for clearing of doubts, he made a communication to the OP Bank on 31.07.15 raising certain questions regarding adjustment of principle amount and interest. However the OP bank in spite of receipt of the communication was unresponsive.
On 29.12.16 another application was made to the OP bank requesting the issuance of a no-objection certificate in respect of the loan account but this time also no reply was received from the Bank’s end.
Finding no other alternative, the Complainant sent a legal notice to the OP Bank on 05.05.2017 seeking clarification in the matter of the repayment mode as mentioned in the sanction advice dtd.25.02.2010.
This time the OP bank sent a reply to the Complainant enclosing a copy of sanction advice dtd.25.02.2010 and statement of accounts in respect of the loan account. However in the copy of the sanction advise dtd.25.02.2010 annexed to the reply the amount of EMI was mentioned as Rs.21,800/-
Thus two different amounts of EMI were mentioned, one in the original advice and one in the copy of the same sanction advice.
On 09.08.2017 another legal notice was sent to the OP Bank by the Complainant through his lawyer seeking clarification on the issues related to EMI and deduction of charges etc. In that communication request was also made to settle the dispute amicably. But instead of giving any reply to the said notice the Bank continued sending sms to the Complainant reminding him of the payment of further EMI.
Now, in the circumstances as stated above the Complainant claims that as a borrower he has every right to know the actual basis of rate of interest and incidental charges.
The Complainant asserts that cause of action in the instant case first arose on 05.05.17, thereafter on 19.06.2017 and on 09.08.17 and still continuing.
Considering the attitude of the OP Bank as ‘utterly negligent’ and stance taken by the Bank as ‘unfair’, the Complainant approaches to the Commission for imposing directions upon the OP bank to ‘release’ the LIC policies held by the Bank as collateral security, to issue no-due/claim certificate in the matter of the loan, to pay Rs.1,00,000/-as compensation for causing mental agony and harassment, to pay Rs.1,00,000/- for negligence and deficiency in service, to pay cost of litigation which is not specified and any other relief/reliefs as the Complainant is entitled as per law.
The Complainant along with his complaint petition has annexed copies of 1) the sanction advice of the OP Bankdtd.25.02.2010, 2) the same sanction advice having the same date but different Ref. No., 3) the communication dtd. 31.07.15 made by the Complainant and sent to the OP Bank, 4) the legal notices dtd. 05.05.17 and 09.08.17 sent to the Bank, 5) reply of the Bank dtd.19.06.17 to the legal notice dtd.05.05.17, 6) certain pages of bank statement, 7) loan agreement and 8) repayment schedule signed by both the parties.
In the affidavit in chief, apart from reproducing the content of the complaint petition, the Complainant has claimed that most of the allegations raised by the OP Bank in their written version are false.
Defence case:-
The opposite party contested the case by filing rebuttals in their written version and evidence on affidavit denying therein the allegations leveled against them.
The OP Bank, in their written version apart from denying the allegations, highlights certain issues among which the relevant ones are as under.
- The Complainant being a businessman approached to the OP Bank for commercial cum hypothecation loan.
- The Complainant after having understood and being satisfied with the terms and conditions of the loan executed the Loan Agreement containing terms and conditions of such loan.
- The complainant was irregular in the matter of repayment of the loan.
- In the loan agreement it is mentioned against serial no.1 that ‘a loan to the maximum extent of Rs.9,45,000/- carrying interest @13.5% with monthly rest provided that the interest payable by the Borrower shall be subject to the changes in interest rates made by the Reserve Bank of India from time to time’.
- The loan became overdue for non-payment of EMI as per terms of the loan agreement.
- The opposite party/Bank cannot go beyond the guidelines and rules of RBI.
The OP Bank in their evidence on affidavit specifically mentions the months and the corresponding years ranging from 2010 to 2017, in respect of which the Complainant borrower allegedly failed to pay the EMI in time.
In the brief notes of argument the OP Bank highlights that the Complainant did not avail the said loan for purchasing the vehicle to earn his livelihood by means of self-employment.
Decision with reasons:-Materials on records are perused.
The complainant and the OP Bank are resident/having their office within the district of Hooghly. The claim preferred by the complainant does not exceed the limit of Rs.20,00,000/-. Thus this Commission has both territorial and pecuniary jurisdiction in the matter of proceeding in this case.
The questions whether there was any deficiency of service on the OP Bank’s part and whether the Complainant is entitled to any relief are taken together for discussion in this order as the issues are mutually interrelated.
It transpires that the petitioner actually agitates over increase in the rate of interest and corresponding enhancement of the amount of EMI by the OP Bank.
On meticulous perusal of all the aspects of the case it is apparent that the Complainant while taking the loan consciously opted for adjustable/floating rate of interest by signing the loan agreement.
Clause 1 of the loan agreement reads as follows.
‘The Bank agrees to lend the borrower and the borrower agrees to borrow from the Bank the purpose of and subject to the conditions hereinafter set out (as also in the borrower’s said application) a loan to the maximum extent of Rs.9,45,900/-@13.5% with monthly rest provided that the interest payable by the borrower shall be subject to the changes in interest rates made by the RESERVE BANK OF INDIA from time to time.’
The agreement has been signed by the borrower, the lender and the concerned guarantor.
In serial no.6 of the application for financial assistance, the Complainant, while furnishing brief history of the borrower and stating his experience, declared that he had twelve years experience in transport business and he owned buses and truck.
Nowhere in the Complaint petition or in any other representation submitted in course of the case proceedings it could be substantiated by producing necessary corroborating evidences that he wanted to purchase the said vehicle to earn his livelihood by self-employment. On the other hand the Complaint petition itself starts with the sentence ‘That the Complainant is a businessman’.
In paragraph 7 of the Complaint petition the Complainant alleges that during the course of repayment of the loan some ‘discrepancies/anomalies’ came to the notice of the Complainant. But the Complainant does not furnish the exhaustive details of the nature of ‘discrepancies/anomalies’.
So far as the irregular payments of EMI as highlighted by the OP Bank is concerned, no satisfactory rebuttal could be given by the Complainant.
Now it transpires that the Complainant was irregular in the matter of repayment of the loan. Moreover a bank is not supposed to go beyond the RBI guidelines in this regard and Banking Regulation Act. The Bank cannot increase or decrease the rates of interest as per their whims and fancies with a purpose to augment their profit.
Hon’ble Apex Court, in the case of Central Bank of India vs. Ravindra & Ors., observed as under.
“With effect from 15.02.1984 Section 21A has been inserted in the Act which takes away power of the court to re-open a transaction between a banking company and its debtor on the ground that the rate of interest charged is excessive. The provision has been given an overriding effect over the Usury Loans Act 1918 and any other provincial law in force relating to indebtedness”
Now, in view of the discussion made hereinabove and considering the facts and circumstances of the case, this commission is of the view that there was no deficiency of service on the OP Bank’s part and there was no unfair trade practice. Resultantly, the instant complaint petition appears devoid of any substance and the same deserves dismissal.
Hence, it is
ORDERED
that the complaint case no.118/2018 be and the same stands dismissed with no order as to cost.
Let a plain copy of this order be supplied free of cost to the parties/their Ld. Advocates/Agents on record by hand under proper acknowledgements/sent by ordinary post for information and necessary action.
