Order No.  13  dt.  16/09/2016

The fact of the case in brief is that the o.p.s are charging more interest on education loan of Rs. 3,50,000/- granted to the complainant for higher studies and charge more interest than that was offered at the time of sanction of the said loan.

The complainant further stated that the o.p. sanctioned Rs. 3,50,000/- for pursuing higher studies for his son. The amount was disbursed in phase by phase. As per terms of the loan the same would carry interest @10.5% p.a. and if the pre-EMI is paid before the starting of EMI 1% should be reduced. On the basis of the said fact the father of the complainant deposited the sum of Rs.1,00,000/- to cover the entire pre-EMI interest. The complainant on 21/11/2013 was informed by the branch manager that the debit balance amount of Rs. 3,85,482/- standing in the account of the complainant’s son which created annoyance to the complainant. The complainant thereafter visited the branch and the EMI amounting Rs. 7,245/- was fixed with the effect from the August, 2013. The complainant raised his voice and lodged a written to the branch manager whereby he informed that the interest on education loan was being charged by the bank at a higher rate than that of other banks. Whenever there was argument between the complainant and the branch manager, the branch manager threatened the complainant that the behaviour of the complainant would be informed to his employer to which the complainant retreated.

The complainant stated that the claim made by the bank regarding the imposition of higher rate of interest upon the complainant’s son towards the education loan was devoid of normal practice of getting interest on education loan by other banks as such there was unfair trade practice on behalf of the bank. Accordingly the complainant prayed for the interest @12% p.a. and permission was sought for liquidating the entire amount towards the balance amount of the education loan and also prayed for compensation and litigation cost.

The o.p. contested the case by filing a w/v whereby all the material allegation of the complainant were denied. It was stated that the o.p. has not practiced any fraud or any unfair trade practice. There was no illegality in demanding the due amount from the complainant on account of loan for education purpose to his son. The o.p. asked the o.p. for repayment of the loan had fallen due with effect from August, 2013 @Rs. 7,245/- per month. The rate of interest charged @10.50% during the course of study thereafter compounding on monthly basis. Concession of 1% on interest shall be allowed if the interest is paid on monthly basis during the course of study. The son of the complainant after completion of study did not inform the o.p. and also the date of getting employment after completion of the course accordingly the rate of interest varies during the period of study and after the completion of the course particularly after getting the employment passing out of the said course. The complainant deposited Rs. 1,00,000/- as interest of the loan and accordingly it was credited to the interest account not to the loan account. But the same was credited in the loan account and thereby the complainant got the benefit of reduced interest on the said amount resulting in the benefit of lesser interest which is also reflected in the calculation of the EMI. It was stated that the rate of interest was subject to change with the change of BPLR had already been stipulated in the sanctioned letter dt. 04/08/2009.

In view of the facts and circumstances as stated above the o.p. has prayed for dismissal of the case.

On the basis of the pleadings of the respective parties the following points are to be decided  :-

1. Had the complainant’s son took loan from the o.p.
2. Was the interest charged by the o.p. excess than that of the interest mentioned in the loan sanction letter.
3. Whether the complainant failed to pay the loan amount as agreed by him.
4. Is the complainant entitled to get the relief as prayed for.  

Decisions with reasons

The Ld. Lawyer for the complainant argued that the loan sanctioned by the bank for prosecuting study for the son of the complainant and accordingly loan was sanctioned to tune of Rs. 3,50,000/- and the said amount was paid phase by phase. The complainant paid the EMI as per terms of the sanctioned letter and whenever the complainant deposited Rs. 1,00,000/- the said amount was credited into the account of interest  towards loan and moreover the interest on loan for education purpose was charged higher than that of the rate of interest prevailing in issuing of the loan for the purpose of education by other banks, accordingly the Ld. Lawyer emphasized that the bank committed unfair trade practice for which the complainant prayed for the relief including the reduction of the rate of interest and the adjustment of the amount deposited by the complainant.

The Ld. Lawyer for the o.p. argued that the rare of interest was imposed on the basis of the sanctioned letter and no higher rate interest was charged upon the complainant. Apart from the said fact the complainant failed to inform the bank as regards the completion of the course by the son of the complainant as well as the information regarding the joining of the son of the complainant in his employment after completion of the course. For delay in payment of the EMI the rate of interest is varied and thereby there was no unfair trade practice or deficiency in service on the part of the bank.

Considering the submission of the respective parties it is an admitted fact that the son of the complainant took the loan for the purpose of the education. It is also found from the materials on record that at the time of obtaining loan by the son of the complainant the loan sanctioning letter clearly spelt out the rate of interest to be charged for availing of the said loan. Thereby the complainant was fully aware as to what will be the interest, EMI which includes the loan amount as well as the interest and on regular payment of EMI the complainant could get the benefit of the 1% lesser payment of interest. The complainant paid a sum of Rs. 1,00,000/- which was adjusted with the loan amount as well as the interest resulting in the lesser quantum of interest had to be paid by the complainant.

On perusal of the documents as well as the evidence adduced by both the parties it appears that o.p. did not charge any excessive interest upon the complainant and so far as the variation of interest from one bank to another bank it is policy of the act of an individual bank which can not be measured with the same yardstick.

Having regard to the facts and circumstance we do not hold there was any deficiency in service or unfair trade practice was adopted by the o.p. accordingly the complainant will not be entitled to get any relief as prayed for. Hence it is ordered,     

that the CC/342/2014 is dismissed on contest without cost.