MRS. NEENA SANDHU, MEMBER

1.         This is an appeal filed by the OP/appellant against the order, dated 10.5.2010 passed  by the  District Consumer Disputes Redressal Forum-I, UT, Chandigarh (hereinafter to be called as the District Forum only) in complaint case No. 1361 of 2009, vide which, it allowed the complaint and  directed OP No.1 to recast/overhaul the loan account of the complainant strictly in accordance with the originally agreed rate of interest @ 10.28% p.a. applicable for the initial 11 years which was clearly stated, in the loan sanction letter  & also to maintain the period of repayment of the loan amount as 132 months with EMI @ Rs.5,608/- p.m. as per the original agreement without making any alteration in any of the terms and conditions of the originally sanctioned loan amount. It was further directed to pay Rs.50,000/- as compensation and Rs.5,000/- as costs of litigation, within 30 days, failing which to pay the amount alongwith interest @ 18% p.a. w.e.f the date of filing of the present complaint i.e. 29.9.2009 till the date of actual realization by the complainant, besides paying the litigation costs of Rs.5,000/-.

2.         Briefly stated, the facts of the case are, that the complainant took a loan of Rs.3,35,000/- from OP No.1 under Loan Agreement dated 1.2.2005 against the security of house in favour of the lender by creating an equitable mortgage by deposit of title deed of the said property, for the purpose of business expansion. As per clause (i) read with item No.8 of the schedule of the said agreement, the rate of interest was to be charged @ 10.28% p.a. for the period of 11 years, from the date of disbursement of loan and total number of installments to be paid by the complainant was 132 @ Rs.5,608/- per month per installment. It was stated that OP No.1 issued cheque No.71954 for Rs.3,28,625/- against the sanctioned loan amount of Rs.3,35,000/- under loan account No. HCHE-0000094 and in this way an amount of Rs.6375/- was paid less towards the principal loan amount, at the time of disbursing the same. It was further stated that after the expiry of first year, OP No.1 of its own and in an arbitrary manner increased the rate of interest to 15.25% p.a. against the agreed rate of interest @ 10.28% p.a. and  consequently, also increased the period of months for the repayment of loan amount and, installments to 239, without any reason. It was further stated that in September, 2007, the complainant received a letter dated 18.5.2007 from OP No.1 informing him that he should send 36 post dated cheques starting from 7.2.2008 for EMI amount of Rs.5,735/- at the address of the said Company. He was also informed about increase in the period of net term (months) from 239 to 262 against the original term of 132 months without any reason. It was further stated that the complainant was informed vide letter dated 14.6.2007 that the rate of interest was increased to 20.50% instead of 10.28% p.a. which was agreed to be paid for 11 years. The complainant approached the Branch Manager of OP No.3, but despite repeated visits, nothing was done by him. The complainant sent a legal notice dated 18.5.2009 to the OP, but to no avail.  It was further stated that the above said act of the OP, amounted to deficiency, in service, and it also indulged into unfair trade practice. Hence, the complaint was filed.

3.         Reply was filed by the OP wherein it was stated that according to the loan agreement signed between the parties, the agreed rate of interest was to be charged at 16% p.a. It was further stated that out of the total amount sanctioned processing fee and insurance premium had been deducted.  It was further stated that the complainant was trying to avoid the repayment of outstanding loan amount. It was further stated that the OP was fully entitled to recover the amount with such interest, as was agreed to between the parties. It was denied that increase in interest, EMIs and tenure of the said loan, was without any reason. It was further stated that the complainant was well aware of the terms and conditions of the agreement. It was further stated that, as a special gesture, he was offered to make pre-payment upto 50% of the principal outstanding before 31.7.2007, if he wished, but he did not avail of the same. It was further stated that as per the common practice, the rate of interest, in such like cases, was to be charged, as per the terms already agreed upon, between the parties. It was further stated that the interest was liable to be revised, as per the guidelines of the Regulatory Authority i.e. RBI. All other allegations, levelled by the complainant, in the complaint, were denied. It was further stated that there was no deficiency, in service, on the part of the OP nor it indulged into unfair trade practice.  

4.       The parties led evidence, in support of their case.

5.       The learned District Forum allowed the complaint, in the manner, referred to, in the opening para of the order.  

6.          Aggrieved against the order, passed by the learned District Forum, the appellant/OP filed the instant appeal. 

7.       We have heard Sh.Ravi Kumar, Advocate for the appellant/OP, Sh.C.L.Katyal, Advocate, proxy for Sh.S.M.Wadhera, Advocate for the respondent/complainant, and, have perused the record, carefully.

8.       The instant appeal was filed after the delay of 99 days. The learned Counsel for the appellant/OP argued that this delay of 99 days in filing the appeal was not intentional but due to merger and acquisition on account of financial restructuring and overhauling. It was further submitted that due to this reason, the Finance Manager (Mutual Fund) of the Company could not quickly supply the papers, required for filing the appeal, which were sent to the Head Office of the appellant Company at Delhi.

9.       The learned Counsel for the respondent/complainant, argued that the plea taken by the appellant in para No.2, of the application for condonation of delay appears to be incorrect and untrue, because firstly there is no provision in the Companies Act, which provides for merger and acquisition on account of financial restructuring and overhauling. Secondly, Finance Manager (Mutual Fund) had nothing to do with the case of the respondent/complainant, because the complainant had taken loan from Chandigarh and, as such, Incharge/Manager of the loan Branch/Section of the Company at Chandigarh could be said to be the competent person to deal with the case file, and not the Finance Manager (Mutual Fund).

10.     There is nothing, on the record, when the alleged restructuring took place. The OP is a big company, having a number of officers, and officials working under it. Had the Officers/officials of the OP, acted in a bonafide manner, the delay would not have occurred. There was complete inaction and lack of bonafides, on the part of the OP, in filing the appeal, in time. There is, thus, no sufficient cause, for condonation of delay. The application, thus, deserves dismissal. It is accordingly dismissed.

11.     In the appeal, the learned Counsel for the appellant/OP, argued that the learned District Forum wrongly allowed the complaint, because the OP had increased the EMIs ; amount of repayment, and charged the processing fee from the complainant, as per the terms and conditions of the loan agreement, which was duly signed by the complainant. It was further submitted that the complainant took a loan of Rs.3,35,000/- at fixed rate of interest and, accordingly signed the agreement. When the complainant came to know of the other option, he requested the OP to grant loan on floating rate of interest and the OP had granted the loan on floating rate of interest on the request of the complainant only. It was further submitted that as the complainant had preferred the loan on floating rate of interest, therefore, the OP rightly charged interest as per the fluctuation of rate of interest, in the market.

11.     The learned Counsel for the respondent/complainant, submitted that the complainant never opted for the floating rate of interest and had taken the loan at fixed rate of interest, as per the loan agreement Annexure C-1. It was further submitted that, in the agreement, it was clearly mentioned that the rate of interest for the initial period will be 16% p.a. with monthly rests. The total EMIs were stated to be 132 and the rate of aforesaid interest was for 11 years from the date of disbursement. However, while sanctioning the loan on 30.7.2005 vide (Annexure C-2), the OP agreed to give the loan @ 10.28% instead of @ 16% p.a. and thereafter the OP charged the EMIs accordingly. After the expiry of first year, the OP of its own and, in an arbitrary manner, increased the rate of interest, and the period of net tenure/months from 132 to 262. It was further submitted that the OP wrongly charged the processing fee as in Annexure C-1, it was clearly mentioned that processing fee was zero.

12.     After giving our thoughtful consideration, to the rival contentions, advanced by the Counsel for the parties, we are of the considered opinion that the appeal is liable to be dismissed. The complainant had taken the loan at a fixed rate of interest i.e. @10.28% p.a. and not on a floating rate, as contended by the OP. It is evident, from the schedule, attached with the agreement (Annexure C-1) that the complainant had taken the loan from the OP in the sum of Rs.3,35,000/- with interest @ 16% for 11 years with total number of EMIs 132, and the amount for each EMI  was Rs.5,608/-. However, at the time of sanction of the loan, the OP agreed to give the loan with interest @ 10.28% p.a., and the same is evident from sanction letter dated 30.7.2005 (Annexure C-2). Therefore, this plea of the OP that the complainant had taken the loan, on a floating rate of interest, is baseless. It is proved, on record, that the OPs have unilaterally increased the rate of interest from @ 10.28% p.a. to @ 20.50 % p.a on the loan amount. They have also arbitrarily increased the EMIs from 132 to 262 by overriding the terms and conditions of the loan agreement, and also by not following the guidelines of the Reserve Bank of India. Not only this, the OPs have also failed to prove, as how, and why, they have charged the processing fee of Rs.6,375/-, as in the schedule, attached with the agreement (Annexure C-1), it was mentioned that the processing fee was zero. The learned District Forum rightly concluded that there was deficiency, in service, on the part of OPs, and they indulged into unfair trade practice.  Hence, no interference is called for. 

13.     In view of the above discussion, the appeal filed by the appellant is dismissed with costs of Rs.2500/-, being barred by time as also on merits.

14.          Copies of this order be sent to the parties, free of charge.

Pronounced.                                                                        

4^th May, 2011.