Punjab

StateCommission

A/1205/2015

Kotak Mahindra Bank - Complainant(s)

Versus

Rajesh Kumar Bansal - Opp.Party(s)

D.K.Singal

14 Mar 2017

ORDER

                                                               FIRST ADDITIONAL BENCH

 

STATE  CONSUMER  DISPUTES  REDRESSAL COMMISSION,   PUNJAB

          SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.

                             First Appeal No.1205 of 2015

 

                                                          Date of Institution: 20.11.2015

                                                          Order Reserved on :10.03.2017

                                                          Date of Decision:  14.03.2017

 

Kotak Mahindra Bank Limited, having its registered office at 36-38-A, Nariman Bhavan, 227, Nariman Point, Mumbai 400021 presently at 27BKC C27 G Block Bandra Kurla Complex Bandra (E) Mumbai 400051 through its Authorized Signatory/Deputy Manager Sh. Shiv Kant Tyagi.

 

                                                             Appellant/Opposite party no.4

                             Versus

 

1.      Rajesh Kumar Gupta son of Suraj Bhan Gupta, r/o B-28,         Tanda Road, Jalandhar.

                                                          Respondent no.1/Complainant

 

2.      Citi Financial Consumer Finance India Limited,  (Formerly       known as Associates India Financial Services Limited) having        its registered office at 3, Local Shopping Complex, Pushp Vihar, New Delhi 110062 through its Managing Director.

3.      Citi Financial Consumer Finance India Limited c/o Mehan and          Mehan Associates, 7-B, Opposite Bocki Industry, Madan Floor Mill Chowk, Near Ajit Press, Jalandhar City through its    Manager.

4.      L&T Housing Finance Limited, having its registered office at   Unit No. 505 and 506, DLF Tower B, District Centre Jasola,      New Delhi 110025.

 

                             Respondents no.2 to 4/Opposite parties no.1 to 3

 

                                                              Respondents/Opposite parties

 

First Appeal against order dated 12.10.2015 passed by the District Consumer Disputes Redressal Forum,  Jalandhar.

Quorum:-

          Shri J. S. Klar, Presiding Judicial Member.

            Smt.Surinder Pal Kaur, Member

Present:-

          For appellant                         : Sh.D.K. Singal , Advocate

          For respondent no.1             : Sh. Gaurav Jindal, Advocate

          For respondent no.2-4                   : Ex-parte.

          . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

 

J.S KLAR, PRESIDING JUDICIAL MEMBER :-

         

          The appellant of this appeal challenges the order of District Forum Jalandhar dated 12.10.2015 by filing this appeal. Respondent no.1 of this appeal is the complainant in the original complaint before District Forum and appellant of this appeal is OP no.4 and respondents no.2 to 4 of this appeal are opposite parties no.1 to 3 in the original complaint before District Forum and they be referred as such hereinafter for the sake of convenience.

2.      The complainant has filed the complaint U/s 12 of The Consumer Protection Act, 1986 (in short, "the Act") against the OPs on the averments that he availed home loan against property amounting to Rs.25,06,897/- from OPs no.1 and 2 under loan account no. 3549849 in the year 2004 and the same was repayable in 144 equal monthly installments of Rs. 34,366/- commencing from 05.07.2004 to 05.06.2016. OPs no.1 and 2 had assured the complainant that rate of interest applicable over the above loan was 13% per annum, which was fixed on reducing balance with the  stipulation, that in case first twelve installment are paid on 1st presentation of cheque. The rate of interest would be reducible from 13% to 12% per annum. Letter to this effect was issued by OPs no.1 and 2 through their Manager Mr. Parvinder Singh Oberio on 29.06.2004. As per assurance and guarantee given by OPs no.1 and 2 through their Manager in writing, complainant agreed to obtain home loan against property from OPs no.1 and 2 and same was disbursed under his loan account. The complainant made payments of all installments. After disbursement of the above said loan, OPs no.1 and 2 never supplied any agreement or statement of account  to the complainant despite his repeated requests and reminders in this regard. On 27.09.2013, complainant gave written request to OPs no.1 and 2 to provide him copy of statement along with foreclosure amount, as he wanted to repay the entire outstanding dues in his loan account, but OPs no.1 and 2 lingered over the matter on one excuse or the other and intimated the complainant verbally that total outstanding amount on 27.09.2013 was around Rs.18 lac and last EMI was payable by the end of year 2024. As per payment schedule, provided by OPs no.1 and 2, last EMI was payable on 5 June 2016 and complainant paid installments in time. The agreed rate of interest was reduced from 13% to 12% after payment of 12 EMIs on its due date, then the last EMI was to be payable on 05.05.2015, as per information supplied by OPs no.1 and 2. They have increased the rate of interest instead of decreasing it without any intimation or knowledge of the complainant, which was against agreement between the parties. The complainant was under the belief that his loan would be repaid by May 2015 and continued paying all the EMIs in time. OPs no.1 and 2 intentionally and malafide, without intimating the complainant, increased the rate of interest in utter violation of the agreement. OPs no.1 and 2 gave false assurance and information intentionally to cheat the complainant despite the assurance that the rate of interest fixed and shall be reduced from 13% to 12% on equal monthly installments, which is an act of an unfair trade practice on their part. The complainant has, thus, filed complaint directing the OPs to reschedule his loan account, as per terms and conditions of letter dated 29.06.2004 issued by OPs. The complainant also prayed for compensation of Rs.1 lac for mental harassment and Rs.20,000/- as cost of litigation.

3.      Upon notice, OPs appeared and filed written reply and contested the complaint of the complainant vehemently. OPs took plea that rate of interest of 13% floating per annum variable annually replaceable at the sole discretion of the OPs was agreed by the complainant at the time of execution of loan agreement. It was too vary   keeping in view the prevailing rate of interest from time to time and consequently the amount of monthly installment was to be paid by the complainant, which remained the same and tenure of monthly installment was increased from 144 to 209 monthly installments due to increase in rate of interest, as per prevailing rate of interest from time to time. OPs also challenged the jurisdiction of the Forum to try the complaint. OPs also averred that complaint is barred by time. The OPs denied the other averments of the complainant by filing prolix written reply.  

4.      During continuance of complaint, it was revealed that loan in question was assigned to L&T Housing Finance Limited /OP no.3 and thereafter it was again assigned to M/s Kotak Mahindra/OP no.4 and as such they were also impleaded as parties in the complaint.  No separate written reply has been filed by OP no.4 and their counsel Sh. Vikas Gupta made a statement that written reply filed by OPs no.1 and 2 be deemed, as their written reply. He also suffered statement on 12.05.2015 that evidence already tendered by OP no.1 and 2 be read as evidence on behalf of OP no.4.

5.      The complainant tendered in evidence his affidavit Ex.C-A and additional affidavit of complainant Ex.C-B along with copies of documents Ex.C-1 to Ex.C-9. As against it; OPs tendered in evidence affidavit of Sh. Sahilesh Kumar Sinha Authorized Representative Citi Financial Consumer Finance India Ltd Ex.OP1&2/A along with copies of documents Ex.OP-1/1 to Ex.OP-1/9 and copy of documents Ex.OP3/1. On conclusion of evidence and arguments, the District Forum Jalandhar accepted the complaint of the complainant by virtue of order dated 12.10.2015. Dissatisfied with the order of the District Forum Jalandhar dated 12.10.2015, opposite party no.4 now appellant, carried this appeal against the same.

6.      We have heard learned counsel for the parties and have also examined the record of the case.

7.      The respective pleadings of both the parties have also been consideration by us. Affidavit of Rajesh Kumar Gupta Ex.C-1 is on the record. He testified the fact of availing home loan/loan against property amounting to Rs.25,06,897/-  from OPs no.1 and 2 under loan account no. 3549849, which started from 05.07.2004 to 05.06.2016. He further deposed in his affidavit that at the time of disbursement of the above said loan, OPs no.1 and 2 assured him that rate of interest applicable over the above loan was 13%  per annum, which was fixed on reducing balance with the stipulation that in case first twelve installment were paid on first presentation of cheque, the rate of interest would be reduced from 13% to 12% per annum. A letter to this effect was issued by OPs no.1 and 2  through their Manager Parvinder Singh  on 29.06.2004 to complainant. The complainant availed the said loan on the above assurance and guarantee by OPs no.1 and 2. The complainant gave written request on 27.09.2013 to OPs no.1 and 2 to provide him copy of statement of account along with foreclosure amount, since he wanted to repay the entire outstanding dues in his loan account. OPs no.1 and 2 lingered the matter on one pretext or the other by orally intimating  him that total outstanding as on 27.09.2013 was around Rs.18 lac and the last EMI was payable by the end of year 2024. Last EMI was payable on 5.06.2016. The complainant had paid installments in time and agreed rate of interest was reduced from 13% to 12% after payment of 12 equal monthly installments on its due date, then the last EMI was to be payable on 05.05.2015. But from the information supplied by OPs no.1 and 2, instead of reducing the rate of interest, they increased it without any intimation and knowledge of this witness. Supplementary affidavit of complainant is Ex.C-B on the record. He stated that as per Article 1 of the agreement, rate of interest means the rate at which the lender has agreed to lend to the borrower, which was mentioned in the schedule. Ex.C-1 is letter sent by Parvinder Singh on behalf of OPs to complainant on 30.09.2014 stating that they have sanctioned loan of Rs.25 lac to the complainant at rate of interest from 13% to 12% after repayment of twelve installments in first presentation of cheques. This information was given by the OPs to complainant, vide letter Ex.C-1 dated 30.09.2014. Ex.C-2 is account repayment statement dated 31.03.2006. The balance amount has been shown in it of the complainant. Ex.C-3 is letter of complainant for demanding statement of account. Ex.C-4 is Legal notice dated 06.11.2013 sent by complainant to OPs regarding unfair trade practice or enhancing rate of interest. Postal receipts are Ex.C-5 and Ex.C-6 on the record. Ex.C-7 is statement of account from 05.07.2004 to 23.09.2014. The amount of installment was fixed as recorded in the statement. Ex.C-8 is courier receipt.

8.      OPs tendered in evidence affidavit of Sh. Sheilesh Kumar Sinha Authorized Representative Citi Financial Consumer Affairs Finance India Limited Ex.OP1&2/A. This witness testified in his statement that loan was disbursed to the complainant  with 144 monthly installments of Rs.34,366/- each. The loan was disbursed to the complainant on 13% floating per annum variable annually replaceable at the sole discretion of the OPs. The rate of interest increased from to time and monthly installment to be paid by the complainant was kept intact and tenure of monthly installment was increased from 144 to 209 monthly installments due to increase in rate of interest. This witness totally denied this fact that rate of interest was refundable to 12% on first presentation of cheque. The OPs never committed that any rate of interest would be increased as same was dependent on the prevailing rates. He further deposed that loan has been assigned to L&T Housing Limited and same was repurchased by OP no.4 now appellant. He further deposed in his affidavit that complainant availed the loan of Rs.25 lac and loan agreement was executed between the parties. As per terms and conditions of the loan agreement on the record, the OPs are changing the rate of interest. He further stated that rate of interest was reducible from 13% to 12% on presentation of first 12 installments, as per letter dated 29.06.2014 issued by OPs. We have carefully examined the terms and conditions of the agreement of loan Ex.OP-1/2 on the record.

9.      We have carefully examined the terms and conditions of the agreement Ex.OP-1/2 on the record. Article 1(e) defines rate of interest, which means the rate at which the lender has agreed to lend to the borrower, which is mentioned in the Schedule, and which may be fixed rate or floating rate, as the case may be. Article 2.2(a) deals with interest and taxes. Article 2.2 (b) of the agreement deals with that the lender shall be entitled to revive the rate of interest at any time and from time to time, as per its policy, market conditions and/or applicable laws and regulations, if any, during the tenor of the loan at its sole discretion. The lender will endeavor to inform the borrower about the variation in the interest in the due course.  The onus stood shifted upon OPs to prove that they intimated the complainant regarding variations in the rate of interest by issuing him any such notice. There is no such notice issued by OPs to complainant in this regard in variations in rate of interest separately. Ex.OP-1/5 is letter addressed to complainant by OPs regarding rate of interest and mortgage loan. Ex.OP-1/6 is another letter addressed to complainant from OPs that rates have been on the rise over the past few months and many financial institutions have increased their lending rates. In line with the overall increase in interest rates, mortgage rate is being revised upwards up to 0.85% per annum. Ex.OP-1/7 is email dated 1.06.2007 sent to complainant by OPs regarding variations in rate of interest from 15.14% p.a to 16.09% p.a. Another email regarding variations in rate of interest from 16.84% p.a to 17.59% p.a. Similarly, there was another email sent to complainant from OPs, vide Ex.OP-1/9 regarding variations in rate of interest from 16.09% p.a to 16.84% p.a.  Ex.OW-3/1 is repurchase letter on the record. Reliance of counsel for the complainant is on letter Ex.C-1 that after repayment of 12 installments in first presentation of cheques, rate of interest would be reduced from 13% to 12%. In this letter, first EMI was due w.e.f. 05.07.2004. Ex.C-2 is statement of account issued by OPs no.1 and 2, wherein booking date was mentioned as 16.04.2004 i.e. before the date of letter dated 29.06.2004 Ex.C-1. Ex.C-7 is statement of account from 05.07.2004 to 23.09.2014 issued by OPs no.1 and 2 and from perusal of the same, it is evident that installment amount was Rs.34,366/- and tenure of monthly EMI was 144. In this statement, booking date was mentioned as 30.05.2004, which was also mentioned in statement of account Ex.C-2. From perusal of this statement of account, it is evident that in the title of this statement of account, installment paid were mentioned as 121 and installment overdue as zero and total outstanding amount as Rs.7,90,418/-. No doubt, as per loan agreement, the OPs were entitled to increase the rate of interest from time to time, but vide letter dated 29.06.2004 Ex.C-1, the OPs no.1 and 2 agreed and undertook to reduce the rate of interest at 12% after payment of 12 regular installments on presentation of cheque. It was not case of OPs that the first 12 installments were not paid by the complainant in time or any cheque during the first 12 installments issued by the complainant was ever dishonoured. As per undertaking contained in letter Ex.C-1, OPs no.1 and 2 are bound to reduce the rate of interest from 13% to 12% after repayment of first 12 installments without any default. The Apex Court has also held in Brojo Nath Ganguly and another versus Tarun Kanti Sengupta and another, reported in 1986(3) SCC 156 that unconscionable terms in contract of employment are not binding. Our own High Court has also held in Sant Singh and others versus State of Haryana and others, reported in CWP no. 19096 of 2011 decided on 20.12.2013 that courts should not enforce unfair and unreasonable contract entered into between the parties, who are not equal in bargaining power.  

10.    The submission of counsel for OP no.4 now appellant is that complaint is time barred. The complainant availed the services of OPs for loan transaction. The submission of counsel for OP no.4 now appellant is that from letter Ex.C-1, this fact came to his knowledge on 29.06.2004 and complaint is barred by time. On the other hand, submission of counsel for complainant now respondent no.1 in this appeal is that it is a continuing cause of action, because during continuance of loan, the practice of unfair trade practice by OPs gives continuous cause of action. We are of this view that the cause of action remains continued in this case, because it is not suit of recovery, like civil suit. It is based on specified amount advanced by the lender to borrower, wherein cause of action is continuing till repayment of the loan. We do not accept this submission of counsel for OP no.4 now appellant that complaint is barred by time.

11.    As a result of our above discussion, we find no merit in the appeal while relying upon the written assurance given by OPs no.1 and 2 to the complainant and resultantly the appeal is hereby dismissed by affirming the order of District Forum Jalandhar dated 12.10.2015 under challenge in this appeal.

12.    The appellants had deposited an amount of Rs.5000/- with this Commission at the time of filing the appeal. This amount with interest, if any, accrued thereon, be remitted by the registry to complainant of this appeal by way of crossed cheque/demand draft after the expiry of 45 days. Remaining amount, if any, shall be paid to complainant by the appellants of this appeal, as per order of District Forum within 45 days from receipt of certified copy of this order.

13.    Arguments in this appeal were heard on 10.03.2017 and the order was reserved. Certified copies of the order be communicated to the parties as per rules.

14.    The appeal could not be decided within the statutory period due to heavy pendency of court cases.

                                                                          (J. S. KLAR)

                                                          PRESIDING JUDICIAL MEMBER

                    

 

                                                                (SURINDER PAL KAUR )

                                                                               MEMBER

 

                                                                                                         

March 14,  2017                                                                  

(ravi)