This appeal is directed against the Final Order dated 23.03.2022 in CC No. 19 of 2019 delivered by Ld. DCDRC, Darjeeling.
The instant consumer case was initiated on the part of Respondent SMT Lakpa Doma Bhutia against S.B.I Kalimpong Branch. The Consumer case was decided in favour of the Complainant and the said Judgement is challenged in this appeal.
The Complainant case in short is that in June 2004 petitioner had taken a House Building Loan amounting to Rs.300000/- 1.e. Three Lakhs at the Fixed Rate of Interest with 8.25 percent per annum. The EMI was fixed at Rs. 2910/- for 180 months.
That the petitioner has completely paid all the EMIS for 180 months which completed on June 2019 without being defaulter for even a single month. But the petitioner received one SMS on 8/07/2019 mentioning that her Home Loan is irregular with Rs. 103359.09 and is due against her home loan interest because the rate of interest was converted to Floating Rate of Interest during 2009-10 which was never intimated to her by the Bank. The respondent has been regularly deducting the EMIS i.e. Rs. 3000/- (Three thousand) from her Salary Account No.11284050705 maintained with the State Bank of India, Kalimpong Branch.
The EMI was fixed at Rs. 2910/- per month for 180 months. However, from October 2010 the Bank started to deduct Rs. 3000/- (Rupees three thousand) from above account per month till the date. When the interest is "Fixed Rate of Interest" then how could it was increased in the midway without even intimating the petitioner. It is apparent that the OP did not give any opportunity of hearing and acted illegally and dehors to the Letter of Arrangement dated 19.06.2004. As per the Arrangement Letter, the total EMI was fixed for 180 (One hundred eighty) months which has already been completed on June 2019, but the State Bank of India is deducting continuously the EMI amounting to Rs. 3000/- from the account of the petitioner. It is absolutely fraud on the part of the Bank. The Bank is not honouring the Memorandum of Term Loan Agreement for Housing Loan granted to public dated 19.06.2004 between the petitioner and the Bank.
The petitioner met with the Chief Manager, SBI, Kalimpong Branch and Manager (Loan Section) several times during second week of July and requested to waive the extra interest charged and for closing of loan account. However, they refused and insisted to pay all dues either in instalment or at a time besides which there is no any other solution. After that petitioner filed a complaint at the Office of the Assistant Director, Consumer Affairs & Fair Business Practices, Darjeeling Regional Office. The notice of the Deputy Assistant Director-in-Charge follows thereof. Two mediations were called on 21/08/2019 and 5/09/2019. The Bank does not appear on first date of Mediation, however they appeared on second Mediation and explained that the petitioner has to pay all the due interest which is calculated in Floating Rate of Interest at once or in forty-one (41) instalments.
So, the complainant by filing this consumer case prayed for closing the home loan account, refund of all excess amount, damages and compensation Rs. 5,00,000/- and cost of litigation.
The SBI Kalimpong branch has contested the case by filing WV and contended that the complainant took house building loan as Rs.3,00,000/- from to bank on 2004 @nterest & 25%. Pa and EMI were fixed as 2910/- for 180 months as per clause 4 of the arrangement letter dated 19.06.2004 and in the Memorandum of agreement signed by the complainant and co-borrower where the right of the bank was stipulated to the effect that the bank at its own discretion enhanced rate of interest over to outstanding loan amount and equated the monthly installments many charge/increases.
The further case is that the borrower / complainant has completely paid all the EMIs for 180 Mouths which completed on June, 2019 without being defaulter for even completed on a single mouth and that her loan is irregular with Rs. 1,03,359/- remained due.
The Bank (OP) further contented that as per RBI Guidelines, the rate of interest of home loan was converted to Heating rate of interest since November, 2010 and for that reason from 7-11-2010 the EMI Rs. 3000/- instead of Rs. 2910/- was deducted which was known to the complainant and this complaint was liable to be dismissed. On the basis of prayer of the complainant Ld. Forum on 3.12.2019 passed an interim order by which SBI. Kalimpong branch was prevented to deduct more amount beyond 180 monthly installments from the loan account of the complainant till the final disposal of the case.
Thereafter, Ld. Forum after completing the process of hearing, came to a conclusion that change rate of interest by the bank and converting the rate of interest from Fixed to floating was, against the loan agreement and arrangement of loan letter dated 19.06.2004 and the bank has illegally deducted more money in 104 months at the rate of Rs. 90/- per month to the tune of Rs. 21,360/-.
So, the back was stopped to raise claim outstanding amount Rs. 1,03,359/- and shall make refund Rs. 21,360/- and to pay Rs. 17000/- as compensation including litigation cost.
Being aggrieved with this order, this appeal follows on the grounds that order of Ld. Forum was arbitrary, suffers from irregularity and not vested with law.
The appeal has been contested by the Respondent/complainant through her Ld. Legal Counsel. Mr. J. Ganguly. The appellant has been represented through LD. Advocate Mr. R. Tripathy.
Appeal was heard on its Merit.
Decision with reasons: -
Having heard the Ld. Legal Counsels of both sides, it has become crystal clear that against the Principal Loan amount Rs. 3000/-. The EMI was fixed at Rs. 2910/- since June 2004 and Emi was increased to Rs. 3000/- since Nov, 2010. Total EMI was fixed 180 months. The Bank claims that as per terms and conditions of loan agreement and RBI guidelines, the Bank was compelled to change the rate of interest from fixed to floating and for that reason, the bank is entitled to claim remaining outstanding amount of the loan to the tune or Rs.1,03,359/- which is strenuously opposed.
Ld. advocate of the appellant Mr. Tripathy argued that as per Clause 4 of the Arrangement Letter-Housing Finance dated 19.06.2004, in the heading Repayment "Your liability to the Bank will be extinguished only when the outstanding in loan account becomes Nil on payment of residual amount, if any.
That the Respondent had kept paying the enhanced EMI of Rs 3000.00 (Three Thousand) as against the initial EMI of Rs. 2,910/- (Rupees Two Thousand Nine Hundred and Ten) per month since the EMI was increased and for the entire duration of Loan, and never objected to the said increasement in the EMI per month. It can be construed from the act of the Respondent that she had given her concurrence for such increase in the amount of EMI.
That Annexure E (Memorandum of Term loan agreement for housing loan granted to public) dated 19.06.2004 clearly states the exact scenario of interest payment and banks right and discretionary powers to increase the interest rate which the borrower i.e., Respondent and co-borrower have agreed and affixed their signature only after reading the terms thereof thoroughly in the usual course of business which reads as per Memorandum of Term Loan Agreement for Housing Loan granted to Public.
The Bank shall be entitled to Charge at its own discretion enhanced rates of interest on the outstanding in the loan account(s) or a portion thereof or for any default or irregularity their part which in the opinion of the Bank warrants charging of such enhanced rates of interest for such period as the Bank may deem fit. The Equated Monthly Installments will have to be paid till the entire loan and the interest is fully repaid. Further, the amount of Equated Monthly installments may change/increase as may be decided by the Bank. Such interest will start accruing from the date of disbursement of loan or the date of disbursement of the first installment of the loan where such loan is paid in installments.
Had there was some objection to the Respondent then she should have objected to the increase in EMI. It is therefore a case of Law of Limitation since the cause of action took place in November 2010 and after a lapse of almost 09 years i.e., in the year 2019 the Respondent has raised this issue before the Ld. District Forum, Darjeeling.
That the Appellant Bank is a Public Sector Bank dealing with public money, therefore, is highly prejudiced and cannot act as per its own whims/will. The Banks act as per the Standards and Orders laid by the Banking Regulators only. Further in this particular case, the Appellant Bank have had no intention to charge higher rate illegally but due to the norms set by the Banking Regulations as mentioned herein before the said amount was increased and that too the Appellant Bank itself have reflected the change in the statement of account.
That the Ld. District Consumer Forum had no Jurisdiction to entertain the said complaint as the matter pertains to Policy matter of Appellant Bank regarding to interest change on the basis of Base Rate as fixed by Reserve Bank of India, time to time and duly followed by every public sector Bank without any fail and violation of any Rules prescribed by RBI has a result of imposing heavy penalty against the said defaulted Bank.
Ld. Advocate of the appellant Bank relies the judgements as follows in support of his arguments: -
- AIR, 1999. SC. 896
- Judgement of Kerala H.C. dated 14.09.2012 in WA No. 974 of 2012 WPC/270 or 2012
Ld. Adv. of respondent countered the argument of appellant by saying that Ld. D.C.D.R.C. Darjeeling has righty pointed out every single issue of the case and has passed a very much correct and balanced Judgment.
He argued that the appellant has stated that they had sent a letter to Respondent regarding change of interest but did not provide any proof that said letter was ever delivered to the Respondent. No any letter, or information regarding change of interest was received by the Respondent till July 2019. When Arrangement Letter Housing Finance and Memorandum of Term Loan Agreement for Housing Loan Granted to Public is already signed by the Appellant finalizing the rate of Interest as FIXED RATE OF INTEREST, then the question of providing any protest or objection on the part of the Respondent does not arise.
He argued, the public sector bank doesn't mean that it will violate an agreement (Arrangement Letter- Housing Finance and Memorandum of Term Loan Agreement for Housing Loan Granted to Public) made with the public (the Respondent) resulting breach of trust. The Respondent had trusted upon the Appellant bank and never even doubted for single moment throughout the period of 180 months until she found on July. 2019 that the Appellant Bank had cheated her and without informing her, rate of interest was converted to Floating from Fixed rate of Interest. If the Appellant bank do not have provision of Fixed Rate of Interest, then why they made agreement of Fixed Rate of Interest when she applied for the House Building Loan during the year 2004. The Respondent would have applied to other banks that will be facilitating the House Building Loan with Fixed Rate of Interest as there are other banks also who sanction such loans. The money earned by the Respondent is hard earned money and being a salaried person, she had a limited income and could not pay such illegitimate demand of the Appellant.
On very careful scrutiny of all related documents of the loan transaction it is revealed that as per clause2(b) of loan agreement, there was a provision that the bank shall at any time and from time to time be entitled to change the rate of interest depending on changes in SBI MTL and such revised rate shall always be construed as agreed to be paid by the borrower and hereby secured. Borrowers Shall be deemed to have notice of change in the rate of interest are notified or displayed or make through entry of interest charged in the Bass book.
The letter of SBI. Kalimpong dated 04.09.2019 addressing to the respondent wanted to re-set the loan terms and has given option to her to pay the outstanding amount due to the enhance rate of interest either by another 41 EMI's or by one-time payment or to write to the bank for rapprochment in consultation with higher authority.
Annexure (B) the Master circular issued by RBI/ 2010-11/72 dated 01.07.2010 has prompted the bank to hike the rate of interest converting fixed rate to floating rate and the bank was empowered to do it with the clause 2(b) on Loan agreement.
Rather, the Respondent had knowledge that the amount of EMI was increase from Rs.2910/- to 3000/- since Nov. 2010, and she has disputed it in 2019 when the bank sent the demand letter to her on 04.09. 2014 i.e., after 9 years.
So, in view of legal aspects the bank had no wrong in increasing the rate of interest of loan or the increased amount Rs 90/- Per month as EMI Since Nov. 2010.
Only the irregularity on the side of the bank is detected to the point that the bank has not properly apprised the borrower about the Master Circular of RBI and re-set II loan transaction after a talk with the borrower in a healthy and congenial terms which to be more convenient of a salary holder having very limited resource of Money.
So, the order of Ld. Forum casting a liability upon the Public Sector bank amounting to Rs (21360+ 17000) = 38,600/- is not appeared to be reasonable and justified one. On the other hand, the demand of the appellant bank from the respondent outstanding amount of Rs. 1,03,359/- is not justified at this belated stage due to lack of co-ordination and Mis-communication
Thus, the instant appeal is disposed of by the order as follows:
Hence,it is Ordered
That the appeal be and the same is allowed on contest without any cost.
The final order and judgement of Ld. D.C.D.R.F., Darjeeling dated 23.03.2022 in CC No. 19 of 2014 is here by set aside.
The appellant bank is also debarred copy from claiming Rs 1,03,359/- as outstanding loan amount from the respondent Smt. Lakpa Doma Bhutia. The bank (SBI, Kalimpong) shall close the instant loan transaction as full and final Settlement and shall make free the property it kept as Mortgage for loan, and discharge the respondent from the loan liability and hand over all the relevant documents within a mouth to her the free copies of this final order be supplied to the parties of appeal and this order be communicated to the Ld. DCDRF, Darjeeling.
