BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM,
ERNAKULAM.
Date of filing : 21/03/2012
Date of Order : 31/05/2014
Present :-
Shri. A. Rajesh, President.
Shri. Sheen Jose, Member.
Smt. V.K. Beena Kumari, Member.
C.C. No. 179/2012
Between
P.A. Noor Muhammed, | :: | Complainant |
Kannattupadavil House, U.C. College. P.O., Aluva – 683 102, Ernakulam District. | | (By Adv. Gireesh Pankajakshan, V/2, Empire Building, High Court End, Old Railway Station Road, Cochin – 18.) |
And
1. South Indian Bank Ltd., | :: | Opposite Parties |
Head Office, T.B. Road, Mission Quarters, Thrissur – 680 001, Rep. by its Managing Director. 2. South Indian Bank Ltd., Market Road Branch, Ernakulam – 682 035, Rep. by its Branch Manager. | | (Op.pts. by Adv. P.A. Augustine, 91/D.D. Tex World, Market Road, Kochi – 11.) |
O R D E R
V.K. Beena Kumari, Member.
1. The facts leading to this complaint are as follows :-
On 23-03-2005, the complainant had availed a loan of Rs. 2,60,000/- from the 2nd opposite party by mortgaging 2.66 cents of land comprised in Sy. No. 127/1 of Aluva West village with a building therein. The mortgaged property stands in the name of complainant's father late P.M. Abdul Kareem and is inherited by the complainant, his mother and three siblings being the legal heirs of his father. Owing to personal inconveniences, the legal heirs other than the complainant, jointly executed a power of attorney authorising the complainant to take the above said loan and to do whatever needed in connection therewith on their behalf. One of the friends of the complainant, Mr. Bobby K. Paul also stood as guarantor. The 2nd opposite party fixed the equated monthly instalment at Rs. 5,990/- to be paid in 60 instalments with effect from 23-03-2005. The interest charged at the time of sanctioning the loan was 12% per annum. The complainant opened a savings bank account with the 2nd opposite party to facilitate payments to the loan account. It is alleged by the complainant that the 2nd opposite party had not issued a copy of loan agreement which is against the Regulation issued by the Reserve Bank of India and that the 2nd opposite party unilaterally hiked the interest rate during the currency of loan agreement to 13.5%, then to 15.5% and to 16.5% without any notice to the complainant. On 24-01-2008, the complainant was asked to meet the legal officer of the 2nd opposite party bank at the Regional Office at Ernakulam. Accordingly, the complainant's brother, for and on behalf of the complainant, met the legal officer. It is alleged that the legal officer misbehaved and harassed the complainant's brother. It is also alleged that the complainant as well as his guarantors were unduly harassed and persistently bothered by the 2nd opposite party which act is against the guidelines for fair practices issued by the Reserve Bank of India. On every 23rd of the month, the 2nd opposite party continued to transfer the EMI amount from the savings bank account of the complainant to his loan account and when the due date for the 60th instalment reached on 23-03-2010, the 2nd opposite party debited an amount of Rs. 29,032/- from the complainant's S.B. account without any notice to the complainant. It is contended that the 2nd opposite party should have closed the loan account after transferring the EMI amount of Rs. 5,990/- on 23-03-2010. On enquiry, the 2nd opposite party informed the complainant that the transfer of Rs. 29,032/- was made by the bank's computer automatically and the 2nd opposite party also offered to pay Rs. 5,000/- to the complainant. It is submitted that the 2nd opposite party was asked vide notice dated 30-03-2010 to deposit back the amount taken from the complainant's S.B. account and in reply dated 29-04-2010 the 2nd opposite party stated that upto 23-02-2008, the interest rate on the loan amount collected by the 2nd opposite party was 16.5%, and thereafter, 14% upto 20-03-2010. All such acts are absolutely illegal and unfair business/trade practice amounting to gross deficiency in service for which the complainant is entitled to refund of the excess amount collected by the 2nd opposite party and the opposite party is liable to compensate the complainant for the mental agony suffered due to the harassment by the 2nd opposite party. Therefore, this complaint is filed before the Forum seeking direction against the 2nd opposite party to refund Rs. 1,23,040/- collected in excess, to pay Rs. 2,09,000/- towards compensation and Rs. 25,000/- towards costs of the proceedings.
2. The version of the 2nd opposite party is as follows :-
All the contentions raised in the version filed by the 2nd opposite party were adopted by the 1st opposite party. It is submitted by the 2nd opposite party that the complaint is not maintainable either in law or on facts of the case, that the complaint is time barred, hence liable to be dismissed. Without prejudice to the above contention, it is submitted that the 2nd opposite party had never intimated the complainant that the interest on loan amount would be 12% p.a. or that the interest rate would be reduced after 5 or 6 months, that the 2nd opposite party had never insisted the complainant to open a savings bank account, that the 2nd opposite party had not obtained the signature of the complainant in unfilled papers or blank cheque leaves as alleged. It is submitted the fixation of EMI was made on the basis of prevailing rate of interest at the time of disbursement of the loan ie. at 13.5% per annum and subsequent hike in the rate of interest was in view of the changes in BPLR and in accordance with the guidelines. It is contended that the variation in the interest rate was duly intimated to the complainant and the complainant vide letter dated 31-08-2007 requested to reduce the rate of interest from 15.5% and sought for easy instalments. It is also contended that the complainant was irregular in repayment of the loan right from the beginning and the irregularity continued about 2½ years and hence the 2nd opposite party was forced initiate proceedings under the securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 (SARFAESI Act). The demand notice issued under Section 13 (2) of the Act was also not honoured. Then mortgagors were requested to deliver possession of the property as provided under Section 13 (4) of the Act. Then only the complainant volunteered to settle the matter. Accordingly, the complainant remitted the arrears and regularised the account on 23-02-2008 and on the request of the complainant, the interest debited was reworked charging interest at the rate of 14% p.a. from 23-02-2008, ie. from the date on which the account was regularised. It is submitted that the issuance of notices to realize the defaulted amount could not be treated as harassment and the 2nd opposite party or its staff had never ill treated or harassed the complainant or his brother or his guarantors. In the facts and circumstances stated above, it is prayed that the complaint may be dismissed as a case of no merit with costs to the opposite parties.
3. The complainant was examined as PW1 and Exts. A1 to A6 were marked on his side. The 2nd opposite party was examined as DW1 and Exts. B1 to B11 were marked on the side of the opposite parties. Heard the counsel for the parties.
4. The points that arose for consideration are as follows :-
Whether the complaint is barred by limitation as envisaged in Section 24 A of the Consumer Protection Act?
Whether the complainant is entitled to get the reliefs sought for?
Whether the opposite parties are entitled to get the costs of the proceedings?
5. Point No. i. :- The complainant had borrowed a sum of Rs. 2,60,000/- on 23-03-2005 secured by mortgage land admeasuring 2.66 cents situated in Sy. No. 127/1 of Aluva West Village together with the building therein owned by the complainant along with the other legal heirs of late P.M. Abdul Kareem, the father of the complainant. The loan was agreed to be paid in 60 monthly instalments with interest at the rate of 13.5% at the time of execution of documents between the complainant and the 2nd opposite party bank. The EMI was tentatively fixed at Rs. 5,990/- per month. The 2nd opposite party bank issued demand notice to the complainant, since the repayment of the loan was irregular for about 2½ years and subsequently the 2nd opposite party requested the mortgagors to deliver possession of the property. Then the complainant volunteered to settle the matter and regularised the accounts on 23-02-2008. The loan account was closed on 23-03-2010 by debiting Rs. 29,032/- from the complainants S.B. account and credited in the loan account of the complainant, which amount is the balance outstanding in the loan account. Thus, the cause of action arose on 23-03-2010 and this complaint was filed on 21-03-2012 ie. within 2 years from the date on which the cause of action arose. Hence the filing of this complaint is not barred by limitation period as envisaged under Section 24 A of the Consumer Protection Act, 1986. It is found that the complaint is maintainable in this Forum.
6. Point Nos. ii. and iii. :- On 23-03-2005, the complainant availed loan of Rs. 2,60,000/- from the 2nd opposite party bank by mortgaging 2.66 cents of land valued Rs. 3.63 lakhs and EMI fixed tentatively at Rs. 5,990/-. The loan amount to be paid in 60 instalments. The both instalment was due on 23-03-2010 and the 2nd opposite party debited the outstanding balance amount of Rs. 29,032/- from the S.B. account to the loan account of the complainant. The contention of the complainant is that the 2nd opposite party should have closed the loan account on 23-03-2010 after transferring the EMI amount of Rs. 5,990/- from the S.B. account of the complainant and the transferred the amount to the loan account of the complainant. The 2nd opposite party on the other hand contended that the complainant was irregular in payment of the loan right from the beginning and the irregularity continued for about 2½ years and that the 2nd opposite party was in fact forced to initiate the proceedings under the SARFAESI Act, 2002 and then only complaint came forward to regularise the account on 23-02-2008. The 2nd opposite party also contended that on the very same day, the interest rate was reworked and 14% p.a. charged on the complainant from 23-02-2008 onwards after considering the request of the complainant. It is pertinent to note that the initial interest rate fixed as on 23-03-2005 was 13.5% as evidenced by Ext. B3. In the agreement dated 23-03-2005, the complainant also agreed to pay interest/service charges at the revised rates fixed by the 2nd opposite party bank from time to time notwithstanding the rate of interest/service charges mentioned in the documents executed in favour of the 2nd opposite party bank on 23-03-2005. The complainant also agreed to the bank charging penal interest of 13.5% p.a. over and above the interest rate mentioned in the documents executed. Thus, the contention of the complainant that the bank unilaterally hiked the interest rate during the currency of the loan is found not correct and true. Further contention of the complainant is that the 2nd opposite party bank/its staff harassed and ill treated the complainant and his guarantors. Except for the pleading, no positive evidences before this Forum to substantiate the above contention. We find that the complainant was very irregular in repaying the instalments for the first 2½ years and interest hiked by the 2nd opposite party bank on 01-04-2006, 15-12-2006, 01-01-2007 and 01-03-2007 etc. was in accordance with the Reserve Bank directions and in accordance with the terms and conditions of the agreement entered with the 2nd opposite party bank. In the circumstances, we find that there is no merit in the complaint filed by the complainant before this Forum. We also find that the complainant is not entitled to get any of the reliefs sought for in the complaint. Hence the complaint is dismissed as a case of no merit. We also find that no strong ground raised by the opposite parties to entitle them for the costs of the proceedings. Hence costs not allowed to the opposite parties.
7. In the result, the complaint filed by the complainant is found without any merit and is therefore dismissed. Ordered accordingly.
Pronounced in the open Forum on this the 31st day of May 2014.
Sd/- V.K. Beena Kumari, Member.
Sd/- A. Rajesh, President.
Sd/-Sheen Jose, Member.
Forwarded/By Order,
Senior Superintendent.
A P P E N D I X
Complainant's Exhibits :-
Exhibit A1 | :: | Copy of Guidelines on fair practices code for lenders |
“ A2 | :: | Copy of the regulation dt. 22-08-2007 |
“ A3 | :: | Copy of the lawyer notice dt. 10-03-2008 |
“ A4 | :: | Copy of the reply notice dt. 24-03-2008 |
“ A5 | :: | Copy of the notice dt. 30-03-2010 |
“ A6 | :: | Copy of the letter dt. 29-04-2010 |
Opposite party's Exhibits :-
Exhibit B1 | :: | Copy of the agreement |
“ B2 | :: | Copy of the demand promissory note dt. 23-03-2005 |
“ B3 | :: | Copy of the loan sanction letter dt. 23-03-2005 |
“ B4 | :: | Copy of the letter dt. 31-08-2007 |
“ B5 | :: | Copy of the circular dt. 15-12-2006 |
“ B6 | :: | Copy of the circular dt. 28-12-2006 |
“ B7 | :: | Copy of the circular dt. 02-04-2007 |
“ B8 | :: | Copy of the circular dt. 30-06-2008 |
“ B9 | :: | Copy of the circular dt. 30-07-2008 |
“ B10 | :: | Copy of the circular dt. 08-04-2006 |
“ B11 | :: | Copy of the statement of account |
Depositions :- | | |
PW1 | :: | P.A. Noor Muhammed – complainant |
DW1 | :: | John Abraham – witness of the 2nd op.pty |
=========
