BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM,

ERNAKULAM.

Date of filing : 28.03.2014

Date of Order : 03.05.2016

Present :-

Shri. Cherian. K. Kuriakose, President.

Shri. Sheen Jose, Member.

Smt. V.K. Beena Kumari, Member.

C.C. No. 242/2014

Between

And

O R D E R

Cherian K. Kuriakose, President

Complainant's case.:

The complainant is holding a housing loan account since 14.07.2006 in the opposite party bank. The loan amount was Rs.31,87,000/-. The rate of interest agreed was 9% floating rate covering a period of 15 years. During the course of time, without intimating the complainant the opposite party bank started collecting higher rate of interest at the rate of 14% while all other commercial banks were collecting much lesser amount of interest. The complainant was never given prior notice of information about charging the higher rate of interest . When the complaint protested the opposite party, the opposite party had subsequently brought down the interest rate from 14% to 13%, at a time when other banks were collecting interest only at 11% per annum. The opposite party did not make any adjustments to the principal amount even after 7 years. The collection of additional interest by the opposite party without giving intimation to the complainant is a violation of principle of natural justice and unfair trade practice. The complainant, as per the loan agreement had never conferred an unbridled or arbitrary power to the opposite party for charging a higher rate of interest at their discretion. The rate charged for a loan shall be the maximum rate permitted by the regulatory authorities for the term loans made during the following calendar month when the parties to such loans have agreed that the rate of interest to be charged by the lender and paid by the borrower shall not vary or be adjusted during the terms of the loan. In no case, the maximum rate of interest permitted on such loans during the term of the loan shall not be greater of the rate announced by the bank when the loan was granted. In this case, since the bank has collected greater rate of interest, the complainant is entitled to recover back the entire amount of interest paid additionally. Whenever the complainant had complained about this malpractice the second opposite party humiliated the complainant before other people who were present in the bank. Therefore the opposite party bank is liable to compensate for the monitory loss, mental agony and personal sufferings of the complainant. The lawyer notice issued to the opposite party demanding rectification of accounts on 28.09.2013 was replied by the opposite party only on 11.11.2013. In that reply notice the opposite party had admitted the facts and attempted to justify the mistakes committed. The complainant is entitled to get back the additional amount of interest collected by the opposite party, considering the fact that the rate of interest should have been collected only at 9% per annum. The complainant is entitled to get compensation and cost also from the opposite party.

2. Notice was issued to the opposite parties and the 2^nd opposite party had filed a version resisting the complaint contending inter-alia as follows:-

3. The version of the opposite party :-

The complaint is not maintainable . The complainant had obtained a housing loan after being satisfied the bench mark prime lending rate (BPLR) as per the guidelines of the Reserve Bank of India. The allegation of the complainant that the opposite party bank had collected an exorbitant rate of interest is incorrect. Under Clause 22(a) of the terms and conditions of the loan as per sanction letter dated 14.07.2006 which has been accepted by the complainant, the opposite parties are entitled to charge the rate of interest from time to time without prior intimation to the complainant. As per the agreement dated 14.07.2006, the complainant had agreed to the 2^nd opposite party to charge interest irrespective of the rate of interest mentioned in the documents. Those documents were already produced by the opposite parties on 06.12.2011 and the copies were handed over to the complainant. Therefore the complaint is misconceived and is liable to be dismissed.

4. The evidence in this case consists of the oral evidence of PW1 and Exts. A1 to A15 on the side of the complainant. The opposite party produced and proved Exts. B1 to B22 in addition to the oral evidence of DW1 Shri Vijay Thomas John , the Chief Manager of opposite party bank at Ernakulam.

5. Issues :-

(i) Whether the complainant had proved that there was

any deficiency in service on the part of the

opposite parties and whether the opposite party

had committed unfair trade practice as alleged ?

(ii) Whether the complainant is entitled to get

compensation as claimed ?

(iii) Reliefs and costs.

6. Issue Nos.(i) and (ii) : The complainant Shri Godwin P. Isidore was examined as PW1. He availed the housing loan in the year 2006. He admitted that he had received letters from the opposite party bank to clear the defaulted amounts. When a specific question was put to PW1, regarding the fact that on 06.12.2011 itself the rate of interest was increased and that fact was communicated to him. The complainant answered that he need to check it. He also admitted that he filed the complaint only in the year 2014 despite the fact that information was disseminated to him on 06.12.2011 itself that the rate of interest was increased. He also admitted that on 28.04.2012 the opposite party bank had refixed the monthly instalments by reducing the EMI at the rate of Rs. 43,025/-. He also admitted the signatures seen in Ext. B1 to B13 marked by the opposite party.

7. Shri Vijay Thomas John, the chief manager of the opposite party bank at Palarivattom Branch had given evidence that hike in the interest rate was displayed in the notice board and it was also published in the website of the opposite party. Ext. B15 series marked through DW1 is the copy of circulars issued by the Reserve Bank of India, regarding the rate of interest to be charged on advances for the period from 01.07.2005 to 01.07.2013. As per the said circular the opposite party bank was entitled to fix the rate of interest as per Clause 3 and 21 (a) of Ext. B1 loan sanctioning letter. The complainant had agreed as per Exts. B4 and B5 agreements that the bank was entitled to charge interest as per the directives of Reserve Bank of India from time to time irrespective of the rate of interest mentioned in the documents. Ext. B16 is a copy of the letter dated 06.12.2011 intimating the complainant regarding the increase in the rate of interest. Ext. B17 series ( 18 Numbers) the attested copies of circulars issued by the competent authorities of opposite parties regarding the revision of rate of interest covering the period from 2011 to 2015 are produced and marked.

8. It is seen that rate of interest was revised periodically. According to the complainant he was not personally intimated regarding the increase in the rate of interest. The opposite party having issued intimation to the complainant regarding the hike of interest as early as 2011 and according to the learned Counsel for the opposite party, the complainant having filed the complaint on 06.12.2011, the complaint is not maintainable as time barred under section 24 A of the Consumer Protection Act. The complaint was filed without a petition to condone that delay provided under section 24 A (2) of the C.P. Act 1986. Therefore the learned Counsel for the opposite party argued that the complaint is time barred. On going through the materials it is seen that the loan account has not been closed so far. The accounts between the complainant and the opposite parties had not been closed and is still continuing. Therefore it cannot be said that the complaint is barred by limitation.

9. As per Ext. B15 series circulars issued by the Reserve Bank of India regarding the interest rates on advances for the period from 01.07.2005 to 01.07.2013 to 01.07.2015, the opposite party bank was entitled to fix the rate of interest based on those circulars. As per Clause 3 and Clause 22(a) of Ext. B1 loan sanction letter, the rate of interest is shown as subject to change from time to time without prior notice. As per Exts. B4 and B5 agreements the complainant had already agreed that the bank would be entitled to change interest as per the directives of Reserve Bank of India, from time to time irrespective of the nature of interest mentioned in the documents. The complainant had admitted the execution and signature in Ext. B1 to B14 documents in the cross-examination. The complainant, other customers and the general public are being informed regarding the revision of interest at the relevant point of time by putting the notice in the notice board and web site. As per Clause 2, 3, 5 of the circular (Ext. B15 series), it is clearly stated that “Banks are required to exhibit the information on their base rate at all branches and also in their website”. The changes were also conveyed to the general public from time to time through appropriate channels. Therefore the argument of the learned Counsel for the complainant that individual notice were to be issued to the complainant cannot be accepted. On going through Ext. B18 series, the copy of circulars, we did not see any reason to hold that the opposite parties had collected interests more than what was sanctioned by the Reserve Bank of India. Therefore the voluminous documents produced by the complainant were not able to bring out a case regarding any sort of deficiency on the part of the opposite party, in the matter of service. The complainant had also failed to prove that the opposite party bank had committed any instance of unfair trade practice as alleged. The issues are therefore found against the complainant.

10. Issue No.(iii) :- Having found issue No. i) and ii) against the complainant, we find that the complaint is liable to be dismissed and is accordingly dismissed. Considering the facts and circumstances of the case, we find that the parties shall bear their respective costs.

Pronounced in open Court on this the 3^rd day of May, 2016.

Sd/- CHERIAN K. KURIAKOSE - PRESIDENT.

Sd/- SHEEN JOSE - MEMBER

Sd/- V.K BEENAKUMARI - MEMBER

Forwarded / By Order

Senior Superintendent

A P P E N D I X

Complainant's Exhibits :-

Opposite party's Exhibits :-

Exhibit B1 :: Copy of loan sanction lr. dt. 14.07.2006

Exhibit B2 Copy of letter dated 14.07.2006

Exhibit B3 Copy of letter dt. 14.07.06

Exhibit B4 Copy of sanction of credit facilities

Exhibit B5 Copy of agreement

Exhibit B6 Copy of agreement

Exhibit B7 Copy of letter dt. 15.07.2006

Exhibit B8 :: Affidavit

Exhibit B9 Copy of acknowledgment

Exhibit B10 “ Letter dated 31.08.2007

Exhibit B11 “ Affidavit

Exhibit B12 “ Letter dated 14.07.2006

Exhibit B13 “ Acknowledgment of debt

Exhibit B14 series “ RBI circular dt. 01.07.05

Exhibit B15 series “ RBI circular dt. 01.07.06

Exhibit B16 series “ RBI circular dt. 02.07.07

Exhibit B17 series “ RBI circular

Exhibit B18 series “ RBI circular dt. 01.07.10

Exhibit B19 series “ RBI circular

Exhibit B20 series “ RBI circular dated 01.07.11

Exhibit B21 series “ RBI circular dated 02.07.12

Exhibit B22 series “ RBI circular dated 01.07.2013