BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

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1.       Vineet Seth

2.       Vinod Kumar Seth

Both residents of House No.28, Sector 16, Panchkula.

…..Complainants

                                      V E R S U S

1]      Standard Chartered Bank, Home Loan, 462, Phoenix Mill Compound, Senapati Bapat Marg, Lower Parel, Mumbai-400013.

2]      Standard Chartered Bank, Sector 9, Chandigarh through its Area Manager.

                                                ……Opposite Parties

CORAM:     SH.P.D.GOEL                                               PRESIDENT

                   SH.RAJINDER SINGH GILL                            MEMBER

DR.(MRS.) MADANJIT KAUR SAHOTA          MEMBER

Argued by:    Sh.Anish Gautam, Counsel for complainants

                        Sh.Sourabh Bindra, Proxy Counsel for

                        Sh.Jatin Kumar, Counsel for OPs.             

PER DR.(MRS.) MADANJIT KAUR SAHOTA, MEMBER

                   In short, the facts of the case are that the complainants were sanctioned housing loan of Rs.10 lacs on 16.10.2004 at the floating rate of interest @ 7% p.a.  The loan was to be repaid in 240 EMIs of Rs.7753/- each (Annexure C-1). According to the complainants, official of OP had assured incentive of one EMI after every three years of payment.

                   That six EMI installments in the repayment period of 20 years would be free and not payable. Since, it was not reflected in the sanction letter, the issue was raised with the bank but to no effect. Ultimately, the complainants filed a complaint dated 07.07.2005 with Banking Ombudsman and thereafter, Bank agreed to grant the said incentive (Ann.C-2).

                   The complainants averred that the OPs revised the rate of monthly installments twice vide letter dated 18.9.2006 and 31.03.2007 (Ann.C-3 & C-4). According to the complainants, as and when Bank rates are revised, it should have been communicated to them.  As per the details furnished on 27.07.2009 (Ann.C-5 colly), the last change in interest rates was effected in April, 2007.  Further, vide e-mail dated 12.8.2009 (Ann.C-6), the complainants also highlighted that Nationalized Banks/Other Banks have subsequently reduced the interest rates, but this e-mail was not replied. The complainants received an e-mail on 23.02.2010 (Ann.C-7), in which it was stated that 1% rate of interest would be reduced, so, the remaining tenure would be 185 months.

                   According to the complainants, OPs are charging rate of interest @ 10.5% since 4.5.2007 instead of 8-9%. The complainants alleged that they had paid 65 installments till February, 2010, so the balance installments should have been 175 only as on Feb. 2010, but the OPs have shown it as 185 installments remaining, to be paid by the complainants.  The case of the complainants is that a number of e-mails (Ann.C-8 to C-10) were exchanged between them, on the issue of charging of wrongful interest & wrongful variation in number of EMIs with increase in tenure, but it yielded no result. Ultimately, a legal notice dated 27.04.2010 was sent to the OPs, which was replied (Ann.C-11 & C-12), but to no effect.  Hence this complaint.

2]                OPs filed written statement and took some preliminary objections. On merits, the facts with regard to the advancement of Rs.10 lacs as loan and increase in the rate of interest from time to time have been admitted. However, it has been pleaded that the loan was sanctioned on floating rate of interest. According to OPs, it has been clearly mentioned in sanction letter (Ann.R-1) under “variable interest rate that “incase of any unforeseen or extraordinary circumstances or sudden changes in market conditions; SCB may at its sole discretion change the rate of interest.  It has been denied that OPs Bank was not revising the interest rate with variation in interest on home loans from time to time. It has been pleaded that all the e-mails of the complainants were duly replied. It has also been pleaded that the rate of interest depends upon credit criteria, market conditions and the competitive rates; so the interest rate of one bank cannot be compared with another bank. Denying all the material allegations of the complainants and pleading that there has been no deficiency in service or unfair trade practice on their part prayer for dismissal of the complaint has been made. 

3]                Parties led evidence in support of their contentions.

4]               We have heard the learned counsel for the parties and have also perused the record. 

5]                The present dispute arisen between the parties because of the fact that OP Bank has not only charged excess rate of interest, but also increased the number of installments, beyond the conditions of sanction letter.  Therefore, the OP Bank had rendered deficient service and involved in unfair trade practices; so the OP Bank was liable to refund/adjust the excess amount charged on account of interest as well as to restrict the number of installments as fixed in the sanction letter (Ann.C-1).

6]                Whereas, the OPs, in their written statement, on merits, had admitted the increase in the rate of interest from time to time with regard to the advancement of the Home Loan etc.  The OPs have further clarified that the said amount was sanctioned on floating rate of interest and as per the sanction letter (Ann.C-1) under “variable interest rate”, it is the sole discretion of the OPs, to make changes in the rate of interest, as per sudden changes in market conditions, unforeseen or extra-ordinary circumstances etc. 

7]                The OPs also stated that at the time of sanctioning the loan, the OP had duly communicated the details of loan to the complainants i.e. sanctioned amount, equated monthly installments (EMIs), tenure, interest rate, interest category etc. and the same was duly acknowledged by the complainants/borrowers by signing and returning the said sanction letter to the OPs.  It is also contended that the rate of interest being floating, could not remain static/same.  More so, once the rate of interest is revised, the EMI or Tenure of the loan account had to be revised. 

8]                Going into the facts & circumstances, which gave rise to the present dispute and also after perusal of the documents placed on file, we are of the view that the Sanction Letter (Ann.C-1), placed by the complainants themselves, had indicated that the OPs in principle have sanctioned the loan facility to the complainants.  In this same very letter (Ann.C-1), the type of Interest as mentioned is to be Variable.  Furthermore, in the terms & conditions of Home Loan/Home Saver (annexed with Annexure C-1), under the Column of Variable interest rate, the following has been mentioned-

“Variable interest rate –

usually the Bank reviews interest rates every six months from the month of disbursement or the previous review.  The first time your interest rate may be eligible for a review will not be before the end of six calendar months from the month of disbursement.

.        At the time of review the bank may decide to increase, decrease or leave the interest rate unchanged.

.        You have been given a Special offer, SCB may announce Special offers from time to time. You have the option, at the sole discretion of SCB, to change to another Special offer provided you agree to pay a fee of 0.75% of the principal outstanding at the time of exercising the option.

.        Standard Chartered Bank Regular Home Loan Rate may change from time to time depending on relevant market conditions. This information shall be available on www.standardchartered.co.in or at our Phonebanking helplines. 

.        In case of any unforeseen or extraordinary circumstances or sudden changes in market conditions SCB may at its sole discretion change the rate of interest.”

9]                There is no denying the fact that the loan was sanctioned as well as availed by the complainants.  As per settled law, when the offer is accepted, it becomes an agreement, henceforth, binding on both the parties.  Moreover, Ann.C-1 is a document, which is the sanction letter issued to the complainants by the OPs and it shows the rate of interest as Variable from time to time. Furthermore, the above reproduced Clause of Variable interest rate proves beyond doubt that in case of any unforeseen or extraordinary circumstances or sudden changes in market conditions, the OP Bank, may at its sole discretion, change the rate of interest. Subsequently, the OP Bank was also entitled to increase the EMI at its sole discretion and the loan tenure shall also change as per the change in EMI’s vis-versa. Henceforth, when facts speak for themselves and are able to clear the dust all together, then such averments, regarding change in interest rate/tenure of loan, holds no ground.  Therefore, in our opinion, no deficiency in service is attributed towards OPs, as alleged by the complainants.

10]              Evaluating the entire case from all angles as well as, after analyzing the documents placed on file by the complainants, we have no hesitation in coming to the conclusion that the complainants have failed to prove his case of alleged deficiency against the OPs.  It can legitimately be said that there is no deficiency on the part of OPs. The OPs have completely rebutted the allegations made by the complainants. Therefore, the complaint being devoid of merit, must fail and the same is accordingly dismissed.

                   Certified copies of this order be sent to the parties free of charge. The file be consigned.