BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, PONDICHERRY

C.C.No.32/2012

Dated this the 5^th day of March 2015.

1. K. Murugavel, S/o.P.Kailasam

    Professor

    Rajiv Gandhi College of Veterinary and

    Science College, Puducherry.

2. Anita Murugavel, W/o.Murugavel

Both are residing at No.44, Third Cross Street,

Venkata Nagar, Puducherry-605 011.                             ….       Complainants

Vs.

State Bank of India, RASMECC,

Rep. by its Asst. General Manager,

No.208, Anna Salai (Vignesh Complex)

Near Botanical Garden, Puducherry-605 001                 ….     Opposite Party

BEFORE:

            THIRU.A.ASOKAN, B.A., B.L.,

            PRESIDENT 

Tmt. PVR. DHANALAKSHMI, B.A.,B.L.,

           MEMBER

FOR THE COMPLAINANTS                  :  Thiru.S.Vimal, Advocate.

FOR THE OPPOSITE PARTY                : Thiru.R.Sivaraman, Advocate

O R  D  E  R

(By Thiru.A.ASOKAN, President)

This is a complaint filed by the complainant under section 12 of the Consumer Protection Act, 1986 praying to:

1. Direct the opposite party to pay the complainant compensation of Rs.3,00,000/- for the physical hardship and suffering and mental agony caused to the complainant due to opposite party's deficiency in service and Unfair Trade Practice as per section 14(d) of Consumer Protection Act.
2. Direct the opposite party to pay the complainant a sum of Rs.7000/- towards litigation expenditure and cost of the complaint. 

2.  The case of the complainant is as follows:

            The complainants participated in the Aadi Housing Loan Mela at Puducherry  on 14.07.2005, which was conducted by the opposite party. On 11.08.2005, the complainant in compliance of the norms of the bank, provided all their particulars required by the opposite party bank along with Housing Loan Application Form to avail housing loan.   On the same day, the opposite party bank issued an Arrangement letter-housing finance to the complainants,  sanctioning a Housing term loan of Rs.10,00,000/-, with fixed rate of interest at the rate of 8% per annum.  The loan was repayable on an equated monthly installment of Rs.9560/- for 15 years.  The complainant has been crediting the Equated Monthly Installment amount directly from his account to the opposite party loan account regularly without any default on his part as per the terms of agreement.  Since the first complainant's salary was increased he preferred to discharge the loan on said term of Fixed Interest at the rate of 8% per annum by payment of a higher equated monthly installments of a sum of Rs.20,000/- per month and thereby close the loan earlier by submitting Electronic Clearing Service (Debit clearing) Mandate Form (ECS Form) dated 14.05.2012 to the opposite party bank. 

3.         It is further submitted that contrary to the terms of loan contract, on 23.05.2012 the first complainant received a letter from the opposite party bank titled as 'Home Loan Account No.10831632000 Branch-Pondicherry Main-900 interest rate Reset'.  Wherein it was stated that, "interest rate on your fixed rate home loan has been reset upwards from 8% to 12.75% w.e.f.13.05.2012 on 14.05.2012.  Due to the increase in interest rate retrospectively, arrears of interest amounting to Rs.1,14,337.23 has been charged to your above mentioned loan account resulting into account becoming irregular.  When the first complainant enquired with the opposite party bank vide his letter dated 28.06.2012 to explain in detail as how interest amount of Rs.1,41,543/- was added to his loan account despite his paying the agreed EMI of Rs.9600/- regularly without any default.  In response to complainant's letter, the opposite party bank replied vide his letter dated 11.07.2012 enclosing a copy of the interest applied in housing loan account along with the calculation and statement of account and also a copy of arrangement letter regarding the terms of the agreement signed by the complainant.

3.         In the Annexure-7, it is stated that interest rate as 8% from 31.08.2008 to 30.06.2012 and every month payment of a sum of Rs.9600/- has been credited to the loan account on every 10^th day of each month from 10.09.2008 to 10.05.2012.  However without any sought of intimation or notice to the complainant, the opposite party has unilaterally varied the terms of agreed fixed rate of interest from 8% p.a. to that of 12..75% p.a. and consequently debiting a sum of Rs.1,41,543/-  to the complainant's loan account.  The opposite party's said debiting of Rs.1,41,543/- from that of the complainant's account without his consent or prior notice to him is per-se illegal, arbitrary conduct amounting to unfair trade practice and deficiency in Service towards the complainant.

4.         The opposite party's debiting of Rs.1,41,543/- without complainant's prior knowledge, consent or prior intimation allegedly due to increase in the interest rate and that too retrospectively, is also contrary to the agreed terms of Loan Agreement/Arrangement Letter as also Section 67 of the Indian Contract Act and hence illegal.  Hence this complaint.

5.         The reply version of the second opposite party is as follows:

            The complaint filed by the complainant is unjust, unsustainable and neither maintainable in law or facts, devoid of merits and is liable to be dismissed with exemplary cost.  The opposite party denies all the averments in the complaint except those that are specifically admitted in the reply version.  The petition have been filed by the complainant which is void for non-joinder of necessary party and on this score itself the complaint to be dismissed in limine. There is no deficiency in service or unfair trade practice as alleged in the complaint.   The Corporate Centre of State Bank of India is changing the rate of interest from time to time depending on various factors, which is applicable to all the branches in India.  So the application of interest to home loans is done uniformly.  There is no deficiency in service. The rate of interest is revised and reset all over India by all the nationalised banks.  So the complainant cannot allege unfair trade practice against the opposite party.   The question of unfair trade practice will arise if the opposite party charges different rate of interest to different set of consumers.  But the rate of interest is revised to all the consumers. Hence the allegation of unfair trade practice is not applicable and unwarranted.

6.         The complainant availed the loan through the State Bank of India, Main Branch, Suffren Street, Puducherry.  It is specifically mentioned in the arrangement letter dated 11.08.2005 that "the interest rate will be charged at 8% p.a. (Fixed rate).  However, it has been decided to incorporate a 'force mejure' clause to alter the fixed interest rate applicable suitable and prospectively in the event of major volatility in the interest rate during the period of loan agreement.  The revision of interest is periodically reported in the newspaper and on the notice board of the bank.   The revision in the interest is as per terms acknowledged letter issued to the complainant, hence he cannot stick on to say that fixed interest rate is 8%.   The increase/decrease is made as per discretion of the Bank which is specifically mentioned in the arrangement letter dated 11.08.2005.  The complainant cannot allege that he has no personal knowledge of increase/decrease in the rate of interest.  After the revision of interest, the outstanding amount was included in the loan account as per the procedure and loan arrangement.   If the complainant is not agreeable for the rate of interest, he could have closed his loan account without paying the switch over fee.

7.         All the representations of the complainant have been properly replied by letters and in person when the complainant visited the bank.  So every action has been done in a transparent manner and to the clear information to the borrower.  Best service is being given to the complainant till now.  The consent of the borrower is necessary for inclusion of arrears to the loan account is untenable.  The genuine grievance of the complainant is properly redressed. The claim of the complainant is unacceptable.  The mental agony, hardship and suffering etc., are false and imaginary. The opposite party is not liable to pay any amount as prayed in the complaint.  hence pray to dismiss the complaint with exemplary cost.

8.         On the side of the complainants, the first complainant has been examined as CW.1 and Exs.C1 to C7 marked.  No oral or documentary evidence adduced on the side of the opposite party.

9.         Points for determination are:

1. Whether the complainant is the consumer?
2. Whether any deficiency in service rendered by the opposite party?
3. To what relief the complainant is entitled for?

10.       Point No.1:   

            The complainants' availed housing loan from the opposite party vide Exs.C1, C2 and C3 on 11.08.2005. Hence the complainants are the consumer as per section 2(i)(o) and 2(i)(d)(ii) of Consumer Protection Act, 1986.

11.       Point No.2:

            We have perused the complainant, reply version, Exs.C1 to C7 and written argument filed by both the parties.  There is no dispute regarding the sanction of Rs.10,00,000/- loan amount and Rs.9560 EMI for 15 years and interest of 8% per annum as per Ex.C3.  The complainant submitted that he has paid the EMI regularly from his account without any default.  The complainant preferred to pay higher EMI as Rs.20,000/- per month to close the loan account earlier.  To that effect the complainant submitted ECS Form Ex.C4, dated 14.05.2012 to the opposite party.

12.       As per Ex.C3, Clause 4, "Fixed Rate of Interest: Interest on the loan will be charged at 8% p.a, on daily reducing balance at monthly rests.  SBI may at its discretion stipulate the periodicity of computation of interest. Further, SBI may at its sole discretion alter the rate of interest suitably and prospectively in the event of major volatility in interest rates during the period of the agreement.  Thenceforth the rate of interest varied as aforesaid shall be applicable to the Loan.  SBI shall be the sole judge to determine whether such conditions exist or not. If the Borrower is not agreeable to the revised interest rate so fixed, the Borrower shall request SBI, within 15 days of receipt of the notice intimating change in interest rates from SBI, to terminate the Loan and shall repay the Loan and any other amount due to SBI in full and final settlement in accordance with the provisions of this Agreement relating to prepayment."

13.       The complainant further submitted that on contra, the opposite party sent a letter Ex.C5 dated 23.05.2012 stating that "With reference to your Home Loan account NO.10831632000 with a limit of Rs.10,00,000/- and advise that interest rate on your fixed rate home loan has been reset upwards from 8% to 12.75% w.e.f. 13.05.2012 on 14.05.2012.  Due to the increase in interest rate retrospectively, arrears of interest amounting to Rs.1,14,337.23 has been charged to your above mentioned loan account resulting into account becoming irregular."

14.       The complainant sent Ex.C6 dated 28.06.2012 to the opposite party for explanation and detail of the interest to the tune of Rs.1,41,543/-.  The opposite party has sent Ex.C7 dated 11.07.2012, the details to the complainant.  The complainant further alleges that the opposite party's debiting of Rs.1,41,543/- without complainant's prior knowledge, consent or prior intimation allegedly due to increase in the interest rate and that too retrospectively, is also contrary to the terms of loan agreement/arrangement letter as also section 67 of the Indian Contract Act and hence illegal.  The opposite party has further replied in their reply version that the complainant has been informed of the revision of rate of interest.  From the loan arrangement letter, it is clear that any revision in rate of interests, intimated in newspaper or notice board of the bank is deemed to have been intimated to the borrower.  The borrower cannot allege that he has no personal knowledge.  In fact the complainant is a learned person and is having more access to the newspaper.  The service of notice is deemed one and the complainant cannot plead no notice.  After the revision of interest, the outstanding amount was included in the loan account as per the procedure and loan arrangement letter.  If the complainant is not agreeable for the rate of interest, he could have closed his loan account without paying the switch over fee.  So the allegation that the complaint is not informed of the revision of interest rate got no basis.

15.       The CW.1 was cross examined by the opposite party on 30.05.2014 and no oral evidence adduced by the opposite party and the opposite party has filed written argument on 11.08.2014.

16.       During the pendency of the complaint, on 10.10.2014 the complainant filed memo alongwith a letter dated 22.09.2014 sent by the opposite party to the complainant containing that "the amount of excess interest recovery on account of wrong interest application being made erroneously during RFIA 2012 on 31.05.2012 may be recredited to the HTL A/c 33019690465 of the above said borrowers as their HTL A/c.10831632000 was closed on 28.05.2013 under switchover option to floating rate of interest as per the attached calculation sheet by debiting your branch term loan interest account".  The complainant endorsed in the memo stating that "without prejudice to the averments in complaint about the Unfair Trade Practice and Deficiency in Service by the opposite party, the complainant is not pressing the relief in Nos.1 and 2 alone in complaint in view of opposite party's letter dated 22.09.2014 in ref RASFCC/HTL/530".

17.       Now the question before this Forum is whether the complainants are entitled for other relief sought by them.  It is admitted by the opposite party that on account of wrong interest application being made erroneously and recredited the amount to complainant's account.  It is apparent that the opposite party acted negligent manner and the complainant suffered injury and mental agony.  The injury and mental agony sustained by the complainants should be compensated by the opposite party.  Hence the complainant is entitled for compensation for their sufferings and the opposite party is liable to pay the compensation for their deficiency in service and for their negligence act.

18.       Point No.3:   

In view of the decision arrived in point no.2, this complaint is hereby allowed and the opposite party is directed to pay a sum of Rs.10,000/- as compensation to the complainant and to pay a sum of Rs.5000/- as cost of the proceedings.

Dated this the 5^th day of March 2015.

1. ASOKAN)

PRESIDENT

(PVR. DHANALAKSHMI)

MEMBER

COMPLAINANTS WITNESS:  

CW.1             30.05.2014                K. Murugavel

OPPOSITE PARTY S WITNESS: 

 COMPLAINANTS' EXHIBITS:

OPPOSITE PARTY S EXHIBITS:    Nil

1. ASOKAN)

PRESIDENT

(PVR. DHANALAKSHMI)

MEMBER