Chandigarh

StateCommission

A/116/2023

ABHISHEK SHARMA & RAVINDER KUMAR SHARMA - Complainant(s)

Versus

STATE BANK OF INDIA - Opp.Party(s)

JAGAN NATH BHANDARI

26 Mar 2024

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

 

Appeal No.	:	116 of 2023
Date of Institution	:	01.06.2023
Date of Decision	:	26.03.2024

 

 

1. Abhishek Sharma, Aged 38 years S/o Sh. Ravinder Kumar Sharma,
2. Sh. Ravinder Kumar Sharma, Aged 66 years S/o Chander Mani Sharma,

Both  residents of Near Jain Prakash Gupta, Ward No.10, Devi Nagar, Paonta Sahib, District Sirmour (HP) – 173025.

…..Appellants/Complainants.

VERSUS

State Bank of India, RACPC Branch, Office Address: Sector 8-C, Internal Rd, Sector 8-C, Chandigarh – 160009.

…..Respondent/Opposite Party.

 

ARGUED BY:

Sh. Jagan Nath Bhandari, Advocate for the appellants.

Sh. Abhineet Taneja, Advocate for the respondent-SBI.

 

 

Appeal No.	:	139 of 2023
Date of Institution	:	27.06.2023
Date of Decision	:	26.03.2024

 

 

State Bank of India, RACPC Branch, Office Address: Sector 8-C, Internal Rd, Sector 8-C, Chandigarh – 160009.

…..Appellant/Opposite Party.

VERSUS

1. Abhishek Sharma S/o Sh. Ravinder Kumar Sharma, Near Jain Prakash Gupta, Ward No.10, Devi Nagar, Paonta Sahib, District Sirmour (HP) – 173025.
2. Sh. Ravinder Kumar Sharma S/o Chander Mani Sharma, Near Jain Prakash Gupta, Ward No.10, Devi Nagar, Paonta Sahib, District Sirmour (HP) – 173025.

…..Respondents/Complainants.

 

BEFORE:   JUSTICE RAJ SHEKHAR ATTRI, PRESIDENT.

                MR. RAJESH K. ARYA, MEMBER.

 

ARGUED BY:

Sh. Abhineet Taneja, Advocate for the appellants-SBI.

Sh. Jagan Nath Bhandari, Advocate for the respondents.

PER RAJESH K. ARYA, MEMBER 

                By this order we are disposing of above  captioned appeals filed by both the parties i.e. the complainant and the opposite parties against common order dated 06.04.2023 passed by District Consumer Disputes Redressal Commission-I, U.T., Chandigarh (for short ‘District Commission’), vide which, the District Commission has partly allowed the consumer complaint bearing No.252 of 2020 in the following manner:-

“11.   In view of the above discussion, the present consumer complaint succeeds and the same is accordingly partly allowed. OP is directed as under :-

1. to pay an amount of ₹1,00,000/- to the complainants as compensation for causing mental agony and harassment to them;
2. to pay ₹20,000/- to the complainants as costs of litigation.

12.    This order be complied with by the OP within thirty days from the date of receipt of its certified copy, failing which, it shall make the payment of the amounts mentioned at Sr.No.(i) above, with interest @12% per annum from the date of this order, till realization, apart from compliance of direction at Sr.No.(ii) above.” 

2]             The brief facts as narrated in the impugned order of the District Commission as under:-

“1.     Averments are that the complainant No.1 had applied for an education loan of Rs.50,00,000/- from OP Bank in June 2016. The copy of student loan sanction letter and arrangement letter is annexed as Annexure C-1 colly. The payment schedule giving the details of tentative interest and installment of the loan to be paid in 158 installments was also signed by complainants (Annexure C-2). The loan was sanctioned at the rate of 10.85% per annum. On the date of sanction of education loan under SBI Student loan Scheme, the rate of Marginal Cost of Lending Rate i.e., MCLR was 9.15% per annum and spread was 1.70% per annum. At the time of sanctioning of SBI Student Loan, it was told by the concerned officer of OP, who processed this loan to insure the loan with a promise that 0.5% per annum concession will be granted in the rate of interest for buying SBI RinnRaksha Policy. The bank’s policy of RinnRaksha and amount of Rs.83,778/- was deducted from account of complainant No.1 on 23.08.2016 (Annexure C-3). The same was given to the complainant on September 12, 2019. Moreover, the amount due for the excess payment by complainant No.1 has still not been completely refunded. The complainant No.1 has paid the interest during the course duration and moratorium period as per agreement (Annexure C-1) therefore, he is entitled for 1% concession as per clause 4-B of the Annexure C-1. The first installment of Rs.68,452/- per month was due from 16.09.2019 after the completion of the course and moratorium period. However, the complainant started repaying Rs.1,00,000/- per month eight months earlier i.e., w.e.f. 02/02/2019 (Annexure C-5). When the complainant No.1 came to know from the bank statement that no concession is being provided to him, then he wrote a letter to the OP on 08.06.2019 (Annexure C-1). On telephone call the concerned official agreed for the 1% rebate in loan interest and accordingly, after the bank official of OP returned the amount of Rs.11,713/- into the education loan bank account of complainant No.1  on 31.07.2019 and OP sent an email dated 17.08.2019 (Annexure C-7). However, the amount of interest refund was much more than Rs.11,713/-, moreover, no details were provided as to how the calculation took place and the complainant raised a complaint email dated 19.08.2019 (Annexure C-8). The OP even after enhancement of 1% interest against credited a sum of Rs.46,433/- on 21.11.2019  into education loan bank account of complainant No.1. The amounts from the earlier re-calculation vide annexure C-10 was Rs.02,67,697.12/-. This is completely arbitrary as the original agreement clearly states that the loan was sanctioned as Personal Segment Advances Education Loan-SBI Student Loan, moreover, the OP has also twice accepted that the complainants are entitled for 1% rebate interest as per the loan agreement. Hence, is the present consumer complaint.

2.    OP contested the consumer complaint, filed its written statement and stated that 1% concession in rate of interest for servicing interest during the moratorium not extended, it is submitted that the loan is sanctioned under SBI Global Ed-Vantage Scheme and such concession is not applicable under this product type and the same was also intimated to the complaint on mail which is annexed by the complainant with their complaint. This is internal guidelines of the OP Bank which is applicable in all the cases in all the customers of SBI but the complainant is adamant. Mail sent to the compliant on 26.12.2019 by bank which is attached by the complainant on page No.42 and also mentioned in para No.16 of the complaint. It is also submitted that the loan interest was charged as per norms of the bank as per scheme of the Bank and the compliant is putting pressure on the bank for extra rebate which is not possible as per norms of RBI. Denying all other allegations made in the complaint a prayer for dismissal of the complaint has been made.”

3]                In appeal filed by the complainant i.e. appeal No.116 of 2023, the complainant is seeking setting aside of the impugned order and has prayed that 1% concession on the rate of interest for the full tenure of the loan as per Clause 4B of the agreement alongwith refund of additional amount charged to date with interest be ordered besides enhancing the amount of compensation awarded by the District Commission on the grounds that the District Commission, even after adjudicating that a 1% concession was part of the offer made by the opposite party – Bank, allowed the Bank to walk away from the contract, which is a clear violation of law and Section 22 of the Indian Contract Act, 1972; that the complainants have been denied the benefit of the opposite party– Bank’s promise by relying upon on
SBI’s internal master circular dated 02.12.2015, which document the complainants never signed; that the opposite party – Bank has mislead the District Commission without placing even a single document on record to back its claim regarding the norms of RBI and the District Commission has made a grave mistake in understanding the facts of the case and has relied on non-existent RBI circular/RBI norms, which had not been placed on record.

4]                On the other hand, the opposite party – Bank in its appeal bearing no.139 of 2023 is seeking setting aside of the impugned order and dismissal of the complaint of the complainants on the ground that despite coming to the conclusion that as per RBI circular, the complainant was not covered under “Student Loan Scheme” and was only covered under SBI Global ed-vantage Scheme as he availed the loan facility of ₹50 Lakhs, has directed the opposite party – Bank to pay huge amount of ₹1 Lakh as compensation on the pretext that the opposite party – Bank is unaware of its own terms and conditions. It has been stated that the District Commission ought to have appreciated the fact that it is a settled law that when there is a mistake in recording contract and if the said contract does not express the real intention of the parties, in that eventuality, the other party cannot take undue advantage of such a mistake. It has further been stated that the complainants could not seek the performance of the contract. It has further been stated that the complainants were well aware from the very beginning that they were sanctioned loan under SBI Global Ed-vantage scheme and consequently, they were not eligible to get 1% concession and were merely trying to take undue advantage of the error in the arrangement letter.  It has further been stated that the District Commission ought to have appreciated the fact that the agreement executed between the complainants and the bank was void ab initio in so far as it pertained to 1% concession clause. It has further been stated that the District Commission ought to have appreciated the fact that the complainants do not suffer any loss due to service of interest during moratorium period and in fact, such service of interest has only helped them to save more money by preventing the accumulation of interest after the moratorium period. It has further been stated that before the District Commission, the complainants have pleaded that they paid the interest during the moratorium period only for the purpose of getting 1% concession, however, merely getting 1% concession was not the purpose of paying the interest during moratorium period. It has further been stated that as per the policy of the bank, the bank charge simple interest during the moratorium period and after the expiry of moratorium period, the bank charge compound interest with reducing balance. It has further been stated that had the complainants not serviced the interest during the moratorium period, the entire interest for 3 years would have accumulated after the expiry of moratorium period and thereafter, the EMIs were to be based on the principal amount and accumulated interest. It has further been stated that if the customer does not pay the interest during moratorium period, the interest accrued over the amount of ₹50 lakhs will be accumulated and if the rate of interest is 10%, the interest for the period of 3 years would be ₹15 lakhs. It has further been stated that thus after the expiry of moratorium period, the EMIs would be on the sum of ₹65 lakhs and thereafter, the compounding interest is charged with reducing balance. It has further been stated that thus, the contention of the complainants that they paid interest only for the purpose of getting 1% concession was totally misleading and vague. The appellant/opposite party placed reliance on ‘Satya Deo Malviya Vs. Life Insurance Corporation of India, CPJ 1 (2004) 96 (NC).

5]                After hearing the Counsel for the parties and going through the material available on record and the written arguments, we are of the considered view that the impugned order passed by the District Commission is liable to be set aside for the reasons to be recorded hereinafter. No doubt, arrangement letter mistakenly contained the words “SBI Student Loan”, which was not substituted with the words “SBI Global Ed-vantage”. Though on account of this mistake on the part of the opposite party/State Bank of India while issuing the arrangement letter, the District Commission has awarded a sum of ₹1,00,000/- as compensation to the complainants yet it cannot be ignored that 1% concession in interest rate was to be given only in the case of “SBI Student Loan” and for an inadvertent mistake in the arrangement letter of mentioning “SBI Student Loan” instead of “SBI Global Ed-vantage”, the complainants could not be given benefit of the said 1% concession in the interest rate. The loan was sanctioned under “SBI Global Ed-vantage Scheme” vide Circular No.NBG/PBU/PL-EDUCATION/58/2015-16 dated 08.02.2016, Annexure ‘A’ and not under “SBI Student Loan Scheme”. In the sanction letter, annexure C-1, there is no mention of any concession to be given in the rate of interest. Therefore, the complainants cannot take benefit of this inadvertent mistake in the arrangement letter. The complainants applied for education loan of ₹50 Lakhs and they were very well aware of the same. In case, a mistake had occurred on the part of the opposite party – Bank while issuing the arrangement letter, the complainants ought to have brought the same immediately to the notice of the Bank, which they did not do.

6]                Not only this, rate of interest sheet, Annexure C-4, also showed that the loan above ₹20 Lakhs up-to ₹1.50 crore could be availed only under SBI Global Ed-vantage Scheme, where under, no such concession in the interest rate was available. Further in Annexure C-5, which is statement of accounts, the product name is mentioned as EDU Loan Abroad 20L-1.50 crore, which could be available only SBI Global Ed-vantage Scheme. Thus, the loan was actually sanctioned under the "SBI Global Ed-vantage Scheme," as indicated in the sanction letter and the rate of interest sheet. The loan product mentioned in the statement of accounts also aligns with the “SBI Global Ed-vantage Scheme”. Based on this information, the complainants were not eligible for 1% concession in interest rate under the "SBI Student Loan" scheme as they had applied for and were granted a loan under the "SBI Global Ed-vantage Scheme." In our concerted view, the District Commission, despite holding that 1% concession in interest rate was not at all applicable to the complainants as the same was applicable for SBI student Loan Scheme, under which, the maximum loan amount could be applied and sanctioned was ₹30 Lakhs for education abroad, wrongly partly allowed the complaint of the complainants. This fact stands corroborated from the e-Circular/Master Circular No.NBG/PBU/PL-EDUCATION/48/2015-16 dated 02.12.2015, Annexure ‘C’, at page 157 of District Commission’s record, i.e. SBI Student Loan Scheme, wherein, as per Term 1.12. QUANTUM OF FINANCE, the maximum ceiling for study abroad is ₹30 lacs. Clearly, no concession of rate was available to the complainants under “SBI Global Ed-vantage Scheme” for the loan above 20 lakhs and up-to ₹1.5 crore, which was to be fully secured by tangible collateral as they had applied for loan of ₹50 Lakhs.

7]                The contention of the complainants is that they kept on paying interest to the Bank even during the moratorium period in order to have that 1% concession in interest rate. It may be stated here that by making interest during the moratorium period, the borrowers can prevent the interest from being added to the principal balance of the loan. This helps in controlling the overall cost of the loan because interest doesn't compound on unpaid interest. It also keeps the loan balance from growing larger. No doubt, the complainants paid interest to the Bank during the moratorium period also but the said amount straight away goes into their loan account and the liability towards interest on the loan account stood reduced. This also resulted in lower overall interest costs over the life of the loan compared to allowing interest to accrue and compound during the moratorium. If the interest is not paid during the moratorium period, it may be capitalized, meaning thereby, it is added to the principal balance of the loan, which can result in higher overall debt and potentially increase the total amount of interest paid over the life of the loan. Therefore, paying interest during the moratorium period by the complainants was their own choice. They cannot be permitted to take undue advantage of the same when they very well knew that their loan was governed under “SBI Global Ed-vantage Scheme”. A mere mistake in mentioning so in the arrangement letter cannot make them entitled to any additional benefit out of it. In our considered opinion, since the mistake in the arrangement letter was truly inadvertent and doesn't constitute a breach of contract or violation of any laws or regulations, therefore, the complainants cannot take any undue advantage out of it and are not entitled to any relief. Thus, the impugned order passed by the District Commission is not based on true appreciation of facts and law, which is liable to be set aside.

8]                For the reasons recorded above, appeal bearing No.139 of 2023 filed the opposite party – State Bank of India is accepted. The impugned order dated 06.04.2023 passed by District Commission-I, U.T., Chandigarh is set aside. Consumer Complaint No.252 of 2020 stands dismissed with no orders as to cost.

9]                Consequently, appeal bearing No.116 of 2023 filed by the complainants stand dismissed with no order as to cost.

10]              Pending applications, if any, in both these appeals stand disposed of accordingly.

11]              A copy of this order be placed in connected appeal bearing No.139 of 2023.

12]              Certified copies of this order be sent to the parties free of charge.

13]              Files be consigned to Record Room after completion.

Pronounced.

 26.03.2024

[RAJ SHEKHAR ATTRI]

PRESIDENT

 

 

 

(RAJESH  K. ARYA)

MEMBER

Ad