BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM,

ERNAKULAM.

Date of filing : 02/09/2011

Date of Order : 31/05/2012

Present :-

Shri. A. Rajesh, President.

Shri. Paul Gomez, Member.

Smt. C.K. Lekhamma, Member.

C.C. No. 475/2011

Between

And

O R D E R

A. Rajesh, President.

1. Briefly stated, the case of the complainant is as follows :

The complainant availed a loan of Rs. 10,42,000/- on 31-12-2007 from the opposite parties under housing scheme for NRIs for the purpose of purchasing 5 cents of land. The rate of interest applicable to the loan was 9.5% p.a. The loan amount was agreed to be repaid in 180 equal monthly instalments of Rs. 11,357/- each. The complainant paid substantial amounts towards the loan account. The balance amount as on 31-08-2011 was Rs. 94,354/-. The facts being so, the opposite parties caused 2 letters to the complainant demanding payment of Rs. 59,257/- and Rs. 18,105/- towards additional interest @ 5.75% alleging that the complainant has not completed the construction of the house. The complainant caused a reply to the above letters, on receipt of the letters the opposite parties have refunded substantial portion of the amounts as per the letters, however they debited an amount of Rs. 20,345.14. The opposite parties are not entitled to charge any additional interest in the loan account as the agreement does not provide the same. The complainant is entitled to refund of the excess interest collected by the opposite parties together with compensation of Rs. 10,000/- and costs of the proceedings. This complaint hence.

2. The version of the opposite parties is as follows :

The loan was granted for the purpose of purchase of a plot of land for the purpose of construction of a dwelling unit. The loan was granted under the “SBI Reality” Scheme. The credit facility was availed by the complainant on condition that the amount would be repaid with interest at the rate of 2.5% below the State Bank Advance Rate rising and falling therewith. At the time of availing the loan, the complainant executed an undertaking that he would construct the house in the plot within a period of 2 years from the date of availing of the loan also irrevocably authorised the bank to change higher rate of interest as deemed fit by the bank. Since the complainant failed to comply with the undertaking, the bank is entitled to levy the interest rate as agreed between the parties. The opposite parties are not liable to refund the amount as claimed by the complainant.

3. No oral evidence was adduced by the parties. Exts. A1 to A6 and B1 to B6 were marked on the side of the complainant and the opposite parties respectively. Heard the complainant who appeared in person and the counsel for the opposite parties.

4. The points that arose for consideration are :-

1. Whether the complainant is entitled to get the excess interest refunded from the opposite parties?

2. Whether the opposite parties are liable to pay compensation and the costs of the proceedings to the complainant?

5. Point No. i. :- The parties are in consensus on the following issues :

1. The complainant availed himself of a housing loan to the tune of Rs. 10,42,000/- from the opposite parties under housing scheme for NRIs as per Ext. A2 agreement dated 31-12-2007.

2. Since the complainant failed to commence the construction of the house within the stipulated period interest applicable to the complainant's account with effect from 31-01-2008 was 5.75% above the basic rate of interest and debited a sum of Rs. 59,257/- in the loan account evidenced by Ext. A3 letter dated 13-05-2011.

3. The opposite parties caused Ext. A4 letter dated 13-05-2011 intimating the complainant that the rate of interest with effect from 31-01-2010 is 5.75% above the basic rate of interest and called upon to pay Rs. 18,105/-.

4. The complainant caused Ext. A5 letter dated 29-06-2011 requesting the bank to revise the demand as per Exts. A3 and A4.

5. In reply to Ext. A5 letter, the opposite parties issued Ext. A6 letter revising the previous demands and demanded only Rs. 20,345.14.

6. Ext. B1, the terms and conditions of the loan goes to show that the maximum period for construction of the house has to be within 2 years from the date of availing of the loan. It is also stated in Ext. B1 that there is a penalty in case of delay in construction. The relevant clause in Ext. B1 reads as follows :

“Interest rate as applicable to Personal Loan against Mortgage of Immovable Property or 5.25% above the Base Rate, whichever is higher, will be applied if construction of house is not commenced within the maximum stipulated period. The higher interest rate will be charged after the expiry of period stipulated for commencement of construction.”

7. The complainant does not have a case that he was unaware of Ext. B1 before entering into Ext. A1 loan agreement. In view of the specific clause in Ext. B1 even prior to the loan agreement, the complainant is contractually and legally liable to pay the excess interest to the opposite parties in know the same. We cannot find any deficiency in service on the part of the opposite parties in levying excess interest @ 5.75% above the agreed rate of interest. Since as per the terms of the loan agreement, the complainant had accepted the conditions.

8. The learned counsel for the complainant relied on a decision rendered by the Hon'ble Union Territory Consumer Disputes Redressal Commission Chandigarh in State Bank of India & Ors. Vs. N.K. Sharma IV (2010) CPJ 346, wherein as per the loan agreement the rate of interest fixed was at down floating rate of interest however, the bank levied interest at commercial fixed rate of interest. The Hon'ble Commission held that the change of interest in violation of the agreement is deficiency in service. But in the instant case, the situation differs and the above decision does not apply.

9. In view of the above, we have no hesitaiton to hold that the complaint is devoid of merits in this context, we are only to dismiss the same. Ordered accordingly.

Pronounced in open Forum on this the 31^st day of May 2012.

Sd/- A. Rajesh, President.

Sd/- Paul Gomez, Member.

Sd/- C.K. Lekhamma, Member.

Forwarded/By order,

Senior Superintendent.

A P P E N D I X

Complainant's Exhibits :-

Opposite party's Exhibits :-

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