BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SIRSA.

                                                                        Consumer Complaint no.181 of 2016                                                                                                                   Date of Institution    :    22.07.2016

                                                                        Date of Decision      :   10.08.2017.

Gurtej Singh son of Shri Gurbax Singh, resident of village Mallewala, Tehsil and District Sirsa.

                                                                                                     ……Complainant.

                                                Versus.

State Bank of India, ADB Branch, Sirsa, through its Branch Manager.

                                                                                ...…Opposite party.

Complaint under Section 12 of the Consumer Protection Act,1986.

Before:           SHRI RAGHBIR SINGH………………..PRESIDENT

                        SMT. RAJNI GOYAT……………………MEMBER

           SHRI MOHINDER PAUL RATHEE ……MEMBER.     

Present:          Sh. A.K. Gupta, Advocate for complainant.

         Sh. M.S. Sethi, Advocate for opposite party.

                        ORDER

                        In brief, the facts of the present complaint are that complainant has one KCC loan account in his name in the op bank and has availed a loan of Rs.2,00,000/- under KCC for agriculture purposes. The complainant is regularly paying the installments of said loan alongwith interest and is maintaining his loan account regularly. That the complainant approached the op in the month of November, 2014 to give the statement of account of the complainant. As per statement of account, the bank had charged penal interest heavily and wrongly and arbitrarily without giving any notice to the complainant. The complainant also got served a legal notice dated 21.8.2015 upon the op to settle the loan account of complainant and to waive the penal interest but to no effect. Hence, this complaint.

2.                     Opposite party filed written statement taking certain preliminary objections regarding cause of action; suppression of material facts and that complaint is bad for non joinder of necessary parties. Lachhman Singh son of Gurtej Singh who is a co-borrower of the op bank has not been impleaded as a party in this case. On merits, it is submitted that complainant and his son Lachhman Singh had availed KCC limit facility to the tune of Rs.two lacs from op bank since 9.2.2012. They had mortgaged their agricultural land as a security for due repayment of the loan amount with interest and other bank charges vide mortgage deed No.2948 dated 4.7.2012. They had also executed the hypothecation agreement regarding terms and conditions of payment and other loan documents in favour of the op bank in this regard. It is further submitted that as per terms of mortgage deed and hypothecation agreement, the borrowers are bound to pay interest at the rate of 12.75% per annum which is revisable from time to time as per the instruction of RBI and as per the circular of the Government of India, the borrowers of agricultural loan will get the subsidy in interest if they pay the loan amount regularly i.e. they have to pay the entire KCC limit every year and then get fresh KCC limit. In the present case, the borrowers have taken the loan of amount of Rs.2,00,000/- by way of KCC limit on 9.7.2012. On next half of the year, they were charged interest at the rate of 7% per annum. Again on 13.9.2013 they were charged interest at the rate of 7% per annum but they were entitled subsidized rate of interest of 7% if they paid the loan/ KCC amount up to 9.7.2013 i.e. within one year but they have paid the said KCC amount on 27.5.2014 i.e. after 1¾ years. In this way, they have made default in making payment, hence they are not entitled to subsidized rate of interest and the bank is entitled to recover the agreed rate of interest from the borrowers at the rate of 12.75% per annum. Hence, the op bank is entitled to recover the difference of said interest 7% and 12.75% per annum. It is further submitted that when the op authorities claimed the difference of charged and chargeable interest, then they made payment of KCC limit amount and closed the same. It is further averred that as stated above, the complainant has not paid the loan/ KCC limit regularly. The interest has been charged as per terms of the loan agreements and the mortgage deed duly executed by the complainant and another co-borrower Lachhman Singh. As and when the complainant met the authorities he was told the true position by the officials of the op bank. Remaining contents of complaint are denied.

3.                     The complainant produced his affidavit Ex.P1, copy of statement of account Ex.P2, copy of legal notice Ex.P3 and postal receipt Ex.P4.  On the other hand, op produced affidavit of Sh. Balbir Singh, Chief Manager Ex.R1, copy of statement of account Ex.R2 and copy of mortgage deed Ex.R3.

4.                     We have heard learned counsel for the parties and have perused the case file carefully.

5.                     Admittedly the complainant alongwith his son had obtained the KCC limit on 9.7.2012 as is evident from copy of statement of account Ex.P2 and cleared the loan account on 27.5.2014. Even if the version of the op bank is believed that borrowers were entitled to subsidized rate of interest of 7% if they paid the loan amount up to 9.7.2013 i.e. within one year but as they have paid the said KCC amount on 27.5.2014 and as such the bank is entitled to recover the interest at the rate of 12.75% per annum then also on one hand the op bank has charged the interest at the rate of 12.75% per annum from the complainant and his son for late payment of above said loan amount and on the other hand the op bank has also charged penal interest of Rs.13109/- on 30.11.2014 as mentioned in the statement of account and the op bank has not justified the deduction of the said amount as penal interest from the account of the complainant. In these circumstances, we are of the considered view that op bank has wrongly and illegally charged the amount of Rs.13109/- from the account of the complainant as penal interest without any basis. However, charging of interest at the rate of 12.75% for late re-payment of KCC limit as per terms and conditions of the loan agreement is not wrong and illegal.

6.                     Thus, as a sequel to our above discussion, we partly allow the present complaint and direct the opposite party to refund/ credit the amount of Rs.13109/- in the account of the complainant within a period of one month from the date of receipt of copy of this order, failing which the op will be liable to pay Rs.100/- per day as penalty to the complainant.  A copy of the order be supplied to the parties as per rules. File be consigned to the record room after due compliance. 

Announced in open Forum.                                                            President,

Dated:10.8.2017.                                                                  District Consumer Disputes

                                                                                                Redressal Forum, Sirsa.

Member                     Member.