BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANGALORE

Dated this the 18^th of June 2011

PRESENT

        SRI. RAVISHANKAR           :   PRESIDENT

                        SMT.LAVANYA M. RAI       :   MEMBER

                        SRI. ARUN KUMAR K.        :   MEMBER

COMPLAINT NO.272/2010

(Admitted on 08.10.2010)

Mr.Sunny Thomas,

So M.T.Elias

Aged 50 years,

Residing at Maliyill House,

Anivoor Neriya Village & Post,

Belthangady Taluk.                                    …….. COMPLAINANT

(Advocate for the Complainant: Sri.K.Premanath).

          VERSUS

1. State Bank of India,

    Belthangady Branch,

    Shree Kshethr Complex,

    Main Road, Belthangady,

    Represented  by it Manager,

2. State Bank of India,

    Regional Business office,

    Region III, 3^rd Floor,

    Essel Towers, Bunts Hostel Circle,

    Mangalore 575 003.

    Rep. by its Regional Manager.     ….. OPPOSITE PARTIES

(Advocate for the Opposite Parties: Sri. B.Nanda Kishore)

                                      ***************

ORDER DELIVERED BY PRESIDENT SRI. RAVISHANKAR:

1.       The complainant filed this complaint under Section 12 of the Consumer Protection Act against Opposite Party No.1 and 2 alleging deficiency of service in not charging interest at rate of 6% per annum on agricultural loan and 8% per annum on housing loan.  Hence prays for reduction of interest at the said rate along with compensation of Rs.25,000/- towards deficiency of service and Rs.25,000/- compensation for hardship. 

The brief facts of the complaint are as under:

2.       The Complainant has availed housing loan of Rs.5,00,000/- from Opposite Party bank on 5.12.2006 and agreed to pay Rs.6,000/- equated monthly installment at the rate of interest at 10.25% per annum. He also availed agricultural loan from Opposite Party bank to the tune of Rs.1,00,000/- on 7.9.2007 and agreed to pay 5 yearly installments amounting to Rs.20,000/- with interest, opposite party has charged 12% interest per annum on the said agricultural loan.  At the time of availing the said loans, the complainant is not aware of guidelines of Reserve Bank of India regarding the rate of interest chargeable by banks on various types of loans.  He availed the loan in urgency and did not enquire about the rate of interest at the time of raising loan.  The complainant is regular in paying installments and when he noticed the statement of accounts, Opposite party is charging interest at the rate of 12% per annum on agricultural loan and 10.25% per annum on the housing loan.  But complainant recently came to know that banks are required to charge the rate of interest at 6% per annum on agricultural loan and 8% per annum on housing loan to the farmers as per the policy of the Central Government.  The government also announced from 2% rebate to the persons who are paying regular payment of the loan.  Such being the case, Complainant approached Opposite Parties to reduce the rate of interest charged against the loan.  But Opposite Parties have not reduced the rate of interest and stated that they have charged the interest as per the agreement.  But the agreement entered with Opposite Party is contrary to the guidelines of the Reserve Bank of India and policy of the Central Government.  Hence Opposite Party is liable to reduce the rate of interest on both housing loan and agricultural loan.  The complainant has sought information as per Reserve Bank of India regarding the rate of interest, but Opposite Parties have not given any information in this regard for which complainant approached Reserve Bank of India for the information and Reserve Bank of India inturn had sent a guidelines of a bank and banks cannot charge more interest beyond the guidelines of the Reserve Bank of India.  Therefore, Opposite Party No.1 and 2 are at deficiency of service in charging 12% per annum on agricultural loan and 10.25% on housing loan.  Hence prays for reduction of the rate of interest along with a compensation for deficiency of service as prayed above.

3.       After service of notice Opposite Parties No.1 and 2 appeared through their counsel and filed version and contended that the Complainant is not come with clean hands to file this Complaint and he has suppressed the material facts of the case.  The Complainant has filed this complaint on imaginary and the rate of interest cannot be charged on the loan of complainant as desired by himself.  The Opposite Party bank is a reputed bank which is guided by statutory rules, regulations and guidelines.  The Complainant had executed an agreement to Opposite Party bank in order to raise those loans.  And both Complainant and Opposite Parties have to act according to the terms and conditions of the agreement.  There is a contractual obligation on Complainant to pay the rate of interest as agreed.  And Opposite Party cannot reduce to 6% per annum on agricultural loan and 8% per annum on housing loan at the desire of Complainant.

4.       Opposite Parties further contented that Reserve Bank of India guidelines is general in nature and it does not apply to a specific case.  The Complainant has executed an agreement letter dated 5.12.2006 and has agreed for the payment of rate of interest (floating rate of interest) and the enhanced rate of interest at 2% per annum for the period of default over and above the applicable rate if the equated monthly installment remains unpaid for a period of 30 days from the due date.  The housing loan was repayable in equated monthly installment of Rs.5,295/- but Complainant had not adhered to this repayment clause as agreed and he is in default in payment of the monthly installment.  Further the Complainant and the guarantor have executed loan document in order to raise agricultural loan and in the sanction letter dated 7.9.2007.  The Complainant has categorically admitted the rate of interest to be paid to the Opposite Party bank. Therefore, no deficiency of service on their part and they are not liable to reduce the rate of interest as claimed in the Complaint. Hence, prays for dismissal of the Complaint.

5.       In view of the above said facts, the points now that arise for our consideration in this case are as under:

1. Whether the Complainant proves that the Opposite Parties No.1 and 2 committed deficiency in service?

2. If so, whether the Complainant is entitled for the reliefs claimed?

3. What order?

6.         In support of the complaint, Mr.Sunny Thomas (CW1) filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on him.   Ex C1 to C7 were marked for the Complainant as listed in the annexure in detail.   One Sri.Dhananjaya Moorthy K.V (RW1), Branch Manager of the Opposite Parties filed counter affidavit and answered the interrogatories served on him.  Ex R1 to R10 were marked for the Opposite Parties as listed in the annexure in detail.   The Complainant as well as Opposite Parties produced notes of arguments.

          We have considered the notes/oral arguments submitted by the learned counsels and also considered the materials that was placed before this Forum and answer the points are as follows:

                       Point No.(i) & (ii) :  Negative.

                       Point No.(iii): As per the final order.  

Reasons

7.  Point No. (i) & (ii): There is no dispute that the Complainant has raised two loans one is housing loan and another one is agricultural loan from the Opposite Party bank by executing loan agreements.  There is also no dispute that rate of interest on housing loan is 10.25% per annum and 12% per annum on agricultural loan.  The only dispute raised by the Complainant is that as per the guidelines of the Reserve Bank of India, the Opposite Party has to reduce the rate of interest on both housing loan and agricultural loan and approached the Opposite Party.  But Opposite Party has not reduced the rate of interest charged on both loans.  Hence, alleges deficiency of service and prays for the reduction of the rate of interest along with compensation for deficiency of service. 

8.       On contrary, the Opposite Party has taken a contention that at the time of availing loans Complainant has executed loan agreement and agreed to pay the agreed rate of interest and they cannot reduce the rate of interest at the desire of the Complainant and hence submits no deficiency of service.

9.       The learned counsel for the Complainant vehemently argued that, under Right to Information Act he received the information regarding the guidelines given by Reserve Bank of India with respect to the rate of interest chargeable by banks and submits that the Central Government has reduced interest on agricultural loan to 6% per annum and on housing loan they have reduced to 8% per annum and basing on that guidelines Opposite Party has to reduce the rate of interest on loan of the Complainant.  The said information given by Reserve Bank of India is marked as Ex.C7.

10.     On going through the loan agreement produced by Opposite Party that is at Ex.R1.   We noticed that the Complainant has agreed to pay the loan with interest at the rate of 10.25% per annum and the rate of interest is floating in nature and he is paying the said installments with interest.  The loan raised by the Complainant is in the year 2006.  The another loan raised by Complainant is agricultural loan and as per Ex.R7 we noticed the said loan raised as a term loan for the purpose of developing the land.  Therefore, the said loan cannot be considered as agricultural loan.  We are of the opinion that the said loan is called as term loan.  The Complainant and guarantor have also agreed to pay interest at the rate of 12% per annum on the said term loan, when the Complainant and the guarantor have executed the agreement and paying the installments at the agreed rate of interest.  He cannot at his whims and fancies claim for reduction of the said interest charged on the loan, therefore we are of the opinion that the Opposite Party bank is a nationalized bank it has got its own policies regarding the rate of interest under the guidelines of Reserve Bank of India.  The policy of Opposite Party bank regarding the rate of interest cannot be challenged by the Complainant before this Forum.  The policy of the Opposite Party bank cannot be discussed in Consumer Forum.  It is pertinent to note that whether the Complainant alone is charged 12% interest on term loan and 10.25% interest on housing loan by the Opposite Party or not?  The Complainant has not explained whether he is alone facing the said rate of interest or all other customers who have raised loan with Opposite Party bank have facing the same rate of interest.  Therefore, if the Complainant established that he is alone charged by the said rate of interest then we consider the Complainant might have committed deficiency of service whereas Complainant has not established that he is alone paying the rate of interest as alleged in the complaint.  Hence, the claim made by the Complainant cannot be justified.  Therefore, the policy of Opposite Party Bank with regard to imposing rate of interest on housing loan and term loan (agricultural loan) cannot be altered to the particular Complainant’s loan and we do not find any deficiency of service on the part of the Opposite Parties in charging the agreed rate of interest on the loans raised by the Complainant.  As such we answer point No.(1) and (2) in the negative and the complaint is liable to be dismissed.

11.     In the result, we pass the following:                          

ORDER

          The complaint is dismissed. No order as to costs.

The copy of this order as per the statutory requirements be forwarded to the parties free of charge or sent to the parties under postal certificate and thereafter the file shall be consigned to the record room.

(Page No.1 to 9 dictated to the Stenographer typed by him, revised and pronounced in the open court on this the 18^th day of June 2011.)

PRESIDENT                    MEMBER                              MEMBER

ANNEXURE

Witnesses examined on behalf of the Complainant:

CW1 – Mr. Sunny Thomas – Complainant.

Documents produced on behalf of the Complainant:

Ex C1 – 29.9.2009: Copy of notice issued to Opposite Party.

Ex C2 – Postal acknowledgement.

Ex C3 – 21.10.2009: Reply by Opposite Party.

Ex C4 – Statement of account.

Ex C5 – 10.11.2009: Letter written by complainant to Regional Manager.

Ex C6 – 25.8.2010: Letter written by SBI Regional business office Mangalore.

Ex C7 –  9.8.2010: Information given by Reserve Bank of India.

Witnesses examined on behalf of the Opposite Parties:

RW1 – Sri. Dhananjaya Moorthy K.V. Branch Manager, SBI Belthangady.

Documents produced on behalf of the Opposite Parties: 

Ex R1 – Housing loan application form filed by the Applicants(copy)

Ex R2 – Appraisal for Housing term loan.

Ex R3 – Arrangement letter-Housing Finance submitted by the complainant.

Ex R4 – Memorandum of loan agreement for Home loan submitted by the complainant.

Ex R5 – Guarantee Agreement by the guarantor.

Ex R6 –  Application for agricultural loan filed and submitted by the complainant.

Ex R7 – Agricultural finance appraisal Memorandum.

Ex R8 – Agricultural loan sanction letter.

Ex R9 – Toradhara Agreement.

Ex R10 – Guarantee Letter.

Dated:18.06.2011                            PRESIDENT