Order No.                 .

This is an application u/s.12 of the C.P. Act, 1986.

          Complainant by filing this complaint has submitted that complainant applied on 23-11-2005 for a housing loan from the Bank for purchase of a new flat Flat No.4E, 4^th floor at 135A, S.P. Mukherjee Road, Kolkata – 700 026 and housing loan of Rs.21,96,000/- was sanctioned by the Bank at 7.75% p.a. on daily reducing balance at monthly rests, subject to interest rate reset at the end of every three years.  If the borrower is not agreeable to the revised interest rates so fixed, the borrower shall request SBI within 15 days of receipt of notice intimating the change in interest rates from SBI, to terminate the loan and shall repay the loan amount with interest. 

          As per agreed terms and conditions of sanction letter issued by the Bank, the Bank is under obligation to resent the rate of interest only after the end of every three years after giving adequate days not5iece to the undersigned and an option to terminate the loan account if the interest rate to be fixed by the Bank is not acceptable to the borrower.

          Fact remains the interest rate was changed or reset to 11.25% unilaterally on 31-05-2011 by the Bank without any intimation and debited her loan account with Rs.1,35,151/- on 31-05-2011 as interest arrears for the period from 23-12-2008.       

          Practically, the arbitrary action of the bank in resetting the interest rate whimsically on 31-05-2011 without any intimation is void ab initio and in gross violation of the mutually agreed/accepted terms of sanction caused gross injustice to the complainant and her right to pre-close the loan account was denied causing huge financial loss and lacks transparency and unethical trade practice on the part of the bank.  Further complainant has submitted that for such sort of unethical conduct of OP and also their u8nfair trade practice complainant has after getting no proper relief from the OP complainant is compelled to file this complaint for proper relief.

          On the other hand bank by filing written version submitted that no doubt the complainant is a customer in respect of her loan account no.11063190473 and fact remains as per loan agreement SBI is the sole judge to determine the rate of interest which was accepted by the complainant at the time of accepting the loan account with sanctioned order so the said term is binding upon both the loanee and the bank also.

          It is further submitted that no doubt rate of interest was 7.75% p.a. from 9^th December, 2005 to 9^th December, 2008 and from 10^th December, 20-08 rate of interest was changed and from 09-02-2011 rate of interest was reset with effect from 31-05-2011 and so the amount of Rs.1,35,151/- as arrear interest was included for the period from 10^th December, 2008 to 31-05-2011.

          It is further submitted that for illegal gain complainant filed this fake case and OP bank never acted illegal and further in the sanctioned letter everything is specifically mentioned.  Complainant accepted it.  Thereafter, loan amount was taken by the complainant.  So, the entire complaint of the complainant should be dismissed as same is vexatious and without any foundation.  

Decision with Reasons

On proper consideration of the entire materials on record including the complaint and written version and particularly relying upon the argument as advanced by the parties including the vital sanctioned order issued by the OP in favour of the complainant it is found that Rs.21,96,000/- only was sanctioned on 09-12-2005 with specific clause of interest on the loan has been charged @7.75% p.a. on daily reducing balance at monthly rests, subject to interest rate reset at the end of every three years on the basis of fixed interest rates prevailing then.

          But it is further mentioned in that sanctioned letter if the borrower is not agreeable to the revised interest rate so fixed, the borrower shall request SBI, within 15 days of the receipt of notice intimating change of interest rate from SBI to terminate the loan and shall repay the loan and any other loan amount due to SBI in full and final settlement in accordance with the provisions of this agreement relating to prepayment.  Practically bank authority has tried to convince that as per said agreement after three years from the date of sanctioning loan on 09-12-2005 the basis of fixed interest rate prevailing it that term will be charged as reset of loan and so, after lapse of three years from the date of sanctioning the loan i.e. loan was sanctioned on 0-9-12-2005 and three years already lapsed on 10-12-2008 and accordingly from 10-12-2008 up to 31-05-2011 Bank charged reset interest as per revised interest rate and so the arrear from 10-12-2008 to 31-05-2011 was assessed and a sum of Rs.1,35,151/- as arrear interest was charged for that period but anyhow complainant did not file any objection against that and also did not pray for closure of the loan and the realization of interest was fixed at the rate of 11.25% on 31-05-2011 but it was assessed from 10-12-2008 when three years already completed from the date of taking loan  on 09-12-2005.

          Considering the entire facts and circumstances it is found that no doubt there is a term that after lapse of three years from date of taking loan and sanction of loan the interest rate shall be changed as per interest as prevailed at the relevant time and no doubt to that effect there is nothing to say because it was within the knowledge of the complainant and it was also within the knowledge of the complainant that at the time of taking and enjoying the loan as per sanctioned letter though the complainant is found unwilling to accept such rest interest rate after lapse of three years.  In that case complainant has no other alternative but to pray for closure of the loan and to repay the entire loan.

          No doubt the OP has tried to convince this Forum that complainant did not file any objection against reset of the change interest @11.25% over the balance amount after expiry of three years from the date of taking loan and also did not pray for closure of the loan but in this regard complainant has submitted it is unfortunate that the loan was sanction on 09-12-2005 and complainant received the loan amount no doubt and three years from the date of taking loan expired on 10-12-2008 but after 10-12-2008 OP never sent any letter to the complainant for resetting of the interest.  So, complainant was satisfied that rate of interest as noted in the sanctioned letter to the extent of 7.75% had not been changed and further it is submitted by the complainant that they came to learn about the change of rate of interest at the time of depositing the EMIs of Rs.20,670/- by cheque on 29-06-2011 that an arrear interest of Rs.1,35,151/- was charged on 31-05-2011 but no letter was sent to the complainant by the bank that rate of interest had been reset to the extent of 11.25% p.a. with effect from 10-12-2008 and no option was given to the complainant whether complainant shall have to accept it or not to accept it and further no option was given to the complainant to close the loan on the repayment of the entire amount.  So, it is proved that OP back behind the complainant completed all official work and charged reset interest @11.25% p.a. with effect from 10-12-2008 that means some back dated interest was charged without the knowledge of the complainant and without any intimation by the bank to the complainant.  but from the agreement it would be clear that before resetting the interest after three years from the date of taking loan OPs are bound to inform the complainant the reset interst rate after three years but since inception of the loan account on 09-12-2005 no information as yet is given by the OP to the complainant about reset of interest and that is no doubt an unfair trade practice and for which complainant did not get any chance to perform her duties as per agreement of the sanctioned letter but OP unilaterally and back behind the knowledge of the complainant after lapse of 6 years reset interest as fixed @11.25% p.a. and automatically charged arrear interest from 10-12-2008 to 31-05-2011 and such an act on the part of the OP is no doubt a violation of the loan agreement/contract and also their own sanctioned letters condition as embodied in the sanctioned letter on 09-12-2005 and practically by that act OP has adopted an unfair trade practice and at the same time complainant has been harassed and service has not been given by the OP as per contract as laid down in the sanctioned letter of the loan agreement.

          We have mentally considered the vital document the loan sanctioned letter dated 09-12-2005 and wherefrom we have gathered the bank authority has no legal capacity to reset the interest after three years from the date of taking loan back behind the knowledge of the complainant and without any information of the complainant and fact remains in this case bank has miserably failed to prove that at any point of time in the month of December, 2008 or after that till 31-05-2011 OP sent any such letter to the complainant for accepting their reset interest @11.25% or to close the account if it is not accepted by repayment of the entire loan when that is that precondition of resetting the interest as per agreement in between the complainant and the OP what has embodied in the sanctioned letter dated 09-12-2005, then it is clear OP Bank violated grossly the terms and condition of the agreement.

          Practically, the written version is also silent in this regard but OP has tried to say both the parties are guided by the condition as embodied in the loan agreement and also in the sanctioned letter when that is the fact then we are relying upon the defence of the OP and after relying upon the defence of the OP we have gathered that OP is equally bound to perform their part performance as per agreement to inform the complainant about the reset of the interest after lapse of three years and thereafter if it is received by the complainant then it is the option or liberty of the complainant either to accept the interest or pray for cancellation of the loan agreement on repayment of full amount.  But that has not been done by the OP but it is evident from the OP’s own overact that OP did everything after lapse of 6 years from the date of sanctioning the loan on 09-12-2005 and fact remains no intimation was given to the complainant prior to the resetting of the interest and when that is the fact then it is clear OP did not perform their part performance as per agreement and practically complainant has no fault in this regard and in this respect already the Hon’ble National Commission has decided and come to a conclusion that terms and condition of the policy or of any loan agreement of the bank or financial institution shall be strictly governed by policy condition and no exception or relaxation can be made on ground of equity (Ref – 2013(4) CPR 165 (NC).  So, considering that ruling and the present conduct of the OP we are convinced that bank authority back behind the knowledge of the complainant and without any intimation and information to the complainant about their resetting of interest after lapse of 6 years changed interest @11.25% and charged a huge amount from back date i.e. from 10-12-2008 and till 31-05-2011 but anyhow the OP has failed to give any explanation to the Forum why they kept the customer in darkness violating the terms and condition of the policy and so, there is no alternative but to hold that the bank authority adopted unfair trade practice keeping the complainant in darkness and charged reset interest at their own wish.  But no doubt bank has sanctioned loan, no doubt bank can reset the interest rate after lapse of three years but before resetting the consent of the customer i.e. complainant is mandatory and if customer(complainant) is not satisfied about interest then the complainant consumer is entitled to get such option to cancel the loan by repaying the same but that scope has not been given to the complainant and this is no doubt another clear instance of practicing fraud on the part of the bank to the consumer and no doubt for adopting such unfair trade practice complainant as consumer has been harassed.  Fact remains the complainant has been regularly paying the EMIs till now.  There was no fault on the part of the complainant consumer but fact remains the entire transaction in between the complainant and the OP has been shattered by the OP for their illegal immoral act and for their adopting such unfair trade practice to charge reset interest @11.25% p.a. with effect from 10-12-2008 but that was based on 31-05-2011 back behind the knowledge and information to the to the complainant.

          Considering all the above facts, materials, conduct, unfair trade practice of the OP and unscrupulous service of the OP are well proved and for which no doubt complainant suffered mentally and also suffered loss because if the matter ought to have been brought to the notice of the complainant in time as per terms and conditions of the loan agreement in that case complainant may repay the entire loan and repay the entire loan amount but that scope has not been given by the OP to the complainant for which no doubt complainant has been able to prove the vital allegation against the bank administration about their unfair trade practice in respect of reset interest or resetting the interest rate and also their trends to change interest back behind the knowledge of the complainant and not only that complainant has also proved that complainant was never informed about that when the allegation of the complainant is well proved against the OP.

In the result, the case succeeds.

Hence,

Ordered

That the case be and the same is allowed on contest with a cost of Rs.10,000/-(Rupees Ten thousand only) against the OPs.

          OP Bank is hereby directed to pay a compensation of Rs.25,000/-(Rupees Twenty Five thousand only) to the complainant for harassing and causing mental pain to the complainant and for adopting unfair trade practice.

          OP bank is hereby directed not to deduct any amount of interest in respect of the present loan of the complainant at the rate of 11.25% p.a. and if any such amount is deducted that shall be deleted from the loan account.

          But considering the present total dispute we are directing the complainant either to write a letter to the bank for closing the entire loan account on receipt of the balance loan amount @7.75% interest up to date.  In the regard complainant shall have to deposit the entire balance loan amount as it would be found as on the date of her application and bank shall have to accept the said amount with interest @7.75% and upto close loan account by issuing NOC and handing over all documents in respect of the said loan agreement in favour of the complainant and it must be completed within two months by the parties and OP bank shall not charge any further interest above @7.75% p.a. with such closure and no interest shall be assessed @11.25% for any period and if it is assessed it shall be deducted from the balanced loan amount.  OP shall have to comply this order on the basis of application of the complainant and complainant may accept this option and close down the same and if complainant is unwilling to accept the option in that case it is the option of the complainant what process they shall have to adopt in respect of the loan account.  So, parties are directed to comply this order very strictly.

          Within two months from the of this order parties shall have to report what is the maturity of the spirit of this order but for adopting the unfair trade practice and unscrupulous service to the consumer OP Bank is imposed Rs.25,000/- (Rupees Twenty Five thousand only) as punitive damages and it is imposed to check the unfair trade practice by the bank administration and same shall be deposited to the present Forum in the account of President, D.C.D.R.F., Kolkata, Unit-II. 

          OP Bank authority is hereby directed to comply the order in respect of payment of cost, compensation to the complainant deposit of punitive damages to this Forum within one month failing which for each days delay penal interest @Rs.300/- shall be assessed over the same which shall be paid by the OP and further penal action u/s.27 of the C.P. Act, started against them for which further penalty shall be imposed.

Dictated & Corrected