DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Rajeev Mishra, R/o H.No.90, Village Mauli Jagran, U.T. Chandigarh – 160 102.

              ---Complainant

Vs.

State Bank of India, Sector 7 Branch, Madhya Marg, Chandigarh.

---- Opposite Party

BEFORE:   MRS.MADHU MUTNEJA            PRESIDING MEMBER

SH. JASWINDER SINGH SIDHU    MEMBER

Argued By:    Complainant in person.

           Sh. K.S. Arya, Counsel for Opposite Party.

PER MADHU MUTNEJA, PRESIDING MEMBER

1.          The Complainant had taken an education loan from the Opposite Party in December, 2003. The loan was for a period of 10 years with 120 installments starting from December, 2003 and ending in December, 2013. The Complainant started repaying the loan from December, 2008 after completion of his Degree in July, 2007. The Complainant has alleged that besides making regular payment of EMI he has also paid arrears of money as and when required. Unfortunately, he has been termed as defaulter by the Bank. Also, the rate of interest has automatically changed to 14.25% and EMI has accordingly been changed from Rs.3400/- to Rs.4300/-. The Complainant has stated that he has been paying more than Rs.5,000/- per month. When he approached the Bank in March, 2012, he came to know that the EMI had now been changed to Rs.11,000/- per month without any notice being sent to him in this regard. Bank statement was not given to him. Despite taking up the matter with the Bank, the issue has not been resolved. The Complainant has thus filed the present complaint for resolving the issue with the Bank. 

2.          Notice of the complaint was sent to Opposite Party seeking its version of the case.

3.          Opposite Party in its reply has admitted that the loan of Rs.2.00 lacs was sanctioned to the Complainant on 31.12.2003. The loan was to be repaid in terms of the agreement along with interest besides payment of the incidental charges, costs, expenses etc. applicable from time to time. The Complainant has miserably failed to maintain the loan account properly. But out of goodwill gesture, the Opposite Party offered with a re-phasement of the outstanding amount. However, inspite of that the Complainant did not bother to repay the loan. The Opposite Party has therefore maintained that the Complainant is liable to pay dues to the bank along with interest and other banking charges applicable.

          A Civil Suit in this regard has also been filed by the Opposite Party against the Complainant for recovery of Rs.2,19,987/- calculated upto 15.10.2012 which is pending before the Ld. Court of Sh. Mahesh Grover, CJ(JD), Chandigarh. As the matter is already sub-judice, the present complaint is not maintainable in this Forum (copy of plaint Ex.R-4). Opposite Party has also submitted that the Complainant had approached the Banking Ombudsman for resolving the dispute, thus, the present complaint is also hit by the principle of res-judicata.   

          On merits, Opposite Party has clarified that the loan of Rs.2.00 lacs was sanctioned to the Complainant on 31.12.2003 for his B.E. course of 04 years which had already started on 21.07.2003. The answering Opposite Party admitted that the loan was sanctioned for a period of 115 months i.e. 43 months of remaining course + 12 months moratorium period + 60 months repayment period. The installments were to commence from July, 2008. As per the relevant instructions the repayment period in the education loan can be granted as under:-

“Moratorium: Course period + 1 year or 6 Months after getting the Job, whichever is earlier.

Repayment: 5-7 years after commencement of repayment.”

          Accordingly, the Complainant was granted adequate period of repayment and the account should have closed on June, 2013. However, the amount recoverable as on 15.10.2012 was Rs.2,19,987/- for which even legal notice was issued to the Complainant to release the loan payment after which the recovery suit was filed. Opposite Party has therefore prayed for dismissal of the complaint. 

4.          Parties were permitted to place their respective evidence on record, in support of their contentions.

5.          We have heard the Complainant in person and learned counsel for the Opposite Party and have perused the record, along with the written arguments filed on behalf of the Opposite Party. 

6.          Before going into the merits of the case, we need to examine the agreement for term loan for education loan scheme placed on record by the Opposite Party at Ex.R-2. The agreement dated 31.12.2003 shows that the loan is for a sum of Rs.2.00 lacs. For interest it is printed that the loan will carry interest of 0.25 per cent per annum ‘above SBAR’. This has been crossed out and ‘below MTLR’ has been written in its place with quarterly rests. These cuttings and additions have not been initialed either by the Complainant or the Opposite Party. It is also written further that the Bank reserves its right to vary the rate of interest commensurate with change in SBAR. The loan was to be repayable in 60 equated monthly installments of Rs.6454/- beginning July, 2008. It has also been given as under:   

“However, a flat amount of Rs._-_ equivalent to 9.5% of the loan amount to be necessarily paid at monthly intervals during the period of study, including the moratorium period, towards part payment of interest.”               [Annexure R-2]

          Would this mean that there was no interest during the period of study. The Complainant has not paid any amount in this period of study.

7.          It has further been written that the Bank could increase the monthly installment upon increase in the rate of interest as changed in SBAR. Interestingly, the quantum of interest and its variation, if any, chargeable/ being charged from the Complainant is not mentioned even in the reply filed by the Opposite Party.  

8.          The OP-Bank has also placed on record the statement of accounts of the Complainant at Annexure   R-5. There are many pages of statements. But a perusal thereof shows that there are gaps in the statements for the reasons best known to the Opposite Party. Also the details of transfer of payments and interests are not adequately explained. The interest rate has been shown to be .00% p.a. The cleared balance of all statements is Rs.1,01,356.15 DR with the drawing power given as Rs.2,05,911.51/-.

9.          To our mind, the statement of accounts placed on record does not put confidence to determine or explain the exact amounts paid by the Complainant, the rate of interest charged from him (whether variable or not) and the total amount outstanding as on date with interest (rate and amount) and principal are not shown clearly.

10.        In view of above discussion, we feel that the grievance of the Complainant is definitely justified, as the ambiguity about the dues and outstanding is increasing without details being provided. The clear details of interest factor and the principal outstanding and adjustments towards both on receiving payment have not been given even to this Forum. The matter is already sub-judice before the Court of Civil Judge (Jr. Division), Chandigarh (Annexure R-4). A perusal of the recovery suit shows that the Opposite Party is claiming interest @16.50% per annum from the Complainant. In Para No.5 of the Plaint, reference is made to the agreement. It is stated that interest is at 0.25% below SBAR, 10.75% p.a. with monthly rests, subject to revision from time to time, with a further stipulation that in the event of a default in payment or any irregularity in account, the Bank would have a right to levy a higher rate of interest @2% p.a. which has duly been acknowledged and agreed by the Defendant (Complainant). 

          The higher rate of interest @2% p.a. mentioned in the plaint alleged to be acknowledged and agreed by the Complainant is not part of the agreement placed on record by the Opposite Party before us or even in the reply filed before us. The rate of interest @16.50% p.a. being demanded in the recovery suit is not explained, as it is given that the rate of interest is 10.75% and it is 0.25% below SBAR. This interest rate of 16.50% has also not been given in the reply filed by the Opposite Party to this complaint.

          In fact, interest rate has not been mentioned at all. Only the amount recoverable has been mentioned. On a comparison of the reply and annexures (including copy of Civil Suit) filed before us; it seems that the Civil Suit pending is for recovery of a far higher amount than what is actually due from the Complainant to the Opposite Party.

11.        Section 3 of the Consumer Protection Act, 1986 provides for an alternate remedy to a consumer. However, the provisions of the Act can be in addition to and not in derogation of the provisions of any other law for the time being in force. The Complainant has approached this Forum as he is in a quandary about what is actually payable by him to the Opposite Party.

12.        While understanding the difficulty of the Complainant and appreciating his dilemma, we hold the Opposite Party liable for deficiency in service and unfair trade practice for not giving a clear picture of the loan account, interest and amounts due. We accordingly allow the present complaint and pass the following orders: -

[a]  The Opposite Party is directed to give a clear self-explaining monthly bank statement to the Complainant from the date of taking of loan, so that the Complainant is well aware of the amounts paid and now due. The statement must clearly mention the date wise quantum of payment received. All adjustment of payments separately towards interest and principal also be shown along with outstanding amount.

[b]  While determining the interest factor, the Opposite Party will charge interest at SBAR or MTLR whichever is lower, as the cutting has not been initialed in the loan agreement. Also, SBAR has been written further in the agreement but has not been crossed out. So, giving benefit of doubt to the consumer, the lower of the two rates only be charged from him.

[c]  The Opposite Party shall pay compensation of Rs.25,000/- to the Complainant for deficiency in service and keeping the Complainant unaware of the factual position of his account.

[d]  The Opposite Party will also pay Rs.7,000/- towards costs of litigation;

13.        This order be complied with by the Opposite Party within 45 days from the date of receipt of its certified copy.

14.        The certified copy of this order be sent to the parties free of charge, after which the file be consigned.

Announced

18^th June, 2013                            

Sd/-

   (MADHU MUTNEJA)

PRESIDING MEMBER

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER