BEFORE THE DISTRICT CONSUMER DISPUTES
REDRESSAL COMMISSION, JALANDHAR.
Complaint No.399 of 2018
Date of Instt. 25.09.2018
Date of Decision: 15.07.2022
Shri Sunil Kumar Goel son of late Shri Inderjit Goel, resident of House No.S-6, New Abadi, Near Dholewala Khooh, Mithapur, Jalandhar.
..........Complainant
Versus
State Bank of India, RACPC 1st Floor, SBI Building, Civil Lines, Jalandhar through its Asstt. General Manager.
….….. Opposite Party
Complaint Under the Consumer Protection Act.
Before: Dr. Harveen Bhardwaj (President)
Sh. Jaswant Singh Dhillon (Member)
Present: Sh. Shivam Arora, Adv. Counsel for the Complainant.
Sh. Y. V. Rishi, Adv. Counsel for OP.
Order
Dr. Harveen Bhardwaj (President)
1. The instant complaint has been filed by the complainant, wherein it is alleged that the complainant approached the OP for obtaining further Housing loan wherein the OP demanded Account Statements of the complainant with regard to earlier loans and the complainant provided the same to the opposite party. The earlier loan was repayable in 19 years and 12 years respectively. At that time the complainant scrutinized the Account Statements and the complainant was stunned seeing that the balance in both the statements of account were the same despite the complainant regularly repaid the monthly installments. When the complainant brought the matter to the notice of the opposite party, he refused to do anything in the matter. Then, the complainant got his loan accounts transferred to Punjab National Bank, New Jawahar Nagar, Jalandhar after adopting due procedure. On scrutiny of the account statements, the complainant found that the opposite party had charged excessive amount towards interest at inflated rate, as such, the loan could not be liquidated despite regular payment of installment by the complainant. In fact, the complainant obtained the loan from the opposite party to the tune of Rs.4,55,000.00 with interest at the rate of 7.75 % pa on 14.1.2006 repayable in 228 installments of Rs.3,950.00 each against Home Loan Account No. 10993149901 (new account) 01593041927 (old account) and a loan of Rs.2,12,000.00 with interest at the rate of 9% p.a. repayable in 144 monthly installments of Rs.2,413.00 each against Account No. 10993149912 (new account) 0159304192700 (old account). After availing the loan, the complainant has paid a sum of Rs.5,88,151.00 from 14.1.2006 to 20.5.2017 towards Loan Account No.10993149901 (new Account) and No. 01593041927 (Old Account). The complainant has paid a sum of Rs.3,02,827.00 from 11.3.2006.10 20.5.2017 against the New Account No.10993149912 and Old Account No. 0159304192700. The complainant has paid the installments upto May, 2017 and has been requesting the opposite party to supply the statements of account, but the same were not supplied. On 18.5.2017, the complainant again approached the opposite party and requested to supply the statements in respect of loan account stated above and the amounts paid by the complainant right from beginning. Only then, the statements of account were supplied by the OP to the complainant and after scrutiny the complainant was stunned to know that almost the entire loan was outstanding against him, although the complainant had been regularly paying the same. The complainant has come to know that the OP had been charging the interest illegally and unlawfully against the norms. In view of the evasive attitude of the OP, the complainant paid a sum of Rs.4,43,000.00 by draft of Punjab National Bank and Rs.543.00 in cash in Account No.10993149901 and further paid a sum of Rs.1,73,000.00 by way of demand draft of Punjab National Bank and Rs.627.00 in cash against second account and liquidated both the loan accounts. The complainant has been regularly paying the installments, but the bank started charging the interest at different rates against the agreed rate of interest. In this manner, the complainant has paid much more amount, which he was liable to pay. The OP has been charging the interest illegally, unlawfully and at inflated rate of interest. The loan was advanced at the rate of interest of 7.75 % per annum and other loan at the rate of 9% per annum. The OP had no authority to charge excessive interest other than at the agreed rate. But the bank has been illegally charging inflated rate of interest and illegal penalties. The complainant has paid more than the amount sanctioned as loan, but the principal amount is almost stands the same. If this accounting process continues, the loan can never be liquidated during the life time of the complainant. The facility alleged to be provided by the bank to the complainant is totally false and the loan is not better than a Usurious loan. The act of the OP in charging inflated rate of interest in the above loan account is highly illegal, unlawful, unilateral and not binding on the complainant and as such, necessity arose to file the present complaint with the prayer that the complaint of the complainant may be accepted and OP be directed to refund the extra amount charged by the OP as interest in both the loan accounts charged from time to time with fluctuations, amounting to Rs.3,2,1000/-. Further OP be directed to pay a sum of Rs.50,000/- as damages on account of unfair trade practice, negligence and deficiency in service.
2. Notice of the complaint was given to the OP, who filed reply and contested the complaint by taking preliminary objections that the present complaint is not maintainable in as much as there is no cause of action against the OP in favour of complainant. There is neither negligence nor deficiency of service nor unfair trade practice on the part of the OP. It is further averred that the complainant has not approached this Hon'ble Forum with clean hands. He has presented a distorted and twisted version of facts and has deliberately withheld true vital facts. The complainant with malafide intentions concocted a false story and attributed absolutely false and wrong allegations against OP. The true fact is that complainant has availed two separate Housing Loans from opposite party's Civil Lines, Jalandhar Branch and the applicable rate of interest as per terms and conditions of said loans were floating rate of interest which was subject to revision from time to time. The complainant availed Housing Loan of 2.4.55,000/- on 14/01/2006 and another Housing Loan of 2.2,12,000/- on 11/03/2006 from the opposite party carrying Floating Rate of Interest. As per the terms and conditions of Housing Loan for 2.4,55,000/- it carried rate of interest at 2.50 % per annum below SBMTLR (State Bank Medium Term Lending Rate) which at the time of advance was 10.25 % per annum with monthly rests and accordingly the effective rate of interest regarding Housing Loan for 2.4.55.000/- at the time of advance was 7.75 % per annum (10.25% - 2.50%) with monthly rests. The Housing Loan for 2.2,12,000/- was also linked with State Bank Advance Rate (SBAR) and it carried interest at the rate of 1.25% below State Bank Advance Rate which at the time of advance was 10.25% per annum with monthly rests as such effective rate at the time of advance was 9% per annum (10.25-1.25) with monthly rests. The said rate of interests was revisable consequent upon change in State Bank Medium Term Lending Rate (SBMTLR) and State Bank Advance Rate (SBAR) of interest, respectively. The complainant had agreed for Floating Rate of Interest and further to pay Penal Interest on any irregularity in the aforesaid Housing Loan Accounts i.e., loan Account Number 109931499014 for Rs.4,55,000/- and Housing Loan Account no.10993149912 for Rs.2,12,000/-. The Housing Loan Account for Rs.4.55.000/-remained irregular/Non Performing Asset for most of the time during the period June 2007 to May 2012. Similarly the Housing Loan Account of Rs.2.12,000/- also remained irregular/Non Performing Asset for most of the time during the period 2008 to January 2012 and various notices were issued to the complainant to regularize his Loan Accounts but to no effect. The said irregularity in Loan Accounts of complainant attracted charging of penal rate of interest. Due to irregularity of complainant in his Loan Accounts the accounts became sticky and NPA and were rephased on 27/12/2008. Despite rephasement the said loan accounts remained irregular till the year 2017. All the allegations made by the complainant are after thought and a cooked up and false story to misuse the process of law with a malafide intentions to harass and pressurize officials of the opposite party after almost a period of more than one year of his closing is accounts with the opposite party and to make unlawful gains. It is further averred that the present complaint is gross misuse of process of law by the complainant. The complainant is barred by his own act, conduct and admissions from filing the present complaint and claiming the relief. On merits, the factum with regard to availing housing loan by the complainant is admitted, but the other allegations as made in the complaint are categorically denied and lastly submitted that the complaint of the complainant is without merits, the same may be dismissed.
3. Rejoinder not filed by the complainant.
4. In order to prove their respective versions, both the parties have produced on the file their respective evidence.
5. We have heard the learned counsel for the respective parties and have also gone through the case file very minutely.
6. It is admitted case of the parties that the complainant took two housing loans from the OP. One loan was to the tune of Rs.4,55,000/- on 14.01.2006 and another loan was of Rs.2,12,000/- on 11.03.2006. The complainant has proved on record the copies of the loan agreement Ex.C-1 and Ex.C-2. The contention of the complainant is that after availing the loan, he has paid the amount of Rs.5,88,151/- from 14.01.2006 to 20.05.2017 and paid Rs.3,02,827/- from 11.03.2006 to 20.05.2017 in both the loans. It has been alleged that he has been paying the installments regularly, but the bank had started charging the interest at different rates against the agreed rate of interest. It has been alleged by the complainant that he took two loans at the interest rate of 7.75% and 9% per annum respectively. His contention is that he had liquidated both the accounts by paying a sum of Rs.4,43,000/- by draft of Punjab National Bank and Rs.543/- in cash and further paid a sum of Rs.1,73,000/- by way of demand draft of Punjab National Bank and Rs.627/- in cash against second account. Copies of the statement of account Ex.C-3 and Ex.C-4 have been proved. The grievances of the complainant is that he has paid much more amount, than he was to pay, but the OP has been charging the interest illegally, unlawfully and at inflated rate of interest. The complainant is not entitled to pay inflated rate of interest. The complainant has also produced on record the calculation made by him in both the accounts @ 7.75% and 9% respectively.
7. On the other hand, the OP had relied upon the documents furnished by the complainant Ex.C-1 and Ex.C-2 which are the loan agreements. His contention is that the loan was taken not at a fixed rate of interest, but rate of interest charged was with quarterly rest and it was subject to revision from time to time. He has referred both the loan agreements Ex.C-1 and Ex.C-2, wherein it has been mentioned that there will be revision of rate of interest from time to time and it will be deemed that the complainant has notice of the change of the rate of interest as per changes in SBMTLR. The OP has further alleged that with regard to rate of interest, the Commission has no jurisdiction. The defence of the OPs is that it is the complainant who is defaulter and his account remained irregular for number of times and number of letter were written to the complainant also. He has also relied the Memorandum of Term Loan Agreement for housing loan granted to public Ex.OP-5 and Memorandum of Term Loan Agreement Ex.OP-6. He has also relied upon the law laid down by the Hon'ble National Commission 2017 CPJ 97 (NC). He has also relied upon Master Circular regarding Interest Rates on Advances and the Section 21 (a) Banking Regulation Act 1949.
8. Ex.C-1 is the agreement letter for housing finance. This is regarding the house loan for Rs.4,55,000/-. This agreement is duly signed by the complainant on 14.01.2006. This document is consisting of four pages and every page has been signed by the complainant. In this letter, it has been mentioned that interest on loan will be charged at 2.50% per annum below SBMTLR, which is currently 10.25% per annum (the current effective rate being 7.75% per annum with quarterly rest). It has been mentioned in it that the rate of interest is subject to the revision from time to time and he shall be deemed to have notice of changes in the rate of interest whenever the changes in SBMTLR are displayed/notified by the Branch or published in the newspaper and through entry of interest charged in the passbook/statement of account sent to him. Similarly, Ex.C-2 is the sanctioned letter in which it has specifically been mentioned that it will be a floating rate of interest at 1.25% below SBAR. Ex.C-3 and Ex.C-4 are the statements of account, which show the interest charged by the OPs and the increase in rate of interest has also been shown in these statement of accounts. Ex.OP-1, Ex.OP-3 and Ex.OP-4 are the letters, written to the complainant regarding the re-phasement of home loan and regarding the irregularity/ NPA of both the accounts of the complainant. Similar is the letter Ex.OP-4, vide which the complainant has been made aware that his account is running irregular. Ex.OP-5 and Ex.OP-6 are the memorandum of term loan agreements.
9. As per the agreements, the rate of interest to be charged from the complainant is a floating rate of interest and statements of accounts of the complainant depict the increase/decrease of rate of interest from time to time. The complainant has also placed on record the statement to show that the entire amount has been paid by him and the wrong interest has been charged by the OPs. It has been held by the Hon’ble Supreme Court in 2015 (4) LawHerald (SC) 3182, titled as “ICICI Bank Ltd. Vs. Maharaj Krishan Datta and Ors.”, wherein it is held that S.14—Housing Loan—Rate of interest—Complainant had taken loan on floating rate of interest basis—Therefore, bank is entitled to charge interest in accordance to RBI guidelines—Consumer Commission cannot direct to charge interest on fixed rate of interest. It has been held by the Hon’ble Union Territory Consumer Disputes Redressal Commission, Chandigarh, in a FA No.382 of 2009, decided on 24.05.2011, titled as “Birbhan Goyal Vs. ICICI Bank Limited”, wherein it is held as under:-
“Consumer Protection Act, 1986 , Section 2 (1) (g) 15 , 26- Frivolous complaint - Costs. Banking service Bank loan - Interest - Floating rate - EMI- Increase in term of EMI - The complainant very well knew that as per the agreement/documents, the rate of interest, on the loan which was taken by him was floating and the EMIs and the period of loan could be varied by the OP from time to time. He also knew that the demand raised by the OP was not illegal and arbitrary and yet he filed a false and frivolous complaint- The District Forum was right in imposing Rs.10,000/- as costs, u/s 26 of the CP Act on the complainant - Order of the District Forum upheld and appeal liable to be dismissed.
It has been held by Hon’ble National Commission, in IV (2019) CPJ 314 (NC), case titled as “ICICI Home Finance Ltd. Vs. Manish Jain”, wherein it is held that since petitioner company has been charging only the rate agreed between parties, no fault can be found with quantum of interest claimed by it-sanction letter issued in the name of complainant and his co-applicants contained terms and conditions which clearly link interest rate to ICICI Home Prime Lending Rate-Deficiency not proved.it is not at the fixed rate of interest as alleged by the complainant. It has further been held by Hon’ble National Commission in II (2017) CPJ 97 (NC), titled as “Anil Gupta & Anr. Vs. ICICI Bank Ltd.”, wherein it is held as under:-
“Banking and Financial Institutions Services-Interest rate – Unilateral increase alleged- Alleged deficiency in service- District Forum dismissed complaint –State Commission dismissed appeals – Hence revision- Terms of agreement does not anywhere state that rate of interest was 11% - Rate of interest payable by borrower shall be subject to changes in interest rates made by RBI from time to time- Bank can give effect to any representation of interest rate as per RBI Guidelines and directives- Loan agreement which specifies interest rate to be ‘floating’ with sole discretion of bank with respect of variance interest as well as number of installments.”
The complainant has challenged the rate of interest in his complaint. He has calculated the amount to be paid and paid @ 7.75% and 9% in both the accounts i.e. account no.10993149901 and 10993149912 respectively. He has alleged that he has paid the excess amount to the OPs if calculated @ 7.75% and 9% regarding both the accounts. As discussed above, as per the agreement agreed between the complainant and the OPs, the rate of interest agreed was floating rate of interest and it was not a fixed rate of interest. As per Section 21 (a) of Banking Regulation Act, rate of interest charged by banking companies not to be subject to the scrutiny by the Courts. As per this section, any transaction between a banking company and its debtor shall not be reopened by any Court on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive. It has been held by Hon’ble Kerala State Commission, in II (2006) CPJ 477, in a case titled as “Vijaya Bank Vs. V. Gilbert”, wherein it is held as under:-
“Banking Regulation Act, 1949- Section 21-A- Charging of interest – Bank realizing interest at rate allowed to be charged by RBI- Same alleged to be in excess of maximum rate- Under Section 21-A of Act of 1949, not open to complainant, to contend excessive charging of interest – Section barred him from getting transaction reopened-Undisputedly said section applied to transaction between parties – complainant not entitled to claim any amount by way of excess interest collected from him- No deficiency in service of bank proved.”
10. From the documents produced on record by both the parties, it is proved that the complainant himself has agreed for the floating rate of interest and the bank has charged the rate of interest as per the guidelines of the RBI and the rate of interest cannot be reopened by the Courts as per the Banking Regulation Act. Thus, there is no deficiency in service and unfair trade practice on the part of the OPs and accordingly, the complaint of the complainant is dismissed with no order of costs. Parties will bear their own costs. This complaint could not be decided within stipulated time frame due to rush of work.
11. Copies of the order be supplied to the parties free of cost, as per Rules. File be indexed and consigned to the record room.
Dated Jaswant Singh Dhillon Dr. Harveen Bhardwaj
15.07.2022 Member President
