Punjab

Ludhiana

CC/14/873

Vikram Monga - Complainant(s)

Versus

State bank of Patiala - Opp.Party(s)

Sandeep Sethi Adv.

08 Sep 2015

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

 

Consumer Complaint No. 873 of 22.12.2014

Date of Decision          :   08.09.2015

 

Vikram Monga son of Shri Harish Kumar Monga, resident of House No.1924/21, Street No.1, Gandhi Nagar, Shivpuri, Ludhiana.

….. Complainant

Versus

1.State Bank of Patiala, Daresi Road, Ludhiana through its Chief Manager.

 

2.State Bank of Patiala, Retail Assets Small Medium Enterprises City Credit Cell, Ist

Floor, Bharat Nagar Chowk, Ludhiana through its Chief Manager.

 

…Opposite parties

 

    (COMPLAINT U/S 12 OF THE CONSUMER PROTECTION ACT, 1986)

 

 

QUORUM:

SH.G.K.DHIR, PRESIDENT

SH.SAT PAUL GARG, MEMBER

 

COUNSEL FOR THE PARTIES:

For complainant                      :         Sh.Sandeep Sethi, Advocate.

For Ops                         :         Sh.Jaswinder Sharma, Advocate

 

PER GOPAL KRISHAN, PRESIDENT

 

1.                          Complainant Vikram Monga, an Advocate by profession, filed complaint under Section 12 of the Consumer Protection Act, 1986(hereinafter as referred as the ‘Act’)  against the OPs, by claiming that he purchased Maruti Ritz car bearing registration No.PB-10-CX-9110 for his personal use on being financed by OP1 vide loan account No.65073517420. At that time, officials of bank assured the complainant to charge nominal interest from him because of his being an old customer of the bank. Letter of Arrangement dated 11.11.2009 was issued by OP2 to the complainant, in which, it was clearly mentioned that loan of Rs.3,50,000/- contracted by the complainant will be repayable in 60 equated monthly installments of Rs.5455/- each for first twelve months and for the 2^nd and 3^rd years, installments will be calculated @10% p.a. fixed and for the 4^th and 5^th years, the prevailing rate of interest at that time will be charged by the bank as per RBI guidelines. Blank signed cheques were obtained from the complainant at the time of sanctioning of loan by disclosing the complainant to deduct the amount of installment through ECS system from his other account. Some other blank signed cheques were obtained from the complainant by Ops. Ops started deducting the amount of Rs.7100/- per month from his account No.55018957687 maintained with OP1. When the complainant got knowledge of the same, then he approached with Ops for calling upon them to settle the account for clearance. After payment of all 60 installments, when the complainant visited OP1 for getting N.O.C. of the said loan, then he was shocked to know that amount of Rs.25,984.24P is still due against him. Complainant called upon the officials of Ops to supply the detail of due amount, but officials did not respond. After obtaining statement of loan account from Ops, complainant got the knowledge about charging of rate of interest @14% p.a. albeit the same was not settled. Present rate of interest in car loan is alleged to be approximately 10.45% p.a. So deficiency in service on the part of Ops pleaded. Directions sought to Ops to refund the excess amount deducted from his account since beginning till end and issuance of NOC. Compensation of Rs.2,00,000/- on account of harassment and humiliation and legal expenses of Rs.20,000/- also claimed. 

2.                On appearance, Ops filed written statement by pleading interalia as if the complaint is not maintainable; complainant is estopped by his own act and conduct from filing the complaint; complainant has not approached this Forum with clean hand and he has made vague and indefinite allegations lacking material particulars. Admittedly, the complainant availed loan for purchase of Ritz car. That loan was payable in 60 equated monthly installments. The installment from 1^st to 12^th months was fixed @8% interest, which comes to Rs.7096.74P, but from 13^th to 36^th months, the installment was to be payable with interest @10% per annum, which comes to Rs.7372.90P per month. Thereafter, from 37^th to 60^th months, the installment was to be paid with interest @14% per annum as per directions of Reserve Bank of India. Letter of Arrangement was executed between the complainant and Ops and as per the same, the payable installment of Rs.7671.25P per month. However, complainant has been making payment of installment of Rs.7100/- per month. Complainant refused to pay the difference of payable amount. An amount of Rs.4,26,000/- has been paid by the complainant, out of the due amount of Rs.4,46,218/- and as such, balance amount of Rs.20,218/- is payable by the complainant. Complainant agreed to pay installment with prevalent rate of interest. Now complainant cannot turn around for taking contradictory stand of the terms of the loan contract agreement. Letter of Arrangement dated 11.11.2009 was executed between the complainant and Ops settling the terms of rate of interest and amount of payable installments and as per that, Rs.7100/- per month continued to be deducted from the account of the complainant. As Ops have given each and every detail of the amount to be charged from the complainant, but later one putting undue pressure on Ops for obtaining NOC without making payment of remaining balance amount of interest. Present rate of interest on car loan is not 10.45% per annum. No application filed by complainant on 24.10.2014 as alleged. Each and every other averment of complaint denied by claiming that Ops being nationalized bank strictly conduct transactions in accordance with the guidelines of Reserve Bank of India.

3.                Complainant to prove his case tendered his affidavit Ex.CA alongwith documents Ex.C1 & Ex.C2 and then closed the evidence.

4.                On the other hand, counsel for OPs tendered in evidence affidavit Ex.RW/A of Sh.Balvir Singh, Chief Manager of State Bank of Patiala alongwith documents RW1 to Ex.RW5 and thereafter, closed the evidence.

5.                          Written arguments not submitted by any of parties. Oral arguments were addressed and heard. Records gone through minutely. 

6.                Undisputedly, the loan was contracted by the complainant qua purchase of the car from Ops as per terms of Letter of Arrangement dated 11.11.2009 Ex.C1=Ex.RW4. Hypothecation Agreement Ex.R5 also produced by Ops themselves. Perusal of Ex.C1=Ex.RW4 reveals that loan was to be repaid in 60 equoted monthly installments of Rs.5455/- each for first 12 months, for the second and third year, installments to be calculated at the rate of interest 10% p.a. fixed and thereafter, at the rate then prevailing floating car loan rate linked with BPLR till the entire loan with interest is fully repaid. As per clause 4 of Ex.C1=Ex.RW4, first installment was to be commenced after 1 month from the date of disbursement. Even as per clause 6 of Hypothecation Agreement Ex.RW6, the borrower to repay the amount in 60 equated monthly installments of Rs.5455/- each, the first of which shall be payable on December, 2009 and the 59 subsequent installments on or before the same date of each succeeding months thereafter. As per clause 8 of Ex.RW5, the bank shall at any time be entitled to give notice to the borrower of its intention to charge and may thereafter, charge interest at such higher rate that the rate mentioned in Hypothecation Agreement as the bank may specify. In the Hypothecation Agreement itself, it is mentioned that interest on the loan will be charged @8% p.a. fixed first year and 10% for the 2^nd and 3^rd year and thereafter, interest rate will be charged at the then prevailing floating car loan rate linked with BPLR with monthly rests. However, in this Hypothecation Agreement Ex.RW5(last page form part of agreement) it is also mentioned that rate of interest is subject to revision from time to time and complainant shall be deemed to have notice of changes in the rate of interest whenever made due to the changes in BPLR or without changes in BPLR and are displayed/notified at/by the branch/ published in news papers/ made through entry of interest charged in the pass book/ statement of account sent to complainant. It is further mentioned in this part of agreement of Ex.RW5 that complainant will be liable to pay such revised rate of interest. The bank has the option to reduce or increase the EMI or extend the repayment period consequent upon changes in interest rates. So, when the terms of the above referred contract agreement taken into consideration, then they lead no manner of doubt that actual rate of interest chargeable for the first year was @8% p.a, but same was settled at 10% p.a. for the second and 3^rd year. It was in the years subsequent to the 3^rd year that bank will be entitled to charge interest rate at the then prevailing floating car loan rate linked with BPLR without notice to the complainant. As and when the terms of the contract are reduced in writing, than those are binding upon the parties. Nothing can be added or subtracted therein. As terms of the contract arrived at between the parties lays payment of installment of Rs.5455/- each by the complainant for the first 12 months, but for the second and third years, rate of interest will be @10% and as such, it is obvious that Ops cannot be charged rate of interest in excess of @8% p.a. fixed for the first year of disbursal of loan amount and not in excess of 10% for the 2^nd and 3^rd years for the disbursal of the loan. However, for the years next to 3^rd year of disbursal of loan, the bank entitled to charge the prevailing floating car loan rate linked with BPLR. Ex.RW1 is Circular of Bank produced to show that rate of interest chargeable on car loan from 3^rd years to 5^th years will be 13.50% p.a. w.e.f.13.7.2011, but 14.00% p.a. w.e.f.17.8.2011 and as such certainly bank entitled to charge this rate of interest during period of 3 years to 5 years of disbursal of loan to the complainant. However, for the period of tenure of 5 years to 7 years for the disbursal of loan, Ops entitled to charge interest @13.75% p.a. w.e.f.13.7.2011, but @14.25% p.a. w.e.f.17.8.2011. As bank was given authority to fix higher rate of installment and as such if the bank has been deducting Rs.7100/- per month after fixing Rs.7096.74P as repayment schedule for the first 12 months as reflected in Ex.RW3 alongwith payment schedule, as the same was not paying in accordance to the terms of the contract agreement arrived at through Ex.C1=Ex.RW4. As the rate of interest chargeable for the first year was @8% per annum fixed, but 10% for the 2^nd and 3^rd years and as such bank cannot be charged interest at the rate of contractual agreement. Even if EMI in excess of the fixed installment of Rs.5455/- had been paid by the complainant.

7.                Bank has not produced on record any documents to show the detail of charged interest was not supplied to the complainant as per his un-rebutted statement through affidavit Ex.CA, despite filing an application dated 24.10.2014 and as such, there is deficiency in service on the part of Ops to this extent. Though, through Ex.RW3, it is mentioned that rate of interest @8% p.a. was charged for the 12 months, but @10% p.a. charged for the installments from 13 to 36 months onwards, but the accuracy of the interest charged is not there, particularly when Ex.RW3 does not contained certificate required by Section 4 of the Banker’s Books Evidence Act, 1891. If interest on the balance amount of Rs.3,50,000/- @8% p.a. assessed for the first 12 months, then the same comes to Rs.2880/- and not Rs.2333.33P. Same is the position with respect to other entries of charging interest as contained in Ex.RW3 and reliance upon Ex.RW3 cannot be placed on final accuracy of this statement. As per Section 4 of the Banker’s Books Evidence Act, 1891, copy of statement of account as presumption of truth provided the same detail certified by the mandatory or any other authorized officer of the bank with certification under Ex.RW3 is not appended and as such, presumption of its genuineness can be drawn.

8.                In view of the non disclosure of the detail of charging of interest accurately, complainant stood harassed and as such, he deserves for adequately compensation. However, Ops have right to charge the interest as per agreement and as such, it will be fit and appropriate to direct Ops to calculate the rate of interest as per terms and conditions of letter of arrangement Ex.RW4=Ex.C1.

9.                Therefore, as a sequel of the above discussion, the present complaint partly allowed in terms that Ops will calculate the rate of interest for the first year of disbursement of loan @8% per annum, but at the rate of 10% per annum for the second and third year as per letter of arrangement Ex.C1=Ex.RW4. After such calculations, the paid amount will be adjusted towards the due amount for working out the balance outstanding against the complainant. Detail of this worked out balance amount be also given to the complainant in writing for enabling him to make the balance amount at earliest. Compensation of Rs.10,000/- and costs of litigation of Rs.3000/- allowed in favour of complainant and against Ops. Compliance of directions be made within 30 days from the date of receipt of copy of this order which be made available to the parties free of costs as per rules.

10.                        File be indexed and consigned to record room.

 

                                      (Sat Paul Garg)                            (G.K.Dhir)

                                   Member                                            President

Announced in Open Forum

Dated:08.09.2015

Gurpreet Sharma.