Kerala

Idukki

CC/66/2021

Ashad - Complainant(s)

Versus

State co-operative bank - Opp.Party(s)

Adv: K B Selvam

31 May 2022

ORDER

 

DATE OF FILING : 12.4.2021

IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, IDUKKI

Dated this the 31^st day of May, 2022

Present :

SRI. C. SURESHKUMAR PRESIDENT

SMT. ASAMOL P. MEMBER

SRI. AMPADY K.S. MEMBER

CC NO.66/2021

Between

Complainant : Ashad Augustine,

Karisseril,

Bethel P.O.,

Melechinnar, Idukki – 685 514.

(By Adv: K.B. Selvam)

And

Opposite Parties : 1. The Deputy General Manager,

Kerala State Co-operative Bank,

(Former Idukki District Co-operative

Bank),

Idukki Colony P.O., Idukki.

2. The Branch Manager,

Kerala State Co-operative Bank,

(Former IDCB, Kattappana Branch)

Kattappana Evening Branch,

Kattappana P.O., Idukki.

(Both by Adv: C.K. Babu)

O R D E R

SRI. C. SURESHKUMAR, PRESIDENT

 

1. Complaint filed under Section 35 of Consumer Protection Act, 2019. Case of complainant is briefly narrated hereunder :

 

1^st opposite party is Deputy General Manager of Kerala State Co-operative Bank and 2^nd opposite party is Manager of Kattappana branch of the same bank. Complainant had obtained a business loan of Rs.2 lakhs from the bank represented (cont…..2)

• 2 -

by opposite parties on 20.8.2011. Complainant had a mobile sales and service shop known as GSM Mobile, at Kattappana. Loan was used for the promotion of this business. In the beginning itself, complainant was unable to repay the loan as scheduled, owing to the fact that business was very dull. In 2014, his brother in law was unexpectedly hospitalized and complainant had to spent substantial amounts for his treatment. Niece of the complainant was undergoing treatment for cancer at RCC, Thiruvananthapuram. Complainant had spent huge amount for her treatment as well. due to this, repayment of loan was in arrears. Complainant had approached opposite parties and had requested for repayment of loan in stages. However, they were not prepared to accept his request. On 6.2.2021, complainant was in receipt of a demand notice issued by opposite parties seeking recovery of the loan. As per said notice, complainant was asked to pay Rs.2,62,715/- for closing his loan account, outstanding balance of which was Rs.4,43,944/-. At the time when loan was sanctioned, interest rate was 12% which was the agreed rate. Opposite parties were demanding interest at 24% per annum, which is exorbitant. They are also charging penal interest along with notice costs. Complainant had again requested for more time and there was an oral agreement by opposite parties for grant of time to clear outstanding loan amount. Despite this, on 23.3.2021, opposite parties had come to the house of complainant and threatened that if outstanding loan amount is not cleared, steps will be taken to recover the loan amount. Hence complainant had approached this commission with a prayer to direct the opposite parties to reduce the exorbitant rate of interest charged for the loan and also to exclude penal and notice charges. He also prayed for Rs.10,000/- as compensation for mental agony suffered by him and Rs.5000/- towards litigation cost.

 

2. Both opposite parties have filed a joint written version contending that complaint is not maintainable in law or upon facts. According to opposite parties, complaint is hit by Section 100 of Co-operative Societies Act. This Commission has no jurisdiction to entertain this case. There is no allegation of deficiency in service and therefore, there is no cause of action for this case. Complainant had availed a loan of Rs.2 lakhs from the 2^nd opposite party on 3.10.2013 upon guarantee given by personal sureties of Mr. Madhu C.B. and Thomas Joseph. Interest rate was 16.5% and additional interest of 2% was to be collected upon defaulted amount. As on the date of filing of written version, outstanding loan amount was Rs.4,57,778/-. Loan become due on 1.7.2014. As complainant was a chronic defaulter, ARC No.1143/15 was filed against him before the Joint Registrar, Idukki. On 11.12.2017, an award was passed by the Joint Registrar as (cont…..3)

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against complainant. It is incorrect to say that interest charged is exorbitant. Despite repeated requests and demands, loan outstanding was not cleared by complainant. Bank takes abundant caution to avoid coercive steps and makes repeated personal and official requests to close overdue loans which is a part of procedure. Intention of complainant is to stall recovery proceedings and to wriggle out from the liability of repaying the loan. Complaint is experimental in nature and is to be dismissed.

 

3. After filing of written version, case was posted for evidence, after affording sufficient opportunity to both sides to take steps. Despite availing repeated opportunities to tender evidence, last occasion being 23.5.2022, complainant has not tendered any evidence. His counsel was also not present. A counsel present in the hall had sought for time on behalf of complainant. Since no reason was given, request was declined. Complainant’s evidence was closed. Since complainant has not tendered evidence, learned counsel for opposite party submitted that opposite parties are also not tendering evidence. Hence evidence was closed. We have also heard learned counsel for opposite parties. Now the points which arise for consideration are :

1) Whether there was any deficiency in service ?

2) Whether complainant is entitled for the reliefs prayed for ?

3) Order to be passed ?

 

4. Point Nos.1 and 2 considered together :

 

Though the complainant alleges that interest charged is exorbitant, namely, 24%, nothing was produced by him to show that opposite parties have charged interest upon the loan at the rate of 24% per annum, as alleged by him. Along with complaint, complainant has produced copy of a death certificate of his brother-in-law and treatment records of his niece, apart from demand notice issued by opposite parties seeking clearance of loan. Opposite parties have contended that the interest rate charged upon the loan was 16.5%, even according to the complainant, loan was availed for his business purposes. That being so, charging of interest at the rate of 16.5% cannot be considered as excessive. Claim of additional interest for defaulted instalments cannot said to be illegal. Nor can be demand for notice charges be termed as unauthorized or illegal. Upon taking the averments as a whole so mentioned in the complaint, it is seen that the loan was availed for the purpose of augmenting the business of complainant. The purpose was commercial. For this reason alone, it has to be held that complainant does not (cont…..4)

• 4 -

have a cause of action. That apart, allegations pertaining to charging of exorbitant rate of interest are not supported by any document or evidence. Therefore, we find that complainant has not succeeded in proving deficiency in service on the part of opposite parties. That being so, he is not entitled for the reliefs prayed for, in the complaint. Point Nos. 1 and 2 are answered accordingly.

 

Point No.3:

 

In the result, this petition is dismissed, considering the circumstances, without costs. We hasten to add that opposite parties are at liberty to consider any application or representation by complainant for reduction of loan amount/rate of interest or other benefits on compassionate grounds, if it is permitted by rules. Interim order passed in this case shall stand vacated.

 

Pronounced by this Commission on this the 31^st day of May, 2022

 

Sd/-

SRI. C. SURESHKUMAR, PRESIDENT

Sd/-

SMT. ASAMOL P., MEMBER

Sd/-

SRI. AMPADY K.S., MEMBER

 

 

Forwarded by Order,

 

 

 

ASSISTANT REGISTRAR