This revision petition is directed against the order dated 16^th of September, 2009 of the State Consumer Disputes Redressal Commission, Union Territory, Chandigarh (State Commission hereinafter for short).  The said order was passed in Appeal No. 2272 of 2008 preferred by the present petitioner against the order dated 13^th of October, 2008 (this date is wrongly mentioned as 4^th of October, 2007 in the order of the State Commission) of the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (District Forum for short).  The District Forum by the said order had allowed the complaint of the respondent herein awarding the following reliefs :-

“a) The OP-Bank is directed not to charge interest @ more than 7% per annum on the loan taken by the complainant for the purchase of KVPs and to calculate the interest accordingly and refund/credit the said amount so calculated to the LAS a/c No. 2132070000163 of the complainant.

b) OP-Bank to also credit the account of the complainant with the amount of commission received by it from the Post Office on the investment of the complainant as per his share of contribution.

c) OP-Bank is directed to pay Rs.50,000/- as compensation for mental and physical harassment and agony etc. caused to the complainant.

d) OP-Bank to also pay Rs.3,500/- as costs of litigation to the complainant.”

            Aggrieved thereupon, the present petitioner-opposite party-Bank had preferred an appeal against the order of the District Forum, which has been dismissed by the State Commission with a cost of Rs.5000/-.  Further aggrieved, the petitioner-opposite party-Bank has filed this revision petition.

            The facts of the case as culled out from the records are that the respondent-complainant was lured/attracted by a scheme known as “KVP Margin Funding” floated by the petitioner-opposite party-Bank.  Under the scheme, an applicant was required to deposit certain amount of margin money, whereupon the Bank was to advance 9 times the value of the margin money as loan and procure the KVPs on behalf of the applicant and keep them in its custody till maturity, which was 8 years and 7 months.  The value of the KPVs was to increase by 100% during this period.  The charm of the scheme was that the KVPs were to give a return in the form of interest which was to be higher than the percentage of interest to be charged by the Bank on the loan amount.  The respondent-complainant was informed and in fact in the ‘customer approval sheet’ it was clearly stated that the rate of interest would be 7% and further that there will be no processing fee.  The respondent-complainant in this case had given a cheque for Rs.10.00 Lakhs on the 7^th of September, 2005 to the petitioner-opposite party-Bank for the purchase of KVPs and the same had been encashed on the 9^th of September, 2005.  An agreement had been signed between the parties with regard to the loan on the 10^th of September, 2005.  The grievance of the respondent-complainant before the District Forum was that while the petitioner-opposite party-Bank was entitled to charge only 7% rate of interest on the amount of loan availed by him, he suddenly discovered that the Bank had been charging interest @ 8% per annum, which was clearly a breach of undertaking and understanding that was given to him at the time of alluring him to join the scheme.  When this was brought to the notice of the petitioner-opposite party-Bank with a request not to charge interest at a higher rate, the petitioner-opposite party-Bank came out with extraneous reasons and explanations as to why the charging of interest @ 8% was justified.  A complaint thereafter came to be filed before the District Forum, who, as stated earlier, allowed the complaint.  The appeal that was filed before the State Commission had been dismissed by the State Commission with a detailed order.

            We have carefully perused the orders passed by the District Forum and the State Commission as also have perused the records of the case. 

Learned counsel for the petitioner-opposite party-Bank has once again reiterated the ground advanced before the District Forum as well as before the State Commission, which have been dealt with at length by both the fora below with reasons.  The main ground once again advanced before us by the learned counsel is that a loan of Rs.2.00 Crores was sanctioned to the respondent-complainant by way of overdraft for his current account for the conduct of his business, against which he had given a promissory note in which it has been clearly stated that the petitioner-opposite party-Bank “may from time to time fix or at a rate which may from time to time be assigned by the bank in accordance with the directive of the Reserve Bank of India”.  Learned counsel, therefore, submits that these being the terms of the contract between the parties, the respondent-complainant could not go behind the contract and later challenge the authority of the petitioner-opposite party-Bank to vary the rates of interest as per the market conditions.

The other contention raised by the learned counsel is that both the fora below have erroneously held that the present case was covered by a decision of this Commission in the case of Rohit Bajaj & Ors. Vs. ICICI Bank & Ors. (Original Petition No. 7 of 2007 decided on 17^th of April, 2008)

On the point of right of the petitioner-opposite party-Bank to vary the rate of interest and enhance it from 7% to 8%, the State Commission in its order has held as under :-

“10. Even on the issue of interest rate, we do not find the agreement of the learned counsel for the appellants convincing as the learned counsel for the respondent/complainant has clearly indicated various documents wherein the rate of interest has been clearly indicated as 7%.  Even on the flow chart, the rate of interest has been indicated as 7% for the calculation.  …..”

            We are in full agreement with the view expressed by the State Commission.  In fact, the reliance of the learned counsel for the petitioner-opposite party-Bank on the contents of promissory note will be of no help to him for the simple reason that the promissory note was obtained by the Bank as a security to the loan advanced by them.  The primary condition of the grant of the loan is contained in the ‘customer approval sheet’, in which the rate of interest has been clearly stated only at 7%.  There is no condition of the rate of interest being of floating nature or could be varied with the passage of time.  It only meant that it was a fixed rate of interest for the period of validity.  Further, this document required no renewal.  That apart, even by their own master circular on interest rates on advances in para 2.5.1 it has been clearly stated as under :-

“Banks have the freedom to offer all categories of loans on fixed or floating rates, subject to conformity to their Asset-Liability Management (ALM) guidelines.  In order to ensure transparency, banks should use only external or market-based rupee benchmark interest rates for pricing of their floating rate loan products.  The methodology of computing the floating rates should be objective, transparent and mutually acceptable to counter parties.  Banks should not offer floating rate loans linked to their own internal benchmarks or any other derived rate based on the underlying.  This methodology should be adopted for all new loans.  In the case of existing loans of longer/fixed tenure, banks should reset the floating rates according to the above menthod at the time of review or renewal of loan accounts, after obtaining the consent of the concerned borrower/s. 

(emphasis added)

            The loan having been sanctioned on the 10^th of September, 2005 with the condition to charge 7% rate of interest, has been enhanced to 8% rate of interest later w.e.f. 24^th of April, 2006.  The same, therefore, could not be varied without the prior consent of the respondent-complainant, even if it was to be held that the petitioner-opposite party-Bank had the right to vary the rate of interest.  It also does not stand to common sense that a person would obtain a loan for investment in the KVP at a rate of interest which ultimately will result in a loss to him rather than getting any benefit after the maturity.  The contention of the learned counsel for the petitioner-opposite party-Bank, therefore, has no substance.

            On the applicability of the facts of Rohit Bajaj’s case (supra), the main contention of the learned counsel is that the same would not be applicable to the facts of this case.  In that case KVPs were purchased prior to the signing of the agreement and in the present case that is not the case.  This has been duly answered by the State Commission in para 9 of its order, which states as under :-

“From the evidence on record, we find that the cheque for the purchase of KVPs had been given on 7.9.2005 and the same had been encashed on 9.9.2005.  Since, the complainant had completed his part of action for the purchase of KVPs, for all practical purposes, the KVPs stood purchased as on 9.9.2005 whereas admittedly, the agreement had been signed by the parties on 10.9.2005.  Thus, we find no merit in the contention of the learned counsel for the appellant that in the instant case, the agreement had preceded the purchase of KVPs.”

The learned counsel has not been able to convince us that the facts are otherwise.

            On both these counts, therefore, the revision petition has no legs to stand against the concurrent finding of the fora below.  We are, therefore, not inclined to invoke our supervisory jurisdiction under Section 21(b) of the Consumer Protection Act, 1986 and the revision petition is, accordingly, dismissed at this preliminary stage.