DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, PALWAL
Consumer Complaint No. 12 of 2014
Date of Institution: 20.01.2014
Date of Decision : 10.03.2015
Surender Kumar Kalra son of Shri Har Narayan Karla, R/o H.No.1111/23/B/A, Kalra Colony, Near Geeta Bhawan, Palwal aged 56 years.
.. Complainant
Versus
1. Syndicate Bank, Through its Chairman At its Head Office at Manipal, Dakshina Kannada Karnatka-576104.
2. Syndicate Bank, Main Delhi Mathura Road, Palwal, through its Branch Manager.
..Respondents/Opposite Parties.
COMPLAINT UNDER SECTION 12 OF CONSUMER PROTECTION ACT
BEFORE: JAGBIR SINGH: PRESIDENT
KHUSHWINDER KAUR: MEMBER
R. S. DHARIWAL: MEMBER
PRESENT: Sh. Ashok Maggu, Adv. for complainant.
Opposite party no. 1 exparte.
Sh.U.C.Goyal, Adv. for opposite party no.2.
ORDER:
In brief the facts agitated in the complaint are as under:-
The complainant was having his saving account bearing no. 82182200056596, over draft loan account bearing no. 82181250000216 and housing loan bank account bearing no. 82187200000134 with the opposite party no. 2.
That complainant after entering into contract with opposite party no. 2 availed the housing loan facility under the housing loan
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Scheme from opposite party no. 1 in the year 2004 which was sanctioned and disbursed by the opposite party to the tune of Rs.4,15,000/- at a fix rate of interest which according to the complainant was fixed and settled at 8.5% per annum for a period of 12 years and it is also apparent that the fixed rate of 8.5% per annum was agreed as the installment of Rs. 4683/- per month were calculated for 12 years at the rate of fixed rate of interest of 8.5% per annum.
To meet the end of the said loan the monthly installment of Rs.4683/- per month was fixed after calculation and was to be paid upto 24.9.2016. (it is misguidance or illegal trade practice how the installment was calculated for 12 years when the bank denying the fact that loan was not sanctioned at a fixed rate of 8.5% per annum for 12 years).
At the time of entering into contract between the complainant and the respondents/opposite parties floating rate of interest over the said housing loan was running 7% and 7.25% per annum but opposite party no. 1 told and convinced the complainant that our bank has introduced a scheme of fix interest loan scheme as under that scheme if the customer agrees to pay interest @ 8.5% which is fixed rate of interest he will not be charged any extra rate of interest if the same does fluctuates in future. As per the complainant it means that in all the cases and circumstances if the complainant agrees to pay fix rate of interest of 8.5% per annum he will not be charged extra or exaggerated rate of interest if the rate of interest fluctuates in future.
That opposite parties after the assurance took the complainant into confidence and complainant agreed to obtain loan at the fixed rate of interest i.e 8.5% per annum over the housing loan which was on much higher rate of interest running at that particular time i.e. in 2004.
That after sometime of sanctioning of loan the opposite
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parties started charging extra and exaggerated rate of interest even without intimating the complainant and according to the complainant this charging of exaggerated and extra rate of interest is illegal and not binding on him as per terms and conditions agreed upon.
That opposite party no. 2 had suddenly without informing and without intimating the complainant deducted Rs. 43,308.05/- and also charged Rs.6320/- from the over draft account of the complainant as inspection seepage charges and as per the allegations of the complainant, seepage interest which have been charged is illegal unlawful and against the terms and conditions of the contract. Further the above said amount have been deducted even without intimating and without the consent of the complainant. After the deduction of the seepage charge/interest the complainant visited opposite party no. 2 a number of times to settle the dispute if any but all in van. Complainant further requested to refund the amount of extra interest charged and received illegally and unlawfully from the overdraft account of the complainant without informing him but to no effect.
That opposite party by deducting Rs. 43,308/- as seepage interest over the housing loan amount from the overdraft account of the complainant in a illegal manner is indulging in unfair trade practices and which is not binding on the complainant. That complainant gave several notices and letters to the opposite parties but all in vain. The complainant have further levelled allegations that the opposite party started charging the exaggerated rate of interest on the housing loan @ 10.5% and is charging till date and that was never into consideration and contract between the complainant as well as the opposite parties. When all the efforts of the complainant to settle his dispute with opposite party failed he knocked the door of this Forum and in which he has prayed for that direction may be issued to kindly refund a sum of Rs.43,308/- charged in the shape of seepage interest illegally from the
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overdraft account of the complainant and Rs.6320/- as inspection charges plus exaggerated rate of interest which is @ 10.5% and further he has prayed the opposite party no. 2 should compensate the complainant for causing mental agony and pain to the tune of Rs.50,000/- with 12% interest and further prayed for any other relief which Hon’ble Forum may deems fit and proper.
Upon registration of the complaint notices were issued to the opposite parties. Opposite party no. 1 was proceeded as exparte on 1.7.2014 and opposite party no.2 appeared through his Ld. Counsel and also filed his reply. In reply at the outset in preliminary objections the opposite party no. 2 has raised objections regarding non maintainability of the complaint, non submission of monthly stock statement to the opposite party and he is liable to pay penal interest for the same, has got no locus standi to file the complaint against opposite party no.2, he is estopped by his own act and conduct, complaint is false and frivolous and further he has taken plea of limitation.
Further the opposite party no. 2 has given the detailed parawise reply of the complaint in which he has almost denied all the allegations levelled in the complaint by the complainant. In para no. 3 of the reply the opposite party no. 2 is admitted to the extent that complainant availed a housing loan from the opposite party no. 2 in the year 2004 and a loan of Rs.4,15,000/- was sanctioned and disbursed by the bank at the fixed rate of interest as mentioned in the agreement and the complainant executed loan documents and relevant papers at the time of availing of loan. It is also admitted that complainant has agreed to pay the loan amount of the housing loan in monthly installments of Rs.4683/- per month till the end of the loan to be paid up to 24.9.2016. The rest of the allegations levelled in the para no. 3 of the complaint are totally wrong and denied. It is further submitted that terms and conditions dated 24.9.2004 executed by the complainant in favour of
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opposite party no. 2 are binding upon the complainant. It is denied by the opposite party no.2 that the rate of interest was settled for about of 12 years and complainant has not referred the other terms and conditions regarding the rate of interest as mentioned in the agreement in his complaint. It is further mentioned in reply by opposite party no. 2 that rate of interest at which the loan was sanctioned to the complainant which was 8.25% per annum was not for 12 years but as per the various circulars and RBI guidelines the housing loan which are sanctioned are to be reset after a period of 5 years and no notices regarding change of interest is mandatory given to the consumer. In para no. 8 it is further mentioned that fixed rate of interest/loans extended by the bank have reset clause under which the rate of interest is to be reviewed every 3 years/5 years as the case may be from May 2006 onwards “ Earlier five years” and in this respect a Bank Circular no. 213/2012/BC/RBD/38 dated 24.7.2012 and Circular No. 026/2003/BC/CRD dated 17.3.2003 was issued by the Syndicate Bank Head Office with respect to the housing loan and the seepage was pointed by inspecting officials of the bank during the course of inspection. The inspector identified an amount of Rs. 43,121.40/- as seepage charges being interest in housing loan and Rs.6320/- in OD account as seepage interest and directed the bank to recover the said amount from the complainant at the earliest and bank acted accordingly. The opposite party no. 2 have further mentioned that stock statement/book debt statement etc. as the bank may require in case of released/pending loan are furnished periodically in time by the borrower to the bank i.e. opposite party and if someone fails to submit the stock statement etc. in time he will be liable to pay penalty in the form of penal interest. And in the end prayer clause of the complaint is denied as being false and fictitious and further it has been pleaded by the opposite party no. 2 that complainant is not entitled to any claim in the sum of Rs..43,308/- in the shape of seepage
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of interest from the opposite party no. 2 and opposite party has charged the interest legally from the complainant and complainant is further not entitled to claim Rs.6320/- as alleged to have been charged in an illegal way and opposite party has also denied that complainant is entitled for Rs.50,000/- with interest @ 12% for causing any kind of mental agony, pain and harassment by the opposite party no.2. Hence opposite party no. 2 prayed for dismissal of the complaint.
To substantiate his case the complainant has placed certain documents which are exhibited from Ex.C-1 to Ex.C-9 and one affidavit in which the complainant himself has given the affidavit which is Ex.CW1/A in which he has reasserted all the facts as alleged in the complaint to prove his case. Ex.C-8 is the legal notice and Ex.C-1 to Ex.C-5 and Ex.C-7 are the receipts and acknowledgment of legal notice and Ex.C-6 is the loan application dated 24.9.2004 in which the rate of interest have been shown as fixed rate of interest @ 8.5% per annum and it is to be paid in Equated Monthly Installment (EMI) Rs. 4683/- per month. Ex.C-9 is a letter to the Bank Manager showing that the seepage charges which have been charged are illegal and in a arbitrary way and that are not binding upon the complainant.
Similarly, the opposite party no. 2 to substantiate his case filed the affidavit of Sh. Yashpal Goyal, Manager Syndicate Bank, Palwal which is Ex.RW1/A in which he has reasserted all the facts mentioned in the reply. The opposite party no. 2 has placed on record documents Ex.R-1 to Ex.R-14. Ex.R-1 is the copy of housing loan agreement ( running into 12 pages). Ex.R-2 is a letter dated 17.2.2003( letter prior to sanctioning of loan to the complainant which shows that bank will have the right to review the rate every 5 years in the case of fixed rate housing loan. Ex.R-3 is also letter dated 8.5.2007 which is in the form of circular in which in clause no. 2 on page 1 it is clearly mentioned that reset clause may be stipulated in the case of fixed rate to the effect that
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bank reserves the right to revise the interest rate upwards on the expiry of reset period or such other intervals determine from time to time the circular as effect from 16.5.2006 and further on page 3 of Ex.R-3 there is a clause bearing no. 3.04 in which it is stated that having regard to risk/return trade of in extending fixed rate loan rate of interest applicable to fix rate SyndNivas loans are also revised w.e.f 1.5.2007 to 11.5% and 12% per annum for up to 5 years and 5 to 10 years tenure respectively and housing loan tenure beyond 10 years under fixed rate option stand abolished w.e.f.1.8.2006, Ex.R-4 is a letter regarding base rate effective from 1.7.2010, Ex.R-5 is the revision in service charged on loans and advances, Ex.R-6 is a letter dated 24.7.2012 stating fixed rate of interest on housing loan, Ex.R-7 is revision of Benchmark Prime Lending Rate of the Bank, Ex.R-8 is a letter written by the complainant to the Manager of opposite party no.2, Ex.R-9 is the proforma of agreement, Ex.R-10 is the statement of the bank of Bhupendra Motors, Ex.R-11 is the bank statement of the complainant, Ex.R-12 is the documents showing excess payment outstanding/due during the inspection period from various consumers, Ex.R-13 is short collection/excess payments deduction chart/statement showing excess payment deducted during the inspecting period from 8.9.2010 to 8.2.2012 from the complainant alongwith other customers and Ex.R-14 is the letter dated 1.3.2012 pertaining to revision of interest rate and other terms on housing loan for general public w.e.f. 1.3.2002.
After adducing evidence, both the parties filed their written arguments as well as further raised oral arguments.
Ld. Counsel for the complainant argued that the HOME LOAN was sanctioned and disbursed to the complainant at fixed rate of interest i.e 8.5% per annum for 12 years and accordingly installments per month was calculated by ending of long term up to 24.9.2016. At the time of sanctioning of HOME LOAN to the complainant the
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FLOATING RATE OF INTEREST on HOME LOAN was 7% and 7.25% per annum. The Ld. Counsel of the complainant argued that why anybody would have chosen the exaggerated rate of interest on HOUSING LOAN at fixed rates of interest if the assurance would not have given to him by the opposite party or if there would not have been beneficial HOME LOAN POLICY. No sane person would like to choose the higher rate of interest when there is no benefit between the floating rate of interest and fixed rate of interest on Home Loan. Certainly there was HOUSING LOAN POLICY/Scheme and agreed terms and conditions on that the complainant agreed to have fixed rate of interest which was Higher than the floating rate of interest.
Ld. Counsel have further argued that once the loan was sanctioned and disbursed to the complainant on fixed rate of interest then charging of exorbitant rate of interest is illegal, arbitrary and not binding on the complainant. It is unfair trade practice on the part of opposite party and the terms and conditions in agreement/contracts are generally loaded in favour of the opposite parties/banks/insurance companies and as in the present complaint.
Ld. Counsel have further argued regarding the SEEPAGE INTEREST and he has stated that it is illegal and arbitrary and against the principles of natural justice and the opposite parties are backing out from their earlier promises/assurance/scheme/policy of housing loan.
Ld. Counsel have argued that opposite parties are not entitled to claim a sum of Rs.43,308/- and Rs. 6320/- in the shape of seepage interest from the complainant from the overdraft account of the complainant as inspection seepage charges, in the present case, seepage interest charged is illegal. He has further argued that if the complainant have not submitted monthly stock statement from 1.9.2010 to January 2012 why he was allowed to continue his business with the bank without any hitch or why any notice or intimation was not given to
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the complainant for submission of required documents and further why credit and debit from his account was allowed by the opposite parties and why the credit limit was further increased on his business loan. Ld. Counsel have further argued that as per the opposite party’s plea that the HOUSING LOAN which was sanctioned to the complainant on fixed rate of interest was to be RE-SET after 5 years and it was not reset. Regarding this resetting of loan the Ld. Counsel have argued that the opposite parties have acted rightly by not resetting the loan in question as it was sanctioned to him to the complainant as per the housing policy prevailing at that time and in the present case the rent of housing loan was sanctioned at fixed rate of interest for 12 years and this important ASPECT was not brought to the knowledge of the Auditor/Inspector Sh. S.C. Kapoor and the Auditor Inspector did not pay any heed to find out why the rate of interest in question was not reset after 5 years and Auditor Inspector computed the seepage charges of Rs.43,308/- as it is done in general loan cases. It was not binding on the complainant because he availed the housing loan on fixed rate of interest under the HOUSING SCHEME prevailing (i.e in 2004)particular time when the loan was sanctioned and disbursed to achieve the target of housing loan by the opposite parties. So in the end Ld. Counsel has forcefully argued that the opposite parties may be directed to refund the seepage charges which have been charged illegally from his account on account of housing loan and late submission of monthly stock statement and other documents for inspection and further Ld. Counsel has argued that the exaggerated interest @ 10.5% (it was being charged at 12% per annum)which the opposite party no. 2 is charging till date may be refunded to him alongwith compensation of Rs.50,000/- with 12% interest may be given to the complainant for causing mental pain, agony and harassment and other relief which this Hon’ble Forum deems fit and proper and may also be passed in favour of the complainant.
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Ld. Counsel for the opposite party no. 2 have rebutted all the allegations levelled in the complaint and have forcefully argued that the seepage charges have been legally received from the complainant on account of housing loan and late submission of monthly stock statement and other documents. On inspection and Auditing the Inspector Sh. S.C.Kapoor has pointed out regarding the seepage charges which are to be received and recovered immediately from the complainant. Sh. S.C.Kapoor Inspector/Auditor identified the seepage charges of Rs. 6320/- (Panel interest from 1.9.2010 to January 2012). The seepage charges on Housing Loan was accrued to the tune of Rs. 43,308.50/- as Housing Loan was not reset and it was to be reset after every 5 years as per the circular and as per agreement between the parties. Accordingly to the Ld. Counsel when the Inspector computed the seepage charges and directed the Branch Manager of the opposite parties to effect the recovery of the seepage charges from the account of borrower/complainant, then accordingly in the legal manner the opposite party no. 2 debited and recovered the amount of seepage charges on 5.3.2012 in both cases.
Ld. Counsel have further argued that the complainant closed his OD account with full and final settlement on 26.6.2012 without any objection. If there was any grudge, he could have pointed out there and then and why the complainant is raising hue and cry now.
The Home Loan account on fixed rate of interest is admitted by the opposite parties but they have denied that the rate of interest was fixed for 12 years..
Ld. Counsel have further argued that as per the bank circular rate of interest on outstanding fixed rates Housing Loan sanctioned prior to 16.5.2006 which have completed 5 years from the date of disbursement is to be Re-Set and present loan was sanctioned in
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2004. So according to this circular the Housing rate of interest was to be reset by the opposite party in 2009 and it was correctly pointed by the Auditor Inspector and recovered on his instruction when it came to light during the inspection.
So the seepage interest/panel have rightly been debited from the account of complainant and he is also bound to pay the reset exaggerated rate of interest as per the circular and guidelines of RBI and is fixed rate of interest was to be RE-SET in 5 years so it was reset in 2009 and since then the opposite party is entitled to reset received the exaggerated/increased reset rate of interest and earlier for 5 years i.e upto 2009 the complainant was charged @ 8.5% per annum and since 2009 till date he is liable to pay the exaggerated rate of interest as per resetting of Housing Loan policy and so the panel interest/seepage charges charged from him is correct. In the end the Ld. Counsel have argued that the complaint of the complainant is not maintainable and complaint is false and frivolous and should be dismissed and he is not entitled for any relief and claim by him.
After hearing the arguments and evaluating the evidence adduced by both the parties and facts on file it is clear that bank was negligent in not providing sufficient information to the Audit Inspector Sh. S.C.Kapoor while Audit Inspection that the loan in question has availed by the complainant is under Housing Loan Policy available during the prevailing time of sanctioning loan i.e. in 2004 at fixed rates and it will be continued till further notification or modification.
Secondly, this Forum comes to the conclusion that unfair trade practice loading the conditions in agreement in favour of the opposite parties and charges exaggerated/excess rate of intrest @ 12% per annum from 2007 till date as per the banks statement issued by opposite party no. 2 is illegal, arbitrary and against all norms set at forth. Excess rate of interest have been charged from 2007 @ 12% per
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annum which is against the Housing Loan Policy prevailing at the time of sanctioning loan and is also against the resetting policy. As per reset policy the fixed rate of interest of housing loan to be reset within 5 years but it is strange that the increase rate of interest is being charged from 2007 @ 12% per annum.
This Forum is also came noticed that unfair trade practice to announce the scheme is apparent on the face of file as it is done under the present case. Opposite parties in order to attract House loan borrowers shows them rosy terms and when the housing loan borrowers are brought into clutches the opposite parties start exploiting them as per their own whims even without intimating them when and how the housing scheme announced on fixed rate of interest against less floating rate of interest of housing loan (as the sanction of loan to the complainant was in 2004). Have the opposite parties who disbursed Housing Loan under fixed rates achieved their fixed target, then when and how, the opposite parties never intimated and are negligent as per document Ex.R-14. The opposite party is violating their own terms and conditions and their housing scheme under which the loan was sanctioned to the complainant to achieve a target under a Housing Scheme.
After hearing the arguments at length of Ld. Counsel of both the parties it is crystal clear that the HOME LOAN IN QUESTION was sanctioned and disbursed to the complainant in 2004 on fixed rate of interest for 12 years and monthly installment to the tune of Rs.4683/- was also calculated on the basis of fixed rate of interest till the repayment date of 24.9.2016 as per the Housing policy prevailing during sanctioning period of loan. There is no dispute regarding the disbursement and sanctioning of loan on fixed rate of interest. Only dispute raised by opposite parties in this regard is that fixed rate of Home Loan is not for 12 years as per the opposite party. On the
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contrary taking the plea that it was to be reset according to the guidelines and circulars of RBI after every 5 years from disbursement.
Revision of interest rates and other terms on Housing Loans for General Public with effect from 1.3.2002 is fully detailed in Ex.R-14 which is running into 3 pages. On page 1 Column (1) Choice of Fixed and Floating Interest Rates:- The customer will have a choice of either fixed interest rate or floating interest rate. The floating interest rate will be linked to PTI.R. Similarly on page 2 of Ex.R-14 sub clause 8 Effective Date and Applicability of the above modifications- The above modifications shall be effective from 1.3.2002 and shall be applicable only to fresh Housing Loans. The Housing Loans availed earlier shall not be eligible for the aforesaid revised interest rates/repayment period.
It is proposed to retain the above liberalised rates and terms till an additional disbursal of Rs.500 crores is achieved under Housing Loans of which there will be a sub-ceiling of Rs.150 crores for Fixed Rate Housing Loans. Accordingly, the format of the monthly statement on Personal Banking Schemes (AR 3041) prescribed as per Cir. NO. 155/98/CYC/CRPPD has been suitably modified to facilitate monitoring of the disbursements under Housing Loans with effect from 1.3.2002. A specimen of the format is furnished in Annexure. On page 3 of Ex.R-14 it may be noticed that all other terms and conditions concerning the Housing Loan Scheme for General Public as set out in HO Circular No.s 14/99/BC. 144/2000/BC and 200/3001/BC not modified in this Circular shall continue and in the present case no intimation or no proof of the same is placed on record regarding the modified in the Housing Loan Schemes as mentioned in Ex.R-14.
To conclude the present complaint this Forum is heavily relying upon regarding the issue of fixed rate of interest on Housing Loan for 12 years. Documents Ex.R-14 which is a letter/circular dated 1.3.2002 placed on file while will make the Apple of Discords crystal
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clear that this document proves that the Loan was sanctioned to the complainant under Housing Loan Scheme which was effective from 1.3.2002 at a fixed rate of interest i.e 8.5% per annum for 12 years. The second point at issue is the charge of panel interest/seepage charge on the late submission of monthly stock statement. In this regard also there is no proof on the file that when the complainant has submitted his monthly stock statement and how much late he was. Was he cronical defaulter or whether he has submitted the monthly stock statement late for only one or two months. There is no iota of evidence of late submission of monthly stock statement by the complainant. So the complainant is able to prove both the allegations levelled against the opposite parties that the Housing Loan sanctioned and disbursed to him was sanctioned to him at fixed rate of interest i.e. @ 8.50% per annum as per Housing Policy Scheme Ex.R-14 according to which it was proposed to retain the above liberalised rates and terms till an additional disbursal of Rs.500 crores is achieved under Housing Loans of which there will be a sub-ceiling of Rs.150 crores for Fixed Rate Housing Loans and seepage charges to the tune of Rs. 43,308/- have been illegally deducted from his account and further he is able to prove that the exaggerated rate of interest which have been charged from 2007 is also illegal. Secondly, there is no proof regarding the late submission that monthly stock statement was submitted by the complainant and the seepage charges charged to the tune of Rs. 6320/- is also illegal and he is not entitled to pay them.
Resultantly this Forum is of the view that the complaint of the complainant is hereby allowed and accepted and opposite parties are directed to:-
(i) To return/refund/adjust the seepage charges, as charged illegally( outgoing bill seepage interest in the bank statement of February 2012 to the tune of Rs. 43,308/- to the complainant.
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(ii) To refund the seepage charges charged in the form of panel interest for late submission of monthly stock statement to the tune of Rs.6320/- from the OD account of the complainant maintained with the opposite party to the complainant.
(iii) Opposite parties are further directed to pay Rs.20,000/- as compensation for mental agony and harassment and Rs.2100/- as litigation expenses to the complainant jointly and severally. The above all directions are to be complied within 45 days from the receipt of the copy of this order failing which the opposite parties will be further burdened to the tune of Rs. 30,000/- as compensation in addition to the above mentioned awarded amount. Copy of this order be given to the parties free of costs and file be consigned to the record room. This order of the Forum is running into 15 pages and each page of this order has been signed by this Forum.
Announced on:10.03.2015 (JAGBIR SINGH)
President
District Consumer Disputes Redressal Forum, Palwal.
(KHUSHWINDER KAUR)
Member
District Consumer Disputes Redressal Forum, Palwal.
(R. S. DHARIWAL)
Member
District Consumer Disputes Redressal Forum, Palwal.
