Date of filing: 10-05-2010 Date of order 10-11-2010 IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD CC.107/10 Dated this, the 10th day of November 2010 PRESENT SRI.K.T.SIDHIQ : PRESIDENT SMT.P. RAMADEVI : MEMBER Mohammed Kunhi, R/at C.H. House of Kalingal, Pallikere Po, } Complainant Kasaragod Dist. (Adv. P.Ramanna Rai, Kasaragod) The Branch Manager, } Opposite party Indus Ind Bank, 2nd floor, Madan’s Arcade, Hosdurg, Kanhangad. 6571315 (Adv.C.K.Unnikrishnan, Hosdurg) O R D E R SRI.K.T.SIDHIQ, PRESIDENT The gist of the complaint is as follows: Complainant Mohammed Kunhi has availed financial assistance from opposite party Indus Ind Bank with a condition to repay `5,59,800/-including the insurance premium on or before 7-6-2009. Though he remitted the entire amount within the stipulated time and demanded the loan clearance certificate. Opposite party instead of issuing clearance certificate initially demanded `19,537.52 and thereafter demand is reduced to `12188.28 without any numerical details. Therefore the complaint alleging deficiency in service on the part of opposite party. 2. According to opposite party complainant has executed written loan agreement while availing the loan of `4,50,000/-. As per the agreement complainant is liable to pay 36% interest p.a for the delayed monthly instalment remittance. Accordingly `4778.61 is due from the complainant towards the loan account. Opposite party has not acted arbitrarily and there is no deficiency in service on the part of opposite party. The complainant is not entitled to get NOC without clearing the entire dues outstanding. There is no deficiency in service on the part of opposite party and the complaint is liable to be dismissed. 3. Complainant filed proof affidavit in support of his case Exts A1 to A47 marked and proved through affidavit. Exts A1 to A42 are the receipts issued by opposite party towards the receipt of monthly instalments. Ext.A43 is the statement of account in respect of the agreement. Ext.A44 is the notice dated 22-01-2010 issued by the legal executive of opposite party demanding 12188.28. Ext.A45 is the reply notice issued by Adv. Balakrishnan at the instance of complainant. On the side of opposite party Ext.B1 marked. Both sides heard. Documents perused. 4. The points arises for consideration are 1. Whether the complainant is liable to pay the additional amount claimed by opposite Party to get the No Objection Certificate? 2. Is there any deficiency in service on the part of Opposite party? 3. What is the order as to relief and costs? 5 For the sake of brevity all the points are discussed together. As per the second schedule contained in Ext.B1 the payment of monthly instalment commences from 13-12-2005 and ends on 07-06-2009. But as per Ext.A42 it is seen that complainant has remitted `2300/- towards the remaining balance as per the loan agreement on13-05-2009. So he has closed the account prior to the last day of settlement stipulated i.e. 07-06-2009. Further Exts A1 to A42 shows that complainant has remitted all the monthly instalments almost regularly though there is slight variation on the dates stipulated for payment. Some monthly payments are seen made in advance also. 6. According to learned counsel for opposite party Sri.Unnikrishnan complainant is liable to pay additional interest @ 36% per annum on delayed payments. But on perusing the payment receipts it is seen that at no occasion opposite party has collected any additional interest when the complainant made the subsequent monthly instalments. Had they been legally entitled for additional interest as claimed then they would have collected it whenever the subsequent instalment is paid. This would make the customer aware about the payment of additional interest and therefore he would be more vigilant to make the monthly payments promptly. That apart most often in practice what is prevailing is that no customer will be warned about the conditions printed in the agreement is fine prints which he is available at the other side of the bank counter for few minutes to execute the agreement to avail loan. 7. Moreover as per the Law of Appropriation of interest a payment upon an interest bearing debt will be applied to the interest in preference to the principal. Where the debt allows interest on interest, a payment should be applied first to discharge overdue interest on interest second to discharge overdue interest and third to discharge principal. 8. In the case on hand the opposite party has advanced a loan of `4,50,000/- with a stipulation to pay `5,59,800/- in 43 monthly instalments. Out of which 40 instalments are of `12,500/- and out of the remaining 2 are of `5000/- and the rest one is `4800/-. The interest for the whole period of 43 months is calculated for the loan amount at the beginning itself and added in every monthly instalments. So the payment of overdue charges over and above the monthly instalments is an interest on interest. As per the law of appropriation of interest the said overdue charges should have been colleted then and there itself when the subsequent instalment is paid lately. If it is not collected and only the interest is collected that means that the overdue charges for that period is waived. Therefore opposite party is not entitled to collect over due charges till waiting up to the payment of last monthly instalment. There is a practice in vogue among the private financial institutions to calculate the overdue interest for the whole period and claim it when the NOC is demanded to cancel the HP endorsement. This is nothing but an unscrupulous exploitation and it amounts to deficiency in service. 9. Moreover the opposite party has no consistent claim regarding overdue interest. In Exts A44 the claim of the opposite party is `12188.28. But in the version the claim is reduced to `4778.61. But no statement of account is produced to show how opposite party arrived on that figure. 10. Therefore it is clear that complainant is unnecessarily dragged to the Forum for the redressal of his grievance. The complainant is therefore entitled for the relief claimed. Hence the complaint is allowed and opposite party is directed to close the account of complainant and issue clearance certificate and No Objection Certificate pertaining to his vehicle bearing Reg.No.KL14/F 1696 together with a cost of `3,000/-. Time for compliance is limited to 30 days from the date of receipt of copy of the order. Failing which on the application by the complainant necessary direction will be given to the concerned registering authority to cancel the HP endorsement from the RC of the vehicle bearing Reg.No. KL14 F/1696. Sd/- Sd/- MEMBER PRESIDENT Exts. A1 to A42 receipts issued by Opposite party. A43. Statement of account in respect of the agreement. A44. 22-01-2010 issued by the legal executive of opposite party demanding 12188.28 A.45 reply notice. A46.Postal acknowledgement card. A47. 3-3-09 letter issued by Legal Officer Indus Ind Bank Ltd to complainant. B1. Photocopy of loan agreement. PW!. Muhammed Kunhi Sd/- Sd/- MEMBER PRESIDENT Pj/ Forwarded by Order SENIOR SUPERINTENDENT
| | HONORABLE P.Ramadevi, Member | HONORABLE K.T.Sidhiq, PRESIDENT | , | | 
