Per Sri A. Hazarath Rao,  President:-

The complainant filed this complaint u/s 12 of the Consumer Protection Act requesting this Forum to set aside the demand notice dated 15-09-12 for Rs.3,18,761/- and a direction to issue outstanding loan amount copy at agreed interest rate of 7% p.a.; for payment of Rs.20,000/- as compensation.

1. In brief averments of the complaint are these:

The complainant on 27-12-06 obtained Rs.1,50,000/- from the opposite party for raising banana crop.  At that time the opposite party obtained complainant’s signatures on all printed forms including demand promissory note which was duly filled.   The rate of interest mentioned in the pronote was 7% p.a.   The complainant also pledged gold ornaments with the opposite party for raising the said loan. The complainant due to oversight in loan application mentioned as owning Ac.7.00 though actually possessed 83 cents of land.   Due to financial hardship the complainant could not discharge the loan.  Meanwhile the Government of India declared Debt Relief Scheme, 2008.   The complainant filed CC 120 of 2009 against the opposite party herein as it failed to apply the Debt Relief Scheme properly.  This Forum on               26-02-11 dismissed CC 120 of 2009.  FA 534 of 2011 filed by the complainant herein was also dismissed on 27-07-12 by APSCDRC.   The complainant deposited Rs.50,000/- on 05-03-10 at the time of filing CC 120 of 2009.  The complainant after receiving orders in FA 534 of 2011 approached the opposite party to discharge the agricultural loan.  The opposite party advised the complainant to pay Rs.3,18,761/-.   The complainant protested the same and asked the opposite party to furnish calculation of interest as per the agreed rate of interest i.e., 7% p.a. from the date of loan.  The opposite party refused to give detailed outstanding account copy to the complainant.   On 15-09-12 the opposite party issued demand notice cum auction mentioning the due amount as Rs.3,18,761/-.   The opposite party as per law is entitled to claim interest @7% p.a., only.   The complainant has to pay Rs.1,73,400/- only after applicable rebate of 25%.    The complainant is willing to pay Rs.1,73,400/- or Rs.2,10,900/-.   Non calculation of interest as per the agreed rate of interest and issuing demand notice claiming more interest amounted to deficiency of service.   The pledged ornaments are ancestral and as such the complainant is not ready to loose the same in auction.  The complaint therefore be allowed.    

3.  The contention of the opposite party in brief is hereunder:

The complainant is a chronic litigant.  The opposite party informed the complainant from time to time through various notices mentioning the rate of interest charged.  The complainant was eligible for 7% interest up to 30-06-07 i.e., due date of loan.   Subsequently, the opposite party charged interest as per bank norms from time to time as the complainant became a defaulter.   Interest rate of 7% was applicable only to those farmers who repay the loan within stipulated date as per guidelines issued by Reserve Bank of India.  After due date no farmer is entitled to 7% interest.   After subvention period the opposite party charged interest as per guidelines of RBI in circular No.RBI 2005-2006/398 dated 05-06-06.   The complainant cannot claim 7% of interest even after subvention period as it was against the contract i.e., loan application copy dated 26-12-06.   The order passed by APSCDRC on 27-07-12 in FA 534 of 2011 is binding on the complainant.   The complainant cannot approach this Forum again on the same cause of action on the principle of resjudicata.   The opposite party did not commit any deficiency of service.  Rest of the allegations contra mentioned in the complaint are all false and are invented by the complainant to suit his case.   The complaint therefore be dismissed.

4.  Exs.A-1 to A-13 and Exs.B-1 to B-20 were marked on behalf of complainant and opposite parties respectively.

5.  Now the points that arise for consideration are:

1. Whether the opposite party can claim interest more than the amount mentioned in the pro-note and if so amounted to deficiency of service?
2. Whether notice on 15-09-12 claiming Rs.3,18,761 issued by the opposite party can be set aside?
3. Whether the complainant is entitled to compensation?
4. To what relief?

6.      Admitted facts in this case are these:

 a. The complainant on 26-12-06 put in an application with the              opposite party for sanction of agricultural loan under pledge of                gold ornaments (Ex.A1=B6).

 b. The complainant on 27-12-06 executed a demand promissory            note for Rs.1,50,000/- (Ex.A-2).

 c. The Government of India announced Agricultural Debt Waiver            and Debt Relief Scheme, 2008.

 d. The complainant filed CC 120 of 2009 before this Forum                    seeking benefits under the Agricultural Debt Waiver    and Debt             Relief Scheme, 2008 and it was dismissed (Ex.B-9).

 e. The complainant filed FA 534 of 2011 before the APSCDRC and it      was dismissed on 27-07-12 (Ex.B-10).

 f. The opposite party on 15-09-12 issued notice to the                complainant demanding Rs.3,18,761/- as on that date and also informing him about the proposed auction of gold ornaments in         case failure to pay the amount within a week.

 g. The opposite party claimed interest more than 7% p.a., after   due date.

7.  POINTS 1 & 2:-   The learned counsel for the complainant relied on Ex.A-2 pronote and contended that the opposite party cannot claim more than the interest mentioned in it and claiming interest more than the rate mentioned in Ex.A-2 amounted to deficiency of service as the loan was for agriculture.   On the other hand, the learned counsel for the opposite party relied on                   Ex.B-6(=A-1)  and contended that the complainant was a defaulter as failed to pay the amount mentioned within the period mentioned in it, the opposite party bank is claiming interest as per the circulars issued by RBI and its management. 

8. The complainant prior to executing Ex.A-2 pronote on                27-12-06 made Ex.A-1 (=B6) application on 26-12-06.  The rate of interest mentioned in Ex.A-2 pronote was 7% p.a. and it was not in dispute.  For better appreciation the relevant portion in Ex.A-1 (=B6) extracted below:

The complainant agreed to discharge the loan on or before 30-06-07 as mentioned in his loan application.   It is also the case of the complainant that he could not discharge the loan within the time agreed due to financial constraints.   The complainant further agreed to abide all the regulations (Nibhandhanalu) formulated by the opposite party from time to time as seen from Ex.A-1 (=B6).   

9.  Ex.B-1 is copy of circular issued by Reserve Bank of India on 05-06-06 to all public sector banks/regional rural banks.   The relevant portion in Ex.B-1 is extracted below for better appreciation:

“In pursuance of this announcement, Government will provide interest subvention of 2% p.a., to Public Sector Banks and Regional Rural Banks in respect of short-term production credit up to Rs.3 lakh provided to farmers.   This mount of subvention will be calculated on the amount of the crop loan disbursed from the date of disbursement/drawal upto the date of payment or upto the date beyond which the outstanding loan becomes overdue i.e., March 31, 2007 for Kharif and June 20, 2007 for Rabi, respectively, whichever is earlier.  This subvention will be available to Public Sector Banks and Regional Rural Banks on the condition that they make available short term credit at ground level at 7% p.a. In case of RRBs, this will be applicable only to short term production credit disbursed out of their own funds and will exclude such credit supported by NABARD refinance.  As regards the rate of interest applicable on NABARD refinance to RRBs, a separate circular is being issued by NABARD”.   

10.  As per the said circular the 7% interest rate was applicable upto 30-06-07.   The period after due date is called as subvention period.   In Ex.B-19 circular issued by head office of the opposite party to its branches it was mentioned that the Reserve Bank of India has deregulated the rates of interest on all categories of advances in Regional Rural Banks vide its circular No.DBOD.BC.114/13:07:01/96 dated 24-08-96 and as such the Regional Rural Banks are free to fix their interest rates on advances w.e.f. 26-08-96.  Ex.B-19 further revealed that Board of Directors of Regional Rural Banks are fixing rate of interest from time to time keeping in view of changes in financial market.  Depending on that circular, the opposite party bank issued                 Ex.B-15 circular showing the rate of interest at 11.5% p.a. w.e.f.                 01-04-06; and Ex.B-4 circular showing the rate of interest at   14% p.a., w.e.f. 01-09-08.  Head office of M/s Chaitanya Godavari Grameena Bank issued Exs.B-3 to B-5 circulars wherein it was mentioned that they can charge penal interest not exceeding at 2% on all over due installments/interest in case of term loans.  It was already observed that the complainant in his loan application (Ex.A-1 =B6) agreed to abide all the regulations formulated by the opposite party.   Under those circumstances it is not open to the complainant in our considered opinion to contend that the opposite party cannot charge more than 7% rate mentioned in Ex.A-2 pronote that too after becoming a defaulter after subvention period.  

11.  The opposite party on 17-06-09 addressed a letter to the complainant informing him that he was eligible for a rebate of Rs.41,323/- if he pays the remaining due amount of Rs.1,32,787/- by 30-06-09.   The complainant for the reasons best known to him instead of availing the said concession filed              CC 120 of 2009 and FA 534 of 2011.   The complainant was  unsuccessful even in the appellate Forum also.  The complainant is not entitled to the said concession as he failed to pay Rs.1,32,787/- by 30-06-09.  

12.     The opposite party charged interest as per circulars issued by its head office from time to time.   Since the Reserve Bank of India gave freedom for Regional Rural Banks to fix interest rates the opposite party is justified in charging interest as per circulars issued by head office and it cannot be said that the opposite party charged interest arbitrarily.   This Forum in our considered opinion cannot decide the legality of circulars issued by head office of the opposite party bank regarding interest rates.   We therefore opine that the opposite party did not commit any deficiency of service by charging interest after subvention period according to circulars of its head office and as such the opposite party did not commit any deficiency of service.   We therefore answer these points against the complainant.  

      13. The point involved in CC 120/09 and the one involved in the present CC are different as rightly contended by the learned counsel for the complainant.   The principle of resjudicate coined by the opposite party is therefore devoid of merit.

14.  POINT No.3:-  In view of above findings, the complainant is not entitle to any compensation.   We therefore answer this point also against the complainant.

15. POINT No.4:-   In view of above findings, in the result the complaint is dismissed without costs.

        Typed to my dictation by Junior Stenographer, corrected by me and pronounced in the open Forum dated this the 26^th day of February, 2013.

          MEMBER                        MEMBER                               PRESIDENT

APPENDIX OF EVIDENCE

DOCUMENTS MARKED

For Complainant  :

For opposite party:     

          PRESIDENT

NB:   The parties are required to collect the extra sets within a month after receipt of this order either personally or through their advocate as otherwise the extra sets shall be weeded out.