D,.O.F;1/2/08<br /> D.o.O: 19/8/08<br /> IN THE CONSUMER DISPUTES REDRESSAL FORUM KASARAGOD<br /> CC. NO.6/08 <br /> Dated this, the 19th day of August 2008<br /> <br /> PRESENT;<br /> SRI.K.T.SIDHIQ : PRESIDENT<br /> SMT.P.RAMADEVI ; MEMBER<br /> SMT.P.P.SHYMALADEVI : MEMBER<br /> <br /> <br /> K.Kunhambu Nair,<br /> S/o Kunhiraman Nair,<br /> R/at K.M. House, Palakunnu Po, ; Complainant<br /> Kasaragod.<br /> <br /> 1. The Branch Manager,<br /> Lord Krishna Bank,(now the Centurion<br /> Bank of Punjab) ,Kasaragod Po<br /> 2. The Asst.General Manager, : Opposite parties<br /> Regional Office, Lord Krishna Bank,<br /> (now the Centurion Bank of Punjab),<br /> kodungalloor.<br /> <br /> ORDER<br /> SMT.P.RAMADEVI: MEMBER<br /> <br /> The complaint is one against the deficiency in service committed by opposite parties.<br /> The facts of the case in brief are as follows. That the complainant approached the opposite party bank to avail a housing loan of Rs.8,50,000/- for an interest of 8.5% per annum. Out of two pattern of interest rate ie, fixed and floating rate he opted fixed rate of interest. But when the loan was sanctioned he came to know that the bank unilaterally changed the pattern of interest rate from fixed to floating. The floating rate of interest less beneficial to him. Hence he do not want to continue the loan, therefore he approached the Central Bank and the central bank offered loan at the rate of 9.5% interest as fixed rate. The lord Krishna Bank who sanctioned the loan was taken over by Central Bank of India on application by complainant. According to complainant the unilateral changes made by the opposite parties in the pattern of rate of interest is arbitrary, irregular and amounts to unfair trade practice. The said act on the part of the opposite party Bank amounts to deficiency in service also and it caused him great hardship, financial loss and mental agony. Hence the complaint is filed for necessary reliefs.<br /> 2. The opposite parties served notice and Adv.K.N.Shetty appeared and filed vakalath and version. According to the opposite parties the complaint is false and it is filed in an ulterior motive to make unlawful gain. The contention of the opposite parties is that the loan sanction was conveyed to the borrower(complainant) wherein interest rate indicated as floating and in the said advance sanction memo it was clearly mentioned that the rate of interest will change subject to directives of Reserve Bank of Indian and Lord Krisna Bank Ltd . Moreover, the loan was sanctioned for a period of 15 years and there is no fixed rate of interest for a period more than 10 years in Lord Krishna Bank. Hence the complaint is liable to be dismissed.<br /> 3. The points to be considered in this case is:<br /> 1. Whether there is any deficiency in service on the part of the opposite parties<br /> 2. If so what is the relief?<br /> 4. The evidence in this case consists of the affidavit of complainant and Exts.A1 to A5 marked . Affidavit and Exts.B1 to B3 on the side of the opposite parties. In the counter affidavit filed by opposite party it is stated that the Centurian Bank of Punjab is now HDFC Bank. <br /> 5. Ext.A1 is the loan application form and Ext.A2 is the advance sanction memo, Ext.A3 is the request regarding House Building Advance exemption of prepayment charge, Ext.A4 is the office copy of the lawyer notice and Ext.A5 is the reply notice.<br /> Here the dispute is regarding the change of pattern of interest and the question is whether it is unilaterally changed by the opposite parties. In Ext.A1(page No.2) clearly mentioned the two pattern of interest rates and variable is strike off. That means the fixed rate is agreed by both the parties. Moreover in Ext.A1(page No.4) the bank manager certified and recommend to sanction the loan referred in Ext.A1, ie, loan which carry interest rate at 8.5% fixed. Hence it is very clear that the Lord Krishna Bank (taken over by the Centurian Bank of Punjab now the HDFC Bank) unilaterally changed the terms and conditions of the contract made between K.Kunhambu Nair and the bank.<br /> <br /> 6. As per Ext.A3 the complainant had made a request to the opposite party No.1 for exempting prepayment charges. The arguments advanced by Mr.M.N.Shetty, the counsel appearing for the opposite party Bank that the bank cannot be exempt the prepayment charges because as per page No.1 of Ext.A2 it is clearly states that prepayment charges on TL .2% as amount prepaid can be waived after completion of 5 years(D.O.Circular No.33/2003). If the contract between the parties is valid, definitely the complainant has to comply all the terms and conditions of the contract. But here the terms of the contract is violated by the bank by changing the pattern of interest unilaterally hence the complainant is not bound by the terms of contract.<br /> In Rohit Bajaj vs ICICI Bank in OP.NO.7/2007, the Hon’ble National Commission in its order dt.17/4/08 observed that:<br /> <br /> These standardized contracts are really pretended contracts that have only the name of contract. They are called contracts of adhension from the French term ( contracts d’adhension) because, in these, a single will is exclusively predominant, acting as a unilateral will, which dictates its terms not to an individual but to an indeterminate collectivity. The standard terms and conditions prepared by one party are offered to the other on a “ take-it-or-leave-it” basis. The main terms are put in large print, but the qualifications are buried in small print. The individual’s participation consists of a mere adherence, often unknowing , to the document drafted unilaterally and insisted upon by the powerful enterprises: the conditions imposed by the document upon the customer, are not open to discussion, nor are they subject to negotiation between the parties , but the contract has to be accepted or rejected as a whole. The contracts are produced by the printing press. The pen of the individual signing on the dotted line does not really represent his substantial agreement with the terms in it, but creates a fiction that he has agreed to such terms. The characteristics, usually and traditionally associated wit a contract, such as freedom to contract and consensus are absent from these so –called contracts.<br /> The entire basis of a contract , that it was freely and voluntarily entered into by parties with equal bargaining power, completely falls to the ground when it is practically impossible for one of the parties not to accept the offered terms. In order to render freedom of contract a reality and particularly of one whose bargaining power is less than that of the other party to the contract, various measures like labour legislation, money-lending laws and rent Acts have been enacted, but there is no general provision in the Contract Act itself under which courts can give relief to the weaker party. The existing section in the Contract Act do not seem to be capable of meeting the mischief.<br /> In view of the aforesaid decision it is clear that the contract which is said to have signed by the complainant is not binding on him. <br /> <br /> 7. Thereafter, the complainant approached the Union Bank and the union bank offered to pay the loan at a fixed rate of interest@ 9.5% per annum, then the loan sanctioned by the Lord Krishna Bank was taken over by the Central Bank of India.<br /> <br /> After considering all the available evidences it is very clear that there is deficiency in service on the part of Lord Krishna Bank,(taken over by the Centurian Bank of Punjab now the HDFC Bank). Hence we are allowing the complaint directing the Lord Krishna Bank (taken over by the Centurial Bank of Punjab now the HDFC Bank) to pay to the complainant Rs.30,000/- towards the additional liability caste upon him by way of interest which he should pay to the Central Bank in future and directing the bank to pay Rs.20,000/- by way of punitive compensation for the hardships caused to him and also Rs.2000/- towards the cost of proceedings. The time for compliance of the order one month from the date of receipt of the order.<br /> <br /> MEMBER MEMBER PRESIDENT<br /> <br /> <br /> Exts:<br /> A1-Loan application form<br /> A2-Advance sanction memo<br /> A3-Request<br /> A4-26/4/07-Office copy of lawyer notice<br /> A5-8/5/07-Reply notice<br /> B1-Demand promissory Note<br /> B2-4/3/06-Take Delivery Letter<br /> B3-Term loan agreement<br /> <br /> <br /> MEMBER MEMBER PRESIDENT <br /> eva/<br />