Complaints filed on: 04-02-2022

                                                      Disposed on: 30-09-2022

BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL COMMISSION, TUMAKURU

DATED THIS THE 30^th DAY OF SEPTEMBER, 2022

P R E S E N T

SMT.G.T.VIJAYALAKSHMI, B.Com, L.L.M, PRESIDENT

SRI.KUMARA.N, B.Sc., L.L.B, MEMBER

SMT.NIVEDITA RAVISH, B.A., L.L.B, LADY MEMBER

CONSUMER COMPLAINT No. 46 OF 2022

Sri. Kumar K.S. S/o Late Siddaramaiah,

Aged about 31 years, R/at Kummanjipalya Village

Kambathanahalli Post, Gulur Hobli,

Tumakuru Taluk.

……….Complainant

(Sri.Sanmathi Kumar B.J., Adv.,)

V/s

Fulletron India Credit Co., Ltd.,

Akshaya Building, 11^th Cross Road,

Gangothrinagara, Behind SIT Road,

Tumakuru City-572 103.

Akshaya Building, 11^th Cross, Road,

Gangothrinagara, Behind SIT Road,

Tumakuru City-572 103.

Fulletron India Credit Co., Ltd.,

Rajath Tower, Behind Metro Station,

Jayanagar, Bangaluru City.

(By M.K. Law Associates)

                                                :O R D  E R :

SMT.NIVEDITA RAVISH -  LADY MEMBER

          This complaint is filed under section 35 of Consumer Protection Act to direct the Opposite Party to receive the balance amount if any towards the loan amount by calculating rate of interest at the rate of 3% p.a. as per law and to direct to pay a sum of Rs.3,00,000/- towards mental pain, agony, communication, expenses, litigation expenses along with interest at 12% PA.

2.       In the present case, OP No.1 is the Branch Manager, Fulletron India Credit Co., Ltd., Tumkur (herein after called as OP No.1), the 2^nd Opposite Party is Sri.Lohith, Fulletron India Credit Co., Ltd., Tumkur (hereinafter called as OP No.2) and 3^rd Opposite Party is Credit Manager, Smt.Poornima, Fulletron India Credit Co., Ltd., Bangaluru (hereinafter called as OP No.3).

3.       This is the case of the complainant that, the OP Nos. 1 to 3 are doing financial business and they used to advance the amount as loans to public at large on the basis of mortgaging the properties in their favour.  The complainant also one of the customer of the OP Nos. 1 to 3 since two years.  The complainant had approached for loan of Rs.60,000/- for his legal necessities in the month of February 2020 to the OP/Company and OPs have sanctioned Rs.60,000/- loan towards the complainant on 17.02.2020.  In the time of sanctioning the loan the complainant has agreed and admits to repay the said loan amount under monthly installments at the rate of Rs.2,168/- per month including interest.  At the time of availing the loan, the OPs have clearly discloses that the rate of interest of the said loan amount is 3% per annum.  The complainant has already remitted the loan amount from 01.03.2020 to 04.12.2021 about 22 months at the rate of Rs.2,168/- which amounting to Rs.47,696/- and complainant also ready to pay the remaining amount to the OP/company as per agreed interest at the rate of 3% per annum.  The OPs have disclosed the balance of the loan amount is as Rs.55,000/-, when the complainant has requested to issue proper and correct loan extract statement.  The complainant astonished and enquired about the details of the said outstanding amount, and the complainant came to know that the OP credit company is charging interest @ 36% p.a. on the said loan amount, OP credit company has charging the interest @ 36% p.a. on the loan amount of the complainant which was not agreed by the complainant and which was the against the guidelines of RBI.  The complainant has got issued legal notice on 29.12.2021 about charging interest on loan which was not agreed by the complainant.  The OPs have replied on 18.01.2022 to the legal notice issued by the complainant and directed to visit the branch.  In-spite of visit the branch office, the OPs have not complied the same.  Hence, this complaint.   

4.       After service of the notice the OP Nos. 1 to 3 were appeared through their common counsel and filed their version.  The OPs have submitted that, the credit company of the OP Credit Company is a non-banking Finance Company, incorporated under the Companies Act 1956 and registered with the Reserve Bank of India.  Further, the OPs have submitted that this Commission lacks the jurisdiction to entertain and try/adjudicate the present complaint as the complainant is not a “Consumer” within the meaning of Section 2(7)(i)(ii) of Consumer Protection Act, 2019, and the complainant have not right to seek such kind of relief before this Commission without fulfilling the contractual obligations in terms of loan agreement, dated:20.02.2020 entered with the OP Nos. 1 to 3.  Further, the OPs have submitted that the loan agreement summary schedule is clearly speaks the rate of interest is agreed between the complainant and credit company at the time of entering the loan agreement and as per Clause No.36 & 37 of Circular of Reserve Bank of India (RBGI) had vide its circular DNBS/PD/CC No.95/03.05.002/2006-07 dated May 24, 2007, RBI/DNBR/2016-17/45 Master Direction DNBR.PD.008/03.10.119/2016-17, September 01, 2016 (Updated as on February 17, 2020) “The interest rates of NBFC are not regulated by the RBI.  Hence, the OP Nos. 1 to 3 have prayed for dismissal of present complaint with cost and compensatory costs to the OP Nos. 1 to 3.

5.       The complainant has filed his affidavit evidence with three documents and one Shri.Hussain Basha, Manager Legal of OP Credit Company has filed his affidavit evidence on behalf of OP Nos. 1 to 3 with two documents.

6.       We have heard the arguments of the complainant. In spite of giving several opportunities, the OP Nos. 1 to 3 have not submitted their arguments and the points that would arise for determination are as under:-

1. Whether the complainant proves deficiency in service on the part of OPs?

2. Is complainant is entitled to the relief sought for?

7.        Our findings on the aforesaid points are as under:

Point No.1: Negative

Point No.2: As per final order for the below

:R E A S O N S:

8.       The counsel for the complainant has argued that the complainant has took loan of Rs.60,000/- from the OP credit company on February 2020 and same is admitted by the OP Nos. 1 to 3.  There is no dispute regarding loan amount and date of disbursement of the loan amount.  The only dispute is about the rate of interest on the loan amount.  The complainant has argued that at the time of availing loan, the OP Nos. 1 to 3 have disclosed that the rate of interest to the said loan was @ 3% p.a.  But as per account statement regarding loan, the OPs have receiving the interest @ 36% p.a. which is against the RBI guidelines.  The complainant has produced loan account statement which clearly shows that the rate of interest is 36% p.a.  The complainant has not produced any documents to show that the OPs have disclosed the rate of interest @ 3% p.a. at the time of availing the loan.

9.       The complainant has further argued that at the time of execution of necessary documents in favour of the OP credit company, the OP was very hurried and demanded the complainant to put complainant’s signatures to several documents on blank papers as they are going to fill the same later and believing the words of the OP credit company, the complainant had put his signatures to the said documents.  But at the same time, the complainant submitted that he is practicing as an Advocate.  When the complainant is doing responsible profession in the Society, it is the duty and responsibility of the complainant to sign on every document after verifying and confirming the points on the particular documents.  Hence, the complainant is liable to pay the rate of interest as agreed in the loan agreement.

10.     The OP Nos.1 to 3 have submitted that they have fixed the EMI along with interest for entire tenure of the repayment schedule for 60 EMI each.

• EMI carries amount of Rs.2,168/- per month,
• For 60 EMI, the total amount has to be paid is (2168X60) = Rs.1,30,080/-

The complainant has already paid Rs.47,696/-.  Hence, the complainant is liable to pay balance of Rs.55,139/- ( Rs.1,30,080 – Rs.47,696).

The copy of the loan account statement and copy of the repayment schedule of loan produced by the complainant are showing the same, the tenure (in months) as 61 and the complainant has also admitted that he has agreed and paying Rs.2,168/- monthly installment including interest.  Hence, the complainant is liable to pay the further installments as agreed at the time of availing the loan and at the same time complainant has not produced any documents to show that he has objected the rate of interest from the beginning EMI.  

11.  The counsel for the complainant submitted that the OP credit company has violated the terms of Reserve Bank of India by imposing exaggerated interest on loan amount which is more than Rs.18% per annum.  In contrary, the OP Nos. 1 to 3 have submitted that they are working as Non banking Finance Company, incorporated under the Companies Act 1956 and registered with the Reserve Bank of India and further submitted that the interest rate of NBFC are not regulated by the RBI.  To prove the same OP Nos. 1 to 3 have produced the master circular of Reserve Bank of India (RBI) had vide its circular DNBS/PD/CC No.95/03.05.002/2006-07 dated: May 24, 2007 PD 008/03.10.119/2016-17 September 01, 2016 (updated as on February 17, 2020).  On perusal of the above documents produced by the OP Nos. 1 to 3, the Clause No.36 reads as follows:-

36. Regulation of excessive interest charged by applicable NBFC

(1) The Board of each applicable NBFC shall adopt an interest rate model taking into account relevant factors such as cost of funds, margin and risk premium and determine the rat eof interest to be charged for loans and advances.  The rate of interest and the approach for gradations of risk and rationable for charging different rate of interest to different categories of borrowers shall be disclosed to the borrower or customer in the application form and communicated explicitly in the sanction letter.

(2)        The rates of interest and the approach for gradation of risks shall also be made available on the web-site of the companies or published in the relevant newspapers.  The information published in the website or otherwise published shall be updated whenever there is a change in the rate of interest. 

(3) The rate of interest must be annualised rate so that the borrower is aware of the exact rates that would be charged to the account.

12.     As per the above clauses, the OP Nos. 1 to 3 have imposed interest on loan amount and the complainant also admitted that he has signed on the loan agreement and the complainant without objecting paid the earlier EMIs.  Hence, we have not found any deficiency of service on the part of the OP Nos. 1 to 3.  Accordingly, we pass the following:-

:O R D E R:

The complaint filed by the complainant is dismissed without cost.

Furnish copy of this order to both parties free of costs immediately.