Tamil Nadu

South Chennai

CC/291/2015

D.Muralidharan - Complainant(s)

Versus

The Chief Manager, Central Bank of India - Opp.Party(s)

K.S.Natarajan

10 Jan 2019

ORDER

                                                                        Date of Filing  : 15.07.2015

                                                                          Date of Order : 10.01.2019

 

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHENNAI (SOUTH)

@ 2^ND Floor, T.N.P.S.C. Road, V.O.C. Nagar, Park Town, Chennai – 3.

 

PRESENT: THIRU. M. MONY, B.Sc., L.L.B, M.L.                    : PRESIDENT

                 TMT. K. AMALA, M.A., L.L.B., PGDCLP.               : MEMBER-I

TR. R. BASKARKUMARAVEL, B.Sc., L.L.M., BPT., PGDCLP.  : MEMBER-II

 

C.C. No.291/2015

DATED THIS THURSDAY THE 10^TH DAY OF JANUARY 2019

                                 

D. Muralidhran,

S/o. Mr. Dharamaraj,

New No.100, 1^st Floor,

Dr. Ranga Road,

Pushpavanam Colony,

Abiramapuram,

Chennai – 600 018.                                                     .. Complainant.

..Versus..

 

The Chief Manager,

Central Bank of India,

No.17, Luz Church Road,

Mylapore,

Chennai – 600 004.                                                 .. Opposite party.

 

 

Counsel for the Complainant      :  M/s. K.S. Natarajan

Counsel for the Opposite party:M/s. C. Nithysh Sekhar & others

 

ORDER

THIRU. M. MONY, PRESIDENT

       This complaint has been filed by the complainant against the opposite party under section 12 of the Consumer Protection Act, 1986 praying to charge only the normal rate of interest at the rate of 11% and to repay the excess sum of Rs.14,74,000/- which was charged to the complainant by way of interest and to pay cost to the complainant.

1.    The averments of the complaint in brief are as follows:-

The complainant submits that the complainant and five others purchased the property in Plot No.203, Chandru Street, Bhuvaneshwari Nagar, Velacherry, Chennai in the year 2008 by way of Sale Deed executed by Janaki Ranganathan, Sridhar Ranganathan, Sheela Srinivasan through their Power Agent P.A. Jagadeesan dated:28.02.2008 and registered as Document No.865/2008 of the Sub-Registrar, Velachery for an undivided share of 1207 sq. ft.  The complainant submits that while approaching the opposite party for housing loan, the same was approved and a loan of Rs.33,00,000/- was sanctioned by the opposite party on 23.02.2008.  The complainant submits that at the time of execution of Sale Deed, the opposite party disbursed only a sum of Rs.12,66,524/- towards the part of the loan amount.   The complainant submits that one Mrs. Bharathi started claiming over the property and instituted Civil Suit No.270/2008 before the Hon’ble High Court against the Power of Attorney Mr. P.A. Jagadeesan.   Thereby, the complainant was not able to construct the proposed building in the site as well as caused delay in obtaining CMDA permission etc.  Since the complainant was not able to construct the house within the stipulated time of 2 years, the opposite party treated the loan as commercial and collected exorbitant interest.  The complainant submits that the arbitrary conversion of the housing loan into a commercial loan and thereby, recovered huge amount of interest amounts to deficiency and unfair trade practice which caused great mental agony and hardship to the complainant.   Hence, the complaint is filed.

2.      The brief averments in the written version filed by the  opposite party is as follows:

The opposite party specifically denies each and every allegation made in the complaint and puts the complainant to strict proof of the same.   The opposite party states that the complainant has availed loan of Rs.33,00,000/- in which, a part of the loan amount of Rs.12,66,524/- was disbursed towards housing loan.  The opposite party states that there was no construction raised in the property even after availing the loan.   Hence, the opposite party is constrained to convert the loan into commercial and recovery made accordingly.  The contention that arbitrary conversion of the housing loan to commercial and recovery of excess interest are against the RBI guidelines and rules are denied.   The opposite party states that the complainant has not intimated anything about the litigation between the owners and the 3^rd party and has not given any details regarding the non-construction of the building and approval.   The opposite party states that the allegation of delay in obtaining the CMDA approval also was intimated to the opposite party.   The contention of the complainant that approval was got from CMDA on 02.03.2011, when the complainant planned to commence the construction there were police complaint lodged by Mrs. Bharathi and due to other several other legal risk the complainant was forced to desist construction due to a combination of harassment and legal proceedings is specifically denied as false.  Therefore, there is no deficiency in service on the part of the opposite party and hence, the complaint is liable to be dismissed.

3.     To prove the averments in the complaint, the complainant has filed proof affidavit as his evidence and documents Ex.A1 to Ex.A3 are marked.  Proof affidavit of the opposite party is filed and documents Ex.B1 to Ex.B7 are marked on the side of the opposite party.

4.      The points for consideration is:-

1. Whether the complainant is entitled to get refund of a sum of Rs.14,74,000/- with interest at the rate of 11% p.a. recovered by way of commercial rate of interest?
2. Whether the complainant is entitled to compensation towards mental agony with cost as prayed for?

5.      On point:-

Both parties filed their respective written arguments.  Heard the respective Counsels also.   Perused the records namely the complaint, written version, proof affidavits and documents.  The learned Counsel for the complainant contended that the complainant and five others purchased the property in Plot No.203, Chandru Street, Bhuvaneshwari Nagar, Velacherry, Chennai in the year 2008 by way of Sale Deed executed by Janaki Ranganathan, Sridhar Ranganathan, Sheela Srinivasan through their Power Agent P.A. Jagadeesan dated:28.02.2008 registered as Document No.865/2008 of Velachery Sub-Registrar Office for the undivided share of 1207 sq. ft.    But the complainant has not produced  any such document of sale.  On the other hand, the above said fact is admitted by the opposite party.  Further the contention of the complainant is that while approaching the opposite party for housing loan, the same was approved and a loan of Rs.33,00,000/- was sanctioned by the opposite party on 23.02.2008.   Ex.A1 is the Sanctioned letter.  Further the contention of the complainant that at the time of execution of Sale Deed, the opposite party disbursed only a sum of Rs.12,66,524/- towards the part of the loan amount also admitted.   

6.     Further the contention of the complainant is that one Mrs. Bharathi started claim over the property and instituted Civil Suit No.270/2008 before the Hon’ble High Court against the Power of Attorney Mr. P.A. Jagadeesan.  Thereby, the complainant was not able to construct the proposed building in the site as well as delay in obtaining CMDA permission etc.  Since the complainant was not able to construct the house within the stipulated time of 2 years, the opposite party treated the loan as commercial and collected exorbitant interest.  The non-construction of the building by the complainant is only due to the litigation and delay in approval by the CMDA.    This facts was informed to the opposite party also.  Further the contention of the complainant is that the arbitrary conversion of the housing loan into a commercial loan and thereby, recovering huge amount of interest amounts to deficiency in service and unfair trade practice which is proved from the statement of accounts as per Ex.A2.   But on a careful perusal of the records and RBI guidelines, it is the duty of the opposite party to convert the housing loan into commercial with excess interest of 8% vide Ex.B6.   It is also seen from the records that the complainant has not given any intimation regarding the litigation and delay in approval even after availing the loan in the year 2008.   The 1^st intimation itself given by the complainant to the opposite party is only on 21^st May 2013 after five years as per Ex.B5.  Hence, the complainant is constrained to filed this case claiming refund of Rs.14,74,000/- with compensation and cost.

7.     The learned Counsel for the opposite party would contend that admittedly, the complainant has availed loan of Rs.33,00,000/- in which, a part of the loan amount of Rs.12,66,524/- was disbursed towards housing loan.  It is also admitted by the complainant that there was no construction raised in the property even after availing the loan.   Hence, the opposite party is constrained to convert the loan into commercial and recovery made accordingly as per RBI guidelines.  Hence, the complainant’s contention that arbitrary conversion of the housing loan is to commercial loan and recovery of excess interest are against the RBI guidelines and rules is not acceptable. The learned Counsel filed the circular as per Ex.B1 dated:10.06.2004 related to finance which provides housing loan for the purpose of purchasing plot and construction.  As per Ex.B2, a sum of Rs.33,00,000/- was sanctioned and disbursed a sum of Rs.12,66,524/- after due execution of loan agreement Ex.B3.  Further the learned Counsel for the opposite party contended that the complainant has not intimated anything about the litigation between the owners and the 3^rd party and has not given any details regarding the non-construction of the building and approval.   

8.     As per Ex.B6, the Master Circular No.2015-16/01 dated:10.04.2015 in consonance with the RBI guidelines, the opposite party treated the loan as commercial which reads as follows:

Sl. No.2. Purpose (d)

d) Finance may be granted for purchase of plot obtaining declaration from the borrower.

e) that he/she/they undertake to construct the house on the plot within the period of two years.  Further, the borrower should undertake to repay the entire Loan at commercial rate of interest, i.e. Base Rate + 8% from the date of availment of loan, (BR prevailing as on the date), if construction of house has not started till then.  Bank at its sole discretion may allow further time not exceeding one year to complete construction with interest being charged at BASE RATE + 8% on the loan sanctioned for purchase of plot from the date of availment of such loan”.

Sl. No.8 Repayment (g)

          g) In case of purchase of plot, the repayment may be combined with that of house construction loan.  In case, construction does not start within stipulated 2 years, the loan is liable to be recalled and paid immediately.  Exceptionally, the loan is to be repaid within next 3 years at Base Rate + 8% RoI”

proves that there is no deficiency in service or unfair trade practice in this case.  Considering the facts and circumstances of the case this Forum is of the considered view that the complaint has to be dismissed.

In the result, this complaint is dismissed.   No costs.

Dictated  by the President to the Steno-typist, taken down, transcribed and computerized by her, corrected by the President and pronounced by us in the open Forum on this the 10^th day of January 2019. 

 

MEMBER-I                           MEMBER-II                     PRESIDENT

 

COMPLAINANT SIDE DOCUMENTS:-

Ex.A1	23.02.2008	Copy of Sanction letter from the opposite party
Ex.A2		Copy of statement of accounts for the Home loan
Ex.A3	13.02.2015	Copy of representation to the opposite party

 

OPPOSITE  PARTY SIDE DOCUMENTS:- 

Ex.B1	10.06.2004	Copy of circular on Housing Finance
Ex.B2	23.02.2008	Copy of loan Sanction Advice to the complainant and his wife
Ex.B3	27.02.2008	Copy of Loan Agreement between the parties
Ex.B4	24.12.2008	Copy of circular for housing loan credit policy
Ex.B5	21.05.2013	Copy of representation made by the complainant’s wife
Ex.B6	10.04.2015	Copy of circular for Cent Home Loan Scheme
Ex.B7		Copy of statement of accounts for the period from 01.10.2010 to 21.08.2013

 

 

 

MEMBER-I                           MEMBER-II                     PRESIDENT