West Bengal

South 24 Parganas

CC/286/2015

Kanak Kanti Mondal, S/O Late Abinash Mondal. - Complainant(s)

Versus

The Manager, HDFC Ltd. - Opp.Party(s)

29 Jun 2018

ORDER

                           DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

SOUTH 24 – PARGANAS,

AMANTRAN BAZAR, BARUIPUR, KOLKATA-700 0144

                                                       C.C. CASE NO. 286 OF 2015

DATE OF FILING: 15/06/15 DATE OF PASSING JUDGEMENT:  29/06/2018

Present                 :   President       :   Ananta Kumar Kapri

                                 Member(s)    :   Subrata Sarker  & Jhunu Prasad                            

COMPLAINANT      :  Sri Kanak Kanti Mondal, S/o- Late Abinash Mondal, Subuddhipur Vidyasagar Pally, Baruipur, P.S- Baruipur, Dist- South 24 Parganas

•  VERSUS     -

 

O.P/O.Ps                    : The Manager, HDFC Ltd, 9 Shakespere Sarani, Kolkata- 700071

_____________________________________________________________________________________

J U D G M E N T

Sri Ananta Kumar Kapri, President

The quintessence of the facts leading to the filing of the instant case by the complainant is that the complainant took a home loan of Rs. 2, 00,000/- from the O.P bank on condition to repay the same by 120 monthly installments of Rs. 2,561/- each commencing from August, 2003 and extending up to July, 2013. He paid 124 EMIs and thereby the O.P bank received much more than what was due from him. So, the complainant prays for refund of the excess amount i.e. Rs. 32,942/- paid by him to the O.P bank. That apart, it is alleged by the complainant that the O.P bank has not granted loan completion certificate and has not also delivered the title deed deposited with the bank, although the entire amount of installments has been paid by him to the bank. Now the complainant prays for refund of the amount as aforesaid, grant of no objection certificate by the bank and return of his title deed from the bank and also for compensation etc. Hence, this case.

The O.P bank has been contesting the case by filing written statement wherein it is contended inter alia that a home loan of Rs. 2,00,000/- was sanctioned by the bank on 30.04.03 on the basis of information supplied by the complainant in his application. The rate of interest was variable from time to time depending upon the money market situation. Loan agreement was also executed on 31.05.03 and the complainant also agreed to pay the loan with interests in 120 installments as laid down in the schedule to the agreements. Loan was disbursed upon the deposit of total deed and mortgage of the property of the complainant. The complainant defaulted in payment of EMIs for a number of months as on November, 2015, resulting in considerable amount getting accumulated as dues and payable to the bank. Interest rate was increased and the period of repayment was also extended. But, complainant stopped repayment of EMI since February, 2014. Bank is still entitled to get a considerable amount of money from the complainant. There is no deficiency in service on the part of the bank and, therefore, the case should be dismissed with cost.

Upon the averments of the parties, the following points are formulated for consideration.

POINTS FOR DETERMINATION

1. Is the O.P bank guilty of deficiency in service as alleged by the complainant?
2. Is the complainant entitled to relief or reliefs as prayed for?

EVIDENCE OF THE PARTIES

Evidence on affidavit is filed by the complainant. No evidence whatsoever is filed by O.P. Questionnaire, BNAs filed herein are kept in record for consideration.

 

DECISION WITH REASONS

Point nos. 1 & 2

Already heard the submission of Ld Lawyer appearing for the parties. Perused the petition of complaint, written version of statement of O.P bank and the evidence on record. Considered all these.

The allegation of the complainant, in this case, against the O.P bank is that the O.P bank has already realized more amount than what is due to them and has been demanding still more amount from him. The version of the O.P bank is that the interest applicable to the loan taken by the complainant is not a fixed rate of interest. But, it was Adjustable Interest Rate, which was likely to be increased from time to time depending upon the situation of money market. The rate of interest has, according to the bank, been increased and, therefore, the bank is entitled to get the amount from the complainant. The complainant has not made payment of the said amount and has been defaulter in payment of the installments to the bank, which was scheduled by the bank as per rules of HDFC. In the context of such allegation and counter-allegation, it is to be seen whether the complainant has actually been defaulter in payment of installments to the bank and whether bank has re-scheduled the repayment schedule of the complainant in accordance of the terms of the agreements.

It is undisputed fact that the complainant took a home loan of Rs. 2, 00,000/- and that the said loan was payable in 120 installments of Rs. 2,561/- each, starting from August, 2003 to July, 2013. The rate of interest was not fixed; it was likely to vary depending upon the condition of money market. All these are available from the loan agreements dated 31.05.03 executed between the parties and these facts admit no controversy whatsoever. From the terms of loan agreements, it is abundantly clear that the O.P bank can increase the rate of interest in its discretion. For better clarification of our discussion, we like to quote ART. 2.6 (d) and (e) as follows:

“2.6 Amortisation 

…………………………..

(d)     Save and except as provided under sub-article (e) below, for administrative convenience the EMI amount is intended to be kept constant irrespective of variation in the AIR and as a result of this the number of EMIs is liable to vary. No intimation shall be given by HDFC as to the number of EMIs required to be paid by the borrower upon each AIR application. Provided however, the information as to the applicable/applied AIR during the financial year of HDFC and the number of EMIs payable from the last AIR application during such year shall be intimated by HDFC to the borrower annually. The borrower shall pay EMIs until the loan together with interest is repaid in full.

(e)      Notwithstanding anything to the contrary contained in this Agreement, having regard to the AIR for the time being, HDFC shall be entitled to increase the EMI amount suitably if:

i)       The said EMI would lead to negative amortisation (i.e. EMI not being adequate to cover interest in full), and / or

ii)      The principal component contained in the EMI is inadequate to amortise the loan within such period as determined by HDFC.

The borrower shall be required to pay such increased EMI amount and the number thereof as decided by HDFC and intimated to the borrower by HDFC.”

An agreement was struck between the complainant and the O.P bank. Both of them are bound to follow the terms of the said agreement. If the bank deviates from the terms of the agreement and does any act contrary to those terms of the agreement, the said act is undoubtedly an act of deficiency of service on the part of the O.P bank and such act of the bank will not be tenable in law. From the provisions of agreement as cited above, it is found that the bank can increase the rate of interest as and when necessary. The EMIs amount is required to be kept constant irrespective of variation in the Adjustable Interest Rate (AIR). But, as a result of such increase in the rate of interest, the number of EMIs is likely to be increased and the number of such EMIs is payable from the date of last AIR application. That apart, the bank is bound to inform the borrower the increased rate of interest during the financial year and also the number of EMIs payable from last AIR application during such year annually.

Coming to the facts of the instant case, it is found from the schedule appended to loan agreement that the loan taken by the complainant was agreed to be repaid by 120 monthly installments of Rs. 2,561/- each. According to the version of the bank, the rate of interest has been increased and, therefore, the complainant is required to pay much more than what was agreed to be repaid by 120 EMIs. If the rate of interest is increased, then the EMI amount can never be decreased and in that case the number of EMI will also be increased. But, the case of the O.P bank appears to be somewhat different. A part/ final disbursement paper dated 30.09.03 has been filed on behalf of the bank. On perusal of it, it is found that the EMIs are fixed at Rs. 2,561/- and the period of repayment is re-scheduled for 15 years from 01.10.03, the first EMI becoming payable on 31.11.03. This re-schedule of re-payment has been done on 30.09.03 i.e. shortly after disbursement of loan amount to the complainant. The bank cannot lower the EMI amount, because the EMI amount is always to be kept constant in accordance with ART 2.6 (d) of the agreement. The bank has given a go by to such provision of agreement and thereby it has committed an Act which may be regarded as a deficiency in service. Again, the bank is under an obligation to give information of the applied AIR and the number of EMIs to the complainant in accordance with the provision of ART 2.6 (d) of the agreement and such information is to be supplied to the complainant by the bank annually. In the instant case, the bank has produced no documents whatsoever to prove that such information was ever supplied to the complainant in compliance of the terms of the agreements. The bank has reduced the EMI amount and has increased the re-payment period from 10 years to 15 years. All these activities of the bank appears to be contrary to the terms of the agreements and for these reason we feel compelled to say that the bank has acted arbitrarily without having any regard or respect to the terms of the agreements executed between the parties. The bank cannot extend the re-payment period from 10 years to 15 years in order to eke out their income and if they are to do so, that must be done in compliance with the terms of the agreement. They have never given any information to the complainant about the rate of interest applied by them from time to time. This is arbitrary act on the part of the bank and, therefore, the bank cannot apply any increased rate of interest to the loan of the complainant arbitrarily and unlawfully. To apply increased rate of interest to the loan of the complainant without giving any information to him as required under ART 2.6 (d) is deficiency in service on the part of the bank. It is also an act which bear testimony to lack of transparency on the part of the O.P bank. If a variable rate of interest is not applied to the loan of the complainant, the number of EMIs cannot be increased and in that case the number of EMIs should be kept confined within 120 EMIs as agreed upon by and between the parties as per schedule appended to loan agreement dated 31.05.03. From the schedule of the said loan agreement, it is found that the first EMI was payable on 31.08.03. If this be so, the loan repayment period will extend up to 31.07.13. From the statement of account for the period 01.04.12 to 31.03.13, as filed on behalf of the O.P bank, it is found that the outstanding amount due from the complainant to the O.P bank as on 31.03.13 is Rs. 285/-. A further perusal of the loan agreement, it is found that the amount of EMI was Rs. 2,561/- and the number of EMIs was 120. So, it is found that Rs. 3, 07,320/- (2,561x120) is payable to the O.P bank from the complainant, if variable rate of interest is not applicable.

We have already made it clear that the O.P bank is not entitled to apply variable rate of interest to the loan transaction, because the O.P has not complied with the provision of ART, 2.6 (d) of the loan agreement. From the statement of accounts filed by the O.P bank herein, it is found that the complainant has paid Rs. 3, 14,216/- in total to the bank. Therefore, we feel no hesitation to say that the complainant has made access payment of Rs. 6,896/- to the O.P bank and he is entitled therefore, to get refund of this amount from this bank.

Point nos. 1 and 2 are thus disposed of accordingly.

In the result, the case succeeds.

Hence,

ORDERED

That the complaint case be and the same is decreed on contest against the O.P bank with cost of Rs. 5,000/-.

The O.P bank is directed to return Rs. 6,896/- to the complainant with the title documents/deeds deposited by the complainant and also loan completion certificate and also to pay a sum of Rs. 20,000/- as compensation for harassment and mental agony caused by the O.P bank to the complainant, within a month of this order, failing which the refund amount, the compensation amount and cost amount will bear interest @ 10% p.a. till full realizations thereof.

Let a copy of this order be supplied or sent free of cost at once to the parties concerned.

I/We agreed                                                                             President

                     Member                         Member

Dictated and corrected by me

                                          President