1.Facts:
Complainant availed gold loan of Rs. 38,400/- from opposite party on 25.04 .2011 by pledging gold ornaments weighing 38.200gm. He repaid it on 25.01.2010. On repaying the loan opposite party collected Rs.4,320/- towards interest and Rs.3,744/- towards risk interest. He had also taken another gold loan of Rs.1,74,500/- on 25.02.2009 by pledging 161.500gm of gold ornaments. This loan was repaid on 27.01.2010.While repaying this loan opposite party again collected Rs.24,137/-towards interest and Rs.24,137/- towards risk interest. Complainant alleges that opposite party has collected risk interest without any basis. The loans were taken to meet the expenses of the treatment of his mother and was repaid within a period of one year without default. The collection of interest as risk interest is alleged to be deficiency by the complainant. Hence this complaint.
Opposite party entered appearance through the authorized agent Sri. Sinu G Nath. Version
(2)
was filed admitting both loans taken by the complainant. It is submitted that complainant has availed the loans under Super Personal Loan and Easy Personal Loan Scheme for a period of one year. The loans are subject to terms and conditions which are described on the reverse side of the pledge form. It is stated in these conditions the basic rate of interest is 17% per annum. Charging of risk interest simultaneously along with basic interest and also charging of penal interest if the loan period exceeds one year, is clearly stated in the terms and conditions in both the loans .For the Super Personal loan, the basic interest is fixed as 15%. In addition there is risk interest charged to a maximum of 15% depending on the period of the loan. The statement of account of the SPL loan availed by the borrower is shown below; .
Loan No : SPL-6455
Date Loan : 25/02/2009
Date of closure :27/01/2010
Duration of loan :11 Months and 2 days
Loan Amount :1,74,500/-
Basic Interest @ 15% : Rs.24,137/-
Risk interest @ 15% :Rs.24,137/-
Postage :Rs.21/-
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Total amount : Rs.2,22,795
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The pattern of risk interest charged in the SPL scheme is that the borrower shall be eligible for a reduction by 8% in the rate of risk interest provided he closes the loan within the first month of availing. If the loan is closed in the second month there will be a reduction by 7% from the rate of risk interest. If the loan is closed in 3rd month there will be reduction by 6% from the rate of risk interest. After 6 months there is no reduction in risk interest. The basic interest and risk interest applicable to this loan was described to the complainant and he had agreed to the same. The statement of accounts of the EPL loan availed by the complainant is stated as under:
Loan No : EPL-18112
Date Loan : 25/04/2009
Date of closure : 25/01/2010
Duration of loan : 09 Months
Loan Amount : 38,400/-
Basic Interest @ 15% : Rs.4,320/-
Risk interest @ 13% : Rs.3,744/-
Postage : Rs.14/-
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Total amount : Rs.46,478/-
(3)
The pattern of risk interest charged in the EPL loan is that the borrower shall eligible for a reduction by 8% in the rate of risk interest provided he closes the loan within 3 months of availing the loan.. If the loan is closed between 3 to 6 months, there will be a reduction by 5% from he rate of risk interest. If the loan is closed within 6 to 9 months , there will be a reduction of 2% from the rate of risk interest. These terms were described to the complainant and he agreed to the same at the time of availing the loan. Complainant had agreed to abide by these conditions .That notices were issued to the complainant every three months period . But he did not close the loan until the expiry of the period of the loan. Opposite party admits that complainant had paid all the interest charged by opposite party and had taken release of the security. Proper receipts were issued. Opposite party has not denied details of the interest charged. That there is no deficiency.
3. Evidence consists of the proof affidavit filed by complainant and Exts .A1 to A4 marked for him. Opposite party filed counter affidavit and documents. Exts.B1 to B9 marked for opposite party. Both sides have not adduced any oral evidence.
4. Complainant has reiterated in his affidavit the contentions put forward in the complaint. Ext. A1 receipt shows that complainant has paid Rs.4320/- and Rs.3744/- as basic interest and risk interest respectively towards the closure of loan of Rs.38400/-.Ext A2 receipt shows that complainant has paid Rs.24137/- each towards basic interest and risk interest to close the second loan of Rs.1,74,500/-. He is aggrieved by the collection of risk interest . It is not disputed that the complainant repaid the loan within the period fixed for repayment. From the submissions made on the side of opposite party we find that opposite party has charged interest upon the amount and a further interest in the name risk interest simultaneously. Further there is provision for collection of penal interest in case of default. The complainant did not commit default. So no penal interest is collected. In Ext. B3 and B6 documents which are documents showing the details of pledge and the amount of loan given it is seen stated that interest17% and again risk interest @15% is to be paid by the borrower. We are not able to understand the collection of interest as well as risk interest simultaneously upon the principal amount. This is explained by opposite party stating that in true value personal loan 12% interest is only charged. Then only 60% of the value of pledged gold will be sanctioned as loan. The complainant had opted for Easy Personal loan in which 91.06% of the value of gold is released as loan. In this type of loan the borrower has to pay risk interest simultaneously. But opposite party has not specifically stated in the counter affidavit what was the value of pledged gold at that time in each loan and what would be 91.06% of Ext. A3 is the notice issue by complainant directly to opposite party. It is stated by him in Ext. A3 that by pledging 38.200gm of gold on 18.12.2010 he was given loan of Rs.38400/- The rate of gold applied was
(4)
RS.1356/- per gram. The value of 38.200gm gold then was Rs. 51806/- This means he was not given 90% of the value of gold pledged as claimed by opposite party..In the case of the second loan opposite party claims to have given 95% of the value of gold pledged. On 25.02.2009 complainant availed second loan by pledging 161.500gm gold ornaments. The rate applied is Rs.1455/- per gram The value of gold would then be 2,34,982/-. The loan released to him is only Rs1,74,500/- It is candid that opposite party has charged interest without any basis due to the cumulative effect of interest and risk interest opposite party is collecting 32% interest upon the loan .By splitting the interest using two names the borrower is trapped and made to believe that the interest rate is less. Banks and Financial establishments are bound to follow the directions and circular issued by RBI while charging interest. A higher rate cannot be levied by tactful application. In the present case complainant was made to believe by advertisements that opposite party was charging only one rupee as interest for Rs.100/-per month .But opposite party has collected exorbitant interest applying the name risk interest. Collection of illegal interest is deficiency. We find opposite party deficient.
5. Complainant prays for refund of the risk interest collected and for compensation and costs. We hold that complainant is entitled for refund of Rs.3,744/-(risk interest of first loan)and Rs.24,137/-(risk interest of second loan). The amount shall be paid with interest @10% from date of complaint till payment which would be adequate compensation. He is also entitled to costs of Rs.1500/-
6. In the result we allow the complaint and order opposite parties to pay to the complainant Rs.27881/- (Rupees Twenty Seven Thousand Eight hundred and Eighty One Only) along with interest @10% p.a from date of complaint till date of payment together with costs of Rs.1500/- (Rupees One Thousand and Five Hundred Only ) within one month from date of receipt of copy of this order.
Dated this 26th day of September, 2011.
C.S. SULEKHA BEEVI, PRESIDENT
MOHAMMED MUSTAFA KOOTHRADAN,
MEMBER E. AYISHAKUTTY, MEMBER
(5)
APPENDIX
Witness examined on the side of the complainant : Nil
Documents marked on the side of the complainant : Ext.A1 to A4
Ext.A1 :Cash Receipt dated 25/01/2010
Ext.A2 :Cash Receipt dated 27/01/2010
Ext.A3 :Letter given to Opposite Party by Complainant dated 04/02/2010
Ext.A4 :Acknowledgement Card dated 05/02/2010
Witness examined on the side of the opposite parties : Nil
Documents marked on the side of the opposite parties : Ext.B1 to Ext.B9
Ext.B1 :Registration Certificate with RBI
Ext.B2 :Application for personal Loan dated 25.02.2009
Ext.B3 :Acceptance Letter dated 25-02-2009
Ext.B4 :Consent letter of Debitor
Ext.B5 :Application of Personal Loan dated 25/04/09
Ext.B6 :Counterfoil of the Acceptance letter dated 25/04/2009
Ext.B7 :Counterfoil of the Acceptance letter
Ext.B8 :Copy of the Fair Practice Code
C.S. SULEKHA BEEVI, PRESIDENT
MOHAMMED MUSTAFA KOOTHRADAN,
MEMBER E. AYISHAKUTTY, MEMBER
