Date of filing : 18-06-2009 Date of order : 11-03-2010 IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD C.C.134/2009 Dated this, the 11th day of March 2010 PRESENT SRI.K.T.SIDHIQ : PRESIDENT SMT.P.RAMADEVI : MEMBER SMT.P.P.SHYMALADEVI : MEMBER P.V.Raman, S/o.(Late) Shankaran, Agriculturist, } Complainant R/at Payattichal, Periya.Po. Hosdurg Taluk , Kasaragod. Dist. (Adv.Kumaran Nair, Kasaragod) 1. The Manager, North Malabar Gramin Bank, } Opposite parties Periya Bazar Branch, Po. Periya, Hosdurg Taluk, Kasaragod Dist. 2. The General Manager, North Malabar Gramin Bank, Head Office, Kannur. Adv.M.Narayana Bhat, Kasaragod) 3. C.Krishnan Nair, S/o. E.Malinga Nair, Bedaduka Village, Bedira, Aramanakkal (In Person) O R D E R SRI.K.T.SIDHIQ, PRESIDENT Complainant P.V. Raman approached the forum by filing this class action complaint seeking a general direction to the opposite party No.2 to prepare the loan agreements in Malayalam language and also to issue all loanees a copy of the loan agreement executed by them with the opposite party Bank with a chart of the instalments showing the repayment. He also prays for a direction to opposite party No.1 to issue a detailed statement of accounts of the instalments of the loan due with the particulars like rate of interest and mode of calculation etc. According to him he availed a housing loan of Rs.4,00,000/- from opposite party No.1 by creating equitable mortgage in respect of his landed property. At the time of availing loan the opposite party No.1 told that the rate of interest was 7.5% per annum and the loan instalments to be paid on half yearly basis. There was an initial repayment holiday for one year. The complainant has been remitting the instalments without any default. But recently he came to know that the interest is calculated monthly basis at the rate of 9.5% per annum and he has to pay interest by every quarterly rests otherwise there will be penal interest. Actually he has not committed any default deliberately. Moreover, the demand notice doesnot show any rate of interest and the mode of calculation of interest. They are fixing the rate of interest arbitrarily and wrongly. On 17-10-08 he received a notice claiming the due amount as Rs.36,200/-. But as per the reminder dated 27-1-2009 the due shown was only Rs.33,395/-. Similarly the details with regard to the amount due to the Bank is also not issuing inspite of repeated demands. The transaction with the opposite party bank by the complainant like other customers are secretive in nature and they are not available for checking and verification by the customers concerned. This is usually and invariably result in financial loss and hardships to the customers as in the case of the complainant. The further grievance of the complainant is that at the time of availing loan a customer is made to put signatures on several papers, mostly printed and unfilled ones spread across the counter before the customers. These documents we in English and the terms and conditions and the mode of calculation of each instalments are not made correctly known to the customers. The majority of the customers of the opposite party Bank are ordinary agriculturists. No branch of the North Malabar Gramin Bank is situated outside Kerala. Therefore it will be very convenient and useful to its customers time the complainant if the loan agreement is made in Malayalam language on a copy is supplied to the customers if a written schedule of repayment is given to a loanee he can remit the instalments as shown in the notices of demand issued to him frequently. Though the complainant caused a lawyer notice, opposite parties replaced reiterating the ordinary officials procedures of the Bank. Hence the complaint. 2. At the time of institution of the complaint, the complainant followed the necessary formalities for a class action complaint and a publication was effected in a vernacular daily that is required for a public interested class actions complaint. 3. According to opposite parties the complainant has availed a housing loan of Rs.4,00,000/-. As per the terms of the agreement executed by the complainant the interest chargeable to the loan is @ 9.5%. This interest is agreed to be paid in quarterly rests. As per the terms of agreement the instalments are to be paid as every half year subject to one year holiday of availing the loan amount. The rate of interest and terms of period of interest is to be paid subject to the variation of interest made by the Reserve Bank of India or the 2nd opposite party. As per the norms and guidelines the interest was charged to the loan account on monthly rest at a discounted rate and the ultimate result of the interest charged as @ 9.5 per annum with compounded quarterly rates. Hence opposite parties has not charged any excess interest. As per the loan agreement, the interest is to be charged then and there on its falling due. If it is not paid the same will be added to the loan account and interest will be charged in sum total. Out of the loan amount complainant has paid Rs.24,859/- and as on 31-7-09 Rs.2,06,127/- is due from him. To the lawyer notice issued at the instance of the complainant asking the statement of account a reply was issued with a copy of the loan ledger extract it is the practice of all the banks to publish the loan agreement in standard format in English Language. However, all the terms and conditions and mode of repayment are explained to the loanees. The loanee is free to seek clarification from the bank officials on any aspect. There is no public interest involved with respect to the demand of the complainant that the loan agreement in Malayalam language is concerned, he can approach Reserve bank of India or appropriate government. As far as the prayer for the agreement in Malayalam language is concerned Forum has no jurisdiction to by the dispute. 4. As against the public notice made in the vernacular daily the supplemental 2nd opposite party entered appearance as he submitted that he is supporting the case of the complainant. 5. Complainant filed proof affidavit and Exts A1 to A5 marked. He was cross- examined by the counsel for opposite party. On the side of opposite parties Ext.B1 marked. Both sides heard. Documents verified. 6. As against the contention of opposite parties that the complainant is evading the payment due to the bank by filing this complaint, the counsel for the complainant submitted that the complainant is ready to pay the entire loan dues in lump if the anomaly is cleared. 7. Ext.A2 is a demand notice dated 17-10-08 issued by opposite party No.1 to complainant in that the due as on 30-10-08 is shown as Rs.36,200/- where as in Ext.A3 demand notice dated 21-01-2009 the loan due is only Rs.33,393/-. There is absolutely no explanation forthcoming for this anomaly. Therefore we find some substance in the case of the complainant that the opposite party No.1 is not issuing the details of amount due to opposite parties and the transactions are secretive in nature. The further case of the complainant is that the opposite parties is not giving a copy of the loan agreement executed by them with loan repayment schedule and its absence often creates confusion with respect to the dues, rate of interest, mode of calculation of interest etc. It is pertinent to mention that the opposite parties have not produced the loan agreement executed by the complainant before the Forum. Therefore it cannot be hold that the demand for a copy of the agreement by a loanee at the time of execution of the agreement is unreasonable. 8. The opposite parties 1& 2 should bear in mind that we are living in a country where the citizens are conferred with the right of information from the public authorities statutorily. 9. Therefore we direct the opposite parties 1 & 2 to issue copy of the loan agreement to every loanee after the execution of the agreement with a loan re-payment chart showing the principal advanced, rate of interest, mode of repayment, calculation of interest, penal interest, terms of repayment Equated Monthly Instalments if any etc. This shall be provided before the disbursement of the loan amount and necessary endorsement shall be obtained from the loanee that he has received the copy of the agreement and payment. This would definitely reduce the disputes in future. 10. The further contention of the counsel for opposite parties 1 & 2 is that the Forum has no jurisdiction to issue a direction to opposite parties to prepare the loan agreement in Malaylam is also not sustainable. The learned counsel for complainant Sri. Kumaran Nair produced a diary released by the opposite party’s bank in which the short profile of the opposite party Bank is described. It shows that the area of operation of the Bank is exclusively within the different districts of Kerala State only. Moreover, the official language of the State is also Malayalam. Therefore preparing the loan agreement in Malayalam language will no way prejudice the interests of the opposite parties. 11. The case of the complainant is that he is an agriculturist and it will be very convenient and useful to the ordinary customers like him if the loan agreement is made in Malayalam language and a copy is furnished to them. We think that asking a loanee to execute a loan agreement in a language not knowing to him without reading translating and convincing the entire clauses of the agreement is a good, proper service. In practice, no bank employees or authorities would try to explain the clauses of the loan agreement to the customers within the few minutes the loanee is available on the other side of the bank counter who came to execute the documents and avail the loan. Therefore asking them to execute the loan agreement running several pages printed in a language alien to them without explaining the clauses is certainly a deficient service under Sec 14(1)(e) of the Consumer Protection Act. In the result, the complaint is allowed and opposite parties 1 & 2 are directed to prepare the loan agreement in Malayalam language and also issue a copy of the agreement after execution of the agreement to all the loanees with the repayment schedule in future. Opposite parties 1 & 2 are also directed to furnish a copy of the agreement executed by the complainant to him. On receipt of the copy of the agreement the complainant shall repay all the loan dues at the rate of interest provided in the agreement and repayment schedule after deducting the amount already remitted by him. Opposite parties 1 & 2 shall also pay a cost of Rs.3500/- to the complainant. Time for compliance is limited to 2 months from the date of receipt of copy of the order. Failing which the opposite 1&2 parties shall be liable to pay a compensation of Rs.5000/- to the complainant in addition to the cost aforementioned. Sd/- Sd/- Sd/- MEMBER MEMBER PRESIDENT Exts. A1. Pass book of Sri.P.V.Raman A2. 17-10-08 Demand notice of installment issued to the complainant. A3.21-01-2009 Demand notice of installment cum reminder issued to the complainant. A4.16-02-09 copy of lawyer notice. A5. Reply Notice Dt.2-4-09. B1. Photocopy of Loans on Security Ledger Page Nos. 12 to 15 PW1. P.V.Raman. Sd/- Sd/- Sd/- MEMBER MEMBER PRESIDENT Pj/ Forwarded by Order SENIOR SUPERINTENDENT
......................K.T.Sidhiq
......................P.P.Shymaladevi
......................P.Ramadevi | | 
