BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM, ERNAKULAM.
Dated this the 12th day of August 2014
Filed on : 21/12/2012
PRESENT:
Shri. A. Rajesh, President.
Shri. Sheen Jose, Member.
Smt. Beena Kumari V.K. Member.
CC.801/2012
Between
Jibu Jacob, : Complainant
42, Poozhikalayil, Jawaharnagar, (party-in-person)
Kadavanthara, Kochi-682 020.
And
1. The Manager, : Opposite parties
SBI Card, Kurisupally Road, (By Adv. Rajesh Thomas,
Ravipuram, No. 41/3792, C2, 1st Floor,
Cochin-682 015. Carmel Centre, Banerji road,
Kochi-682 018)
2. Grievance Redressal Officer,
DLF Infinity Towers, Tower C,
10th – 12th Floor, Block 2,
Building 3, DLF Cyber City,
Gurgaon -122 002,
Haryana, India.
3.Chief Nodal Officer &
Vice President Customer Services,
SBI Card & Payment Services Ltd,
P.O. Bag No. 28, GPO,
New Delhi-110 001.
O R D E R
A. Rajesh, President.
The case of the complainant is as follows:
The complainant has been banking with the opposite parties for a long time. While so a representative of the opposite parties contacted the complainant over phone and offered to provide loan with diminishing interest rate. The complainant was informed that the telephonic conversation was being recorded. Fascinated by the assurances and rosy promises of the representative of the opposite parties, the complainant availed a loan of Rs. 4,10,000/- at diminishing interest rate of 15.4% p.a. As per the terms and conditions of the loan the interest rate would be calculated afresh on the balance principal amount after every EMI payment and not a flat fixed rate interest. On 29-09-2011 the complainant received the amount of Rs. 4,10,000/- by a demand draft. The covering letter appended set out the interest rate as 15.4% with an EMI of Rs. 16,650.56
per month. However after the complainant had paid 11 instalments towards loan repayment, he received a penalty charge on his account. The representative of the opposite party informed the complainant that his loan was a flat rate interest loan. The complainant approached the opposite parties and highlighted the anomaly. The employees of the opposite parties promised to verify the recordings of the conversation the complainant had with the opposite parties. Later they went back on their promise. The opposite parties are bound to convert the complainant’s loan into a diminishing interest rate loan as had been originally passed. Thus the complainant is before us seeking direction against the opposite parties.
i. to immediately convert the loan to a diminishing rate interest loan
made effective retrospectively from 29-09-2011.
ii. to refund the excess amount paid on interest by the complainant
along with interest @ 15% p.a.
iii. to pay Rs. 25,000/- each towards compensation and costs of the
proceedings.
2. The version of the opposite parties is as follows:
The complainant availed a loan of Rs. 4,10,000/- which was to be repaid in 36 EMI of Rs. 16,650/-. On the overleaf of; the cheque issued to him it is specifically stated that, the offer carries a flat rate interest @ 15.4% on the offered principal amount. After making various defaults in payment of the instalments the complainant is now making false allegations against the opposite parties. The complainant has availed the loan after fully knowing the terms and conditions of the scheme. The opposite parties are not bound to convert the complainant’s loan account in to diminishing interest rate loan and to refund the excess amount paid by him towards interest. There is no deficiency in service or unfair trade
practice on the part of the opposite parties. This complaint is liable to be dismissed.
3. The complainant was examined as PW1 and Exbts. A1 and A2 were marked. The witness for the opposite parties were examined as DW1. Heard the complainant who appeared in person and the learned counsel for the opposite parties.
4. The points that arose for consideration are as follows:
i. Whether the complainant is entitled to convert the loan to a
diminishing rate interest loan made effective retrospectively from
29-04-2011.
ii. Whether the opposite parties are liable to refund the excess
amount received as interest together with interest @ 15% p.a.
iii. Whether the complainant is entitled to get compensation and costs
of the proceedings from the opposite parties?
5. Point Nos. i &ii. It is not in dispute that on 29-04-2011 the complainant availed a loan of Rs. 4,10,000/- from the opposite parties. According to the complainant he availed the loan agreeing to repay with interest @ 15.4% p.a. at diminishing interest rate. On the contrary the opposite parties maintain that the interest agreed to between the parties was 15.4% p.a. under flat interest rate on the offered principal amount.
6. Admittedly the loan agreement is not in black and white. The loan was granted in furtherance of a telephonic conversation between the complainant and the representative of the bank. DW1 the witness for the opposite party deposed before the Forum that the conversation between the complainant and the bank is not available with them, since it is aged more than 2 years.
7. Exbt. A1 is the covering letter dated 29-04-2011 issued by the opposite parties to the complainant along with the demand draft for the loan amount. As per Exbt. A1 the offer details are as under.
“A. Processing Fee 2% of principal amount, Min. Rs. 499/- & Max Rs.
1,950/-.
B. Rate of interest : 15.4%
C. EMI : 16650.56
D. Tenure : 36
(Service charge Extra, as applicable)”
8. It is pertinent to note that the type of interest rate has not been stated in Exbt. A1. The learned counsel for the opposite party vehemently
and vigorously contended that the terms and conditions of the loan are stated on the overleaf of Exbt. A1 and it is specifically stated that the offer carries a flat rate of interest on the offered principal amount.
9. We have carefully gone through the terms and conditions stated on the reverse side of Exbt. A1. We could not read the same with our naked eyes since it is in too fine a print. According to the Hon’ble Supreme Court if the terms and conditions are in fine prints and so the terms and conditions are not binding on the parties. (Modern Insulators Ltd. Vs. Oriental Insurance Co. Ltd., 2000 CTJ (SC) (CP) 169.
10. In the instant case the terms and conditions stated on the reverse side of Exbt. A1 are not binding on the complainant. Had the opposite parties stated the type of interest in a conspicuous place of Exbt. A, this complaint could have been avoided, in which the opposite parties failed which amounts to deficiency in service on their part.
11. At this juncture it is worthwhile to note that the non production of the recorded telephonic conversation between the complainant and the
opposite parties regarding the terms and conditions of the loan in this Forum speaks volumes, not to mention fatal to the case of the opposite parties.
12. In the above circumstances we are only to hold that the complainant is entitled to get the loan under diminishing interest rate Scheme @ 15.4% p.a. retrospectively with effect from 29-04-2011. The complainant is also entitled to get refund of the excess amount collected by the opposite parties by way of flat interest rate.
13. Point No. iii. The primary grievance of the complainant having been met sufficiently and squarely, we refrain from awarding compensation to the complainant. However the complainant has had to approach this
Forum to get his rights established by spending his valuable time and energy, costs of the proceedings are called for, we award Rs. 2,000/- towards the same.
14. Accordingly we partly allow the complaint and direct as follows:
i. the opposite parties shall jointly and severally levy interest @ 15.4% p.a. under diminishing interest rate for the complainant’s loan amount of Rs. 4,10,000/- with effect from 29-04-2011.
ii. the opposite parties shall jointly and severally refund the excess amount to the complainant collected by the opposite parties towards interest under flat interest rate.
iii. the opposite parties shall jointly and severally pay Rs. 2,000/- to the complainant towards costs of the proceedings.
The above order shall be complied with within 30 days from the date of receipt of a copy of this order failing which the amounts would carry interest @ 12% p.a. till payment.
Pronounced in the open Forum on this the 12th day of August 2014
Sd/-
A. Rajesh, President.
Sd/-
Sheen Jose, Member.
Sd/-
Beena Kumari V.K., Member.
Forwarded/By Order,
Senior Superintendent.
Appendix
Complainant’s exhibits :
Ext. A1 : Copy of letter dt. 29-09-2011
A2 : Copy of amortization schedule
Opposite party’s exhibits : Nil
Depositions:
PW1 : Jibu Jacob
DW1 : Vipin Thomas
