O R D E R

Paul Gomez, Member.

1. The facts pertaining to the complaint are as follows :

The complainant is an account holder with the opposite party bank having Savings Bank Account No. 57058161050. Lured by the tall claims of the opposite party, made in advertisements through various media about car loan scheme, the complainant availed a car loan of Rs. 2,50,000/- for the purchase of a Maruti Alto Lxi car. The said loan amount was to be repaid in 60 equated monthly instalments of Rs. 4,980/-. Thus, the total amount to be repaid including interest was Rs. 2,98,800/-. The last instalment was of the value of Rs. 3,800/-.

2. The opposite party bank was taking the monthly instalments from the bank account of the complainant on 26^th day of every month without failure from October 2005. The 60^th instalment of Rs. 3,800/- was due on 26^th September 2010. In September, when the complainant went to the opposite party opposite party bank to remind about the last instalment for closing the account, the opposite party demanded the complainant to pay Rs. 23,097.51 for closing the loan account. They also informed him that necessary certificate for the hypothecation clearance of the vehicle will not be issued unless the balance amount is remitted. Hence this complaint with the following prayers :

1. Direct the opposite party to close the loan account with the complainant.

2. Direct the opposite party to issue necessary certificates with regard to closing of the vehicle loan.

3. Direct the opposite party to return an amount of Rs. 6,200/- excessively taken from the complainant.

4. Direct the opposite party to pay Rs. 15,000/- towards compensation for mental agony and losses.

5. Direct the opposite party to pay an amount of Rs. 3,000/- towards litigation costs.

2. The version filed by the opposite party embodies the denial of the allegations raised against the opposite party. The averment of the complainant that he was promptly paying the loan is incorrect. The loan was sanctioned to the complainant at floating rate of interest linked to the State Bank of Travancore Prime Time lending Rate (SBTPLR) calculated on the daily balance of the amount due. This has been agreed by the complainant and the guarantor. The interest has changed several times since availing the loan due to change in State Bank of Travancore Prime Time lending Rate. The complainant has not remitted the arrears fully during the period. The complainant visited the branch several times and he has been provided with the statement of accounts which contained the details of remittance, interest and charges debited in the account, prevailing rate of interest and the outstanding balances. All that, this opposite party has done is only in accordance with the terms of the agreement executed by the complainant. Hence, according to the opposite party, the complaint is liable to be dismissed.

3. The complainant was examined as PW1. Exts. A1 to A6 were marked on his side. The opposite party had no oral evidence. Exts. B1 to B3 were marked for them. The learned counsel appearing on both sides were heard.

4. The points outstanding for settlement are:

1. Whether the complainant has fully paid the loan amount?

2. Whether the opposite party is entitled to recover the amount demanded by them?

3. What are the reliefs, if any?

5. Point Nos. i) and ii) :- Clearly narrated by the complainant, he availed a loan of Rs. 2,50,000/- from the opposite party bank to purchase a Maruti Alto Car. The amount of loan was divided into 60 equated instalments for repayment along with interest. When he approached the bank for closure of the loan at the 60^th instalment, he was shocked to hear that he was still to pay outstanding balance of Rs. 23,097.51. According to the opposite party, there is nothing to be surprised because the loan was sanctioned with floating rate of interest, therefore the due amount is subject to change. According to them, the loan was sanctioned at floating rate interest linked to the State Bank of Travancore Prime Time Lending Rate (SBTPLR) calculated on the daily balance of the amount due to which the complainant had agreed. They have also the case that the complainant had visited the branch several times and he has been provided with the statement of accounts which contains the details of remittance, interest and charges debited in the account, prevailing rate of interest and the outstanding balance.

6. It has to be borne in mind that the loanee has been holding an SB account with the opposite party bank. Ext. B3 is the statement of accounts furnished to the complainant. Unfortunately, it was not served during the currency of the transaction. Therefore, the contention of the opposite party that the complainant was apprised with the fluctuation in rate of interest cannot be relied upon. In the same way, Ext. B2 account statement indicating the gradual rise in rate of interest was served only too belatedly. Had these informations been furnished in time, he could have got an opportunity to make an evaluation of the whole situation so as to exercise the option of pre-closure. In this context, it is worth while to take into account clause 4 of Ext. B1agreemnent where it has been stipulated that bank is liable to issue notice to the borrower when the bank intends charge at a higher rate the interest. Therefore, we are of the view that the conduct of the opposite party was not above board in as much as the borrower was continuously kept in the dark as to the rate of interest he was liable to pay. Of course, the opposite party take shelter under clause 3 of the Ext. B1 agreement. To be frank, God Almighty along can comprehend the implications of such a clause apart from the bank officials. Ordinary mortals cannot make out anything out of such a provision which is couched in highly technical terms. In fact, the officials of the opposite party bank apparently was also in the same boat is brought out by the fact that they too could demand the additional amount only at the fag end of the transaction. We have to keep in mind the fact that loanee is a Savings Bank account holder of the bank and Ext. B3 statement would show that he was not a defaulter in paying any instalment at any point of time. As per Ext. B1 agreement he was permitted to repay the loan amount with interest in 60 instalments. When he approached the bank to close the account, the bank unilaterally resheduled it to 84 instalments behind his back. It tantamounts to nothing less than deficiency in service and unfair trade practice. It was the bank that was debiting the instalments from his Savings Bank account regularly. Therefore, they could have debited the required amount as and when it was required according to the fluctuation in the rate of interest. That too was not done by the opposite party bank. All these conducts lead us to the inescapable conclusion that the bank has committed deficiency in service in respect of the impugned loan transaction. Therefore, point No. (i) is answered in the affirmative Point No. (ii) is answered in the negative.

7. Point No. iii) :- Several reliefs have been sought in the complaint. The complainant has urged us to direct the opposite party to close the loan account and issue necessary certificates pertaining to closing of the loan. We think it is a legitimate demand raised by the complainant which can be allowed, given the facts and circumstances of the case. Then he has demanded the refund of Rs. 6,200/- excessively levied from the complainant. In the absence of any material to establish this fact, we cannot countenance such a demand. Also, the demand for compensation and cost is turned down taking into account the peculiar facts and circumstances of the case.

8. Accordingly, the compliant is partly allowed and the opposite party is directed to close the impugned loan account and issue necessary certificates consequent upon closure of such loan transactions.

The order shall be complied with, within a period of one month from the date of receipt of a copy of this order.

Pronounced in open Forum on this the 30^th day of June 2011.