DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, PALAKKAD
Dated this the 31st day of August 2021
Present : Sri.Vinay Menon.V President
: Smt.Vidya.A, Member Date of Filing: 26/08/2019
CC/214/2019
C.P.Muhammed Rafeeq,
Chakkalakunnan House,
Kodukkad (PO),
Mannarkkad College (via)
Palakkad – 678 583 - Complainant
(By Party in Person)
Vs
The Manager
Canara Bank,
Hospital Junction,
Mannarkkad (PO),
Mannarkkad – 678 582 - Opposite party
(By Adv.C.Balachandran)
O R D E R
By Smt.Vidya.A. Member
Brief facts of the complaint
The complainant is a poor small scale agriculturist having minute Land. Due to severe financial difficulties, he availed KCC loan (Kissan Credit Card Scheme)_ for Rs.1 lakh from Canara Bank Mannarkkad Brach on 31/3/2018. At the time of sanctioning the loan, the officer of the opposite party bank did not convey anything about the repayment. The KCC 0847840026191 number loan was disbursed through the complainant’s SB account No.015144 and Rs.18/- was debited from his account towards SMS charge.
For Agricultural purpose, the interest rate of KCC loan is 3% after deducting the subsidy.
When the complainant approached the bank on 30/6/2019, for repaying the loan the opposite party bank gave notice to pay interest at the rate of 10.5%. When asked about the high rate of interest, he was informed that if the loan is not repaid within 365 days this rate of interest will be levied. But this was not informed to him at the time of sanctioning the loan. The complainant enquired about this to the officers of the bank and asked why SMS alert was not send in this regard, but they kept silent.
On 20/6/2019 when he repaid the loan, an amount of Rs.8,000/- was levied as interest instead of Rs.3500/- causing him a loss of Rs.4500/-
Without informing the complainant about the repayment schedule and interest rate at the time of sanctioning the loan, the opposite party bank had cheated the complainant by levying high rate of interest showing loan default.
The complainant filed a complaint No.2/004991/18-19 before the Banking Ombudsman, Thiruvananthapuram on 1/7/2019 and the Ombudsman directed him to file a complaint with the Bank. As per that he gave a complaint on 8/7/2019 and a reminder on 29/7/2019. But there was no reply from the part of the Bank. There is clear deficiency in service and irresponsibility on the part of the bank. So this complaint is filed for getting Rs.4500/- from the opposite party which the opposite party bank had illegally collected from the complainant and Rs.15,000/- as cost and compensation.
The complaint admitted and notice issued to the opposite party. The opposite party entered appearance and filed their version.
The main contentions in the version of the opposite party
The opposite party admits that the complainant had availed a loan under Kissan Credit Card Scheme (KCC Loan) for Rs.1,00,000/- on 31/3/2018 from the opposite party bank. The contention in the complaint that the complainant is a poor small scale agriculturist and on account of severe financial problems he availed the loan from the opposite party bank etc. are denied by the opposite party. The loan amount was credited on 31/3/2018 and the complainant has not withdrawn the amount for about 15 months which means that the loan amount is not needed to the complainant to do agriduclutre. Interest rate, repayment schedule and other terms and conditions of the KCC loan were conveyed to the complainant when the loan was disbursed. In the sanction memorandum, it is clearly mentioned that the loan has to be repaid within 365 days. The complainant is an educated man and is a retired Gazetted officer and he understood the repayment condition.
It is admitted that an amount of Rs.18/- is debited on quarterly basis from the account of the complainant towards, SMS alert charge. SMS alert is given only for withdrawal of amounts from SB account. If the customers are not subscribing the SMS alert, the bank will not be charging the same.
The KCC loan amount has to be repaid within 365 days. Then only the borrower is entitled to get interest subsidy. If repayment is not made within the said period, interest has to be charged without interest subvention at the rate of 10.05%. In this case, the complainant availed the loan on 31/3/2018, but the payment was made on 20/6/2019. In order to get the benefit, the loan had to be repaid on or before 31/3/2019. The complainant lost the benefit because he failed to make prompt repayment and he alone is responsible for that. The complainant had not given consent to the Bank to adjust the amount under liability from his SB account and hence the same cannot adjusted from his account. The amount will be adjusted from the borrower’s account only if the loan become Non Performing Asset and here the loan will be NPA only after one year, from the date on which it falls due for payment.
The allegations in the complaint that nobody told the complainant about repayment of the loan within 365 days failing which 10.5% interest will be levied and when the complainant asked about SMS alert, the bank kept silent etc. are denied by the opposite party. The Bank has not charged 10.5% interest as alleged but charged only 10.05%. The complainant lost the benefit only because of his default in repayment and for that bank is not liable. There is no deficiency in service on the part of the Bank. The complainant is not entitled to get Rs.4500/- and cost and compensation from the opposite party. The complaint has to be dismissed with compensatory cost to the opposite party.
Complainant filed proof affidavit and documents. Ext.A1 to A5 were marked. (Ext.A3 in series and Ext.A6 marked with objection) and evidence closed. The opposite party bank filed affidavit and documents which are marked as Ext.B1 to B3.
Both parties filed notes of argument. Heard both parties.
Main Issues
- Is there any deficiency in service on the part of the Bank ?
- If so, what is the relief as to cost / compensation ?
Issues 1 & 2
We have perused the affidavit, documents and notes filed by both parties.
It is admitted fact that the complainant had availed a loan under Kissan Credit Card Scheme (KCC Loan) for Rs.One lakh on 31/3/2018 from the opposite party bank. The loan amount was disbursed through his SB account with the opposite party on 31/3/2018.
According to the complainant, when he approached the Bank on 20/6/2019 for repaying it the bank issued notice to repay the loan with high rate of interest (10.5%) while the interest of the loan for agricultural purpose is only 3% and when questioned about this, the bank officials told him that unless the full amount is repaid within 365 days, this rate of interest will be charged.
As per opposite party’s contention, the complainant availed the loan of Rs.1 lakh on 31/3/2018 and in order to get benefit unless the KCC Scheme, the loan amount with interest is to be repaid within one year from the date of availing, that is on or before 30/3/2019. But in this case, it was repaid only on 20.6.2019 and so he is not entitled to the benefit. Further according to them, it is clearly stated in Ext.B2 sanction Memorandum and the complainant being an educated man is fully aware of these conditions.
From these contentions, it is clear that after availing the agricultural loan for Rs.one lakh on 31/3/2018, the complainant approached the bank for repayment only on 20/6/2019 i.e. after 15 months. As per Ext.B2 the borrower is entitled for interest subvention in the case of prompt repayment. Here the complainant has not repaid the principal amount or interest within the stipulated time mentioned in the sanction memorandum. The sanction memorandum, the copy of which is produced by the opposite party bank and it is marked as Ext.B2. In Ext.B2, the repayment period is shown as “within 12 months in one Lumpsum and the rate of interest is shown as 9.80 and it is written that net rate will be 4% if loan repaid within one year” The complainant and the Manager of the opposite party bank has put their signature on the sanction memorandum.
As per the opposite party bank, the original of the sanction memorandum was handed over to the complainant and the duplicate was kept by the bank. But the complainant in his affidavit has denied this. The complainant has stated that the bank has not issued him the copy of the agreement and the bank officials did not inform that, in order to get the interest subvention, the repayment has to be made within 12 months from the date of disbursal of the loan.
Here it is clear that the complainant had put his signature in sanction memorandum and being an educated man worked in the Govt.Department (as admitted by him during argument) he ought to have understood the terms and conditions. But since he had raised a contention that he was not provided with a copy of the sanction memorandum and nothing was explained by the bank officials about the re-payment and interest rate and the conditions for getting interest subvention, the bank should have taken steps to cross examine the complainant to bring out the veracity of their contentions. But the bank did not take any steps and did not file any petition for directing the complainant for the cause production of the original of Ext.B1 which they claimed to be with the complainant before the Forum.
Further the complainant filed a complaint before the Banking Ombudsman, Reserve Bank of India on 1st July 2019 which is produced by the complainant and marked as Ext.A1. The complainant got a direction from the Banking Ombudsman to first approach the bank for redressal of his grievance giving a reference that “This complaint was forwarded by the office of the Banking Ombudsman, Thiruvananthapuram to the Nodal Officer of the bank on 29/6/2019. As per the direction, he filed a complaint to the bank (which is marked as Ext.A3(a)) on 8/7/2019 and a reminder on 29/7/2019 which is marked as Ext.A3(b). But the Bank did not give a written reply for that. So there is a deficiency in service on the part of the bank in not giving a reply to the complaint filed by him as per the direction of the Banking Ombudsman and to the reminder send by him again in this matter. They should have given a reply stating their contentions.
It is true that the complainant can approach the Banking Ombudsman, if he has not received any reply from the Bank or if he is not satisfied with the Bank’s reply. At the same time, another remedy open to the complainant is to approach the Consumer Forum against the Bank. The only thing is that the complainant has proof that he had raised the matter with the Bank. If he had approached a Banking Ombudsman, the complainant need to have the related documents too. Here the complainant had produced the documents relating to that and are marked in evidence. The opposite parties contention that the complaint is not maintainable in law as it is barred by sub judice is not tenable. The matter is not pending before the banking Ombudsman. The complainant can very well approach the Forum if there is any deficiency in service on the part of the bank.
There is some mistake on the part of the complainant also. He is eligible for interest subvention only in the case of prompt repayment. As a prudent man, he has to enquire about the terms and conditions of the loan at the time of availing it. At the same time, the banks have to give adequate publicity of the facility so that maximum farmers may benefit from the scheme. It is their duty to make the borrower aware that there is interest subvention / incentive given by the Govt.of India/State Govt. in the case of prompt repayment.
A broad review of the KCC loan scheme indicate that the farmers can avail short term loan under the scheme. Interest subvention of 2% to banks and 3% to farmers towards prompt repayment incentive is available to short terms KCC loan. As per this, the interest subvention of 2% is given to the complainant in this case on 30/9/2018 & 31/3/2019. This can be seen from the account statement produced from both sides marked as Ext.A4 and B3. The complainant is not eligible for the interest subvention for prompt repayment as he had not repaid the loan within the period.
But the details regarding the interest subvention is not clearly mentioned in the sanction memorandum and not properly explained to the complainant. The bank should have given a detailed reply explaining these facts to the complainant for the complaint filed by him. In this aspect, there is a deficiency in service on the part of the bank. This deficiency on their part had caused the complainant to approach the Forum for the redressal of his grievance.
The contentions of the bank that the complainant is not a poor agriculturist as he had not withdrawn the amount for about 15 months which implies that the loan amount is not needed to him is of no relevance. The bank had issued the loan to the complainant only after verifying the eligibility and on production of necessary documents. The reasons for the non withdrawal of the amount is properly explained by him in his affidavit.
In the result, the complaint is partly allowed. We direct the opposite party bank to pay Rs.3,000/- (Rupees Three thousand only) to the complainant for their deficiency in service and Rs.2,000/- (Rupees Two thousand only) as cost.,
Pronounced in the open court on this the 31st day of August 2021.
Sd/-
Vinay Menon V
President
Sd/-
Vidya.A
Member
APPENDIX
Exhibits marked on the side of the complainant
Ext.A1 – Letter from Ombdusman dated 1/7/2019 to the complainant
Ext.A2 – Bank SB Account pass book No.15144
Ext.A3 (a)(b) – Photocopies of letter sent to the opposite party dated 8/7/19 & 29/7/19
Ext.A4 – Photocopy of bank statement for the period from 1/3/18 to 19/6/19
Ext.A5 – Remittance counterfoil for Rs.1,08,000/-
Ext.A6 – KCC norms interest order.(with objection)
Exhibits marked on the side of the opposite party
Ext.B1 – Photocopy of common application cum appraisal report for agricultural loan upto
2 lakhs dated 30/3/2018
Ext.B2 – Photocopy of memorandum regarding the loan of the complainant dt.30/3/18
Ext.B3 –True copy of the statement of loan account of the complainant maintained by the
bank for the period 1/1/2018 to 9/10/2019.
Witness examined on the side of the complainant
NIL
Witness examined on the side of the opposite party
NIL
Cost : Rs.2000/- allowed as cost.
NB : Parties are directed to take back all extra set of documents submitted in the
proceedings in accordance with Consumer Protection (Consumer Commission
procedure) Regulations, 2020.
