BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM VAZHUTHACAUD : THIRUVANANTHAPURAM
PRESENT:
SHRI. G. SIVAPRASAD : PRESIDENT SMT. BEENA KUMARI .A : MEMBER SMT. S.K. SREELA : MEMBER
O.P. No. 28/2007 Dated: 30..04..2009
Complainant: S. Chithra, Proprietor, M/s. Devi Stores, Market Road, Attingal. (By Adv. J. Jayakumar)
Opposite party: The Manager, Indian Bank, Attingal Branch, Attingal. (By Adv. S. Easwaran)
This O.P having been heard on 15..04..2009, the Forum on 30..04..2009 delivered the following:
ORDER
SHRI. G. SIVAPRASAD, PRESIDENT: The facts leading to the filing of the complaint are that complainant had availed a Secured Overdraft of Rs. 7,25,000/- from the opposite party, that complainant could not repay the said amount in time due to bad business conditions, that the repayment was made irregular, that the opposite party transferred and classified the said loan into non-performing account on 31/3/2004 and issued notice to that effect to the complainant, and that the agreed rate of interest was 16% per annum. Complainant's husband was the surety of the said loan transaction, and he mortgaged 20 cents of land to the opposite party. The opposite party issued a notice under Section 13(2) of the Securitisation and Re-construction of Financial Assets and Enforcement of Security Interest Act, 2002. The complainant submitted an application for One Time Settlement. But the opposite party did not consider the same. The opposite party took over the mortgaged property and demanded exorbitant amount for settlement of the loan transaction, and the complainant was forced to remit interest at compound rate, interest on interest, penal interest, incidental expenses and memorandum of legal charges. The balance amount due on the date of closure was only Rs.7,39,208/- as per the accounts of the opposite party. The opposite party has no manner of right to ignore the binding direction of the RBI. The opposite party has no right to charge interest as they think fit by way of memorandum of interest account. The complainant demanded the true statement of loan account to the opposite party, but the opposite party never given any statement of account so far. Hence this complaint to direct the opposite party to refund the excess amount of Rs. 3,63,523/- and pay Rs. 10,000/- towards compensation. 2. Opposite party did not file version and opposite party remained ex-parte. 3. The points that arise for consideration are:
Whether the opposite party has collected excess amount from the complainant? Whether the complainant is entitled for refund of excess amount? Whether there is deficiency in service on the part of opposite party? Whether complainant is entitled to get compensation? If so, at what amount?
4. In support of the complaint, complainant has filed affidavit in lieu of examination in chief and Exts. P1 to P4 were marked.
5. Points (i) to (iv): It has been the case of the complainant that complainant had availed a secured overdraft of Rs.7,25,000/- from the opposite party on 2/1/2001, that complainant could not repay the said amount in time due to bad business conditions, and that on 31/3/2004 the said loan was put into non-performing account and the same was intimated to the complainant by the opposite party. It has also been the case of the complainant that the agreed rate of interest was 16% per annum, that complainant's husband was the surety of the loan transaction, who mortgaged 20 cents of land with residential building therein to the opposite party, that a notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 was issued by the opposite party, that the said mortgaged property was taken over by the opposite party and an exorbitant amount was demanded by the opposite party for settlement of loan transaction ignoring the binding direction of the RBI, and that complainant was bound to comply all the illegal demands and directions under the threat of the opposite party. Ext.P1 is the copy of advocate notice dated 10/11/2006 sent by the complainant to opposite party, Ext.P2 is the acknowledgment card, Ext.P3 is the postal receipt and Ext.P4 is the current Account Pass book in the name of Devi Store, Market Road, Attingal. Submission by the complainant is that opposite party had transferred and classified the said loan into non-performing account on 31/3/2004 and issued notice intimating the same to the complainant. Complainant did not produce the said notice. Evidently by Ext.P4, complainant's operation is under current account; complainant herself deposed that interest rate at 16%. A perusal of Ext.P4 pass book would reveal that the said account was in force from 23/12/2000 and the creditor has charged interest from the debtor on periodical rests and capitalised the same so as to make part of the principal. If the interest on periodical rest is not paid by the debtor, normally the interest amount would be debited to the account of the borrower and then it would be capitalised. In the instant case interest amount is seen debited once in three months up to 31/3/2002 in the account of the complainant and the same is capitalised. Submission by the complainant is that the said loan was transferred and classified in to non-performing account on account of 31/3/2004. On perusal of Ext.P4 pass book, it is found that even after 31/3/2004, there is credit entry and debit entry. It is pertinent to note that the balance amount shown as due on 10/3/2003 was Rs.8,56,998/-. The said balance amount would consist principal sum advanced plus interest amount debited and capitalised. On 31/3/2003, a sum of Rs.1,36,224/- is seen deposited and made the same in the credit entry – thereafter some small amounts are seen debited. The balance amount shown as due on 23/8/2005 is Rs.7,39,008/-. Then on 7/9/2005 Rs.50,000/- is seen deposited and the same is made in the credit entry and an interest amount of Rs.50,000/- is also seen debited on 7/9/2005. Further on 22/11/2005 Rs.10,000/- is seen credited and Rs.10,000/- is debited as against MO1.Debt interest of Rs.10,392/- is debited on 31/1/2006. On 27/2/2006 Rs.50,000/- is seen put under credit entry, on 28/2/2006 interest of Rs.9,157/- is debited, on 8/3/2006 a sum of Rs.1,50,000/- is seen brought under credit entry and on the same day of Rs.1,80,414/- is seen debited against withdrawal transfer. On 28/3/2006 a sum of Rs.3,00,000/- is entered under credit entry and the same is also seen withdrawn on the same date and debited the same. On 31/3/2006 a sum of Rs.9,952/- is seen debited against interest and the balance amount shown as due as on 31/3/2006 is Rs.7,49,179/-. It is further to be noted that from the very inception of the loan the interest amount is seen debited quarterly which continued up to 31/3/2002 and the same is capitalised. From 01/04/2002 onwards the interest amount is seen debited monthly and capitalised the same. Main thrust argument advanced by the complainant was to the effect that an exorbitant amount was demanded by the opposite party for settlement of loan transaction, that complainant was forced to remit interest at compound rate, penal interest, incidental expenses etc. In this context, it is to be highlighted that recognition of the method of capitalisation of interest so as to make it part of the principal consistently with the contract between the parties or established banking practice does not offend the sense of reason, justice and equity. The underlying principal is that when interest is debited to the account of borrower on periodical rest, it is debited because of it having fallen due on that day. If the interest is not paid on the date due, from that date the creditor is deprived of such use of the money which it would have made if the debtor had paid the amount of interest on the date due. The creditor needs to be compensated for deprivation. Therefore, the balance amount shown as due on a particular date may include the amount of interest, charged on periodical rests and capitalised with the principal sum actually advanced. In this case, the complainant has not paid the amount of interest on the date due, and interest amount is debited and capitalised. Thereby the balance amount shown as due became lumpy. A perusal of Ext.P4 pass book reveals that opposite party has acted in accordance with the established procedure. No material on record to prove otherwise. Cogent and clinching evidence must be adduced to prove that opposite party collected exorbitant amount contrary to the established procedure. Complainant failed to establish the case. Deficiency in service not proved. Complaint has no merits which deserves to be dismissed.
In the result, complaint is dismissed.
A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.
Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the open Forum, this the 30th day of April, 2009.
G. SIVAPRASAD, PRESIDENT BEENA KUMARI .A : MEMBER
S.K. SREELA : MEMBER
ad.
C.C.No.28/2007 APPENDIX I. Complainant's witness: PW1 : Chithra. S II.Complainant's documents:
P1 : Reply notice dated 10/11/2006 issued by opp. Party
P2 : Acknowledgement card dated 13/11/2006 P3 : Postal receipt dated 10/11/2006
P4 : Current Account Pass Book
III. Opposite party's witness : NIL
IV. Opposite party's documents: NIL
PRESIDENT ad.
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM VAZHUTHACAUD : THIRUVANANTHAPURAM
PRESENT:
SHRI. G. SIVAPRASAD : PRESIDENT SMT. BEENA KUMARI .A : MEMBER SMT. S.K. SREELA : MEMBER
O.P. No. 28/2007 Dated: 30..04..2009
Complainant: S. Chithra, Proprietor, M/s. Devi Stores, Market Road, Attingal. (By Adv. J. Jayakumar)
Opposite party: The Manager, Indian Bank, Attingal Branch, Attingal. (By Adv. S. Easwaran)
This O.P having been heard on 15..04..2009, the Forum on 30..04..2009 delivered the following:
ORDER
SHRI. G. SIVAPRASAD, PRESIDENT: The facts leading to the filing of the complaint are that complainant had availed a Secured Overdraft of Rs. 7,25,000/- from the opposite party, that complainant could not repay the said amount in time due to bad business conditions, that the repayment was made irregular, that the opposite party transferred and classified the said loan into non-performing account on 31/3/2004 and issued notice to that effect to the complainant, and that the agreed rate of interest was 16% per annum. Complainant's husband was the surety of the said loan transaction, and he mortgaged 20 cents of land to the opposite party. The opposite party issued a notice under Section 13(2) of the Securitisation and Re-construction of Financial Assets and Enforcement of Security Interest Act, 2002. The complainant submitted an application for One Time Settlement. But the opposite party did not consider the same. The opposite party took over the mortgaged property and demanded exorbitant amount for settlement of the loan transaction, and the complainant was forced to remit interest at compound rate, interest on interest, penal interest, incidental expenses and memorandum of legal charges. The balance amount due on the date of closure was only Rs.7,39,208/- as per the accounts of the opposite party. The opposite party has no manner of right to ignore the binding direction of the RBI. The opposite party has no right to charge interest as they think fit by way of memorandum of interest account. The complainant demanded the true statement of loan account to the opposite party, but the opposite party never given any statement of account so far. Hence this complaint to direct the opposite party to refund the excess amount of Rs. 3,63,523/- and pay Rs. 10,000/- towards compensation. 2. Opposite party did not file version and opposite party remained ex-parte. 3. The points that arise for consideration are:
Whether the opposite party has collected excess amount from the complainant? Whether the complainant is entitled for refund of excess amount? Whether there is deficiency in service on the part of opposite party? Whether complainant is entitled to get compensation? If so, at what amount?
4. In support of the complaint, complainant has filed affidavit in lieu of examination in chief and Exts. P1 to P4 were marked.
5. Points (i) to (iv): It has been the case of the complainant that complainant had availed a secured overdraft of Rs.7,25,000/- from the opposite party on 2/1/2001, that complainant could not repay the said amount in time due to bad business conditions, and that on 31/3/2004 the said loan was put into non-performing account and the same was intimated to the complainant by the opposite party. It has also been the case of the complainant that the agreed rate of interest was 16% per annum, that complainant's husband was the surety of the loan transaction, who mortgaged 20 cents of land with residential building therein to the opposite party, that a notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 was issued by the opposite party, that the said mortgaged property was taken over by the opposite party and an exorbitant amount was demanded by the opposite party for settlement of loan transaction ignoring the binding direction of the RBI, and that complainant was bound to comply all the illegal demands and directions under the threat of the opposite party. Ext.P1 is the copy of advocate notice dated 10/11/2006 sent by the complainant to opposite party, Ext.P2 is the acknowledgment card, Ext.P3 is the postal receipt and Ext.P4 is the current Account Pass book in the name of Devi Store, Market Road, Attingal. Submission by the complainant is that opposite party had transferred and classified the said loan into non-performing account on 31/3/2004 and issued notice intimating the same to the complainant. Complainant did not produce the said notice. Evidently by Ext.P4, complainant's operation is under current account; complainant herself deposed that interest rate at 16%. A perusal of Ext.P4 pass book would reveal that the said account was in force from 23/12/2000 and the creditor has charged interest from the debtor on periodical rests and capitalised the same so as to make part of the principal. If the interest on periodical rest is not paid by the debtor, normally the interest amount would be debited to the account of the borrower and then it would be capitalised. In the instant case interest amount is seen debited once in three months up to 31/3/2002 in the account of the complainant and the same is capitalised. Submission by the complainant is that the said loan was transferred and classified in to non-performing account on account of 31/3/2004. On perusal of Ext.P4 pass book, it is found that even after 31/3/2004, there is credit entry and debit entry. It is pertinent to note that the balance amount shown as due on 10/3/2003 was Rs.8,56,998/-. The said balance amount would consist principal sum advanced plus interest amount debited and capitalised. On 31/3/2003, a sum of Rs.1,36,224/- is seen deposited and made the same in the credit entry – thereafter some small amounts are seen debited. The balance amount shown as due on 23/8/2005 is Rs.7,39,008/-. Then on 7/9/2005 Rs.50,000/- is seen deposited and the same is made in the credit entry and an interest amount of Rs.50,000/- is also seen debited on 7/9/2005. Further on 22/11/2005 Rs.10,000/- is seen credited and Rs.10,000/- is debited as against MO1.Debt interest of Rs.10,392/- is debited on 31/1/2006. On 27/2/2006 Rs.50,000/- is seen put under credit entry, on 28/2/2006 interest of Rs.9,157/- is debited, on 8/3/2006 a sum of Rs.1,50,000/- is seen brought under credit entry and on the same day of Rs.1,80,414/- is seen debited against withdrawal transfer. On 28/3/2006 a sum of Rs.3,00,000/- is entered under credit entry and the same is also seen withdrawn on the same date and debited the same. On 31/3/2006 a sum of Rs.9,952/- is seen debited against interest and the balance amount shown as due as on 31/3/2006 is Rs.7,49,179/-. It is further to be noted that from the very inception of the loan the interest amount is seen debited quarterly which continued up to 31/3/2002 and the same is capitalised. From 01/04/2002 onwards the interest amount is seen debited monthly and capitalised the same. Main thrust argument advanced by the complainant was to the effect that an exorbitant amount was demanded by the opposite party for settlement of loan transaction, that complainant was forced to remit interest at compound rate, penal interest, incidental expenses etc. In this context, it is to be highlighted that recognition of the method of capitalisation of interest so as to make it part of the principal consistently with the contract between the parties or established banking practice does not offend the sense of reason, justice and equity. The underlying principal is that when interest is debited to the account of borrower on periodical rest, it is debited because of it having fallen due on that day. If the interest is not paid on the date due, from that date the creditor is deprived of such use of the money which it would have made if the debtor had paid the amount of interest on the date due. The creditor needs to be compensated for deprivation. Therefore, the balance amount shown as due on a particular date may include the amount of interest, charged on periodical rests and capitalised with the principal sum actually advanced. In this case, the complainant has not paid the amount of interest on the date due, and interest amount is debited and capitalised. Thereby the balance amount shown as due became lumpy. A perusal of Ext.P4 pass book reveals that opposite party has acted in accordance with the established procedure. No material on record to prove otherwise. Cogent and clinching evidence must be adduced to prove that opposite party collected exorbitant amount contrary to the established procedure. Complainant failed to establish the case. Deficiency in service not proved. Complaint has no merits which deserves to be dismissed.
In the result, complaint is dismissed.
A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.
Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the open Forum, this the 30th day of April, 2009.
G. SIVAPRASAD, PRESIDENT BEENA KUMARI .A : MEMBER
S.K. SREELA : MEMBER
ad.
C.C.No.28/2007 APPENDIX I. Complainant's witness: PW1 : Chithra. S II.Complainant's documents:
P1 : Reply notice dated 10/11/2006 issued by opp. Party
P2 : Acknowledgement card dated 13/11/2006 P3 : Postal receipt dated 10/11/2006
P4 : Current Account Pass Book
III. Opposite party's witness : NIL
IV. Opposite party's documents: NIL
PRESIDENT
......................Smt. Beena Kumari. A
......................Smt. S.K.Sreela
......................Sri G. Sivaprasad | |
