D.O.F:11/07/2017
D.O.O:15/12/2021
IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD
CC.No.143/2017
Dated this, the 15th day of December 2021
PRESENT:
SRI.KRISHNAN.K :PRESIDENT
SRI.RADHAKRISHNAN NAIR.M : MEMBER
SMT.BEENA.K.G : MEMBER
Pushparaj.A, aged 42 years
S/o. K.Narayana Shetty. : Complainant
R/at Lakshmi Nivas, Beeranthbail
Kasaragod - 671121
(Adv: A. Balakrishnan Nair)
And
- The Manager
Dewan Housing Finance
Corporation Ltd, First floor
Raaby Tower, Opp – Railways Station : Opposite Parties
Kannur.
- The Manager
D. H. F.L. Office.
S.M.S Building, First Floor, Nayaks Road, Kasaragod
(Adv: Sadanada Kamath )
ORDER
SRI.RADHAKRISHNAN NAIR.M : MEMBER
The instant complaint is filed by the complainant under section 12 of the Consumer Protection Act, 1986 (as amended )
The facts of the case in brief is that complainants availed a loan of Rs. 4,80,000/- from the Opposite Parties for the purpose of construction of residential building . The rate of interest was at 12% per annum and EMI fixed was Rs 5,765 / - and the tenure of the loan was 15 years . As per the sanctioning order, the Opposite Party agreed that the rate of interest would be variable. ।t was specifically stated that the loan was under the category of Housing Ioan. The Opposite Party ought to have reduced the rate of interest whenever the RBl interest rate and repo rate reduce. On the other hand the Opposite Party enhanced the interest rate disproportionately .The Opposite Party collected the interest at the rate of 14.5 % p.a., when the rate of interest for the housing Ioan is 9% p.a. The complainant was forced to pay exorbitant interest and thereby sustained a loss of Rs.78,000/- in that account . The action of the Opposite Party amounts to service deficiency and unfair trade practice.
Therefore the complaint is filed for directing the Opposite Party to refund Rs.78,000/- and to pay Rs 1,00,000 /- towards compensation and costs.
The Opposite Parties entered appearance and the Opposite Party No. 1 filed a written statement . As per the version of Opposite Party. No.1 , the complaint is false, frivolus, vexatious, and not maintainable at law. It is admitted that the complainants availed a loan of Rs.4,80,000/- and the EMI was Rs. 5,765/- The interest rate is not as alleged by the complainant. The loan was sanctioned for purchasing a plot and thereafter to construct a residential house within 2 years of purchase. The complaint has not produced a completion certificate within time and therefore not eligible for the benefit of Housing Loan as per the agreement .The rate of interest varies from time to time as per the guidelines of RBl and Opposite Party No. 1 applied that rate only in this case. No service deficiency on the part of the Opposite Party No .1 and no mental agony caused to the complainant. The complaint is Iiable to be dismissed.
The Opposite Party No. 2 filed a memo stating that they are adopting the statement of the Opposite Party No .1.
The Complainant filed proof affidavit in Iieu of chief examination and marked documents as Ext. A1 to Ext. A7. He was cross examined as PW 1. The Ext - A1 is the copy of Offer cum Acceptance Letter dated 14.10.2008, Ext A 2 is the copy of the complaint filed against Opposite Party No. 2, dated 26.08.2016.before RBl, Ext. A3 is the copy of Mail letter dated 07.02.2017 to Customer care , Ext. A4 is the Remainder Mail letter dated 07.03.2017, Ext. A5 is the Statement of Account for the period from 13-10-2008 to 09-03-2016,Ext. A6 is the copy of a letter dated 07-01-2017 issued by Opposite Party No.2, Ext. A 7 is the Completion Certificate. The complainant produced a copy of Letter of offer cum - acceptance dt.11-09-2014. issued by the Opposite Party No. 1 to a third party which is marked as Ext. A 8 subject to objection.
From the side of Opposite Parties, the Manager of the Opposite Party No .1 filed proof affidavit in lieu of chief examination and marked documents Ext. B1 to Ext.B3 . He was cross examined as DW 1. Ext. B1 is a copy of Affidavit - cum - undertaking dt.28 -10 -2008 executed by the complainant infavour of the Opposite Parties. Ext B 2 is the statement of account, Ext. A 3 is the Loan Agreement.
Based on the pleadings and evidence of the rival parties in this case the following issues are framed for consideration.
1. Whether there is any service deficiency or unfair trade practice on the part of the opposite party?
2. If so, what is the relief ?
For convenience, both these issues are considered together.
Here the specific case of the complainant is that he availed a loan of Rs. 4,80,000/- from the OPs for the purpose of construction of residential building . The rate of interest was at 12% per annum and EMI fixed was Rs 5,765 / - and the tenure of the loan was 15 years. As per the sanctioning order the Opposite Party agreed that the rate of interest would be variable. ।t was specifically stated that the loan was under the category of Housing Ioan .The Opposite Party ought to have reduced the rate of interest whenever the RBl interest rate and repo rate reduce. On the other hand the Opposite Party enhanced the interest rate disproportionately .The Opposite Party collected the interest at the rate of 14.5 % p.a., when the rate of interest for the housing Loan is 9% p.a. The complainant was forced to pay exorbitant interest and thereby sustained a loss of Rs.78,000/- in that account . The action of the Opposite Party amounts to service deficiency and unfair trade practice.
As per the version of the OPs, it is admitted that the complainants availed a loan of Rs.4,80,000/- and that the EMI was Rs. 5,765/- The interest rate is not as alleged by the complainant. The loan was sanctioned for purchasing a plot and thereafter to construct a residential house within 2 years of purchase. The complaint has not produced completion certificate within time and therefore not eligible for the benefit of Housing Loan as per the agreement .The rate of interest varies from time to time as per the guidelines of RBl and Opposite Party No. 1 applied that rate only in this case. No service deficiency on the part of the Opposite Party No .1 and no mental agony caused to the complainants. The complaint is Iiable to be dismissed.
The Opposite Party state in their written version that the complainant has not produced the completion certificate within 2 years and therefore he cannot get the benefit of the housing loan . But the Opposite Party failed to prove any such condition to the effect that in order to get the benefit of the housing loan, the complainant has to produce the completion certificate within 2 years .The Document Ext.A1 , the Letter of offer cum acceptance issued by the Opposite Party would show that the request of the complainant was for a housing loan(Plot loan ) and the bank has sanctioned the loan on certain conditions. But the Opposite Party didn’t produce any document to show that there is a condition to the effect that in order to get the benefit of the housing loan, the complainant has to produce the completion certificate within 2 years. The Opposite Party has no case that they have issued any notice to the complainant demanding the production of such a completion certificate.
Ext.A5 is the statement of account for the period from12 March 2009 to 31 March 2016. In that series of documents, up to the March 2014, it is mentioned that the remittances are towards Housing Loan Adjustment( Principal Amount for the year)”.Thereafter it is mentioned that “ Loan Adjustment (Principal Amount for the year)”. The Opposite Party has no case that these changes are done with the knowledge and consent of the complainant. So it is clear that the Opposite Party has done all these unilaterally.
After the filing of the version the complainant produced the completion certificate dated.11.11.2014., issued by a licensed Building Supervisor, which is marked as Ext. A8. Therefore in this circumstance the complainant shaII not be denied the benefit of the Housing loan.
The document Ext.A1 shows that the rate of interest of the loan is 12% p.a. Variable which means that the loan was advanced on a floating rate of interest. The Opposite Party in their written version states that the rate of interest varies from time to time as per the guidelines of RBI. In case, there is change in the floating rate of interest on loans then, while fixing the rate of interest and taking the consent of the concerned borrower, whether he wants to continue the loan with the enhanced rate of interest or he could adopt for other option i.e. closing of the account or shifting of the account is to be sought. But here there is no case for the Opposite Party as to whether any personal notice was delivered upon the complainant to check transparency and mutually acceptable.
The Opposite Party, during cross examination, admitted that they had not issued any notice to the complainant /borrower informing about the change of interest rate. Therefore, the Opposite Party bank has not complied with the RBI instructions with regard to change in the floating rate of interest of loans.
In the case reported in 2012 (4) CPJ 415 (NC) IDBI Bank Ltd. (M/s.) v. Subhash Chand Jain & Anr. , it was observed that “concept of floating rate of interest flows from the regulation of rate of interest by the RBI guidelines and not arbitrarily by the service provider without informing or telling the reasons for increasing the rate of interest in general terms and not that there is inflationary market. Every discretion has to be exercised judicially so as to make persons understand fully as to the reasons and ground for increasing the rate of interest and not arbitrarily under the garb of floating rate of interest."
Relying on the above mentioned dicta , even if the Opposite Party has been given the right to change the rate of interest charged on the loan, it does not automatically confer a power upon the Opposite Party to increase or decrease of interest without apprising the borrower/Complainant about the change in interest charged. In simple terms, an opportunity must be afforded to the Borrower before changing the floating rate of interest.
Here in the facts of the present case, the Opposite Party had the power to change the rate of interest charged, however, the Complainant was never apprised about the fact that the rate of Interest had been increased. The Opposite Party was duty bound to disclose the aforesaid information to the Complainant in order to provide the complainant the option to either close the account or shift the account.
Considering the facts and circumstances of the case this commission is of the view that the increase or decrease of the interest rates by the Opposite Party without taking the consent from the borrower/complainant amounts to Unfair Trade Practice and due to which the complainant suffered mental agony and hardships apart from monitory loss. The complaint says that an amount of Rs. 78,000/- is collected from him in excess by the Opposite Party. But the complainant has not furnished any calculation statement to that effect. Therefore, we are of the view that a total amount of 50,000/- will be a reasonable compensation in this case.
In the result, the Opposite Parties are jointly and severally directed to pay Rs. 50,000/- (Rupees Fifty thousand only) towards the compensation and Rs. 5,000/-(Rupees five thousand only) .towards the litigation cost.
The time for compliance is 30 days from receipt of copy of this judgment
Sd/- Sd/- Sd/-
MEMBER MEMBER PRESIDENT
Exhibits
A1- Offer cum acceptance
A2- Letter Dt: 26/08/2016
A3- copy of mail letter
A4- Remainder mail letter
A5- Statement of account
A6- A letter Dt: 07/01/2017
A7-Completion Certificate
A8-Letter of offer cum acceptance
B1- Affidavit cum undertaking
B2- statement of account
B3- Loan agreement
Witness Examined
Pw1- Pushparaja.A
Dw1- Nagesh.K
Sd/- Sd/- Sd/-
MEMBER MEMBER PRESIDENT
Forwarded by Order
Senior Superintendent
Ps/
