IN THE CONSUMER DISPUTES REDRESSAL FORUM, ALAPPUZHA
Thursday the 30th day of June, 2016
Filed on 19.07.2013
Present
1.Smt. Elizabeth George (President)
2.Sri. Antony Xavier (Member)
3.Smt.Jasmine.D. (Member)
in
C.C.No.227/2013
between
Complainants:- Opposite Party:-
- Sri. T.T. Mathew The Manager
Thaivelikkakath Federal Bank Ltd.
Vettackal P.O., Cherthala Thankey Branch
- Smt. Nidhi Shajan Kadakkarappally P.O.
D/o T.T. Mathew -do- Cherthala
Represented by her (By Adv. Cheriyan Kuruvila)
Power of Attorney Holder and orally authorized
Person Sri. T.T. Mathew
- Sri. Shajan, S/o V.K. Sebastian
Vazhappilly House, Aloor P.O.
Thrissur, represented by his Power of Attorney Holder
and orally authorized Person T.T. Mathew
(By Adv. E.D. Zachariah – for complainants)
O R D E R
SMT. ELIZABETH GEORGE (PRESIDENT)
The case of the complainant is as follows:-
The first complainant executed loan documents in favour of the bank as the Power of Attorney Holder of the complainants 2 and 3 and availed a loan for Rs.15 lakhs. The first complainant closed the loan account on 13.12.2012. After closing the loan the opposite party did not return the original Power of Attorney documents and the original Federal Housing Scheme agreement. At the time of availing the loan the rate of interest was 8.5%. As per the agreement, the opposite party has no right to enhance the rate of interest without the direction of the Reserve Bank. But the opposite party enhanced the rate of interest without the direction of Reserve Bank. The opposite party realized more than 50% in excess. The complainant claimed the excess amount realized from him, and also the Power of Attorney executed by the complainants 2 and 3. But the opposite party repudiated the claim and also ridiculed and mocked him and mentally harassed him. Alleging deficiency in service on the part of the opposite party the complaint is filed.
2. The version of the opposite party is as follows:-
The allegation against the bank that they failed to return the deed of Power of Attorney and Federal Housing Loan Agreement executed in favour of the bank even after the closure of the loan account is quite strange and unusual. The loan documents executed by the borrowers at the time of availing the loaner properties of the bank and are not returnable to the borrowers. At the time of availing the loan the complainant agreed to repay the loan with interest at the rate of 8.5% per annum. As per the agreement, bank shall have the right and discretion to revise the rate of interest and such revision of interest shall be binding on the borrowers. The variation in the rate of interest will be notified in the notice board of the bank and no separate notice or intimation will be sent to the borrowers. The allegation that the complainant was subjected to humiliation and ridicule by the opposite party is not true and hence denied. The complainant is not entitled to get any reliefs prayed in the complaint. 4. The complainant was examined as PW1. The documents produced were marked as Exts.A1 to A6. The opposite party was examined as RW1. One witness was examined as RW2. The documents were produced marked as Exts.B1to B11.
5. The points that arose for consideration are as follows:-
1) Whether there is any deficiency in service on the side of the opposite party?
3) If so the reliefs and costs?
6. The additional complainants 2 and 3 have executed a General Power of Attorney in favour of the first complainant and accordingly the first complainant had availed a loan for Rs.15 lakhs from the opposite party. It is an admitted fact that the first complainant had closed the loan on 13.12.2012. According to the complainant, after closing the loan, the opposite party failed to return the deed of Power of Attorney and the Federal Housing Loan Agreement executed in favour of the bank. The opposite party filed version stating that the loan documents executed by the borrowers at the time of availing the loaner properties of the bank and are not returnable to the borrowers even after the closure of the loan account. They further stated that as per RBI guide lines the loan documents are to be kept with the bank even after the closure of the loan accounts particularly for audit purpose. While cross examining the RW1 he stated that on the basis of memorandum of instruction, they have no right to return the Power of Attorney and Loan Agreement. The memorandum of instruction is also produced and it marked as Ext.B9. It is pertinent to see that nowhere in the said document, it is stated that the bank has right to keep the Power of Attorney executed by the customers. It is an admitted fact that the complainants 2 and 3 have executed General Power of Attorney in favour of the first complainant and the first complainant had availed the loan from the opposite party. The copy of the General Power of Attorney is also produced it marked as Ext.B1. On verifying the Ext.B1, we came to see that it was a General Power of Attorney executed by Shajan and Nidhi Shajan in favour of T.T. Mathew as their lawful attorney to do all or any of the acts stated therein. The opposite party has no right to claim that it is a property of the bank. They should have returned the Power of Attorney to the loanee after closing the loan transaction. If the bank is so particular to keep the documents in custody it can very well taken photo copy of the same and keep it along with the records certify it as a true and return the original to the loanee. Without doing that they kept it in their custody. The inordinate delay committed by the opposite party in returning the General Power of Attorney to the first complainant amounts to deficiency in service on the part of the opposite party.
7. The another allegation of the complainant is that the opposite party had realized excess amount as interest from the loanees. It is an admitted fact that the loan was granted at the rate of 8.5%. According to the opposite party, the variation in the rate of interest was in accordance with the RBI guide lines. The opposite party has produced Annexure II which shows that on account of the proposed division in BPLR w.e.f. 15.12.2010 an upward revision at the rate of 50 Basis Points will be applicable w.e.f. 15.12.2010 for all existing retail loans sanctioned on 30.6.2010. Ext.B10 is the Master Circular regarding the interest rate on advances issued by the Reserve Bank of India. Under the Clause 2.2 under the title Base Rate it is stated that the Base Rate system has replaced the BPLR system w.e.f. July on 2010. In the instant case in the agreement executed by the complainant, the rate of interest was 8.5% and the interest charged to the loan is floating. Ext.B3 series are the revision of the interest rate on advances in accordance with the decision taken at the meeting held on different dates. Ext.B3 series and Ext.B11 document which subsequently produced show that the variation in the rate of interest in the loan account was in accordance with the RBI guide lines. But it is pertinent to see that Ext.B10 Clause 2.4 under the title Floating Rate of Interest on Loans it is stated that, “Banks have the freedom to offer all categories of loans on fixed or floating rates, subject to conformity to their Asset-Liability Management (ALM) guidelines. The methodology of computing the floating rates should be objective, transparent and mutually acceptable to counter parties. The Base Rate could also serve as the reference benchmark rate for floating rate loan products, apart from external market benchmark rates. The floating interest rate based on external benchmarks should, however, be equal to or above the Base Rate at the time of sanction or renewal. The methodology should be adopted for all new loans. In the case of existing loans of longer/fixed tenure, banks should reset the floating rates according to the above method at the time of review or renewal of loan accounts, after obtaining the consent of the concerned borrower/s.” In the instant case no documents produced by the opposite party to prove that they obtained the consent of the complainant before re-setting the rate of interest. The main allegation of the complainant is also that the opposite party has no right to enhance the rate of interest. The learned counsel of opposite party produced the reported decision in CPJ 2014 (IV) page 302 Kaveri Telecom Ltd. Vs. Vijaya Bank. But in the said decision the guide line contained in the “Master Circular on interest rates on advances with respect to the floating rate of interest on loans’ (guide line 2.4)” not discussed. Since the facts stated in the said case is not similar to the present case and the clause2.4 of the guide line is also not dealt with therein that decision is not applicable. In the instant case Ext.B3 series and Ext.B11 show that the opposite party made variations in the rate of interest as per the Circular of RBI, they failed to inform it to the complainant as per clause 2(4). Even though they have right to make changes in the rate of interest, they failed to obtain the consent of the complainant. In these circumstances this Forum did not order for the refund of the interest enhanced without notice to the complainant, but for the failure on the part of the opposite party in obtaining the consent of the complainant in making alterations in the rate of interest amounts to deficiency in service, and opposite party has to pay compensation for the same.
In the result, complaint is partly allowed. The opposite party is directed to pay Rs.10,000/- (Rupees Ten thousand only) towards compensation for the mental agony sustained by the complainant and Rs.2,000/- (Rupees two thousand only) towards costs of this proceedings to the complainant. The opposite party is also directed to return the original Power of Attorney and original Federal Housing Scheme agreement to the complainant. The order shall be complied within one month from the date of receipt of this order.
Dictated to the Confidential Assistant transcribed by her corrected by me and pronounced in open Forum on this the day 30th day of June, 2016.
Sd/- Smt.Elizabeth George (President) :
Sd/- Sri. Antony Xavier (Member) :
Sd/- Smt.Jasmine.D. (Member) :
Appendix:-
Evidence of the complainant:-
PW1 - T.T. Mathew (Witness)
Ext.A1 - True copy of the notice dated 3.1.2013
Ext.A2 - Copy of the pass book
Ext.A3 - Copy of the reply notice dated 28.1.2013
Ext.A4 - Copy of the Federal Housing Scheme Agreement
Ext.A5 - Copy of the General Power of Attorney
Ext.A6 - True copy of the registered letter dated 4.6.2013
Evidence of the opposite parties:-
RW1 - George M.M. (Witness)
RW2 - Premachandran. S. (Witness)
Ext.B1 - True copy of the General Power of Attorney
Ext.B2 - True copy of the Federal Housing Scheme Agreement
Ext.B3series - Copy of the revision of rate of interest (Loans & Advances linked to BPLR)
(8 pages)
Ext.B4 - Copy of interest report for accounts (4 pages)
Ext.B5 - True copy of the complaint dated 4.4.2013
Ext.B6 - True copy of the letter dated 17.5.2013
Ext.B7 - True copy of the letter dated 4.6.2013
Ext.B8 - True copy of the letter dated 28.1.2013
Ext.B9 - Memorandum of instructions
Ext.B10 - Copy of Master Circular
Ext.B11 - Copy of Annexure II
// True Copy //
By Order
Senior Superintendent
To
Complainant/Opposite parties/S.F.
Typed by:- pr/-
Compared by:-
