Complaint filed under section 12 of the Consumer Protection Act.

Complaint in brief is as follows:-

The Complainant availed a loan of Rs. 4,00,000/- for house construction from the Opposite Party's Bank. The issuance of the loan was upon the security of landed property and it was in the norms of fixed rate of interest which is 7.25% per annum. The loan amount was disbursed in three installments and the 1^st installment was on 23.8.2005. The debit and credit of transaction towards the loan was done through the account of the Complainant. The Opposite Party charged higher amount in the way of interest and it is against the terms and conditions agreed mutually. The Complainant came to know that the interest calculated and the amount which was tabulated consists of discrepancy and the same was made known to the Opposite Party. How ever the Opposite Party has not responded positively. On detail perusal of the interest calculated, the Complainant could realize that the Opposite Party collected excess amount. During the period of 23.8.2005 to 13.2.2006 an excess amount of Rs.6,100/- is debited in the account of the Complainant. The Complainant sent letter pointing out the irregularities to the Opposite Party but no reply was sent to the Complainant. A collection of exorbitant amount other than the terms agreed is a breach of contract. There may be an order directing the Opposite Parties to charge the interest at the rate of 7.25 percentage and to return the excess amount collected. The Complainant is a government employee who is drawn to the proceeding unnecessarily and it is to be compensated with Rs.10,000/- as along with cost of the complaint.

2. The Opposite Party filed version. The sum up of the version is as follows:- The complaint is not maintainable. The Opposite Party's bank is the Co-operative Society Registered under Kerala Co-operative Societies Act 1969. The act envisages in chapter 9

section 69 in the dispute regarding the issuance of loan is to be agitated before the Co-operative Arbitration Court and the Registrar. The Opposite Party has not done any deficiency in service in the disbursement or recovery of the loan and further no breach of contract effected. The interest rate agreed initially was at the rate of 7.25%. The certain corrections were made in the rate of interest in the later period. The excess amount collected was refunded to the Complainant and same was informed also. The loan amount issued to the Complainant is under the refinance scheme of NABARD and it was at the concessional rate and when the scheme was in operation the NABARD stopped the refinance and the bank was in risk. The efforts on the part of the Opposite party to get the refinance from NABARD was turned down.

The board meeting of the Directors in such circumstances decided to enhance the interest provided to 9% with effect from 01.02.2008 and it was also informed to the Complainant on 11.2.2008. The Complainant if had any contra opinion it was also informed to close the entire loan account by 28.2.2008 on else to continue with the revised rate. Enhancement of the interest is in accordance with the terms agreed by the Complainant and Opposite Party. The complaint is to be dismissed with cost to the Opposite Party.

3. The points in consideration are:

1. Is there any deficiency in service on the part of the Opposite Parties?

2. Relief and cost.

    

4. Point No.1:- The complainant swore the contentions and filed affidavit. The documents Ext.A1 to A14 are marked for the Complainant. The Opposite Party filed proof affidavit. The case of the Complainant is that the loan availed for house construction was remitted by the Complainant. In calculating the interest upon the loan amount the Opposite Party disregarded the rate of interest agreed upon. More over calculations of the amount itself consists of discrepancy, the excess amount remitted is to be refunded. Both the

Complainant and Opposite Parties have given the oral testimony. Ext. A1 is the loan application. The type of loan and the mode of payment along with other details are recited in the loan application. The type of loan is agreed is at the fixed rate of interest which is 7.25%. The clause 5 of the application details the interest rate schedule of the loan agreement also specifies that the home loan issued is at fixed rate. The term of payment is 180 months and the EMI is Rs.3,665/-. The Opposite Party has no case that the interest agreed was not in floating rate. The letter addressed to the Complainant, Ext.A8 mentions that the interest as per the resolution of the board meeting is revised to the 9% with effect from 01/02/2008. The contentions of the Opposite Party that they are empowered to enhance the rate of interest beyond the terms agreed is not reasonable and against the spirit of agreement. The Opposite Party further postulate that the interest rate is enhance in pursuance of the refinance scheme in NABARD. The NABARD stopped refinance scheme and concessional rate could not be continued. Regarding that no document is produced by the Opposite Parties. The disregarding of the terms agreed to change the fixed rate of interest is a deficiency in service as such the difference in calculation also comes latches on the part of the Opposite Party. The point No.1 is found accordingly.

5. Point No.2:- The 2^nd Opposite Party branch of 1^st Opposite Party admitted that in opening of the account the rate of interest calculated was 7.5% which was done mistaken and that was corrected in to the account of the Complainant and the same was also informed to the Complainant. In the calculation of interest and in tabulation of payable loan amount if any discrepancy are there the 2^nd Opposite Party is bound by duty to rectify it, during the period of availing loan to closing of it. The interest to be calculated is 7.25%. The 2^nd Opposite Party is directed to cancel the enhanced rate of interest calculated upon the loan amount. The amount payable by the complainant in his account of loan is to be restructured at the rate of interest 7.25%. The excess amount received by the Opposite Party is to be given back to the Complainant along with cost.

In the result, the complaint is partly allowed. The Opposite Parties are directed to charge the rate of interest at 7.25% and to tabulate the account as such. The excess amount collected by the 2^nd Opposite Party is to be refunded to the Complainant. The Opposite Parties are also directed to pay Rs. 1,000/- (Rupees One thousand only) to the Complainant towards the cost. This is to be complied with within one month from the date of receiving this order.

Pronounced in open Forum on this the 29^th day of November 2008.