DATE OF FILING : 11.03.2011
BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM, IDUKKI
Dated this the 31st day of May, 2011
Present:
SRI.LAIJU RAMAKRISHNAN PRESIDENT
SMT.BINDU SOMAN MEMBER
C.C No. 63/2011
Between
Complainant : Elsamma W/o Late Edikkula,
Naitholil House,
Anakkara P.O,
Idukki District.
(By Adv: Sijimon.K.Augustine)
And
Opposite Parties : 1. The Secretary,
Kerala State Housing Board,
Thiruvananthapuram.
2. The Executive Engineer,
Kerala State Housing Board,
Idukki Division,
Kattappana P.O, Idukki District.
3.The Accounts Officer,
Kerala State Housing Board,
Idukki Division,
Kattappana P.O, Idukki District.
(All by Advs: Jiby Sebastian & V.C.Sebastian)
O R D E R
SRI.LAIJU RAMAKRISHNAN(PRESIDENT)
The complainant's husband late Mr.Edikkula George availed a loan of Rs.1,00,000/- from the opposite party for constructing a house by giving 62.32 Ares of land in Survey No.393/4 in Anakkara Village as security for the loan. The husband of the complainant agreed to repay the said amount in 104 monthly instalments and out of which he paid 45 instalments. Thereafter due to his illness and the destruction of agricultural crops, the complainant's husband failed to remit the EMIs in time. The complainant's husband died on 26.10.2006. She spent much money for the treatment of her husband. After the death of her husband, the complainant contacted the 2nd and 3rd opposite parties and they made the complainant to believe that as the principal debtor died, the penal interest and default interest relating to the said loan is waived out. Believing their words, the complainant remitted Rs.30,000/- on 6.09.2010. Facts being so, the opposite parties issued notice for the sale of the immovable property mortgaged by the complainant's husband showing an amount of Rs.3,50,959/- plus interest and other expenses due to the opposite party as on 12.07.2010. The amount due to them include penal interest and default interest and other hidden charges. Due to the illness of her husband and his death, the complainant is in financial crisis and seeking instalments to remit the balance amount. The complainant also demanded the statement of accounts of his loan transaction showing details regarding the payment made and also showing the details of interest, penal interest and default interest. But the opposite party did not turn up to issue the same. The Government of Kerala directed to avoid penal interest and default interest. The complainant is ready to remit the loan instalments if the defaulted and penal interests are avoided by the opposite parties and allowing instalments after deducting the instalments already remitted. The complainant is having no other property except the security and if it is sold in auction, the complainant and his family have no other means. The complainant has every right to get the benefits of the scheme declared by the Government. Charging of default interest in addition to penal interest is illegal and hence the complainant is not liable to pay that amount. The opposite parties have no right to recover the entire amount without providing the benefits of the scheme declared by the Government. The opposite parties charged 14.5% interest for the loan amount and they have no right to charge the same. So this petition is filed for restraining the opposite parties from further sale proceeds of the security property and also directing them to avoid default interest, penal interest and other hidden charges and also for compensation.
2. As per the written version filed by the 3rd opposite party on behalf of the Ist and 2nd opposite parties, it is admitted that the husband of the complainant Sri.Edikkula George, Naitheliyil Veedu, Anakkara P.O, Idukki availed a housing loan of Rs.1,00,000/- from the Board by pledging the land in Sy.No.393/4 of Anakkara Village vide Mortgage Deed No.1684/1995 dated 6.05.1995 registered at Sub Registrar Office, Kattappana. As per the agreement executed by the complainant's husband with the Kerala State Housing Board, the loan was to be repaid in 168 equal monthly instalments and the instalment amount was fixed at Rs.1,555/-. As per the income certificate produced by the loanee from the Anakkara Village Officer, his annual income as on 16.03.1985 was Rs.36,000/-. He paid 46 instalments by remitting a total amount of Rs.1,05,380/- and that too is highly in irregular intervals. As per Clause 12 of the Mortgage Deed executed by the loanee with the Board, “if any instalment of principal or interest is not remitted on the due dates a penal interest @ 19.25% in addition to the usual rates shall be paid on the instalments as are not paid on due dates”. The penal interest has been split up as 16.75% default interest and 2.5% penal interest for computation purpose. Therefore the amount remitted by him has been adjusted as follows :
Principal portion paid : Rs. 12,792.73
Interest paid : Rs. 61,352.02
Penal Interest paid : Rs. 4,056.54
Default Interest paid : Rs. 27,178.71
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Total amount paid : Rs.1,05,380.00
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Notice dated 7.12.2006, 29.05.2009, 27.05.2010 and 7.02.2011 were served for closure of loan under One Time Settlement Scheme. The Board officials visited the complainant's house several times to issue notice of Revenue Recovery. During these visits she was informed about the benefits of closing the loan under One Time Settlement. However the response of the complainant was poor. The dues outstanding against the loanee as on 31.03.2011 is Rs.3,98,436/-. The opposite parties never made the complainant to believe that she could settle the account by allowing full waivement of penal interest and default interest. The waivement allowed under One Time Settlement scheme is 100% penal interest and 70% default interest. The Board charges only interest, penal interest and default interest as per Clause 6 and 12 of the Mortgage Deed No.1684/1995 of Sub Registrar, Kattappana. Being a public sector undertaking the Board cannot impose any hidden charges. The complainant has not submitted any request for allowing instalment facility to clear the dues. The amount due to the Board as on 31.03.2011 is Rs.3,98,436/-. As per the OTS scheme less waivement of penal interest 100% which is Rs.33,397/-, Default interest 70% is Rs.1,48,936/-. So the balance to be remitted before 31.03.2011 is Rs.2,16,103/-. The OTS Scheme has been extended by the Government upto 30.06.2011. If the complainant is willing to close the account by availing the OTS benefits, she can close the account on or before 30.06.2011 under the scheme.
The Board borrows funds from financial institutions like HUDCO and these amounts are to be repaid with interest rates as decided by these lending agencies. As per clause 18 and 19 of the Mortgage Deed, in case of default of the payment, the Board have the power without the intervention of any court, to take possession of the mortgaged property, to sell the same and all sums found due to the mortgagee shall be recoverable from the mortgagor and his properties movable and immovable under the provisions of the Revenue Recovery Act for the time being in force as though such sums are arrears of public revenue due on land and in accordance with the relevant provisions of the Kerala State Housing Board Act, 1971. So there is no deficiency in service on the part of the opposite parties.
3. The point for consideration is whether there was any deficiency in service on the part of the opposite parties, and if so, for what relief the complainant is entitled to ?
4. The evidence consists of the oral testimony of PW1 and Exts.P1(series) and P2 marked on the side of the complainant. No oral evidence adduced by the opposite parties and Exts.R1 and R2 (series) marked on their side.
5. The POINT :- The complainant produced evidence as PW1. PW1 deposed that her husband availed a loan of Rs.1,00,000/- from the opposite party for constructing a house and the instalments were paying promptly. But unfortunately the husband of PW1 expired on 26.10.2006, so the instalments became due. Out of the entire 168 equal monthly instalments, 45 instalments were paid by the complainant's husband. Ext.P1(series) are the copy of the pass book for the repayment of the loan. After when the husband of PW1 expired, she contacted the opposite parties. The opposite parties made the complainant to believe that penal interest and default interest would be waived because of the death of the principal debtor. But the opposite party issued a notice for the sale of the immovable property mortgaged by the complainant's husband and demanded an amount of Rs.3,50,959/- plus interest and other expenses due to the opposite party as on 12.07.2010.
So the complainant remitted an amount of Rs.30,000/- on 6.09.2010. The receipt issued by the opposite party for the payment of Rs.30,000/- is marked as Ext.P1(series). The only property belongs to the complainant and her husband is mortgaged to the opposite party which is 62.32 Ares of land in Survey No.393/4 in Anakkara Village. A notice was issued by the opposite party on 13.12.2010 stating that RR proceedings were initiated against the complainant, copy of the same is marked as Ext.P2. The Government has introduced One Time Settlement Scheme and several other schemes, waiving penal interest and default interest of the loan availed by the customers of the opposite party. But the opposite party denied the said benefit to the complainant. The complainant is entitled to get the benefits as per the Government scheme. No oral evidence adduced by the opposite parties. The opposite party produced a copy of the Mortgage Deed created between the complainant's husband and the opposite party at the time of availing the loan is marked as Ext.R1. The opposite party issued several notices for settling the loan account by providing OTS facility. Ext.R2(series) are the notices issued by the opposite party to the complainant. But the complainant was not ready to settle the same. As per Clause 12 of the Mortgage Deed executed by the loanee with the Board, “if any instalment of principal or interest is not remitted on the due dates, a penal interest @ 19.25% in addition to the usual rates shall be paid on the instalments as are not paid on due dates”.
The husband of the complainant availed a loan of Rs.1,00,000/- from the opposite party and the repayment was 168 equal monthly instalments of 1,555/- rupees each. The husband of the complainant repaid only 45 instalments and the loan became due after the same, because her husband was admitted in hospital due to illness. Unfortunately her husband expired on 26.10.2006. Due to his death and failure in agricultural crops PW1 was not able to repay the balance instalments. While Revenue Recovery proceedings were initiated by the opposite party, the complainant paid an amount of Rs.30,000/- to the opposite party thinking that the penal interest and default interest were waived because the principal debtor was expired. So the complainant paid a total amount of Rs.1,05,380/- to the opposite party and it is also admitted by the opposite party as per the written version filed by them. But the entire outstanding amount of the loan as on 31.03.2011 is Rs.3,98,436/-, that is, they have calculated a penal interest of 19.25% in addition to the usual interest rate. It is accepted by both parties as per clause 12 of the Mortgage Deed. But the Government has introduced a new scheme for repayment of the loan in which 100% penal interest and 70% default interest can be waived. If she is willing to settle the account by availing the OTS benefits, she will get a reduction of Rs.33,397/- as penal interest and Rs.1,48,936/- as default interest. So the balance to be remitted by the complainant is Rs.2,16,103/-. Now the Government has extended the benefits upto 30.06.2011. So the complainant can avail this facility within 30.06.2011. No instalment facility can be given if she wishes to avail the OTS facility.
The complainant already paid more than the principal amount to the opposite party. The husband of the complainant was paying the instalments promptly upto 45 instalments. It is admitted by the opposite party that she has paid an amount of Rs.1,05,380/-. It is also very clear from Ext.P1(series). But unfortunately the husband of the complainant was admitted in hospital and she spent a huge amount for the treatment of her husband. The husband was expired on 26.10.2006. Due to his death and failure of agricultural crops she was not able to pay any amount to the opposite party. Anyway the complainant is ready to repay the loan instalments to the opposite party if they avoid penal interest and default interest and also give instalment facility. But as per the opposite party they have the right to charge 19.25% penal interest as per Clause 12 of the Mortgage Deed. But the opposite party never produced any circular from the RBI or order from the Government to show that the opposite party can charge 19.25% penal interest in excess of the usual interest 14.5% to the loan. So it is a gross unfair trade practice from the part of the opposite party. Being a Government institution, the opposite party should act for the welfare of the customers and it is not proper to charge such a hike interest from the customers evenafter the death of the principal debtor. So we think that the opposite party can charge 12% interest per annum for the defaulted instalments for the defaulted period because they have already paid 14.5% interest for the entire loan and it is divided in instalments. Now the Government has introduced a scheme in which there is a waivement of 100% penal interest and 70% default interest. Considering the financial circumstances of the complainant, we think that the principal debtor is no more so the opposite party should provide some instalment facility to the complainant for repaying the loan.
Hence the petition allowed. The opposite parties are directed to settle the housing loan of the complainant's husband as No.IMR-104 by calculating 12% interest per annum for the defaulted instalments for the defaulted period. The opposite parties are also directed to give monthly instalment facility for closing the loan not less than three.
Pronounced in the Open Forum on this the 31st day of May, 2011
Sd/-
SRI. LAIJU RAMAKRISHNAN(PRESIDENT)
Sd/-
SMT. BINDU SOMAN(MEMBER)
APPENDIX
Depositions :
On the side of Complainant :
PW1 - Elsamma Thankachan
On the side of Opposite Parties :
Nil
Exhibits:
On the side of Complainant:
Ext.P1(series) - Photocopy of Pass Book for repayment of the loan & Photocopy of Receipt for Rs.30,000/- issued by the
opposite party
Ext.P2 - Photocopy of Notice dated 13.12.2010 issued by the opposite party
On the side of Opposite Parties :
Ext.R1 - Photocopy of Mortgage Deed dated 6.05.1995 created between the complainant's husband and the opposite parties
at the time of availing the loan
Ext.R2(a) } Photocopy of opposite party's notices dated 27.05.2010,
Ext.R2(b) } - 29.05.2009, 7.12.2006 and 7.02.2011 addressed to
Ext.R2(c) } the complainant informing about the OTS facility for
Ext.R2(d) } the settlement of the loan
