Dated this the 27th day of August 2020
Present : Sri.V.P.Anantha Narayanan, Member (President I/c)
: Smt.Vidya.A, Member Date of Filing: 20/12/2018
CC No.179/2018
Chanjal Prakash
Residing at Koodaram House,
Erattakulam Post, Alathur,
Palakkad. - Complainant
(By Adv.M.Raveendran , M.P.Ravi & M.J.Vince)
VS
The Branch Manager,
Canara Bank,
Alathur, Palakkad – 678 001. - Opposite party
(By Advs.Vikas.V.B)
O R D E R
By Sri.V.P.Anantha Narayanan, Member (President I/c)
This is a case based on a consumer complaint under section 12 of the Consumer Protection Act 1986. The averments in the complaint are as follows.
The complainant who is an account holder of the opposite party bank has availed an educational loan of Rs.3,90,000/- in 2008 vide loan account number – 073965112417 and after the successful completion of the BE course in 2012, complainant has joined MBA course in August 2012 which was intimated to the bank. According to the complainant, the then Manager Mr.Radhakrishnan promised to take immediate action. Subsequently in order to extend the moratorium period the complainant was asked to give a written request addressed to the Alathur Branch Manager, which was done by the complainant. But the request was misplaced by the bank authorities and the complainant was asked to give a fresh application. During this time the complainant was continuing his studies and it was confirmed by Mr.Sreeram who was an employee of the opposite party bank at that time. According to the complainant, he was again asked to give application to extend the moratorium which complainant submitted along with copies of Master Degree Certificate to the Manager, Alathur Branch of Canara bank. But all the efforts to intimate the bank were not considered and the moratorium was not extended and the bank charged compound interest which was calculated for the period when the complainant was doing the Master Degree course. Aggrieved by this, the complainant approached the bank several times, but the bank asked the complainant to remit the amount with compound rate of interest and the complainant had to pay the same and thereby lost a huge amount due to the deficiency in service of the opposite party bank. Complainant contends that if the first application was considered by the opposite party bank in right time the complainant would not have lost much amount as interest. According to the complainant, the acts of the opposite party bank in not considering the application in time and not considering fresh application constitute deficiency in service of the opposite party bank and charging of interest against norms prescribed by Government for educational loan is unhealthy trade practice. Complainant also pleads that he had made request to the opposite party bank but no reply was sent to him, the opposite party bank followed evasive attitude and the neglect to respond shows deficiency of service. The complainant also suffered a lot of mental agony as a result of financial loss caused by opposite party’s deficiency in service. Because of the indifferent attitude of the opposite party complainant has decided to close the loan by remitting huge interest, so the complainant is entitled to get back Rs.90,000/- together with 12.5% interest per annum from the date of payment; complainant is also entitled to get Rs.50,000/- from the opposite party as compensation for the mental agony suffered by the complainant.
Therefore, the complainant prays to this Hon’ble Forum to pass an order directing the opposite party bank to pay Rs.90,000/- along with 12.5 % interest per annum from the date of payment to the complainant, directing the opposite party to pay Rs.50,000/- by way of compensation for mental agony suffered by the complainant and directing the opposite party to pay him the cost of this proceeding.
The complainant was admitted and notice was issued to the opposite party bank. The opposite party bank entered appearance and filed version in which it contends the following:
The opposite party denies the averments stated in the complaint except those specifically admitted and contends that the complaint is not maintainable either in law or on facts. This opposite party denies the averments in the complaint that after successful completion of BE course in 2012 the complainant joined the MBA course in August 2012 and the matter was intimated to the opposite party bank, that then Manger, Mr.Radhakrishnan promised to take it into file and a written request addressing the Manager, Alathur branch was filed by the complainant, that the said request was misplaced by the bank and complainant was asked to file fresh application etc., that the same aspect was confirmed by the bank official Mr.Sreeram and the opposite party bank asked the complainant to file fresh application for extending moratorium. This opposite party denies also another averment in the complaint that, in spite of proper intimation to extend moratorium, the opposite party bank charged compound interest etc. This opposite party denies the averment in the complaint that the complainant lost a huge amount of money due to service deficiency of the opposite party bank employees and contends that there is no defect in the service from the part of the opposite party bank. Another averment in the complaint that the opposite party bank charged interest against the terms and objectives prescribed by the Government for educational loans which shows unhealthy trade practice committed from the side of the opposite party which is denied by this opposite party bank as incorrect and the opposite party contends that the complainant has not suffered any financial loss and mental agony due to the defective service of this opposite party bank. This opposite party further denies the averment as incorrect that the complainant is entitled to get back Rs.90,000/- from the opposite party bank together with interest @12.5% p.a and to get Rs.50,000/- as compensation for mental agony from the opposite party.
Thus the opposite party bank denies all the averments of the complainant in his complaint as not correct and states that the following are the correct facts. The complainant availed an educational loan after executing necessary loan agreement with the opposite party bank vide loan account number – 073965112417 for BE course and as per records the complainant completed the BE course in July 2012. According to the loan agreement the sanctioned moratorium period for the repayment was upto August 2013 which is well known to the complainant. But he has not filed any request to extend the moratorium period in time. The complainant should have intimated the opposite party bank about his future studies soon after the completion of the BE course and the complainant should have filed an application for extending moratorium period before August 2013. According to this opposite party the complainant has not intimated this opposite party bank about his future course of study and not filed any application to the opposite party bank for extending the moratorium in or before August 2013. Hence this bank contends that it is not liable to extend the moratorium period. This opposite party also contends that the records show that a letter was given to the opposite party bank on 12/02/2014 in which no mention is made of earlier request letter and this letter is after the period of moratorium of August 2013. According to this opposite party that this matter was properly intimated to the then Manager Mr.Radhakrishnan is not believable. Opposite party also contends that during the year 2012 one Mr.Ramkumar was the Manager of the opposite party bank. This opposite party further contends that as per the loan agreement the bank has the discretion to extend moratorium for one year from the completion of the course or till the employment of the loanee whichever is earlier. For the complainant the moratorium period was completed in August 2013. These facts are known to the complainant who has cleared major portion of his liability without any dispute. Hence this opposite party argues that this complaint is only an afterthought to get amount from this opposite party bank. This opposite party also submits that although the complainant has taken up this matter with Banking Ombudsman (vide number – CTS000973/2018-19), it dismissed the complainants complaint as in admissible. Hence the opposite party prays to this Hon’ble Forum to accept their contentions and the complaint may be dismissed with cost to this opposite party.
The following issues arise in this case
- Whether there is any deficiency in service and unfair trade practice occurred on the part of the opposite party bank?
- If yes, the relief and cost available to the complainant?
Issues 1 & 2 in detail
To defend his pleas complainant has produced Exts. A1 to A3. To prove its contentions the opposite party bank has submitted Exts. B1 to B7.
Ext.A1 is a copy of degree of Master of Business Administration of the complainant awarded by the University of Calicut which proves that complainant has passed the MBA Degree Examination from Calicut University with B+ grade conducted in June 2014 by Calicut University. Ext.A2 is a copy of certificate of degree of Bachelor of Engineering in Electronics and Communication Engineering issued by Anna University which proves that complainant has passed in 1st class examination of the degree of Bachelor of Engineering conducted by Anna University in April 2012. Ext.A3 is copy of a letter dated 20/9/2018 given by the complainant to the opposite party which requests the latter to reverse the excess interest debited to complainant’s account. Ext.B1 is a copy of sanction memorandum issued by opposite party bank which proves that education loan facility was sanctioned to the complainant on his application for educational loan dated 27/8/2008 and repayment in 50 EMIs from July 2013. Ext.B2 is a copy of educational loan agreement entered into between the complainant and the opposite party which shows educational loan of Rs.3,90,000/- was sanctioned to the complainant which is to be repaid in 50 equated monthly instalments w.e.f. July 2013. Ext.B3 is copy of a letter issued by the opposite party dated 30/11/2009 which states that the opposite party received credit report of the complainant, parameters of educational loan such as amount of educational loan, rate of interest, purpose of loan, marks secured in qualifying examinations, repayment in 50 equated monthly instalments. Ext.B4 is a manual of instructions on retail lending schemes, DPN and DIR and educational loans issued by the opposite party bank which shows student eligibility, eligible courses, quantum of educational loan, margin, security, nature of security etc. Ext.B5 is a true copy of attendance register of July 2013 which proves that Mr.Radhakrishnan was not working in Alathur Branch of Canara Bank, then when the complainant is stated to have given a written request for moratorium period extension to the opposite party bank in 2013. Ext.B6 is a request letter given by the complainant dated 12/02/2014 for extending educational loan repayment period which proves that complainant has given a written request to the opposite party for extension of his educational loan repayment or moratorium period only in February 2014. It also does not mention about any earlier requests stated to have been given by the complainant to the opposite party in 2013. Ext.B7 is an attested copy of interest statement given by the opposite party bank which clearly shows difference between actual interest charged(which is Rs.1,12,815/-) and interest amount if simple interest is charged during the period from 01/06/2012 to 30/06/2014 as Rs.89,854/-. This also shows difference of Rs.22,961/- (Rs.1,12,815 – Rs.89,854) which proves the contention of the opposite party bank that excess interest of Rs.22,961/- only was charged from the complainant on his educational loan availed, which disproves Rs.90,000/- was allegedly charged by the opposite party bank as excess interest from the complainant, as stated by the complainant.
We have closely examined chief affidavits and documentary evidences submitted by both parties and observe that the complainant has availed an educational loan for Rs.3,90,000/- for pursuing his BE Electronics course in Anna University from 2008 to 2012 vide educational loan agreement dated 29/08/2008 entered into between the complainant borrower and the opposite party bank and the said loan was sanctioned @12.5% simple interest rate as per sanction memorandum issued by the opposite party in response to the complainant’s application dated 23/08/2008 and the said loan is to be repaid in 50 equated monthly instalments from July 2013. It is also clear from the submitted records that the complainant has completed Bachelor of Engineering course in Electronics and Communications Engineering in April 2012 with 1st class from Anna University and MBA course from Calicut University in 2014 with B+ grade with CEPA 6.64. It is also observed that complainant has not given any request application to extend the moratorium period of his educational loan before August 2013, it is also clear that the complainant is not seen to have intimated the opposite party bank regarding his future course of study for MBA course in Calicut University and given application for extension of moratorium period in respect of his educational loan to the opposite party bank authorities before August 2013. It is also seen that the complainant has given a request to the opposite party bank for extending his educational loan moratorium period only in February 2014 which is clear from Ext.B6. It is also evident from this Ext. that the complainant has not given any request letter earlier for extending his educational loan moratorium period. Further we observe that if complainant had given application for extension of his educational loan moratorium period before August 2013 to the opposite party bank, then complainant would have definitely mentioned this point clearly in his request letter dated 12/02/2014(Ext.B6) to avail the benefit of educational loan moratorium period extension and the complainant would have been sanctioned extension of educational loan moratorium period by the opposite party bank authorities and then he could have availed the benefit of simple interest rate for one more year. We also view that complainant has not produced any other evidence to prove that he has given to the opposite party bank application for extension of moratorium period in respect of his educational loan before August 2013. We also observe that the complainant is not seen to have taken any steps to cross examine the bank officials namely then Manager Mr.Radhakrishnan, and then bank official Mr.Sreeram to prove that the moratorium period extension application was given by the complainant before August 2013. We also find that as per evidences produced (attendance register of opposite party bank branch officials of July 2013), Mr.C.T.Ramakrishnan was the Senior Manager of the opposite party bank branch in July 2013 which is clear from Ext.B5 evidence. We further observe that complainant’s educational loan moratorium period was completed in August 2013 and he has repaid major portion of his educational loan availed by him from the opposite party bank without raising any disputes. We view that if the opposite party bank branch has received any written request in time from the borrower complainant for extension of moratorium period in respect of his educational loan before the expiry of original moratorium in August 2013 for pursuing his MBA course studies in Calicut University, the sanctioning authority (Canara Bank, Alathur branch) would have permitted the complainant to avail the extension of his educational loan moratorium period and during such extended moratorium period also simple interest rate would have been charged by the opposite party bank on the complainant’s educational loan amount. We also observe that the opposite party bank is not seen to have charged excessive interest of Rs.90,000/- from the complainant on his educational loan availed by him from the opposite party bank which is clear from interest statement given by the opposite party bank (Ext.B7) where by only Rs.22,961/- has been charged as excess interest, instead of Rs.90,000/- as excess interest as alleged by the complainant in his complaint which is due to the difference between the simple interest rate and compound interest rate charged by the opposite party bank. All these show that the opposite party has not been seen to have committed any deficiency in service and unfair trade practice in this case and the complainant cannot prove commission of any deficiency in service and unfair trade practice from the side of the opposite party bank.
The result is that the complaint is dismissed.
Pronounced in the open court on this the 27th day of August 2020.
Sd/- V.P.Anantha Narayanan
Member (President I/c)
Sd/-
Vidya.A
Member
Appendix
Exhibits marked on the side of complainant
Ext.A1 - Attested copy of degree of Master of Business Administration of the complainant
awarded by the University of Calicut
Ext.A2 - Attested copy certificate of degree of Bachelor of Engineering in Electronics and
Communication Engineering issued by Anna University to the complainant
Ext.A3 - Copy of a letter dated 20/9/2018 given by the complainant to the opposite party
Exhibits marked on the side of Opposite parties
Ext.B1 - Copy of sanction memorandum issued by opposite party bank
Ext.B2 - Copy of educational loan agreement entered into between the complainant and the
opposite party
Ext.B3 - copy of a letter issued by the opposite party dated 30/11/2009 to the complainant
Ext.B4 - Manual of instructions on retail lending schemes, DPN and DIR and educational loans
issued by the opposite party bank
Ext.B5 - True copy of attendance register of July 2013 which proves that Mr.Radhakrishnan
and Mr.Sreeram were not working in Alathur Branch of Canara Bank in July 2013
Ext.B6 - Request letter given by the complainant dated 12/02/2014 for extending educational
loan repayment period
Ext.B7 - Attested copy of interest statement given by the opposite party bank to the
complainant
Witness examined on the side of complainant
NIL
Witness examined on the side of opposite parties
DW1 - Poornima.M.Kammath
Cost : Nil
