DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

SOUTH 24 – PARGANAS , AMANTRAN BAZAR, BARUIPUR, KOLKATA-700 0144

      C.C. CASE NO. _154_ OF ___2017

DATE OF FILING : 6.12.2017                     DATE OF PASSING JUDGEMENT:  _16.5.2018_

Present                        :   President       :   Ananta Kumar Kapri

                                        Member(s)    :    Subrata Sarker  & Jhunu Prasad

COMPLAINANT        :    1. Prasanta Kumar Sardar, Uttar Camelia, Ukil Para, Kabi Sukanta Sarani, Baruipur, Kolkata – 700 144.

                                            2.   Gita Routh (Sardar)

•  VERSUS  -

O.P/O.Ps                            :  UCO Bank, Baruipur Branch, Baruipur, (IFSC –UCBA0000199), 700 144.

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                                                            J  U  D  G  M  E  N  T

Sri Ananta Kumar  Kapri, President

     The nub of the complainants’ case is that complainants took a house building loan of Rs.5 lac on 6.3.2006 from the O.P Bank on Fixed Rate of Interest i.e 8.5% p.a. They agreed to repay the loan amount by 120 installments of which Rs.6200/- was EMI per month. Installments were paid duly and punctually . But the Bank has realized an amount of Rs.74,400/- ( as demanded in prayer of complainants as refund) in excess of its legitimate dues. So, the complainants pray for refund of Rs.74,400/- to them and also for payment of compensation of Rs.50,000/- for harassment and mental agony caused to them by the O.P Bank . Hence, this case.

    The complaint is resisted by filing written statement by the O.P Bank, wherein it is admitted by the Bank that the loan amount was advanced to the complainants and the rate of interest was also fixed at 8.5% p.a. But according to the bank , the said rate of interest was converted to MCLR (Marginal Cost of Funds based Lending Rate)  in pursuance of option exercised by the complainant in terms of direction of Reserve Bank of India. The complainant is stopped to revert back to the Fixed Rate of Interest from MCLR and, therefore, there is no cause of action for the case filed by the complainants and as such the complaint should be dismissed in limini with cost.

     Upon the averments of the parties following points are formulated for consideration.

POINT FOR DETERMINATION

1. Is there any deficiency in service on the part of the O.P in converting the Fixed Rate of Interest of the complainant to MCLR?
2. Are the complainants entitled to get relief or reliefs as prayed for ?

EVIDENCE OF THE PARTIES

Pleadings of the parties are treated as their evidence vide their petitions ,kept in the record. BNA is filed only by the O.P.

DECISION WITH REASONS

Point no.1 & 2 :-

Originally the loan was advanced to the complainants on Fixed Rate of Interest i.e 8.5% p.a and this is not disputed by the O.P Bank. But the version of the O.P Bank is that the said rate of interest was converted to MCLR rate of interest following the option exercised by the complainants in pursuance of the direction of the Reserve Bank of India.

In the face of such submission of the O.P Bank, it is to be seen whether there is any direction of RBI to convert the fixed rate of interest to MCLR rate and whether the proper procedure was followed by the O.P Bank in converting fixed rate of interest to MCLR rate. We do not know what the actual direction of the RBI was in this regard, because no Circular whatsoever has been produced by the O.P Bank before the Forum . But we get a glimpse of the Circular from the option letter which is claimed to be given to the complainants by the O.P Bank. A copy of this option letter is filed herein by the O.P Bank and the same is marked as annexure A. A perusal of the said option letter makes it abundantly clear that the direction of RBI regarding MCLR is applicable for the new accounts/loans/credit facilities. Further, it is laid down therein that the existing borrowers can opt to switch over to MCLR system in replacement of /instead of Base Rate System i.e Fixed Rate of Interest. A further perusal of this option letter reveals that the letter does not disclose the MCLR rate of interest. The rate of interest is the vital thing and such rate should be known to the customer before exercising an effective option as to whether he or she will switch over to MCLR from the existing rate of interest. If that rate is not mentioned in the option letter, no customer will be able to exercise an effective option in this regard and this being so, the notice of option letter i.e annexure A appears to be not in proper manner. Before exercising optiona customer should know in which case whether in the existing system or in MCLR system, he is required to pay more interest. To enable him to exercise such interest, MCLR rate must be mentioned in the option letter. But, that has not beenmentioned in the notice of option letter i.e Annexure A. The relevant portion in the option letter has been kept blank. That apart, the said guide-lines of RBI is not applicable to the case of complainants, because effect is given to that guidelines on and from 1.4.2016,vide Annex. “Ä”of O.P Bank.

It is submitted on behalf of the O.P Bank that the complainants have exercised option to switch over from the existing rate of interest to MCLR rate by signing a document which is produced herein and marked as Annexure B. On perusal of annexure B ,it is found that mere signature of complainant Prasanta Kr. Sardar has been collected on the said document and the said document has not been filled up properly. Even no date has also been placed in the said document. In the circumstances, annexure B cannot be said to be a valid document by which the complainants have exercised their option to switch over to MCLR system in so far as the interest of the loan is concerned.

Regards being had to all these, we feel no difficulty whatsoever to say that the option as alleged by the O.P Bank has not been properly exercised by the complainant and the complainants are still entitled to pay interest on their loan amount to the O.P Bank on the basis of fixed rate of interest as agreed by and between the Bank and themselves.

It is the case of the O.P Bank that they have realized Rs.74,400/- from the complainant due to enhancement of the rate of interest for adoption of MCLR system by the complainants. The complainants have not adopted MCLR system; they are not stopped from reverting back to their existing rate of interest and, therefore, the O.P bank will have to refund this amount to the complainant. The recovery of excessive amount by the O.P by applying MCLR system without strictly following due guidelines of that system is clearly a deficiency in service on the part of the O.P Bank and, therefore, the bank will also have to pay compensation to the complainants for harassment and mental agony suffered by the complainants.

In the result, the case succeeds.

Hence,

                                                                              ORDERED

That the complaint case be and the same is decreed on contest against the O.P with cost of Rs.5000/- only.

The O.P Bank is hereby directed to refund Rs.74,400/- to the complainants and also to pay a sum of Rs.5000/- as compensation for harassment and mental agony caused to the complainant by their unscrupulous actswithin a month of this order, failing which the refund amount and compensation amount will bear interest @10% p.a till full realization thereof.

     Let a free copy of this order be given to the parties concerned at once.    

                                                                                                                   President

I / We agree

                               Member                                                    Member                                                           Dictated and corrected by me

                        President