Edpuganti Sreeramachandramurthy, S/o Venkataratnam, Hindu, male, aged 55 years

Cultivation, R/o Gangannagudem village

Denduluru Mandal, W.G. Dist., -- Complainant



And



1. The Regional Manager, Chaitanya Godavari Grameena Bank, Brodypet

Guntur, Guntur District


2. The Manager

Chaitanya Godavari Grameena Bank

Gopannapalem village, Denduluru Mandal

W.G. Dist., -- Opposite Parties

O R D E R

The complainant filed the present complaint under Sec. 12 of the Consumer Protection Act to direct the opposite parties to close the loan account No. HLPS/01/20020001 under which the opposite parties demanding to pay Rs.1,44,000/- and to return the documents that were deposited at the time of taking loan and to pay Rs.46,000/- towards compensation and for mental agony and also costs of the complaint.

The averments of the complaint in brief are that :

1. The 1st opposite party being the higher authority of the Chaitanya Godavari Grameena Bank is having control over the 2nd opposite party/Bank whose duties are to look after the affairs and to render proper and fair services to the public and thereby develop business of the bank in a sound line. The main duty of the 2nd opposite party is to collect deposits, to sanction loans and to see that there should be a maximum number of account holders.

The complainant, having attracted with the schemes and insurance policies introduced by the opposite parties, had taken a loan for the construction of house to a tune of Rs.2,25,000/- vide HLPS/01/20020001 in the year 2003. The 1st opposite party sanctioned a sum of Rs.2,25,000/- with a fixed rate of interest at 7.75% and accordingly a loan sanctioned letter dt. 16-12-2002 was sent to the complainant. Then, as per the sanctioned order, the complainant availed a sum of Rs.1,00,000/- on 4-2-2003, Rs.75,000/- on 12-4-2003 and Rs.50,000/- on 30-6-2003 the total of which comes to Rs.2,25,000/-. As per the terms of the sanctioned letter/agreement, the loan shall be repaid with interest within 5 yearly instalments at a sum of Rs.52,500/- for each.

The sanctioned letter is silent about so many particulars such as what to do in case of default in payment of instalments, what is the rate of interest if instalment is over due and how much interest is to be collected and from which date it should be collected. After availing the loan, the complainant paid a total sum of Rs.2,60,690/- towards entire amount due ie., Rs.52,500/- on 2-6-2004, Rs.52,500/- on 9-7-2005, Rs.12,000/- on 1-8-2006, Rs.20,000/- on 27-10-2006, Rs.71,090/- on 7-12-2007, Rs.2,000/- on 9-6-2008 and Rs.50,000/- on 30-6-2008. But the opposite parties have been demanding the complainant to pay Rs.1,44,000/- showing it as still due.

Thereupon the complainant addressed a letter requesting clarification for which, the 2nd opposite party sent a letter and account copy but that was not clear about the calculation. Then the complainant again got issued a registered notice dt. 28-11-2008 demanding the opposite parties to furnish full particulars for which, the 2nd opposite party got issued an evasive reply.

The sending of notice without mentioning the particulars such as interest and basis of document for calculation of the amount amounts to deficiency in service on the part of the opposite parties. The act of the opposite parties caused lot of mental agony to the complainant since he had already discharged the entire amount and was expecting to get back all the documents that were given by him as security to the loan. Thus the present complaint is filed for the aforesaid reliefs.

2. The 2nd opposite party filed its version denying the averments of the complaint and stated that the sanctioned letter clearly discloses that the rate of interest to be charged is at 7.75% over and above the rate of interest of RBI subject to a minimum of 14%. But the complainant willfully erased the 2nd column of the sanctioned letter copy furnished to him at his request.

It is further stated that the sanctioned letter is the correspondence between the superior authority and the subordinate office and it is not an offer made to the complainant and so the sanctioned letter is a privileged document and it will not confer any right to the complainant to question the same, and that the promissory note dt. 4-2-2003 executed by the complainant and the Guarantors, Agreement of hypothecation and Agreement of repayment of loan and the General Farm of Guarantee clearly stipulates the rate of interest and repayment schedule.

It is further stated that as per the terms of the loan agreement, the interest is payable quarterly, that in case of failure in payment of interest, it will form part of the principal amount due for the next quarter, that the due date of the first instalment is 4-2-2004 and in case of delayed payments, the complainant is liable to pay 2% over due interest from the date of over due, that the complainant never paid the instalment on due date and as well as the quarterly interest and thereby he is liable to pay over due interest on the over due instalments along with interest payable quarterly. So, absolutely there are no latches on the part of the opposite parties in recovering the loan from the complainant. Thus the complaint is liable to be dismissed with costs.

3. The 1st opposite party filed Memo adopting the version filed by the 2nd opposite party.

4. The complainant in proof of his claim filed his affidavit corroborating the averments of the complaint and got marked Ex A.1 to Ex A.5. On behalf of the opposite parties in support of their contentions, filed the affidavit of the 2nd opposite party and got marked Ex B.1 to B.7.

5. The points for determination now are that :

1) Whether the deficiency in service alleged against the opposite parties in rendering service to the complainant is proved ?

2) Whether the complainant is entitled for the reliefs sought for by him ?

3) To what relief ?

POINT No: 1:


It is the case of the complainant that as per the sanctioned letter dt. 16-7-2002 under the original of Ex A.1, the 2nd opposite party sanctioned loan to a tune of Rs.2,25,000/- with a fixed rate of interest at 7.75% payable in 5 yearly instalments at Rs.52,500/- each without any further conditions that though he repaid the total loan amount with accrued interest by way of instalments ie.,Rs.2,60,090/- but still the 2nd opposite party is not closing the account and not returning the title deeds etc., deposited by him on the ground that still he is having a due to a tune of Rs.1,44,000/- which amounts to deficiency in service on the part of the opposite parties.

On this aspect, the contention of the opposite parties is that the rate of interest is 7.75% over and above the RBI rate of interest subject to a minimum of 14% and the same shall be paid quarterly, that in case of committing default in remitting the instalment on due date, penal interest at the rate of 2% shall be charged, and that in the case on hand, the complainant never paid the instalment on due date and so much so, he never paid the interest quarterly and therefore it will form part of the principal amount and there is no deficiency in service or any unfair trade practice on their part in rendering service expected to be rendered by them to the complainant.

As per the material placed on record by both sides, there is no dispute about the complainant’s availing of housing loan from the opposite parties and the payment made by him to a total tune of Rs.2,60,090/- but the only controversy in the matter is with regard to the rate of interest.

According to the complainant, the rate of interest is 7.75% and according to the opposite parties the rate of interest is 14% payable quarterly and in case of default on due date, there will be a penal interest at 2% from the date of over due. The contention of the complainant is that there is no specific mention about all those things as contended by the opposite parties in the sanctioned letter and therefore there is deficiency in service on the part of the opposite parties in demanding the complainant to pay Rs.1,44,000/- for closing the account and for returning the title deeds deposited by him.

In support of his contention, the complainant mainly relied upon the copy of such sanctioned letter Ex A.1 Para No.2 of Ex A.1 reads as follows:

“2. Rate of interest 7.75% OBR with minimum of……………% per annum. This rate of interest is subject change from time to time…….”


It is no doubt true that in Ex A.1, against Para No.2 the rate of interest is mentioned as 7.75% and the “OBR with minimum of percentage” column is appeared to be kept blank.

On this aspect the contention of the learned counsel for the opposite parties is that the complainant willfully erased the second condition in second para of the sanctioned letter with regard to OBR rate of interest with minimum percentage. In support of their contention, the opposite parties relied upon Ex B.2 the similar copy of sanctioned letter maintained by the Bank. A perusal of the second condition in second para mentioned in Ex B.2 reads as follows:

“2. Rate of interest 7.75% OBR with minimum of…14%... per annum. This rate of interest is subject change from time to time…….”

On perusing the recitals of Ex A.1 and Ex B.2 we found that there is a difference between both of them, because the second condition with regard to rate of interest at 14% pa., and the Photograph appearing in Ex B.2 are not appearing in Ex A.1. It is the case of the complainant that after his applying for housing loan, the 2nd opposite party sent a sanctioned letter to him sanctioning the loan. If such is the case, the complainant ought to have relied upon the said original letter instead of relying upon Ex A.1 a copy said to have been sent by the opposite parties to negative the contention of the opposite parties. But the complainant to the best reasons known to him failed to produce such original letter.

Therefore, the complainant can not solely rely upon Ex A.1 a copy of the sanctioned letter to establish his case that there is a deficiency in service on the part of the opposite parties. Further as rightly contended to by the learned counsel for the opposite parties that the sanctioned letter Ex B.1 is only a correspondence between the Superior authorities and subordinate authority and it is a privileged letter.

In fact, the complainant himself besides the guarantors executed the Demand Promissory note, Agreement of payment of loan, Deed for hypothecation etc., in favour of the opposite parties and availed loan having agreed with the terms and conditions mentioned therein. Exs B.3 to B.7 clearly supports the contentions of the opposite parties with regard to the method governing the levy of interest more particularly in the case of default. As per the very averments of the complaint itself, the complainant is not a regular in payment of instalment amount and appears to be a defaulter in making payments against the terms and conditions of the agreement executed by him in favour of the opposite parties.

Therefore, as per the terms and conditions mentioned in Ex B.4 a crucial document executed in favour of the 2nd opposite party by the complainant, the interest is payable quarterly and in case of failure to pay interest, it will form part of the principal amount due for the next quarter and in case of delayed payments, the complainant is liable to pay 2% over due interest from the date of over due. As stated above, as per the very averments of the complaint with regard to the payment made by him, clearly appears that the complainant paid the instalments with irregular intervals. Instead of filing the original sanctioned letter, the complainant agitates his case only by relying upon Ex A.1 copy of sanctioned letter on the ground that it is supplied to him by the opposite parties mentioning the rate of interest at 7.75% which is not being tallied with Ex B.2 produced by the opposite parties.

Therefore, the complainant by executing agreement in favour of the opposite parties and having agreed with the terms and conditions mentioned therein now he can not rely upon Ex A.1 which in fact is not tallied with the recitals of Ex B.1 to establish his claim against the opposite parties that there is a deficiency in service on their part in not closing the account. Therefore, for the reasons stated above, we hold that the complainant failed to establish the deficiency in rendering service against the opposite parties. This point is accordingly answered.

POINT No.2 & 3:
In view of our finding under Point No.2, the complainant is not entitled for the reliefs sought for by him and thus the complaint is liable to be dismissed.
In the result, the complaint is dismissed. No order as to costs.