CONSUMER COMPLAINT NO:86/2006.
1/58, Subramaniasamy Kovil Street,
Tirunelveli District. …Complainant.
The Branch Manager,
Indian Overseas Bank,
Tirunelveli District. … Opposite party.
This complaint came before us for final hearing on 25-11-2009 in the presence of Thiru R.Appavurathinam, Advocate for the complainant and Thiru M.S.Jaganathan, Advocate for the opposite party and having stood over till this day for consideration this Forum made the following:
This complaint is filed under section 12 of Consumer Protection Act 1986.
1) The averments of the complainant in the complaint are briefly as follows: The complainant is a student of NMSMSP Velayutha Nadar-Lakshmi Thangammal Polytechnic College at Pavoorchatram in Diploma course. The complainant obtained an educational loan from the opposite party by depositing the title deeds of his mother K.Vairaviammal to the tune of Rs.41,000/- on 21-10-2003. The loan pass book No. is 2/2003. Ledger Folio No. is 74. As per the agreement the agreed rate of interest for the educational loan is 7% per annum. The complainant has to pay the interest amount alone for the principal amount till fourth year from the date of receipt of this loan amount and after that he has to pay the principal amount and accruing interest within 5 years so the total period of repayment of the educational loan amount is 9 years and the complainant has to pay Rs.910/- per month from December 2004 as per the agreement. The interest rate of 7% is also mentioned by the opposite party in the pass book. On 7-12-2004 the opposite party issued a demand notice that for the education loan No.2/2003 the complainant has to pay interest at the rate of Rs.2078/- within 10-12-2004. As per the agreement the complainant has to pay 7% interest only that too from December 2006 onwards and he has to pay monthly Rs.910/- only as per the entries made in the pass book. The complainant approached the opposite party and questioned about the changes in the interest rates. To his surprise the opposite party told him that loan sanctioned to him was not an educational loan but an agricultural loan. For agricultural loan the interest period is 11.3/4% per annum and the complainant has to pay Rs.2078/- per month towards interest. The opposite party has also changed the number of loan pass book from 2/2003 to 4106/005 without giving any intimation to the complainant. The opposite party has got no right to change the provisions of the agreement already agreed between the parties. The act of the opposite party breaching the agreement and changing the educational loan into agricultural loan amounts to deficiency in service. Hence the complainant sent a legal notice to the opposite party on 29-8-2005. The opposite party received the notice on 30-8-2005 but so far not chosen to send any reply nor take any action to change the agricultural loan into educational loan as per the agreement. Hence the complainant has filed this complaint to direct the opposite party to change the character of the loan from agricultural loan into the educational loan as per the agreement dated 7-12-2004 and to pay Rs.1,00,000/- as compensation for this deficiency of service and mental agony caused to the complainant and the cost of the proceedings.
2) The averment in the counter filed by the opposite party is as follows: The complaint is not maintainable either in law or on facts. The complaint is misusing the process of law after availing the loan amount for education from the opposite party and committed default in repayment. It is true that the complainant obtained educational loan from the opposite party of Rs.41,000/- and the loan account no. is 2. But interest rate agreed is 11.75% per annum and he has to pay in 60 monthly installments at Rs.610/- per annum starting from December 2004. The agreed rate of interest for educational loan is not 7% per annum as stated by the complainant. The complainant executed necessary documents on the date of obtaining the loan in favour of the opposite party bank that is term loan agreement and promissory note. Prior to that he has given an application for the loan for prosecuting higher education. In all these documents it is specifically stated that the loan is an educational loan and its no is 2/2003 and rate of interest is 11.75% and repayable in 60 monthly installments, the first one to commence from December 2004. The said term loan agreement is also countersigned by his mother Vairava ammal who is the guarantor of the said loan. She has created an equitable mortgage by deposit of title deeds with the bank for the said loan as security. Since there is no separate pass book specifically meant for educational loan, the agricultural loan pass book was issued to the complainant which is a printed one and the conditions mentioned therein are not applicable to the educational loan. The complainant taking into advantage of the same and misconception filed this complaint. More over the rate of interest for agricultural loan are 9% per annum and not 11.75 % per annum as alleged in the complaint. This opposite party has not changed the number of the loan pass book from 2/2003 to 4106/05. The loan granted is an educational loan and the loan account No. is 2/2003 and the rate of interest is 11.75 % per annum as per the documents executed by the complainant, right from the beginning till now. For the purpose of operation of the computer, each head has separate code and the educational loan code is 4106 type 27 and the complainant has got no connection with the number he has misconstrued the said code number and stated in the computer that the loan account number has been changed without his knowledge. Once a loan is granted as education loan Account No.1, it will not be changed till the end. After receipt of the legal notice sent by the complainant the Branch Manager of the opposite party called for the complainant to explain the facts in person on various occasions, but the complainant did not turn up. But his father Mr.M.Krishnan came to the Bank on 16-9-2005 and the Bank Manager explained the matter with regard to the legal notice sent by his son and he was convinced. He also gave a letter dated 16-9-2005 to that effect to the bank. That is why no reply notice was sent to the complainant. The complainant after availing the loan and executing the documents, committed default in payment of the loan amount and only to forestall the legal actions by the opposite party he come forward with false complaint. There is no deficiency of service on the part of the opposite party. Hence this complaint is liable to be dismissed.
3) The points for considerations are;
1. Whether there is any deficiency of service on the part of the opposite party and if so;
2. To what relief the complainant is entitled to?
4) Points: On the side of the complainant proof affidavit was filed and Ex.A1 to Ex.A5 were marked. Ex.A1 is the pass book for the education loan and Ex.A2 is the sanction order and Ex.A3 is the certificate given by the educational institutions of the complainant. Ex.A4 is the legal notice given by the complainant to the opposite party and Ex.A5 is the acknowledgement card.
5) On the side of the opposite party proof affidavit was filed and Ex.B1 to Ex.B6 were marked. Ex.B1 is the application form for term loan for prosecuting higher education filed by the complainant and Ex.B2 is the undertaking letter given by the complainant to the opposite party and Ex.B3 is the pro-note given by the complainant at the time of sanctioning the loan and Ex.B4 is the guarantee deed given by the complainant’s mother Vairava ammal. Ex.B5 is the letter given by the father of the complainant to the opposite party and Ex.B6 is the statement of loan account of the complainant with the opposite party. The case of the complainant is that he availed a education loan from the opposite party of Rs.41,000/- on 21-10-2003 and without the knowledge of the complainant the opposite party had changed the character of the education loan into agricultural loan and also has changed the loan pass book No.2/2003 to 4106/05. As per the agreement the complainant had to pay only 7% interest per annum. But the opposite party issued a notice demanding the complainant to pay interest at the rate of 11.3/4% per annum which is intended only for the agricultural loan and not for the education loan. Thus by changing the character of the loan the opposite party had changed the interest rate also and demanded higher rate of interest to be paid by the complainant. On the other side opposite party would contend that once an educational loan is granted its character cannot be changed till the end and since there was no printed pass book for the education loan the printed pass book of the agricultural loan was used but the loan sanctioned to the complainant is only an education loan and its character was never changed by the opposite party. He would further contend that for agricultural loan rate of interest is less than the education loan that is 9% per annum. He has also stated that the account no. of the complainant was never changed and the No 4106/05 denotes only code for the education loan for the purpose of operation of the computer.
6) Ex.A1 is the pass book given to the complainant for his education loan, it is noted on it that the education loan No. is 2/2003 and above that the No. 4106-56-3002-03 is stated. In the 2nd page of the pass book the loan number is stated as 2/2003. In Ex.B6 the statement of account of the complainant also the loan number is stated as 2/03 in Ex.B2 also the loan number is stated as 2/2003. The complainant is under misconception that the education loan has been altered in to agricultural loan because the code number of the education loan 4106 has been written in the pass book Ex.A1. This number denotes only code number of the education loan and the complainant had misconstrued it as change of the character of the loan. Since no printed pass book for education loan is available and the pass book printed for agricultural loan has been used in this case, the conditions prescribed for the agricultural loan will not hold good for the education loan. Hence the argument of the complainant that the opposite party had changed the character of the loan from education loan into agricultural loan is not correct.
7) The other argument of the complainant is that for the education loan rate of interest is only 7% per annum but the opposite party had issued a notice demanding interest at 11.75% per annum which is against the terms of the agreement. On the other hand opposite party would contend that the agreed rate of interest between the complainant and the opposite party for educational loan is only 11.75% per annum and not 7% as alleged by the complainant. Ex.A1 is the pass book for the loan amount of the complainant wherein it has been specifically stated that the rate of interest is 11.75%. Ex.B1 is the application form given by the complainant to the opposite party in it also the rate of interest has been stated as 11.75% per annum. Ex.B3 is the pro-note given by the complainant to the opposite party at the time of availing the loan amount in it also the rate of interest is stated as 11.75% per annum. From the above documents it is proved that the agreed rate of interest for the education loan of the complainant is only at 11.75% per annum and not 7% per annum as alleged by the complainant. Hence this argument is does not to be correct. Under Ex.B5 the father of the complainant has given a letter to the opposite party agreeing to pay the loan amount with interest to the opposite party. Since the complainant had not turned up to the opposite party in spite of notices from the opposite party the father of the complainant met the opposite party after getting explanations from the opposite party regarding the rate of interest satisfied himself and after that only he had given the letter under Ex.B5 to the opposite party. Hence the allegation that the rate of interest for the education loan is only 7% per annum and the opposite party had changed the interest rate to 11.75% by changing the character of the loan not seems to be correct. The counsel for the opposite party would contend that having availed the loan from the opposite party he had committed default in payment of the loan amount and only to forestall the legal actions by the opposite party the complainant has come forward with this false complaint. We hold that this argument has got some force.
8) In the circumstances stated above we come to the conclusion that there is no deficiency of service on the part of the opposite party and the complainant is not entitled to get relief as asked for. We decide this point accordingly.
9) In the result the complaint is dismissed. There is no order as to costs.
Dictated to the Steno-typist taken and typed by him and corrected by me and pronounced by us in the Open Forum on this the 7th day of December 2009.