COMPLAINT NO.1713 OF 2009
4th Cross, 1st Block,
Bangalore – 560 011.
Temporarily Residing at:
Off Shetty Halli Main Road,
Tumkur – 572 102.
01. The Chairman & Managing Director,
Canara Bank, #1/2, J.C.Road,
Bangalore – 560 002.
02. The Branch Manager
Housing Finance Branch,
Canara Bank, 1st Floor,
South End Road, Basavangudi,
Bangalore – 560 004.
03. The Branch Manager,
Canara Bank, Shopping Complex
Branch, Jayanagar, Bangalore – 560 011.
…. Opposite Parties
This complaint is filed seeking the following directions to the Opposite Parties:-
i. Both the Branches of the Bank to credit back the amount excess debited to my SB a/c which stands at Rs.8415.96 and Rs.66/- debited towards non maintenance of minimum balance and any further sum that may be debited in future also either towards EMIs or short minimum balance;
ii. The Branches to treat my letter of authorization dated 04/04/2009 to automatically debit my SB a/c as REVOKED AND WITHDRAWN with immediate effect;
iii. To furnish all the workings in support of their claim that there is an overdue outstanding in my loan a/c 1655 duly explaining the circumstances leading to such abrupt development;
iv. If at all they convince me about any over-dues, to re-spread the EMIs as they have done in respect of loan 1488;
v. To furnish me separate interest work sheets for all the three loan a/cs i.e., 1488, 1655 and 15344 duly furnishing the different rates of interest charged for different periods from the respective dates of their borrowal to enable me to verify the correctness of their claim.
2. The case of the complainant is as under:-
The complainant had availed loan of Rs.6,00,000/- under loan account No.1488, Rs.2,00,000/- under loan account No.1655 and Rs.1,90,000/- under loan account No.15344 totaling to Rs.9,90,000/- from the Canara Bank housing finance branch, South End Road, Basavanagudi, Bangalore for construction and improvement of his house at first block, East, Jayanagar, Bangalore during 2000-2002 under floating rate of interest. From April – 2001 to April 2009 he was paying the EMI’s by issuing 12 post-dated cheques for each year in April and has not delayed or defaulted in repayment of the loan at any time. In April every he used to visit the Bank to ascertain the EMI amount for all the three loans and used to issue 12 post-dated cheques and was making available sufficient funds in his S.B.Account. The interest rate was around 13.5% when he availed the first loan under loan account No.1488 and the rate of interest was revised down-word a few times and by June-2004 it was 8%. On 03/06/2004 he was given a work sheet indicating revised EMIs of Rs.6,125/- for loan a/c No.1488, Rs.2,080 for loan a/c No.1655 and Rs.2220/- for loan account No.15344. Accordingly he continued to pay a total EMI of Rs.10,425/- up to March-2007. Since there were few up-ward revisions in 2006-07, without any advise from the Bank he voluntarily enhanced the total EMI to Rs.11,000/- comprising of Rs.6,500/- for loan account No.1488, Rs.2,200/- for loan account No.1655 and Rs.2,300/- for loan account No.15344 from April-2007 and made payment accordingly till March-2009. In spite of the fact that in the letter dated 29/06/2007, the Bank stated that there was no over due outstanding in respect of loan account No.1488, during the last week of June-2008 he was informed over phone that there was over due outstanding of Rs.16,000/- in respect of loan account No.1488 while the status of the other two accounts were normal. On 07/07/2008 he went to the Bank and gave a letter explaining his inability to pay the entire amount in one lump-sum and requested the Bank to accept Rs.10,000/- as the one time payment against the over due amount and to re-spread EMI amount from April-2009, but there was no reply. In the first week of January-2009 he was advised to meet the AGM of Housing Finance Branch to sort out the matter amicably. Accordingly he meet the AGM on 12/01/2009 and handed over a letter explaining his hardship and also the fact that in view of a few down-ward revisions of interest in February and November 2008 to which he was also eligible the outstanding would be reduced to some extent. The AGM agreed to do the needful. He also forwarded a copy of the letter to the DGM of the circle office with a request to re-spread the EMIs, but there was no response. On 03/04/2009 at about 6.30 p.m. he received a phone call from Housing Finance Branch stating that the Bank had taken a decision to help the customers like him by extending the tenure of the loan and re-spread the EMIs so that there would be no extra monthly burden and he was asked to go to the Bank. Accordingly on 04/04/2009 he met the concerned staff to ascertain the revised EMIs for all the three loans and to issue post-dated cheques for the year 2009-10. The concerned staff gave the figures of EMIs as Rs.6,395/- for loan account No.1488, Rs.2,064/- for loan account No.1655 and Rs.2,274/- for loan account No.15344 and also asked to sign standing instruction/ECS authorization so that the issuance of cheques every year could be avoided. Accordingly he gave the letter dated 04/04/2009 authorizing the Bank to debit Rs.10,800/- on 15th of every month to his S.B.Account No.0408101062218. He furnished the breakup as Rs.6,400/- for loan account No.1488, Rs.2,100/- for loan account No.1655/- and Rs.2,300/- for loan account No.15344. On 26/04/2009 he took a mini statement of his account from ATM in Tumkur where he is temporarily residing and noticed three debits of Rs.205/-, Rs.5,885/- and Rs.6,395/- towards loan repayment totaling to Rs.12,455/- as against Rs.10,800/-. Since he had no information about the excess debit in his account, he wrote the letter dated 27/04/2009 explaining the blunder they had committed by violating the authorization and asked them to treat the letter of authorization as “revoked and withdrawn”. He also forwarded a copy of the letter to DGM of Jayanagar shopping complex Branch with request to take note of revocation and not to debit any further amount to his S.B.Account with immediate effect. There was no response to the above letter from either branch of the Bank. On 30/04/2009 he found further debit of Rs.616.96 paise which brought down the balance in the account to Zero. However, hoping that the Bank would heed to his request and act judiciously he credited Rs.18,595/- to his account in the first week of May 2009. Immediately after the credit, the Bank further debited Rs.572/- on 02/05/2009 and Rs.1415.04 paise and Rs.2,274/- on 04/05/2009 as against authorization to debit only on 15th of every month. This dealt him into a severe financial hardship and he wrote the letter dated 08/05/2009 to the DGM of Jayanagar shopping complex branch bringing to his notice about the unauthorized debit and urged him to credit back the excess amount debited. He also marked a copy of the letter to HFB asking them to transfer the excess amount to his account. There was no response to the said letter. The Bank again debited Rs.1,310.96 paise to his account on 26/05/2009. Thereupon he wrote the letter dated 25/09/2009 to the Chairman of the Bank seeking his intervention to redress his grievance. He received the letter dated 29/05/2009 from the office of the Chairman stating that his letter was forwarded to the circle office, Bangalore Metro with a request to take-up the matter with the branch. He also received the letter dated 02/06/2009, in which the Bank’s Retail Banking Division and the circle office assured him of suitable redressal on priority, but he is yet to hear from either of the branches. Since there was no response from either of the branch, he contacted the Chief Manager of HFB on 02/07/2009 to ascertain if there was any good news for him. But he received the information that the excess withdrawal from the S.B.Account was due to an overdue outstanding in the loan account No.1655 which was all along said to be normal. If at all there was to be any such overdue, the same would have been brought to his notice at-least over phone as it was done in respect of loan account No.1488. But no such information was given till that day which clearly shows that the Bank to justify its blunder has apparently manipulated the account and trying to make out a case for themselves. The up-word revision of interest was only for a short span and as such there was no scope for any accumulation of over-dues in respect of the said loan account. As a consequence of indiscriminate excess drawal beyond authorization, it resulted in nil balance in the S.B. account and the Jayanagar shopping complex branch has been debiting the account Rs.22/- for not maintaining minimum balance. Up-to 03/07/2009 a total sum of Rs.66/- was debited to the account in that regard. The HFB had no right to draw from his S.B.Account more than Rs.10,800/- per month and Jayanagar shopping complex branch had no authority to transfer more than 10,800/- per month that too on or after 15th of every month as expressly authorized in the letter dated 04/04/2009. They should not have drawn or transferred the amount indiscriminately in excess of what was authorized without bringing to his notice. Thus, the branches have committed breach of trust and have violated his personal right which has caused him severe mental agony and financial hardship. At-least when he wrote informing that he has revoked the authorization and it stood withdrawn, both the branches should have considered the request and stopped the withdrawal or transfer of the amount from his account. If there were any genuine overdues, the same could have been sorted out amicably. The Bank has debited totally Rs.8,415/- in excess of the authorization between April and June-2009 and have debited Rs.66/- towards non maintenance of minimum balance for which the Bank only is liable. Hence, the complaint.
3. In the version, the contention of the Opposite Parties is as under:-
Opposite Party Nos. 1 & 2 have granted the following three housing loans to the complainant:-
Housing Loan A/c
Sanctioned / Disbursed amount in Rupees
Period of payment
EMIs in Rupees
Date of Disbursement
Rate of Interest
The complainant has executed several documents including the loan agreements and pro-notes and has unconditionally agreed for waiver of notice of the change of interest and EMIs of the loan account. They have provided service to the complainant whenever the same was sought. The EMIs have been changed upward and downward due to change of rate of interest since the rate of interest adopted by the complainant is floating. Entire process is computerized by the Bank with software so that calculation of rate of interest and consequential changes of the amount of EMIs would be done by the computer automatically. There is manual work for that effect. Since the complainant has given standing instructions to debit the EMI’s and any arrears of loan account including difference amount due to changes of EMIs have been debited from the SB Account of the complainant. The complainant has been making payment towards the amount regularly. The periodical change of rate of interest of EMIs is as detailed in Para-2 of the version. In view of the transparency maintained by the Opposite Parties there is no discrepancy in maintaining the loan accounts of the complainant. No instructions were given by the staff of the Opposite Parties to the complainant regarding the alleged changes of EMIs of the loan accounts as alleged. Even now the complainant can be provided all the information regarding the loan accounts if he cooperates in a manner required. The complainant is a chronic litigant, he had already withdrawn a complaint 444/2003 filed against the Opposite Parties with regard to the same housing loans. For every small bit of an issue he rushes to the Forum making unnecessary and baseless allegations. He has also filed a case before the Hon’ble MRTP Commission, New Delhi pertaining to the very same housing loan accounts. In the year 2007 due to change of rate of interest, the EMIs were changed at Rs.6,815/- for loan account No.1488 and the same was intimated to the complainant through letter dated 07/08/2009. But the complainant had kept on making payment of Rs.6,500/- for loan account No.1488, Rs.2,200/- for loan account No.1655 and Rs.2,300/- for loan account No.15343 as against the changed EMIs. As a result, the differential EMIs amount was accumulated in the account as outstanding of Rs.16,000/-. Without any dispute, the complainant made payment of lump-sum amount of Rs.10,000/- and requested for further time to make payment of the balance and the same was accepted. Through the letter dated 24/07/2009 the Opposite Parties answered all the queries of the complainant intimating the changes of EMIs for the loan accounts and having debited differential EMI and for deletion of standing instructions. Initially the complainant had made payment towards the loan account through cheques. The rate of interest was 13.5% when the loan under account No.1488 was sanctioned. In June-2004 due to revision of rate of interest, it was reduced to 8% and accordingly the proportionate EMI was calculated. In 2006-07 due to upward revision, the rate of interest was increased to 11.5% and proportionately the EMI of Rs.6,815/- was fixed for loan account No.1488 and proportionately to other loan accounts and the same was intimated to the complainant by the letter dated 07/08/2007. The complainant had not voluntarily enhanced the EMI amount to all the accounts as contended. Instead of making payment of actual enhanced EMI amount, the complainant started making payment of lower amount and therefore there was an accumulated outstanding of Rs.16,000/- in loan account No.1488. The complainant did not raise any objection or dispute in respect of that arrears. As per the request of the complainant the loan account was restructured in March-2009. Accordingly from April-2009 the EMI was fixed at Rs.6,395/- for loan account No.1488, Rs.2,604/- for loan account No.1655 and Rs.2,274/- for loan account No.15344 and the same was intimated to the complainant orally on 04/04/2009. Accepting the same, the complainant gave standing instructions/ECS authorization for recovery of the installments with arrears and other charges towards all the three loan accounts from his S.B.Account with Opposite Party No.3. The allegation that the concerned staff gave EMIs of Rs.2,064/- for loan account No.1655 and asked for the standing instruction is denied. No such figures were given as alleged by the complainant in respect of loan account No.1655. With ulterior motive, the complainant changed the EMI as Rs.2,064/- instead of Rs.2,604/-. Since the process of calculation and maintenance of account has been computerized, there is no discrepancy or wrong calculation in the account. Since the arrears have not been fully credited by the complainant, the balance arrears and other charges are also recovered by the system from the S.B.Account based upon the standing instructions. The allegation that the amount was debited without communication is false. The recovery was made from the S.B.Account by the system based upon the instructions and no excess amount is recovered from the S.B.Account of the complainant. As such, there is no question of crediting back the excess amount to the S.B.account of the complainant. The information sought by the complainant was provided not only once but several occasions. Whenever the complainant visited the branch, he was given good response and all the information required by him was provided. The over-dues in all the three accounts were intimated to the complainant orally as he used to visit the Bank. The complainant is in the nature and attitude of dissatisfaction even though all the information is provided. As per RBI guidelines all the benefits under the loan accounts shall be provided to the complainant based on the request. The complainant mistook the EMI of Rs.2,604/- as Rs.2,064/- and started paying lesser amount. The complainant has failed to maintain the S.B.Account in a required manner and in violation of norms, warranting action. There is no discrimination or breach of trust and violation of personal rights as alleged in Para-19 of the complaint. The amount debited to the S.B.Account of the complainant towards the loan accounts are all genuine and bonafide. Without having any endurance to have information, the complainant has rushed to this Forum with ulterior motive in order to harass the officials of the Opposite Parties. This Forum has no jurisdiction either to maintain the complaint or to grant any relief sought in the complaint. The reliefs sought are in the nature of rescheduling the loan account and also the manner in which the process of recovery to be made. In the absence of any deficiency of service provided by the Opposite Parties, the complaint is out of the provisions of the Act and therefore liable to be dismissed. The complainant has tried to convert this Forum into a Civil Court for recovery of the alleged amount paid as excess. On these grounds, the Opposite Parties have prayed for dismissal of the complaint.
4. In support of the respective contentions both parties have filed affidavits and have produced copies of documents. We have heard the arguments on both side.
5. The points for consideration are:-
1. Whether the complainant has proved deficiency in service on the part of Opposite Parties?
2. Whether the complainant entitled to the relief prayed for in the complaint?
Point No(1) : In the Affirmative
Point No(2) : As per final order,
for the following:-
6. At the outset we may point out that it is not a case disputing the correctness of the amount claimed towards the loan account of the complainant involving the accounts. No doubt as held by the Hon’ble TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, in the decision reported in III (1993) CPJ 1614 on which the learned counsel for the Opposite Party relied upon, the Forum constituted under the Consumer Protection Act is not the proper Forum for taking accounts and deciding the amount due to any of the parties and such disputes are to be decided only by the Regular Civil Court of competent jurisdiction. But a reading of the complaint makes it clear that the complainant has not disputed the correctness of the amount claimed by the Opposite Parties towards the three loan accounts. The sole grievance of the complainant is with regard to the excess debiting of the amount to his S.B.Account based on the standing instructions given on 04/04/2009 to debit the particular amount to his S.B.Account towards the EMIs for three loans. It is the contention of the complainant that as per letter dated 04/04/2009 he has authorized the Bank to debit Rs.10,800/- on 15th of every month towards EMIs of the three loans and in spite of that specific standing instructions the bank has debited the amount in excess of Rs.10,800/- every month. It is the case of the complainant that in violation of the specific instruction to debit Rs.10,800/- on 15th of every month towards EMIs of three loans, the Bank has debited Rs.205/-, Rs5,885/- and Rs.6,395/- totaling to Rs.12,445/- towards the repayment of the loan on 25/04/2009 and it is in excess of Rs.10,800/-. It is the further allegation of the complainant that after noticing the excess debit to his account he gave the letter dated 27/04/2009 revoking the standing instructions given on 04/04/2009 and in spite of it, the Bank has debited the amount to his S.B.Account even subsequent to revocation of the authorization. Both the parties have produced the copy of the letter dated 04/04/2009 by which the complainant gave standing instructions to debit Rs.10,800/- to his S.B.Account on 15th of every months towards repayment of the three loans. In this letter the amount payable to each loan account is also mentioned. From this letter we are unable to make out that the complainant had authorized to debit any amount other than Rs.10,800/- towards the amount payable to the loan account. Therefore, we are unable to accept the contention of the Opposite Parties that the complainant has authorized to debit any amount over and above Rs.10,800/- every month towards any arrears of the loan account. When the complainant had given specific instructions to deibt only Rs.10,800/- to his S.B.Account on 15th of every month towards the repayment of the three loans in case of debiting excess amount than Rs.10,800/- it was necessary for the Opposite Party Bank to inform the complainant about the excess amount that was to be debited to his account and to seek his approval. Debiting the amount in excess of Rs.10,800/- without instruction by the complainant, in our opinion clearly amount to deficiency in service on the part of Opposite Parties. That apart, after the complainant sent the letter dated 27/04/2009 intimating that he has revoked the standing instructions given on 04/04/2009, the Bank sent the letter dated 24/07/2009 intimating the complainant about the EMIs amount under each loan account and about the accumulation of the arrears in respect of loan account No.1655 and further informing that they have deleted the standing instructions created in his S.B.Account towards the loan EMIs as per his request. The information convyed by the Opposite Party in this letter in this regard is as under:-
“ We have deleted the standing instruction created in your S.B.Account towards the loan EMIs as per your request”.
Thus, the Bank informed the complainant that they have acted upon his letter dated 27/04/2009 revoking or canceling the standing instructions given on 04/04/2009 with regard to debiting of the EMI’s to his S.B.Account. The letter dated 24/07/2009 is subsequent to the complaint which was filed on 22/07/2009. It appears the Bank sent the letter even before issuance of the notice of the complaint. In spite of promising in the said letter in July-2009 that the Bank has deleted the standing instructions created in the S.B.Account of the complainant with regard to the loan EMIs, the Bank never stopped debiting the S.B.Account of the complainant with the loan EMIs. From the entries in the pass book pertaining to S.B.Account of the complainant, a copy of which is produced, it is evident that till September – 2009 the Bank went on debiting the EMIs amount to the S.B account of the complainant. This is against promise and commitment made by the Bank in the letter dated 24/07/2009 and this also amounts to deficiency in service. During the pendency of the complaint after hearing arguments for some time, the Forum suggested to the parties to see the possibility of amicable settlement of the dispute. Accordingly it appears the complainant approached the Bank and got some issues settled. On 25/11/2009 he filed a memo with regard to issues settled and the same is as under:-
“AS advised by the Hon’ble forum, I met the AGM, Canara Bank, Bangalore Metro Circle office with my letter PER/H.Loan/07/09 dt.16/11/2009 on the day and explained him the issues and sought his intervention to redress the same. After hearing me, he spoke to the Sr.Manager, HFB, Canara Bank whom I was advised to meet on the next day. Accordingly I met the Sr.Manager HFB and after a lengthy discussion and interaction following issues, the redressel of which was sought, were partly sorted or concurred to be resolved at an early date.
(i) The excess amount deducted from my SB a/c 0408101062218 till date will not be sought to be refunded since already adjusted to may loan account.
However, regarding the penalty of Rs.154/- debited to my above account towards non maintenance of minimum balance, no assurance from HFB was forthcoming as it should be decided by another Branch i.e., Jayanagar Shopping Complex Branch. A direction in this regard from the Hon’ble Forum will be a great help to me.
(ii) The Sr.Manager has confirmed that the standing instruction issued by me on 04-04-09 has been cancelled effectively during second week of November i.e., subsequent to the latest debit effected on 03/11/2009 (as per bank pass book entry) and there would be no more debits).
(ii) Regarding overdue outstanding in my loan account 1655, based on the details furnished by the bank as sought by me in my complaint under relief (V) I have agreed to work out the EMIs and sort out the issue.
However, regarding the cost and the compensation I have prayed for in may complaint, the Hon’ble forum, before which I have placed all the documents to prove that the Bank has failed to respond to all my letters, numbering four including one to the chairman of the bank, before approaching the Hon’ble Forum, with total disregard to my hardship by their sheer indifference and apathy, may kindly grant my prayer.
As mentioned in this memo the complainant is not insisting for refund of the excess amount debited to his S.B.Account as the same is already adjusted to his loan account. It is also stated in the memo that the standing instruction given by the complainant on 04/04/2009 has been cancelled during second week of November namely subsequent to the latest debit effected on 03/11/2009 and there would be no more debits. The complainant has also agreed to work out the EMIs and to sort out the issue regarding the overdue outstanding in his loan account No.1655. Prayer Nos. 1 to 4 as sought in the complaint have been thus amicably settled between the parties and now the only issue is with regard to the debiting of Rs.154/- towards penalty for not maintaining minimum balance in the S.B.Account and the compensation claimed in the complaint as well as the cost of the proceedings. So far as the sum of Rs.154/- debited towards penalty for not maintaining the minimum balance in the account is concerned from the entries in the pass book of the complainant, it is seen that there are several withdrawals from the S.B.account of the complainant besides debiting of the loan amount.. In such circumstances, it was proper on the part of the complainant to maintain sufficient credit balance in his account. When the complainant failed to maintain the minimum balance, the Bank has levied penalty as per the rules in force and therefore in our opinion, the complainant is not entitled to seek refund of penalty amount levied by the Bank for not maintaining the minimum balance. With regard to compensation claimed by the complainant as stated earlier, the Bank debited the amount in excess of the specific instruction to debit Rs.10,800/- on 15th of every month. No information was given to the complainant with regard to excess amount debited to his S.B.Account. Assuming for a moment that in view of the undertaking given by the complainant in the loan agreement it was not necessary to give notice to the complainant with regard to excess amount due under the loan account consequent upon change of EMIs due, to variation in the rate of interest, at-least it was necessary for the bank to desist from debiting amount from the S.B.account of the complainant after he gave the letter dated 27/04/2009 revoking or canceling the standing instruction or at-least subsequent to 24/07/2009 when the Bank informed the complainant that it has deleted the standing instruction created in S.B.Account. The Bank admittedly failed to act upon the letter dated 27/04/2009 immediately or with effect from 24/07/2009 when the Bank stated that it has deleted the standing instruction. On the other hand, the Bank went on debiting the amount to the S.B. Account till November – 2009. In our opinion, as stated earlier, this act of the Opposite Parties amounts to deficiency in service and therefore the complainant is entitled to compensation for inconvenience and mental agony suffered by him. Considering the facts and circumstances of the case it appears to us that the sum of Rs.50,000/- claimed as compensation is on the higher side. In our opinion, it is just and sufficient if the complainant is awarded compensation of Rs.5,000/- including the costs of the proceedings having regard to the fact that the other issues are amicable settled by the Bank. In the result, we pass the following:-
1. The complaint is allowed in part.
2. The Opposite Parties are directed to pay compensation of Rs.5,000/-
3. Compliance of this order shall be made within eight weeks from the date of communication, failing which the amount awarded shall carry interest at 6% Per Annum from the date of the order till the date of communication.
4. Send a copy of this order to both parties free of costs, immediately.
5. Pronounced in the Open Forum on this the 07th Day of DECEMBER 2009.