BEFORE THE DISTRICT CONSUMER DISPUTES

REDRESSAL FORUM, JALANDHAR.

Complaint No.217 of 2017

Date of Instt. 11.07.2017

Date of Decision: 23.10.2018

1. Dr. Kamal Gupta, aged about 55 years son of Late Sh. Satya Pal Gupta.

2. Ms. Nikita Gupta, aged about 23 years daughter of Dr. Kamal Gupta.

3. Ms. Ankita Gupta, aged about 27 years daughter of Dr. Kamal Gupta.

4. Dr. Ruby Gupta, aged about 55 years daughter of Dr. Kamal Gupta. All residents 408-A, near Jain Bhawan, Adarsh Nagar, Kapurthala Road, Jalandhar. ..........Complainants

Versus

1. Bank of Baroda, Bhagwan Mahavir Marg, Jalandhar through its Branch Manager.

2. The Jalandhar Improvement Trust Jalandhar through its Administrative Officer/Chairman.

….….. Opposite Parties

Complaint Under the Consumer Protection Act.

Before: Sh. Karnail Singh (President)

Smt. Harvimal Dogra (Member)

Present: Sh. PP Singh Ahluwalia, Adv Counsel for Complainants.

Sh. APS Pathania, Adv Counsel for the OP No.1.

Sh. Sachin Sharda, Adv Counsel for the OP No.2.

Order

Karnail Singh (President)

1. This complaint has been presented by the complainant, wherein alleged that in the year 2011, the complainant No.2 Ms. Nikita Gupta applied for a plot area measuring 500 yards situated at Surya Enclave Extension, Jalandhar from OP No.2 under sports quota and she was allotted a plot No.26-C, situated at Surya Enclave Extension, Jalandhar, vide Allotment Letter No.4660 dated 02.04.2012 by the OP No.2/Jalandhar Improvement Trust, Jalandhar for total consideration amount of Rs.85,00,000/- as per details mentioned in the said allotment letter. Accordingly, in order to make the payment towards price of the said plot to OP No.2, the complainants approached OP No.1/Bank of Baroda, vide application dated 28.04.2012 for availing a housing loan towards payment of consideration amount as per terms of allotment letter to OP No.2. The OP No.1, vide Letter of Sanction dated 30.04.2012, sanctioned a Term Loan of Rs.40,00,000/- for the purchase of said plot with interest @ 1.50% over the base rate i.e. 12.25% per annum with monthly rest repayable in 162 equal monthly installments of Rs.50,596/- w.e.f. 13.11.2013. The OP No.1, Bank agreed to sanction a term loan of Rs.40,00,000/- against equitable mortgage of House No.28-C, Surya enclave, Jalandhar in the name of Dr. Ruby Gupta, the complainant No.4.

2. The complainants No.1 to 4 availed the sanctioned housing loan of Rs.40,00,000/- in loan account number 19600600000855 from the OP No.1/bank and ever since the availing of said credit facility, the complainants had been paying all the loan installments regularly. The OP No.2 failed to deliver possession of the said plot to the complainants as stipulated in allotment letter as there was a dispute pending before Hon'ble Punjab & Haryana High Court between the OP No.2 and the owners of the said land from whom the land pertaining to area of Surya Enclave Extension was acquired by the OP No.2 and the Hon'ble Punjab & Haryana High Court had granted stay in respect to land in dispute in respect to the said colony. In March-April, 2016, a case was decided in favour of OP No.2 from the Hon'ble Punjab & Haryana High Court and now the OP No.2 has started the development work in the said locality, but none of the plot holders have been given the possession of the respective plots allotted to them.

3. That keeping in view of non-delivery of possession of the said plot to the complainants, the complainants were incapacitated to carry any construction over the plot. In October 2015, in reply to bank notice served to complainants, the complainants duly informed the Branch Manager of the OP No.1 in respect to the state of affairs, but the OP No.1 Bank quite arbitrarily failed to consider and appreciate the circumstances beyond the control of complainant and illegally debited an amount of Rs.5,24,000/- in the loan account of the complainant on 20.07.2016, which was quite unreasonable and unwarranted. By charging of commercial rate of interest by the bank on a residential property, that too for not making constructions within the time period in circumstances explained above tantamount to malafide intentions on the part of the OP No.1/bank and the levying such excessive and exorbitant rate of interest is unreasonable, arbitrary, illogical, illegal and against the principles of natural justice, whereas to the maximum in case of non-compliance of any terms and conditions as per sanctioned letter dated 30.04.2012, the OP No.1 bank could have charged 2% per annum towards penal rate of interest and by imposing and illegally charging a commercial rate of interest and debiting huge amount of Rs.5,24,000/- in the loan account of the complainants and further continue charging commercial rate of interest indicates that OP No.1 no longer values the relationship with good customers.

4. That the complainant No.1 earlier served a notice dated 30.07.2016 to the OP to withdraw, waive and reverse all the entries of excessive rate of interest of Rs.5,24,000/- charged at a commercial rate illegally and exorbitantly from the loan account of the complainant, but the same was not done despite many assurances. The complainants then served a legal notice on 20.09.2016 to OP No.1 in order to withdraw, waive, reverse all the entries of excessive rate of interest of Rs.5,24,000/- charged as a commercial rate in the loan account of the complainants, but no action has been taken on the aforesaid legal notice of the complainants, then subsequently the OP asked the complainant, vide letter dated 26.10.2016 to deposit a sum of Rs.4,25,409/- towards the overdue amount in the said housing loan otherwise, the said loan account of the complainants will be turned NPA and on the assurance of the OP No.1 to the complainants that matter is under consideration with the higher authorities of the OP and after approval of the same, the benefit will be given to the complainants and upon that assurance, the complainants deposited a sum of Rs.4,25,409/-, but under protest. The OP No.1/Bank failed to pass any such benefits to the complainant despite several notices and representations and thereafter, the complainants with having no alternative except to clear the entire outstanding amount due and made the final payments under protest to the OP bank, vide forwarding letter dated 30.01.2017, whereas the receipt of the same was given by OP No.1 on 13.02.2017. The act of the OPs is tantamount to unfair trade practice and deficiency in service and accordingly, a cause of action accrued to the complainant to file the presented complaint with the prayer that the complaint of the complainant may be accepted and OP No.1 may be directed to refund the amount of Rs.5,24,000/- towards interest excessively charged on 20.07.2016 and be further directed to pay an amount of Rs.7,00,000/- as an interest illegally charged from the complainant till the date of final liquidation of payment and OP No.1 be directed to pay compensation for harassment and financial loss to the complainant, to the tune of Rs.50,000/- and litigation expenses of Rs.50,000/-.

5. Notice of the complaint was given to the OPs and accordingly, OP No.1 appeared through its counsel and filed written reply, whereby contested the complaint by taking preliminary objections that the complaint is not maintainable against the answering OP because there is no negligence, unfair trade practice or deficiency in service on the part of the bank and the complainant has unnecessarily filed the present complaint against the answering OP. It is further averred that the complainant availed the housing loan and executed various bank documents and only then the bank issued a sanction letter dated 30.04.2012 with the pre-condition that the bank's guidelines prescribed the timely return of the housing loan along with interest and expenses and also to make construction within the stipulated time or otherwise the bank has to charge the commercial rate of interest instead of the normal housing loan interest. After agreeing with the said terms and conditions, the complainant executed the bank documents and under the provision of 'Contract Act', all the terms as agreed by the complainant are binding and he cannot escape his liability for any of the term, which he has otherwise agreed with the bank. Hence, the instant complaint is liable to be dismissed. It is further averred that the complainant has no locus standi to claim any damages or compensation against the answering OP. It is further averred that the present complaint is not maintainable before this Forum and even the complainant is not the consumer as defined under the 'Consumer Protection Act' and complainants cannot claim any relief before this Forum and further alleged that the facts of the complaint itself shows that there is a requirement of detail evidence and the matter in issue cannot be decided in the summary proceedings and further submitted that the claim is bad for non-joinder and mis-joinder of necessary parties. On merits, it is admitted that the complainants availed the facility of loan of Rs.40,00,000/- from the complainant for purchase of plot and it is also not denied by the OP No.2 that a commercial rate of interest had been charged from the complainant, but took a plea that the said commercial rate of interest has been charged as per agreed terms and conditions between complainants and OP No.2, as the complainants could not able to construct the house in the so purchase plot within a stipulated period and as such, the interest charged from the complainants is according to terms and conditions of the bank with the complainant. The other averments as made in the complaint are categorically denied and lastly submitted that the complaint of the complainant is without merits and the same may be dismissed.

6. OP No.2 filed its separate reply and contested the complaint by taking preliminary objections that the present complaint is not maintainable in this Forum, the same is liable to be dismissed and further alleged that no statutory legal notice was ever served by the complainant to the OP and as such, the complaint deserves to be dismissed and further alleged that the complainant has not approached the Forum with clean hands rather suppressed the material facts from the Forum. It is further submitted that the OP No.2 has issued a publication, calling upon all the buyers of the plot to come and take over the possession of the plot, but despite having the knowledge of the same, the complainant has not revealed the fact before this Forum in the compliant. On merits, it is admitted that the plot in question was allotted to the complainant Nitika Gupta and it is also admitted that the dispute between answering OP No.2 as well as with the owner, whose land was acquired, remained pending before the Hon'ble Punjab & Haryana High Court. The other averments as made in the complaint are categorically denied and lastly submitted that the complaint of the complainant is without merits and the same may be dismissed.

7. In order to prove the case of the complainant, one of the complainant Dr. Kamal Gupta tendered into evidence his own affidavit Ex.CA along with some documents Ex.C-1 Certificate issued by Bank of Baroda dated 13.02.2017, Ex.C-2 Letter dated 30.01.2017, Ex.C-3 Letter dated 30.07.2016, Ex.C-4 Legal Notice, Ex.C-5 Reply to Legal Notice, Ex.C-6 Cutting of Newspaper, Ex.C-7 Letter dated 27.10.2016, Ex.C-8 Copy of Cheque deposited, Ex.C-9 Letter dated 26.10.2016 issued by Bank of Baroda, Ex.C-10 Copy of Allotment Letter, Ex.C-11 Letter of Sanctioned, Ex.C-12 Letter dated 09.04.2014 and Ex.C-13 Copy of Statement of Accounts and then closed the evidence.

8. Similarly, Counsel for the OP No.1 tendered into evidence affidavit Ex.OP-A along with some documents Ex.OP-1 Copy of Circular, Ex.OP-2 Letter dated 22.11.2014, Ex.OP-3 Letter dated 26.08.2015, Ex.OP-4 Copy of Certificate dated 13.02.2017, Ex.OP-5 Appraisal-cum-Sanction Memo, Ex.OP-6 Letter dated 13.12.2016 and Ex.OP-7 Letter of Loan Sanction dated 30.04.2012 and then closed the evidence.

9. Similarly, counsel for the OP No.2 tendered into evidence affidavit Ex.OP2/A along with some documents Ex.OP2/1 to Ex.OP2/3 and then closed the evidence.

10. We bestowed our thoughtful consideration to the submissions made by learned counsel for the respective parties and also gone through the case file very minutely.

11. In nutshell, we observed that there is no direct or indirect relief of the complainant against OP No.2, rather the OP No.2 is impleaded as a party in this case only that the plot in question was allotted by the OP No.2 to the complainant and for the purchase of said plot, a loan was obtained by the complainant from OP No.1 and the dispute in this case is only that the complainant has not raised the construction upon the said plot within a stipulated period as given by the bank i.e. OP No.1 and complainants alleged that the possession of the plot in question has not been delivered by the OP No.2/JIT, Jalandhar, till March-April 2016, due to the reason, there was a dispute before the Hon'ble High Court in regard to the land, where from the plot in question was allotted to the complainant and this fact has been admitted by the OP No.2 in its reply. So, one thing is clear that the possession of the allotted plot was not handed over to the complainant till April, 2016 though the OP No.2 alleged that a publication was given to all the allottes to get the possession of the respective plot and to that effect, the OP No.2 has placed on the file a letter Ex.OP2/3 dated 01.12.2015, but this letter does not disclose to whom the said letter was forwarded because the said column is blank. So, it is not established that the complainants were called upon by OP No.2 in the month of December, 2015 to take the possession of the plot in question, but if we considered that the said letter was delivered or sent to the complainants, even then the period of three years has been already elapsed because the allotment was made on 02.04.2012 and the aforesaid letter was sent on 01.12.2015. So, from all angle, it is established that the possession of the plot till April, 2016 was not handed over to the complainants.

12. Now keeping in mind the above discussion, we have to dispose the matter in issue, in between the complainants and OP No.1. Admittedly, the complainant raised a loan of Rs.40,00,000/- from the complainant for making payment of the price of the said plot and as per version of the complainant, the OP No.1 charged commercial rate of interest from the complainant, which is beyond the agreed rate of interest i.e. 12.25% as mentioned in the loan sanctioned letter Ex.C11. So, if we go through the loan sanctioned letter, wherein the rate of interest is mentioned 12.25% on monthly rest and in Clause No.7, in case of any violation of terms and conditions of the loan, then penal interest @ 2% per annual to be paid on the entire balance loan amount, but as per admission of the OP No.1, commercial rate of interest was charged from the complainant, for the reason, the complainant has not raised the construction upon the plot, so purchased from the OP No.2 and this is the term and condition circulated by the Bank of Baroda, vide Circular dated 01.10.2016, copy of the same is Ex.OP-1. No doubt, in the said Circular, at Page No.9, it is categorically mentioned that the construction of the house should be completed within three years or up to the period allowed by the Development Authority, whichever is earlier. Here, we like to make it clear that in the allotment letter, the Development Authority also allowed the period of three years for construction.

13. Further, in the aforesaid circulation, it is mentioned that if the construction is not completed within three years, then bank is at liberty to charge commercial rate of interest, but the OP No.1 intentionally and willfully ignored the second stanza of the said circular at Page No.9, wherein it is categorically mentioned as under:-

“In case the borrower could not construct the house within the stipulated period due to circumstances beyond his/her control or genuine difficulties, Zonal Authority is authorized to waive/refund the commercial rate of interest on case to case basis and strictly on merits.”

and further after one para, in the next para, it is again reiterated that compliance of the undertaking rests with the borrower, Branches should ensure that suitable covenants have been incorporated in the loan sanction letter, to enable the Bank to charge higher rate of interest, abinitio, in the event of non-compliance by the borrower with his undertaking.

14. First of all, the case of the complainant is obviously covered under the circumstances, which are beyond the control of the complainant because if the possession of the plot is not handed over to the complainant, then how he can raise construction thereon within stipulated period of three years. Moreover, it is admitted case that there is a dispute of the acquire loan pending before the Hon'ble High Court, which was decided in the month of April, 2016. So, it means the possession of the plot in question was handed over to the complainants after April, 2016 and under these circumstances, how the complainant can raise construction within the period of 3 years and accordingly, the case of the complainant is apparently covered in the definition of circumstance beyond his control as mentioned at Page No.9 of the Circular of the bank Ex.OP-1 and further, if we go through the loan sanctioned letter Ex.C-11, therein it is not incorporated that in case the borrower failed to comply the undertaking, then he will be liable to pay commercial rate of interest, whereas as per Circular Ex.OP-1, Page No.9, the said wording should be incorporated in the loan sanctioned letter, but if not mentioned, then the complainants are not liable to pay the commercial rate of interest.

15. So, from the over all circumstances, we conclude that the bank has illegally and arbitrarily charged commercial rate of interest from the complainants, which has admittedly deposited by the complainants and thus, the OP No.1 is directed to reimburse the said excess interest amount acquired from the complainant i.e. Rs.5,24,000/-, to the complainant with interest @ 9% per annum from the date of filing complaint, till realization. Further, the complainant could not establish that in what manner a sum of Rs.7,00,000/- was more interest charged from the complainant, therefore, the complainant is not entitled for this relief. Further, the OP No.1 is directed to pay compensation for mental agony and harassment to the complainant, to the tune of Rs.25,000/- and litigation expenses of Rs.5000/-. The entire compliance be made within one month from the date of receipt of the copy of order. This complaint could not be decided within stipulated time frame due to rush of work.

16. Copies of the order be supplied to the parties free of cost, as per Rules. File be indexed and consigned to the record room.

Dated Harvimal Dogra Karnail Singh

23.10.2018 Member President