Date of Filing:09/06/2017

Date of Order:25/08/2018

BEFORE THE BANGALORE I ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SHANTHINAGAR BANGALORE -  27.

Dated:25^th DAY OF AUGUST 2018

PRESENT

SRI.H.R. SRINIVAS, B.Sc., LL.B. Rtd. Prl. District & Sessions Judge And PRESIDENT

SRI D.SURESH, B.Com., LL.B., MEMBER

COMPLAINT NO.1513/2017

Vs

ORDER

BY SRI.H.R.SRINIVAS, PRESIDENT:

1.     This is the Complaint filed by the Complainant U/S Section 12 of Consumer Protection Act 1986, against the Opposite Parties (herein referred in short as O.Ps) alleging the deficiency in service and direct the O.Ps to calculate EMI by taking correct principle amount and applying the floating rate of interest as per the RBI directions , to adjust the extra interest recovered towards the future amount payable by him, to adjust the extra amount recovered towards principle to the principle to be paid by him, for compensation of Rs.2,00,000/- for causing mental agony and Rs.50,000/- towards litigation expenses and other reliefs as this Forum deems fit.

2.     The brief facts of the complaint are: that the complainant pursued his B.E (Architect) course by obtaining education loan from O.P.  O.P sanctioned Rs.4,00,000/- towards education loan on 4.9.2008 under the usual terms and conditions.O.P.No.1 released Rs.81,750/- between Rs.29.9.2008 and 2.1.2009. Total amount released towards education loan of the complainant was Rs.3,76,620/- and last disbursement was on 2.1.2013.  The Government of India, Ministry of Human Resource Development and Department of Higher Education announced an interest subsidy scheme in respect of the loan availed by the students belonging to economically weaker section from the schedule bank. As per the said scheme those students and their parents whose annual income is Rs.4,50,000/- and less or eligible for the subsidy in the interest and the interest for the period of course period plus one year  or six months after getting a job whichever is less to be subsidized and to be paid by the Government of India to the  bank with which the loan is lent through the nodal  bank i.e. Canara Bank and the scheme has come into existence from the academic year i.e. 1.4.2009-2010 onwards.

3.     It is contended that, during August 2013, the complainant completed his architecture course and the moratorium period ended in the month of April 2014. Complainant is liable to pay interest on the amount obtained by him as loan from the O.Ps at the agreed rate from 1^st April 2014 onwards.   According to him, the principle amount borrowed is Rs.3,76,620/-. It is further contended that, instead of calculating interest from 1.4.2014 onwards on the above amount, O.Ps have adopted a wrong procedure and considered Rs.5,21,177/- (Rs.3,76,620 + the interest accrued during the moratorium period)  as principle amount and fixed EMI at Rs,8,100/- per month which is erroneous and has no basis and the same if paid will exceed the amount payable by him. Further interest is being debited to his account every month. Thus, making him to pay interest twice which has resulted in hardship, mental agony and financial loss.   The principle adopted by the O.Ps are erroneous and there is deficiency in service. From 1.4.2014 onwards, he  paid Rs.8,100/- in 35 EMI’s and that he is ready to pay the remaining amount both principle and interest if the same is calculated as per the scheme of providing subsidy in interest and on Rs.3,76,620/- along with interest as per the RBI regulations. The method adopted by the O.P is erroneous, and made him to pay more money.There is deficiency in service and hence the complaint.

4.     Upon the service of notice O.Ps appeared before the Forum and filed their objection contending that the complainant got sanctioned a sum of Rs.4,00,000/- towards education loan and drawn Rs.81,750/- between 29.9.2008 and 2.1.2009.  The complainant produced the income certificate issued by the Tahasildar, Bengaluru North  Taluk, dated 19.12.2012 wherein the total income of the complainant and his parents was Rs.1,69,818/-. The complainant is eligible for interest subsidy as per the scheme evolved by the Government of India, Ministry of Human Research Development and Department of Higher Education under economically weaker section and the interest subsidy is for the moratorium period i.e. course period + one year or 6 months after getting the job, whichever is earlier.

5.     An interest subsidy of Rs.65,042/- has been received and added to the loan account of the complainant which is evident from the loan statement filed before this Forum from 21.9.2008 to 31.7.2016.  On the request made by the father of the complainant to re-fix EMI and insisting for waiver of the entire interest, they wrote a letter to the head office. After receiving the reply, they have intimated the same to the father of the complainant. The interest subsidy amount claimed by them from the complainant is the interest due to them by the nodel bank. Whatever the amount received by them towards interest subsidy from the nodal bank has been given credit.  It is also made known to the complainant that after receipt of the pending interest subversion from nodal bank, the same will be added to the loan account and also advised that since they have not received the remaining subsidy amount, the EMI will be fixed once the entire subsidy amount is received and added to the loan account. That means, they are nothing to do with the subsidy amount and as and when they received interest subsidy from the Government through the nodal bank, that will be directly remitted to the account of the complainant. They have clarified the scheme and guidelines for re-fixing the EMI at the beginning of the repayment period.    The accumulated interest will be added to the principle and then EMI would be calculated.   It is also informed to the complainant that when once they receive the entire subsidy and added to the loan amount, the EMI would be re-fixed.

6.    It is contended that  wrong allegation has been made against them that they have claimed inflated EMI, included  interest at a higher rate, debited the interest to the complainant’s loan account every month thus charging interest twice which amounts to dissective trade practice. They have denied the contention that they have wrongly adopted the principle loan amount of Rs.5,21,177/- instead of Rs.3,76,620/- and therefore the EMI worked on the said amount and interest thereon works-out to be Rs.4,49,726/-.

7.   It is further contended that they have, according to the practice and rules, have calculated EMI by taking in to consideration of the initial payment holiday at the beginning of the repayment period by taking into account the balance outstanding including interest debited during repayment holiday period, the rate of interest and the tenure of repayment. The future credits are not considered for fixing the EMI’s.  They are the public sector banks dealing with public money and are bound to abide by the conditions of the RBI.  Though the complainant is earning handful salary after getting a good job, he is fighting for the subsidy which deprives the chances of other deserving students. There is no merit and cause of action in this complaint. No prime facie case made out by the complainant, there is no basis for filing of this complaint. The reasons mentioned are all false, frivolous, vexatious, bereft of merit and hence prayed the Forum to dismiss the complaint.

8.   In order to substantiate his case, the complainant examined himself as PW-1 and has produced documents. O.Ps have also filed their affidavit evidence along with documents. Heard the arguments. The following points arise for our consideration:-

                   (1)   Whether the complainant has proved the

       deficiency in service on the part of the O.Ps?

(2)  Whether the complainant is entitled to

      the relief prayed for in the complaint?

9.     Our answers to the above points are:-

POINT 1:         In the  negative

POINT 2:        Partly in the affirmative.

                        for the following:     

REASONS

POINT No.1:-

10.   On perusal of the pleadings and the evidence of both the parties it is an admitted fact that the complainant got sanction for education loan for Rs.4,00,000/- in the year 2008 and got released Rs.85,882/- on 21.09.2008 (Account statement for the period 1.4.2008 to 31.3.2009). The complainant is entitle for interest subsidy as his and his parents annual income is Rs.3,14,500/- asper the income certificate issued by the Special Tahasildar Bangalore North Taluk and they belong to economically weaker sections whose annual income is less than Rs.4.5 lakhs per annum.  The total loan amount drawn by the complainant for his B.E architect education according to the parties is Rs.3,76,162/-. 

11.   As per interest subsidy scheme in respect of education loan for economically weaker section which has come into effect from the academic year 2009 -10 started from 1.4.2009 applicable to the students who  have taken loan fro the approved courses in technical and professional institutions. The interest subsidy on education is for the period of monitorial i.e. force period + one year or 6months after getting job whichever is earlier.  The interest for the said  moratorium period is to be paid by Government of India  to the bank which has lent the money through the nodal bank. As per the scheme after the candidate completes his course and getsa job within 6 months thereafter or after one year if he did not get any job he has to pay principle amount which he had borrowed from the bank along with interest as agreed at the time of borrowing the loan from the date of completion of one year after completion of the course period.

12.   In this case, it is not insipte  that the complainant got the loan amount of released on 22.9.2008.  Since the scheme has come into effect from 1.4.2009 the complainant’s has to pay the interest for the said period after the completion of moratorium period. During the moratorium period whatever the interest as agreed on the amounts drawn is to be paid by Government of India. After the moratorium period is over the complainant has to pay the amount drawn as loan  and the accrued interest i.e. interest   for the period 22.9.2008 to 1.4.2009 along with agreed rate of interest (floating). In this case from 1.4.2014.

13.   The main grievance of the complainant is that , the O.Ps have added the interest which has accrued during the moratorium period as principle amount and calculated interest  the floating rate or prevailing rate of interest from 1.4.2014 thus making him to pay interest which he is entitle for subsidy as per the scheme. 

14.    On perusing the accounts extract produced by the O.P Bank for the period from 1.4.2014 to 6.8.2016. O.Ps have mentioned as opening balance Rs.5,21,177/- (the amount drawn as loan by the complainant + the interest accrued from the date of borrowing and also that accrued during the moratorium period) and has calculated interest on the said amount which works-out to be 12 to 12.5%  per annum.  It is on this amount the O.P Has fixed the EMI’s at Rs.8,100/-. The account statement document shows that the complainant had paid 37EMI at the rate of Rs.8,100/-.

15.   The O.Ps have also admitted that they received Rs.65,000/- towards interest subsidy in respect of the education loan from the complainant and they are due the remaining subsidy to be paid by the Nodal bank. In view of the scheme evolved by the Government of India O.P is entitle to receive the interest subsidy during the moratorium period for which since complainant is entitle for it, O.Ps have make correspondence with the nodal bank or Government of India and get the same for which complainant cannot be held responsible. On the other hand, it is the duty of the complainant to pay the interest as agreed in the loan agreement in respect of the amount drawn by him along with principle. Considering the nature of the complaint and the procedure with which the O.Ps have to follow, we are of the opinion that there is no laxity or lapse on the part of the O.ps in calculating the interest. Hence we cannot hold O.Ps for any deficiency in service.

16.    At the same time, it cannot also beheld that the complainant has filed a false and frivolous complaint, he has a point to make out that the O.Ps ought to have calculate interest separate for the amount borrowed by him till the scheme interest subsidy came into effect and calculate interest separately during the moratorium period and to keep as a separate entity and recover the same from the nodal bank or Government of India and recover the principle amount i.e. (actually lent to the complainant for education) and interest after the period of moratorium and recover the same by fixing EMI’s.  Hence we answer Point No.1 in the Negative.

POINT No.2:-

17.    In the result though the complainant has not suffered any financial loss since he has yet to pay the balance of interest and the principle amount he is not entitle for any damages.  Though he has been put to some mental stress and physical strain.In the interest of both the parties we are of the opinion that by giving guidelines to the O.Ps regarding calculating the amount due by the complainant ends of justice will be met.  Hence we pass the following order by answering Point No.2 Partly in the affirmative.

ORDER

1. The complaint is hereby partly allowed. Parties to bear their own cost.
2. O.Ps are hereby directed to calculate interest for the period 1.04.2009 to 1.04.2014 (moratorium period) on the principle amount lent to the complainant and keep it as a separate interest entity and give credit to the same as and when they receive the subsidy from the nodal bank or from the Government of India taking into account a sum of Rs.65,000/- already received towards interest subsidy.
3. O.Ps are directed to calculate interest on the amount of Rs.85,520/- released as education loan on 22.9.2008 till 31.03.2009 and on the amount released during the course of education of the complainant and make it as principle amount on 1.4.2014 and calculate interest on the said amount as per the loan agreement between the complainant and the O.P and recover the same from the complainant by re-fixing the EMI’s after taking into consideration the payment of 37 EMI”s paid by the complainant. 
4. The O.Ps arehereby directed to file the statement of accounts as instructed above with a copy to the complainant and to re-fix the period of payment by the complainant and comply the above order within 30 days from the date of receipt of this order and submit the compliance report to this forum within 15 days thereafter.
5. Send a copy of this order to both parties free of cost.

(Dictated to the Stenographer over the computer, typed by him, corrected and then pronounced by us in the Open Forum on this 25^thDay of AUGUST 2018)

MEMBER                            PRESIDENT

*RAK

ANNEXURES

1. Witness examined on behalf of the Complainant/s by way of affidavit:

Copies of Documents produced on behalf of Complainant/s:

Doc.No.1: Copy of letter to RBI dtd:03.06.2017 for clarification on calculation of EMI.

Doc.No.2: Copy of reply from Manager RBI dt 05.06.2017.

Doc.No.3: Copy acknowledgment from CEPC Bangalore dt 09.06.2017.

Doc.No.4: Copy of reminder dated 12.07.2017 from the complainant.

Doc.No.5: Copy of the communication stating  that loan repayment period extended to 10 years.

Doc.No.6: Copy of proof of having paid the EMI as certified by the O.P.

Doc.No.7: Copy of details of Principal loan amount, interest debits and interest. Subsidy credits during the moratorium period.

Doc.No.8: Copy of the medical reports and death certificate of mother of the complainant.

2. Witness examined on behalf of the Opposite party/s by way of affidavit:

RW-1: Mrs.N.Muthumeenakshi, Chief Manager of O.P.No.1 and Power of Attorney Holder for O.P.No.2 and 3.

Copies of Documents produced on behalf of Opposite Party/s

Doc.No.1:Copy of Loan application.

Doc.No.2: Copy of Income certificate.

Doc.No.3: Copy of Loan Statement.

Doc.No.4: Copy of letter dated 31.05.2016

Doc.No.5: Copy of Letter dated 31.05.2016.

Doc.No.6: Copy of Email correspondence.

Doc.No.7: Copy of Letter dated 01.07.2016.

MEMBER                        PRESIDENT