1. Heard Mr. Ankur Bansal, Advocate, for the complainants, Ms. Ekta Chaudhary, Advocate, for the opposite parties. 2. Sushil Kumar More, Sangeeta More, Bijoy Kumar More and Saroj More have filed CC/2395/2018 for directing Corporation Bank (now merged with Union Bank of India) to (i) refund Rs.918140/- i.e. the excess amount realized from them during 01.12.2010 to 18.11.2013 with interest @12% per annum from 19.11.2013 till the date of refund; (ii) pay Rs.25843/-, as incurred by them in transferring their loan to Citibank with interest @12% per annum from 19.11.2013 till the date of payment; (iii) pay Rs.4/- lakhs, as the compensation for mental agony and harassment; (iv) pay Rs.one lakh, as the litigation costs; and (v) any other relief, which is deemed fit and proper, in the facts of the case. The complainants stated that Corporation Bank (the opposite party) (for short ‘the bank’) was a banking company, incorporated under the Banking Companies (Acquisition & Transfer of Undertaking) Act, 1980 and engaged in the banking business. Around August/September, 2010, the complainants purchased Flat No.D-162, in the building “Kalpataru Towers”. For purchasing the flat, the complainants had to take loan. The officers of the bank represented that the bank used to provide housing loan in an utmost superior and professional manner in complete adherence to the prevailing banking laws and was an epitome of fair trade practice. Believing upon the representation of the bank, the complainants applied for home loan and the bank sanctioned Rs.11900000/- on 13.09.2010. The complainants further negotiated with the bank in respect of interest and repayment schedule. The bank agreed for fix interest @8% per annum for first year and thereafter @8.5% per annum for the 2nd and 3rd year and from 4th year onwards base rate + 1.25% per annum and 180 monthly EMI of Rs.113723/-. The Branch Manager recorded this negotiated term in the margin of the loan sanction letter dated 13.09.2010, in his hand writing, signed it and affixed his seal. The bank opened Loan Account No.CHSMT/01/100007 in the names of the complainants and disbursed the loan amount of Rs.11900000/- to the builder on 24.09.2010. The bank charged interest @8% per annum from 24.09.2010 to 30.11.2010. However, the bank started charging higher interest w.e.f. 01.12.2010. The complainants protested for charging of higher interest to the officers of the bank but of no effect. The complainants paid EMI under protest. Due to charging interest arbitrarily, the complainants applied for home loan of Rs.11500000/- to Citibank and incurring Rs.25843/- as loan processing fee, which was sanctioned on 01.11.2013. Citibank credited Rs.11500000/- to Loan Account No.CHSMT/01/100007 of the complainants with the bank on 18.11.2013 and closed it. The bank overcharged Rs.1034240/- as interest during 01.12.2010 to 18.11.2013. The complainants filed a complaint, before Banking Ombudsman, Maharashtra & Goa on 21.11.2013, against the bank, for charging excess interest. The Banking Ombudsman, Maharashtra & Goa, vide his order dated 26.02.2014, held that the bank had varied the rate of interest in first year, which was frozen @8.25% for the first year and charged the rate of interest as per increase in base rate for rest of the period, which was in accordance with the terms and conditions of Credit Sanction Intimation duly signed by the complainants. The bank then refunded Rs.116100/- to the complainants on 11.04.2014. The complainants filed a complaint before International Consumer Rights Protection Council, Mumbai for balance amount of Rs.918140/-, who issued notice to the bank on 08.05.2014. In spite of service of notice dated 08.05.2014, the bank did not come forward to settle the dispute. The complainants then filed CC/284/2014, before District Consumer Forum on 19.07.2014. The bank filed its written reply on 04.03.2015, in which, the bank has denied endorsement of the modified terms and conditions as endorsed in the margin of sanction letter dated 13.09.2010. District Forum, however, after completion of the pleading, by order dated 08.08.2018, held that sanctioned loan exceeded Rs.one crore as such, it had no pecuniary jurisdiction and returned the complaint for presentation of appropriate forum. Then this complaint was filed on 24.10.2018, alleging unfair trade practice. 3. Santosh Kumar More, Kamla More, Ajay Kumar More and Anju More have filed CC/2396/2018 for directing Corporation Bank (now merged with Union Bank of India) to (i) refund Rs.882497/- i.e. the excess amount realized from them during 01.12.2010 to 18.11.2013 with interest @12% per annum from 19.11.2013 till the date of refund; (ii) pay Rs.23202/-, as incurred by them in transferring their loan to Citibank with interest @12% per annum from 19.11.2013 till the date of payment; (iii) pay Rs.4/- lakhs, as the compensation for mental agony and harassment; (iv) pay Rs.one lakh, as the litigation costs; and (v) any other relief, which is deemed fit and proper, in the facts of the case. The complainants stated that Corporation Bank (the opposite party) (for short ‘the bank’) was a banking company, incorporated under the Banking Companies (Acquisition & Transfer of Undertaking) Act, 1980 and engaged in the banking business. Around August/September, 2010, the complainants purchased Flat No.D-152, in the building “Kalpataru Towers”. For purchasing the flat, the complainants had to take loan. The officers of the bank represented that the bank used to provide housing loan in an utmost superior and professional manner in complete adherence to the prevailing banking laws and was an epitome of fair trade practice. Believing upon the representation of the bank, the complainants applied for home loan and the bank sanctioned Rs.11800000/- on 09.09.2010. The complainants further negotiated with the bank in respect of interest and repayment schedule. The bank agreed for fix interest @8% per annum for first year and thereafter @8.5% per annum for the 2nd and 3rd year and from 4th year onwards base rate + 1.25% per annum and 126 monthly EMI of Rs.138722/-. The Branch Manager recorded this negotiated term in the margin of the loan sanction letter dated 09.09.2010, in his hand writing, signed it and affixed his seal. The bank opened Loan Account No.CHSMT/01/100006 in the names of the complainants and disbursed the loan amount of Rs.11800000/- to the builder on 24.09.2010. The bank charged interest @8% per annum from 24.09.2010 to 30.11.2010. However, the bank started charging higher interest w.e.f. 01.12.2010. The complainants protested for charging of higher interest to the officers of the bank but of no effect. The complainants paid EMI under protest. Due to charging interest arbitrarily, the complainants applied for home loan of Rs.10325000/- to Citibank and incurring Rs.23202/- as loan processing fee, which was sanctioned on 01.11.2013. Citibank credited Rs.10325000/- to Loan Account No.CHSMT/01/100006 of the complainants with the bank on 18.11.2013 and closed it. The bank overcharged Rs.1014718/- as interest during 01.12.2010 to 18.11.2013. The complainants filed a complaint, before Banking Ombudsman, Maharashtra & Goa on 21.11.2013, against the bank, for charging excess interest. The Banking Ombudsman, Maharashtra & Goa, vide his order dated 26.02.2014, held that the bank had varied the rate of interest in first year, which was frozen @8.25% for the first year and charged the rate of interest as per increase in base rate for rest of the period, which was in accordance with the terms and conditions of Credit Sanction Intimation duly signed by the complainants. The bank then refunded Rs.132221/- to the complainants on 11.04.2014. The complainants filed a complaint before International Consumer Rights Protection Council, Mumbai for balance amount of Rs.882497/-, who issued notice to the bank on 08.05.2014. In spite of service of notice dated 08.05.2014, the bank did not come forward to settle the dispute. The complainants then filed CC/283/2014, before District Consumer Forum on 19.07.2014. The bank filed its written reply on 04.03.2015, in which, the bank has denied endorsement of the modified terms and conditions as endorsed in the margin of sanction letter dated 09.09.2010. District Forum, however, after completion of the pleading, by order dated 08.08.2018, held that sanctioned loan exceeded Rs.one crore as such, it had no pecuniary jurisdiction and returned the complaint for presentation of appropriate forum. Then this complaint was filed on 24.10.2018, alleging unfair trade practice. 4. This Commission issued notice in the complaints, vide order dated 05.12.2019, which was served upon the bank on 28.01.2020. The bank did not file any written reply in above complainants. Corporation Bank was merged with Union Bank of India w.e.f. 01.04.2020. The complainants did not file any application for impleadment/substitution of Union Bank of India. In compliance of the order dated 05.12.2019, Union Bank of India filed affidavits of Hira Lal Mahto, the Branch Manager, (sworn on 13.04.2023) stating that as per Head Office Circular No.579/2010 dated 21.10.2010, prevailing rate of interest on home loan was 8.25% frozen for the first year, 9.25% for next two years and from 4th years onwards as per then prevailing base rate plus 2.5% at the beginning of the fourth year. The loans were sanctioned to the complainants vide letters dated 09.09.2010 and 13.09.2010 respectively by Zonal Office, in two copies. One copy of the Loan Sanction Letter had to return to Zonal Office after signatures of the complainants. The Loan Sanction Letters as returned to Zonal Office after signature of the complainants did not contain any handwritten Terms and Conditions as alleged. When the case was listed on 25.04.2023, the counsel for the bank informed that all the papers relating to sanction of the loan to the complainants were transferred to Citibank on 01.11.2013 as such at present, there is no paper with the bank relating to sanction of the loan. The bank filed its written synopsis. Although the bank was directed to file Head Office Circular No.579/2010 dated 21.10.2010 but Hira Lal Mahto, the Branch Manager, filed his Additional Affidavits (sworn on 11.05.2023) filed Circular No.3929/2023 dated 31.03.2023, which is not relevant for this case. 5. I have considered the arguments of the counsel for the parties and examined the record. A perusal of Loan Sanction Letters dated 09.09.2010 and 13.09.2010 respectively shows that Zonal Office, who was competent authority, sanctioned the loan and Sanction Letters mentioned as follows:- “We require your acknowledgement of having received Credit Sanction and confirmation that the terms and conditions as communicated herein for various credit facilities are acceptable to you. This intimation is therefore sent to you in duplicate. You are requested to return one copy duly signed at the relevant space in token of having accepted these terms. On receipt of the copy of Credit Sanction intimation duly signed by you and your executing the prescribed security documents along with guarantors, we will arrange to release the facilities”. 6. As per Head Office Circular No.579/2010 dated 21.10.2010, interest for first year was charged @8.25% per annum. Condition-(d) provides that Branch shall release the loan only after receipt of satisfactory legal approval from Zone-Legal department and complying with their observations. In paragraph-5 of the complaints, the complainants have stated that terms and conditions were amended by the Branch Manager. The Branch Manager was not a competent authority. The complainants have nowhere stated that this amended terms and conditions were ever communicated to the Zonal Office or approved by it, which was competent authority to sanction the loan, before disbursement of the loan on 24.09.2010. Admittedly, the bank was charging interest @8.25% per annum from December, 2010. Although, the complainants have alleged that they had deposited higher rate of interest under protest but no such protest letter was produced. For the first time, the complainants filed complaints before Banking Ombudsman, Maharashtra & Goa on 21.11.2013, against the bank, for charging excess interest. Therefore it is not proved that the terms and conditions as amended by the Branch Manager, was ever approved by Zonal Office. Contrary to it, it is proved that the bank was charging interest @8.25%, as per sanction letter from December, 2010. Supreme Court in Indian Bank Vs. Blue Jaggers Esates Ltd., AIR 2010 SC 2980, held that the arguments of the learned counsel for the respondents that the rate of interest is unconscionable, expropriatory and contrary to law also merits rejection because at no stage the respondents had questioned the terms on which loan and other financial facilities were extended by the appellant. ORDER In view of the aforesaid discussions, the complaints have no merits and are dismissed. |
