DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, SANGRUR .

                                                                         RBT Complaint No. 337

 Instituted on:  21.08.2018

                                                                          Decided on  :  02.02.2023      

1. Suresh Kumar Garg s/o Krishan Chand r/o Backside Scholar Public School, Village Dhanauri, Rajpura Distt. Patiala.                                                                  …. Complainant.                                                      Versus

1. ICICI Home Finance Co. Ltd. ICICI Bank Towners, Bandra Kurla Mumbai-400051.
2. ICICI Bank Ltd. (Home Loan Department) Leela Bhawan Market, Patiala.

                                                                ...Opposite parties. 

QUORUM                                       

JOT NARANJAN SINGH GILL: PRESIDENT

SARITA GARG                           : MEMEBR

KANWALJEET SINGH             : MEMBER

For the complainant  : Shri Gurpreet Kaur Tiwana, Adv.              

For the Ops              : Shri R.K. Pandey,Adv.

ORDER BY

KANWALJEET SINGH, MEMBER.

As per orders of the Hon'ble State Commission, vide Endst.No 10226 dated 26.11.2021, the present file received by transfer from District Consumer Disputes Redressal Commission, Patiala vide receipt no.481 dated 30.11.2021 to this Commission.

1. Complainant has alleged in the complaint that complainant has availed home loan from Ops alongwith his wife Rozy Garg, However, present complaint is filed by complainant as there is a matrimonial dispute between Husband and Wife. Sale deed of the plot i.e. Vasika number 2622 dated 03.01.1994, wherein the house is being constructed in the name of the complainant, all the installments are being deposited upto date by the complainant.
2. Vide application/file number 7771681827 dated 28.04.2004 the complainant entered into an agreement for home loan of Rs. 7,00,000/- with FRR 7.7 % p.a. on floating rate of interest - .25% p.a. = 7.5% p.a. on monthly rest of Rs. 2967/- for the terms of repayment of 180 months and the loan account number is LBRJP00000866388. Ops rescheduled the interest and have charged more rate of interest @14.21%. The complainant paid all the EMI's as per the scheduled/increased rate of interest.
3. That after the complainant came to know that the other financial institutions were charging lesser rate of interest on home loan i.e. 9.50% on home loans. Complainant approached Op.no.2 several times with his grievances that as the loan was availed on floating rate of interest @7.7% and due to increase in the rate of interest at that time, they started charging @ 14.21% p.a. but when the rate of interest decreased, they still remain charging higher rate of interest, which in liable to be reduced. Complainant was never informed about the change in the rate of interest. Complainant issued legal notice dated 27.07.2018. The complainant has two grievances against the Ops. Firstly the excessive rate of interest being charged as detailed above and secondly when the complainant requested the Ops to allow him to change the bank from where the complainant can get lesser rate of interest. The Ops flatly refused to do so. These acts of Ops amount to deficiency in services and unfair trade practice.  The complainant prayed that the complaint may kindly be accepted and Ops be directed to reduce the rate of interest at the present prevailing rate of interest and to adjust the amount which was already charged in shape of EMI and reschedule the account, to pay Rs. 50,000/- on account of mental harassment and agony.  To pay 22000/- as litigation expenses. Any other alternative relief which the forum may deems fit, may kindly be granted to the complainant.
4. Upon notice, Ops appeared and filed written reply and taking preliminary objections that complainant is not a consumer and the complaint is bad for non -joinder of necessary parties as the main applicant Rosy Garg has not been impleaded as party in the complaint. The customer Mrs Rosy Garg and complainant have approached ICICI Bank for a home loan and after considering their request and accessing the eligibility, bank had sanctioned a loan amount of Rs. 7,00,000/- vide loan account number LBRJP00000866388 in august 2004 with floating rate of interest ( FRR 8.75%- margin 0.39%)=8.36% p.a. which was repayable in 180Months. As per the sanction letter and loan agreement signed and accepted by the complainant at the time of disbursement, the rate of interest type opted as "Floating Rate of Interest". The final rate offered to a customer is a function of the bench mark rate and the margin associated with the loan. The margin remains constant throughout the loan. The appropriation of EMI toward interest and principal would depend on the rate of the interest applicable to the complainant. There was no excess interest levied to customer's loan account at any point in time. Where ever there is any increase in rate of interest, the bank increase tenure of the loan subject to permissible limits, in order to avoid burdening the customer with higher EMI and the same has been mentioned in the loan agreement duly singed by the customers at time of disbursement. In case customer wish to reduce the tenure, he may opt to increase the EMI or make a part pre payment or combination of both. Whenever there is increase or decrease in interest rate, change in tenure or EMI the reset letters were sent by bank to complainant's communication address towards the intimation of the same. The changed rate would apply upon execution of the conversion agreement and payment of fees. Reply on merits, Ops alleged that it is correct to the extent that the presently rate of interest @ 14.21% has been charging by the Ops as per loan agreement. Complainant was duly informed as and when rate of interest was revised on his loan account. Further the complainant has also obtained interest certificates from the Ops on every financial year since his loan account started and there is every possibility that he may have availed tax rebate from income tax department on the paid interest. Hence the complainant could not take a plea that he has no knowledge regarding the charging of interest by the bank. It is denied that the complainant had paid all his dues rather as the complainant had opted the repayment mode of auto debit from his account number 016201516652. However, EMI's were returned unpaid, the bounce charges/ late payment charges are levied to the loan account. The bounce charges of Rs. 25,751/- and additional interest (Late Payment Charges) of Rs. 10,537/- have been levied in the loan account. As on  04.12.2018, installment overdue of Rs. 4918/- Late Payment Charges Rs. 9102/- bounce Charges of Rs. 23,537/- and other Charges of Rs. 223.66/- are yet to be paid. The Ops have increased and even decreased the rate of interest since 2004 in the loan account of complainant. No legal notice was received by the Ops. The Ops have never refused the complainant to transfer his loan case with some other bank. It is denied that the Ops have committed any deficiency in service or unfair trade practice as alleged by the complainant. Lastly, Ops prayed that the complaint may kindly be dismissed with cost.
5. Complainant has tendered into evidence Ex. C-A affidavit alongwith documents Ex.C-1 to Ex.C-6 and closed the evidence. Similarly, Ops tendered into evidence Ex. Op-A affidavit of Sh. Arshdeep Kumar, Legal Manager of Op alongwith documents Ex. Op.1 to Ex.Op-17 and closed the evidence of Ops.
6. We had heard the learned counsel of both the parties and gone through the record file carefully with the valuable assistance of the learned counsel for the parties. During arguments the contentions of the learned counsel of both the parties are similar to their respective pleadings. So, there is no need to reiterate the same to avoid repetition. Now come to major controversy whether the complainant is liable for relief as claimed by him in his prayer?
7. No doubt it is admitted fact that the complainant had availed home loan of Rs. 7,00,000/- on 28.08.2004 from Ops. The floating rate of interest was fixed 7.75%. The adjustable rate of interest of Ops was fixed floating reference rate - .25% p.a. = 7.5% p.a. on monthly rest of Rs. 2967/- for the terms of the repayments of 180 months and the loan account number is LBRJP00000866388. As per para no.3 of complaint, the complainant had opted for floating rate of interest. As per para number 1 of the complaint, complainant claimed that he had paid all the installments of Home Loan. Complainant issued a legal notice dated 27.07.2018 which is Ex. C-3.
8. On the other hand, reply on merit of Ops had mentioned the schedule since October 2005 to November 2018. During this period the installments cheques of complainant with regard to Home Loan was bounced on the ground of "Insufficient Funds". We have examined the document Ex.Op.3 in which the revised rate of interest mentioned as 13.75% to 14 % p.a. w.e.f. 03.01.2011, later on 14% to 14.50% p.a. w.e.f. 24.02.2011, As per Ex.Op.4 Loan interest increased from 14.50% to 15% w.e.f. 07.05.2011, the rate of interest increased from 14.11% to 14.61% p.a. As per Ex. Op.5 Loan interest increased from 15% to 15.25% p.a. from 04.07.2011, increased from 15.25% to 15.75% p.a. from 13.08.2011, As per Ex.Op.6 decreased rate of interest was 15.75% to 15.50% p.a. on 23.04.2012. Complainant interest was decreased 15.36% to 15.11% p.a. As per Ex. Op.7 interest was increased from 15.50% to 15.75% from August 2013. As per Ex. Op.8 decreased interest was 0.25% p.a. w.e.f. 10.04.2015 further increased 0.05% w.e.f. 26.06.2015. As per Op.9 interest decreased by 0.35% p.a. w.e.f. 05.10.2015. As per Ex.Op.10 interest decreased by 0.05% p.a. w.e.f. 01.10.2016. As per Ex.Op.11 interest decreased by 0.05% p.a. w.e.f. 03.01.2017. As per Ex.Op.12 interest decreased by 0.15% p.a. w.e.f. 28.04.2017. As per Ex. Op.13 interest decreased by 0.10% p.a. w.e.f. 10.08.2017. As per Ex.Op.14 interest decreased  by 0.15% p.a. w.e.f. 13.11.2017. As per Ex.op.15 interest decreased by 0.10% p.a. w.e.f 01.04.2018. As per Ex.Op.16 the rate of interest increased by 0.10% p.a. w.e.f. 31.08.2018. As per Ex. Op.17 which is repayment schedule of Complainant's Home Loan, where Interest Shown Rs. 2,027,222/ and installment amount shown as Rs. 2,727,222/-  The Ops pleaded in his written arguments at para no.12 that repayment schedule is Ex.Op.17 which clearly shows the period when the changes has been made in the interest rate. As per loan agreement Ex.Op1 at page number 19 was specifically mentioned as the cheque dishonour charges was Rs. 200/-. On the other hand, as per Ex. Op2 the loan account statement at page number 18 since 09.08.2016 to 08.06.2017 ops had illegally debited cheque bounce charges of Rs. 500/-, similarly, since 10.07.2017 to 09.11.2018 ops had already been debited the cheque bounce charges Rs. 590/-. It is a well settled principal of Law is that "The Person who seeks equity must do equity". To trace out the veracity of truth this Commission Examined all the documents of both the parties, but the Ops failed to produce any cogent evidence with regard to Reserve Bank of India guidelines for increased/decreased interest for Home Loan time to time. This Commission observed according to Ex.Op.1 Home Loan agreement the total number of EMI's are settled between the parties of the complaint are 180 meaning thereby the loan term was settled for 15 years, while, as per Ex.Op. 17 pre EMI schedule commenced since 30.09.2004 and the EMI schedule will be completed on 07.08.2033.It seems to this Commission that Ops fixed the term loan for 29 Years, which is illegal, arbitrary, unjust and without the consent of the complainant. From this angle, the ops have committed clear cut unfair trade practice qua the complainant. The loan agreement was executed on 28.08.2004. The Ops levied the rate of interest from 7.5% to 15.36% qua the complainant. This Commission observed that the charging of interest should be reasonable. However, the Ops have failed to bring a cogent evidence on record that how much amount is due toward the complainant at this stage and in what manner the amount is calculated. The Ops even failed to disclose the outstanding amount qua the complainant. We feel that the Ops placed on record Ex.Op.3 to Op.16 to prove the revision of rate. But the counsel for the Ops are unable to prove the mode of the dispatch of these notices to complainant. Neither Postal receipts nor dispatch record of the Ops have been placed on record, that how it was dispatched to the complainant. Therefore, without sending increased interest rate letter and consent of the complainant, the interest rate cannot be resettled by Ops. We feel that the act of Ops are not legal before the eyes of Law. In these circumstances the Ops cannot charge enhanced rate of interest without the consent of the borrower/complainant. We placed reliance on order dated 27.08.2019 passed by Hon'ble National Commission, RP number 2954/2015 titled as "ICICI Bank Ltd. Vs Karam Chand and Anr". Relevant portion of the same is reproduced as: 15. The RBI has issued its circulars from time to time, how the rate of interest is to be changed. RBI circular number DBO D.Dir. BC.5/13.03.00/2006-07 dated 01.07.2006, the loans upto 2 Lakh carry the prescription of not exceeding Benchmark Prime Lending Rate (BPLR) and on loans above Rs. 2 Lakh, banks are free to determine the rate of interest subject to BPLR and spread guidelines. In the same circular dated 01.07.2006, it has been mentioned how the interest rate are to be fixed, as referred as under :

"Banks have the freedom to offer all categories of loans on fixed or floating rates subject to conformity to their Asset-Liability Management (ALM) Guidelines. In order to ensure transparency, Banks should use only external or market based rupee benchmark interest rate for pricing of their floating rate loans products. The methodology of computing the floating rates should be objective, transparent and mutually acceptable to counterparties. Banks should not offer floating rate loans linked to their own internal benchmarks or any other derived rate based on the under line. This methodology should be adopted for all new loans. In the case of existing loans of longer/fixed tenure, banks should reset the floating rate according to the above said method at the time of review or renewal of loans accounts after obtaining the consent of the concerned borrowers. Whether he wants to continue the loan with the enhanced rate of interest or he could adopt for other option i.e. closing of the account or shifting of the account. Therefore, information/consent of the borrower is the predominant clause while changing the floating rate of interest. In another judgment "Hon'ble National Commission reported in 2012(4) CPJ 415(NC) IDBI Bank Ltd. (M/s) Vs Subhash Chand Jain and Anr" in which it was again observed that the concept of floating rate of interest flows from the regulation of the rate of interest by the RBI guidelines and not arbitrarily by the service provider without informing or telling the reasons for increasing the rate of interest in General terms and not that there is inflationary market. Every discretion has to be exercised Judicially. So, as to make person understand fully as to the reason and ground for increasing the rate of interest and not arbitrarily under the grab of floating rate of interest."

9. It is writ large on the file, that as per documents Ex.C-6 which is Home Loan Agreement, we have minutely examined this document, schedule- B of Loan agreement clause (B) is reproduced  as under.

1. The adjustable interest rate applicable to the loan is as stated herein below.
2. Until and as varied by ICICI Bank in terms of this agreement, the adjustable interest rate shall be the percentage of margin stated herein below and the FRR plus applicable interest tax or other statutory levy if any. Provided that the foresaid interest rate shall be reset quarterly, based on the then prevailing FRR, and the borrower shall pay interest at such reset rate as may be notified by ICICI Bank to the borrower.
3. The borrower shall reimburse or pay to ICICI Bank such amount as may have been paid or be payable by ICICI Bank to the Central or State Government on account of  any tax levied on interest (and/or other charges including the PEMII) on the loan by the Central or State Government. The borrower shall make the reimbursement or payment as and when called upon to do so by the ICICI Bank.  

10. This Commission observed that Ex. C-6 and Ex.Op.1 are Home Loan documents/loan agreement at page no.18 the floating reference rate of interest mentioned as 7.75% and adjustable rate of interest mentioned as 0.25%. So, the rate of interest was fixed 7.5% p.a. additional interest 24% p.a. The term of repayment was fixed 180 Months. The EMI was fixed Rs. 2967/-. On this loan agreement both the parties put their signature at page number 20. It is a well established principal of law is that the parties are binding upon the agreement executed between them. No party can violate the terms and conditions of the agreement.
11. Resultantly, keeping in view the facts and circumstances of the present complaint in hand and in the light of decisions of the Hon'ble National Commission, we partly allow the complaint of the complainant and direct the Ops to prepare de novo repayment schedule of the Home Loan, as per the loan agreement Ex.Op.1 i.e. 7.5% p.a. . Further the Ops are directed to adjust the increased interest rate into the principal amount of Home Loan of the complainant and to refund the excess amount, if any, charged from the complainant. Further the Ops are directed to pay a consolidated a sum of Rs. 10000/- as compensation and litigation expenses.
12. This order be complied by Ops within a period of 60 days from the date of receipt of order.
13. The complaint could not be decided within the statutory time period due to heavy pendency of cases.
14. Copy of this order be supplied as per rules by District Consumer Disputes Redressal Commission, Patiala. File be sent back to the District Consumer Commission, Patiala.     

                                Announced.

                                02 February,   2023.

( Kanwaljeet Singh)    (Sarita Garg)  (Jot Naranjan Singh Gill)

    Member                        Member                  President