DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BARNALA, PUNJAB.

 

Complaint Case No : 183/2019

Date of Institution   : 29.10.2019

Date of Decision    : 14.07.2020

Vikas Kumar son of Mohan Lal C/o Guru Nanak Jewelers, Near Police Station City, Sadar Bazar, Barnala.     

                        …Complainant

Versus

1. ICICI Home Finance Company Limited (IHFC), SCO-6, 2nd Floor, Above Bank of India, Chotti Baradari, Patiala-147001 through its Authorized Person. 

2. ICICI Bank, Pacca College Road Branch, Barnala through its Branch Manager.

...Opposite parties

3. Vinod Kumar son of Mohan Lal proprietor of Babu Ram Mohan Lal Jewelers, Gokal Market, First Floor, Barnala.  

    …Performa Opposite party

 

Complaint Under Section 12 of Consumer Protection Act, 1986.

Present: Sh. S.M. Gupta counsel for complainant.

Sh. Anuj Mohan counsel for opposite parties No. 1 & 2.

None for opposite party No. 3. 

 

Quorum.-

1. Sh. Kuljit Singh : President

2.Sh. Tejinder Singh Bhangu : Member

 

(ORDER BY KULJIT SINGH, PRESIDENT):

The complainant namely Vikas Kumar has filed the present complaint under Consumer Protection Act, 1986 (in short the Act) against ICICI Home Finance Company Limited and others (hereinafter referred as opposite parties).  

2. The facts leading to the present complaint are that the complainant and performa opposite party No. 3 had availed a home loan of Rs. 4,14,000/- from the opposite parties vide Loan Account No. LBBNL00000835545 and the rate of interest on the said loan amount was floating i.e. liable to be increased or decreased as per the policy of Reserve Bank of India. It is alleged that at the time of availing the loan the rate of interest was 7.75% per annum and the same was required to be paid in 180 monthly installments, which was fixed at Rs. 3,987/- per month. The first installment has to be paid in the month of September 2004 and an agreement was duly executed to this effect between the parties. The performa opposite party No. 3 has not joined with the complainant in the present complaint and as such he has been impleaded as perform opposite party. It is further alleged that previously the complainant and performa opposite party No. 3 had paid the installments in cash or through cheque with the opposite parties No. 1 & 2 and thereafter in the month of March 2007 an account bearing No. 051801500730 has been opened by the complainant with the opposite party No. 2 and the opposite parties automatically deduct the installment of the said loan amount from the said account. In the month of October 2019 the complainant obtained the copy of the statement of his loan account then it has come to the knowledge of the complainant that the opposite parties had deducted 182 installments from the account of the complainant and further extended the installments from 180 to 302 without any intimation to the complainant and to performa opposite party No. 3. The complainant was not informed about such change in the rate of interest or installments. Therefore, nothing is due against the complainant, but the opposite parties demanding Rs. 6,11,583/- from the complainant and from performa opposite party No. 3 which is against law and facts and against the principle of natural justice. It is further alleged that on inquiry, the Branch Manager refused to furnish reasons and stated that the employee of the bank has nothing to do with the account because every entry is done by the computer. Further, increase in the installments from 180 to 302 without knowledge/consent of the complainant is amounts to deficiency in service and unfair trade practice on the part of opposite parties. The complainant has approached the opposite parties number of times for issuance of "Account Liquidation Certificate/No Due Certificate", but the opposite parties flatly refused to do the same. Hence, the present complaint is filed for seeking the following reliefs.- 

i) The opposite parties are liable to issue "Account Liquidation Certificate/No Due Certificate" to the complainant. The opposite parties are further may kindly be directed not to demand the above said illegal amount.  

ii) To pay Rs. 1,00,000/-  as compensation and Rs. 11,000/- as litigation expenses.   

iii) The opposite parties are directed to refund the amount of Rs. 10,194/- i.e. of two installments (181 & 182 installment) which have been illegally deducted by the opposite parties.

3. Upon notice of this complaint the opposite parties No. 1 and 2 appeared and filed written version taking preliminary legal objections. It is averred in the objections that the present complaint is false frivolous and vexatious is liable to be dismissed and the present complaint is not maintainable. The complainant has unnecessarily dragged the opposite parties into uncalled litigation. The complainant has got no cause of action in locus standi to file against the opposite parties. It is further averred that the complaint is hopelessly time barred as the loan in question was availed in 2004 and now after the lapse of about 15 years the complainant is raising the dispute about the rate of interest and instalment. Further, the complainant has concealed and has suppressed the material and relevant facts of the case. The complaint has been filed with malafide and dishonest intention and has not only concealed the material facts from the Forum but has also twisted and distorted the same to suit their own convenience and to mislead this Forum. 

4. On merits, it is submitted that in the month of July 2004, complainant and opposite party No. 3 approached the opposite parties and requested for the grant of Home Loan and submitted an application form No. 7771678296 duly signed by the complainant and opposite party No. 3 and after considering their request and assessing their eligibility, the answering opposite parties had sanctioned the loan amount of Rs. 4,14,000/- to the complainant vide Loan account No. LBBNL00000835545 in July 2004 with Floating Rate of Interest (FRR 7.75% - Margin 0%) = 7.75% p.a. which was repayable in 180 months. The complainant and opposite party No. 3 signed the loan agreement after admitting the contents thereof to be correct. It is further averred that the said loan amount was repayable in 180 equal monthly installments of Rs. 3,987/- subject to variation of interest as per terms and conditions of the loan agreement and at the time of sanctioning the loan the rate of interest was 7.75% per annum. The factum of adjustable rate of interest is duly mentioned in the loan agreement. As per the sanction letter and loan agreement, the rate of interest type opted is "Floating Rate of Interest" and floating interest rate applicable to the loan account is subject to changes. The borrowers of such floating rate loans have a transparent rate which gets reviewed from time to time throughout the tenure of the loan. As cost of funds is one of the components of FRR, any change in cost of funds would therefore impact all customers whose loans are linked to FRR. Further, the spread between the FRR and the actual rate of interest (ROI) offered to the customer is called as "Margin". Any change in the ROI is on account of the changes in the FRR. The final rate offered to a customer is a function of the benchmark 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 interest applicable to the customer. There was no excess interest levied to the said loan account at any point in time. It is wrong that nothing is due against the complainant. It is further averred that since the loan was sanctioned at floating rate of interest/ adjustable rate of interest, therefore the opposite parties rightly increased the EMI schedule from 180 EMI to 302 EMIs as per terms & conditions of the agreement as per schedule B sub clause D i.e. amortisation, the EMI and its period be changed time to time as per the sole discretion of opposite parties. It is further averred that as per the said clause the opposite parties has the discretion to change the EMI and its terms to meet the requirement. Therefore, without increasing the amount of EMI in order to easy making the payment at the hands of complainant, the answering opposite parties increased the EMIs. The said EMIs may further increase or decrease depending upon the rate of interest. Whenever there is an increase in rate of interest, the answering opposite parties increase tenure of the loan to the customers, subject to permissible limits, in order to avoid burdening the customer with higher EMI the same has been mentioned in the loan agreement duly signed by the complainant at the time of disbursement. Further, as per the revised RBI Guidelines now, the customer have option of migrating to new benchmark External Benchmark Based Lending ("EBBL”) which is available for existing customers. The customers have option to reprice their Loan Account to new Benchmark and margin. The customer would be required to visit an asset serving branch and execute a conversion agreement. The changed rate would apply upon execution of the conversion agreement. At the time of availing the loan customer was fully aware of rate of interest, tenure of the loan, EMIs of the loan, along with other details and the same were clearly explained to customer, at the time of disbursal of loan. Based on the same, the loan agreement was executed by customer. In terms of the loan agreement, customer had agreed to make timely & regular repayment of loan installments, which were the essence of the contracts. Further, at the time of availing this loan, customer was provided with the copies of the loan agreement and other documents signed/entered by him along with amortization schedule of the repayment, which clearly mentioned the amount adjustable towards principal and interest at every stage of repayment. The said loan was disbursed in July 2004 and repayment mode was Post Dated Cheques (PDC). The PDCs were presented duly on the EMI due date ie 1st of every month from the month of September 2004 till September 2007. However, customer’s EMIs were returned unpaid which is as under:-

Month

Cheque number

Bounce reason

January 2005

389205

Insufficient funds

November 2005

389127

Insufficient funds

It is further averred that PDCs were exhausted in August 2007 and intimation letter related to PDC exhaust/submitting new PDCs for banking was sent to customer’s communication address through post on May 2007, but due to non-receipt of continuation PDCs from your end PDCs was not banked in the month of September 2007 on due date. It is further averred that on request from customer in September 2007, his repayment mode was change from PDC to Auto Debit (AD) and accordingly AD Transactions were presented duly on the EMI due date i.e 1st of every month from October 2007. However, the EMIs were returned unpaid as under:-

Month

Bounce reason

November 2019

Insufficient funds

It is further submitted that whenever EMIs are returned unpaid, bounce charges are levied to the loan account. Late payment charges are levied to the loan accounts when EMIs are paid after the due date. Due to all above reasons, bounce charges of Rs.1,745.00 and Additional Interest (Late payment charges) of Rs.4,627.00 were levied in the loan account. As on date, instalment overdue of Rs. 4,807.63, Additional interest (late payment charges) of Rs 4,627.00 and bounce charges of Rs 1,724.00 are reflecting as pending in the loan account. In this case, customer had deposited cash of Rs. 4,118.00 in the month of January 10, 2005 towards pending EMI of January 2005 at Patiala Branch, but the said receipt was updated in excess by EMP ID-HPTSANGB instead of adjusting with pending EMI. The said amount was adjusted with the pending EMI on April 25, 2009. Due to delay in adjustment in system, the wrong overdue charges of Rs. 3,930.00 have been generated which need to be waived off and also in SOA bounce charges of Rs 200.00 has been wrongly created which is not applicable to the customer. For waiver off Overdue charges of Rs.3930/- and Bounce charges of Rs.200/-. The other allegations of the complainant are denied and prayed for the dismissal of complaint.  

5. The opposite party No. 3 also filed written version. It is averred that the loan obtained was utilized by the complainant and it was agreed upon verbally between the complainant and the answering opposite party that all the installments has to be paid by the complainant and as such the complainant has opened the account with the opposite party No. 2 in his name. It is further submitted that the answering opposite party has not received any notice or letter regarding enhancement of installment/EMI's of installments is against the principle of natural justice and against the agreement entered between the parties. 

6. In support of his case the complainant tendered into evidence his own affidavit Ex.C-1, copy of welcome letter Ex.C-2, copy of loan agreement Ex.C-3, copies of account statement Ex.C-4 & Ex.C-5 and closed the evidence. The complainant has filed rejoinder in support of his  case in which he reiterated the averments as mentioned in the complaint.   

7. To rebut the case of complainant, the opposite parties No.1 and 2 tendered into evidence affidavit of Sparsh Nagrik Ex.O.P-1.2/1, copy of offer letter dated 15.7.2004 Ex.O.P-1.2/2, copy of loan agreement Ex.O.P.1.2/3, copies of letters regarding revision in rate of interest dated 1.7.2009, 4.9.2010, 15.1.2011, 15.4.2011, 11.10.2011, 7.7.2012, 17.10.2013, 1.7.2015, 15.10.2016, 11.4.2017, 8.7.2017, 11.10.2017, 9.1.2018, 7.4.2018 & 8.10.2018 Ex.O.P.12/4 to Ex.O.P.1.2/18 respectively, copy of rate of interest Ex.O.P.1.2/19 and closed the evidence. 

8. The opposite party No. 3 also tendered into evidence his affidavit Ex.O.P-3/1 and closed the evidence. 

9. The complainant in support of his case has filed rejoinder in which he reiterated the averments as mentioned in the complaint. 

10. We have heard the learned counsel for the parties and have gone through the record on file. Written arguments filed by complainant and opposite parties No. 1 & 2 have also been gone through. 

11. The case of the complainant is that he availed a home loan of Rs. 4,14,000/- from the opposite parties vide Loan Account No. LBBNL00000835545 and the rate of interest on the said loan amount was floating i.e. liable to be increased or decreased as per the policy of Reserve Bank of India. Ld. Counsel for the complainant argued that at the time of availing the loan the rate of interest was 7.75% per annum which was required to be paid in 180 monthly installments at Rs. 3,987/- per month. It is further argued by the Ld. Counsel for complainant that in the month of October 2019 the complainant obtained the copy of the statement of his loan account and he found that the opposite parties had deducted 182 installments from the account of the complainant and further extended the installments from 180 to 302 without any intimation to him and nothing is due against him, but the opposite parties demanding Rs. 6,11,583/- from the complainant. Ld. Counsel for the complainant further argued that increase in the installments from 180 to 302 without knowledge/consent of the complainant is amounts to deficiency in service and unfair trade practice on the part of opposite parties. 

12. To face the situation, the Ld. Counsel for opposite parties No. 1 & 2 argued that in the month of July 2004, complainant and opposite party No. 3 availed the above said loan of Rs. 4,14,000/- vide Loan account No. LBBNL00000835545 in July 2004 with Floating Rate of Interest (FRR 7.75% - Margin 0%) = 7.75% p.a., which was repayable in 180 equal monthly installments of Rs. 3,987/- subject to variation of interest as per terms and conditions of the loan agreement. At the time of sanctioning the loan the rate of interest was 7.75% per annum. It is further argued by the Ld. Counsel for opposite parties No. 1 & 2 that it is wrong that nothing is due against the complainant. Further, the loan was sanctioned at floating rate of interest/ adjustable rate of interest, therefore the opposite parties rightly increased the EMI schedule from 180 EMI to 302 EMIs as per terms & conditions of the agreement as per schedule B sub clause D. It is further argued that the PDCs were presented duly on the EMI due date ie 1st of every month from the month of September 2004 till September 2007, however, customer’s two EMIs (i.e. January 2005 and November 2005) were returned unpaid due to insufficient funds. Further, on request from customer in September 2007, his repayment mode was change from PDC to Auto Debit (AD) and accordingly AD Transactions were presented duly on the EMI due date i.e 1st of every month from October 2007, however, the EMIs were returned unpaid and bounce charges are levied to the loan account. It is further argued that late payment charges are levied to the loan accounts when EMIs are paid after the due date and due to the above said reasons, bounce charges of Rs.1,745.00 and Additional Interest (Late payment charges) of Rs.4,627.00 were levied in the loan account. Ld. Counsel for the opposite parties No. 1 & 2 further argued that regarding the change of rate of interest, the complainant was informed time to time by sending letters. 

13. Perusal of the record shows that the complainant availed a home loan of Rs. 4,14,000/- from the opposite parties vide Loan Account No. LBBNL00000835545 and the rate of interest on the said loan amount was floating i.e. liable to be increased or decreased as per the policy of Reserve Bank of India. It is also the case of the complainant that at the time of availing the loan, the rate of interest was 7.75% per annum and the same was required to be paid in 180 monthly installments, which was fixed at Rs. 3,987/- per month subject to variation of interest as per terms and conditions of the loan agreement. 

14. In the present case the allegation of the complainant is that the complainant was not informed by the opposite parties No. 1 & 2 about such changes in the rate of interest or installment and without intimation/consent to the complainant the rate of interest could not be changed. 

15. To rebut the allegation of the complainant, the opposite parties No. 1 & 2 have placed on record letters Ex.O.P.1.2/4 to Ex.O.P.1.2/18 to show that the information regarding the revision in rate of interest of Loan LBBNL00000835545 has been sent to Vikas Kumar B11/683 Shaheed Bhagat Singh Road Mandir Market Sangrur Barnala-148101 Punjab. Ld. Counsel for opposite parties No. 1 & 2 argued that these letters/informations have been sent to the complainant on the adress on which the welcome letter Ex.C-2 has been sent to the complainant which was duly received by the complainant. 

16. Further, record placed on record by the opposite parties No. 1 & 2 proves that loan was taken on floating rate of interest and floating rate was liable to be increased or decreased as and when rates were increased and decreased by RBI. Even, this fact is also mentioned in the para number (a) of the complaint of the complainant. We are of the view that however, if the intimation regarding the change of rate of interest has not been sent to the complainant even then, it cannot be inferred that rate of interest could not have been increased when loan had been taken on 'floating rate of interest'. The opposite parties No. 1 & 2 have also placed on record copies of letters regarding News Release of ICICI Bank, Ex.O.P.1.2/29 to Ex.O.P.1.2/32 to show that the news regarding new floating home loan rates have been published by the Bank time to time. On the other hand, the complainant has failed to prove on record by adducing any cogent, relaible and trustworthy evidence that the information regarding the change of rate of interest has not been given to him by the opposite parties No. 1 & 2 (Bank). Ld. counsel for the complainant has failed to place on record any document showing that after Loan Agreement excess rate of interest was charged by opposite parties No. 1 & 2 from the complainant.

17. The another allegation of the complainant is that the opposite parties increased the the installments from 180 to 302 without the knowledge of the complainant. The opposite parties stated that as the loan sanctioned at "floating rate of interest", as such the opposite parties have the right to increase the rate of interest. The opposite parties further stated that they increased the installments schedule from 180 to 302 EMIs as per terms and conditions of the agreement as per schedule B sub clause D. 

18. Ld. Counsel for the opposite parties No. 1 & 2 has relied upon the judgment of Hon'ble National Commission, New Delhi, in case titled ICICI Bank (Home Loan) Vs. Ganga Singh Shekhawat decided on February, 24 of 2015, in which the same view has been taken by the Hon'ble National Commission, New Delhi. 

19. In view of the above discussion, there is no merit in the present complaint and the same is accordingly dismisssed. Copy of this order be supplied to the parties free of costs. The file be consigned to the records after its due compliance.

  ANNOUNCED IN THE OPEN FORUM:

       14th Day of July, 2020 

 

            (Kuljit Singh)

            President

              

(Tejinder Singh Bhangu) Member