Sri Shyamal Gupta, Member

The complaint case since been dismissed by the Ld. District Forum, Kolkata-I (North) vide its order dated 11-06-2014, aggrieved by/dissatisfied with such decision, this Appeal is filed by the Complainants, Sri Suven Mazumdar and Smt. Seuli Mazumdar.

In short, case of the Complainants is that, they took a home-loan worth Rs. 4,00,000/- from the OP which was repayable in 156 instalments @ Rs. 3,967/- per month.  However, as the OP charged excessive interest and penalty charges to the said account of the Complainants, which was far above the RBI mandated interest, outstanding due in respect of the said loan account escalated leaps and bounds.  According to the Complainants’ own calculation, they owed a sum of approx. Rs. 40,000/- to the OP.  Twice the Complainants served legal notice upon the OP through their Ld. Advocate calling upon the OP to mend its ways, but to no avail.  So, the complaint was filed.

In its WV, the OP submitted that said loan was sanctioned in favour of the Complainants on floating interest rate basis.  The OP further stated that banks cannot increase or decrease interests as per their own whims and fancies, but they have to act as per the direction of the RBI in this regard.  The OP denied any arbitrariness in its conduct, as alleged.

Decision with reasons

Ld. Advocates for the parties were heard at length in the matter.  We have also gone through the documents on record.

It seems from the record that the subject loan was sanctioned in favour of the Appellants on floating interest rate basis.  No doubt, while applying for loan, the Appellants ought to minutely consider the pros and cons of the terms and conditions contained in the agreement and after understanding the implications of said terms and conditions fully, put their signatures on the dotted lines. 

It is imperative on the part of a loan-taker to analyze the demerits of the Floating interest rate system before making a decision. One cannot lose sight of the fact that, in case of floating interest rate, the rate of interest relies heavily on the market situation, which is volatile and unpredictable in nature. Due to this, the interest rate risk may increase to a limit that the loan may become difficult to repay within stipulated time. Another disadvantage of floating interest rate system is that, it heavily depends on prime lending rate.  In case of negative changes in the market, the financial institutions try to play safe by shifting their sudden expense over customer’s shoulders. For this they start charging high margin over prime lending rates that ultimately affects the pockets of the customer. However, since the terms and conditions contained in the agreement empowers Banks to do so, after putting their signatures on the dotted lines, it is futile for the aggrieved consumers to cry foul over the same once they confront the hard reality.

It is though claimed by the Appellants that they signed the agreement hastily, it is no excuse to justify their casual approach.  Once one put one’s signature on the dotted line, there is no point crying foul over the same.  Terms and conditions of an agreement is binding on both sides. 

The Respondent submitted a Statement of Account in respect of the concerned loan account.  Significantly, the Appellants made no such endeavour to point out any arbitrariness in the same.  Mere allegation does not prove anything.  In terms of Sec. 101 of the Evidence Act, 1872, the burden of proof of existence of any fact lies on that person who makes the claim.  That obligation being not discharged by adducing tangible proof in this regard, it was totally futile on the part of the Appellants to expect any favourable decision from the Ld. District Forum. 

On due consideration of the entire facts and circumstances of the case, I find no infirmity with the impugned order. I, therefore, see no reason to interfere with the same in any manner whatsoever.

The Appeal, accordingly, fails.

Hence,

O R D E R E D

The Appeal stands dismissed on contest against the Respondent.  The impugned order is hereby affirmed.  No order as to costs.