ORDER

BY SRI.H.R.SRINIVAS, PRESIDENT.

This is the Complaint filed by the Complainant U/S Section 12 of Consumer Protection Act 1986, against the Opposite Party (herein referred in short as O.P) alleging the deficiency in service in charging exorbitant interest in respect of the home loan borrowed by him and for refund of Rs.9,87,000/- which was paid in excess to the OP, Rs.5,00,000/- as damages for causing deficiency in service and Rs.1,00,000/- for causing harassment and mental agony, and for other reliefs as the Commission deems fit.

2.      The brief facts of the complaint are that;

The complainant along with his brother Mohammed Ibrahim obtained a loan of Rs.28,00,000/- in order to purchase an apartment bearing No.204-B, Prism Manor, 9^th Main, II Cross, BTM I Stage, Bangalore, by mortgaging the said flat from ING Vysya Bank Ltd., which is now being called as Kotak Mahindra Bank Ltd., OP in this case.  They executed the terms and conditions of the agreement and other documents in respect of the said loan. The period of repayment was 240 EMIs.  The interest agreed was floating rate of interest as per article 2.2 of the agreement of loan.  It is also mentioned therein that the rate of interest would be levied as per the guidelines of the RBI and the monthly installment was Rs28,902/-.  Since there was change in the rate of interest from HPLR to RPLR, and then to MPLR, OP ought to have reduced the rate of interest as per the directions of the RBI.  The complainants raised the monthly installment from Rs.28,902/- to 35,000/- from July 2017 onwards to clear the loan as early as possible. 

3.      It is averred that, on 24.03.2017 they made a request to the OP to reduce the rate of interest as per the RBI guidelines.  Several emails correspondences were also made.  Together they have paid Rs.45,00,000/- towards the said loan.  Whereas, inspite of it, as per the account statement of the OP, it is showing Rs.52,046.26 and installment of Rs.1,05,000/- due whereas, they have paid the entire amount.  OP did not reduce the rate of interest on the ground that there is an outstanding balance of Rs.1,05,000/- and till the payment of the said amount is made the interest could not be changed.  When he calculated the same, he has paid Rs.9,87,000/- to the bank in excess towards principal and interest. Inspite of request and issue of legal notice demanding OP to furnish the rate of interest charged and changed periodically and also to provide the account particulars, OP has not complied with the demand.  Instead it has taken action under Surfacie Act to recover the amount on the ground that the account is a non performing (NPA) Asset.  Though on 24.03.2017, OP agreed to change the rate of interest, it did not carry out the change and thereby complainant has been suffering financially, physically and mentally and there is deficiency in service on the part of OP and also unfair trade practiced by the OP.  Hence the complaint.

4.      Upon the service of notice, OP did not appear before the forum and placed exparte. An application is also filed to set aside the exparte which also came to be dismissed.  OP has filed written argument after the complainant adduced his evidence.

5.      In order to prove the case, the complainant filed his affidavit evidence and produced documents. Arguments Heard. The following points arise for our consideration:-

1) Whether the complainant has proved deficiency in service on the part of the Opposite Party?

2) Whether the complainant is entitled to the relief prayed for in the complaint?

6.     Our answers to the above points are:-

POINT NO.1:            In the Affirmative

POINT NO.2:            Partly in the affirmative.

                                For the following.

REASONS

7.     POINT No.1:-

   Perused the complaint, affidavit evidence and the documents produced by the complainant.  It is not in dispute that the complainant borrowed Rs.28,00,000/- by depositing the title deeds of the flat purchased, to the said loan.  Ex.P1 is the sanction letter issued by Erstwhile ING Vysya Bank, regarding sanctioning of Rs.28,00,000/- towards housing loan and the repayment period is 240 months and the rate of interest is 11% floating interest rate linked to bank home loan rate of interest.  The monthly installment is Rs.28,902/-.  It is not in dispute that the complainant has been paying the installment and he also gave a letter to the bank to change the rate of interest as applicable under NCLR six months rate.  The correspondences shows that the EMI amount has been enhanced from Rs.29,902/- pm to Rs.35,000/- from 08^th July 2011.  The RBI rules have also been produced.  

        8.     In the written argument it is contended that since the complainant became defaulter in not paying the installment as agreed, the matter was considered as non performing asset and u/s 13(2) of the Sarfaesi Act, demand notice was also issued, since it is a secured loan.  It has also taken the contention that u/s 74 of the said act, Civil Court has no jurisdiction to entertain any suit or proceedings in respect of any matter which a debt recovery tribunal or appellate tribunal is empowered to take.

9.     Further it has also relied on the decision of the NCDRC holding that the Civil Court mentioned in Sec 34 of the Sarfaesi Act includes Tribunals and Commission and hence it is also a suit. Though it can be held that it is a suit, no document has been produced by the OP to show that the matter is pending before the Debt Recovery Tribunal to invoke sec 34 of the Surfacie Act. 

10.   Further OP is bound by the guidelines issued by the RBI in respect of levying interest.  Since the loan granted to the complainant to purchase the house is a housing loan under Floating rate of interest, it is bound by the direction of the RBI in levying the rate of interest which is now and then changed by taking into consideration the economic condition of the bank as well of the country.  In view of this, the complainant’s request for change the rate of interest as and when the same has been changed as per the direction of the RBI, not been adhered to by the OP.  When such being the case, it amounts to deficiency in service on the part of OP.  In view of this, we hold that there is deficiency in service on the part of OP in not extending the reduced rate of interest to the complainant, hence we answer point No. 1 in the Affirmative.

11.   POINT NO.2:

Complainant has sought refund of Rs.9,87,000/- on the ground that he has made excess interest payment to that extent.  He has also sought Rs.5,00,000/- as damages for deficiency in service and causing him mental agony and strain and harassment and further Rs.1,00,000/- for the harassment and cost of the complainant.  

12.   It is not in dispute that the complainant was sanctioned loan along with his brother the purchased house and execute the mortgage in respect of the house purchased and sanctioned and released Rs.28,00,000/- and the repayment mode is 240 months EMI and the monthly installment is Rs.28,902/- per installment.  The interest mentioned therein is 11% i.e., HPLR(15.5% - margin 4.50% = 11%) floating rate of interest linked to banks home loan PLR.  As pointed out the OP is bound by the guidelines issued by the RBI in respect of the charging of interest in respect of the floating rate of interest, though the complainant has given application to reduce the interest the same was considered and given effect to as per Ex.P4.  Inspite of it, the complainant has raised the issue by writing emails stating that from 2016 onwards OP has not reduced the rate of interest though he is paying higher EMI to reduce his burden and to pay more amount towards the principal.  On July 7^th 2018 and on 12^th July 2018 he has sent an email to OP stating that though the rate of interest is 8.75% he has been charged 14.75%.  In the reply to the notice given to the complainant’s notice at para 3 it has been stated clearly admitting that it is a floating rate of interest and there was a change in the rate of interest as the complainant opted for floating rate of interest and he has been informed regarding the change in the rate of interest.  It has denied that he has not given proper explanation on the rate change and there was increase in the EMI.  The customer care department was interacting with the complainant and replied to the mails confirming that without paying the EMIs regularly, reschedule of the interest cannot be done.  It is also claimed in the said reply that the complainant has been defaulting in paying the regular EMIs and to normalize the account in order to avoid the account becoming NPA.  Throughout the said notice, there is no mention of what is the outstanding amount due on that day and also have they informed the complainant regarding the due and the demand made by them.  OP has also not produced any document in that respect.

13.   Ex.P9 is the reply to the notice, wherein it is mentioned that on 08.10.2015 complainant along with his brother by mortgaging the property obtained loan of Rs.28,00,000/- as per the agreed rate of interest.  In Ex.P10 dated November 30, 2018 issued a notice u/s 13(2) of the Surfacie Act, stating that as on 27^th November 2018 the outstanding balance in respect of the housing loan obtained by the complainant is Rs.27,29,860.77 and demanded to pay the same failing which they would take legal action before the debt recovery tribunal.  As per the Gmail written by the bank to the complainant on 06.08.2018, they have informed that there is a overdue amount of Rs.52,046/- and an installment of Rs.1,05,000/- towards installments and unless and until the said amount is paid and updated no interest reduction is possible.  It is to be noted here that the RBI issues circulars and guidelines to the bank and also revises the rate of interest in respect of housing loan and other loans periodically. It is the bounden duty of all the banks and NDFCs to abide by the said Revision of interest and if the interest is enhanced or decreased the same has to be intimated to the customers/account holders and also to carryout the same and charge the same to the loan accounts.

14.   In this case as per the said letter, OP has put a condition that the overdue charges and installments are to be paid till then, they are not going to reducing the rate of interest applicable to the loan borrowed by the complainant. As per the averments made in the complaint, complainant has requested by writing a letter on 24.03.2017 and also on July 7^th, 2018 and 12^th July 2018 to reduce the rate of interest from 14.75% to 8.75%, for which OP has replied as above, which is much against to the intended object of the RBI and the Government of India.  Reduction of the interest rate is only to benefit the borrowers, whereas the act of OP in refusing to reduce the same amounts to unfair trade practice besides violating the guidelines of the RBI.  

15.In the recent decision by the Hon’ble High Court of Karnataka WP No.42815/2019 it has been specifically held that as and when the RBI revises the rate of interest it has to be passed on to the customer without seeking any request letter.  It is the duty of the bank to carry out the reduction in the interest and to pass on to the customers, which OP has not done in this case.

16.   Complainant has sought refund of Rs.9,87,000/- on the ground that he has paid excess interest for which he has not placed any bank statement or calculation of his own.  Further he has sought for damages of Rs.5,00,000/- and Rs.1,00,000/- for harassment for which also he has not substantiated.

17.   It is to be noted here that the cardinal principles of granting damages for deficiency in service, mental agony and harassment should not be a bounty or a lottery on the part of the complainant, whereas it should be just and reasonable. Under the circumstances, we are of the opinion that OP is entitled for damages of Rs.25,000/- and a litigation expenses of Rs.10,000/-.  Further we are of the opinion that in the absence of any concrete evidence in respect of excess payment of interest by the complainant, we deem it proper to direct the OP to calculate the interest as and when raised or lowered by the RBI and to apply the same as on the date of the RBI issues/issued guidelines without waiting for the request either in writing or orally and calculate the amount of interest payable, the amount of interest paid and the amount adjusted towards the principle and the interest and file to this commission a detailed calculation from the date of the commencement of the loan and also the moratorium period extended to the complainant and to file a memo of calculation till this date and if the amount paid by the complainant is in excess either towards the interest or towards the principal the same has to be adjusted towards the same as the loan period is for 20 years commencing from 2015 and likely to end by 2035 or earlier.  With this we answer point NO.2 partly in the affirmative and pass the following;

ORDER

1. Complaint is allowed in part with cost.
2. OP is directed to calculate the interest as and when raised or lowered by the RBI and to apply the same as on the date of the RBI issues/issued guidelines without waiting for the request either in writing or orally and calculate the amount of interest payable, the amount of interest paid and the amount adjusted towards the principle and the interest and file to this commission a detailed calculation from the date of the commencement of the loan and also the moratorium period extended to the complainant and to file a memo of calculation till this date and if the amount paid by the complainant is in excess either towards the interest or towards the principle the same has to be adjusted towards the same as the loan period is for 20 years commencing from 2015 and likely to end by 2035 or earlier.
3. OPPOSITE PARTY is further directed to pay damages of Rs.25,000/- and a litigation expenses of Rs.10,000/- to the complainant.
4. OP is further directed 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.

Note:You are hereby directed to take back the extra copies of the Complaints/version, documents and records filed by you within one month from the date of receipt of this order.

(Dictated to the Stenographer over the computer, typed by him, corrected and then pronounced by us in the Open Forum on this  23^RD DAY OF FEBRUARY 2022)

MEMBER                                PRESIDENT

ANNEXURES

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

Copies of Documents produced on behalf of Complainant/s:

Ex P1: Copy of the loan sanction letter

Ex P2: Copy of the repayment letter

Ex. P3: Copy of the letter requesting OPPOSITE PARTY to reduce the rate of interest

Ex P4: Copy of the letter send by OPPOSITE PARTY in respect of our request letter

Ex P5: Copy of the email correspondences

Es P6: Copy of the legal notice

Ex P7: Copy of the postal acknowledgement

Ex P8: Copy of the reply of the notice sent

Ex P9: Notice sent by OPPOSITE PARTY under sec 13 of the Sarfaesi Act

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

• NIL -

Copies of Documents produced on behalf of Opposite Party/s

• NIL -

MEMBER                                        PRESIDENT

HAV*