DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION ERNAKULAM
Dated this the 15th day of November, 2023
Filed on: 20/02/2020
PRESENT
Shri.D.B.Binu President
Shri.V.Ramachandran Member Smt.Sreevidhia.T.N Member
C.C NO. 83/2020
COMPLAINANT
Angel Mary Abraham, D/o. P.K. Abraham, W/o. Ajay B., Kanirazhikam House, Marithazham P.O., Kanjiramattom, Ernakulam 682315.
(Rep. by Adv. A.B. Shrilatha, Old Bus Stand, Thripunithura)
VS
OPPOSITE PARTY
- The Kerala State Financial Enterprises (KSEF), Arayankavu Branch, Kulayettikkara P.O., Ernakulam 682315.
- The Kerala State Financial Enterprises Ltd. (KSFE), Regd. Office “Bhadhratha”, PB No. 510, Museum Road, Thrissur 680020.
(OP No. 1&2 Rep. by Adv. Sandeep Gopalakrishnan & Zafar Antonio, Firm Resolve Law Office, No. 101, Travancore Twinkle, Ayyappankavu, Kochi 18)
F I N A L O R D E R
V. Ramachandran, Member:
This consumer complaint is filed by Angel Mary Abraham, Kanirazhikam House, Marithazham P.O., Kanjiramattom, Ernakulam alleging deficiency of service and unfair trade practice from the side of the opposite party which is KSFE, Arayankavu Branch and another. The complainant states that she had availed a loan for Rs.15,75,000/- in April 2014. This was a House Building Loan and the opposite party had provided the Rules and Regulations regarding the Housing Loan but the opposite party had not adopted the Rules or Regulations issued at the time of availing the loan and at the time of closing the loan.
The complainant was having chit with the opposite party and the monthly instalments were regularly paid by the complainant. Due to financial strincture the complainant had not paid the monthly instalment regularly. But thereafter the instalments were regularised and the amount was paid with default interest. The monthly instalments fixed at the time of availing the loan was Rs.22,053/- from which an amount of Rs.13,125/- was towards capital and an amount of Rs.8,928/- was towards the interest which was told by the opposite party to the complainant. Thereafter the complainant proposed to shift the loan from KSFE to elsewhere and therefore enquired to the opposite party and the opposite party told the complainant that the outstanding balance is Rs.10,80,000/- on 23/06/2018. When the loan was shifted to SIB Kanjiramattom the opposite party had taken an amount of Rs.12,31,681/- instead of Rs.10,80,000/- which is against the terms and Condition of loan. At the time of filing Income Tax Return NHFS issued by the opposite party for 2014, 205 and 2017 the amount shown by the opposite party is not that is taken from the complainant. Moreover it can be seen from the certificate that a total of Rs.4,33,125/- is credited towards Rs.15,75,000/- and therefore the remaining balance of Rs.11,41,875/- shall only been remaining as the outstanding amount. The complainant alleges that the opposite party had levied the excess amount of 2 lakhs from the complainant.
Upon notice from the Commission opposite parties appeared and filed their version.
In the version 1st opposite party contended that the complainant at the time of entering in to the Loan Agreement, agreed to follow the Conditions stipulated and the EMI schedule followed is the Yearly Diminishing Balance Method. The complainant agreed to abide by the same and throughout the repayment period availed the benefit of Yearly Diminishing Balance Method. Thereby the complainant is estopped from challenging the same method, from which the complainant availed benefit. In the case of The Rajasthan State Industrial Development and Investment Corporation & Anr Vs. Diamond and Gem Development Corporation Ltd. & Anr, The Hon’ble Supreme Court of India observed that “a party cannot be permitted to ‘blow hot and cold’, ‘fast and loose’ or ‘approbate and reprobate’. Where one party knowingly accepts the benefits of a contract or conveyance or an order, it is estopped to dey the validity or binding effect on him of such contract or conveyance or order. The doctrine of election is a facet of law of estoppel. A party cannot blow hot and cold at the same time. Any party which takes advantage of any instrument must accept all that is mentioned in the said document.”
In the version 2nd opposite party contended that the complainant availed a Housing Loan of Rs.15,75,000/- under the New Housing Finance Scheme in the month of April, 2014 with monthly instalments calculated on a Yearly Diminishing basis as submitted by the complainant in Annexure A3 EMI schedule. The same is reflected in the loan agreement entered between the company and the loanee. The complainant failed to pay back the EMI as per the EMI schedule, as on 11/08/2017 she remitted 38 instalments with penal interest where payments were delayed. The complainant’s major allegation is that the outstanding balance is Rs.10,80,000/- whereas the opposite party claimed an amount of Rs.12,31,116/- by calculating it with yearly diminishing balance method and it is also alleged that the same is against the terms of the Loan Agreement.
The Clause 11 of the Loan Agreement states that “the Loanee has read and understood the rules of the New Housing Finance Scheme contained in the application form and agree that the rules of the scheme as well as schedule of EMI will also form a part of this agreement.” Thus it is an undisputed fact that the complainant at the time of entering into the agreement read and signed the Loan Agreement, which includes the EMI schedule, a perusal of the EMI schedule provided to the complainant envisages that the “computation base” is “yearly rest” and “calculated method” as “diminishing”. Thus the allegation that the word yearly diminishing was not mentioned earlier as well as in the agreement is false. Further the yearly diminishing method is a usual practice in calculating the interest of a loan. In the yearly diminishing balance method, interest is calculated on the outstanding principal balance for that year. The principal paid is deducted from the opening principal outstanding balance to arrive at the opening for the next year and interest is computed on the new, reduced principal outstanding. Thus this method is actually beneficial to the loanee, as the principal paid is adjusted at the end of every year.
As per the EMI schedule provided to the complainant at the time of sanctioning the house loan, Rs.22,053/- is to be paid towards the EMI wherein Rs.13,125/- is towards the principal amount and Rs.8,928/- towards the interest amount. Since the loan is for 120 months, the total amount to be paid back is Rs.26,46,360/- and the same is calculated by applying the yearly diminishing balance method. If the EMI is to be calculated by way of applying simple interest method without adjusting the paid principal every year, the total pay back will be Rs.32,68,125/- for which the EMI will be Rs.27,234/- per month, thus this method is implemented by the opposite parties and other similar institutions for the benefits of customers.
Further the alleged change in the outstanding amount happened for the same reason. In yearly diminishing balance method, the principal paid is adjusted only in the end of every year. At the time of loan transfer, the outstanding balance will be calculated based on the principal paid until the loan transfer, thus in such event the EMI schedule cannot be relied upon. The complainant at the time entering into the loan agreement, agreed to follow the conditions stipulated and the EMI schedule is follows the yearly diminishing balance method. The complainant agreed to abide by the same and throughout the repayment period availed the benefit of yearly diminishing balance method. Thereby the complainant is estopped from challenging the same method, from which the complainant availed benefit. In the case of The Rajasthan State Industrial Development Corporation & anr V. Diamond and Gem Development Corporation Ltd. Anr. The Hon’ble Supreme Court of India observed that “a party cannot be permitted to ‘blow hot and cold’, ‘fast and loose’ or ‘approbate and reprobate’. Where one party knowingly accepts the benefits of a contract or conveyance or an order, it is estopped to dey the validity or binding effect on him of such contract or conveyance or order. The doctrine of election is a facet of law of estoppel. A party cannot blow hot and cold at the same time. Any party which takes advantage of any instrument must accept all that is mentioned in the said document.”
Notwithstanding the above contentions, the total amount to be repaid for a loan of Rs.15,75,000/- at 10.75% rate of interest as per yearly diminishing calculations for a period of 10 years will be Rs.26,46,360/-. The repayment amount for the same principal amount, rate of interest and period of loan calculated as simple interest will amount to Rs.32,68,125/-. Further the same calculated as per basic compounding interest will amount to Rs.43,72,380/-. Hence it is clearly seen that the calculations as in yearly diminishing balance is in fact the most beneficial to the loanee.
The complainant had produced proof affidavit and 8 documents which was marked as Exbt. A1 to A8. Exbt. A1 is the terms and conditions of loan, Exbt. A2 is the loan sanctioning letter, Exbt. A3 is EMI Schedule, Exbt. A4 is Income Tax Certificate, Exbt. A5 is Account statement, Exbt. A6 Outstanding liability certificate, Exbt. A7 is the copy of complaint, Exbt. A8 copy of reply letter received from the opposite party.
The points for consideration are:
- Whether the complainant is sustained to any sort of deficiency of service, or unfair trade practice from the side of the opposite party?
- Whether the complainant is eligible to get any relief from the opposite party?
- Cost of the proceedings if any?
On going through the complaint, version and evidence produced from the side of the complainant, it can be seen that the complainant had approached the opposite party and the opposite party granted a loan for Rs.15,75,000/- to the complainant on April 2014. Subsequently on verification it seen from Exbt. A1 that the monthly instalment to be paid by the complainant towards the loan was Rs.22,083/-. As per loan schedule issued by the opposite party it can be seen that an amount of Rs.13,125/- was reduced from the above amount towards principal and Rs.8,928/- towards interest. But from the letter dated 22/09/2017 issued by the opposite party it can be seen that as on 22/09/2017 an amount of Rs.12,31,116/- is outstanding as liability against the above loan and there are 82 months instalment are remaining to be paid. The complainant had subsequently stated that they have transferred their loan on 23/06/2018 to SIB Kanjiramattom and the amount remitted by them towards the outstanding liability is Rs.12,31,681/- whereas what is shown in the letter dated 22/09/2017 issued by the opposite party to the complainant that the total amount of liability outstanding towards the complainant is Rs.12,31,116/- as on 22/07/2017.
The complainant had not proved with any speaking evidence that the amount paid by the complainant and the amount demanded and accepted by the opposite party varies and is in excess to the actual payable. The Commission can’t come into an exact inference into the actual amount payable by the complainant to the opposite party in the absence of any definite derivation provided by the complainant and in the absence of favourable evidence. The statement of account furnished by the opposite party as stated in their version cannot be disbelieved since the complainant had not established their case by producing the actual statement and also by making the Commission to get examine the opposite party in box to bring out the facts. Hence Point No. (1) is found against the complainant. Since Point No. (1) is found against the complainant Point No. (2) and (3) decided accordingly. Hence the complaint is dismissed.
Pronounced in the Open Commission on this the 15th day of November, 2023
V.Ramachandran, Member
Sd/-
D.B.Binu, President
Sd/-
Sreevidhia.T.N, Member
Forwarded/by Order
Assistant Registrar
Appendix
Complainant’s Evidence
Exbt. A1: Terms and conditions of loan
Exbt. A2: Loan sanctioning letter
Exbt. A3: EMI Schedule
Exbt. A4: Income Tax Certificate
Exbt. A5: Account statement
Exbt. A6: Outstanding liability certificate
Exbt. A7: Copy of complaint
Exbt. A8: Copy of reply letter received from the opposite party
Opposite party’s Exhibits
Nil
Registrar
Despatch date:
By hand: By post
kp/
CC No. 83/2020
Order Date: 15/11/2023
