Kerala

StateCommission

A/16/416

Area manager, lic housing finance ltd - Complainant(s)

Versus

MANUAL KOLADY - Opp.Party(s)

DINESH SAJAN

28 Jan 2019

ORDER

KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION SISUVIHARLANE VAZHUTHACADU THIRUVANANTHAPURAM

 

APPEAL NUMBER 416/16

JUDGMENT DATED :28.01.2019

 

(Appeal filed against the order in CC.No.87/15

on the file of CDRF, Palakkad)

PRESENT

SRI.T.S.P.MOOSATH                        : JUDICIAL MEMBER

SRI.RANJIT.R                          : MEMBER

 

APPELLANTS

1. LIC Housing Finance Ltd, Rep.by its Area Manager,

Shani Tower, Iyyatil Junction, Ernakulam

 

2. The Branch Manager, LIC Housing Finance Ltd, Palakkad Branch, Mannil Arcade, 2^nd Floor, Shornur Road, Palakkad

                       (By Adv.Sri.Santhosh kumar & Adv. Dinesh sajan.K)

 

VS

RESPONDENTS

1. Manual Kolady, S/o.Mathew Manual, Kolday House, Near Gayathri Motors, Chandra Nagar, Palakkad

 

2. Beena Joe, W/o.Manual Kolady, Kolady House, Near Gayathri Motors, Chandra Nagar,

 

JUDGMENT

SRI.T.S.P.MOOSATH                        : JUDICIAL MEMBER

The opposite parties in CC.No.87/15 of the Consumer Disputes Redressal Forum, Palakkad, in short, the district forum has filed the appeal against the order passed by the forum by which they were directed to Rs 10,000/- towards concession in interest and to waive penal interest charged by them on the housing loan taken by the complainants and to pay cost of Rs 1000/- to the complainants.

 

                  2.   The averments contained in the complaint are in brief as follows. The complainants availed a housing loan A/c.No.20004566 from the opposite party on 10/07/1999. According to the complainants the loan was availed with floating interest facility. The interest rate at the time of availing the loan was 14.75%. At the time of granting the loan the opposite parties made the complainants believe that the loan was granted and the loan facility will be continuing finally complying the norms and directions of the RBI. According to the complainants, the opposite parties assured them that since the loan was on floating interest rate, the rate of interest would vary according to the norms and directions of the RBI from time to time and the complainants could enjoy the fruits of reduced interest rates when the interest rates were reduced according to the RBI policy made from time to time. According to the complainants they were making the repayments promptly. Several repayment instalments were remitted with the second opposite party who charged 14.75% interest. Though the housing loan interest rates were reduced considerably several times after 10/07/99 till date the opposite parties never had given any reduction in the interest rates to the complainants. The complainants made several communications to the opposite parties and Higher authorities requesting them to give reduced interest rate to them on their loan but their efforts were in vain. Letters were sent by the complainants to Ernakulam office and Chennai Regional Office of LIC housing Finance Ltd to adjust the excess amount collected from them towards the loan amount. Lawyer notices were also sent to the opposite parties on 07/10/2013 to give the concession of the reduced interest rates and to adjust the excess amount collected from the complainants towards the loan amount. But the opposite parties did not adjust the excess amount collected and sent any reply to the lawyer notice of the complainant. The opposite parties charged very high interest for a short delay in paying the loan instalments violating RBI norms in this regard. According to the complainants the loan account would have been closed by now if the opposite parties adjusted amounts collected on the fixed interest rate form the complainant and the amount charged exorbitantly as penal interest. Complainant further pleads that the housing loan has been availed believing the words of opposite parties that interest would be calculated on floating rate basis and the complainants would get the benefit of interest rate reduction when announced by the RBI. By calculating the interest always at 14.75% and not giving the benefit of reduced interest rates to the complainants and charging exorbitant amount as penal interest, the opposite parties collected excess amount from the complainants which amounts to deficiency of service and unfair trade practice on the part of opposite parties. On 07.06.2014 the complainant sent an application under the RTI Act seeking information on the variation of interest on floating housing loan from July 1999 to 07/06/2014, number of times the rate of interests had gone down below 14.75% during the above mentioned period and the rate of penal interest calculated by opposite parties for defaulted payment and the parameters for the calculation. The opposite parties did not provide the information sought and gave an excuse that applicability of RTI Act to LIC housing Finance Ltd is subject to subjudice and hereby they could not supply the necessary information. According to the complainants denial by opposite parties to furnish the details sought by them amounts to covering up of the malpractice. Complainants plead that they have suffered huge financial loss and mental agony due to the unfair trade practice and deficiency of service on the part of the opposite parties. Hence the complainants pray to the Forum that a judgment may be passed directing the opposite parties to calculate the interest at a lower rate whenever interest on housing loan is reduced below 14.75% according to the RBI directions and to adjust excess amount collected by the opposite parties from the complainants by way of excess interest and penal interest towards the loan amount. Further the complainants pray for compensation for damages for Rs 2,00,000/-, which is caused to complainants for the mental agony and hardships suffered by them because of deficiency of service and unfair trade practice on the side of opposite parties along with litigation cost of     Rs 5000/-.

                        3.     Opposite parties filed version raising the following contentions. The complaint is not maintainable and hence should be dismissed because the complainants are not consumers. Why they are not considered as consumers is because they have taken a housing loan from LIC housing finance Ltd, and the rights, duties and obligations of the parties are strictly governed by the terms and conditions mentioned in the loan agreement entered into between the complainant and opposite parties.  The opposite parties admit that the complainants have availed a housing loan of Rs 9,00,000/- from them on 10.07.1999 as per account no.20004566 but deny the averment of the complainants that the availed loan is with floating interest facility. The opposite parties admit that at the time of granting the loan they made complainants believe that the loan facility was granted to them and but they denied giving of assurance to the complainants that the availed loan facility was with floating rate of interest and the rate of interest will vary according to terms and conditions of the RBI policy made from time to time. The opposite parties also denied the allegations of the complainants that the latter had made many communications to the opposite parties and higher authorities requesting for interest calculation according to the reduced rates but with no results. But according to opposite parties it is true that the complainants had sent a lawyer notice to the opposite parties requesting them to provide the complainants the applicable concession of the reduced interest rates and to adjust the excess amount collected from them towards the loan amount. The opposite parties made it clear in their affidavit that as they did not collect any excess amount the request made by the complainants could not be met and this fact was informed to the first complainant over phone. Hence no reply to the complainants’ letter was sent. The opposite parties also denied the complainants allegation that the housing loan was availed by them believing the words of opposite parties that interest will be calculated on floating rate basis and they can be benefited by interest rate reduction announced by RBI. The opposite parties therefore contend that there is no deficiency of service or unfair trade practice on their part because they did not collect excess amount from the complainants and the complainants are not entitled for the benefit of reduced interest rates and claimed by them. The opposite parties admitted that on 07/06/2014 the first complainant sent an application under the RTI Act seeking information regarding rate of interest etc. Since the LIC Housing Finance Ltd, does not come within the purview of the RTI Act, the information has not been supplied to the complainant, according to the opposite parties.   

                  4.   The first complainant was examined as PW1 and Exts.A1 to A7  were marked on the side of the complainants. DW1 was examined and Exts.B1 to B4 were marked on the side of the opposite parties.

                  5.   Considering the evidence adduced by the parties and hearing both sides the district forum has passed the impugned order.

                  6    Aggrieved by the order passed by the district forum the opposite parties have preferred the present appeal.

                  7.   Heard both sides. Perused the records.

                  8.   There is no dispute to the fact that the complainants availed a housing loan of Rs 9,00,000/- from the opposite parties on 10.07.1999. The interest rate at the time of availing the loan was 14.75%. According to the complainants at the time of availing the loan the opposite parties assured them that the loan was granted on floating interest rate, the rate of interest would vary according to the norms and directions of the RBI from time to time and they could enjoy the fruits of reduced interest rate when the interest rates were reduced according to the RBI policy made from time to time. It is the case of the complainants that the housing loan interest rates were reduced several times as per the directions and policy of the RBI, but the opposite parties never had given any reduction in the interest rates to them. Further the opposite parties on several occasions collected penal interest. The opposite parties admitted that the complainants availed housing loan of Rs 9,00,000/- from them. But according to them they never assured the complainants that the loan was given on floating rate of interest and they can enjoy the fruits of reduced rate of interest, when interest rate is reduced by RBI. It is contended by the opposite parties with the interest rate for the housing loan availed by the complainants is 14.75% which will be the same throughout the tenure of the loan transaction. It is stated by the opposite parties that they have collected interest only as per the agreement made by the complainants with them.

                  9. The district forum, considering Ext.B1 series documents, found that the complainants availed the loan after understanding the terms and conditions of the loan offer letter given to them by the opposite parties and they have signed the loan offer letter. The complainant agreed to avail the loan of Rs 9,00,000/- with fixed interest rate of 14.75% throughout the tenure of the loan. In Ext.B2 promissory note executed by the complainants in favour of the opposite parties they agreed to repay the amount with interest at the rate of 14.75%. The complainants sent Ext.P2 to P4 letters the opposite parties to reduce the interest rate retrospectively from the date of loan and amount of interest thus reduced may be adjusted to their loan account. As per Ext.B4 letter the opposite parties informed the complainants that the repayment of the loan amount at 14.75% rate of interest can be reduced by fulfilling five conditions mentioned in that letter. It is also mentioned that if the complainants comply with the conditions mentioned in the letter the loan can be rewritten and brought down to the present rate. But the complainants have not taken any action in that regard and they have not fulfilled the conditions mentioned in Ext.B4 letter. The district forum found that the complainants have not produced any document in support of their claim that the housing loan availed by them was on floating rates of interest. So the district forum did not allow the prayer of the complainants to direct the opposite parties to calculate the interest at a lower rate whenever the interest on housing loan was reduced the below 14.75% as per the direction of the RBI and to adjust the amount collected by the opposite parties from them by way of excess interest and penal interest towards the loan amount. The district forum did not find that there was any deficiency in service or unfair trade practice on the part of the opposite parties. There was no specific finding by the district forum with the opposite parties collected any excess amount as interest or penal interest. But the opposite parties were directed to give Rs 10,000/- to the complainants towards concession in interest and to waive penal interest charged by them on the housing loan taken by the complainants, together with cost of Rs 1000/-. The counsel for the appellants submitted that the district forum ought to have dismissed the complaint since there was no deficiency of service or unfair trade practice on the part of the opposite parties. The district forum observed that the opposite parties should consider the fact that the complainants have been regularly remitting loan installments at higher rate of interest (14.75%) since 10/07/1999. Hence concession in interest can be given and penal interest can be waived as a special case in appreciation of prompt repayment of the loan by the complainants. The counsel for the appellants submitted that the said observation made by the district forum is without any basis and they have not collected any amount in excess of the actual amount due and they have only collected interest and penal interest as agreed by the respondents/complainants. It is to be noted that PW1 admitted that on several occasions the repayment of the loan amounts were defaulted and the amounts became overdue. So the observation of the district forum that there concession in interest can be given and penal interest can be waived as a special case in appreciation of the prompt repayment of the loan by the complainants is baseless. The direction of the district forum to the opposite parties to give Rs 10,000/- to the complainants towards concession in interest and to waive penal interest charged by them on the housing loan taken by the complainants is not sustainable and is liable to be set aside. We do so.

                        10.   Counsel for the appellant submitted that after the filing of the present appeal the loan transaction of the respondents / complainants was closed on 31.07.2017 and the documents deposited with them for granting equitable mortgage relating to the property were returned to the complainants on 06.11.2017.

          In the result, the appeal is allowed. The Order passed by the district forum is set aside and complaint is dismissed.

          Refund the amount of Rs 5500/- deposited by the appellants, to them, on filing proper application.

 

 

T.S.P.MOOSATH      : JUDICIAL MEMBER

 

 

RANJIT.R                 : MEMBER

 

 

 

Be/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

KERALA STATE

CONSUMER DISPUTES

REDRESSAL COMMISSION

SISUVIHARLANE

VAZHUTHACADU

THIRUVANANTHAPURAM

 

APPEAL NUMBER 416/16

JUDGMENT DATED :28.01.2019