Sri Shyamal Gupta, Member

This Appeal is directed against the Order dated 03-04-2017, passed by the Ld. District Forum, North 24 Parganas in CC/612/2016.

Alleging unfair trade practice on the part of the Appellant Bank in respect of the House Building Loan taken by him, the complaint case was filed by the Respondent.

We have heard both sides in the matter and perused the documents on record.

The main allegation of the Respondent against the Appellants was that the Appellants resorted to unfair trade practice while realizing EMIs from him.

In this connection, it is submitted by the Ld. Advocate for the Appellants that the subject loan was sanctioned on 03-02-2011 and the same was repayable in 288 months.  Initially, EMIs were realized at the fixed rate of Rs. 5,964/-.  However, in view of upward revision of interest rate when the interest component exceeded the fixed EMIs, no principal amount was realized from the Respondent.

Ld. Advocate further submitted that the amortization chart  is a tentative chart which shows the payment pattern of both principal and interest fragments and the same is not sacrosanct and that such deduction of interest and principal through EMI is controlled through a centralized banking software and is not the product of manual recording.

According to the Loan Agreement executed between the parties dated 02-02-2011, the interest was payable along with principal amount by way of equated monthly instalments (EMI).  The Agreement further stipulated that, the EMI computed by the Bank would consist of principal as well as interest.  It was also contained therein that after payment of all the EMIs, if there remained outstanding as a consequence of revision in interest rate, other incidental charges etc. the same would be payable separately by the borrower. 

In view of such governing terms and conditions, there was no scope for the Appellants to recover only interest from the Respondent.  On account of upward revision of interest, if indeed the EMI amount fell short, the Appellants ought to realize the residual amount separately after repayment of all the 288 EMIs.  The Appellants could either seek the approval of the Respondent to realize higher EMIs or they could stretch the repayment schedule further keeping the original EMI intact.  In either case scenario, it was obligatory on the part of the Appellants to take due approval of the Respondent.

In view of this, we cannot accept the contention of the Appellants that simply because the interest amount surpassed the EMI amount, the bank only realized interest amount from the Respondent.  As the terms and conditions of the agreement were binding upon both sides equally, there was no scope for the Appellants to deviate from the same at their own sweet will.

It is also alleged by the Ld. Advocate for the Respondent that although there was no revision in the rate of interest during the period from 01-08-2011 to 08-02-2013 and again from 09-02-2013 to 31-12-2013, EMIs were realized in an erratic manner.  Significantly, the Appellants did not offer any explanation in this regard.

Since in case of house building loans, interest amount is calculated on diminishing balance basis, due to non-recovery of principal amount strictly as per the amortization chart, had such anomaly went unnoticed, it would cause substantial financial loss to the Respondent. 

It is though claimed by the Ld. Advocate for the Appellants that it is not possible for banks to individually inform all loan takers about the impact of revisions of interest rates from time to time, we cannot endorse such bizarre argument.  It is the bounden duty of every financial institution to take their customers in the loop of every development that takes place in course of repayment of loans. 

No such case is made out from the end of the Appellants that the goof up took place due to any technical snag/malfunction of system. 

Clearly, the software was purposefully designed for unjust enrichment and therefore, we cannot take such matter lightly.  In case the error was not detected, surely, the Respondent would end up paying excess money to the Appellants. We do not know how many innocent loan takers fall victim of such wrongful act of the Appellants.  It is indeed a sad sight that a public sector bank can adopt such dubious means to make illegal gain. 

The Appellants though pointed out some procedural lapses in course of adjudication of the complaint case, since no revision was preferred against the same within the statutory limitation period, the Appellants cannot rake up this issue at the Appeal stage.

Considering all these aspects, we deem it appropriate to dismiss this Appeal with a cost of Rs. 25,000/-, payable by the Appellants to the Respondent.