Order No.  10  dt.  15/05/2017

          The fact of the complainant as it appears in brief is that complainant and husband of the complainant jointly entered into loan agreement on 25.03.2003 with Standard & Chartered Bank, 41, Chowringhee Road, Kolkata-700 071 for home loan of Rs.10,00,000/- for the purpose of purchasing a flat at 5H,Cornfield Road, Kolkata-700019 under certain terms and conditions as written in the loan agreement specified in Article 1 to Article 10 against the schedule wherein rate of interest being 9.5% per annum, amortization by terms of payment of 192 installment @ Rs.10,150/- (EMI) per month with commencement of EMI on 18.10.2003. On 10^th June, 2003 Bank issued a letter for sanction of loan of Rs.10,00,000/-, the rate of interest against this loan being written as variable rate of interest and the rate would be valid for one month only. In favour of the home loan a/c being 41893506 the complainant had paid initially with EMI of Rs.10,150/-(for 6 ½ yrs approx) subsequently from February,2009 with EMI of Rs.9,699/-(for 5 yrs approx.) due to reduction of interest rate from 13.82% to 13.07% p.a from Feb,09.  On 10.12.2014 o.p. through email informed the complainant that there was 201 installments till to pay for outstanding amount of Rs.7,80,042.45 against which complainant showed his be wilderness and astonishment by tendering a prayer of reconsideration on 24.01.15 in this regard before theo.p.  The complainant claimed to change the EMI amount. On Feb, 2014 op once again asserted their assurance of best service by ignoring the prayer of the borrower. Being aggrieved against the dealings of the o.p. by terming it as U.T.P complainant lodged this complaint seeking relief as prayed for.

          O.p. contested the case by submitting w/v and evidences. Ld lawyer of the o.p. has argued that the complainants has not approached the Ld Forum with clean hands and has not disclosed true facts, which if disclosed would disentitle the complainants from claiming any relief.

          The o.p. stated that since the interest rate was sanctioned under ‘variable interest rate category’ it was subject to change. The o.p. Bank had also sent a communication to this effect. In accordance to the above, the complainants’ Loan Interest Rate is subject to change every three months and the complainants is liable to pay the interest related to the loan. Further, the applicability of the interest is also stressed upon in the agreement signed by the complainants. Even under Clause 2.6(c) of the agreement, it is clearly stated that, “SCB shall have the right at any time or from time to time to review and reschedule the repayment terms of the loan or  of the outstanding amount thereof in such manner and to such extent as SCB may in its sole discretion decide. In such event the borrower shall repay theloan or the outstanding amount thereof as per  the revised schedule as may be determined by SCB in its sole discretion and communicated to the borrower by SCB in writing.” Moreover, the interest rates for the Home Loans was linked to the lender’s Benchmark lending rate earlier however the same was replaced by the Mortgage Variable Reference Rate which was the MVRR of the Bank. The lending rate is decided by the respective banks based on the Reserve Bank of India guidelines. The Bank normally sends an intimation letter at the time an interest rate revision is effected in the account via postal mail. Likewise, the intimation letters have been sent by the Bank on every rate revision. Further the MVRR was mentioned in the Bank’s webpage. The details with regards to the interest rate are clearly mentioned under 4^th point of the sanctioned letter.

          The o.p. stated that there is no cause of action to institute the present complaint since the o.p. Bank had acted in bonafide  discharge of its duty. There was no deficiency on the part of the o.p. Bank and the complainant filed this case for unjust enrichment and hence, this present complaint is liable  to be dismissed and all the prayers are liable to be rejected.

       On the basis of pleadings of the parties the following points are to be decided:-

1. Whether the complainant & her co-borrower regularly paid the EMI?
2. Whether there was any deficiency in service/UTP on the part of the op?
3. Whether this from has pecuniary jurisdiction to try this case?

Decision with reason :

We have gone through the pleadings of the parties and materials on record and the evidence submitted by the op in particular. It is admitted fact that according to sanction order of the Standard Chartered Bank ( SCB ) , the amount of loan of Rs.10,00,000/- with interest accrued thereon at the rate of 9.5% would have been completed after payment of Rs.19,48,800/-in 192 installments within 16 years. As the 1^st installment had been paid on 18.03.2003 the last installment would be paid on 18.02.2019. The complainant claimed that 143 installment had already been paid as on May,2015. Therefore, in 143 installments complainant paid more or less Rs.13,86,957/-. With further 201 installments he will have to pay Rs.20,32,110/-and the payment will  be completed in the year 2033 i.e after 30 years approximately.

          In the w/v nowhere it is contested by the Ld lawyer of the o.p. that the o.p. informed the complainant well ahead regarding enhancement of rate of interest but the o.p. had enclosed at least 14 letters which were written in favour of the complainant regarding such enhancement of rate of interest. But there is hardly any proof that the complainant received those letters acknowledged the favourment.

At the time of filling up of agreement form the applicant had no scope to have the knowledge about veracity of variable rate of interest as the terminology ‘variable rate’ was not at all mentioned in the said form.Complainant signed the form against rate of interest of 9.5%. She came to know about the variable rate of interest of 9.5% from the  sanction order, the effect of which was probably felt by the complainant after receiving the email dated 10.12.2014.Thereafter the complainants several times requested the o.p. to withdraw their new proposal for payment of Rs.7,80,042.45 in 201 additional installments by actual payment of (201x9,699 or 10,150 say Rs.10,000/-) 201 x 10,000 =20,10,000/- though the complainant had already paid Rs.13,86,957/- in 143 instalments @ Rs.10,150 or @ Rs.9699/- thereby the complainant had succeeded to pay only. (10,00,000 – 7,80,042)  Rs.2,19,958/- during the last 11 years from 18.03.2003 to 10.12.2014 against the home loan of Rs.10,00,000/-.

          The complainant signed an agreement to pay 192 instalments @ Rs.10,150/- p.m. The o.p. raised no question regarding irregular payment, if any, by the borrower. Therefore,it is only the variable rate of interest which causes payment of additional 201 instalments. The elongation thus arose entails agreement between the parties afresh ?If not, unilateral adherence to sovereign character of the bank will prevail over the elements of contract out of the agreement dated 25.09.2003.

On 18.10.2003 interest due was Rs. 7916/-which gradually diminished to Rs.6133 on 18.11.2004 during the interim one year. Thereafter it ascended gradually upto Rs. 9565/-on 18.12.2008 during   next 4 years. Just after 18.12.2008 it decreases to Rs.9284/- from Rs 9565/-by Rs 279/-within 2 months.The downward movement of Rs.279/-in interest accrual to the loan a/c during the above stated two months attracted the attention of concerned authority of the bank and the Bank authority promptly advised the borrower to decrease the EMI from Rs.10,150/- toRs.9699/-. Bank authority suddenly felt for the borrower and tried  to show their sympathetic merciful attitude to their borrower friend.

From 18.12.2008 to 18.03.2014 the interest accrual amount persistently remained in horizontal level for a period of 4 years and the mercy shown by the Bank aggravated the situation of the borrower to a state of unmanageable position.

Merciful attitude of the Bank towards the borrower had been withdrawn and recovery wing of the bank sent an email dated 10.12.2014. Thereafter, the borrower felt the veracity of variable rate of interest. The concerned authority did not advise the borrower to increase the EMI amount during 2004 to 2008 when interest was going up. As the rate of interest is variable one and it’s variability is learnt by the Bank at first, the skilful competence of the Bank in the management of recovery ofthe fund lies more on the bank than the borrower.

Bank should inform the complainant the ill-effect of ascending of the interest accrual from 18.11.2004 to 18.10.2008 by Rs.3932/- from Rs.6133/- to Rs.9565/- Rather they advised the borrower to reduce the EMI from Rs.10,150/- to Rs.9699/- for decrease of interest by Rs.279/- only.

This is a deficiency in service in on the part of the op for which  the complainant have to pay Rs.35,93,100/- against home loan of Rs.10,00,000/-.

In the loan agreement form bank offered interest rate of 9.5% per annum ie, simple rate of interest. In sanction order borrower was introduced  with variable rate of interest per annum. There in, it was mentioned that this rate would be applied for a period of one month only. Again variable rate is subject to change only on a six monthly basis. In the written version op bank stated that complainant loan interest rate is subject to change every three months. Moreover, interest rate had been linked to lender’s benchmark lending rate which was replaced by mortgage variable reference rate ( MVRR ) and which was calculated incorporating i) actual cost of the fund ii) operating expenses iii) profit margin etc. Any change in the MVRR would have an impact on variable interest rate. The details of MVRR movement from 2005 to 2014 are noted down in the wv and twenty two of such movements are within 10.50% to 20.25%  The impact of all those interest rates from simple ie yearly to monthly to quarterly to six monthly along with most vulnerable variable interest rate to MVRR in different stages of fund management by the bank on the loan of the complainant can not be ascertained quantitatively & summarily by us for adjudicating the alleged UTP of this instant case.

Moreover, the instant case surpasses the pecuniary jurisdiction of this Forum as the value of complaint appears to be above twenty lakh (Rs. 19,48,800 /-payable amount plus Rs. 3,00,000/- compensation. Hence, the case is beyond pecuniary jurisdiction of this Forum.  

Thus all points are disposed of accordingly

Hence,  ordered,

          That the CC No 288/2015 is dismissed on contest without cost against the op. Complainant is at liberty to file the case before appropriate Forum for self same cause of action.

Supply certified copy of this order free of cost.