BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, PONDICHERRY

C.C.No.15/2014

Dated this the 29^th day of April 2015.

Nayana Prasad

A/5 B/4 Industrial Estate

Thattanchavady,

Puducherry-605 009.                                                                      ….       Complainant

Vs.

1. State Bank of India, RASMAC Branch

   Rep. by the Manager,

   No.208, Anna Salai,

   (Opp. To Botanical Garden)

   Puducherry-605 001.

2. State Bank of India,

    SME branch,

    (Old Name Siruthozil Br.)

    Rep. by the Manager,

    Kamaraj Salai, Puducherry-605 011.                                       ….     Opposite Parties

BEFORE:

            THIRU.A.ASOKAN, B.A., B.L.,

            PRESIDENT 

Tmt. PVR. DHANALAKSHMI, B.A.,B.L.,

           MEMBER

FOR THE COMPLAINANT                     :  Party in person.

FOR THE OPPOSITE PARTIES             :  Thiru.R. Sivaraman, Advocate.

O R  D  E  R

(By Thiru.A.ASOKAN, President)

This is a complaint filed by the complainant under section 12 of the Consumer Protection Act, 1986 praying to:

1. To direct the opposite parties to return the amount of Rs.41,600/- with interest @ 12% p.a. which was debited from the complainants account towards interest with retrospective effect.
2. To pay a sum of Rs.1,00,000/- towards compensation for mental agony, stress etc.,
3. To pay a sum of Rs.50,000/- as compensation for spending time to meet the authorities, to write letters, to make phone calls and for litigation expenses.

2.  The case of the complainant is as follows:

            The complainant herein had availed a loan for sum of Rs.15,00,000/- on 31.01.2007 as stated in the Arrangement letter by submitting necessary documents as required by the second opposite party in Loan Account No.30120382603 with fixed interest rate of 10.25% for a period of nine years with EMI Rs.21,315/-.   She paid the EMIs on a regular basis since the day of the borrowing of the loan as shown in the bank statement. In June 2012, after the payment of the monthly EMI, she realized from the bank statement that a sum of Rs.41,600/- were debited in the account.  When she enquired about the debit of Rs.41,600/- with the second opposite party, they could not immediately explain for the debit.   The defect and deficiency of opposite parties 1 and 2 is that they have levied an amount of Rs.41,600/- as arrear interest which is against the arrangement letter.   She wrote a letter to the opposite party 1 and 2 on 18.07.2012 explaining that a 15 day notice had to be served to him, the complainant by the opposite parties 1 and 2 giving the borrower a choice for accepting the interest rate hike as agreed upon in the arrangement letter. Thus the bank did not follow its own rules.

3.         The complainant forced his personal fixed deposit and paid up the entire balance amount equivalent to 96 months of the loan amount in a short span of two months.   As a formality, a letter dated 17.07.2012 was received from the second opposite party by stating that the housing loan had been fully paid up and closed and that the complainant could collect the sale deed deposited with the bank as collateral. Actually, the last payment of housing loan was effected only on 27.07.2012 and that the letter of closure of HTL Loan account No.30120382603 is dated 17.07.2012. On 01.08.2012, the complainant collected the sale deed deposited as collateral with the bank.  On receipt of original document, the complainant given a letter dated 01.08.2012 stating that if the arrear interest was not paid back, she would approach the Consumer Redressal Forum.  On 07.08.2012, the first opposite party had sent a letter to the complainant stating that "however the recovery of the interest was effected after a delay due to technical reasons, which is deeply regretted". 

4.         It is further submitted by the complainant that she went in person to the first opposite party and asked about the technical reasons, but there was no clear answer given by them. The complainant approached the Consumer Education and Research Centre, Ahmedbad.  On 23.05.2012, the first opposite party had sent a letter to the complainant stating clearly that the HTL interest was reset upwards from 10.25% to 11.25% with effect from 13.05.2012 on 14.05.2012. Due to the increase in interest rate retrospectively, arrears of interest amounting to Rs.20,879.72 has been charged to the complainant's loan account resulting in account becoming irregular.  On 03.06.2013, the complainant approached the Consumer Education and Research Society (CERC), Ahmedabad to help him to resolve the pending issue. Since the opposite parties 1 and 2 have not responded to CERC, the complainant has issued another notice from Consumer Redressal Forum, Puducherry, hoping that the complainant's cause is heard and the issue resolved.  Hence this complaint.

5.         The reply version of the first opposite party being adopted by the second opposite party is as follows:

            The complaint is unjust, unsustainable and not maintainable in law or facts. This opposite party denies all the averments narrated in the complaint except those that are admitted in the reply version. The complaint have been filed by the complainant which is void for non-joinder of necessary party and on this score itself the complaint to be dismissed in limine. The corporate Centre of State of Bank of India is changing the rate of interest from time to time depending on various factors, which is applicable to all the branches in India. So, the application of interest to home loans is done uniformly.  There is no deficiency in service.  The rate of interest is revised and reset all over India by all the Nationalized Banks, so the complainant cannot allege unfair trade practice.  The complainant availed loan through the State Bank of India, SME branch, Kamaraj Salai, Puducherry,  It is specifically mentioned in the arrangement letter dated 31.01.2007 that  the interest will be charged at 10.25% p.a. (fixed rate).  However it has been decided to incorporate a “force majeure” clause to alter the fixed interest rate applicable suitable and prospectively in the event of major volatility in the interest rate during the period of loan arrangement

6.         The complainant has been informed of the revision of rate of interest.  From the loan arrangement letter, it is clear that any revision of rate of interests, intimated in newspaper or notice board of the bank is deemed to have been intimated to the borrower. The borrower cannot allege that she has no personal knowledge. If the complainant is not agreeable for the rate of interest, she could have closed her loan account without paying switch over fee.  All the representations of the complainant have been properly replied by letters and in person when the complainant visited the bank.  So every action has been done in a transparent manner and to the clear information to the borrower. Best service being given to the complainant till now. The rate of interest is applied in prospective manner.  Whenever the rate of interest is revised, it will be applied prospectively. As already submitted the revision is made by the corporate centre of the bank based on various factors and this opposite party cannot take any individual decision.  The claim of the complainant is unacceptable. The mental agony, hardship and suffering etc., are false and imaginary.  Hence prayed to dismiss the complaint with exemplary cost.

8.         On the side of the complainant, she has chosen to examine herself as PW.1 and marked Exs.C1 to C8.  . No oral or documentary evidence adduced on the side of the opposite parties.

9.         Points for determination are:

1. Whether the complainant is the consumer
2. Whether any deficiency ins service attributed by the opposite parties
3. To what relief the complainant is entitled for

10.       Point No.1:   

            The complainant has availed HTL loan from the opposite parties to the tune of Rs.15,00,000/- on 31.01.2007 by virtue of Ex.C1.  Hence the complainant is the consumer under section 2(i)(o) and 2(i)(d)(ii) of Consumer Protection Act.

11.       Point No.2:

            We have perused the complaint, reply version of the opposite parties, exhibits marked by the complainant and documents, calculation filed by the opposite parties and written arguments adduced by both the parties.  Both the parties not adduced any oral evidence.

12.       From the records, we have ascertained that the complainant availed HTL loan from the opposite parties for Rs.15,00,000/- on 31.01.2007.  Both the parties entered into an agreement and signed in Ex.C1, the arrangement letter.  The loan will be repaid on EMI of Rs.21315/- at the rate of 10.25% of interest till 31.01.2014.  As per the pleadings of the complainant, she has paid the EMI regularly without any break.  The allegation of the complainant is that during the month of June 2012 the opposite parties debited Rs.41,600/- without her knowledge from her account as arrears of interest.

13.       The complainant wrote a letter Ex.C2 to the first opposite party on 18.07.2012 seeking refund of excess interest imposed during the period retrospectively against the condition in Ex.C1 the agreement letter.  The complainant further submitted that having pain and sufferings, she intended to pay the entire balance and to pre-close the account with the opposite parties and paid entire balance on 27.07.2012 itself.  The complainant demanded through Ex.C4, dated 01.08.2012 to return the excess interest of Rs.33,796.90 debited by the opposite parties.  The complainant sent reminder Ex.C6 to the opposite parties to settle the matter.  The complainant filed Ex.C8, the statement of accounts showing the interest calculated by the opposite parties on 31.05.2012 as Rs.41,600/- for the period from 01.05.2009 to 31.05.2012.  The complainant filed her own calculation for the excess interest till date through memo of calculation.

14.       We have perused the reply version and the calculation made by the opposite parties.  The opposite parties have taken plea and stated in Ex.C5 that the rate of interest as applicable as per the agreed terms and conditions of the sanction, has been calculated and no excess as claimed has been charged.  However the recovery of the interest was effected after a delay, due to technical reasons, which is deeply regretted.  Further the opposite parties referred in Ex.C7 that the interest rate on fixed rate home loan has been reset upwards from 10.25 to 11.25% with effect from 13.05.2012 on 14.05.2012.  Due to the increase in interest rate retrospectively arrears of interest amounting to Rs.20,879.72 charged.

15.       The complainant alleged that the opposite parties were acted against their own conditions laid in Ex.C1 the letter of arrangement, the clause 4 of Ex.C1 as follows:

Interest on the loan will be charged at 10.25% p.a. on daily reducing balance at monthly rests.  Subject to interest rate reset at the end of every two years on the basis of fixed interest rates prevailing then.  SBI may at its discretion stipulate the periodicity of computation of interest.  Further, SBI may at its sole discretion alter the rate of interest suitably and prospectively in the event of major volatility in interest rates during the period of the agreement. 

16.       As per the terms and conditions of Ex.C1, the opposite party has its sole discretion to alter the rate of interest suitably and prospectively and reset the interest rate at the end of two years with due notification to the barrower to facilitate them to repay the dues in full and final.    But in this case, the opposite parties have not given prior notice to the complainant about the reset of interest rate.  The opposite parties have not reset the interest at the end of every two years.  The opposite parties have reset the interest rate upwards from 10.25% to 11.25% retrospectively for the period from 01.05.2009 to 13.05.2012 on 14.05.2012.

17.       As per the terms and contention of the complainant the opposite parties have violated the terms and conditions of Ex.C1.  If the notice served to the complainant time to time during the said two years brake period, the complainant having chance to switch over to another banker or having chance to settle the loan or pre-close the account as per the terms at the earliest.  If the complainant agreed for the interest there was a chance to the complainant to pay the interest time to time without any financial implications.  Therefore the opposite parties have committed deficiency in service by imposing higher rate of interest retrospectively without giving notice to the complainant.  The calculation and statement of account shows that the excess interest recovered from complainant as on 31.05.2012 is Rs.41,600/-.  The regular interest applicable to the loan for prospective period during May 2012 is Rs.8674/.-.  After deducting the above current the above current period interest of Rs.8674/-,  the excess interest debited by the opposite parties for the retrospective period 01.05.2009 to 14.05.2012 is Rs.32,926/-.  Hence the complainant is entitle for Rs.32,926/- which is debited by the opposite parties as retrospectively against the conditions of Ex.C1.  The opposite parties are liable to pay the same.  Thus, the opposite parties are deficiency in rending the service to the complainant.

18.       Point No.3:

            In view of the decision arrived in point no.2, the complaint is hereby allowed.  The opposite parties are directed

1. To refund Rs.32,926/- with 12% interest from 31.05.2012 till realisation.  No compensation is awarded being imposed interest for the amount as per decision arrived in Sh.Ramanayak Tiwari Vs. Regional Provident Fund Commissioner (North) and another  reported in 2014(3) CPR.  
2. To pay a sum of Rs.5000/- as cost of the proceedings.

Dated this the 29^th  day of April 2015.

1. ASOKAN)

PRESIDENT

(PVR. DHANALAKSHMI)

MEMBER

COMPLAINANTS WITNESS:  

CW.1             03.07.2014                Nayana Prasad

OPPOSITE PARTY S WITNESS:  Nil

COMPLAINANTS EXHIBITS:

OPPOSITE PARTYS EXHIBITS: Nil

1. ASOKAN)

PRESIDENT

(PVR. DHANALAKSHMI)

MEMBER