BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE URBAN

    24^th DAY OF JULY 2019

Complainant/s: -                           

1. Sri.Dattatreya Dharwad

Aged about 41 years

S/o Sri.Hanumanthappa Dharwad

2. Smt.Swetha Dharwad

Aged about 34 years

W/o Sri.Dattatreya Dharwad

Both R/at Flat No.211,

Ranka Nest Apartment, K.K.S.Road, Okalipuram, Bengaluru-21.

By Adv.Sri.Mohan.S

V/s

Opposite party/s:-    

The Branch Manager

The Corporation Bank

Rajajinagar Branch,

No.25/2, 1^st Main Road,

E Block, 2^nd Stage, Rajajinagar,

Bengaluru-10.

By Adv.Sri.Satyanarayana

ORDER

SRI. S.L PATIL, PRESIDENT

The Complainant No.1 & 2 (herein after called as Complainants) have filed this complaint U/s 12 of Consumer Protection Act 1986, seeking direction against the Opposite Party (herein after called as OP) to return the amount of Rs.4,72,104/- which collected in excess with interest at 18% p.a.; to pay a sum of Rs.10 lakhs as damages; to pay cost and to award such other reliefs.

2. The brief facts of the complaint is as under:

The Complainants submit that, they approached the OP bank seeking housing loan for purchase of flat bearing No.211, Ranka Nest Apartments, Bengaluru offering the said flat as security. Accordingly OP sanctioned the loan and has imposed certain terms and conditions to sanction the loan. As per clause 3, OP bank has specifically mentioned the manner in which to levy the interest on the amount lent. The clause 3 of other special terms state about the EMI tenure and interest rate, which binding on both the parties and have to follow the same as mandatory. After availing the loan, as per the terms, the Complainants have been paying the EMI regularly. The Complainants further submit that, as per the clause 3, it is mandatory on the part of the OP bank to notify about re-schedule of the interest and EMI, whenever the changes made. No notification has been made by the OP bank at any point of time, as such the Complainants are under the impression that, no such re-schedule has been made in the rate of interest and the EMI. In the mean time, OP bank started demanding the Complainants to confirm the balance. Then only, the Complainants came to know that, without intimation, OP made the changes. When the Complainants protested, OP started to threaten to initiate recovery proceedings against them. Complainants wrote a letter dtd.14.08.15 intimating about the irregularities in charging the rate of interest. OP replied on 19.08.15 stating that, they are ready to convert the present base rate of interest subject to payment of conversion charges. Though the OP has violated their own terms and conditions are trying to shift their burden on the Complainants. Due to the high handed procedure of the OP bank, the Complainants have decided to discharge the entire loan amount, for which they have made alternative arrangements to take over the loan from the OP bank to The Bajaj Finserve ltd., In a circumstances to escape from the clutches of the OP bank, the Complainants paid excess of Rs.4,72,104/-. Even after discharging of the entire loan, the Complainants approached the OP bank requesting them to repay the amount collected in excess. But OP did not respond properly and rejected the claim, for which the Complainants suffered mentally. Hence this complaint.

3. After issuance of notice, OP did appear and filed version stating that, Complainant no.1 being an practicing Chartered Accountant, along with his wife after reading the terms and conditions for sanction of loan (as per Credit Sanction Intimation) and also after reading the terms and conditions of all the loan documents like Agreement for Term loan etc., and after understanding and agreeing for the said terms and conditions have signed/executed the same and availed the housing loan. The OP further submits that, in the CSI it is very clearly mentioned at page 3 & 7 at clause 3 that, rate of interest is 8% p.a. and rate of interest under floating rate is 8% frozen for the first year 9.5% for the next two year years, and from fourth year onwards as per the then prevailing slab rates at the beginning of the fourth year. And further the first sentence of clause 3 reads as follows ‘Loan to be covered under Chome-Delight EMI clause.” And the second sentence reads as follows “loan shall be repayable in 240 months in 240 EMIs starting from EMI for the first year is Rs.25,094/- and EMI for the next two years and from fourth years onwards shall be re-fixed and informed at the beginning of second year and fourth year.” And so also the 3^rd sentence reads as follows “rate of interest under floating rate is 8% frozen for the first year 9.5% for the next two year years, and from fourth year onwards as per the then prevailing slab rates at the beginning of the fourth year. And so on so. From the above it is very clear that, while re-fixing the EMI, the bank shall inform. And nowhere in the said CSI, it is stated that or agreed that, the bank should inform the change of interest rate as and when the same is changed. The OP with due respect submits that, it has very clearly mentioned in the CSI that the rate of interest is floating and for the first year it is 8% and for next two years 9.5% and there afterwards as per the then prevailing slab rates at the beginning of the fourth year and accordingly, it has charged the said interest rate to the loan account as per the H.O.Circular dtd.14.08.19 and this circular was also duly exhibited in the notice board of the OP branch and the same is also uploaded in websites and also published in news papers. That apart in the Agreement for term loan, in Clause 3(a), it is very clearly mentioned that the rate of interest is floating rate of 8% p.a…….. or at such other lending rates that the bank may determine to charge from time to time in terms of the directives of RBI……… or otherwise determined by the bank at its discretion “without further reference or notice to the borrower.” From this also, it is very clear that the rate of interest is floating and the bank may charge the rate of interest in terms of the RBI directions, from time to time, without any intimation or further notice. The OP further submits that, very conveniently, the Complainants have deliberately suppressed the above fact, but, under a misunderstanding of CSI clause and under a mistake of fact, they have taken up a false plea that, the bank did not inform the change in rate of interest and thereby charged excess interest. And the said plea is absolutely false and unsustainable in law. The OP further submits that, the change in interest rates are as per circulars of Head Office, the same will be exhibited in the notice board of the OP branch as and when the change in interest rates takes place and so also the same will be published in website. And that apart, the Complainants are well aware of the same, as the Complainant no.1 is a practicing Chartered Accountant and he has also taken the interest certificate from the bank every year for claiming the Income Tax benefit and where under the change of interest rate is also notified to the Complainant. The OP further submits that, from the account extract also the change of interest rates can be made out and the Complainants have regularly collected the account extracts, which also clearly demonstrates that the change in rate of interest is duly notified to the Complainants and thereby they are fully aware of the change in interest rate. And further, the Complainants have also on 31.10.12 executed an AOD (Acknowledgement of Debt) by way of Promissory note and Take Delivery letter to DPN i.e. for the outstanding liability and wherein also they have agreed for the interest rate as 11.75% p.a. and that being the case, the Complainants are fully aware of the change in interest rates. The OP further submits that, the Complainants have also collected bank statements regularly and so also Interest Certificates every year (for IT purpose) and also on 31.10.12 acknowledged the loan debt by executing fresh DPN and letter and at that point of time also, the Complainants did not raise any objections or taken the contention that bank has charged excess interest and thereby they have agreed for the said change in interest rate and now that too after closing the loan account, without any protest or demur, are claiming that OP bank has charged excess interest, which is far away from truth. The OP further submits that, the H.O.Circular dtd.14.08.09 and also the circular dtd.09.08.12, clearly shows that the rate of interest applicable for the floating rate as – loan upto Rs.30 lakhs first year 8% next two years 9.5% fourth year onwards as per the then prevailing slab rates at the beginning of fourth year and which is very much as per the CSI and accordingly the bank has charged the interest and not otherwise. And at no point of time bank has charged excess interest as claimed by the Complainant. The OP further submits that, the rate of interest are changed from time to time as per the directions of the RBI and as and when the changes takes place, the Head office issues circulars noting about the change in rate of interest and the same will be exhibited in the notice board, maintained in the branch, regularly as and when such circulars are issued and so also the same will be published in website. The OP further submits that, on receipt of the letter from the Complainants, OP replied to the same and informed them that, it has not charged any excess interest. But, however has given the option of conversion, despite receipt of the same, the Complainants have filed this complaint without any basis. Hence prays for dismissal of the complaint.

4. The Complainants to substantiate their case filed affidavit evidence and produced the documents. OP filed affidavit evidence and produced the documents. Both filed written arguments. We have gone through the available materials on record. Heard.

5. The points that arise for our consideration are:

1. Whether the complaint filed by the Complainants is barred by limitation ?

2. Whether the Complainants prove the deficiency of service on the part of OP, if so, entitled for the relief sought for?

3. What order?

        6. Our answer to the above points are as under:

Point No.1:- In the affirmative

Point No.2:- In the negative

Point No.3:- As per final order

REASONS

7. Point no.1 & 2: Since these points are interconnected, hence we have taken these points together for our discussion just to avoid the repetition of the facts.

8. We have briefly stated the contents of the complaint as well as the version filed by OP.  The main contention taken by the Complainants are that, OP did not inform in respect of change of interest which is mandatory under Clause 3. Without informing the change of interest, they have collected the sum of Rs.4,72,104/- in excess.

9. To falsify the contention taken by the Complainant, OP has very well taken its defense in para 4 to 6 of its version stating that, at the time of availing the loan, it is clearly mentioned that, rate of interest is 8% p.a. and rate of interest under floating rate is 8% frozen for the first year 9.5% for the next two year years, and from fourth year onwards as per the then prevailing slab rates at the beginning of the fourth year. Further the first sentence of clause 3 reads as ‘Loan to be covered under Chome-Delight EMI clause.” And the second sentence reads as “loan shall be repayable in 240 months in 240 EMIs starting from EMI for the first year is Rs.25,094/- and EMI for the next two years and from fourth years onwards shall be re-fixed and informed at the beginning of second year and fourth year.” And so also the 3^rd sentence reads as “rate of interest under floating rate is 8% frozen for the first year 9.5% for the next two year years, and from fourth year onwards as per the then prevailing slab rates at the beginning of the fourth year.” Submitting so, from the above it is very clear that, while re-fixing the EMI, the bank shall inform. And nowhere in the said CSI, it is stated that or agreed that, the bank should inform the change of interest rate as and when the same is changed. Hence, it is very clearly mentioned that, CSI rate of interest is floating one. It also submits that, the concerned Circular dtd.14.08.19 also exhibited in the notice board of the OP branch and the same is also uploaded in websites and also published in news papers. Apart from the Agreement for Term Loan, in Clause 3(a), it is very clearly mentioned that the rate of interest is floating rate of 8% p.a…….. or at such other lending rates that the bank may determine to charge from time to time in terms of the directives of RBI……… or otherwise determined by the bank at its discretion “without further reference or notice to the borrower.”  So this clearly indicates that it is already made known to the Complainants in respect of floating rate of interest. The OP has also taken another specific contention stating that, the account extract and also the change of interest rates can be made out and the Complainants have regularly collected the account extracts, which also clearly demonstrates that the change in rate of interest is duly notified to the Complainants and thereby they are fully aware of the change in interest rate. In this context, we find considerable force in the arguments advanced by the learned counsel for the OP in respect of the Complainants having knowledge of change in rate of interest by regularly collecting account extract. It is also interesting to note that, the Complainants have also on 31.10.12 executed an AOD (Acknowledgement of Debt) by way of Promissory note and Take Delivery letter to DPN i.e. for the outstanding liability and wherein also they have agreed for the interest rate as 11.75% p.a. and that being the case, the Complainants are fully aware of the change in interest rates.

10. Though the OP has not taken specific contention that, complaint filed by the complainants is barred by time, but anyhow, when it is noticed by this forum in respect of point of limitation which should not be allowed to scot free without recording the reasons. The Complainants on 31.10.12 executed an AOD (Acknowledgement of Debt) by way of Promissory note and Take Delivery letter to DPN i.e. for the outstanding liability wherein also they have agreed for the interest rate as 11.75% p.a. When such being the case, the Complainants know the rate of interest is 11.75% p.a. Under such circumstances, they are estopped to raise an issue stating that, the change of rate of interest not made known to the Complainants is hit by law of estoppels as contemplated under Sec.115 of the Indian Evidence Act, so also, the claim of the Complainants is also barred by time, since the Complainants are ought to have been file this complaint within two years from the date of executing AOD on 31.10.12 as contemplated U/s.24A of CP Act. Hence, we come to the conclusion that, the Complainant No.1 is practicing Chartered Accountant; the Complainant No.2 is his wife, when they have executed the documents knowing fully well about the terms and conditions incorporated under clause 3 & 3(a) and also the AOD dtd.31.10.12, they should have to be bound by the terms and conditions as per the decision reported in Hon’ble Supreme Court decision reported in (1996) 4 SCC 704 in the case of Bharathi Knitting co., vs. DHL Worldwide Express Courier Division of Air Fright ltd., Accordingly, the complaint filed by the complainants is not only liable to dismiss on the merits but also on the point of limitation. Hence, we answered the point no.1 in the affirmative & 2 in the negative.

  11. Point No.3: In the result, we passed the following:         

  O R D E R

The complaint filed by the Complainants is dismissed. Looking to the circumstances of the case we direct both parties to bear their own costs.

Supply free copy of this order to both the parties.

(Dictated to the Stenographer, got it transcribed and corrected, pronounced in the Forum on this 24^th day of July 2019)

        MEMBER                                             PRESIDENT

Witnesses examined on behalf of the Complainants dated.26.04.16

Sri.Dattatreya Dharwad  

Copies of Documents produced by the Complainants:

Witnesses examined on behalf of the OP dated.15.06.16

Sri.Rudra Setty, Manager of OP bank   

Copies of Documents produced by OP

            MEMBER                                           PRESIDENT