Date of Filing:17.12.2008 Date of Order:13.08.2009 BEFORE THE II ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SESHADRIPURAM BANGALORE-20 Dated: 13TH DAY OF AUGUST 2009 PRESENT Sri S.S. NAGARALE, B.A, LL.B. (SPL.), President. Smt. D. LEELAVATHI, M.A.LL.B, Member. Sri BALAKRISHNA. V. MASALI, B.A, LL.B. (SPL.), Member. COMPLAINT NO: 2725 OF 2008 K.M. Revanna, S/o K.M. Malleshappa, R/at: No. 68/14, 8th Cross, II Main, Bhovipalya, Mahalakshmi Layout, Bangalore-560 086. Complainant V/S 1. The Regional Manager, Housing Development Finance Corporation (HDFC), Near Richmond Circle, Kasthuraba Road, Bangalore-560 001. 2. The Director of Treasuries, I Floor, Podium Block, Visveswaraiah Towers, Ambedkar Veedhi, Bangalore 560 001. Opposite Parties ORDER By the President Sri. S.S. Nagarale This is a complaint filed u/Sec. 12 of the Consumer Protection Act, 1986. The facts of the case are that, the complainant availed housing loan facility through second opposite party to construct his house in site bearing No.1061 situated at Chikkamagalur and opposite party No.1 sanctioned loan of Rs.1,36,000/- and the same was communicated to the complainant vide letter No.174/95-96, dated 22/11/1995 issued by the Deputy Commissioner, Chikkamagalur. As per the said letter he was directed to submit the title deeds of his property and other documents to get the loan amount. The complainant also informed about the mode of repayment. The repayment through installment was to commence from three months from the date of disbursement of 2nd installment. The complainant was to pay the principle amount at the first instance at the rate of Rs.1,700/- for 80 months and secondly to pay the interest amount at the rate of Rs.1,237/- for 40 installments, immediately after the last installment of principle amount. The installment commenced from September-1997 and Rs.1,700/- was being deducted from the salary by 2nd opposite party up to April-2004. The complainant retired from the service on 30/09/2006. The complainant addressed a letter on 31/05/2006 to opposite party No.2 about his retirement and also requested for return of documents pertaining to the property mortgaged to the Bank and also no-objection certificate. Thereafter, the opposite parties did not respond to the request of the complainant. The opposite party neither returned the original documents mortgaged nor did they issue no-objection letter. The complainant went on approaching the respondents and ran around pillar to post to get his matter resolved, but no results. All of a sudden opposite parties written a letter demanding interest of Rs. 1,01,326/- to issue no-objection certificate. The complainant shocked to see the interest particulars and noticed that the opposite parties had calculated the interest hypothetically and arbitrarily which was against the Circular/Notification issued by Deputy Commissioner and also the interest rates were exorbitant. The opponents have charged the interest at the rate of 15.5% from, 20/02/1996 and 23.25% from 01/12/1996 to 31/08/1997. The act of the opposite parties is wholly unreasonable and the interest amount levied is not only exorbitant which also contrary to notification dated 22/11/1995 issued by Deputy Commissioner, Chikkamagalur. Hence, the complainant prays to direct the opposite parties to issue no-objection letter/loan clearance certificate and to return the original documents and also for compensation of Rs.50,000/- for deficiency of service and mental agony. 2. Notice was issued to opposite parties. Opposite parties appeared through counsel and submitted defence version stating that the opposite party No.1 has sanctioned loan amount of Rs.1,36,000/-. The loan was sanctioned under the Line of Credit arrangement between opposite party No.1 and the Government by the recommendation of the Deputy Commissioner. The letter issued by the Deputy Commissioner clearly shows that all the documents have been kept in safe custody of its office. Accordingly the opposite party sanctioned the loan amount to the complainant. As per the agreement which was signed by the complainant deductions were to be made by his employer. The employer of the complainant i.e., the Deputy Commissioner, Chikkamagalur has entered into an agreement with the opposite party No.1 on 16/11/1995 in addition to that the said department has also issued a letter of under taking and guaranteed to the opposite party No.1 on behalf of the complainant herein to take all obligations and liabilities in case the complainant fails to pay the amount to the opposite party No.1. While sanctioning the loan the EMI are calculated and informed by the Head of the Department of the complainant and the repayment was directly made by the Director of Treasuries to HDFC. As per LOC arrangement the Office of Deputy Commissioner retained all original documents of the complainant herein as security towards the said loan. After payment of all the installments of the loan, the Director of Treasuries will issue the Clearance Certificate/No Due Certificate. The complainant has not at all deposited the title deeds with the opposite party No.1 for availing the loan amount. The complainant very well aware that the original title deeds are kept in the safe custody of the Department of Deputy Commissioner. In spite of that the complainant filed false complaint against the opposite parties for seeking direction to return the original document and NOC. Hence, opposite parties prayed to dismiss the complaint. 3. Affidavit evidence of both the parties filed. Arguments are heard. 4. In the light of the arguments advanced before us following points arise for consideration: Whether there was deficiency in service on the part of opposite parties? REASONS 5. The complainant is a retired First Grade Assistant who is working in the Deputy Commissioner’s Office, Chikkamagalur. The complainant had taken housing advance loan of Rs.1,36,000/-. According to the sanction order the amount of loan sanctioned was Rs.1,36,000/- which was repayable by 80 monthly installments of Rs.1,700/- and the interest amount of Rs.49,480/- was payable by monthly installment of Rs.1,237/- for 40 months. The loan sanction order has been produced by the complainant. The complainant has produced amount recovery sheet. As per the statement of account he has paid full principal amount of Rs.1,36,000/- right from September-1997 to April-2004. As per the statement of account the sum of Rs.9,102/- had been recovered from his salary towards interest. The concerned department (salary disbursement authority) had recovered the interest on lesser rate in view of Government Order dated 11/06/2004. As per this Govt. order the rate of interest had been reduced on housing loan advanced to the Government servants. According to that G.O the interest at the rate of 274/- was deducted from salary of the complainant up to June-2006. The total amount collected towards interest had been shown as Rs.9,102/-. It is the case of the opposite parties that the above Government Order is not applicable to the case of complainant. Therefore, the lesser interest collected is not proper. Therefore, the opposite party demanded the balance amount of interest from the complainant. According to the complainant, he is liable to pay interest as per the loan sanction order. As per the account statement the complainant has already paid Rs.9,102/- towards the interest. The complainant is still ready and willing to pay the balance interest of Rs.40,924/-. The complainant had also produced a Challan for Rs.40,924/- and taken the approval of District Treasury Office, Chikkamagalur on that Challan. If the complainant deposits Rs.40,924/- towards the interest then it comes to Rs.49,480/- including the interest already paid by him. In this way the complainant will satisfy the entire interest amount. The demand put up by the opposite party No.2 for the payment of interest of Rs.92,224/- as per the statement of account is not based on any Circular or Government Order. The said demand is arbitrary and without any basis. The opposite parties have not produced any Circular or Government Order or any documents to show that the complainant is due of interest in a sum of Rs.92.224/-. The demand of interest made by the opposite parties is highly arbitrary and without any legal basis. Therefore, the complainant shall be directed to pay interest on the housing loan as per the loan sanction order. As per the housing loan sanction order principal amount of Rs.1,36,000/- has been recovered regularly from the monthly salary of the complainant and Rs.9,102/- has been recovered towards interest amount and the complainant is now ready and willing to pay the balance interest amount of Rs.40,924/- by way of Challan. In this way the total amount that is going to be paid towards interest by the complainant comes to more than Rs.49,480/-, the interest amount shown in the sanction order of the loan. In this way the complainant will satisfy the interest component of the loan. If the complainant deposits interest component of Rs.49,924/- with the opposite party No.2 after receiving the interest amount, the opposite party No.2 shall have to issue No Due Certificate/Loan Clearance Certificate to the complainant. So that, he can get back all the documents deposited with the Deputy Commissioner Office, Chikkamagalur. After getting the loan clearance certificate from the Director of Treasuries, the Deputy Commissioner Office shall release all the documents deposited by the complainant from Serial No.2 to 10 as shown in the loan sanction letter dated 22.11.1995. The complainant submitted that KGID Bonds and LIC Bonds have been deposited with the Deputy Commissioner Office, Chikkamagalur and the policies have been matured. Even after maturity also, he is not getting the amount on account of the original policies are with the Deputy Commissioner Office and if the documents are released to him he will get the maturity amount of the policies. The complainant being a retired Government Servant had suffered lot on account of some miscalculation and arbitrary demand of interest on the housing loan. Consumer Protection Act is a social and benevolent legislation intended to protect better interest of the consumers. The complainant has come forward to pay the balance interest to the department. Therefore, his request deserves to be accepted and he shall be granted the required relief. So that, the complainant may get justice. In the result I proceed to pass the following: ORDER 6. The complaint is allowed. The complainant is directed to pay Rs. 40,924/-, the balance interest to the opposite party No.2 through Government Challan and on his deposit, the opposite party No.2 shall issue No-Due Certificate/loan Clearance Certificate to the complainant. The complainant is entitled for return of the original documents produced/deposited by him at the time of sanction of loan in the Office of the Deputy Commissioner, Chikkamagalur. 7. Send the copy of this Order to both the parties free of costs immediately. 8. Pronounced in the Open Forum on this 13TH DAY OF AUGUST 2009. Order accordingly, PRESIDENT We concur the above findings. MEMBER MEMBER rhr.,