Punjab

Ludhiana

CC/16/435

Kishore Chand - Complainant(s)

Versus

Union Bank of India - Opp.Party(s)

M.S.Sethi Adv.

20 Sep 2017

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, LUDHIANA.

                                                            Complaint No: 435 dated 07.06.2016.                                                                                   Date of decision: 20.09.2017

                   

Kishore Chand s/o Sohan Lal & Sukhwinder Singh s/o Kishore Chand r/o 182-83, Chand Colony, Street No.2, Chotti Haibowal, Ludhiana.                                                                                                                                          ..…Complainants                                                               Versus        

Union Bank of India, Cinema Road, Kesar Ganj Chowk, Ludhiana, through authorized signatory.                                                                                                                                                                                            …..Opposite party

            Complaint under Section 12 of Consumer Protection Act, 1986.

QUORUM:

SH. G.K. DHIR, PRESIDENT                                                                            SH. PARAM JIT SINGH BEWLI, MEMBER

COUNSEL FOR THE PARTIES:

For complainants             :         Sh.M.S.Sethi, Advocate

For OP                             :         Sh.Narinder Singh, Advocate                        

ORDER

PER G.K. Dhir, PRESIDENT

1.            Complainants availed services of OP for contracting loan of Citi Financial. OP paid directly Rs.2,88,000/- to Citi Financial and remaining amount of Rs.1,12,000/- was credited to the saving account No.309002010030693 of complainants opened with OP. This credit was given against the term deposit loan of Rs.4 lac. Sanction advice dated 17.12.2005 was supplied to the complainants, but the terms and conditions along with agreement form was not handed over to the complainants at any stage. Sanction letter disclosed as if the loan amount payable in 117 monthly installments of Rs.4936/- each. Complainants handed over the original sale deed of property No.182-183, Chand Colony, Chotti Haibowal measuring 200 sq.yard to OP and even handed over security cheques No.114502-08 and cheque No.114512 from its other account maintained with OBC, Tagore Nagar, Ludhiana. Complainant started depositing monthly installment of Rs.4936/- with OP w.e.f.10.2.2006, but after accepting five installments of that amount, OP without any intimation started collecting monthly installment of Rs.5004/-. Complainant paid all the 117 installments from February 2006 till December 2015 regularly without any break or delay in payments. After clearance of loan amount, complainant claimed NOC and original sale deed, but the same was denied by OP on the ground that still amount of Rs.86,631/-, being the difference of amount of Rs.22,931/- against the actual monthly installment of Rs.5237/-, instead of Rs.5004/- and Rs.63,700/- against difference of interest change outstanding against the complainant. OP clarified as if the said demand stacked from 2006 till date. Complainant is not liable to respond to this illegal demand because banks cannot enhance the rate of interest on providing the loan amounts against the RBI guidelines, which provide that in case of change of rate of interest, notice to borrower’s  be issued by the bank. So, by pleading deficiency in service on          the part of Ops, prayer made for directing OP to desist from putting forth the illegal demand of Rs.86,631/- because the same is alleged to be an act of unfair trade practice. Compensation for mental harassment and agony of Rs.1 lac, but litigation expenses of Rs.11,000/- more claimed.

2.                 In written reply submitted jointly by OPs, it is pleaded interalia as if complaint is not maintainable because the complainants have not approached this Forum with clean hands owing to suppression of material facts. It is claimed that complainants at the time of sanction of loan, signed documents after knowing the terms and conditions of the loan. In the loan agreement, it has been specifically mentioned that rate of interest can be changed as per discretion of the bank as per money market conditions. Further, as per those terms and conditions, installments will be appropriated partly towards interest and partly towards the principal as per the rules of the bank framed from time to time. Complainants issued cheque No.114503 dated 23.4.2016 for Rs.84,274.34p drawn at Union Bank of India, in account of Sh.Kishore Chand(complainant no.1) for the remaining balance amount. However, that cheque stood dishonoured on presentation regarding which intimation was given to the complainants, but the complainants requested OP not to initiate any legal action because he was in financial crises, due to which, he will clear the whole amount of the loan after few days. Complainants instead of repaying the remaining amount, have filed this false complaint. Admittedly, loan was advanced to the complainants, but each and every other averment of the complaint denied, by praying for dismissal of complaint.

3.                 Complainants to prove their case tendered in evidence their joint affidavit Ex.CA along with documents Ex.C1 to Ex.C4 and thereafter, counsel for complainants closed the evidence.

4.                 On the other hand, counsel for Op tendered in evidence affidavit Ex.RA of Sh.Surendra Partap Yadav, Assistant Manager of OP along with documents Ex.R1 to Ex.R5 and then closed the evidence. 

5.                 Written arguments not submitted by any of the parties. Oral argument alone addressed by counsel for parties and those were heard. Records gone through carefully.

6.                 Counsel for complainants after taking us through Ex.C1=Ex.R5 vehemently contends that rate of interest settled was 2.75% below the 10.75% per annum Benchmark Prime Lending Rate(BPLR) and as such, the complainants are bound to pay interest @8% per annum only. Certainly in Ex.C1=Ex.R5, it is mentioned as if on the secured term loan union home of Rs.4 lac, interest @2.75% below BPLR=8% payable. However, parties are governed by the terms and conditions of loan agreement because contract of loan is binding on the parties.

7.                 It is vehemently contended by counsel for complainants that terms and conditions of loan agreement were not supplied to the complainants and only copy of sanction letter was supplied and as such, complainants have got no knowledge of the terms and conditions of the loan agreement. That submission of counsel for complainants has no force because loan agreement Ex.R1 was arrived at between the parties on 23.12.2005 and thereafter, deduction of amount of Rs.4936/- started to be made through EMI from the saving bank account of complainants w.e.f.10.2.2006 to 10.6.2006, but subsequently Rs.5004/- each per months w.e.f.10.7.2006 to 25.12.2015 deducted as borne from the contents of copies of saving bank account statements produced on record as Ex.C2 to Ex.C4. So, in view of these deductions of varied amount of EMI’s, it is obvious that complainants virtually got knowledge about enhancement of EMI’s after 10.7.2006, when amount of Rs.5004/- deducted from their saving bank account. It cannot be believed that complainants would not have got the knowledge of entries of saving bank passbooks Ex.C2 to Ex.C4 and as such, it is obvious that complainants got knowledge of varied rate of interest after 10.7.2006, when the enhanced EMI of Rs.5004/- for the first time was deducted from their account. Complainants acquiesced in the act of OP in deducting Rs.5004/- per month as EMI w.e.f.10.7.2006 to 25.12.2015 and as such, in view of this long acquiesce of 9 years, now complainants estopped from claiming that they were not aware of the terms and conditions of the loan agreement Ex.R1 providing for charging of floating rate of interest.

8.                 Even if in loan agreement Ex.R1 mention of payment of loan in EMI of Rs.4936/- of 117 months made, but in the subsequent clause-C of loan agreement Ex.R1, reference of charging of minimum interest @8% per annum made. Perusal of clause-B of Ex.R1 reveals as if bank has sole                    discretion to alter or re-schedule the installments if it deemed fit. Clause-C of loan agreement Ex.R1 provides that bank may in its sole discretion increase the rate of interest, if unforeseen or extraordinary changes take place in the money market conditions during the currency of this loan agreement and thenceforth, the rate of interest increased as aforesaid shall be applicable to the said loan. Further as per this clause-C of Ex.R1, bank shall be the sole judge to determine whether such conditions exist or not. When such discretion through loan agreement itself given to the bank to enhance the rate of interest as per money market conditions, then certainly complainants after paying enhanced EMI of Rs.5004/- for nine years, now cannot claim that they were not aware of the conditions of loan agreement providing for discretion of the bank to enhance the rate of interest.

9.                 Further, after going through demand promissory note Ex.R2 as well as letter of sanction Ex.R3 and schedule Ex.R4 as well as Ex.C1=Ex.R5, it is made out as if the rate of interest was 2.75% per annum below BPLR existing on the date of loan agreement namely 23.12.2005,which was 10.75% per annum is a fact borne from the contents of demand promissory note Ex.R2. This demand promissory note Ex.R2 is a Negotiable Instrument Act bearing signatures of complainant no.1 Kishore Chand in Punjabi and one Sukhwinder Dhir in English and as such, legal presumption of truth u/s 118 of Negotiable Instrument Act attached to the contents of Ex.R2. Contents of Ex.R2 provides that the contracted loan of Rs.4 lac will be chargeable with interest at the fixed rate of 2.75% per annum below Union Bank of India’s Benchmark Prime Lending Rate/ such other rates as may be prescribed by the Bank from time to time at monthly rests for value received. This BPLR as applicable  on the date of execution of demand promissory note Ex.R2 was  10.75% per annum as per contents of Ex.R2. So, the contents of Ex.R2 also provides that bank from time to time was having the authority to change the rate of interest depending on money market conditions or such other exigencies. When such powers given by the complainants themselves through Ex.R1 and Ex.R2 to OP to enhance the rate of interest in its discretion, then certainly complainants now estopped from claiming that bank cannot vary the interest rate without notice to them. However, principles of natural justice requires that details of claimable varied rate of interest must be supplied by OP to the complainants for enabling them to find as to whether the amount claimed is in accordance with the terms and conditions of the  loan agreement Ex.R1 and demand promissory note Ex.R2 or not. Those details have not been furnished by OP to the complainants and as such, deficiency in service on the part of OP is to that extent only. However, the plea taken in the complaint regarding demand of Rs.86,631/- is not contested in the written statement, but denial thereof made and as such, OP bank must be saddled with the responsibility of supplying the details of due amount along with varied chargeable rate of interest, as per terms of agreement, to the complainants within 30 days from the date of receipt of copy of this order and thereafter, complainants will be obliged to pay the due amount for getting NOC or the submitted documents back.

10.               As the complainants themselves are in the dark as to what varied rate of interest chargeable by OP from them as per terms and conditions of loan agreement Ex.R1 and as such, it cannot be held that actually the total repayable loan amount has been paid by the complainants till date. If that be the position, then deficiency in service on the part of OP cannot be inferred for finding that act of non-issue of NOC and return of submitted sale deed is illegal or same amounts to deficiency in service on the part of OP.

11.               Benefit from ratio of case cited in para no.10 of the complaint cannot be gained by the counsel for complainants because perusal of ratio of that case reveals that the entire amount of the complainant required to be overhauled strictly as per terms of two loan agreements, meaning thereby that loan accounts needs be reopened as per terms and conditions of the loan agreements. Keeping in view these observations of Hon’ble State Consumer Disputes Redressal Commission, U.T. in appeal Nos.433 and 434 of 2009(referred in para no.l0 of the complaint), there is no escape from the conclusion that OP entitled to charge the varied rate of interest as per the terms and conditions of the loan agreement Ex.R1. There is no stipulation in Ex.R1 or Ex.R2 that OP will notify the complainants about change of rate of interest and as such, if such notification in writing not made by OP to the complainants, then inference of adoption of unfair trade practice cannot be drawn, albeit of violation of principles of natural justice alone can be drawn. Being so, complainants not entitled to any amount of compensation or litigation expenses.

12.               As a sequel of above discussion, complaint disposed of in terms that OP will furnish details along with varied chargeable rate of interest, as per terms of agreement, to complainants within 30 days from the date of receipt of copy of order and thereafter, complainants will be obliged to pay due amount for getting NOC or the submitted documents back. No order as to costs or compensation. Copies of order be supplied to parties free of costs as per rules.

13.               File be indexed and consigned to record room.

                                         (Param Jit Singh Bewli)                      (G.K. Dhir)

                                         Member                                              President

Announced in Open Forum.

Dated: 20.09.2017.

Gurpreet Sharma