STATE BANK OF INDIA vs Shoba Mohan

REVISION Petition No. 2205 of 2015 has been filed by the petitioner/opposite party against the order dated 24.4.2015, passed by West Bengal State Consumer Disputes Redressal Commission, Kolkata (short, "State Commission") in First Appeal No. 349 of 2014.

THE facts of the case as per the respondent/complainant are that on 23.11.2005 the she had applied for a Housing Loan to the O.P. - Bank (petitioner herein) in order to purchase a flat being No. 4E, at 4 floor of a building situated at 135A, S.P. Mukherjee Road, Kolkata - 700026 and the O.P/Petitioner sanctioned an amount of Rs. 21,96,000/ - towards the loan with an interest @ 7.75% p.a. on daily reducing balance at monthly rests subject to rescheduling of the interest at the end of every three years. It was also mentioned under the terms that if the borrower was not agreeable with the reset interest rate she should request SBI within 15 days of receipt of notice issued by the Bank intimating the change of interest rate so that the borrower might liquidate the loan by repaying the loan amount with interest. The Complainant had further stated that on 31.05.2011 the O.P/Petitioner - Bank had reset the rate of interest as 11.25% p.a. w.e.f. 23.12.2008 and debited an amount of Rs. 1,35,151/ - from the loan account of the Complainant as interest arrears. Stating these facts the Complainant filed the petition of complaint praying for direction upon the O.P/Petitioner that considering the gross deficiency in service and lack of any serious efforts by the Bank to redress the grievance by making compensation for mental agony and financial distress imposed on the Complainant and to reverse the wrong debit dated 31.05.2011 as well as to restore interest @ 7.75% per annum till 23.12.2014.

THE O.P/Petitioner contested the case and filed written version contending, inter alia, that the O.P. - Bank had the sole authority to reset the rate of interest. The O.P/Petitioner further stated that as per terms of the sanction letter the interest @ 7.75% was valid from 09.12.2005 to 09.12.2008. The Bank reset the rate of interest on 09.02.2011 w.e.f. 10.12.2008 and Rs. 1,35,151/ - had been debited towards arrears of interest. According to the O.P/Petitioner, there is no deficiency in service on the part of the O.P. and, therefore, the case should be dismissed.

THE District Forum vide its order dated 18.2.2014 while allowing the complaint observed as under: - "We have mentally considered the vital document the loan sanctioned letter dated 09 -12 -2005 and wherefrom we have gathered the bank authority has no legal capacity to reset the interest after three years from the date of taking loan back behind the knowledge of the complainant and without any information of the complainant and fact remains in this case bank has miserably failed to prove that at any point of time in the month of December, 2008 or after that till 31 -05 -2011 OP sent any such letter to the complainant for accepting their reset interest @ 11.25% or to close the account if it is not accepted by repayment of the entire loan when that is that precondition of resetting the interest as per agreement in between the complainant and the OP what has embodied in the sanctioned letter dated 09 -12 -2005, then it is clear OP Bank violated grossly the terms and condition of the agreement.

Practically, the written version is also silent in this regard but OP has tried to say both the parties are guided by the condition as embodied in the loan agreement and also in the sanctioned letter when that is the fact then we are relying upon the defence of the OP and after relying upon the defence of the OP we have gathered that OP is equally bound to perform their part performance as per agreement to inform the complainant about the reset of the interest after lapse of three years and thereafter if it is received by the complainant then it is the option or liberty of the complainant either to accept the interest or pray for cancellation of the loan agreement on repayment of full amount. But that has not been done by the OP but it is evident from the OP''s own overact that OP did everything after lapse of 6 years from the date of sanctioning the loan on 09 -12 -2005 and fact remains no intimation was given to the complainant prior to the resetting of the interest and when that is the fact then it is clear OP did not perform their part performance as per agreement and practically complainant has no fault in this regard... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ...So, considering that ruling and the present conduct of the OP we are convinced that bank authority back behind the knowledge of the complainant and without any intimation and information to the complainant about their resetting of interest after lapse of 6 years changed interest @ 11.25% and charged a huge amount from back date i.e. from 10 -12 -2008 and till 31 -05 -2011 but anyhow the OP has failed to give any explanation to the Forum why they kept the customer in darkness violating the terms and condition of the policy and so, there is no alternative but to hold that the bank authority adopted unfair trade practice keeping the complainant in darkness and charged reset interest at their own wish.

Considering all the above facts, materials, conduct, unfair trade practice of the OP and unscrupulous service of the OP are well proved and for which no doubt complainant suffered mentally and also suffered loss because if the matter ought to have been brought to the notice of the complainant in time as per terms and conditions of the loan agreement in that case complainant may repay the entire loan and repay the entire loan amount but that scope has not been given by the OP to the complainant for which no doubt complainant has been able to prove the vital allegation against the bank administration about their unfair trade practice in respect of reset interest or resetting the interest rate and also their trends to change interest back behind the knowledge of the complainant and not only that complainant has also proved that complainant was never informed about that when the allegation of the complainant is well proved against the OP.

In the result, the case succeeds.

Hence,

Ordered

That the case be and the same is allowed on contest with a cost of Rs. 10,000/ - (Rupees Ten thousand only) against the OPs.

OP Bank is hereby directed to pay a compensation of Rs. 25,000/ - (Rupees Twenty Five thousand only) to the complainant for harassing and causing mental pain to the complainant and for adopting unfair trade practice.

OP bank is hereby directed not to deduct any amount of interest in respect of the present loan of the complainant at the rate of 11.25% p.a. and if any such amount is deducted that shall be deleted from the loan account.

But considering the present total dispute we are directing the complainant either to write a letter to the bank for closing the entire loan account on receipt of the balance loan amount @ 7.75% interest up to date. In the regard complainant shall have to deposit the entire balance loan amount as it would be found as on the date of her application and bank shall have to accept the said amount with interest @ 7.75% and upto close loan account by issuing NOC and handing over all documents in respect of the said loan agreement in favour of the complainant and it must be completed within two months by the parties and OP bank shall not charge any further interest above @ 7.75% p.a. with such closure and no interest shall be assessed @ 11.25% for any period and if it is assessed it shall be deducted from the balanced loan amount. OP shall have to comply this order on the basis of application of the complainant and complainant may accept this option and close down the same and if complainant is unwilling to accept the option in that case it is the option of the complainant what process they shall have to adopt in respect of the loan account. So, parties are directed to comply this order very strictly.

Within two months from the of this order parties shall have to report what is the maturity of the spirit of this order but for adopting the unfair trade practice and unscrupulous service to the consumer OP Bank is imposed Rs. 25,000/ - (Rupees Twenty Five thousand only) as punitive damages and it is imposed to check the unfair trade practice by the bank administration and same shall be deposited to the present Forum in the account of President, D.C.D.R.F., Kolkata, Unit -II.

OP Bank authority is hereby directed to comply the order in respect of payment of cost, compensation to the complainant deposit of punitive damages to this Forum within one month failing which for each days delay penal interest @ Rs. 300/ - shall be assessed over the same which shall be paid by the OP and further penal action u/s. 27 of the C.P. Act, started against them for which further penalty shall be imposed."

The petitioner filed an appeal before the State Commission which vide its order dated 24.4.2015 dismissed the complaint and observed as under: -

"Having heard the submissions and on perusal of record it appears that the moot point is whether the Bank authority rescheduled the rate of interest as per terms of the allotment letter in respect of the loan disbursed. In the allotment letter dated 09.12.2005 the Bank authority clearly mentioned "thenceforth the rate of interest varied...........as applicable to the Loan. SBI shall be the sole judge to determine whether such conditions exist or not. If the Borrower is not agreeable to the revised interest rates so fixed, the Borrower shall request SBI, within 15 days of receipt of the notice intimating change in interest rates from SBI, to terminate the loan and shall repay the loan and any other amount due to SBI in full and final settlement in accordance with the provisions of this Agreement relating to prepayment." Therefore, it is evident therefrom that the Borrower must be served with the notice regarding proposed change in rate of interest and, if he does not agree with the same, he may avail the opportunity to liquidate the loan by paying outstanding amount. In the instant case no prior notice intimating proposed change in interest has been served upon the Respondent and thus she has got no opportunity to liquidate the loan. This infringement of right of the Respondent in violation of the terms of the contract is an example of deficiency in service on the part of the Appellant.

In such view of the matter, we are of opinion that the Ld. District Forum rightly passed the impugned order.

In the result, the Appeal fails.

Hence

ORDERED,

that the instant appeal is dismissed on contest without cost. The impugned Judgment of the Ld. District Forum is affirmed."

HENCE , the revision petition.

WE have heard learned counsel for the petitioner and gone through the records. Learned counsel for the petitioner submitted that as per the sanction letter, the petitioner could at its sole discretion alter the rate of interest suitably and prospectively in the event of major volatility in the interest rates during the period of the agreement. The petitioner would be the sole judge to determine whether such conditions existed or not. Thus respondent was aware that the interest of 7.75% as fixed in the sanction letter dated 09.12.2005 could be altered and hence it was within their rights to charge the higher rate. We agree that the petitioner was within its rights to alter/increase the rate of interest. However, the sanction letter also provided that "if the borrower is not agreeable to the revised rate of interest so fixed, the borrower shall request SBI within 15 days of receipt of notice intimating change in interest rates from SBI to terminate the loan and shall repay the loan and any other amount due to SBI in full and final settlement in accordance with the provisions of the agreement relating to repayment.". Hence, it is evident that the terms of the agreement mandated that not only could the rate of interest be altered "suitably and prospectively" but that the bank was bound to give 15 days'' notice to the borrower to enable the borrower to decide whether she was willing to pay higher rate of interest as intimated or wanted to apply for termination of the loan. On our repeated enquiry, the learned counsel for the petitioner could show no evidence that the petitioner had issued a notice to the respondent regarding increase in rate of interest and the total amount due as interest arrears before deducting the arrears unilaterally from the loan account of the respondent. In fact, in their reply before the District Forum the petitioner had stated that as per the agreement, the rate of interest was 7.75% from 9.12.2005 to 10.12.2008 and thereafter the rate of interest was changed. The OP charged 7.75% interest upto 8.5.2011 and from 9.2.2011, the changed rate of interest was effected and on 31.5.2011, they had debited a sum of Rs. 1,35,151/ - the arrear interest as per accounts in respect of the changed interest from 10.12.2008 to 31.5.2011. They had also stated that the rate of interest was mentioned in the statement of accounts and from the statement of accounts, the respondent could have got the details. This tantamount to a clear admission that no notice was issued. This is in violation of the terms of the agreement. We agree with the State Commission that this "infringement of right of the respondent in violation of terms of the contract is an example of deficiency in service on the part of the Appellant" (Petitioner).

THE Hon''ble Supreme Court in Mrs. Rubi Chandra Dutta Vs. M/s. United India Insurance Co. Ltd, : 2011 (3) Scale 654 has observed: "Also, it is to be noted that the revisional powers of the National Commission are derived from Section 21(b) of the Act, under which the said power can be exercised only if there is some prima facie jurisdictional error appearing in the impugned order, and only then, may the same be set aside. In our considered opinion there was no jurisdictional error or miscarriage of justice, which could have warranted the National Commission to have taken a different view than what was taken by the two Forums. The decision of the National Commission rests not on the basis of some legal principle that was ignored by the Courts below, but on a different (and in our opinion, an erroneous) interpretation of the same set of facts. This is not the manner in which revisional powers should be invoked. In this view of the matter, we are of the considered opinion that the jurisdiction conferred on the National Commission under Section 21(b) of the Act has been transgressed. It was not a case where such a view could have been taken by setting aside the concurrent findings of two fora."

THUS , no jurisdictional or legal error has been shown to us to call for interference in the exercise of powers under Section 21(b) of Act. Since, the State Commission has given detailed and reasoned order which does not call for any interference nor it suffer from any infirmity or erroneous exercise of jurisdiction or material irregularity. Thus, the present revision petition is hereby dismissed. No order as to cost.