Pritam Pal, President:
1. The aforementioned two appeals arise out of one and the same order dated 3.9.2009 passed by the District Consumer Forum-I, U.T. Chandigarh whereby complaint bearing No. 503/2009 filed by Naresh Malhotra (hereinafter to be referred as complainant) was allowed against ICICI Bank Limited etc. (hereinafter to be referred as OPs) in the following terms:
âThe OPs are directed not to charge any pre-payment charges and if the same has been charged by it during the pendency of the complaint, to refund the same, along with interest @ 8% per annum since the date of receipt of the said amount till the amount is paid back to the Complainant. They are also directed to pay Rs. 50,000 as compensation to the Complainant, along with Rs. 5,000 as costs of litigation, within 30 days from the date of receipt of the copy of this order, failing which they would be liable to pay the entire amount along with penal interest @ 12% per annum since the filing of the present complaint i.e. 15.4.2009, till realization.â
2. In fact appeal No. 582/2009 has been filed by ICICI Bank Limited for setting aside the impugned order whereas appeal No. 576/2009 has been filed by the complainant for enhancement of compensation. Since, in both these appeals, common questions of law and facts are involved, so, we are deciding these appeals by this common judgment.
3. In nutshell, the facts culminating to the commencement of these two appeals may be recapitulated thus:
The complainant on the inducements and representations made by representatives of OPs applied for a home loan of Rs. 1,15,00,000 at 9% per annum adjustable interest rate/floating rate. The loan was sanctioned on 31.5.2005 and disbursed on 8.6.2005 and was to be repaid in 180 EMIs of Rs. 1,16,641 comprising of principal and interest. The complainant received letter dated 24.6.2005 according to which pre EMI for June, 2005 was Rs. 54,494. The EMI chart supplied by the OPs showed that from January to July, 2005 they would charge interest @ 9% per annum but immediately after disbursement of loan they increased the same to 9.5% per annum. In the month of August, 2005 the EMI was Rs. 1,16,641 but OPs charged Rs. 4792 extra. Then EMI remained constant from 1.8.2005 till 1.9.2006. However, from the statement of account complainant found that OPs charged interest @ 10% per annum after April 2006, 11% per annum after July 2006, 11.5% per annum after January 2007 and 13.5% per annum after April 2007. The complainant in order to ease the pressure of increased rate of interest, paid Rs. 40.00 lacs to OPs, after availing loan from GE money in September 2006 but after receipt of the same, the OPs in October 2006 at their own increased the EMI from Rs. 1,16,541 to Rs. 1,38,350 and reduced the EMIs from 180 to 93. The complainant made several representations to OPs for clarifying the position upon which he received letters dated 4.1.2008 and 26.5.2008 from the OPs offering 10.5% per annum rate of interest with nil switch fee which was accepted by him but he was charged @ 11.25% and was informed vide letter dated 29.8.2008 that from 1.10.2008 the rate of interest would be 12%. The complainant ultimately decided to prepay the entire loan but the OPs demanded exorbitant pre-payment charges @ 2%. Hence, alleging deficiency in service and unfair trade practice on the part of OPs, complainant filed complaint before the District Forum.
4. On the other hand, the case of OPs before the District Forum was that the complainant of his own opted for the loan facility at the adjustable interest/floating rate. It was pleaded that the interest was charged as per the loan agreement and the loan was sanctioned @ 9% but since the floating reference rate was increased by 0.50% on 15.6.2005, the applicable rate of interest was changed to 9.50%, however, as a gesture of goodwill and with a view not to overburden the complainant the EMI was kept intact and the tenure was changed accordingly. It was admitted that the complainant pre-paid a part of the loan to the tune of Rs. 40.00 lacs on 27.9.2006 but no specific request regarding reduction in EMI was received and according to the normal banking procedure the EMI was kept intact and the loan tenure was reduced automatically which was in his interest. Complainant was sent letter dated 4.1.2008 offering 10.50% p.a. rate of interest but the same was not accepted by the complainant and as such without his consent the said facility could not be provided to him. It was admitted that the complainant was charged pre-payment charges according to the clause which was mentioned in the Agreement signed between the parties. OPs had acted in accordance with the Agreement and no extra charges were ever levied against the account of complainant. It was further pleaded that increase/decrease in CRR and Repo-rates by RBI from time to time is only a guiding factor for the banks for determining their own rate of interest and they had not violated the guidelines as proved by the Reserve Bank of India. A prayer was made for dismissal of the complaint.
5. The District Consumer Forum after going through the evidence and material brought on record and hearing the Counsel for the parties, allowed the complaint as indicated in the opening part of this judgment. This is how feeling aggrieved, opposite parties as well as complainant have filed their separate appeals.
6. We have heard learned Counsel for the parties and gone through the file carefully. In the appeal filed by the complainant, he has sought enhancement of compensation already awarded by the District Forum to the tune of Rs. 50,000 whereas in the cross appeal filed by OPs, learned Counsel has made reference to letter Annexure C-1 dated 31.5.2005 and submitted that in fact OPs are entitled to charge pre-payment charges @ 2%.
7. We have given our thoughtful consideration to the above points raised on behalf of the parties and have also gone through the letter dated 31.5.2005- Annexure C-1 written by OPs to the complainant as well as to the terms and conditions contained in written Agreement Ex. C.3/A dated 6.6.2005 entered between the parties. In fact OPs are proved to have accepted the pre-payment of Rs. 40 lacs from the complainant without any resistance or protest. Further, a perusal of contents of letter Annexure C-1 stated to have been written by OPs to the complainant goes a long way to show that the same was written prior to the entering into agreement Ex. C-3/A between the parties. It is further pertinent to mention here that this letter is not proved to have been accepted by the complainant. Moreover, had the terms contained in this letter been given consent by the complainant then same would have been incorporated in the Agreement Ex. C3/A entered into between the parties at a later stage i.e. on 6.6.2005.
8. A perusal of the terms and conditions of the Agreement which is duly signed by the parties does not disclose anywhere about any rate of charges to be levied by OPs upon the complainant on prepaid amount. In fact in order to claim charges @ 2% as being now alleged by OPs in its appeal should have been incorporated in clear terms in the Agreement of Loan but this fact is missing therein. Faced with such a situation, complainant cannot be held liable for making any pre-payment charges. Admittedly complainant could not show any deficiency in service with regard to charging of interest at the floating rate by OPs.
9. Thus, taking an overall view, compensation of Rs. 50,000 awarded to the complainant on account of sending a notice for pre-payment charges, appears to be on the higher side which in the given facts and circumstances is reduced to Rs. 25,000.
10. But for this modification in the quantum of compensation awardable to the complainant, which has been reduced from Rs. 50,000 to Rs. 25,000, both the appeals are hereby dismissed. The other part of the impugned order dated 3.9.2009 shall remain intact.
Certified copies of this order be sent to the parties, free of charge. The file be consigned to record room.