ABHEY RATTAN LAMBA vs Canara Bank

THIS appeal has been directed by the complainants against order dated 25. 7. 2006 passed by Consumer Disputes Redressal Forum-I, Union Territory Chandigarh (hereinafter to be referred as District Consumer Forum), vide which the complaint of appellants (complainants) was dismissed with no order as to costs.

THE appellant No. 1 Sh. Abhe Rattan Lamba got education loan in the month of September,92 with a limit of Rs. 2. 5 lakh. He had executed the requisite loan documents on 4. 8. 92. However, on 15. 11. 1992 he had requested the respondents to reduce the limit of loan from Rs. 2,50,000 to Rs. 2,00,000 and subsequently issued reminders on 20. 12. 1992 and 22. 12. 1992. Ultimately, respondents on 15. 4. 1999 allowed concession in the interest treating the limit to be Rs. 2,00,000 i. e. it was reduced from 19. 75 % to 14% retrospectively with effect from 20. 12. 1992 and thus passed interest benefit of Rs. 29,607 to appellant No. 1. According to respondents, as per letter Annexure C-6, Canara Bank had received request of appellant No. 1 Shri Abhey Rattan Lamba on 20. 12. 1992 and from that date the benefit had been extended because the interest had been lowered from 19. 75% to 14% and thus extended the benefit of Rs. 29,607 as stated above. It is true that respondent had taken more than 7 years to give concession but the concession had been given from the date when respondent had received the request of appellant No. 1 to reduce the limit and as such there should not be any grievance to the appellants on this score. The allegation of respondents is that appellant No. 1 had not adhered to the repayment schedule which attracted penal charges and further he had changed university which he did not inform for a sufficiently long time and did not take prior permission to change the university as mentioned in Annexure C-6. Originally Sh. Abhey Rattan Lamba had taken loan for getting admission in Louisiana University of USA but later on he got admission in Connecticut University. It is stated that appellant No. 1 had applied on 4. 3. 1993 for approval of change of university in 1-20 form with a copy of foreign exchange department as the course in the university was to be completed in December, 95. There is no documentary evidence on file that respondents had agreed in principle for change of university. There was of course delay in extending the concession because the interest was agreed to be 19. 75 and that had to be charged even if the limit sanction is not availed or part of it is availed but keeping in view that appellant No. 1 had paid major part of the loan and only Rs. 38,268 remained outstanding and further he was employed in America and intended to open account with the bank, the rate of interest was decreased as a special case. Thus, it was done as a goodwill gesture, although, it was not permitted under rules and regulations of the bank. Of course, he had been charged some amount as penalty for not making payment of the instalments on due dates. Appellants could not have changed the university or place of education unilaterally because the consent of respondents was required.

The limit of loan was sanctioned to appellant No. 1 on the basis of guarantee instrument dated 4. 9. 1992 executed by Smt. Asha Rani Lamba and Sh. Agia Ram Lamba and had further pledged shares of various companies held by appellants, wife of Sh. Agia Ram Lamba and daughters worth over Rupees five lakh. The main allegation of appellants is that if the interest part had been decided in time and would not have taken seven years, then they would have got security released earlier as in the meantime rates of security had fallen down, thus, they had suffered loss. No worthwhile evidence had been led that the shares which were pledged with respondent No. 1 and were released on 16. 11. 1999 had suffered in value due to fall of rates. No documentary evidence has been placed on file that on 20. 12. 1992 the price of shares was so much and on 16. 11. 1999 the price had fallen and it was so much and thus, they had suffered loss.

IT is true that loan had been refunded on 3. 5. 1999 and the securities were released on 16. 11. 1999 but according to letters written by respondents, it was appellants who had not taken the securities or had not taken any steps in getting securities i. e. shares pledged released. It may be that they had not intentionally got released shares in order to get compensation. At present there is further no evidence that in November,99 the shares market had crashed. On the other hand, respondents had written letters to appellants and also pointed out on their personal visits that they could collect the security pledged to the loan but they persisted that till bank refunded penal interest they would not accept the security. Although, they were informed that concession in rate of interest had already been extended and there was no case for refund of penal interest. In the letter dated 31. 12. 99 it is also mentioned by the respondents that they had not refused to release the securities and further they stated that a period of 7 years was taken as a big interest benefit was to be passed and that was extended only as a goodwill gesture because of valuable long connection. Thus, there is no evidence that the appellants had suffered loss of Rs. 2,76,000 due to non-release of shares in time because no documentary evidence has been led to that effect. Moreover, it is speculative loss which has been referred by the appellants and cannot be accepted by the Fora. It is clearly mentioned in Clauses (f) and (g) of terms and conditions of the loan as appended on page 9-10 of the application form for term loan for prosecuting education that the borrower should not , without the bank''s written prior permission, change the course of studies or the place of study or the educational institution. However, appellant No. 1 without bank''s prior permission had changed the course of studies, changed place of studies as well as the educational institution. Thus, appellant No. 1 definitely committed error by not seeking prior written permission from the bank. On this score, it is appellant No. 1 who was deficient and not the respondents.

COUNSEL for appellants contended that respondents had charged Rs. 7,590 as extra interest. This amount was due because the repayment was not made within scheduled time, as such extra interest had been charged which the bank was competent to charge. We concur with the reasoning given by the District Consumer Forum and hold that there is no force in the appeal and as such the same is dismissed. Copies of this order be communicated to the parties, free of charge. Appeal dismissed.