Kalka primary Agricultural And Rural Development Bank Ltd. vs Mam Chand

THE Kalka Primary Agricultural & Rural Development Bank Ltd. (hereinafter referred to as the Petitioner) has filed the present revision petition against the orders of the State Consumer Disputes Redressal Commission, Panchkula (hereinafter referred to as the State Commission) which has ruled in favour of one, Mam Chand (hereinafter referred to as the Respondent) who was the original complainant before the District Forum.

THE facts of the case are that the Respondent had taken a loan of Rs.4,50,000/- from the Petitioner/bank for setting up a bee-keeping unit at 16% simple rate of interest per annum on 12.01.2001 in 8 yearly installments payable monthly with 6 months grace period. THE Respondent had also deposited Rs.22,500/- as share money as required with the Petitioner/bank. THE loan amount was released in 3 installments by the Petitioner/bank on various dates and the last installment of loan amounting to Rs.2 lakhs was released on 20.01.2001. As such the Respondent became entitled for repayment of first installment of loan with interest on 20.01.2002. THE Respondent deposited Rs.20,000/- only and thereafter failed to deposit any amount and thus became a defaulter. He was given 6 months grace period as per agreement and bank policy to pay the installment. On 31.03.2003, the case of the Respondent was declared as a Non-Performing Asset (NPA) since he failed to pay the installment even after the grace period. In 2004, as per a policy decision of National Bank for Agriculture & Rural Development (NABARD), the Petitioner/bank introduced a scheme known as One Time Settlement scheme (OTS) in respect of the loan amounts of small and marginal farmers which were in default as on 24.06.2004. THE Petitioner/bank informed the Respondent that if he wanted to avail the benefit of 50% waiver of interest under the OTS, he should repay the entire loan amount in lump-sum by 31.12.2005. THE Respondent agreed to avail the benefit of the scheme and paid a sum of Rs.1,40,000/- on 29.05.2005 and on 27.12.2005, he cleared the entire loan by depositing a further sum of Rs.5,67,500/- in cash. Rs.22,500/- deposited earlier with the bank as share money was adjusted in the loan amount. THE Petitioner/bank thereafter, granted him the benefit of OTS by waiving 50% of the interest from the date his case was declared NPA till the date of final realization which was calculated at Rs.55,750/-. The Respondent aggrieved because of the lesser amount calculated as due to him, filed a complaint before the District Forum seeking refund of Rs.1,30,500/- which according to the Respondent was charged in excess by the Petitioner/bank on account of interest including penal interest and also to refund Rs.10,000/- charged for legal fees and Rs.10,000/- as cost of complaint.

The District Forum after hearing both parties accepted the complaint and directed the Petitioner/bank to refund Rs.1,30,500/- with interest-compensation at the rate of 6% per annum simple interest from 27.12.2005 till realization and Rs.1,000/- as costs of proceedings.

AGGRIEVED by this, Petitioner/bank filed an appeal before the State Commission which upheld the orders of the District Forum and dismissed the appeal. The operative portion of the order of the State Commission reads as follows: The stand of the complainant that he had deposited Rs.1,40,000/- on 29.09.2005 and the balance amount on 27.12.2005, the details of which have been given in Para No.3 of the complaint, have not been refuted from the side of the opposite party. The copy of the one time settlement scheme Ex.C5 dated 22.08.2005 clearly stipulates that the settlement amount will be balance outstanding in the loan account as on 31st March, 2001 and the interest on the balance outstanding loan amount shall be determined after 31.03.2001. It is further stated therein that interest on the balance outstanding amount after 31.03.2001 shall be waived and the credit so accrued after 31.03.2001 in the account will be counted towards payments of settlement amount. With regard to settlement under B class, it has been provided that NPA in the books of accounts after 31.03.2001 shall be worked out taking the balance outstanding in the loan account as on date the accounts were declared NPAs plus 50% of the interest accrued till the date of settlement. The credit amounts were also to be taken into account towards the payment of the settlement amount. From the data furnished on record it has been established that interest, excess interest and penal interest has been charged by the opposite party which comes to Rs.1,30,000/- for which benefit has not been given to the complainant by the opposite party under one time settlement scheme, because in this case the opposite party had charged interest ignoring the terms of the above stated scheme. Therefore, the complainant was entitled to refund the amount recovered in excess after invoking the waiver clause of 50% noticed above. Hence the present revision petition. Learned counsel for both parties made oral submissions. Counsel for Petitioner stated that the learned fora below had erroneously concluded that the Respondent was entitled to 50% waiver of interest from 31.03.2001 whereas his case was declared as NPA not on 31.03.2001 but on 31.03.2003. As per the relevant part of the banks NPA policy and OTS Scheme, 2004, he was entitled for 50% waiver of interest from the date when his loan was declared as NPA i.e. 31.03.2003 till the loan was settled i.e. 27.12.2005. Counsel for Respondent, however, refuted the above contention and stated that the learned fora below had rightly calculated that as per the OTS the actual interest which should have been charged by the Petitioners from the year 2001 to 2003 should be at 8% (i.e. 50% of 16%) and from January, 2004 to October, 2004 it should be @ 6% being 50% of the interest of 12%. No penal interest is to be charged under the OTS scheme. However, the Petitioners erred in charging full interest of 16% plus 12% penal interest during that period because of which the Respondent paid interest of Rs.3 lakhs whereas it should have been Rs.1,69,500/-. Therefore, Rs.1,30,000/-(Rs.3,00,000/- minus Rs.1,69,500/-) should obviously be refunded to him. We have considered the above oral submissions and have gone through the evidence on record.

THE facts about the loan having been taken and the terms and conditions of the loan as also that of the One Time Settlement Scheme are not in dispute. It is only in respect of the date from which the 50% waiver of interest would be due where the contentions of the Respondent and Petitioners are different. We have gone through the OTS scheme and from this it is clear that for accounts which were declared as NPA in the books of the bank after 31.03.2001 which covers the present case, the settlement amount will be the balance outstanding in the loan accounts as on the date the accounts were declared as NPA plus 50% interest accrued till the date of settlement. The State Commission in its well reasoned order has rightly calculated that an excess amount of Rs.1,30,500/- has been charged by the Petitioner/bank for which no benefit has been given to the Respondent as per the provisions of the OTS. We agree with both the reasoning and calculation of the fora below and uphold their orders in this case. We, accordingly, direct the Petitioners to refund the excess interest already paid by the Respondent amounting to Rs.1,30,500/- along with interest-compensation @ 6% per annum with effect from 27.12.2005 till realization and also Rs.1,000/- as costs of proceedings within 30 days from the date of this order. The Revision Petition is dismissed.