M/S. MUTHOOT FINANCE LTD. vs H.B. MOHAMMED & ANR.

This revision petition has been filed by petitioner against order dated 15.4.2014 passed by State Commission in Appeal No. 224 of 2013- The Authorised Signatory, M/s. Muthoot Finance Ltd. VS. H.B. Mohammed & Anr. ; by which while dismissing appeal, order of District Forum allowing complaint was upheld.

Brief facts of the case are that complainants/respondents availed loan of Rs. 9,55,000/- and Rs. 2,50,000/- respectively from opposite party/ petitioner on 18.1.2011 and offered gold ornaments as collateral security. On 10.5.2011, complainants paid Rs. 13,09,700/- including interest of Rs. 1,04,701/-. It was further submitted that opposite party charged exorbitant rate of interest contrary to published in the newspaper and guidelines of Reserve Bank of India. Alleging deficiency on the part of opposite party, complainant filed complaint before District Forum. Opposite party resisted complaint and submitted that complaint was not maintainable as it was a commercial transaction. It was, further, submitted that loan was availed under SPL A/c and complainant agreed to pay interest @ 23%, 24%, 25% and 28% if loan is closed within one month, two months, three months and six months respectively. It was, further, submitted that complainants repaid loan alongwith interest within 112 days without any protest, hence, complaint be dismissed. Learned District Forum after hearing both the parties, allowed complaint and directed opposite party to refund interest charged more thatn 12% and further awarded Rs. 10,000/- as compensation and Rs. 2,000/- as litigation cost. Appeal filed by opposite party was dismissed by Learned State Commission vide impugned order against which this revision petition has been filed.

Heard Learned Counsel for the parties finally at admission stage and perused record.

Learned Counsel for the petitioner submitted that in spite of charging interest as per agreement, Learned District Forum committed error in allowing complaint and directing refund of interest and Learned State Commission further committed error in dismissing appeal, hence, revision petition be allowed and impugned order be set aside. On the other hand, Learned Counsel for respondent submitted that order passed by Learned State Commission is in accordance with law in the light of advertisement dated 8.8.2011, hence, revision petition be dismissed.

Perusal of record reveals that loan was availed under SPL A/c on 18.1.2011 and was repaid on 10.5.2011. learned Counsel for respondent, in support of her contention, placed reliance on advertisement in Udayavani Kannada daily dated 8.8.2011 according to which 12% p.a. interest was to be charged on TPL A/c.

As loan was availed under SPL (Super Personal Loan) A/c, terms & conditions of TPL (True value Personal Loan) cannot be held applicable. Not only this, loan which was availed on 18.1.2011 had already been repaid on 10.5.2011 whereas advertisement regarding TPL was published on 8.8.2011 in the newspaper. Advertisement dated 8.8.2011 can have no relevance with loan availed and repaid before the date. In such circumstances, the aforesaid advertisement is not applicable to the loan availed by complainants.

Opposite party, specifically, pleaded in the written statement that complainants availed loan and agreed to pay interest @ 23% to 28% for early closer of account and certainly parties are bound by the terms & conditions. Learned State Commission observed in the order that rate of interest charged is contrary to RBI Circular. Learned Counsel for respondent has not placed on record any RBI Circular by which charge of higher interest by opposite party was restricted and in such circumstances, merely because higher rate of interest has been charged on account of early closer of SPL loan A/c, no deficiency can be attributed on the part of opposite party. Learned Counsel for respondent could not place any calculation on record to show that opposite party charged higher rate of interest than agreed. In such circumstances, learned District Forum committed error in allowing complaint and Learned State Commission further committed error in dismissing appeal and revision petition is to be allowed.

Consequently, revision petition filed by the petitioner is allowed and order dated 15.4.2013 passed by Learned State Commission in Appeal No. 224 of 2013- The Authorised Signatory, M/s. Muthoot Finance Ltd. VS. H.B. Mohammed & Anr. ; and order of District Forum dated 22.1.2013 in Complaint No. 287/2011- H.B. Mohammed & Anr. Vs. The Authorised Signatory, M/s. Muthoot Finance Ltd.; is set aside and complaint stands dismissed with no order as to costs.