Nirmal Kumar Pandey vs ICICI Bank Limited & Anr.

It is proposed to dispose off R.P. Nos.4782 and 4783, both of 2013, vide a common order. Both these revision petitions arise out of the same order of the District Forum in C.C. No.996 of 2010 vide which the consumer complaint filed by the petitioner/complainant had been partly allowed, directing the respondents/OPs to refund Rs.20,603/- with interest @ 12 % from 9.4.2009 till the date of payment, with cost of Rs.2,000/-.

This order of the District Forum was challenged by both the complainant as well as the OPs.

F.A. No.315 of 2012, filed by the OPs, was allowed vide State Commission's order dated 28.12.2012, and the District Forum's order was set aside. Against this order of the State Commission, the complainant has filed R.P. No.4782 of 2013.

F.A. No.845 of 2012, filed by the complainant, seeking higher compensation, was dismissed by the State Commission vide order dated 22.3.2013, noting that the complainant had not challenged the order of the State Commission dated 28.12.2012 in F.A. No.315 of 2012, and therefore concluding that there was nothing more to be considered in the appeal. Against this, the complainant has filed R.P. No.4783 of 2013 dated 17.12.2013.

As such, both the revision petitions basically challenge the impugned order of the State Commission in F.A. No.315 of 2012 dated 28.12.2012 vide which the District Forum's order had been dismissed and the OPs appeal had been sustained. Both revision petitions have been filed by the complainant.

The brief facts of the case are as follows. The OP bank had taken over the complainant's existing loan from LIC Housing Finance Ltd. on certain terms viz. @ 7.25%, repayable in 262 EMIs at Rs.12,207/- p.m.. This was on 24.2.2004. The complainant, on examining the statement of account dated 19.3.2008 noticed that he was being charged higher interest, without any notice and without obtaining his consent. So, the complainant issued a notice dated 21.3.2008 to the OPs seeking break up of figures. It is the case of the complainant that the OPs had obtained his signatures on standard format without explaining the terms and conditions to him and had ended up charging excess interest. On 12.6.2008, the complainant issued another notice to the OP demanding that his loan be foreclosed and the excess interest charged be refunded. He received no reply. Further, per the complainant, when he examined his statement of account from 6.7.2007 to 5.7.2009, he found that EMIs of Rs.12,207/- comprised of Rs.166/- by way of principal and Rs.12,041/- by way of interest. Now, he was apprised of a scheme during April 2009 by the OP and offered the option to switch over to this scheme, the benefit being that his interest would reduce from 13.75% to 9.75%. For this switch, he had paid Rs.20,603/-. His plaint throughout the tenure of his loan is basically that OPs increased the interest payments by him on the loan whenever there was an increase in interest rate, without any notification and without obtaining his specific consent. However, the same thing did not happen when there was a decrease in interest rate. This was unfair. Further, when the complainant wanted to change to another bank which offered lower interest rate, the OPs demanded huge amount towards foreclosure. Hence, the complainant filed a consumer complaint no.996 of 2010 before the District Forum, Hyderabad which, after due consideration, found some deficiency in service on the part of the OPs, and directed that the switch over fee of Rs.20,603/- be refunded with 12 % interest.

Both the parties filed their respective appeals. In the appeal filed by the OPs, the appeal succeeded and the order of the District Forum was set aside. In the appeal filed by the complainant, it was dismissed as infructuous as an order had already been passed in F.A. No.315 of 2012, and there was no revision petition against that order before the National Commission.

It is against these two orders of the State Commission in F.A. No.315 of 2012 and F.A. No.845 of 2012, disposed of respectively vide orders dated 28.12.2012 and 22.3.2013 that the two revision petitions under consideration were filed.

Matter was heard on 5.8.2020.

At the outset, it was pointed out and noted that both the revision petitions have been filed with delay and the application for condonation of delay had been noticed to the OPs and the same had not yet been considered by the Commission. Heard arguments on the delay application. Counsel for the OPs vehemently argued that a plain reading of the application for delay would reveal that all the reasons advanced are without any supporting evidence and of such nature as to be only within the knowledge of the complainant. He therefore argued that these revision petitions be dismissed forthwith. After considering the arguments and the reasons put forth in the application for delay, and keeping in view that much time has already elapsed since filing of the RPs in the commission, delay is condoned and the revision petitions admitted.

Learned counsel for the petitioner began his arguments by submitting that the facts in RP 4782 and RP 4783, both of 2013, were the same and both were basically against the State Commission's order which had dismissed the order of the District Forum. He raised a preliminary point of order: OPs had been asked vide the National Commission's order dated 19.7.2016 to submit an affidavit to explain what was 'floating rate of interest' and 'adjustable rate of interest' and as to how the switch over offer under consideration would be beneficial to the petitioner/complainant. After more than a year, this was filed by Mr. Mohammad Jaffrey, but without any details as to his identity. The learned counsel further submitted that, as on date, there was no existing loan account of the petitioner with the OP bank. Arguments are therefore about the injustice suffered by the complainant at the hands of the OP bank earlier. He drew attention to agreement for loan of Rs.12,30,859/- with EMIs of Rs.12,607/- p.m. He drew attention to schedule A of para (B), (C) and (G) of the agreement to argue that a close look at these would show that the OPs had not been fair with the complainant and had ended up charging more interest than they could have. He highlighted the fact that in 2007-08, there was a financial crunch and RBI had issued guidelines to all Banks to reduce the rate of interest. He drew attention to receipt of OP of payment made by him of Rs.20,603/- on 09.04.09 which was a 'switch fee' taken by the OP bank. His contention was that the OP was not entitled to have taken this 'switch fee'. He further referred to the "Amendatory Agreement" for the switch from the present interest rate scheme to Adjustable rate of interest and emphasized that the handwritten note thereon clearly showed that that the switch was from 'floating' to 'floating', and not from floating to fixed or something like that. In fact, he argued that this clearly showed that there was no switch; that this amendatory agreement was effectively the same as before and yet a fee had been taken. He then drew attention to the order of the State Commission, para 9 thereof, which was read out, to argue that it was clear that the agreements on record and other documents were not keenly appreciated by the State Commission. The State Commission had passed its order only on the ground that the complainant was not an uneducated and illiterate person and that he could not have signed the documents without knowing their intent and purpose. Since he did sign the amendatory agreement, he was bound by it and therefore estopped from agitating the issue. Summing up, the learned counsel made the following points:

(i) what the complainant was paying towards loan repayment in 2004 was no different from what he was paying in 2009; as such, it was not understood why and for what benefit the OP had taken a switch fee of Rs.20,603/-;

(ii) when RBI had issued guidelines for special rate of interest, the OP took the switch fee but that meant no benefit to the complainant;

(iii) the State Commission had only observed that the complainant should not have signed the agreement; it did not go into the details available in the documents such as the agreements between the complainant and the OP- bank.

Learned counsel for the respondent/OP drew attention to the Amendatory Agreement, Instructions sheet, clause 3 therein, and explained that it clearly spelt out that the Amendatory Agreement was for switch from present rate of interest scheme to Floating Reference Rate or Fixed Rate. Referring to the hand written noting on the Instructions sheet which was referred to by the counsel for the complainant's, he explained that it was the complainant's instructions that had been noted by the bank official, and that it was therefore the OP's case that he had himself opted for switch from the existing rate of interest scheme to the new scheme offered which offered a reduced rate of interest, 9.75% against the existing 13.25%. It is for this switch from the existing to the new scheme that the switch fee was charged. He argued that the main point was that everything was done as per the agreement(s) between the parties which, in turn, were as per RBI guidelines. Therefore, the State Commission was correct in having dismissed the District Forum's order. In particular, he drew attention to para 8 and para 9 of the State Commission's order which has recorded that the complainant had himself opted to switch from the present interest scheme to the adjustable rate of interest scheme. The complainant's submission that Rs. 20,603/- collected from him had been assured by the bank officials to be credited back to his account was without any supporting evidence. So, the complainant himself had done whatever he did and he cannot now find fault with the Op-bank. Indeed, he was stopped from doing so.

After hearing arguments and perusing the record, I am inclined not to interfere with the impugned orders of the State Commission.

The complainant has not been able to show how the OP bank had indulged in any unfair trade practice and had charged him higher rate of interest than that provided in the Agreement. It is an admitted position that the complainant's existing loan from LIC Housing Finance Ltd. was taken over by the OP bank from 24.2.2004. Notably, this was at the complainant's instance. It has not been stated anywhere as to why the complainant opted for the OP-Bank; whatever be the reason, it is self evident that the complainant must have found it to be advantageous in switching to the OP Bank. After this, however, it would appear that he was less than satisfied with the OP-Bank, and there is a mention in the complaint petition that he wanted to foreclose and switch to another Bank offering lower interest rate but could not do so because the OP-Bank wanted high foreclosure charges. It is quite clear therefore that the complainant knew his own interest quite well and was willing to consider change of Banks for his loans. The complainant was therefore a discerning consumer. It is also clear that he admittedly did not get the benefit he thought he would get from the OP-Bank, and hence, he filed a consumer complaint.

The OP bank, on the other hand, has taken a clear defence in it's statement that whatever was done in respect of the loan account was in terms of the two agreements between the complainant and the OP bank. Indeed, OP Bank could not have done otherwise: it is bound by the Banking Act and Regulations and has to function under the guidelines of the RBI. The Agreements on record are not customized documents; rather, they are standard documents and would apply to all similarly situated customers. The OP-Bank has been able to show that the Amendatory Agreement had only executed what the complainant had himself desired by way of the hand written notes recorded by the concerned bank official on the body of the Amendatory Agreement (Ann. P-8, page 102). The State Commission had appreciated this point and had therefore set aside the order of the District Forum, resulting in dismissal of the complaint. After a careful perusal of the record, I am also of the considered view that nothing has been done in the transactions highlighted by the complainant that would show unfairness of the OP in handling of the complainant's loan account. Admittedly, a floating interest rate regime was opted by the complainant in the first instance and again, when performing the switch to take advantage of lower interest rate. To have opted for the switch and thereafter to allege unfairness in the interest rate charged by the OP is hardly tenable. At least, apart from averring that when he checked his account statement, he found that interest rates had been increased on several occasions, and that he had to pay a switch fee which was promised to be credited back, there is no other allegation. As for the first allegation, the statement of account clearly shows a fluctuating rate of interest (7.25% to 13.75%) but then, the loan scheme was on floating interest rate basis; around April 2009, the complainant opted to switch and this did result in lower interest rate. As for the second, a switch fee was charged because the OP-Bank was providing a service. The complainant should not have opted for the switch. His averment that he was misled has not been backed by any evidence.

In view of the discussion above, both these revision petitions are dismissed. The impugned orders of the State Commission are accordingly upheld. No order as to costs.