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Judgment
Brief facts of the Case are as follows:-
Complaint No. 7 of 2007 has been filed before this Commission, alleging failure to fulfil the commitment and assurance made by the Opposite Parties in levying fixed rate of interest on the loan taken for purchase of Kisan Vikas Patras. This Commission vide its judgementdated 17.04.2008, allowed the Complaint directing the Opposite Parties, not to continue with the Unfair Trade Practice of charging more than 6.4% interest on the loan taken by the Complainants for the purchase of KVP's. The Bank shall also pay costs to the Complainants assessed at Rs. 50,000/-. This order was not challenged by the Opposite Parties within limitation under the provisions of the Consumer Protection Act, 1986 and has become final. It is alleged that though the order of this Commission was passed in favour of the Complainants, the Opposite Parties failed to comply with the same and once again on 31.10.2008 charged a rate of interest higher than 6.4% p.a. for the month of October 2008.The Complainants, therefore, approached this Commission through Miscellaneous Petition No. 295 of 2008 in Consumer Complaint No. 7 of 2007, under section 27 of Consumer Protection Act 1986, for taking appropriate and strict action against the Opposite Partiesfor not complying with the order dated 17.04.2008 passed by this Commission. In view of the said Petition, the Opposite Parties took immediate steps to reverse their entries on interest beyond 6.4% p.a. as well as penal interest and accordingly informed this Commission that the directions in the said judgement have been complied. Vide order dated 13.03.2009, passed in Misc. Petition No. 295 of 2008, this Commission disposed of the aforesaid execution application holding that:-
"Having considered the reply filed to the execution application and also having heard the counsels, we are satisfied that interest entry has been reversed charging interest @6.4% p.a. on the amount by the Opposite Party Bank. Order stands complied with by the Bank."
The Complainants alleged that despite the aforesaid proceedings, once again the Opposite Parties charged a rate of interest higher than 6.4% varying from 6.68% to 8.4% during the period October 2008 to November 2010 and from 6.95% to 7.15% during the period January 2011 to March 2013. Thus, in this way, the Opposite Parties have acted contrary to the special terms and conditions agreed between the Parties, which was also re-confirmed by the Opposite Parties in writing under different letters and emails. It is stated that provision of variable interest and penal interest was only in the standard format agreement which this Commission has already held null and void, vide it judgement dated 17.04.2008. Hence, instead of complying this Commission's Order, Opposite Parties kept on charging higher rate of interest under the said standard-format agreement. Therefore, the Complainants filed a Complaint before the District Consumer Disputes Redressal Forum, Patna vide Complainant Case no. 293/10, 302/10, 315/10 and 316/10. The same was dismissed vide order dated 27.10.2010 at the admission stage itself, by holding that:
"we are of the opinion that the Complainants could have applied for enforcement of the order before the Hon'ble National Commission and they cannot bring a fresh complaint on the same cause of action before the District Forum merely by lowering the quantum of claim by dividing the same set of Complainants".
Thereafter, Complainants challenged the said order before the State Commission, Bihar vide First Appeals No. 572/10, 575/10 and 577/10, and the same was dismissed vide order dated 20.02.2013 wherein it was held and directed as under:
"In facts and circumstances, the operative order of the Hon'ble National Commission is very clear so as to infer that the respondent-OPs-ICICI Bank were directed not to continue with such unfair trade practice, which definitely goes to show that they have been restrained from raising any interest rate or taking any contrary decision, which is not in accordance with the direction of the Hon'ble National Commission. The order of the Hon'ble National Commission is final."
"In the facts and circumstances, we uphold the verdict of the learned District Forum and are not inclined to take any contrary view than what has been taken and decided by the District Forum".
It is further contended that all the KVPs would be maturing in Sept./Oct., 2013. Once the KVPS mature, the Opposite Parties are likely to adjust the entire amount based upon their present accounts, which is contrary to the directions of this Hon'ble Commission. Imposition of excess interest and penal interest under the agreement already declared to be null and void by this Commission leads to further harassment to the Complainants.
Alleging deficiency on the part of Opposite Parties, Complainants have filed the present execution application before this Commission under Section 25 and 27 of the Consumer Protection Act, 1986, praying for relief as under:-
Direct the Opposite Parties to take appropriate steps in strict and complete compliance of the directions/orders of this Hon'ble Commission contained in its judgement dated 17.04.2008.
Direct the Opposite Parties to restrain from practicing Unfair Trade Practices against Complainants as directed by this Hon'ble Commission in its judgement dated 17.04.2008.
Pass an order imposing penalty by way of imprisonment and fine upon each of the Opposite Parties under section 27 of the Consumer Protection Act, 1986 for the repeated violation of the NCDRC order dated 17.04.2008.
Pass an order imposing costs upon the Opposite Parties.
The said execution application filed by the Complainants was contested by the Opposite Parties by contending that there is no default on the part of the Opposite Parties while complying with the directions of this Hon'ble Commission, vide order dated 17.04.2008. On the contrary, the Complainants have wrongly invoked Section 25 and 27 of the Consumer Protection Act, 1986, since they have attempted to portray a false picture before this Commission that the Opposite Parties have been charging interest beyond 6.4% per annum. It is submitted that the Opposite Parties have not charged any excess rate of interest as alleged by the Complainants.
This Hon'ble Commission, vide its order dated 17.04.2008 had not struck down the Agreement executed between the Parties. Therefore, the Parties are still governed by the terms and conditions of the said Agreement. While the Opposite Parties were directed not to charge interest at a rate exceeding 6.4% per annum, the Complainants were under a contractual obligation to regularly service their accounts by clearing the outstanding amounts. It is clear from the terms of the Agreement that non-payment of the outstanding amount would attract penal charges of 2%. The penal interest charged by the Opposite Parties was on the overdrawn amount. The overdrawn amount is the outstanding amount (-) drawing power of the Complainants. The Complainants have constantly exceeded their drawing limit thereby attracting penal charges as laid down in the agreement entered between the Parties.
The Opposite Parties have annexed RBI Notification dated 01.07.2009 in which it was stated at point 2.6 of Guidelines that "Since the Boards of the banks have been empowered to decide the BPLR as also spread over BPLR, banks are permitted (with effect from October 10, 2000) to formulate a transparent policy for charging penal interest with the approval of their Board of Directors. However, in the case of loans to borrowers under priority sector, no penal interest should be charged for loans up to Rs. 25,000. Penal interest can be levied for reasons such as default in repayment, non-submission of financial statements etc. However, the policy on penal interest should be governed by well-accepted principles of transparency, fairness, incentive to service the debt and due regard to genuine difficulties of customers."
Heard the Learned Counsel for the Complainants as well as the Opposite Parties.They put-forth eloquent arguments as already stated above.Also carefully perused the records.
The orders dated 17.04.2008 of this Commission are very clear.The OP have been directed not to charge more than 6.4% on the loan taken by the Complainants for the purchase of Kisan Vikas Patras.
In the present case, the Complainants monthly interest on the loan and the drawals has been accruing.The interest so accrued has to be serviced on a monthly basis and if the same is not done for a period of more than 90 days, then accounts have to be classified as out of order and provisioning has to be made as per the norms of RBI.The Complainants are supposed to service the interest and are bound by financial discipline.The Opposite Party contended that penal interest of 2% has been charged only on the overdrawn amount, i.e., outstanding amount - drawing limit of the Applicants. The orders of this Commission stands complied as long as the rate of interest charged on the loan is 6.4%.Interest of 6.4% was to be charged only on the loan as per the contract.It would be improper to expect charging the same rate of interest for excess drawals and overdue interest beyond the loan amount.The 'KVP Scheme' was designed to obtain loan at 6.4% against security of KVPs and not to fund over drawals at the same rate of interest.
The Complainant in his petition has brought out that :
"during the month from 1-Jul-11 to 31-Jul-11(for 31 days), the Bank has shown penal interest (2% on overdrawn amount of Rs.90,03,250) as Rs.44,060 though on proper calculation, it would be Rs.15,005/- only.
At page no.48 of the Petition- during the month 1-May-11 to 1-May-11(for 1 day), the Bank has shown penal interest for 1 day (2% on overdrawn amount of Rs.75,48,078) as Rs.1,58,844 which is not possible."
To the extent there are errors in the calculation of interest, the Opposite Parties are directed to rectify the same and refund to the Complainants excess amount charged with interest at the rate of 8% p.a. within a period of 30 days.The Execution Application is disposed off accordingly.