Shivashankara Gowda B. vs Manager, D.H.FL.

This revision petition has been filed by the petitioner Shivashankara Gowda B. against the order dated 22.2.2018 of the State Consumer Disputes Redressal Commission, Karnataka, (in short 'the State Commission') passed in Appeal No.739 of 2013.

Brief facts of the case are that the petitioner/complainant filed a consumer complaint before the District Consumer Disputes Redressal Forum, Bangalore (in short District Forum') alleging deficiency against the respondent/opposite party. The complainant availed housing loan from the opposite party for Rs.7,37,668/-. It is the case of the complainant that he opted '8.5.% p.a. interest' (fixed). It has been alleged in the complaint that the opposite party charged variable rate of interest from the complainant. It is also alleged in the complaint that the opposite party insured the mortgaged property by paying premium of Rs.62,668/-, which was debited to the housing loan account of the complainant. Further, it is alleged that he is entitled for 1% of subvention as loan is less than Rs.25.00 lakhs.

The complaint was contested by the opposite party by filing the written version. It was contended that complainant agreed to repay the loan amount with interest @ 8.5% p.a. variable from time to time and this fact was made known to the complainant by virtue of offer letter dated 17.05.2010 given by the OP. The said letter was also acknowledged by the complainant and the complainant also signed the home loan agreement dated 17.5.2010 in which the complainant had agreed to pay 8.5% p.a. with variable rate of interest from time to time. Further it is pleaded that at the time of availing loan, the complainant agreed to keep the secured asset insured to cover the risk of the financier. Further in the event of death of the borrower, the financier will not claim any amount from the legal heirs of the deceased and they will claim amount from the insurance company. Insuring the secured asset is a pre-condition for sanctioning the home loan etc. In the circumstances, complainant is not entitled for reduction in the rate of interest or refund of insurance premium. For the claim of subvention scheme for housing loan, it is pleaded that it was only a budget announcement from the Hon'ble Finance Minister and it is not applicable to OP directly as the OP is governed by the Reserve Bank of India Rules and the complainant has failed to produce any guidelines for non-banking financial institutions issued by the Reserve Bank of India and thus the OP sought dismissal of the complaint.

The District Forum after considering all the aspects dismissed the complaint vide its order dated 08.05.2013.

The complainant then preferred an appeal before the State Commission bearing No.739 of 2013. The State Commission also dismissed the appeal vide its order dated 22.02.2018.

Hence the present revision petition.

Heard the petitioner in person at the admission stage. The petitioner stated that he had applied for loan at the rate of 8.5% p.a. interest (fixed rate of interest), however, the respondent is charging variable rate of interest. The respondent has not produced copy of the application form submitted by the complainant either before the District Forum or before the State Commission. The petitioner further raised the issue of 1% rebate in the interest under the scheme of subvention as loan is less than Rs.25.00 lakhs. It has further been stated by the petitioner that the complainant has unnecessarily been burdened with an insurance premium of Rs.62,668/- which has been debited to the account of the complainant without his consent.

I have considered the arguments advanced by the petitioner in person. The State Commission has observed the following:-

"7. On perusal of the records of the court, the letter of offer cum acceptance dated 17.05.2010 discloses conditions for granting loan in which obtaining of insurance policy is a must and unlike rate of interest is mentioned as 8.5% p.a. variable. Subsequent, to such assurance of offer, loan agreement was also executed between the parties and same also stipulates rate of interest at 8.5% p.a. which is variable rate. Thus, having agreed for all such offers, now the complainant is estopped from defending such agreement unilaterally. In the circumstances, impugned order dismissing the complaint is proper and the same does not call for interference."

Once the petitioner/complainant has agreed to the offer letter and has signed the loan agreement, he cannot raise the issue of fixed rate of interest. Loan agreement is binding on both the parties and the petitioner/complainant cannot wriggle out of the agreement.

Thus, I do not find any merit in the argument of the petitioner that instead of fixed rate of interest on loan, the opposite party is charging floating rate of interest.

Coming to the question of insurance premium having been deducted from the complainant's loan account, it is seen that insurance of the mortgaged property is essential to safeguard the interests of the bank. This is also in the interest of the borrower that his loan is covered under insurance so that in case of any untoward incident, he may not have to repay the loan from his own funds. The agreement has been signed by the complainant and hence, he cannot object to the same. So there is no merit in this objection of the petitioner.

So far as the question of rebate of 1% interest under subvention scheme is concerned, it is seen from the order of the District Forum that petitioner had submitted a budget announcement and no proper notification or order of the Finance Ministry was submitted. However, before this Commission, the petitioner has submitted guidelines of National Housing Bank. These guidelines are applicable from the year 2011-12 and limit of the cost of the residential unit and the limit of loan has been enhanced to Rs.25 lakhs & Rs.15 lakhs respectively from earlier Rs.15 lakhs and Rs.10 lakhs. The complainant has not disclosed in his complaint or elsewhere the cost of his residential unit for which he obtained the loan of Rs.7,37,668/-. Moreover, guidelines are for the year 2011-12 and his loan was sanctioned in the year 2010. Thus, his case has to be examined under the guidelines existing in 2010. The complainant has not mentioned in his complaint as to how he is eligible for rebate of 1 % interest under subvention scheme. The Forum cannot grant relief until it is claimed properly. The eligibility under the scheme is linked to the cost of the residential unit and the complainant has not disclosed the cost of his residential unit in the complaint. Thus, obviously, this relief could not have been allowed to the complainant. The complainant has failed to clarify his eligibility under 1% interest subvention scheme even in his revision petition.

Based on the discussion, I do not find any merit in the present revision petition No.2128 of 2018 and the same is dismissed. However, if the complainant finds that he is eligible under 1% interest subvention scheme, he may file fresh complaint in this regard before the appropriate forum. Time consumed before the District Forum, State Commission and this Commission in respect of the present complaint shall not be counted towards period of limitation.