Vikas Vij vs Standard Chartered Bank

S.N.H. Zaidi, J

Heard parties' counsel on appeal. This appeal has been directed against the order dated 5.11.2012 of DRT-II, Delhi, whereby S.A. No. 41 of 2007 filed by the appellants has been dismissed.

Mr. Chaudhary states that the only issue which the appellants intend to press in this appeal is the rate of interest charged by the respondent bank. His submissions are that the bank had sanctioned a housing loan of Rs. 65 lacs to the appellants, which was repayable in 240 equated monthly instalments(EMI) of Rs. 51,375/- with interest @7.5% per annum, that a loan agreement was executed by the appellants in respect thereof and the sanctioned loan amount was disbursed to them on 3.11.2004; that the bank had wrongly increased the amount of EMI to Rs. 62,687/- and alleging default in repayment of EMIs, issued demand notice dated 26.9.2006 under section 13(2) of the SARFAESI Act, claiming an amount of Rs. 64,45,104.95 as due on 25.8.2006; that tile bank also published the demand notice in the newspaper wherein the amount was claimed with interest @7.25% per annum w.e.f. 26.8.2006; that though in paras 7 and 11 of the reply to the S.A. the bank had admitted that the amount claimed through the demand notice was payable with future interest @7.25% per annum, but in paras 3-5 of the said reply {page 85) it had stated that the rate of interest of 7.25% was for the first month only and thereafter the interest was @16% per annum, which had been charged at such rate; that In the affidavit filed by the bank's officer, it was again stated that the amount of debt was claimed with future interest @7.25% per annum; that in para 7 of the reply to this appeal the bank has, for tile first time, said that the interest @7.25% was to be charged on compounding basis but in para 9 thereof, it has been said that the rate of interest was 7.25% to 12% on compounding basis till the declaration of account as NPA, which shows that even the bank was not clear about tile rate of interest, as it has changed its stance repeatedly. According to him, the appellants are liable to pay interest only @7.25% p.a.

Mr. Chaudhary also points out that in his affidavit dated 8.3.2010 the bank's officer has admitted the deposit of Rs. 40,70,496/- by the appellants, out of which Rs. 21.88 lacs was deposited subsequent to the issuance of the demand notice and about Rs. 18.82 lacs was paid prior to it and since an amount of Rs. 34.50 lacs has been deposited with the bank during the pendency of this appeal, as such an amount of Rs. 56.38 lacs has already been deposited against the demand of about Rs. 64.45 lacs.

Mr Sagar, on the other hand, submits that the sanction letter dated 31.10.2004 had clearly stated that tile type of interest was variable' and as per clause 2.3 of the loan agreement, the EMI was comprised of interest calculated on the basis of monthly rests, which shows that the interest was compoundable at such rests and clause 2.7. thereof provides that, in case of default in the payment of EMI, the borrower would be liable to pay additional interest @27% per annum. According to him, the bank has rightly charged the interest at variable; rates as applicable from time to time. He has, however, admitted, the receipt of amounts totaling Rs. 56.38 lacs by the bank post demand notice on different dates. He has also not disputed that prior to the issuance of the demand notice, certain amounts were paid by the appellants through EMls.

Having considered the submissions of the parties and looking to the facts and circumstances of the case, I am of the view that though ill the demand notice published in the newspaper as well as in its reply to the S.A., the bank had demanded the amount with future interest @7.25% p.a., yet the sanction letter dated 31.10.2004 shows that the regular home loan rate of interest was 10'% p.a. and interest @7.25% p.a. was valid as a special offer for one month only from the date of sanction. It also appears that though in the loan agreement the rate of interest was specified as 7.25% p.a., yet it was also agreed, that in case of default in payment of EMls, additional interest would be charged @27% per annum on the defaulted amount. It is note-worthy that while contesting the S.A., it had all along been the case of the bank that it was entitled to the future interest @7.25% p.a. and during the proceeding of S.A. before the Tribunal below also, neither any claim qua the compounding of interest was made nor the interest was claimed @27% per annum. Thus the claim of interest with compounding effect made for the first time before this Tribunal in this appeal is not acceptable. It is also pertinent to note that despite payment of considerable amount post demand notice dated 26.9.2006, the appellants are yet to pay the balance amount and future interest on the claimed amount and the matter is being agitated since 20,07, when the S.A. was filed. Keeping all the circumstances of the case in view, the rate of interest payable by the appellants is, fixed @10% per annum on reducing balance basis. The appellants are accordingly, directed to pay the interest with effect from 25.8.2006. The bank is directed to provide the statement of the balance amount of debt due with interest calculated @10%, to the appellants within two weeks. The appellants shall deposit the said amount in three equal quarterly instalments with up-to-date interest.

The first instalment shall be paid on. 1st April 2014. The subsequent instalments shall be payable on 1st July and 1st October 2014. Needless to mention that in the event of default of payment of any instalment, the respondent bank shall be at liberty to proceed in accordance with law for the recovery of the entire balance amount.

With the above observation, the appeal is disposed of finally.

Copy of the order be given/sent to the parties as per rule.