National Consumer Disputes Redressal
Icici Bank Ltd. vs Ramakant Dnyandeo Gaikwad on 12 November, 2018
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 1033 OF 2017 (Against the Order dated 08/02/2017 in Appeal No. 36/2016 of the State Commission Maharashtra) 1. ICICI BANK LTD. THROUGH ITS AUTHORISED REPRESENTATIVE MR. MOHAMMAD JAFFRREY, ICICI TOWER NBCC PALACE BHISM PITAMAH MARG, PRAGATI VIHAR NEW DELHI-110003 ...........Petitioner(s) Versus 1. RAMAKANT DNYANDEO GAIKWAD S/O. DNYANDEO GAIKWAD, R/O. PLOT NO. 14, RAJIV GANDHI NAGAR, N-2, MUKUNDWADI, CIDCO, AURANGABAD MAHARAHSTRA ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.K. JAIN,PRESIDING MEMBER
For the Petitioner : Mr. Punit K. Bhalla, Advocate
Ms. Chetna Bhalla, Advocate
Mr. Rachit B., Advocate
Mr. Keval Verma, Officer For the Respondent : Mr. Amol Karande, Advocate
Ms. Aditi Deshpande, Advocate
Dated : 12 Nov 2018 ORDER
JUSTICE V.K. JAIN, PRESIDING MEMBER
The respondent / complainant took a housing loan of Rs.2,90,000/- from the petitioner ICICI Bank and executed at loan agreement dated 01.3.2005, incorporating the terms and conditions including the interest payable on the said loan. The interest clause contained in the said loan, reads as under:
"E Interest ICICI Bank Floating Reference rate 8.25% per annum (as on the date of executing of this agreement) Adjustable Rate of interest : ICICI Bank Floating Reference Rate +- .75% p.a.= 7.5% p.a. Ore-EMI Interest 7.5% per annum F. EMI is calculated on the basis of monthly rests.
On behalf of the bank the loan agreement was signed by its authorized signatory whereas both the borrowers namely Ramakant Gaikwad and KesarbBai Gaikward signed the said agreement.
2. The case of the complainant / respondent is that when he noticed that the interest charged by the bank was exorbitant he contacted the Bank Manager, who promised to charge interest @ 10.5% per annum for next two years and accordingly, the second loan agreement was executed between the parties on 06.2.2015. Alleging charging excess interest from him, the complainant / respondent approached the concerned District Forum by way of a consumer complaint, seeking return of the alleged excess interest along with compensation.
3. The complaint was resisted by the petitioner bank, which inter-alia stated that the interest had been rightly charged and recovered as per the Floating Rate of interest.
4. The District Forum vide its order dated 08.12.2015 directed the petitioner bank to apply rate of interest at 7.5% per annum, prepare the account accordingly, supply the statement of account to the complainant and not charge additional rate of interest from him. A sum of Rs.2,000/- was also awarded as cost of litigation and compensation to the complainant.
5. Being aggrieved from the order passed by the District Forum, the petitioner approached the concerned State Commission by way of an appeal. The said appeal having been dismissed vide impugned order dated 08.2.2017, the petitioner bank is before this Commission by way of this revision petition.
6. It would be seen from the interest clause contained in the Loan Agreement executed on 01.3.2005, that the borrowers were liable to pay adjustable rate of interest, which meant ICICI Bank Floating Reference Rate minus .75% per annum. It also shows that at the time of execution of the said loan agreement, ICICI Floating Reference Rate was 8.25% per annum and therefore, the adjustable rate of interest came to 7.5% per annum. The loan agreement also shows that the EMI was to be calculated on the basis of monthly rests. As is evident from its name itself, the Floating Reference Rate of bank is not a fixed rate and can be changed by the bank from time to time. Therefore, it would not be correct to say that the petitioner bank could not have charged interest at a rate higher than 7.5% per annum. The interest payable by the complainant and his co-borrower being linked to the ICICI Bank Floating Reference Rate, it was to increase as and when the ICICI Bank Floating Reference Rate was increased and it was to decrease if and when the ICICI Bank Floating Reference Rate was decreased. This is not the case of the complainant that the interest charged by him was more than the adjustable rate of interest i.e. ICICI Bank Floating Reference Rate minus .75% per annum. His contention that the bank could not have charged interest at a rate higher than 7.5% per annum has absolutely no merit.
7. As regards the execution of the second loan agreement, a perusal of the copy of the said agreement would show that it was not signed on behalf of the petitioner bank, though it was signed by the complainant and his co-borrower. In the absence of the signature of the authorized person on behalf of the petitioner bank, the aforesaid document cannot constitute an agreement binding the petitioner bank. The case of the petitioner in respect of the said document is that since the petitioner did not even deposit the conversion fee of Rs.970/-, which was payable before execution of the said document by the bank, they did not execute it and therefore, the proposed agreement dated 06.2.2015 never came into force.
8. The learned counsel for the complainant submitted, during the course of arguments, that the second agreement dated 06.2.2015 was signed not only by the borrower but also on behalf of the petitioner bank. When asked to point out the signature of the bank official on the said agreement dated 06.2.2015, the learned counsel for the complainant drew my attention to what apparently is only an endorsement by an Advocate certifying the copy of the said agreement as a true copy. The said endorsement of the copy being a true copy of the original appears not only the disputed agreement dated 06.2.2015 but also on the admitted agreement dated 01.3.2005. As pointed out by the learned counsel for the petitioner the admitted agreement on 01.3.2005 was duly signed by the constituted attorney of the Bank, on Schedule I, forming part of the loan agreement, which bears not only the signature of the constituted attorney but also the stamp of the petitioner bank. No such stamp appears on the disputed agreement dated 06.2.2015. I therefore have no hesitation in holding that the disputed agreement i.e. the agreement dated 06.2.2015 having not been executed by the petitioner bank, never came into force and therefore does not bind it. The payment of interest therefore continued to be governed by the agreement dated 01.3.2005.
9. When this mater came up for hearing on 31.1.2018, the petitioner was directed to file a statement showing the floating reference rate applicable from time to time since the loan was granted as well as the rate at which the interest was charged from the complainant from time to time. The said statement was filed by the petitioner bank. Vide order dated 25.5.2018, the petitioner bank was also directed to disclose the I-Base adjustable rate i.e. base rate applicable to loan of similar nature provided by the lender with effect from the date of the alleged second agreement till the date on which the consumer complaint was instituted as well as the interest actually charged from the complainant during the aforesaid period. The petitioner was also directed to disclose the ICICI Bank Floating Reference Rate, with effect from the date of the first loan agreement as well as the interest actually charged from the complainant for the said period. In compliance of the said direction, the petitioner bank has in its affidavit filed on 31.10.2018, given the FRR applicable from time to time and has also stated that amendatory agreement dated 06.2.2015 has not been acted upon as no statutory fee was deposited by the borrower and the said agreement had not been signed by the bank. It is also stated in the affidavit that in the absence of execution of the agreement dated 06.2.2015, the rate of interest as agreed in the agreement dated 01.3.2005 were applicable. It is also stated in the affidavit that on 06.2.2015 the I-base adjustable rate applicable to the loan of similar nature was 10.5% and this complaint was instituted immediately thereafter, in March, 2015.
10. For the reasons stated hereinabove, I have no hesitation in holding that the complainant having been charged interest in terms of the agreement dated 01.3.2005 and the second agreement i.e. the agreement dated 06.2.2015 having not been executed by the bank, no excess interest was charged from the complainant. The impugned orders therefore cannot be sustained and the same are accordingly set aside. The complaint is consequently dismissed. No order as to cost.
......................J V.K. JAIN PRESIDING MEMBER