State Consumer Disputes Redressal Commission
State Bank Of India vs Usha Vaid on 27 April, 2007
IN THE STATE COMMISSION: DELHI IN THE STATE COMMISSION: DELHI (Constituted under section 9 clause (b) of the Consumer Protection Act, 1986) Date of decision: 27.04.2007 Appeal No.07/130 (Arising from the order dated 15.11.2006 passed by District Forum(North East) Nand Nagari, Delhi in Complaint Case No.219/2005) State Bank of India Appellant Through its Asst. General Manager, through Ms. Ruchi Kolhi, G.T. Road, Shahdara, advocate. Delhi. Versus 1. Dr.(Mrs.) Usha Vaid Respondent. 126, Surya Niketan, New Delhi. AND 1/4992, Loni Road, Shahdara, Delhi. 2. Ms. Shilpa Vaid, 126, Surya Niketan New Delhi . CORAM: Justice J.D. Kapoor, ... President Ms. Rumnita Mittal Member
1. Whether reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
Justice J.D. Kapoor, President(ORAL)
1. In December 2002, a joint loan application was submitted by respondents for loan of Rs.23,76,913/-. Before release of the loan they were asked to sign blank forms and applications. Whereafter the loan was released in the shape of three drafts and handed over to Standard Chartered Bank. Since the bank was charging much less interest from the new consumer but did not give this benefit to the respondents though her case was falling in the floating rate of interest category and since ICICI Bank was charging lesser rate of interest, the respondent got transferred the loan to ICICI Bank. Appellant bank issued an advertisement to the effect that they were passing low rate of interest to housing loan customers with no pre-payment charges. Inspite of this they charged Rs.42,300/- as pre-payment charges. Feeling aggrieved the respondents filed instant complaint before District Forum for refund of the said amount.
2. Vide impugned order dated 15.11.2006, the District Forum allowed the complaint of the respondents with the direction to the appellant to refund aforesaid amount and also to pay Rs.1,000/- as compensation and Rs.500/- as cost of litigation.
3. Feeling aggrieved the appellant has preferred this appeal.
4. Perusal of the impugned order shows that the District Forum has referred to and relied upon clause 4 of the agreement, which forms part of the original agreement but later on scored it off. This clause clearly mentions that pre-payment charges of 2% and the amount showing pre-payment shall be levied when the loan is pre closed for the reasons to take offer by another bank. District Forum also relied upon the view taken by this Commission that 2% pre payment charges could not be levied on the basis of circular issued by the appellant bank.
5. The aforesaid reasons given by the District Forum have been assailed by the counsel for the appellant. At first instance the counsel for the appellant has contended that there was no circular issued by the appellant bank as referred in the impugned order and the only contract between the appellant and respondent was the loan agreement whose clause 4 specifically stipulated that pre-payment charges @2% of the amount say pre-payment charges shall be levied when the loan is so closed by taking over of another bank.
6. Even if we assume for the sake of argument that the contentions being raised by the counsel for the appellant are correct still the fact remains that the said sum could not have been claimed by the appellant bank as it was not pre-payment but taking over. Moreover the ICICI Bank was charging only 7.25% interest while appellant bank was charging 9% and even if 1% demanded by the appellant would have been paid respondent would have paid 8% which was still higher than the market rate. It was a case of a consumer having taken loan from some other bank namely Standard Chartered Bank, which was got transferred to the appellant bank and thereafter the loan from the appellant bank was got transferred to the ICICI Bank for the obvious reasons that the rate of interest was much lower in the ICICI Bank.
7. Any consumer availing such a loan always avails service of those banks which charge lesser rate and if he is not aware of the lesser rate being charged by particular bank and avail the service of government bank which normally and ordinarily is supposed to charge not more than what the private banks are charging and if at later stage he finds that government bank is charging much higher rate of interest he would naturally make request for transfer of the loan amount and therefore such a request cannot come within the ambit of terminology of pre-payment as it has to be deemed a case of take over.
8. Thus from any aspect we may examine the matter clause 4 was not applicable in the given facts and circumstances of the case. Foregoing reasons persuade us to dismiss the appeal being devoid of merit, as the impugned order does not suffer from any infirmity. It appears that the government bank is indulging in unfair trade practice and this amount was charged as punishment to the consumer who sought transfer of the loan amount to some other banks who were giving lower rate of interest. Such a conduct is not expected atleast from Government bank.
9. No bank or for that purpose finance companies can be allowed to indulge in restrictive trade practice by binding the consumer to go on availing loan even if rate of interest charged by the said bank is much higher than the other banks and any such clause which operates adversely to the consumer like clause 4 has to be held as void and therefore not enforceable.
10. The order be complied within one months from the date of receipt of this order.
11. Bank Guarantee/FDR, if any, furnished by the appellant be returned forthwith.
12. A copy of this order as per the statutory requirements be forwarded to the parties free of charge and also to the concerned District Forum and thereafter the file be consigned to Record Room.
Announced today on 27th day of April 2007.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member Tri