KAVERI TELECOM LTD. Vs. VIJAYA BANK

JUDGEMENT

(1.) This case swirls round the question, "Whether the Bank can charge more interest than the agreed between the parties?. What can be the ulterior hidden motive to the plea that the petitioner or Loanee signed the blank papers?

(2.) Vijaya Bank, OP1 sanctioned the working capital facility to the complainant (Kaveri Telecoms Limited) at an interest rate of prime lending rate (PLR) + 2.5% + interest tax vide its sanction letter dated 18.12.1997, which was renewed on 18.05.1999 vide copies of these letters marked as Annexures-A and A1. It is alleged that the OP1 illegally debited the interest on the amounts drawn by the Company in the loan account for the period from 01.04.1997 to 31.03.2002 @ PLR + 4.5% + interest tax and in the process, for the period from 01.04.1997 to 31.03.2002. It is alleged that the OP Bank collected from the complainant excess amount in the sum of Rs.27,56,684/- as interest, in utter violation of the terms and conditions of the sanction letters. All these facts came to light when the audit of complainant's accounts were taken up by their Auditors. The complainant immediately gave a representation dated 03.10.2000 to the Bank, copy of which is marked as Annexure-B. The OP1 did not take any action and thereafter reminders/ representations dated 22.01.2001 and 13.02.2001, marked as Annexures-C & D, respectively, were sent. The last one was sent through registered post and postal acknowledgment was produced as Annexure D1. Vide letter dated 22.01.2001, the OP informed the complainant that his requests were turned down as the interest was charged as per the guidelines and the circulars issued by Head Office, from time to time, copy of which is placed on record as Annexure-E. The complainant sent other representations on 15.02.2001, marked as Annexure-F and on 16.03.2001, marked as Annexure-G, to the Chairman and Managing Director, Vijaya Bank, OP2. Another representation was sent on 03.04.2001 to the 1st OP, copy of which has been produced as Annexure-H.

(3.) Ultimately, the OP1 wrote a letter dated 02.05.2001, marked as Annexure-I, to the complainant stating that OPs have taken a decision to entrust the rechecking on interest and other charges debited to the accounts of the complainant to an outside agency, but referred by the OPs as concerned agency. When, for a considerable time, the complainant could not get information about the present position and thus asked the OP, vide letter dated 11.07.2001 Annexure- J, to inform about the current position. Besides this letter and various communications, the OP did not respond though they acted against the RBI's guidelines. The complainant is a small scale industry doing business with various organisations of Government of India. The illegal charging of the Trust amount crippled their financial position resulting in damage to the business and reputation of the complainant company.