STATE BANK OF INDIA Vs. SAMUEL S CHAUDHURY

JUDGEMENT

(1.) The State Bank of India, opposite party in C. D. Case No.38 of 1994 of the District Forum, Gajapati is the appellant in this appeal. The District Forum having directed the State Bank of India, the present appellant to settle the loan account of the complainant as regards the rate of interest and for issuance of clearance certificate to him after settling the loan accounts, the present appeal has been filed.

(2.) The complainant (respondent in this appeal) admittedly obtained a loan of Rs.10,275/- for purchase of a scooter from the State Bank of India. According to him, the rate of interest payable on the said loan was fixed @ 15% per annum. During the course of repayment of the loan in instalments, he has alleged that sometime in August/september, 1992, he came to learn that the outstanding loan shown against him was a loan much higher amount and much beyond the actual dues payable by him. On enquiry he further came to learn that the rate of interest has been increased to 23.25% per annum of which he had no intimation or knowledge. He has also alleged that there has been some discussion with the Bank in this connection and since no clearance certificate was given to him after lump sum amount was paid to the Bank, he approached the District Forum praying for direction to the Bank to be issued by the Forum to pay a sum of Rs.15,000/- as compensation and also to issue a clearance certificate. A prayer was also made that the excess amount paid by the complainant should be refunded to him with interest.

(3.) The present appellant filed the show cause denying the complainant allegations. Their case was that the complainant having taken the loan of Rs.10,275/- on executing a term loan agreement hypothecating his vehicle and executing the mortgage deed by his guarantor, he defaulted in payment of the instalments as stipulated. The further complaint of the appellant in the counter was that the complainant having confirmed the balance amount due to Bank on 21.11.1992 who having executed the revival letter to save limitation acknowledging his debt, the aforesaid allegations of the complainant have no relevance. They indicated in the counter as to how much was the loan amount after deduction of the payments were calculated and they justified their stand that the rate of interest having been enhanced by the directives of the Reserve Bank of India, the complainant was also bound to pay interest at the enhanced rate. It was further alleged that the complainant had agreed to pay interest at the enhanced rate from time to time and, therefore, he was estopped from challenging that excess interest as not recoverable.