Unfair trade practices related to arbitrary increase in interest rates and the importance of adhering to National Housing Bank guidelines and fair practices code.

ORDER

Nisha Gupta, President.—This appeal has been filed against the order passed by the District Forum, Jaipur 4th dated 11.5.2016 whereby the complaint has been dismissed.

2. The contention of the appellant is that a loan of Rs. 20,26,000/- was sanctioned to him on 13% interest. Monthly instalment was of Rs. 25123/- and total instalments were 192. Till 2011 he has paid Rs. 15,38,576/- in spite of this the due amount is shown to be Rs. 93,96,900/- which is unfair. The respondents are not entitled to raise the interest rate arbitrary and when he deposited Rs. 25,000/- on 20.12.2011 the rate was reduced from 21.22% to 13.50% but the Forum below has not considered the facts hence, the claim should have been allowed.

3. Per contra the contention of the respondent is that the loan was sanctioned on floating rate of interest and whenever interest rate was increased, intimation was given to the appellant. Loan was sanctioned in 2006 and the appellant has paid the instalments after accepting the increased interest rate. Now he cannot agitate against it and the claim has rightly been disallowed.

4. Heard the counsel for the parties and perused the impugned judgment as well as original record of the case.

5. The loan agreement has been submitted as Anx. R 1 which clearly shows that the loan amount is Rs. 20,26,000/- and monthly instalment is Rs. 25,123/- and interest means the rate of interest as referred to in schedule - A. Loan agreement is the admitted document between the parties. Two parts of schedule-A has been submitted, one is for fixed rate of interest and other is for floating rate of interest. Both are get signed by the appellant. The contention of the appellant is that borrower is on the mercy of the financial institute. He was forced to sign both the parts and part 'I' which is for fixed rate of interest is blank one which shows the flowed working of the respondents. Part "II" of the agreement is for floating rate of interest and interest rate mentioned is 13%. There is a reference of floating rate but it has been shown as 0'. Term of payment is 192 months and EMI is Rs. 25,123/- subject to variation as per terms of the agreement. Hence part II of the agreement clearly shows that the loan was sanctioned on floating rate of interest but floating rate has been sanctioned as + - 0' and rate of interest which was agreed between the parties was 13%.

6. It may be noted that the appellant was get to sign part I and II of the agreement which relates to different rate of interest and the reason for the same has been explained by the respondent that it is complete agreement. Both parts are being signed by the borrower and accepted rate of interest would be signed by the bank and which is evident in the present case that only part II was signed on behalf of the respondent. This practise of getting signed both the agreement is unfair trade practise on the face of it. When borrower is bound to sign different conditions for the rate of interest it cannot be said to be fair on the part of the respondent and it may also not in the notice of the borrower that on which rate of interest the amount has been sanctioned as after getting the documents signed by the borrower housing company is free to accept any of the part as regard to the terms of the interest even without knowledge of the borrower. Here in the present case it cannot be taken that the appellant is not knowing about the rate of interest which is floating as he is paying the interest on the increased rate. Hence, it can very well be concluded that the loan was sanctioned on floating rate of interest but getting signed part I and II both of the schedule- A is unfair trade practise on the part of the respondent.

7. The further contention of the appellant is that he signed the Demand Promissory Note in which also he agreed for 13% interest only but this contention is not sound one as there is a specific narration that 13% interest or at such other rate as IBHFL may fix from time to t