IMPORTANT POINT
Higher rate of interest can be charged if agreed terms of Bank is violated.

ORDER

1. The respondent/complainant had obtained a plot on lease-hold basis from Urban Improvement Trust, Bhilwara vide lease deed dated 01.11.2003. He obtained a housing loan from the Bank of Baroda to the extent of Rs.5 lakhs. The loan was sanctioned vide sanction letter dated 21.09.2007 whereby a condition was imposed requiring the complainant to construct house within two years, failing which interest was to be charged with retrospective effect i.e. from the date of disbursement of the loan. The case of the petitioner is that the house was not constructed within the stipulated period of two years as a result of which they become entitled to charge commercial rate of interest from the complainant.

2. Being aggrieved the complainant approached the concerned District Forum by way of a consumer complaint challenging the levy of commercial rate of interest by the petitioner bank.

3. The complainant was resisted by the bank primarily on the ground as per the terms of the sanction the housing loan interest at commercial rate was payable if the house was not constructed within two years. Since the complainant had failed to construct the house within the aforesaid period of two years, they were liable to pay commercial rate of interest with effect from the date of disbursal of the loan.

4. The District Forum having dismissed the consumer complaint, the complainant approached the concerned State Commission by way of an appeal. Vide impugned order dated 09.05.2016, the State Commission allowed the appeal and set aside the levy of interest at commercial rate. Being aggrieved the opposite party/petitioner is before this Commission by way of this Revision Petition.

5. It is not in dispute as per the sanction letter issued by the bank on 21.09.2007 the complainant was required to construct the house on the plot taken by him on lease from Urban Improvement Trust within a period of two years, failing which interest was chargeable at commercial rate with retrospective effect.

Therefore, the only question which arises for consideration in this case as to whether the complainant had constructed a house within two years from the disbursal of the loan or not. The petitioner has placed on record two inspection reports one dated 08.08.2012 and other dated 17.09.2012. The inspection report dated 08.08.2012 was submitted by a bank official Mr. Sandeep Khaitan and reads as under:

“Today, I have inspected the plot of sh. Mahabir singh Chaudhary, who has been sanctioned a loan of Rs.5 lakh by our branch for purchasing a plot and constructing a house.

..........

I have found that there is a boundary wall constructed on the plot, a main gate is installed, and a shed is constructed in the plot for parking of car. A garden is also developed in the plot. Sh. Chaudhary is residing with his family in the house at the adjoining plot of the said plot whose address is C-588, Azad Nagar, Bhilwara. Address of Plot financed by us is C-587, no residential house is constructed on the said plot.”

The inspection report dated 17.09.2012 was submitted by another bank official namely Mr. S.K. Bhandari and reads as under:

“During inspection of Plot No.C-587, situated at Azad Nagar, Bhilwara whose owner is Sh. Mahaveer Singh Chaudhary S/o Sh. Kanhaiya Singh Chaudhary, it is found that there is no construction within inside area of Plot and only Boundary Wall is constructed.”

6. The learned counsel for the complainant submits that the complainant had constructed one room with toilet, garage and boundary wall. He relies upon the affidavit of the complainant filed before the District Forum in this regard. I asked the learned counsel for the complainant/respondent as to whether the complainant has obtained any completion certificate in respect of the house constructed by him on the plot taken on lease from the Urban Improvement Trust, Bhilwara. The learned counsel submits that no completion certificate was taken. I asked him as to whether any building plan had been got