JUDGEMENT

SATISH CHANDRA SHARMA, C.J.

1. The present LPA is arising out of an Order dated 06.07.2022 of a learned Single Judge of this Court, in W.P.(C.) No. 6913/2021 (“Impugned Order”).

2. The undisputed facts of the present case reveal that the Appellants before this Court had applied for a joint housing loan and were accordingly sanctioned Rs.51,50,000/- from the State Bank of India, RAPC Branch, New Delhi.

3. The Appellants and the Respondent Bank entered into the Loan Agreement on 20.06.2009 and the same stipulated a fixed rate of interest at 8% for the first year and, thereafter, a floating rate of interest. The tenure of the loan was for 15 years (180 months), and the Appellants were required to furnish regular EMIs to repay the loan. Clause 5 of the Loan Agreement had provided that the Respondent Bank had a right to reduce or increase the EMI, or extend the repayment period, or both, consequent upon revision in the interest rate. Clause 4 (v) of the Loan Agreement had also granted liberty to the Respondent Bank to alter the rate of interest at its sole discretion in the event of major volatility in interest rates during the subsistence of the Loan Agreement. Clause 4(i)(b) further stated that the change of interest rate would be informed to the Appellants vide a notice and it was stated that the Appellant would be deemed to have notice of the change in interest rate if the same is published on the notice board of the Respondent Bank’s branch office / newspaper publication is effectuated / a publication on the Respondent Bank’s website is effectuated / entries of the interest rate charged in the passbook/ statement of accounts furnished to the Appellants.

4. The Appellants have submitted before this Court that they regularly paid EMIs to the Respondent Bank from June 2009, without any default and at times the EMIs were also reduced. However, the Appellants were never informed about any increase in the rate of interest. It was submitted that the Appellants were under the impression that the interest rate has never been increased as at no point of time, the EMI’s were increased. The Appellants have given details of the payment made by them from time to time and have further stated that they had approached the Respondent bank in December 2020 to foreclose the loan account. It was submitted that at such point in time whence they sought to foreclose the Loan Account, upon making an inquiry regarding the outstanding amount due to the Respondent Bank, they were informed that there is an outstanding principal amount of Rs.33 Lakhs due to be paid to foreclose the loan account.

5. It was submitted that the dispute started sometime in December 2020, when the Appellants learnt that the outstanding principal loan amount is still Rs. 33 Lakhs, even though the 15-year loan term was about to conclude in 2024. It was submitted that the Appellants believe that there are some serious irregularities and manipulations with respect to its Loan Account. Further, upon perusing the amortization schedule, which was furnished upon the demand of the Appellants, they learnt that the tenure of the Loan was increased from 180 months to 274 months and the Respondent Bank, unilaterally, without obtaining any consent of the Appellants, increased the repayment schedule. The loan amount due to the Respondent Bank had also increased. On a loan of Rs. 51.5 lakhs, the Respondent Bank’s calculation showed that a sum of Rs. 1.34 crores were still due. It was further submitted that the interest payment on a loan of Rs. 51.5 lakhs was ascertained at approximately Rs. 82 lakhs.

6. As there was serious dispute in the matter of repayment of loan as alleged by the Appellants, they have stated in the Writ Petition that they visited the Assistant General Manager of the Respondent Bank on

29.12.2020, and they were informed that the recovery process in the Respondent Bank is an automatic system which is