Where a lender fails to adhere to agreed loan terms and miscommunicates changes, it constitutes a deficiency of service under consumer protection laws.

1. This First Appeal No. 762 of 2020 under S.51(1) of the Consumer Protection Act, 2019 challenges the order dated 31.7.2019 passed by Honble Karnataka State Consumer Disputes Redressal Commission, Bangalore (for short, the Stale Commission) in CC No. 46 of 2016, whereby the Complaint filed by the Complainant was allowed with a direction that the Opposite Party / Appellant Bank, to reverse entries and restore the terms of the house loan dated 29.3.2006 along with payment of Rs. 10,000 towards mental agony and inconvenience.

2. Brief facts of the case are that the Respondent / Complainant is a Non Resident Indian who availed a Housing Loan of Rs. 40,00,000 under Non - Resident Indian Loan Scheme at a ˜Fixed Rate of Interest @8.5% repayable in 120 monthly installments of Rs. 49,595. The Respondent / Complainant executed the GPA in favor of his Father to execute the Loan Agreement. The Loan Agreement was executed on 22.03.2006 and as per the Agreement, the amounts were disbursed to the Respondent / Complainant as follows:

The remaining amount of Rs. 2,98,800 was paid by the Bank directly to the sub-registrars office, towards stamp duty, registration fee etc.

3. The Respondent started paying EMIs and made a total payment of about Rs. 59,65,000. On 22.2.2015 he sent an email to the Appellant / Opposite Party for a loan statement in connection with pre - closure of the Loan amount. He was shocked to see revisions in his Loan Account Statement and was informed that the revision was intentional and that he had to pay an additional tenure of 50 months i.e. 50 more EMIs @ Rs. 51,968, i.e. 25,98,400.

4. Being aggrieved by the unilateral revision made by the Appellant Bank, the Respondent issued a Legal Notice to the Appellant Bank on 28.9.2015 seeking rectification of the revision to its original agreed terms. In response to the Legal Notice, the Appellant Bank apologized for having committed mistake as follows:
The letter shared by you is not the offer letter and is the welcome letter which is normally sent by the bank after disbursement of the loan amount and regrets to state that the rate of interest is inadvertently mentioned as Fixed in the said letter. We sincerely regret the inconvenience caused to you in this regards. We have sensitized the relevant unit to ensure that such instances do not reoccur.

5. The Respondent submitted that, he was asked to cough up an additional sum of Rs. 18,00,000 ˜In the form of differential interest @ 15.75% p.a. Floating rate, instead of 8.5% PA Fixed rate and which the Respondent had never categorically agreed to.

6. The Respondent further submitted that, Mr. Narendar from home loan division confirmed that the deviation (from fixed rate to floating rate) happened since the day when the loan was closed and Appellant Bank failed to take note that, if the original offer made to the Complainant was @8.5% p.a. - Fixed, then the bank had to adhere to the said offer and adjust / redress the loan as per the original offer and not change the terms detrimental to the interest of the Respondent / Complainant. Alleging deficiency in service on the part of the Appellant / Opposite Party, the Respondent / Complainant filed Consumer Complaint No. 46 of 2016 before the State Commission with following prayer:
(a) Direct the Opposite Party - Bank to reverse the entries made in impugned Bank statement at Annexure - F and to restore the terms and condition of the housing loan as per terms promised / agreed to at Annexure - A.
(b) Award damage of Rs. 5 lakh for the inconvenience caused and for