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2026 Supreme(Online)(SCDRC) 8178
IN THE DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION
Sangita Dhingra Sehgal, President, Pinki, Member (Judicial)
REKHA GAUTAM – Appellant
Versus
CITI BANK & ANR. – Respondent
COMPLAINT CASE NO.- 1097/2017
Important Points
Subject
Consumer Protection - Banking Services
Headnote
(B) Duty of Care - Communication - Notification of Rate Hikes - A bank is obligated to provide proof of communication regarding interest rate enhancements; mere assertions of sending letters without evidence of dispatch or service are insufficient to justify rate increases. (Para 20)
(C) Regulatory Compliance - RBI Guidelines - Base Rate System - It is the mandatory duty of the bank to inform borrowers about RBI circulars and offer the option to switch to the Base Rate regime; failure to do so constitutes a deficiency in service. (Para 21, 23)
Issues: Whether the Opposite Party indulged in deficiency in service and unfair trade practice by unilaterally increasing interest rates and failing to inform the complainant about the RBI Base Rate system.
For the Appellants/Petitioners: V.V. Gautam, Sumit Kumar
For the Respondents: Akshay Kapoor
| Table of Content |
|---|
| 1. complainant alleges excess interest recovery and failure to implement rbi base rate guidelines. (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10) |
| 2. parties submit competing claims regarding floating rates and notification of interest changes. (Para 11 , 12 , 13 , 14 , 15 , 16) |
| 3. court identifies issues regarding agreed interest rates, notification, and rbi compliance. (Para 17 , 18) |
| 4. bank failed to prove floating rate agreement or notification of rate hikes and rbi guidelines. (Para 19 , 20 , 21) |
| 5. legal precedents establish bank's duty to inform borrowers of rate changes and regulatory updates. (Para 22 , 23 , 24) |
| 6. bank found deficient; ordered to refund excess interest and pay compensation. (Para 25 , 26 , 27 , 28 , 29 , 30 , 31) |
JUDGMENT
1. The present complaint has been filed by the Complainant against M/s Citibank (hereinafter referred to as the Opposite Party No.1 which has been substituted by Axis Bank Ltd. vide order dated 29.07.2024) alleging deficiency in service and unfair trade practice. The Complainant has prayed for the following reliefs:
a. Direct the Opposite Party to reduce the interest rate in the Complainant’s account to 11.25% or less per annum w.e.f. 1st July, 2010 i.e. the date on which RBI Circular regarding base rate became effective, refund of Rs.12,19,512/- to the Complainant in lieu of excess amount collect from her more than the principal loan amount and the applicable interest rate alongwith interest @ 11% to delete the outstanding balance of Rs.7,28,446/- shown as on 25.04.2017 in her loan account and to issue NOC to the Complainant to the effect that the opposite Party has received the due principal amount and interest thereof from the Complainant in respect of subject loan.
b. Direct the Opposite Party to pay a sum of Rs.5,00,000/- to the Complainant on account of mental torture, agony and financial crises suffered by the Complainant due to the unlawful and illegal and illegal acts/inactions of the Opposite Party for over a period of 12 years.
c. Direct the Opposite Party to pay a sum of Rs.1,00,000/- to the Complainant as cost of litigation;
d. Pass any other or such further orders as this Hon’ble Forum may deem fit and proper to pass having regard to the facts and circumstances of the present complaint.”
2. The brief facts of the case are that the complainant was sanctioned a housing loan of Rs.50,00,000/- by the Opposite Party on 13.12.2005 at an interest rate of 12% per annum for a tenure of 120 months, with a fixed monthly EMI of Rs.71,736/-. Along with the sanction letter, the Opposite Party provided a detailed repayment schedule showing the principal component payable with each monthly instalment. As per the repayment schedule, the loan was to be fully repaid by November 2015 (Annexure C-1 at pages 23-26 of the complaint).
3. The complainant regularly paid the EMIs in accordance with the repayment schedule. Upto 31.01.2014, she had paid 97 EMIs amounting to Rs.69,58,332/-. As per the original repayment schedule, the outstanding principal on that date should have been Rs.14,16,408/-. However, the loan account statement issued by the Opposite Party reflected an outstanding principal of Rs.26,19,404/-, which prompted the complainant to scrutinize the loan account. On examining the loan account statement for the period from 31.12.2005 to 31.01.2014, the complainant found that the Opposite Party had revised the applicable rate of interest upward on several occasions, which is evident from the chart placed as Annexure C-2 at page 27 of the complaint. According to the complainant, these frequent increases in the rate of interest resulted in a substantial increase in the outstanding loan amount and were contrary to the terms of the sanction letter.
4. The complainant further alleged that, pursuant to the RBI Circular No. RBI/2009-10/390/DBOD No.Dir. BC88/13.03.00/ 2009-10 dated 09.04.2010, which introduced the Base Rate System with effect from 01.07.2
