The State Consumer Disputes Redressal Commission has upheld an order of the Ernakulam Consumer Disputes Redressal Forum directing the State Bank of India, Avoly Branch, at Muvattupuzha to release the security documents of a borrower who had closed his loan.
The Commission passed the verdict while dismissing an appeal filed by the SBI against the order of the forum. The directive to release the documents such as title deeds was passed by the forum on a petition filed by Thomas of Kalloorkade, Muvattupuzha. According to his complaint, on closure of the loan amount of ₹4 lakh he sought to release the security documents. However, the bank rejected his request saying that he had to pay ₹34,020 in addition to the instalment of ₹8,645 he paid towards the loan.
The bank contended that it was crystal clear from the agreement that payment of instalments was subject to variation of the interest rate .Repayment of the amount in instalments was only a facility provided to the complainant. It would not absolve him of repaying the entire loan amount as per the statement of accounts maintained by the bank. As per the account, an amount of ₹31,405 was due from the borrower.
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Dismissing the appeal, the Commission pointed out that the bank’s thrust was on the terms of agreement executed by the complainant. It could not understand what prompted the bank not to produce the ‘so called agreement’ before the lower forum. Had the agreement mandated the bank to charge interest at rates fixed from time to time, it would be their burden to prove it with appropriate documents.
The Commission added that even if the bank had permission to change interest rates from time to time, the customer should have been made aware of the change and the corresponding impact on the overall repayment structure. Banking codes also stipulated that banks should intimate customers regarding the operation of terms of agreement on increase and decrease in the rate of interest. The bank in this case had not done prudently anything to substantiate their claims for the additional amount charged as against the agreed EMI and number of instalments, it said.