- (1.) Leave granted. This appeal is directed against an order passed by the National Consumer Disputes Redressal Commission (in short "the National Commission") dated 29.09.2014 dismissing the Revision Petition filed by the Appellant bank. The Commission held that the Revision Petition is disposed of with an order that upto 30.11.2006, the bank was entitled to charge interest at Floating Reference Rate (FRR) per annum minus 1.5% per annum, whereas w.e.f. 01.12.2006, the bank would charge interest @ 8.75% per annum, irrespective of any increase or decrease in the FRR. The said order was passed by the National Commission on the following facts: "(a) The complainants/respondents herein availed home loan to the extent of Rs. 13,35,100/- from the Appellant bank for purchase of a flat in Zirakpur. The loan was sanctioned vide letter dated 14.11.2005 and it carried an interest @ 7.25% per annum. Later, it was confirmed by the bank that w.e.f. April, 2006 the loan would carry an interest @ 7.75% per annum. (b) It was further case of the complainants/respondents that an additional loan of Rs. 3,00,000/- was sanctioned on 30.10.2006 with an obligation to pay interest @ 8.75% per annum. The grievance expressed by the Respondents was that instead of charging interest at the agreed rate, the bank had charged the same @ 11.25% per annum for the period from 01.04.2007 to 31.03.2008, besides charging interest during pre-EMl period @ 9.5% per annum. Hence, the complainants/respondents filed a complaint before the District Forum, alleging deficiency in the service provided by the Appellant bank to them. (c) Such complaint was resisted by the Appellant bank on the ground that loan was sanctioned on the floating rate of interest, which at the time of sanction was 8.75% per annum and could be enhanced as per the guidelines issued by the Reserve Bank of India and in accordance with the agreement between the parties. (d) The District Forum passed an order in the matter directing the Appellant bank to charge interest @ 7.25% per annum till 31.03.2006 and thereafter @ 7.75% per annum from 01.04.2006 to 30.10.2006 and thereafter @ 8.75% per annum. It further directed that the enhanced rate of interest shall not be more than the rate at which loan is advanced to the new borrowers. It further directed to pay a compensation, as a result whereof, the bank preferred an appeal before the State Commission. The State Commission, by its order dated 19.03.2010, permitted the Appellant bank to vary the rate of interest only as per the variation allowed by the Reserve Bank of India from time to time, granting the complainants benefit of minus 1.5% of the FRR. (e) the State Commission held that in view of the agreement between the parties, payment of interest @ minus 1.5% of the prevalent FRR, which could be reset by the bank based on the guidelines issued by the Reserve Bank of India. It was further held that the intimation of such resetting should be given to the complainants/constituents. The State Commission also affirmed the payment of compensation as well as the cost of litigation as assessed by it. In these circumstances, the Appellant bank filed a Revision Petition before the National Commission and the National Commission dismissed the said petition."
(2.) Being aggrieved, the Appellant bank had to knock the doors of this Court by filing this appeal by way of special leave.
(3.) Mr. P. Chidambaram, learned senior counsel appearing in this matter on behalf of the Appellant bank submitted that a housing loan can be advanced either on a fixed rate of interest or on a floating rate of interest. In cases of floating rate of interest, the rate of interest is not fixed and varies from time to time with the changes in the economic environment and resultant changes in the borrowing cost of the Bank. For calculating such rates of interest, a bench mark rate is adopted, which in the present case is the Floating Reference Rate(FRR). The interest payable by the Borrower is determined by adding or subtracting the margin percentage from such a bench mark rate as agreed between the parties.;