National Consumer Disputes Redressal Commission

New Delhi

ORIGINAL PETITION NO. 7 OF 2007

.1 Rohit Bajaj

S/o Sri Ramashankar Bajaj

.2. Mohit Bajaj

S/o Shri Ramashankar Bajaj

.3. Umashankar Bajaj

S/o Sri Sitaram Bajaj

.4. Indra Bajaj

W/o Shri Ramashankar Bajaj

.5. Anita Bajaj

W/o Shri Umashankar Bajaj

.6. Neetu Bajaj

W/o Shri Mohit Bajaj

.7. Sitaram Bajaj

S/o Late Shri Sagarmal Bajaj

.8. Ramashankar Bajaj

S/o Shri Sitaram Bajaj

Address for all the above:

7^th Floor, Trinity Plaza,

84/1A, Topsia Road,

Kolkata – 700 046. …. Complainants

Versus

.1. ICICI Bank Ltd.,

ICICI Bank Towers,

Bandra Kurla Complex,

Mumbai – 400051.

.2. Mr. K.V.Kamath,

Chairman-cum-Managing Director,

ICICI Bank Towers,

Bandra Kurla Complex,

Mumbai – 400051.

.3. Mr.Neelakantan Pillai,

Business Head – Loan Against Securities,

ICICI Bank Towers,

Bandra Kurla Complex,

Mumbai – 400051.

.4. Mr.Bhaskar Mukherjee,

Business Representative(LAS),

ICICI Bank Towers,

Shanti Niketan Building,

3^rd Floor, Bistupur,

Jamshedpur – 831 001. … Opposite Parties

BEFORE:

HON’BLE MR. JUSTICE M.B.SHAH, PRESIDENT.

HON’BLE MRS. RAJYALAKSHMI RAO, MEMBER.

For the Complainant : Mr.Devashish Bharuka,

Advocate,

For the Opposite Parties : Mr. R.S.Suri, Advocate &

Mr. Rahul Malhotra, Advocate.

Dated the 17^th April, 2008

O R D E R

M.B.SHAH, J. PRESIDENT

It is the case of the complainant that ICICI Bank (hereinafter referred to as the Bank) had adopted unfair trade practice by alluring the complainants to take loan at a fixed rate of interest varying between 6.25% to 6.40% by pledging Kissan Vikas Patras (KVPs for short) and when the complainants were trapped in, the bank demanded increased rate of interest on the loan amount given to the complainants and also unjustifiably deducted Processing Fee to the tune of Rs.6,69,465/-.

The complainants, in their complaint, have alleged that relying upon discussions held with the concerned Bank officials over a period of three months as also relying upon the terms and conditions of the proposed KVP scheme contained in the written communications, each of the eight complainants who are family members, proceeded to invest Rs.20 lakh (margin money of 10%) in the scheme. As against such investment, the Bank granted a loan of Rs.1.80 crore to each of the complainants enabling each one of them to purchase KVPs (through the Bank) worth Rs.2 crore which was then pledged as security with the Bank. Thus, the complainants were assured returns from the KVP at an interest rate of 8% per annum on Rs.2 crore each whereas at the same time, availing the Bank loan of Rs.1.8 crore at an interest rate of only 6.4% per annum for the entire period of 103 months. Eventually, the complainants were to receive a net gain of almost Rs.60 lakh on their initial investment of Rs.20 lakh that is a four-fold gain within a period of 103 months (8 years and 7 months).

The complainants further contended that all the activities relating to purchase of KVPs on behalf of the complainants was done by the Bank itself. The complainants merely deposited the margin money. The Bank thereafter added the loan amount, purchased the KVPs and pledged the same to itself.

The complainants withdrew a total sum of Rs.1.10 crore from their different PPF accounts for depositing the margin money with the Bank. It is their contention that in their PPF accounts, they were getting Compound Interest at the rate of 8% per annum and the same was also tax-free, whereas interest on the KVP is taxable.

After the loan was sanctioned and the KVPs were purchased, the complainants were made to fill up and sign a standard format paper supplied by the Bank. The complainant signed the said documents under the presumption that the terms and conditions agreed upon by the Bank in writing, by issuing different letters and E-mails, would be made applicable.

On the rosy picture drawn by the Bank officials, the complainants invested money in the KVP Scheme of the Bank. Thereafter, by its letter dated 19.5.2006, the Bank informed the complainant with regard to the revision of the rate of interest from 7% to 7.75% per annum with retrospective effect from 15.4.2006. In spite of lodging various protests against upward revision of rate of interest, the complainants were informed that from December 2006, the rate of interest was enhanced from 7.75% to 9.50% per annum. It is their say that by such unfair trade practice adopted by the Bank, the complainants are ruined. Hence, the complainants have prayed that:

1) The Opposite Parties (the Bank and its officers) be declared guilty of deficiency in service and of adopting unfair trade practices, and be directed to stop such practice in future;

2) Compensation of Rs.1 crore be awarded for the unfair trade practice adopted by the bank which has caused undue harassment, mental agony and suffering to the complainants.

3) The Opposite Parties be directed to refund a sum of Rs.6,69,465/- deducted from the complainants’ account as Processing Fee with interest thereon; and,

4) The Bank be directed to recover interest at the rate of 6.40% per annum with respect to the loan granted to the complainants against the KVP Scheme of the Bank;

Written submissions of the Opposite Parties:

It is contended by the Opposite Parties:

.(i). that the complaint is filed by way of an after thought inasmuch as the Complainants are highly educated business people and well versed in the business of investment and the risks associated thereto, including the interest risk. Looking at the trend of declining interest rates in the past, the Complainants assumed and decided that this investment, even by borrowing from the Bank, would be worthwhile/profitable. They knew all the time that interest rate on the borrowed amount from the bank is variable and not fixed;

.(ii). that the Complainants availed the offer of loan against security facility from the Respondents Bank; under such facility the Complainants could pledge securities like KVPs, shares, RBI Relief Bonds, mutual fund units, insurance policies etc., and obtained over draft facility from the Respondent bank. In order to purchase the KVP, the Complainants decided to avail over draft facility from the Bank to fund 90% of the face value of KVP and the remaining 10% from their funds. Accordingly loan against security agreement/s were executed between the parties on 4.11.2004 and over draft limit of Rs.3,00,00,000/- for each of the Complainants was sanctioned to the Complainants by the Respondent Bank (aggregating to Rs.24 Crores). The variable rate of interest was 6.25%. The schedule providing details of the facility is (at page No.38 of the Reply) filed by the Bank.

.(iii). The Complainant further executed another set of agreements for loan against security dated 12.3.2005 in favour of the Respondent bank for the enhancement in the aforesaid overdraft limits to Rs.6,00,00,000/- for 7 of the Complainants and for Rs.8,00,00,000/- for the remaining one Complainant. The said limit was enhanced accordingly (aggregating to Rs.50 crores). It is pertinent to note that under the said LAS Agreements for the enhanced overdraft limits, the variable rate of interest was mentioned as 6.40% and the Complainants accepted the same and never had any objection. Therefore, Complainants’ allegation that the rate of interest was fixed from the very beginning and it was not subject to variation is false and baseless and obviously made as an after thought.

.(iv). That the Complainants had arranged for the margin money during 21 to 28.02.2005 and the KVPs were purchased by them availing the said overdrafts and thereafter they pledged their respective KVPs with the Respondent Bank during 21-28.02.2005 as security for their respective overdraft limits.

.(v). It is relevant to note that bank vide its welcome letter dated 7.3.2005 informed the Complainants about the overdraft limit sanctioned to each of the Complainants, which is by way of revolving credit facility extended by the Respondent Bank through their respective current accounts. It is categorically mentioned in the said letter that the Respondent Bank reserves the right to amend the interest rate on the facilities with prior notices to the Complainant.

.(vi). The Complainants have also executed agreements with regard to the terms of loan facility granted to the Complainants and in those agreements there is a specific condition that interest rate decided by the bank from time to time would be applicable to the facility.

Relevant correspondence for finding out the agreement between the Complainant and the Bank.

To decide the questions involved in this case, it is worthwhile to reproduce the relevant portions of the correspondence exchanged between the parties, as to how the agreement to take loan was finalized and thereafter the purchase of the KVPs.

.(1). By letter dated 20.12.2004 ICICI Bank informed the complainant, Mr.Ramashankar Bajaj, about sanction of limit of 100 million on interest at the rate of 6.25% to 6.75% and Nil Processing Fee. The relevant part of the letter is as under:

“This has reference to our various discussions regarding sanction of over draft limit against Kissan Vikas Patra. We are pleased to inform you that ICICI Bank has agreed to sanction a limit of 100 million in your and your family member’s name against KVP till maturity as per the terms and conditions mentioned below:

· Security : KVP in dematerialized form

· Drawing Limit : 90% of the value of security pledged and limit accrued yearly

· Rate of Interest : 6.25%-6.75% (subjected to further hardening of interest by RBI)

· Processing Fee : Nil

· Interest Payment Periodicity : Monthly

· Utilization : 100% of initial DP set for the full tenure of KVP

Kindly revert as token of acknowledgement to initiate relevant procedure at our end for setting up of limit.”

.(2). After further discussion with the Complainant, the bank changed its stand and by letter dated 21.12.2004 the Bank informed the Complainant, Mr.Ramashankar Bajaj, about sanction of limit of 100 Million on terms and conditions, especially mentioning the rate of interest at 6.25% p.a.

“This has reference to our various discussions regarding sanction of over draft limit against Kissan Vikas Patra. We are pleased to inform you that ICICI Bank has agreed to sanction a limit of 100 million in your and your family member’s name against KVP till maturity as per the terms and conditions mentioned below:

. Security: KVP in dematerialized form

. Drawing Limit: 90% of the value of security pledged

. Rate of Interest : 6.25% p.a

. Processing Fee: Nil

. Interest Payment Periodicity : Monthly

Kindly revert as token of acknowledgment to initiate relevant procedure at our end for setting up of limit.

Assuring you our best services.

.(3). Again, pursuant to the mutual discussions between the Complainant and the Opposite Party Bank, the Bank by its E-Mail, dated 5.2.2005 indicated rate of interest at 6.25% p.a., which is as under:

“E-mail dated 5.2.2005

Subject : KVP Approval

Date : Sat, 5 Feb 2005 14:09:52+0530

Your case of KVP has been approved, On following conditions:

Rate of interest 6.25% p.a. ( interest amount paid on monthly basis )

Your Limit will be revised as per the LTV Grid attached.

I am enclosing cash flow chart for 1 Crore for your reference on above and conditions check and confirm.”

.(4). Thereafter, the Complainant accepted the said offer by letter dated 9.2.2005, which reads as under:

“We have considered your mail dated 9.2.2005 regarding KVP cash flow and Bank O/D Limit set by ICICI accordingly. After several discussion with you we feel that we should consider the scheme as suggested by you.

In this respect, however, we wish to re-confirm the terms from the concerned authority: (Your letter no: REF/ICICI/LAS/JSR/005 dated 21.12.2005)

1. Security KVP in dematerialized form

2. Drawing limit as suggested by you in the mail

3. Rate of Interst:6.25% p.a.

4. Processing fees : NIL

5. Interest payment periodicity: Monthly

We request you to take minimum processing time for setting up the limit on our a/c. The initial limit should be set immediately (same/next working day ) the demat KVP is transferred into your security account. Similarly the enhancement of limit should be automatically made in our concerned account so that we can enjoy the limit from next day onwards. This is very crucial for our decision since there is not much time for budget and financial accounts closing.

Since all the terms and conditions have already been suggested and acceptable by your Bank we wish to receive the final confirmation at the earliest so that we can proceed accordingly.”

.(5). Thereafter, as a final confirmation offer, bank wrote a letter dated 15.2.2005. The Bank increased rate of interest at 6.4% also. The letter reads as under:

“Letter dated 11.2.2005

Please refer to the various discussion we had and your telecon with our India Head today. We are pleased to give our best possible offer.

. Security : KVP in dematerialized form

. Drawing Limit : On maturity value of KVP

. Rate of Interest : 6.4% p.a

. Processing Fee: Nil

. Interest Payment Periodicity : Monthly

Assuring you our best services.”’

On the basis of the said confirmation of the best possible offer, the Complainant deposited the margin money on different dates from 21.2.2005 to 7.3.2005. The bank, thereafter, purchased the KVPs within a period of week from the respective dates of their deposits.

From the aforesaid correspondence it is apparent that the Complainants and the Bank officers had various discussions from time to time and finally it was agreed that on the basis of the security of KVPs in dematerialized form loan facility of 90% of the value of the security pledged was granted. The rate of interest was also fixed at 6.40% p.a. It was also agreed that no processing fee was to be charged. The flow chart also clearly mentions the rate of interest payable by the Complainants for 103 months. Bank officers have agreed finally to the rate of interest at 6.4% p.a. by their letter dated 11.2.2005, as quoted above. On that basis, the Complainant deposited margin money by withdrawing from their PPF accounts on which they were getting interest at 8% p.a. and deposited with the bank, and, thereafter, the bank gave 90% loan and purchased the KVPs.

Despite the aforesaid assurances, the bank, thereafter, wrote letters to the Complainants increasing the rate of interest. The first letter dated 7.3.2005, written by the Bank indicating the current account number, the limit and interest rate 6.40% reserving the right to amend the interest rate.

Thereafter, another letter dated 20.6.2005 was written by the Bank indicating increase in interest rate from 6.40% to 7.00% with effect from 1.7.2005.

In response to the said letters the Complainants by their letter dated 25.6.2005 requested the Bank not to increase the rate of interest, and further pointed out that the family investments was blocked over a period 8 years and 7 months, and, at the time of opening of the OD Account with the bank, Complainants were assured that there might be a normal change of interest. But, raising of interest rate within a period of 3 months can hardly be justified. Therefore a request was made to reconsider the decision of increasing the rate of interest.

Thereafter, by another letter dated 19.5.2005 from the Bank indicted increase in interst rate from 7.00% to 7.75% with effect from 15.4.2006, terming it as normal revision in the rate of interest of loan.

Finally, on 26.6.2006 the Complainants gave a notice through Advocate to the Bank, narrating all the facts and pointing out that the agreed rate of interest was 6.25% p.a. and that charging the processing fee and the entire demand was totally unjustified. We do not want to reproduce the said notice. Finally, it was stated that the bank should roll back the rate of interest to 6.4% p.a. and not to levy or debit interest in the Complainant’s account in excess of 6.4%. To that notice, by letter dated 7.9.2006, the bank informed the Complainant that the cost of funds existing on that day does not allow them to bring down the rate of interest.

Findings:

Therefore, the question is - whether the tactics adopted by the Bank of alluring the Complainants to take loan by promising fixed rate of interest, thereafter to increase the rate of interest at its will and also to charge the processing fee, even though the agreement was not to charge the same, can be termed as unfair trade practice?

In our view, it would be an apparent unfair trade practice, because, the Complainants were assured, after various discussions, that rate of interest to be charged on the loan facility, which was to be given by pledging the KVPs, would be only 6.4% and that the bank would not charge any processing fee.

It is pointed out that despite this assurance, the processing fee of Rs.6,69,465/- was charged. However, after the filing of the complaint, that charging of the processing fee was withdrawn by the Opposite Parties. Hence, this issue needs no further consideration.

Now, the only question, therefore, is with regard to demand of rate of interest above 6.40%.

In our view, this cannot be justified.

However, the learned Counsel for the Bank placed reliance upon the terms of the agreement dated 12.3.2005, in support of the bank’s claim. The relevant terms of the agreement are as under:

“Declaration:

- I/we confirm that the funds will be used for the stated purposes only and will not be used for speculative purpose and/or anti-social purposes;

- I/we confirm that the security to be created is held by me/us in my/our name OR in the name of the guarantor, as absolute owners thereof and not in our capacity as trustees or guardian OR any other fiduciary capacity.

………

“Interest:

The facility shall carry interest at the rate(s) specified in the Schedule written hereto or such other rate(s) as may be decided by the bank from time to time. The interest rate/s decided by the bank from time to time to be applicable to the facility may be subsequently intimated to the borrower and shall be binding upon the borrower; the borrower shall not be entitled to dispute or question the same on any ground whatsoever. The borrower agrees and confirms that the bank may, at its sole discretion, charge different rates of interest for different advances against the facility secured by different types of security. All amounts drawn by the borrower over and above the operating limit shall carry interest at the rate of 6.4% over and above the applicable rate for the facility from the date of drawal till the payment thereof to the bank.

The interest amount at the aforesaid rate(s) shall be calculated on the daily debit balance in the overdraft account opened/to be opened by the borrower with the bank in respect of the facility (the “Account”). The Bank shall debit the interest amount to the account or collect the amount of interest separately from the borrower.”

In our view, the written agreement was subsequent event to the finalisation of the contract and purchase of the KVPs. The contract came to be completed on the basis of the correspondence exchanged between the parties. That too, after long discussions from the month of December, 2004 to February, 2005. This has been specifically stated in the letters which are produced on record and quoted above.

Further, no prudent investor would give a free hand to the banker to raise the rate of interest which will affect his investment.

Hence, the subsequent agreement, after trapping the Complainants, cannot be relied upon and it would be unfair trade practice. The agreements were executed subsequent to grant of loan and purchase of the KVPs would be clear from the following undisputed chart of investment:

		Margin Money Credited In our A/c with ICICI Bank		P A G E N O.	Amount of KVP Purchased and Debited in our account by ICICI Bank		Date of the agreement executed
					Date of Debit	Amount
		Date of Credit	Amount
1	Anita Bajaj	21.02.2005	10,00,000	2			12.03.2005
		24.02.2005	10,00,000		24.02.2005	20,00,000
2.	Indra Bajaj	21.02.2005	10,00,000	3			12.03.2005
		22.02.2005	10,00,000		24.02.2005	20,00,000
3.	Mohit Bajaj	21.02.2005	8,00,000	4			21.03.2005
		21.02.2005	2,00,000		24.02.2005	10,00,000
		07.03.2005	10,00,000		10.03.2005	10,00,000
4.	Neetu Bajaj	24.02.2005	20,00,000	5	24.02.2005	20,00,000	12.03.2005
5.	Ramashan- Kar Bajaj	16.02.2005	5,00,000	6	17.02.2005	50,00,000
		02.03.2005	15,00,000		10.03.2005	1,50,00,000
6.	Rohit Bajaj	21.02.2005	5,00,000	8			12.03.2005
		21.02.2005	5,00,000		24.02.2005	10,00,000
		07.03.2005	10,00,000		10.03.2005	10,00,000
7.	Sitaram Bajaj	14.02.2005	5,00,000	9	17.02.2005	50,00,000	12.03.2005
		24.02.2005	15,00,000		24.02.2005	1,50,00,000
8.	Uma- shankar Bajaj	22.02.2005	10,00,000	11	24.02.2005	10,00,000	12.03.2005
		07.03.2005	10,00,000		10.03.2005	10,00,000
	Total Amount		1,60,00,000		Total Amount		16,00,00,000
	Margin Money Rs.1,60,00,000/-				KVP Amount		16 Crores

Dealing with such standardized contracts the Law Commission of India in its 103^rd Report, May 1983, termed it as unfair requiring protection of the consumer. The Law Commission observed that these standardized contracts are really pretended contracts. That have only the name of the contract and the individual signing on the dotted lines does not really represent his substantial agreement with the terms in it. To provide relief to the consumers in case where the document is drafted unilaterally and signed on dotted lines, the Consumer Protection Act, 1986 makes provision in case the contract is unfair or is by way of unfair trade practice. The Commission observed:

“1.2. These standardized contracts are really pretended contracts that have only the name of contract. They are called contracts of adhesion from the French term (contracts d’adhesion) because, in these, a single will is exclusively predominant, acting as a unilateral will, which dictates its terms not to an individual but to an indeterminate collectivity. The standard terms and conditions prepared by one party are offered to the other on a “take-it-or-leave-it” basis. The main terms are put in large print, but the qualifications are buried in small print. The individual’s participation consists of a mere adherence, often unknowing, to the document drafted unilaterally and insisted upon by the powerful enterprise; the conditions imposed by the document upon the customer, are not open to discussion, nor are they subject to negotiation between the parties, but the contract has to be accepted or rejected as a whole. The contracts are produced by the printing press. The pen of the individual signing on the dotted line does not really represent his substantial agreement with the terms in it, but creates a fiction that he has agreed to such terms. The characteristics, usually and traditionally associated with a contract, such as freedom to contract and consensus are absent from these so-called contracts.

……..

.3.3. The entire basis of a contract, that it was freely and voluntarily entered into by parties with equal bargaining power, completely falls to the ground when it is practically impossible for one of the parties not to accept the offered terms. In order to render freedom of contract a reality and particularly of one whose bargaining power is less than that of the other party to the contract, various measures like labour legislation, money-lending laws and rent Acts have been enacted, but there is no general provision in the Contract Act itself under which courts can give relief to the weaker party. The existing section in the Contract Act do not seem to be capable of meeting the mischief.

……….

.3.8. The net result is that the Indian Contract Act, as it stands today, cannot come to the protection of the consumer when dealing with big business. Further, the ad-hoc solutions given by courts in response to their innate sense of justice without reference to a proper yardstick in the form of a specific provision of statute law or known legal principle of law only produce uncertainty and ambiguity.”

May be that the Contract Act is not amended on the basis of the aforesaid report, but the Consumer Protection Act, 1986 empowers the Consumer Fora of curing the mischief adopted by one of the contracting parties. In case, term/terms of the contract in specified form is unjustified/unilateral, it cannot be termed as intentional contract between the parties, and, in some cases, it may amount to unfair trade practice. Hence, relief under the Consumer Protection Act can be granted in such a case.

Further, the aforesaid agreements are disputed by the Complainants by contending that their signatures were taken on a printed form without explaining any terms and conditions. They signed it solely relying upon the word of the bank officers and on the assumption that agreement would be in conformity with the earlier correspondence by which contract was finalized.

Further, by letter dated 24.4.2006 the Complainant pointed out that the conditions which attracted them were the rate of interest which was 6.25% p.a., and the processing fees was ‘nil’. He has further pointed out that the Complainants repeatedly impressed upon the bank that the Complainants were in business and always to assess the long-term gain that would accrue. This factum was well and truly documented by them. Therefore, increase in rate of interest was not justified.

In our view, the object and purpose of the Consumer Protection Act, 1986 is to protect the consumers against such unfair trade practice and that is the reason why Section 14 of the Consumer Protection Act, 1986 provides that Consumer Fora can issue order to discontinue the unfair trade practice or the restrictive trade practice. In our view, as stated above, the practice adopted by the bank is apparently unfair trade practice, because it has adopted unfair and deceptive means in alluring the Complainants to take loan and purchase the KVPs by taking 90% purchase price from the Bank, that too by assuring that bank would charge interest at the rate 6.4% p.a., only and no processing fee would be charged. It was the duty of the bank at the relevant time to inform the Complainant that interest rate may increase from time to time. That was not done before grant of loan or purchase of KVPs. After the grant of the loan and the purchase of the KVPs if the Complainants are informed that rate of interest would be increased they are helpless because KVPs cannot be sold at its face value.

Further, along with the letter dated 5.2.2005 even the bank has give a flow chart indicating how it is profitable to the Complainants to take loan and purchase the KVPs and pledge it to the bank. Relying upon that flow chart if loan is taken and the KVPs are pledged, bank cannot change its stand and that such breach of promise would be unfair trade practice.

The flow chart is quoted as under:

M On th	KVP Valuation	Limit set By ICICI	Month Ins. Paid	Cum.Cash Outflow	Finance on Accru- -red interest	Cum. Cash In flow	Interest On Investment
1	1,00,00,000	90,00,000	-46875.00	-46875.00	0	-46875.00	-1464.84375
2	1,00,00,000	90,00,000	-46875.00	-93750.00	0	-93750.00	-2441.40625
3	1,00,00,000	90,00,000	-46875.00	-140625.00	0	-140625.00	-2929.6875
4	1,00,00,000	90,00,000	-46875.00	-187500.00	0	-187500.00	-2929.6875
5	1,00,00,000	90,00,000	-46875.00	-234375.00	0	-234375.00	-2441.40625
6	1,00,00,000	90,00,000	-46875.00	-281250.00	500000	218750.00	1139.322917
7	1,00,00,000	95,00,000	-49479.17	-49479.17	0	169270.83	5289.713542
8	1,00,00,000	95,00,000	-49479.17	-98958.33	0	119791.67	3119.574653
9	1,00,00,000	95,00,000	-49479.17	-148437.50	0	70312.50	1464.84375
10.	1,00,00,000	95,00,000	-49479.17	-197916.67	0	20833.33	325.5208333
11	1,00,00,000	95,00,000	-49479.17	-247395.83	0	28645.83	-298.394097
12	1,00,00,000	95,00,000	-49479.17	-296875.00	0	-78125.00	-406.901042
13	1,00,00,000	95,00,000	-49479.17	-49479.17	0	-127604.17	-3987.63021
14	1,00,00,000	95,00,000	-49479.17	-98958.33	0	-177083.33	-4611.54514
15	1,00,00,000	95,00,000	-49479.17	-148437.50	0	-226562.50	-4720.05208
16	1,00,00,000	95,00,000	-49479.17	-197916.67	0	-276041.67	-4313.15104
17	1,00,00,000	95,00,000	-49479.17	-247395.83	0	-325520.83	-3390.84201
18	1,00,00,000	95,00,000	-49479.17	-296875.00	500000	125000.00	651.0416667
19	1,00,00,000	10000000	-52083.33	-52083.33	0	72916.67	2278.645833
20	1,00,00,000	10000000	-52083.33	-104166.67	0	20833.33	542.5347222
21	1,00,00,000	10000000	-52083.33	-156250.00	0	-31250.00	-651.041667
22	1,00,00,000	10000000	-52083.33	-208333.33	0	-83333.33	-1302.08333
23	1,00,00,000	10000000	-52083.33	-260416.67	0	-135416.67	-1410.59028
24	1,00,00,000	10000000	-52083.33	-312500.00	0	-187500.00	-976.5625
25	1,00,00,000	10000000	-52083.33	-52083.33	0	-239583.33	-7486.97917
26	1,00,00,000	10000000	-52083.33	-104166.67	0	-291666.67	-7595.48611
27	1,00,00,000	10000000	-52083.33	-156250.00	0	-343750.00	-7161.45833
28	1,00,00,000	10000000	-52083.33	-208333.33	0	-395833.33	-6184.89583
29	1,00,00,000	10000000	-52083.33	-260416.67	0	-447916.67	-4665.79861
30	1,00,00,000	10000000	-52083.33	-312500.00	500000	0.00	0
31	1,00,00,000	10500000	-54687.50	-54687.50	0	-54687.50	-1708.98438
32	1,00,00,000	10500000	-54687.50	-109375.00	0	-109375.00	-2848.30729
33	1,00,00,000	10500000	-54687.50	-164062.50	0	-164062.50	-3417.96875
34	1,00,00,000	10500000	-54687.50	-218750.00	0	-218750.00	-3417.96875
35	1,00,00,000	10500000	-54687.50	-273437.50	0	-273437.50	-2848.30729
36	1,00,00,000	10500000	-54687.50	-328125.00	500000	171875.00	895.1822917
			#VALUE!
37	1,00,00,000	11000000	-57291.67	-57291.67	0	114583.33	3580.729167
38	1,00,00,000	11000000	-57291.67	-114583.33	0	57291.67	1491.970486
39	1,00,00,000	11000000	-57291.67	-171875.00	0	0.00	3.03165E-13
40	1,00,00,000	11000000	-57291.67	-229166.67	0	-57291.67	-895.182292
41	1,00,00,000	11000000	-57291.67	-286458.33	0	-114583.33	-1193.57639
42	1,00,00,000	11000000	-57291.67	-343750.00	500000	328125.00	1708.984375
43	1,00,00,000	11500000	-59895.83	-59895.83	0	268229.17	8382.161458
44	1,00,00,000	11500000	-59895.83	-119791.67	0	208333.33	5425.347222
45	1,00,00,000	11500000	-59895.83	-179687.50	0	148437.50	3092.447917
46	1,00,00,000	11500000	-59895.83	-239583.33	0	88541.67	1383.463542
47	1,00,00,000	11500000	-59895.83	-299479.17	0	28645.83	298.3940972
48	1,00,00,000	11500000	-59895.83	-359375.00	0	-31250.00	-162.760417
49	1,00,00,000	11500000	-59895.83	-59895.83	0	-91145.83	-2848.30729
50	1,00,00,000	11500000	-59895.83	-119791.67	0	-151041.67	-3933.37674
51	1,00,00,000	11500000	-59895.83	-179687.50	0	-210937.50	-4394.53125
52	1,00,00,000	11500000	-59895.83	-239583.33	0	-270833.33	-4231.77083
53	1,00,00,000	11500000	-59895.83	-299479.17	0	-330729.17	-3445.09549
54	1,00,00,000	11500000	-59895.83	-359375.00	500000	109375.00	569.6614583
55	1,00,00,000	12000000	-62500.00	-62500.00	0	46875.00	1464.84375
56	1,00,00,000	12000000	-62500.00	-125000.00	0	-15625.00	-406.901042
57	1,00,00,000	12000000	-62500.00	-187500.00	0	-78125.00	-1627.60417
58	1,00,00,000	12000000	-62500.00	-250000.00	0	-140625.00	-2197.26563
59	1,00,00,000	12000000	-62500.00	-312500.00	0	-203125.00	-2115.88542
60	1,00,00,000	12000000	-62500.00	-375000.00	500000	234375.00	1220.703125
61	1,00,00,000	12500000	-65104.17	-65104.17	0	169270.83	5289.713542
62	1,00,00,000	12500000	-65104.17	-130208.33	0	104166.67	2712.673611
63	1,00,00,000	12500000	-65104.17	-195312.50	0	39062.50	813.8020833
64	1,00,00,000	12500000	-65104.17	-260416.67	0	--26041.67	-406.901042
65	1,00,00,000	12500000	-65104.17	-325520.83	0	--91145.83	-949.435764
66	1,00,00,000	12500000	-65104.17	-390625.00	500000	343750.00	1790.364583
67	1,00,00,000	13000000	-67708.33	-67708.33	0	276041.67	8626.302083
68	1,00,00,000	13000000	-67708.33	-135416.67	0	208333.33	5425.347222
69	1,00,00,000	13000000	-67708.33	-203125.00	0	140625.00	2929.6875
70	1,00,00,000	13000000	-67708.33	-270833.33	0	72916.67	1139.322917
71	1,00,00,000	13000000	-67708.33	-338541.67	0	5208.33	54.25347222
72	1,00,00,000	13000000	-67708.33	-406250.00	500000	437500.00	2278.645833
73	1,00,00,000	13500000	-70312.50	-70312.50	0	367187.50	11474.60938
74	1,00,00,000	13500000	-70312.50	-140625.00	0	296875.00	7731.119792
75	1,00,00,000	13500000	-70312.50	-210937.50	0	226562.50	4720.052083
76	1,00,00,000	13500000	-70312.50	-281250.00	0	156250.00	2441.40625
77	1,00,00,000	13500000	-70312.50	-351562.50	0	85937.50	895.1822917
78	1,00,00,000	13500000	-70312.50	-421875.00	500000	515625.00	2685.546875
79	1,00,00,000	14000000	-72916.67	-72916.67	0	442708.33	13834.63542
80	1,00,00,000	14000000	-72916.67	-145833.33	0	369791.67	9629.991319
81	1,00,00,000	14000000	-72916.67	-218750.00	0	296875.00	6184.895833
82	1,00,00,000	14000000	-72916.67	-291666.67	0	223958.33	3499.348958
83	1,00,00,000	14000000	-72916.67	-364583.33	0	151041.67	1573.350694
84	1,00,00,000	14000000	-72916.67	-437500.00	500000	578125.00	3011.067708
85	1,00,00,000	14500000	-75520.83	-75520.83	0	502604.17	15706.38021
86	1,00,00,000	14500000	-75520.83	-151041.67	0	427083.33	11121.96181
87	1,00,00,000	14500000	-75520.83	-226562.50	0	351562.50	7324.21875
88	1,00,00,000	14500000	-75520.83	-302083.33	0	276041.67	4313.151042
89	1,00,00,000	14500000	-75520.83	-377604.17	0	200520.83	2088.758681
90	1,00,00,000	14500000	-75520.83	-453125.00	0	125000.00	651.0416667
91	1,00,00,000	14500000	-75520.83	-75520.83	0	49479.17	1546.223958
92	1,00,00,000	14500000	-75520.83	-151041.67	0	-26041.67	-678.168403
93	1,00,00,000	14500000	-75520.83	-226562.50	0	-101562.50	-2115.88542
94	1,00,00,000	14500000	-75520.83	-302083.33	0	-177083.33	-2766.92708
95	1,00,00,000	14500000	-75520.83	-377604.17	0	-252604.17	-2631.2934
96	1,00,00,000	14500000	-75520.83	-453125.00	500000	171875.00	895.1822917
97	1,00,00,000	15000000	-78125.00	-78125.00	0	93750.00	2929.6875
98	1,00,00,000	15000000	-78125.00	-156250.00	0	15625.00	406.9010417
99	1,00,00,000	15000000	-78125.00	-234375.00	0	-62500.00	-1302.08333
100	1,00,00,000	15000000	-78125.00	-312500.00	0	-140625.00	-2197.26563
101	1,00,00,000	15000000	-78125.00	-390625.00	0	-218750.00	-2278.64583
102	1,00,00,000	15000000	-78125.00	-468750.00	0	-296875.00	-1546.22396
103	1,00,00,000	15000000	-78125.00	-78125.00	0	-375000.00	-1953.125

58159.72222

This flow chart would establish that for the entire period till the KVPs are negotiated the rate of interest was to remain stagnated at 6.40%

Further, dealing with the question of unfair trade practice in case of Om Prakash Vs. Assistant Engineer, Haryana Agro Industries Corporation Ltd., and Anr. (1994) 3 SCC 504, the Court considered the contention of the Complainant that he had booked a tractor with the Haryana Agro Industries Corporation Ltd., by depositing advance money and that though his name was placed first in the list of persons who had booked tractors, Haryana Agro Industries Corporation Ltd., postponed delivery to the Complainant while giving delivery to the others on pick and choose basis and meanwhile price of the tractor having gone up, he received supply of tractor at enhanced rate as a result of which he suffered loss.

In these set of circumstances, the Apex Court held that such conduct of Respondent would constitute ‘unfair method or deceptive practice’ under the amended S.36-A of the MRTP Act and hence unfair trade practice under Section 2(1)(c)(i) read with Section 2(r) of the Consumer Protection Act, 1986. Stipulation in the agreement that the consumer shall pay the price prevailing at the time of delivery is inconsequential.

Similarly, in the present case, the alleged term in the agreement which is executed subsequently, would be of no consequence and the practice adopted by the bank is apparently an unfair trade practice. Hence, as provided in Section 14(1)(f) of the Consumer Protection Act, 1986 the ICICI Bank is required to be directed to discontinue the unfair trade practice of alluring the persons to take loan at a specified rate and thereafter to increase the rate of interest without there being such specific condition at the time of making offer.

In this view of the matter, this complaint is allowed. The Respondent ICICI Bank is directed not to continue with such unfair trade practice. The ICICI Bank is also directed not to charge interest @ more than 6.4% on the loan taken by the Complainants for the purchase of KVPs and to calculate interest accordingly.

The Complaint stands disposed of accordingly. The Bank shall pay costs to the Complainants assessed at Rs.50,000/-.

Sd/-

………………………….…J.

( M.B.SHAH )

PRESIDENT

Sd/-

……………………………….

( RAJYALAKSHMI RAO)

MEMBER