Dismissed

Nandakumar.a.B v. Reserve Bank of India

Kerala HC5 Jul 2017WA/420/2017

Case brief

AI extract

What is this about?

This appeal arises from a housing loan dispute where the appellant claimed unjustified extension of the loan tenure. The Court held that the agreement allowed for floating interest rates and upheld the bank's calculation, dismissing the appeal while allowing the appellant to prepay the loan.

What did the court decide?

The appeal was dismissed; the appellant is at liberty to prepay the outstanding principal to avoid future instalments.

Nandakumar.a.B Vs Reserve Bank of India — Contract and Commercial Disputes | Kerala HC (2017)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE THE CHIEF JUSTICE MR.NAVANITI PRASAD SINGH &

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THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V

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WEDNESDAY, THE 5TH DAY OF JULY 2017/14TH ASHADHA, 1939

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WA.No. 420 of 2017 () IN WP(C).33116/2016

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AGAINST THE JUDGMENT IN WP(C) 33116/2016 DATED 07-12-2016

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APPELLANT(S)/PETITIONER:

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NANDAKUMAR.A.B AGED 43 YEARS S/O. BALAN, ANAKATHY HOUSE, MADAYIKKONAM P.O MAPRANAM, TRICHUR, KERALA REP. BY HIS POWER OF ATTORNEY HOLDER LAWRENCE, AGED 44 YEARS, S/O. ANTONY CHENATHUPARAMBIL HOUSE, IRINJALAKUDA

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BY ADV. SRI.L.RAJESH NARAYAN

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RESPONDENT(S)/RESPONDENTS: --------------------------

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1. RESERVE BANK OF INDIA CENTRAL OFFICE BUILDING 18^TH FLOOR SHAHID BHAGAT SINGH ROAD, MUMBAI 400 001 REPRESENTED BY ITS GOVERNOR

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2. ICICI BANK LIMITED "LANDMARK",RACE COURSE CIRCLE, VADODARA 390 007

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3. ICICI HOME FINANCE COMPANY LIMITED ICICI BANK TOWERS BANDRA KURLA COMPLEX, MUMBAI 400 051

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4. THE AUTHORISED OFFICER/BRANCH MANAGER ICICI BANK, IRINJALAKUDA BRANCH CHURCH VIEW, KODUNGALLOR ROAD, TRICHUR, KERALA 680 125

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R2-R4 BY ADV. SRI.A.A.ZIYAD RAHMAN R2-R4 BY ADV. SRI.LAL K.JOSEPH R2-R4 BY ADV. SRI.V.S.SHIRAZ BAVA R2-R4 BY ADV. SRI.JOSEPH KURIAN VALLAMATTAM

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 05-07-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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sou.

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Navaniti Prasad Singh, CJ &

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Raja Vijayaraghavan V, J

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W.A. No. 420 of 2017

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--------------------------------------------------------------Dated this the 5^th day of July, 2017

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J U D G M E N T

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Navaniti Prasad Singh, CJ

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We have heard learned counsel for the appellant and the learned counsel for the ICICI Bank and with their consent we dispose of this appeal at this stage itself.

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The appellant was the writ petitioner who had taken a housing loan from the ICICI Bank Limited. At the time when loan was granted, it was agreed that it would be repaid in 120 equated monthly instalments ('EMI' for short) as stipulated therein based on interest rate of 8%. The agreement provided for a floating rate of interest, which means increase or decrease of rate as stipulated by the Reserve Bank of India under the Banking Regulation Act. It appears that from time to time there were rate revisions which included both increase as well as decrease of the interest element. What the Bank did was, it informed the appellant/petitioner, as is evident from Ext.P3, that while keeping the EMI the same, the number of instalments

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W.A.420/17 2

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would be increased. Apparently, as the EMI was not altered, the appellant did not take notice of this fact. After paying 120 instalments, when he made enquiries to close the loan acount, he was told that he has to pay 66 more instalments at the same rate of EMI. He was certainly shocked. He came to this Court complaining that he had not bargained for this. He had bargained for repayment of the EMI fixed for the entire loan within a period of 10 years. But what he has ended up is, paying the same loan on the same EMI for more than 15 years.

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Learned Single Judge did not accept the challenge nor are we inclined to accept the same. The reason is simple. As per the agreement itself, it was a floating rate of interest that had to be paid. Ext.P6, which is the repayment schedule given to the appellant on 28.12.2015 shows the increase of interest and consequential increase of monthly instalments. No error in the rate of interest or calculations has been pointed out. Shocking it may be, that from the initial agreement of payment of Rs.17,896/- for 10 years, same has now gone up to Rs.17,896/- for 15 years and 4 months. But that is the agreement and unless something is shown to be wrong, however shocking it may be, the court cannot interfere in

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W.A.420/17

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matters of agreement. However, the appellant/petitioner is at liberty to pre-pay the outstanding principal and avoid the liability for future instalments. That is for the appellant to decide.

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We find no merit int his appeal and accordingly the same is dismissed with the above observations.

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Sd/Navaniti Prasad Singh, Chief Justice

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Sd/Raja Vijayaraghavan V, Judge

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sou.6/7.

Nandakumar.a.B v. Reserve Bank of India

Case brief

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Nandakumar.a.B v. Reserve Bank of India

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