Jimmy George vs The Consumer Disputes Redressal … on 28 January, 2011

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

WP(C).No. 25000 of 2006(A)


1. JIMMY GEORGE,
                      ...  Petitioner

                        Vs



1. THE CONSUMER DISPUTES REDRESSAL FORUM,
                       ...       Respondent

2. REETHAMMA MATHEW,

3. REGISTRAR OF CO-OP.SOCIETIES,

                For Petitioner  :SRI.P.N.MOHANAN

                For Respondent  :SRI.D.AJITHKUMAR

The Hon'ble MR. Justice P.N.RAVINDRAN

 Dated :28/01/2011

 O R D E R
                        P.N. RAVINDRAN, J.
                     -------------------------------
                   W.P.(C) No.25000 of 2006
                     -------------------------------
            Dated this the 28th day of January, 2011

                           J U D G M E N T

Ext.P7 order passed by the Consumer Disputes Redressal

Forum, Alappuzha on 16.5.2006 directing the petitioner to refund the

sum of Rs.7663/- together with interest at 10% per annum on the

sum of Rs.3603/- from 14.2.2004 till the date of payment, Rs.1000/-

as compensation and Rs.450/- as costs is under challenge in this

writ petition. Ext.P7 order was passed on a complaint filed by the

second respondent herein. It was contended that the second

respondent was not given the benefits flowing from Exts.P5 and P6

circulars, when she closed the loan account on 14.2.2004. The second

respondent alleged that the petitioner herein, the President of the Co-

operative Society, had realised a sum of Rs.7663/- in excess from the

second respondent. The Consumer Disputes Redressal Forum held

that as per Exts.P5 and P6 circulars, the second respondent was

entitled to waiver of interest, and therefore, the second respondent is

entitled to refund of the excess amount paid by her by way of

interest.

2. It is not in dispute that the second respondent did not

settle the loan account under the one time settlement scheme. The

W.P.(C) No.25000 of 2006

2

second respondent availed the loan on 15.4.1997. It was to be repaid

in 48 instalments. She committed default in repayment of the loan

and she closed the loan account only on 14.2.2004, after nearly 7

years. She did not while settling the loan account claim any benefit

under the one time settlement scheme. A Division Bench of this

Court has in Cheranalloor Service Co op. Bank Ltd v. Alfred

(2010 (1) KLT 749) held that schemes for waiver of interest are not

meant for persons who have closed their loan accounts before the

issuance of the schemes, which are notified only to collect arrears and

not to refund the amounts already collected by banks. In the light of

the authoritative pronouncement of this Court, the second respondent

who had closed the loan account without availing the benefit of the

one time settlement scheme cannot be heard to contend that she is

entitled to the benefit of the scheme, and therefore, the bank should

refund to her the excess amount collected by it by way of interest.

The Consumer Disputes Redressal Forum appears to have lost sight of

the fact that one time settlement schemes are not meant to enable

debtors to obtain refund of the interest already paid, but to enable

banks and financial institutions to recover the arrears by giving

reduction in interest to the debtors. In such circumstances, it has to

W.P.(C) No.25000 of 2006

3

be necessarily held that Ext.P7 order cannot be sustained.

In the result, I allow the writ petition, quash Ext.P7 order

and dismiss O.P.No.A.103 of 2004 on the file of the Consumer

Disputes Redressal Forum, Alappuzha.

P.N. RAVINDRAN,
JUDGE.

nj.