The wait was long for K Bangaru Raju. This Bengaluru resident fought for eight long years to reclaim the money that was rightfully his. Raju’s battle against Vijaya Bank took him to the Consumer Court which finally ruled in his favour.

In 2006, Raju, KB Geetha and KB Ashok procured a loan for Rs 1.9 crores in order to buy a property worth Rs 2.38 crores. At the time of granting the loan, the bank had fixed the interest at 7.75 per cent.

However, Raju decided to sell the land when the BBMP initiated a road widening project in the area. He wrote the bank manager and was asked to sell it to a third party. The bank manager also advised him to pay the closure charges before applying for a new loan. Three years later, Raju sold the land and asked the bank not to levy any penalty on the closure charges.

But Vijaya bank officials debited Rs 45, 92,555 from his account even though the third party had paid the full amount. When asked, the bank said that this was the additional interest charged over the loan.  

Raju wrote to the bank asking for a refund of Rs 2.4 lakhs as the bank had charged him 9.75 per cent instead of 7.75 per cent. In total, Vijaya bank owed him Rs 48,33,329 lakhs. Nevertheless, Raju was told that the money belonged to the Government of India and could not be refunded.

In 2010, Raju approached the Consumer Court in this regard. The bank contended that the house was supposed to be constructed within three years and that wasn’t the case. The bank said that was the reason why an additional interest had been levied.

However, the court noted that the three year period hadn’t expired when Raju sold the house and in fact, he had with him a sanctioned construction plan as well. The court also noted that Raju was forced to sell as part of the property was acquired by BBMP for road widening.

The court told the bank, “In the circumstances, the contention of the complainants that they did not commit breach of any condition while obtaining the loan will have to be accepted and the facts and circumstances rendered it impossible for them to carry out the same. Thus the bank charging the interest on housing loan availed and penalty at commercial rate is not proper.” The High Court said the bank cannot increase the interest without notice.