DWARKA NATH SHARMA vs HDFC BANK LTD on 23 October 2026

D I'l B'I's R Ii cov EIIY A P l'} Fl [,LA'I'E T'ltI I] IJNA L, D I,r, LI II Appcal No.2(ll2(t22 Arising out of SA No.33 /2016 (I)R.I._.Iaipur) Dwarka Nath Sharma V. llousing Dcvcl.pmcnt Finance corporation Limited (HDFC Limitcd) ltcm No.17 23.10.2026 l{on'blc Dr. Justicc Sudhir Kumar Jain I)rcscr-rt: Sh' Alakh Alok Srivastava, Aclvocatc for appcllant through vc sh. Anuj Ilhan<lari, Advocatc for rcspondcnt through vc 'l'his r.attcr is tarl<,'r up thr<lugh Ilybricl hcarir-rg. Oltl)lrlt (OltAl,) l"l'hc appcllant lrlcci S.A. bcetring no.33l20l(> whiclr was statcci to bc pcncling bclirrc I)lt'l'-.laipurr. I)R'l-.laipr-tr viclc impugnccl llnal or6cr clatcci 01.03 .2022 has clisrnisscc'l thc S'A. by obscrving that tlrcrc was no illcgality in actjon initiatccl by thc rcsponclcnt against thc appcllant. 2"1'hc appcllant bclorc I)lt'l'-Jaipr-rr has nrcntionccl in par"a-8 of thc impugnccl final trrcJc| clatccl 0l'03.2022 tha[ accoltnt wets clcclarccl NI'}A wror:rgly as no i,forr.nation with [cgard to charlgc of't'zttc ol'intcrcst ancl with rcgiu-cl tr> thc incrcasc arnount ol' IiMI was givcn to thc appcllant. It was also contcnclccl that thc dcrnancl noticc ancl collscclLlcntial action initiatcci by thc rcsponclcnt worc rccluirc<l to bc dcclarccl as rrr-rll ancl voicl.'l'lTc para-tJ ol'thc irrpr;gnccl orclcr datccl 01.03 .2022 is rcprocluccd as rurcicr:

8. Ld. c,unscl for sA Appricant submitted that the account was dcclared Nl'A wrongly and no information was givcn with regard to change tlf ratc of interest and with rcgard to incrcascd amount nf EMI and so Ld. counscl for Applicant, submitted that thc Demand Noticc as wcll as furthcr coursc of actions, initiate,l by thc ltespondcnt llank arc rcquired to he dcclared as null & void. was contcr-rdcd on bchalf of thc rcsponclcnt that as pcr clausc 2.2 thc agrccd of irrtcrcst was 7.5% and as pcr clausc 2.7 (b),11-rc ratc of intcrcst was Ig%. It als<r argr-rccl that thc ratc o['intcrcst was not chargc<J rnorc than 7.5oh anc] if

3. Ir ratc was

I 8%r t'utc o{' intcrcst is chargccl that can only bc c'lonc or-r account of' dclayccl paymcnt.

4. I)R'I'-Jaipur in para-10 also rcproduccd2.2 and2.7 (b) of thc agrccmcnt to crcdit tacility which is also rcproduccd as undcr:

10. For ready refercncc, Clause 2.2. and 2.7(b) of Anncxurc-A/l arc rcproduced hcrcundcr- Clausc 2.2. - Intcrcst (a) Until and as varied by IIDFC in terms of this Agrccment thc AIlt applicablc ttl the said loan as at thc datc of cxecution of this agrecmcnt is as statcd in thc Schcdule.

(b) Thc borrower shall rcimburse or pay to I{DFC such amount as may havc becn paid or payablc by IiDFC to the Central or State (]overnment on account of any tax lcvicd on intcrcst (andior other charges including the I'EMII) on thc loan by thc Ccntral or State ()ovcrnmcnt. The reimbursement or payment shall bc madc by the borrower as and whcn callcd upon to do so by I-IDFC. Clause 2.7 - Dclay in payment of IIMI ctc.

(a) No noticc, rcminder or intimation will bc givcn to thc borrower regarding his obligation to pay thc IIMI or I'EMII regularly on duc date. It shall bc cntircly his responsibility to ensure prompt and regular paymcnt of EMI or I'}IIMII.

(b) The dclay in paymcnt of EMI or I'IIMII shall rcndcr the borrowcr liable to pay additional intcrest at thc ratc of 18 per cent pcr annum or at such higher ratc as pcr thc rulcs of I{DFC in that bohalf as in forcc from timc to time. In such cvcnt, the borrower shall also be liablc to pay incidental chargcs and costs to HDFC.

5. Sh. Alakh Alok Srivastava, Advocatc for thc appcllant has rcfcrucd thc schcdulc of thc Loan Agrccmcnt datcd 31.01 .2005 whcrcby a loan of Its.35 lacs was sanctioncd in favour of thc appcllant and as pcr clausc2.2 the ratc of intcrcst was 7.5% pcr annum. It was also mcntioncd that thc ratc of intcrcst was liablo to bc rcsct as pcr rcvision cyclc i.c. aftcr 3 months.

6. Sh. Alakh Alok Srivastava, Advocatc also rcfcrrcd thc movcmcnt in thc ratc of intorcst as pcr Anncxurc L-12 from 7.25oA as on 31.01 .2005 and to 13.85% as on 01.02.2019. Sh. Srivaslava, Advocatc in light of thcse submissions argucd that bcfore thc cnhanccmcnt/incrcasc in thc ratc of intcrcst, thc information was not givcn to thc appcllant bcsidcs taking thc conscnt of thc appcllant for thc cnhancemcnt of thc ratc o[ intcrcst. Sh. Alakh Alok Srivastava, Aclvocatc during thc coursc ol- argururont also citccl thc judgrncnt datcd 12.02.201ti passod by thc Statc Consumcr Disputcs Itcdrcssal Commission titlcd as ICICI Home Finance V. Mr. Jarnail Singh and in parlicular has rcfcrrcd para- 12 of thc said judgmcnt whcrcin it was opincd that in casc of cxisting loans of longcr/fixccl tcnure, banks shoulcl rcsct thc floating ratcs aftcr obtaining thc conscnt of thc concornccl boruowcr. Sh. Alakh Alok Srivastav, Advocatc also rcfcrcd thc I{III Circular clatccl 01.07.2006 as mcntionccl in para- 12 of thc said juclgmcnt. Sh. Srivastava, Advocatc also rcfcrrcd anothcr judgmcnt of Statc Consumcr Disputcs Itedrcssal Commission, I)clhi datcd 11.05.2021 titlcd as Mr. Vishnu Ilansal V ICICI llank Limitcd whcrcin aflcr rcfcning thc various dccisions passcd by thc National Consumcr Disputcs Itcclrcssal Commission, it was obscrvcd that in casc thcrc was changc in floating ratc of intcrcst thcn by fixing thc ratc of intcrcst, thc conscnt of thc conccrnccl borrowcr shoulcl bc takcn to thc fact whcthcr hc wants to continuc thc loan with thc cnhanccd ratc of intcrcst or hc oan closc thc loan account.

7. Sh. Anuj Ilhandari, Advocatc for thc rcsponclcnt during thc ooursc of argumcnt has rcfcrrcd thc sanction lcttor datcd 29.01.2005 whcrcin thc ratc of intcrcst at thc ratc of 7 .25% pcr annum on a yarrablc ratc basis. I Ie also rcfcrrcd the clausc 2 and 3 of thc spccial conditions which is rcproducccl as unclcr:

2. 'l'he ratc of intcrcst mcntioncd abovc prcvailing lll'l,R and thc samc way vary at thc klan as wcll as cluring its pcndcncy agrocmcnt. bascd on the currently time of disburscmcnt of terms of thc said loan is the in

3. As a result of thevariations in the intcrest rate, thc numbcr of EMI's is liable to vary from time to timc.

8. Sh. Anuj Ilhandari, Advocate also rcfcmcd the llMI transaction statcmcnt of loan aocount no.520731185 and statcd that sincc 30.09.2005 and thercaftcr thc amount of IiMI was constantly and rcgularly incrcascd without any objcction from the appcllant. Sh. Ilhandari, also rcfcmcd thc lcttcr dated 24.03.2015 which was addrcsscd to thc appcllant to dcmonstratc that from 31.01.2005 till 01.02.2014thc ratc of intcrcst was cnhanccd from 7.25% to 13.75Yo and vchcmcntly argued that thc incrcasc in thc ratc of intcrcst was wcll within thc kngwlcdgc of appcllant. IIc furthcr argucd that it is not practically possiblc to takc oonscnt of thc borrowcr at cvcry stagc of incrcasc in thc ratc of intcrcst as pcr thc loan agrecment. I Ic further argLlcd that thc appcllant was wcll awarc about thc prop'scd cnha,ccmcnt in thc .atc ol'intcrcst in tcrlns o1'sanction lcttcr clatccl 29.01 .2005. It is also argurccl that thc appc'anr rras n.[ raisccr thcsc p.irrts lrc10rc I)*,r.-Jaipurr. sh. I]hancrari, Aclv.catc lir.tllcr atrgLrcci tlrat Lhc Itlll (lircular as rcrbrrccl by thc crurr-rscl [or.thc :tppcllant is applicablc whcn thcrc is a rcsct o1-thc r,an anrou,t cruc t. thc changc in thc mcthoci ol-conrputation. 9' sh' Alal<h Alol< Srivastva, Aclv<tcatc lor thc appcllant irr rcsporsc r-o rottcr clatccr 24'03'2015 statccl that altcr 2005 whcn thc loan was sanctioncd thc rcsponcrcnt only in tl"rc ycar 2015 has infornrccl thc appcllant about thc cl-rangc/cnhancc.-rcnt o[. rato of itltcrcsl li"<'tt't 7'25o/nt<t 13.7S%and bclorc that thcrc w.s,o,ccasion ftrrthc appcllant ttl I<now about thc charrgc/cnhanc,ncnt in thc ratc o{'inlcrcst ashc was 'cvcr i,ro',rcd.r his c.r-rsc'rt was cvcr terr<cn by thc rcspondcnt. l0' sh' Alal<h Alol< Srivitstava, Adv<tcatc c,phatically arguccl that tl-rc ratc ol- itrtc.ost can bc rcsct only allcr tal<ing thc conscnt of borrowcr as pcr thc l*ll (lircurlar. I l' It is nr>t in clisputc that tllc appcllant was sanctionccl a loan of'lts.35 lacs viclc sittrctiorr lcltcr datcd 29-01 .2005 ancl thc ratc of intcrcst which was accrlrccl was 7 '25% pcr anlrulr only variablc ratc basis. It was also rcflccting th,t as pcr. clausc 2 trf'thc spccial conclitions as t'r'tcntionccl in thc sar-rction lcttcr c.latcc.l 29.012005 that thc ratc tlf itltcrcst tray vatry at thc timc of'clisburrscrncnt ol'thc loan as wcll as clurring thc pcrlclcncy ol-loan in tcrms o['loan agrccmcnt. It was also rncntionccj ir-r clauso 3 that durc to thc variation in thc rato o1- intcrcst, tlrc nunrbcr ol'liMl,s arc Iiablc to vary liorl timc to timc. It is also argr:ccl that as pcr thc schcdulc of thc loan agrcctl]ctlt tl-rat ir-rtcrcst ratc was Iiablc to bc rcsct rcvisi<ln cyclc aftcr cvcry thrcc ntonths.

12. 'f'hc pcn-tsal o{-thc impugncd llnal ordcr clatcd 01.03.2022 rcgccts that I)R'l'- .laipurr irl thc impr-rgnccl [lnal ordcr has not cor-rsi<lcrccl thc vatriours contcntions cvcn as sl"aLccl ilr perra-S ancl 9 ol'thc inrprlgnccl urcicr. 'l'hc irrpurgrrccl orclcr was passcd otr thc prcrrriscs tl"rat thc appcllant has {ailccl to clcposit pcncling llMI's as wcll as thc rcgr-rlar lrMl and whiclr rcflcctccl that tl-rc appcllant was nr>t intcrcstccl in thc rcpayll.lcllt ol'thc or-rtstanding amount. l)lt'l'-.laipur shoulcl havc cor-rsiclcrccl thc ratc ol'intorcst which thc appcllant was liablo to pay as pcr thc loan agrcomont ancl various stipurlation contcnt hcrcinabovc and also ir-r thc light of thc I{lll Circular rcgelrcling thc obtai,ing o1'thc co,scnt of'thc borrowcr bcrorc thc cr-rha,cclrcvisiorr oI' thc l.al.c oI' inLct.csl-. l3''l'hc irlrpug,ccl final ordcr clatccl 01.03.2022 was passccl on thc basis of c'rl'iurlcti.ns ancl surnriscs witlrrr-rt corrsiclcring thc rcrcvant issr-rc. Accorclingly, thc ir,pugncci firral tl'clcr clatccl 01.03 .2022cernnot bo sustair-rc<J and is liablc to bc sct asicic arrcl thc S'A' bcarirrg,r.33 1201() is rcrnanclcd bacl< ror ricsh consi<icration anci disp,sal irr accorclancc with Iaw t. I)R'r'-JaipLrr. It is,racrc crcar that I)R.r.- 'laipLrr shall c'l-tsic'lcr all tllc plcas arcl c.rtcnti.r-rs t' bc rerisccl clr-rring thc hcarirrg of appcal altlroLrgh lray n.t bc tal<cn bc{irrc l)rt'r'-Jaipur carlicr bcforc thc final clisposal ol'S'A' bcarirrg no'33/201(t. Ir is also r,acJc crcar trrat I)rt.r.-Jaipur sha, ',t Lrc inllucncc by ary obscr.vati.r.r ,-rac1c in thc prcscnt orclcr. l4' 'l'hc prc-clcposit, il any, nraclc o. bchall'of'thc appcllant bc rcturnccl to thc pcr"solr who has actttally nradc thc prc-clcposil as pcr rulcs ancl rcgular.ions ancl alicr propcr vcr.iIlcation. I5''l'hc cot-tccrnccl partics arc clircctccl to appoar on Il .12.20266c1orc I)l{.1.-.laipur lirr lurthcr cJirccti<1,s. Il- is cxpcctcci [ha[ l)lt'l'-.laipur sl-rall ,al<c ovory possiblc otrcicitvot-tr Ibr carly clisposal of'S.A. bcaring n<t.331201(t. In thc nrcantirrrc, thc corrtcsting parl-ics shall bc at Iibcrty to cxplorc thc possibility of'scttlcrlcnt, iI-a,y. t H--- (Dr..Iustice Sudhir Kumar Jain) Chairpcrson -v$