Legal Question in Banking Law in India

Mortgage is one of the type of contract with mutual agreement nothing would be binding to each other hence if you not signed it will not band you.

The unilateral change in contract may not bind you; however, you may have agreed for "variable" rate of interest which may entitle the lender to increase either EMI amount or the duration of loan.

SARFAESI Act nowhere provides change in ROI, probably you have not been given anything in writing that the change in ROI has been induced as per SARFAESI Act. Further, you might have availed the credit facility with floating rate arrangement hence the increase in rate. Whenever ROI is increased, either tenure of repayment is increased (Keeping EMI constant) or the EMI is increased (keeping the tenor constant). Sometimes when the loan goes to indefinite period of repayment keeping EMI constant due to excessive rate hike, it is called a negative amort situation and in such a case both tenor and EMI are increased.

In any case, customer is kept posted in advance of any proposed change. You should properly check the date when you were informed of the change in tenor, if it is a retrospective change (letter received after the change was effected), you have a valid ground to approach consumer forum. Be that as it may, you should approach consumer forum on the ground that you availed the credit facility keeping in view your capabilities to repay within your limitations but to increase the tenor unilaterally and that too for exorbitant period has caused a great hardship to you.

Alternatively you may file a writ petition in the High Court (making RBI also a party respondent), on the ground that financial institutions are exploiting the privilege extended by RBI that they may fix ROI as per own whims and fancy thereby causing hardship to debtors. To repay the enhanced ROI, customer is compelled to compromise its bare minimum necessities to subsist and survive. Hence RBI may be directed to have the sole power of fixing ROI for all banks and FIs without there being any delegation. If banks are empowered to fix their own ROI, then charging foreclosure charges (fee for pre-closure of loan) must be declared illegal because it penalizes a customer who gets his balance transferred to other banks offering lower rate.

On these lines, you should consult a local lawyer practicing in High Court.