BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD
FA 1262 of 2013 against CC 44 of 2013, District Forum -1, Hyderabad
Between :
Smt. U. Padma Kumari,
W/o U. Peddanna, aged about 42 years
Occ : Housewife, R/o Flat no. 3108,
Block No. 3rd, Janapriya Mahanagar
Meerpet (post), Saroornagar Mandal,
Ranga Reddy District - 500 097 … Appellant/complainant
And
- The Branch Manager
Karur Vysya Bank, Jubilee Hills Branch
Priyadarshini House, Road No. 1, Plot no. 227
Hyderabad – 500 033, A. P.
- The General Manager
Karur Vysya Bank, Loan Department No. 6549
Rastrapathi road,
Secunderabad – 500003 .. Respondents/opposite parties
Counsel for the Appellants : Mr. U. Peddanna
Counsel for the Respondents : Mr. P. Rajesh Babu for R1.
QUORUM:
HON’BLE SRI JUSTICE GOPALA KRISHNA TAMADA, PRESIDENT
AND
SRI R. LAKSHMINARASIMHA RAO, HON’BLE MEMBER
Monday, the Thirtieth Day of June, TWO THOUSAND FOURTEEN
Oral Order : ( As per Sri R. Lakshminarasimha Rao , Hon’ble Member )
1. The unsuccessful complainant is the appellant. He filed the complaint seeking relief for compensation to the extent of Rs.5 lakhs and costs of Rs.5,000/-.
2. The appellant’s case is that she is savings bank account holder with the respondent-bank since 22.12.2008 and her son has been pursuing Doctor of Medicine in General Medicine at the Medical institute of Osh State University in Kyrgyz Republic. The appellant applied on 5.12.2011 for sanction of education loan for her son and as required by the respondent-bank she submitted all the requirements and her husband’s Income tax returns, link documents of his house property, copies of his son SSC certificate, intermediate passport, admission in Osh State University and University, and University ID card, Visa, Immigraion , the Ministry of Education and Science of the Kyrgyz Republic Osh State University 120m, Hyderabad to New Delhi train ticket, Delhi to Bishkek Fight Ticket.
3. Further, it is the case of the appellant that on advice of the respondent bank, her son came to India from Osh City , Kyrgyzstan and signed the relevant papers and after submitting the documents, the appellant along with her husband and son approached the respondent bank till 28.09.2012 and as the respondent had not sanctioned the loan, her son could not go to Osh city ( Kyrgyzstan). The appellant got valued her property and obtained opinion of the panel advocate of the respondent-bank on 25.08.2012 and the estimate of her property prepared by authorized Engineers, Ragu and Mahender. As the loan was not sanctioned, she addressed letter dated 12.12.2012 and filed the complaint.
4. The respondent-bank resisted the case contending that the appellant had not submitted the relevant documents for sanction of the education loan of Rs.5, 00,000/-and since the month of December, 2011 she has not submitted the letter of admission, original certificates of academic qualifications, other relevant documents with regard to course of study i.e., the course fee, living expenses etc, collateral security property particulars acceptable to the bank, valuation report and legal opinion over the said property. The appellant’s husband requested the respondent-bank in the month of August,2012 to sanction education loan to his son and the respondent requested him to submit the documents which the appellant was required to submit 8 months ago.
5. The appellant’s husband informed the respondent that his son would be visiting India in the month of September, 2012 and at the time he would submit the documents sought to be submitted. He had submitted in the month of September, 2012 the photocopies of his son’s education certificates and foreign course details only and not all the documents. The appellant’s husband had taken back the documents in the month of October,2012 on the premise that he would avail the education loan from another bank. The appellant’s complaint was dismissed by Banking Ombudsman as the appellant failed to prosecute the matter.
6. The appellant filed her affidavit and the documents Ex. A1 to A34 and on behalf of the respondents its Branch Manager filed his affidavit only.
7. The District Forum dismissed the complaint on the premise that sanctioning of loan is within the discretion of the Bank and eligibility of the appellant for sanction of the loan as per the rules framed therefor by the Reserve Bank of India could be decided by the Bank and the District Forum held that there is no contract of service between the respondent and the appellant.
8. Feeling aggrieved by the order of the District Forum, the complainant has filed appeal contending that the District Forum has not considered the evidence on record and that the respondent instead of granting loan went on seeking for submission of documents. The appellant has contended that on the advice of the respondent-bank, her son visited India and he signed the agreement, promissory note and other documents and she submitted all the required documents despite that the respondent-bank has not granted loan which caused mental tension leading to paralytic stroke to the appellant and her hospitalization for treatment therefor.
9. The point for consideration is whether the order of the District Forum suffers from misappreciation of facts or law?
10. The appellant approached the respondent-bank in the month of 05.12.2011 with a request to sanction education loan to her son who at the relevant time was pursuing Doctor of Medicine (MD), General Medicine at the Medical institute of Osh State University in Kyrgyz Republic. The respondent-bank requested the appellant to submit certain documents which it appears the appellant had not submitted resulting in delay for consideration of eligibility of the appellant for the respondent to sanction the education loan. The District Forum held that there is no contract of service between the respondent-bank and the appellant. In other words, it held the appellant not a consumer within the meaning of Section 2(1)(d) of Consumer Protection Act.
11. The learned counsel for the appellant has submitted that the appellant incurred an amount of Rs.2,500/-for obtaining estimate of the property from the Engineers and opinion of the panel advocate of the respondent bank. We find substance in the contention of the learned counsel as the appellant had not taken opinion of an advocate other than the panel advocates of the respondent bank. For facilitating the respondent bank to form an opinion in the matter of sanction of education loan, the appellant incurred an amount of Rs.2,500/- and as such we are inclined to accept the contention of the learned counsel that the appellant is ‘ consumer’ within the meaning of section 2 (1) (d) of Consumer Protection Act. the learned counsel for the appellant has placed reliance upon the decision of the National Commission in “ the Branch Manager, State Bank of India, Vs. Nirakar Sahoo, General Manager”, in RP. No. 1055 of 2002, decided on 01.02.2007 wherein the National Commission held :
“ Learned Counsel for the petitioner further submitted that the complainant cannot be held to be a consumer. In our view, this submission is also without any substance. The State Commission has rightly held that for the loan which was sanctioned to the complainant the bank was to recover interest and the loanee would be a consumer and that the complainant is beneficiary of such scheme and therefore, the complaint under the Consumer Protection Act, 1986 was maintainable”.
12. The Hon’ble Supreme Court in “Maharashtra State Financial Corporation vs Sanjay Shankara Mamarde” 2010(3) CPR 136, considered the power of financial institution or bank to grant or reject loan and sanction or rejection of the loan whether amounts to deficiency in service on the part of the bank.
13 The facts of that case are that the borrower did not pay the previously obtained loan and his loan repayment history was not satisfactory. The law laid therein is that to sanction or decline to lend loan is within the discretion of the financier or Bank and the Courts or Tribunal cannot direct the bank to sanction or disburse the sanctioned loan amount to the borrower.
14 Sanction of the loan is dependent on several parameters of which the security of the repayment of the loan amount is the prime factor governing the release of the loan amount. The interest of the bank or finance corporation to secure repayment of the loan amount to be released is within the domain of the discretion of the Bank or the Finance Corporation. Unless the Bank or the Finance Corporation exercise mala fide intention in not sanctioning or refusing to release the sanctioned loan amount, there cannot be any deficiency in service on the part of the Bank or the Finance Corporation. The Supreme Court held :
“We also find substance in the contention of learned Counsel for the Corporation that unless the action of a financial institution is found to be mala fide, even a wrong decision taken by it is not open to challenge, as the wisdom of a particular decision is normally to be left to the body authorized to decide. In U.P.Financial Corporation &Ors.v.Naini Oxygen & Acetylene Gas Ltd &Anr.(supra) this Court had observed that a Corporation being an independent autonomous statutory body having its own constitution and rules to abide by, and functions and obligations to discharge, in the discharge of its functions, it is free to act according to its own right. The views it forms and the decisions it takes would be on the basis of the information in its possession and the advice it receives and according to its own perspective and calculation. In such a situation, more so in commercial matters, the Court should not risk their judgments for the judgments of the bodies to which that task is assigned. It was held that: (SCC p.761, para 21)
“Unless its action is mala fide, even a wrong decision taken by it is not open to challenge. It is not for the Courts or a third party to substitute its decision, however more prudent, commercial or business like it may be, for the decision of the Corporation. Hence, whatever the wisdom (or the lack of it) of the conduct of the Corporation the same cannot be assailed for making the Corporation liable.”
15. In the light of the ratio laid in the aforementioned case and on its application to the facts of the case on hand, we are of the considered view that the respondent bank was right within its limits to seek for the relevant documents for sanction of the loan. There cannot be any deficiency in service on the part of the respondent bank as the appellant has taken back the documents on the premise of seeking sanction of loan from another bank. The appeal is devoid of any merits and is liable to be dismissed.
16 In the result, the appeal is dismissed confirming the order of the District Forum. There shall be no order as to costs.
PRESIDENT
MEMBER
DATED : 30.06.2014
