Andhra Pradesh

Nellore

CC/12/2015

1.Nuthalapai Murali Son of Venkateswarlu - Complainant(s)

Versus

1.Branch Manager Union bank of india - Opp.Party(s)

N.Masthanaiah

27 Feb 2017

ORDER

Date of filing      :  12-02-2015

Date of Disposal :  27-02-2017

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

           :: NELLORE ::

                                                       

Monday, this the 27th day of February, 2017.

 

        PRESENT:  Sri V.C. Gunnaiah, B.Com., M.L, President(FAC)

                                      Sri. K.Umamaheswara Rao, Member                                

                     

                             

C.C.No.12/2015     

 

1. Nuthalapati Murali

S/o.Venkateswarlu,

Hindu, aged about 44 years’

Near Gandhi Statue

Vidyanagar-524 413

Kota Mandal, SPSR Nellore District.

 

 

2. Smt.Nuthalapati Anuradha,

W/o.Murali

Hindu, aged about 42 years’

Near Gandhi State

Vidyanagar-524 413

Kota Mandal, SPSR Nellore District.              …  Complainants

 

                      Vs.

                                                                            

1. The Branch Manger,

       Union Bank of India,

       Balireddypalem branch,

       Vakadu Mandal,

       SPSR Nellore District.

 

2. The Field Officer,

        Union Bank of India,

        Balireddypalem Branch,

        Vakadu Mandal,

        SPSR Nellore District.

 

3. Regional Manager,

       Union Bank of India,

       Imperial Towers, 2^nd Floor,

       Magunta Layout, Nellore – 524 003,

       SPSR Nellore District.

 

4. The General Manager,

       Union Bank of India,

       Central Office, 239, Vidhan Bhavan Marg,

       Nariman Point, Mumbai-400 021.                         … Opposite parties

 

 

This matter coming on   20-02-2017  before us for final hearing in the presence of  Sri N.Masthanaiah, advocate for the complainant and Sri J.Ram Mohan,                advocate for the 1^st opposite party and Opposite party Nos.2 to 4 were remained absent  and  having stood over for consideration till this day, this Forum passed the following:                                          

 

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

ORDER                                                                                                                                                                                                                                                             (By Sri V.C. Gunnaiah, B.Com., M.L., President(FAC)

 

 

1.     The complainants filed this complaint under section 12 of Consumer Protection Act, 1986 against the opposite parties to direct them to pay Rs.3,00,000/- as compensation to the complainants towards mental agony caused to them due to deficiency in service, to pay Rs.40,000/- towards travelling expenses incurred by them, to pay Rs.60,000/- towards expenses incurred for obtaining  documents as required by the opposite parties and to pay Rs.5,000/- towards costs of the complaint  and such other reliefs.

 

2.    The averments of the complaint in brevity are as follows:

 

      The complainants 1 and 2 are husband and wife, are running a cloth shop at Vidyanagar, for eaking out their livelihood.    The 1^st complainant made an application for loan, for their personal needs and to repay the debts to the 1^st opposite party on             07-01-2014. The complainant was advised by him to get income tax returns for 3 years i.e., for the years from 2011-12, 2012-13, 2013-14, property valuation report in the name of the 2^nd complainant, as the property belongings to her and the legal opinion from the bank advocate and also approved plan from the Gram Panchayat, Chendodu Panchayat for their property.  He further advised that the 2^nd complainant must be stood as co-borrower/co-obligator, since the house property worth of Rs.25,00,000/- stands in her name and all the original house documents shall be submitted along with encumbrance certificate.  The opposite parties 1 and 2 asked the complainants to come to the bank day by day for verification of the material papers and to get the loan quickly.  Believing the words of the opposite parties 1 and 2, the complainants  wandered  around the bank day by day more than 6 months leaving  their regular work from Vidya Nagar to Balireddypalem,  but all their efforts are proved futile in getting the loan,  due to the deficiency in service of opposite parties 1 and 2. Due to the submission of material papers, the 2^nd complainant stood as guarantor to one Shaik Masthan Basha, who is the proprietor of “Diamond Shoe Mart”, Kota. If the 1^st complainant stood as guarantor to the above said diamond shoe mart proprietor, then only the 1^st complainant would get the loan, by clarifying that if any additional surety is required to the complainants, then the proprietor of the diamond shoe mart would be signed in the loan papers belongs to the complainants. Accordingly, the said Basha signed in the loan papers of the complainant.  The 1^st complainant stood as guarantor to the Diamond Shoe Mart, as advised by the opposite parties 1 and 2.  However, the 1^st opposite party had not done his service towards the complainants. Thus, there is lot of deficiency in service on the part of the opposite parties 1 and 2, towards the complainants. The complainants sustained heavy loss physically, mentally and financially by wandering around the bank by closing their works, with a pond hope they will get the loan.  However, they were not granted loan.  Hence, the complaint for the above reliefs.

 

3. The opposite party No.1 filed its written version. The Opposite party Nos.2 to 4 served with notices remained absent and not filed their written versions.  

 

4.   The opposite party No.1 filed written version denying the allegations in the complaint regarding the deficiency in service on their part, accordingly they advised the complainant with regard to the loan. The complainants incurred expenditure to the tune of Rs.3,00,000/- and travelling expenses of Rs.40,000/-, Rs.60,000/- for obtaining the loan documents  and underwent mental agony etc., have to proved by them. They also denied the allegations that they asked the complainants to come day by day to the bank and stood as sureties to one Shaik Masthan Basha, who is the Proprietor of “Diamond Shoe Mart”. 

 

5.    It is further averred that the complainants approached the 1^st opposite party for getting loan and stood as guarantor for the loan amount.  But as per the bank rules, the property situated in the rural areas has not taking surety under Union Mortgage scheme.  Further, as per the bank rules, the borrowers get income tax returns periodically for three consequent years.  But, the complainants submitted income tax returns, obtained from the Income Tax Department on the same month for three years under the above mentioned circumstances, the complainants are informed by the 1^st opposite party’ bank that they are not eligible for obtaining the mortgage under the “Union Mortgage Scheme” and advised the complainants to avail retail business loan under “Retail Trade Scheme” to a sum of Rs.2,00,000/- to 3,00,000/- as per the eligibility  instead of  mortgage loan under “Union Mortgage scheme”.  But, the complainants refused the proposal of the 1^st opposite party’ bank and filed the present case with all false allegations.  The opposite party never made any assurances to the complainants to sanction the mortgage loan under Union Mortgage Scheme and not instructed to obtain legal opinion and valuation report for their property.  It is a settled Law that sanctioning of loan is a discretionary power of branch manager of the bank even after the sanction of loan, there is no obligation on the part of the branch manager of the bank to release the applied loan.  There is no evidence that the complainants sustained  loss of Rs.1,00,000/- due to deficiency of service and not entitled for Rs.3,00,000/- and the complaint is filed for wrongful loss.  Hence, the complaint is liable to be dismissed with costs. 

 

6.    The 1st complainant filed his affidavit on 09-07-2015, an additional affidavit filed on 14-08-2015 and further affidavit filed on 02-12-2015 and got marked Exs.A1 to A28 in support of their case.

 

7.    Affidavit is filed on behalf of the 1^st opposite party, in support of their case, from one Hrudananda Pradan, Son of Jadumani Pradhan, working as In-charge Branch Manager of 1^st opposite party.  But, no documents are marked.  Oral arguments of both sides heard are considered the written arguments filed by the complainants and the 1^st opposite party.

 

 

8. On the above pleadings, the following points are settled for determination.

1. Whether there is deficiency in service on the part of the opposite parties, as pleaded by the complainants?
2. Whether the complainants are entitled for the claims, from the opposite parties?
3. To what relief?

 

9. POINTS 1 AND 2:  It is contended on behalf of the complainants that on the promise made by the 1^st opposite party’s bank manager they applied and obtained all documents required for grant of mortgage loan and offered surety  also.  The opposite parties refused to grant loan as the security produced by them is not sufficient and it is a rural property and in view of the inaction of the opposite parties they sustained huge monetary loss apart from mental agony. Therefore, the complainants proved the deficiency in service on the part of the opposite parties and they are entitled for the reliefs as claimed against the opposite parties.

10.   Per contra, the learned counsel for the 1^st opposite party vehemently contended that the opposite parties never promised or assured that they would grant loan and obtain all the record filed by the complainants, and no expenditure of Rs.40,000/- towards travelling expenses, Rs.60,000/- towards obtaining documents and mental agony  caused to them to a tune of Rs.3,00,000/- and there is no proof to show all the above expenditure.  Therefore, they have are not entitled for the claims as no deficiency in service on the part of the opposite parties.  It is also contended on behalf of the 1^st opposite party that the sanctioning of loan is always discretionary one of the bank and if bank authorities not satisfied with the repaying capacity of borrower, the bank is always at liberty to exercise their discretionary duly to decline sanctioning of loan in the interest of the public money.  Therefore, the complaint has no merit and the complaint is liable to be dismissed.

 

11. After going through the contentions and the evidence placed by the parties before this Forum, there is no merit we find in the complaint and no deficiency in service on the part of the opposite parties and this complaint is not maintainable and the same is liable to be dismissed for the following reasons.

 

 

12.  It is the case of the complainant that in view of the assurances given by the opposite parties especially by the 1^st opposite party they applied for the documents required for loan including the income tax returns for three consecutive years and incurred expenditure of Rs.60,000/- towards the documents and Rs.40,000/- towards the travelling expenditure.  However, the opposite parties not sanctioned the loan and refused on the pretext that the security offered by them (complainants) is not sufficient.  Thus, there is deficiency on the party of the opposite parties and they caused mental agony and distress to them.

 

13.  The complainants filed affidavit in support of their case and also filed documents as many as Exs.A1 to A28.  On the careful perusal of the above documents, none of them reveal that any assurance or promise letter to sanction the loan was given by the 1^st opposite party or other opposite parties to the complainants.  Thus, the complainants failed to prove that the 1^st opposite party assured that loan would be sanctioned to them as pleaded by them. 

 

14.  Coming to the expenditure of Rs.60,000/-, in obtaining the documents by them there is no proof to show that the complainants spent Rs.60,000/- towards obtaining the documents alleged to have been required by the opposite parties.  So, the same has not been proved by the complainants.  Thus, it cannot be believed.  Although, the complainants stated that they spent Rs.40,000/- towards travelling expenses from time to time to approach  the opposite party’s bank, still no proof is filed by them to show  that they spend that much amount towards travelling expenses.  No evidence has been placed except the averments in the affidavit which has been denied by the opposite parties.  Therefore, the complainants failed to prove that they spent Rs.40,000/- towards travelling expenses as pleaded.

 

15.  In number of cases, the Hon’ble National Commission, New Delhi held  that  sanction of loan is always discretionary by the authorities  and refuse to sanction the loan does not amounts to  deficiency in service.

 

16.  In 2013 Part-III C.P.J. at page No. 200 of Hon’ble National Consumer Disputes Redressal Commission, held that even after sanction of loan it was not obligatory on the part of the opposite parties to release the part of the loan and that does not amounts to deficiency in service.

 

17.  In a decision reported in 1999 Part-II, C.L.T. 513 (S.C.) Shiva Parshad  Vs.  Punjab National Bank, the Hon’ble Apex Court, held the complainant is precluded in filing the complaint for not sanctioning of loan and as such, the complaint is liable to be dismissed.

 

18.  In the case reported in 2002 Part-III C.L.T. 481, Sri Kanaka Durga Hatcheries Vs. State Bank of India, it was held that since the bank  took a consequent decision  not to go ahead to grant of loan though sanctioned  letter is not delivered the same cannot be described as deficiency  in service. 

 

      Thus, after going through the contentions of the both parties and considering the affidavits filed by them in support of the respective cases, considering the documents filed and written arguments, we hold that sanctioning of loan by the opposite party is discretionary one and the opposite parties have to see the interest of the public money with them to realize the same while sanctioning the loan to the borrower by taking adequate and sufficient security to realize  the loan amount and if they entertained a  reasonable doubt regarding the security offered to the bank  for sanctioning loan, the banker has liberty to use his discretionary power to decline from sanctioning of loan and release the same to the borrower/complainants herein.  The same cannot be construed as deficiency in service while discharging the duties of the bank i.e., the opposite parties herein and no mental agony is caused to the complainants by the bankers/opposite parties.

 

19.   Therefore, we hold that there is no deficiency on the part of the opposite parties as stated by the complainants and the complainants failed to prove the same and the complainants are not entitled for the reliefs claimed against the opposite parties and the complaint is liable to be dismissed.  Thus, the points 1 and 2 are answered against to the complainants.

 

20.  POINT NO.3:   In the result, the complaint is dismissed but in the circumstances without costs.

 

Dictated to the Stenographer, transcribed by her and corrected and pronounced by us in the Open Forum this the 27th day of FEBURARY                     2017.    

 

             Sd/-                                                                              Sd/-           

         MEMBER                                                                  PRESIDENT (FAC)

 

  APPENDIX OF EVIDENCE

 

 WITNESSES EXAMINED FOR COMPLAINANTS:

 

PW1

09-07-2015       14-08-2015       02-12-2015

:       :       :

Nuthalapati Murali S/o.Venkateswarlu, Hindu, aged about 44 years’, resident of Vidyanagar, Near Gandhi Statue, Kota Mandal, SPSR Nellore District.   Nuthalapati Murali S/o.Venkateswarlu, Hindu, aged about 44 years’, resident of Vidyanagar, Near Gandhi Statue, Kota Mandal, SPSR Nellore District.   Nuthalapati Murali S/o.Venkateswarlu, Hindu, aged about 44 years’, resident of Vidyanagar, Near Gandhi Statue, Kota Mandal, SPSR Nellore District.

 

WITNESSES EXAMINED FOR OPPOSITE PARTIES:

 

RW1

26-06-2015

:

Hrudananda Pradan, Son of Jadumani Pradhan, Hindu, aged 27 years, working as In-Charge Branch Manager, Union Bank of India, Balireddypalem branch, Balireddypalem Vilalge, Vakadu Mandal, SPSR Nellore District.

                                                                          

EXHIBITS MARKED FOR COMPLAINANTS:

 

Ex.A1	-	:	Copy of the application for Union mortgage of Union Bank of India.
Ex.A2	-	:	Copy of the credit information of the Union Bank of India signed by the 1st complainant.
Ex.A3	-	:	Copy of the credit information of the union bank of India signed by the 2nd complainant.
Ex.A4	-	:	Copy of the credit information of the Union Bank of India signed by the one P.V. Sarat Babu, the guarantor.
Ex.A5	-	:	Copy of letter of (CIBIL) undertaking from guarantor.
Ex.A6	-01-2014	:	Copy of letter addressed by the 2nd complainant to the Branch Manager of Union Bank of India, Ballireddypalem branch handing over title deeds of properties.
Ex.A7	-	:	Copy of letter of (CIBIL) undertaking from borrower.
Ex.A8	29-01-2014	:	Notary attested copy of the declaration by 2nd complainant.
Ex.A9	07-01-2014	:	Copy of the statement of total income (income tax returns) for the year 2011-2012 and along with tax payer counterfoil, Trading profit and loss account, Balance sheet for 31-03-2011, statement of capital account and acknowledgement of income tax returns.
Ex.A10	27-12-2013	:	Copy of Indian income tax return verification form, the statement of total income for the year 2012-2013 along with tax payer counterfoil, Trading profit and loss account, Balance sheet for 31-03-2012 and statement of capital account.
Ex.A11	03-01-2014	:	Copy of the statement of total income for the year 2013-2014 Indian income tax return verification form, the statement of total income for the year 2013-2014 along with tax payer counterfoil, Trading profit and loss account, Balance sheet for 31-03-2013.
Ex.A12	31-01-2014	:	Copy of the valuation report of the property along with details of valuation and abstract etc.
Ex.A13	26-01-2014	:	Copy of Chendodu Gram Panchayat approval.
Ex.A14	-	:	Copy of statement of Encumbrance Certificate on property.
Ex.A15	29-01-2014	:	Copy of search report and title report.
Ex.A16	24-01-2014	:	Copy of Search Report.
Ex.A17	23-08-2014	:	Copy of   notice and its reply by the 2nd opposite party.
Ex.A18	06-09-2014	:	Copy of the legal notice and its regd.post receipt and courier receipt.
Ex.A19	16-09-2014	:	Copy of the legal notice got issued by the counsel to the 1st opposite party and its copies of courier receipts three in nos.
Ex.A20	12-09-1996	:	Copy of the registered document of the property of 2nd complainant.
Ex.A21	-	:	The Memorandum of deposit of title deeds (Union Bank of India, Balireddypalem branch).
Ex.A22	09-02-2015	:	Copy of legal notice got issued to the branch manager, Union Bank of India, Balireddypalem branch and another
Ex.A23	09-02-2015	:	Copy of the legal notice addressed to the branch manager, Union Bank of India, Balireddypalem branch and another.
Ex.A24	14-02-2014	:	Copy of Pawn receipt for Rs.5,000/- in the name of the 1st complainant.
Ex.A25	28-04-2014	:	Copy of Pawn receipt for Rs.10,000/- in the name of the 1st complainant.
Ex.A26	27-06-2014	:	Copy of Pawn receipt for Rs.18,000/- in the name of the 1st complainant
Ex.A27	14-07-2015	:	Copy of Pawn receipt for Rs.7,000/- in the name of the 1st complainant.
Ex.A28	20-08-2014	:	Copy of gold loan, Union Bank of India, Balireddypalem branch.

 

EXHIBITS MARKED FOR OPPOSITE PARTIES:                          

 

-N I L -

 

                

                                                                               Id/-

                                                                      PRESIDENT (FAC)

 

Copies to:

 

1. Sri N.Masthanaiah and A.Raja Manikyam,  Advocates, Gudur, SPSR Nellore

District.

 

2. Sri J.Rammohan, Advocate, Nellore .

 

3. The Field Officer, Union Bank of India,Balireddypalem Branch,

Vakadu Mandal,SPSR Nellore District.

 

      4) Regional Manager,Union Bank of India, Imperial Towers, 2^nd Floor,

Magunta Layout, Nellore – 524 003, SPSR Nellore District.

 

5)The General Manager, Union Bank of India, Central Office, 239, Vidhan  Bhavan

        Marg, Nariman Point, Mumbai-400 021.                        

 

 

Date when order copies were issued: