BEFORE THE DISTRICT CONSUMER FORUM : MEDAK AT SANGAREDDY

PRESENT: Sri Patil Vithal Rao, B.Sc., LL.B.,President

                Sri G.Sreenivas Rao, M.Sc., B.Ed.,LL.B.,PGADR (NALSAR),Member

 Monday, the 17^th day of June, 2013

CC. No. 47 of 2011

Between:

1. Mohd. Ghouse Pasha S/o Late Amjad Ali,

Aged 42 years, Occ: Business,

2. Smt. Shahnaz Sultana W/o Mohd. Pasha,

Aged about 35 years, Occ: House wife,

Both are R/o H.No. 11-63, Khazi Street,

Narsapur (V), Medak District.

                                                                                     ……Complainants                      

                   And

1. Branch Manager,

Andhra Pradesh Grameena Vikas Bank,

H.O. Warangal, Branch at Narsapur,

Medak District.

                                                                                        ……Opposite party

                        This case came up for final hearing before us on 10.06.2013                                                                   in the presence of Sri V.V. Patil, Advocate for complainants and Sri R. Sreenivas Reddy, Advocate for opposite party and on hearing the arguments and perusing the record and having stood over for consideration till this day, this Forum delivered the following:

O R D E R

(Per Se Sri Patil Vithal Rao, President)

                 The complainant No. 1 is husband of the complainant No. 2. Their case, which has been filed under Section 12 of the Consumer Protection Act, 1986, in brief, is that they borrowed a loan of Rs. 4,00,000/- from the opposite party bank for construction of a house on their open plot bearing No. 30 in survey Nos. 267 & 268 situated at Narsapur (V) & (M) by mortgaging the said house plot as security. Their further case is that the opposite party bank released a sum of Rs.3,90,000/- and that the complainant commenced the construction works but could not complete the same due to escalation of construction material. As per the complainants, when they approached the opposite party bank for sanction of additional loan of Rs. 2,50,000/- to complete the construction work, the opposite party bank instead of sanctioning the same, issued demand notices and initiated recovery proceedings under SARFAESI Act even ignoring the reply notices sent by the complainants. Therefore the complainants have prayed to allow the complaint directing the opposite party bank to sanction additional loan of Rs. 2,50,000/- and award compensation of Rs. 1,00,000/- on account of deficiency of service on its part.

2.          The opposite party bank opposed the complaint and filed the written version stating, in brief, that no doubt the complainants have availed a housing loan of Rs. 4,00,000/- by receiving an amount of Rs. 3,90,000/- for construction of house but failed to repay the same as per agreed terms and conditions and that as such a demand notice was issued to them. The further contention of the opposite party bank is that instead of repaying the loan amount, the complainants requested for additional loan of Rs. 2,50,000/- but the same could not be sanctioned by considering their income source and repaying capacity. When the loan become overdue the opposite party bank initiated steps under SARFAESI Act. Further defence of the opposite party bank is that to avoid repayment of the loan amount the complainants sent reply notice with false allegations. For these reasons the opposite party bank has prayed to dismiss the complaint with costs.

3.           During the course of the enquiry the complainant No. 1 was examined as PW.1 & Exs.A1 to A15 were marked in support of the case of the complainants. The opposite party bank has examined its branch manager as RW.1 and marked Exs.B1 & B2, in defence.

4.        Written arguments were filed on behalf of the complainants. The learned counsel for the opposite party bank has filed a memo to treat the written version as written arguments for the opposite party bank. Heard both the learned counsel.

5.           Now the point for consideration is that whether there is any deficiency of service on the part of the opposite party bank, and if so, to what relief?

Point:

6.          Admittedly, the complainants approached the opposite party bank for a house loan of Rs. 5,00,000/- but the bank sanctioned the loan of only Rs.4,00,000/- and released a sum of Rs. 3,90,000/- for construction house on their open plot. The said open plot was mortgaged as a security for the loan transaction. After availing the loan, the complainants seems to have obtained due permission from the town Gram Panchayat and commenced house construction. Ex.A12 is the said permission letter and Ex. A10 is the receipt towards construction fees issued by the Gram Panchayat. Ex.A11 is a copy of the plan of proposed construction and Ex. A13 is details of construction work estimation.

7.          It seems the complainants could not complete the construction works and for unknown reasons committed default in making repayment of the loan amount in accordance with agreed terms and conditions. Therefore the opposite party bank issued demand notices and commenced recovery proceedings by taking over symbolic possession of the mortgaged property. Then the complainants resorted to a novel way by approaching the opposite party bank with a request to sanction additional loan of Rs. 2,50,000/- for completion of the construction work. Exs. A1 to A8 and B1 are the documents evidencing the correspondence between the parties. In fact the opposite party bank issued a paper publication vide Ex. A9 cautioning the general public not to deal with the mortgaged property in view of the recovery proceedings of the loan amount. Ex.B2 is a copy of extract of statement of account showing the  outstanding loan amount due of Rs. 5,15,605/- as on 04.01.2012.

8.           The complainants have filed copies of income tax return and acknowledgement vide Ex.A14 and A15 to contend that they got capacity to avail additional loan and repay the same. Be that as it may it is the exclusive decision of the bank whether or not to sanction any additional loan to the complainants. In fact the bank, in its written version, has specifically noted that the known income source of the complainants and the banking norms do not permit to extend additional loan facility to the complainants. In this circumstance, in our considered view, this Forum cannot issue any direction to the opposite party bank to sanction additional loan to the complainants. The learned defence counsel has cited a decision in “Hanuman Hosiery vs. Canara Bank & anr.,”,III (2002) CPJ  253 (NC) in which it was held that when the bank did not give any assurance to sanction loan and accordingly did not release the same, it does not amount to deficiency of service. In this case a loan of Rs. 75,000/- was sanctioned by the Canara Bank to the complainant and same was also released but the complainant alleged that the bank assured to sanction Rs 1,25,000/- also making a total loan amount of Rs.2,00,000/- but without any proof. Therefore the complaint was dismissed. In the present case also the opposite party bank has sanctioned loan of Rs. 4,00,000/- but never promised to sanction any additional loan. In this circumstance the complainants, having committed default in making repayment of the outstanding dues, cannot compel the bank to sanction additional loan on the premise of their paying capacity. In the given circumstance the ratio laidown in the above cited the decision is aptly applicable to the facts of this case. Therefore we hold that there is no deficiency of service on the part of the opposite party bank. Even, otherwise when the opposite party bank has already invoked provisions of the SARFAESI Act to recover the outstanding dues against the complainants, this Forum sans jurisdiction to entertain the present dispute. For all these reasons the complaint is liable to be dismissed.

9.                The point is answered accordingly against the complainants.

10.              In the result, the complaint is dismissed but in the circumstances the parties shall bear their own costs.

          Dictated to Stenographer, after transcription and correction the order is pronounced by us in the open court today on this the 17^th day of July, 2013.

                         Sd/-                                           Sd/-

                     MALE MEMBER                            PRESIDENT

Copy to:

1. The complainant
2. The opposite party
3. Spare copy.