IN THE CONSUMER DISPUTES REDRESSAL FORUM, PATHANAMTHITTA. Dated this the 28th day of May, 2010. Present:- Sri. Jacob Stephen (President) Smt. C. Lathika Bhai (Member) Sri. N. Premkumar (Member) O.P. No. 109/03 (Filed on 22.05.03)Between: 1. M/s. Hig-Tech Dry-wash Centre, P.O. Box 57, Pathanamthitta P.O., Pin – 689645, represented by Attorney Sri. Sharafuddin. 2. Sri. Sharafuddin, S/o. Aboobacker, Shannovre, Vettipuram, Pathanamthitta P.O. 3. Smt. Seenath Sharafuddin, Shannovre, Vettipuram, Pathanamthitta P.O. ... Complainants. And: 1. The Branch Manager, M/s. Kerala Financial Corporation, Pazhamannil Jessy Towers, College Road, Pathanamthitta – 689645. Addl.2.The Managing Director, Kerala Financial Corporation, Vellayambalam, Thiruvananthapuram. (By Adv. K. Jyothi Kumar) ... Opposite parties. ORDER Sri. Jacob Stephen (President): The complainants have filed this complaint against the opposite parties for getting a relief from the Forum. 2. The complainants’ case is that the complainants approached the first opposite party for availing a loan of Rs.15 lakhs for starting a dry wash unit under the name and style ‘M/s.Hi-tech Dry-wash Centre’ owned by the 2nd and 3rd complainants. An officer of the first opposite party informed that they could consider the financing against 50% collateral security as per their norms and could be considered within the Branch/R.M. level. It is also informed that the processing time would be 2 to 4 weeks. On 25.07.2001, the complainants submitted their application along with relevant documents required as per the instructions of the first opposite party. Thereafter on 04.08.2001, the officials of the first opposite party inspected the site for valuation and other purposes. The legal officer verbally confirmed that the value of collateral is much higher than the prescribed level for the loan amount. The Engineer confirmed that he foresee no problem in granting the loan. They indicated that sanction letter could be given within one week to 10 days time. The Branch Manager repeated that the sanction letter could be given very soon. On the basis of the positive opinion for granting the loan from the part of officials of the opposite parties, the complainants started the initial works for starting the project by constructing a workshop, by appointing employees, by sending technical staff to Hyderabad and Mumbai for getting training on similar machines proposed to install for the project. While so on 03.10.2001, the second complainant was called for by the Branch Manager for a meeting with their Regional Manager. All the doubts of the Regional Manager in respect of the project was cleared. Thereafter some amendments were also made in the application form for the speedy sanctioning of the loan. Advances were also given to some suppliers for the supply of machinery and other equipments. 3. While so, a letter dated 21.11.2001 received from the opposite parties in which it is intimated that their loan application is rejected. Thereafter, numerous communications were exchanged in between the parties. The opposite parties rejected their loan application by saying that the project is neither technically feasible nor financially viable. The rejection of their loan application after receiving the processing charges and after giving verbal sanction is a clear deficiency in service, which caused financial loss and mental agony to the complainants, and the opposite parties are liable to the complainants for the same. Hence this complaint for realisation of a total amount of Rs.13,08,000/- as compensationunder various heads along with cost. 4. The opposite parties entered appearance and filed their version with the following main contentions: The opposite parties admitted the submission of the loan application and the relevant documents by the complainants for sanctioning a loan of Rs.15 lakhs for the complainants’ project. But they have denied all the allegations in the complaint against the opposite parties. On getting the loan application, the officials of the opposite parties inspected the site and conducted market survey and enquired about the proposed suppliers. Their studies reveals that the complainants project is not technically feasible and financially viable and the credibility of the proposed suppliers seems doubtful. The above study report was submitted before the sanctioning authority. The sanctioning authority discussed the report in detail and called the complainants for further clarifications and after completing all the formalities; the sanctioning authority decided to reject the loan application of the complainants and advised the complainants to submit any other feasible projects. 5. The opposite parties admitted the collection of processing charge and they have collected the processing charge as per the norms of the opposite parties. In processing and in the rejection of the complainants’ loan application, the opposite parties have not committed any illegalities or deficiency in service. With the above contentions, the opposite parties pray for the dismissal of the complaint, as there is no deficiency of service from their part as alleged by the complainants. 6. On the basis of pleadings of the parties, the only point to be decided is whether this complaint can be allowed or not? 7. The evidence of this complaint consists of the oral testimony of PWs.1 to 6 and DWs.1 and 2 and exhibits A1 to A16 series and B1 to B8 series. After closure of evidence, both sides were heard. 8. The Point: The complainant’s case is that he had submitted a loan application before the first opposite party for availing a loan of Rs.15 lakhs for starting a dry-wash unit. In connection with the above matter, the complainant had complied with all formalities including the payment of processing charge for getting the loan sanctioned. But later, the opposite parties rejected the complainant’s loan application arbitrarily and illegally by saying that the complainant’s project is neither technically feasible nor financially viable. But according to the complainant, their project is technically feasible and financially viable. He had submitted the project after proper consultation and studies with experts. While his loan application processing is going on, the officials of the opposite parties verbally given instructions for starting the initial works of the proposed project. Believing the words of the officials, he had started the initial works and spent huge amount for the same. Due to the rejection of his loan application, he had lost the money spent for the initial works. The above said rejection of the loan application of the complainant by the opposite parties is a clear deficiency of service, which caused financial loss and mental agony to the complainant and the opposite parties are liable to compensate the complainant for the said deficiency in service. 9. In order to prove the complainants’ case, the second complainant and 5 witnesses were examined as PWs.1 to 6. The documents produced from the side of the complainants were marked as Exts.A1 to A16 series and the plan and valuation reported filed by PW5 on the basis of the order of this Forum were marked as Exts.C1 and C2. Ext.A1 is the photocopy of the loan application of the complainants. Exts.A1(a) is the copy of the project report of the complainants’ unit. Ext.A2 is the cash receipt of application fee issued by the opposite parties. Ext.A3 is the receipt for processing fee issued by the opposite parties. Ext.A4 is the copy of letter-dated 05.10.2001 given by the complainants to the first opposite party for making changes in the loan application. Ext.A5 is the copy of letter-dated 21.11.2001 issued by the first opposite party to the third complainant stating that the loan application is rejected and directing him to submit any alternate viable project. Ext.A6 is the photocopy of the letter-dated 19.06.2002 of the first opposite party issued in the name of the third complainant stating that they have nothing to comment further that what has been intimated earlier. Ext.A7 is the building permit dated 06.08.2001 issued by Pathanamthitta Municipality. Ext.A8 is the power allocation letter issued by the Asst. Executive Engineer, KSE Board, Pathanamthitta. Ext.A9 is a brochure regarding the proposed machinery to be installed for the dry wash unit. Ext.A10 is pamphlet of the STED Project. Ext.A10(a) is the page No.37 of Ext.A10. Ext.A11 is a letter from Advocate Somasundaram dated 24.04.4003 addressed to the complainants. Ext.A12 is the copy of registered letter dated 11.05.2002 sent by the third complainant to the first opposite party requesting for the refund of processing charges. Ext.A13 is the copy of appraisal memorandum of loan above 7-50 lakhs issued by the first opposite party. Ext.A14 is the photocopy of the property valuation report dated 10.01.2003 prepared by PW6 in respect of the complainant’s property. Ext.A15 is the brochure published by the Kerala Financial Corporation. Ext.A16 series (11 in number) are the copy of the minutes and other proceedings of KFC in connection with complainants’ loan application and other communications between the parties. PWs.1 to 6 were cross-examined by the opposite parties. 10. On the other hand, the contention of the opposite parties is that the complainants’ loan application was rejected on sound reasons. After receiving the loan application, the opposite parties conducted studies and enquiries through the officials of the opposite parties about the feasibility of the project and the credibility of the suppliers of machinery and found that the project submitted by the complainants is not technically feasible and financially viable and the proposed supplier of the machinery is not traced out. In the circumstances, and as per the norms of the Kerala State Financial Corporation, the opposite parties are constrained to reject the complainants’ loan application for the proposed project. After rejecting the said loan application, opposite parties also directed the complainants to submit any other feasible projects. But the complainants have not turned up or submitted any other projects. The rejection of the complainants’ loan application by the opposite parties on sound reasons as per the norms of the Kerala Financial Corporation is not a deficiency in service. 11. In order to prove the contentions of the opposite parties, the first opposite party and the then Assistant Manager (Legal/Appraisal) filed proof affidavit and on the basis of their proof affidavits, they were examined as DWs.1 and 2 and the documents produced from the side of the opposite parties were marked as Exts.B1 to B8 series. Ext.B1 is the letter-dated 29.08.2001 sent by DW2 in his personal capacity to the proposed supplier for ascertaining the credibility of the supplier. Ext.B2 is the letter-dated 21.11.2001 issued to the third complainant by the first opposite party intimating the rejection of the complainants’ loan application along with advice for submitting a viable project. Ext.B3 is the application-dated 28.01.2002 by the third opposite party for returning the documents submitted by the complainants along with the loan application. Ext.B4 is the copy of the letter dated 06.04.2002 issued to the first complainant by the first opposite party stating their inability to furnish the details of enquiry conducted by them about the supplier. Ext.B5 is the letter-dated 17.07.2002 issued to the first opposite party by the third complainant requesting to return the documents and the processing charges. Ext.B6 is the copy of the letter-dated 19.07.2002 issued to the third complainant by the first opposite party stating their inability to return the processing charges. Ext.B7 is the letter-dated 05.10.2001 submitted before the first opposite party by the second complainant for making certain changes in the loan application. Ext.B8 is the undelivered postal cover sent by the opposite parties to the supplier of the machinery. Ext.B8(a) is the endorsement of the postal authorities over Ext.B8 saying that ‘no such agencies in this location’. PWs.1 and 2 were cross-examined by the complainant. 12. On a perusal of materials on record, there is no dispute between the parties with regard to the submission of the loan application, processing of the loan application and the rejection of the loan application. The only question to be decided is whether the rejection of Ext.A1 loan application is a deficiency in service. According to the complainants, the opposite parties rejected the loan application illegally and the said illegal rejection is a deficiency of service. At the same time, opposite parties’ contention is that the rejection of the loan application is not illegal and is rejected on sound reasons and the said rejection is legal and is not a deficiency in service. According to the complainant, he had complied all the formalities required for sanctioning his loan and his project is technically feasible and financially viable. But according to the opposite parties, the project submitted by the complainant is not technically feasible and financially viable as per their studies and enquiries. In order to substantiate the complainant’s claim that his project is technically feasible and financially visible, the complainant is relying Ext.A10(a) i.e. page No.37 of Ext.A10 pamphlet published by the STED Project. Apart from Ext.A10(a), the complainant had not adduced any other evidence to show that his project is technically feasible and financially viable. He also produced one witness attached with the STED Project who is examined as PW4. In cross examination, PW4 deposed as follows: “]¯\wXn« PnÃbn F{X bqWn Bhiyaps¶v ]dªn«nÃ. Pnà Xncn¨v {]tXyIw ]dªn«nÃ. ]¯\wXn«bnse lnI£nbpsS \n#177;njvS bqWnsâ km²yXsb¸ ]T\w \S¯nbn«nÔ. 13. The main reasons for rejecting the complainant’s loan application is that the proposed project is not technically feasible and financially viable on the basis of the studies and enquiries conducted by the opposite parties. The opposite party is an agency established by the Government for providing loan for starting new projects. But the projects should be technically feasible and financially viable. The opposite parties are duty bound to study the feasibility of the projects and if they are not satisfied about the feasibility, they are also entitled to reject the loan application. In this case, it is clear from Ext.A16 minutes and Exts.B1 letter and B8 postal cover, that they had conducted studies and enquiries about the complainant’s project and they found that the complainant’s project is not feasible. But the complainant has failed to rebut the studies, enquiries and findings of the opposite parties with cogent evidence. The complainant also failed to adduce any evidence to substantiate his allegation that the opposite parties had orally directed the complainant to start the initial works for starting his proposed project and spent money for the same. The value of the collateral security alone is not a criteria for sanctioning a loan. The mere submission of a loan application before the opposite parties itself does not qualifies an applicant for a loan as a consumer under the C.P. Act. Ext.B2 letter clearly shows the willingness of opposite parties to give loan to the complainant for any other alternate viable projects. In the circumstances, we find that the rejection of Ext.A1 loan application on sound reasons by the opposite parties is not illegal and hence there is no deficiency in service from the part of the opposite parties. Therefore, this complaint is not allowable and is liable to be dismissed. 14. In the result, this complaint is dismissed. No cost. Pronounced in the Open Forum on this the 28th day of May, 2010 (Sd/-) Jacob Stephen, (President) Smt. C. Lathika Bhai (Member) : (Sd/-) Sri. N. Premkumar (Member) : (Sd/-) Appendix: Witness examined on the side of the complainants: PW1 : Sharafudeen. PW2 : Mohammed Haneefa. P. PW3 : Surfraz. S. PW4 : Rajesh. P.V. PW5 : Binu. T.R. PW6 : R. Sreedharan Nair. Exhibits marked on the side of the complainants: A1 : Photocopy of the loan application of the complainants dated 25.07.2001. A1(a) : Photocopy of the Project Report of the complainants’ unit. A2 : Cash receipt dated 04.07.2001 for Rs. 100/- for the sale of application form issued by the opposite parties. A3 : Cash receipt dated 28.07.2001 for Rs.875/- for processing fee issued by the opposite parties. A4 : Photocopy of letter-dated 05.10.2001 issued by the complainant to the first opposite party. A5 : Photocopy of letter-dated 21.11.2001 issued by the first opposite party to the third complainant. A6 : Photocopy of the letter-dated 19.06.2002 sent by the first opposite party to the third complainant. A7 : Building permit dated 06.08.2001 issued by the Asst. Engineer, Pathanamthitta Municipality. A8 : Power allocation Order issued by the Asst. Executive Engineer, KSE. Board, Pathanamthitta. A9 : Brochure regarding the proposed machinery to be installed for the dry wash unit. A10 : Pamphlet of the STED Project. A10(a) The relevant portion of Ext.A10. A11 : Letter from Advocate Somasundaram dated 24.04.4003 addressed to the complainants. A12 : Photocopy of registered letter dated 11.05.2002 sent by the complainants to the first opposite party. A13 : Photocopy of appraisal memorandum for loan above 7-50 lakhs issued by the first opposite party. A14 : Photocopy of the Property Valuation Report dated 10.01.2003 prepared by R. Sreedharan Nair in respect of the complainant’s property. A15 : Brochure published by the Kerala Financial Corporation. A16 series: Minutes and other proceedings of KFC in connection with complainants’ loan application. Witness examined on the side of the opposite parties: DW1 : S. Radhakrishnan. DW2 : Ajithkumar. Exhibits marked on the side of the opposite parties: B1 : Letter-dated 29.08.2001 sent by Ajithkumar to the Manager (Marketing), M/s. Sreelekha Agencies for ascertaining the credibility of the supplier. B2 : Letter-dated 21.11.2001 issued to the third complainant by the first opposite party. B3 : Letter-dated 28.01.2002 issued by the third complainant to the first opposite party for returning the documents. B4 : Registered letter dated 06.04.2002 issued to the first complainant by the first opposite party. B5 : Letter-dated 17.07.2002 issued to the first opposite party by the third complainant requesting to return the documents and the processing charges. B6 : Registered letter-dated 19.07.2002 issued to the third complainant by the first opposite party. B7 : Letter-dated 05.10.2001 submitted before the first opposite party by the second complainant for amending the loan application. B8 : Undelivered postal cover sent to the supplier of the machinery. B8(a) : Endorsement of the postal authorities over Ext.B8. Court Exhibits: C1 : Estimate for existing shed for Sri. Sharafudeen, M/s. Hi-Tech Dry Wash Centre, Pathanamthitta prepared by Binu. T.R., Supervisor Gr.B. C2 : Plan prepared by Binu. T.R., Supervisor Gr.B. (By Order) Senior Superintendent. Copy to:- (1) Sharafuddin, Shannovre, Vettipuram, Pathanamthitta. (2) Zeenath Sharafuddin, -do. -do. (3) The Branch Manager, M/s. Kerala Financial Corporation, Pazhamannil Jessy Towers, College Road, Pathanamthitta – 689645. (4) The Managing Director, Kerala Financial Corporation, Vellayambalam, Thiruvananthapuram. (5) The Stock File.
| | HONORABLE LathikaBhai, Member | HONORABLE Jacob Stephen, PRESIDENT | HONORABLE N.PremKumar, Member | | 
