Kerala

StateCommission

A/304/2017

KERALA GRAMIN BANK - Complainant(s)

Versus

C.V. SADASIVAN - Opp.Party(s)

K N JUSTIN

29 Jul 2019

ORDER

KERALA STATE CONSUMER DISPUTES REDRESSAL

COMMISSION  VAZHUTHACAUD, THIRUVANANTHAPURAM

    APPEAL NO.304/17

   JUDGMENT DATED:29.07.2019

PRESENT : 

SHRI. T.S.P MOOSATH                                             : JUDICIAL MEMBER

SHRI.RANJIT .R                                                          : MEMBER

SMT. BEENAKUMARI.A                                            : MEMBER

1. M.P. Pavithran,

Branch Manager,

Kerala Gramin Bank,

Thundiyil Branch, Iritty Taluk,                                        

Thondiyil P.O, Kannur-670 673.

:  APPELLANTS

2. The Branch Manager,

Kerala Gramin Bank,

Thundiyil Branch, Iritty Taluk,                                        

Thondiyil P.O, Kannur-670 673.

Rep. by its Regional Manager.

 

(By Adv: Sri. K.N. Justin)

 

            Vs.

C.V. Sadasivan, S/o Raman,

Chengunni veedu, Manathana, P.O,                             : RESPONDENT

Iritty Taluk, Kannur District-670 674.

 

JUDGMENT

SHRI. RANJIT. R : MEMBER

Opposite parties 1 and 2 has filed this appeal against the order in CC.287/14, dated:13.3.2017 on the file of Consumer Disputes Redressal Forum, Kannur (for short the District Forum) by which the District Forum directed the opposite parties to pay a sum of Rs.20,000/- as compensation and Rs.2000/- as costs.

2.      The case of the complainant in brief is that:-

The complainant had approached the opposite parties for a housing loan for the partly constructed house.  Thereafter as directed by the opposite party No.1, he has produced all the relevant documents before them.  As per the direction of the opposite party No.1 he has visited the bank at least 17 times for consultation for different reasons.  Thereafter without any reason the opposite party No.1 denied the loan to him.  When the complainant enquired the reason for the same, the opposite party, deliberately insulted the complainant before other customers.  Apart from that the opposite party No.1 demanded to register the road to the house of the complainant in favour of the bank.  There is deficiency of service and unfair trade practice on the part of the opposite parties.  The complainant has suffered much hardship, mental agony, loss of money and time.  Hence the complaint.

3.      The opposite party filed version contending that since the complainant failed to produce any document to show that the plot has got enforceable independent clear access, the bank was not in a position to sanction the loan.  Though the complainant sought enough time to produce such a document, he could not produce it.  So the opposite party was constrained to intimate about the inability of the bank to sanction the loan.  The opposite parties are not responsible for the delay, since the actual delay was occurred from the side of the complainant.  There is no deficiency of service on the part of the opposite party as alleged.  Hence the complaint is liable to be dismissed with compensatory cost.

4.      The evidence consists of oral testimony of complainant as PW1 and his witness, (village officer) was examined as PW2, Exts.A1 to A8 were marked on his side.  Opposite parties authorized representative was examined as DW1 and their witness was examined as DW2.  Ext.B1 was marked on their side.

5.      Lower Forum appreciating the materials produced and considering the rival contentions concluded that refusal of granting loan by the opposite party without any valid reason is deficiency of service on their part and on the basis of such conclusion passed the impugned order.

6.      Learned counsel for the appellant contended that the complainant failed to produce any document proving of existence of a path way to the schedule property that will be deposited for creating equitable mortgage for sanctioning the loan.  The access to the schedule property is mandatory requirement for granting loan.  Since there is no enforceable path way to the property that was submitted for creating equitable mortgage to the appellant bank, refused to grant loan.  They further stated that denial or non sanctioning of loan does not amount to deficiency of service.  The eligibility of the parties to give credit assistance is within the discretion of the bank depending upon various factors.  In support of his contentions, the learned counsel for the appellant placed reliance on judgment of the National Commission in the matter of Ashok Prabhakar Vs. State Bank of India wherein Hon’ble Supreme Court had held that “It is for the financial institution to decide whether to provide loan to any industry after taking consideration its viability”.  It cannot constitute deficiency of service.  Another judgment of This Commission, in the matter of  A. Shamsudeen Vs. Union of India wherein this Commission held that “banks inability to provide finance on the ground that project was not viable would not constitute deficiency of service”.  He has referred other decisions of the National Commission to substantiate its contentions that it is for the bank to decide whether a particular party is eligible for credit within the frame work of credit policy laid down by the Government of India and Reserve Bank of India and the complainant was explained in the prevailing rules and guidelines for sanctioning a mortgage/housing loan.

7.      Even though notice was served to the respondent/complainant he did not appear and prosecute his case.

8.      We considered the contentions raised by the appellant and perused the records.  The definite case put forward by the complainant as per his complaint is that there is an independent enforceable clear access to the plot which is clearly brought out through the location sketch issued by the village officer and (Ext.A6) and the site plan of the proposed building.  Since there is clear and enforceable path way to his property, the denial of loan on the ground that there is no road access available, amounts to deficiency of service and unfair trade practice on the part of the opposite party.

9.      The short question to be considered is whether denial of loan amount ,to the property submitted for creating equitable mortgage amounts to deficiency of service.  It is a settled law that issuance of loan is in the discretion of the bank authorities.  They will grant loan only after ensuring themselves that amount of the depositers which had invested in the form of credit is safe and viable.  Their judgment regarding sanction of loan would not constitute deficiency of service.

10.    In the instant case the appellant bank deputed a valuer  to access the viability of the loan application and the valuer after site inspection gave a valuation report.   In the report it is stated that to the property of the complainant, there is no free and independent access.  The location sketch issued by the village officer is not reliable.  In this sketch, a mud road is shown as access to the land offered as security.  As a matter of fact, the land on western side of the property offered as security is also owned by Sadasivan, the complainant.  The loan was denied after verifying the valuation report and complainant’s document. True, in the location sketch there is mention about  a mud road/mud way to the property, but in the location certificate there is no mention about this mud road.  What is mentioned is that all the boundaries of this property is surrounded by properties of the complainant itself.  In other documents produced by the complainant also there is no proof with regard to the existence of an enforceable, independent, clear access to the property to be given for creating equitable mortgage.

11.    This Commission in the matter A. Shamsudeen Vs. Union Bank of India reported in 1994 (1) CPR 452 (supra) held that “banks inability to provide finance from the ground that project was not viable would not constitute deficiency of service.”  The Hon’ble National Commission in the decision reported in 1993 (1) CPR 103 held that the decision of the bank not to provide finance would not constitute deficiency of service.

12.    In the light of the above we hold that there is no deficiency of service on the part of the appellant/opposite party in not granting loan to the complainant.  The lower Forum did not look into the well settled legal position and came to a wrong conclusion that there is deficiency of service on the part of the opposite party/appellant in not granting loan to the complainant, and passed the impugned order, which is to be setaside.

In the result the appeal is allowed.  The order of the lower Forum is setaside and complaint in CC.287/14 on the file of Consumer Disputes Redressal Forum, Kannur is dismissed.

 Parties to suffer their respective costs.

Refund the statutory amount deposited by the appellant at the time of filing the appeal to them, on proper application.

 

T.S.P MOOSATH : JUDICIAL MEMBER

 

RANJIT .R : MEMBER

 

BEENAKUMARI.A : MEMBER

VL.