Karnataka

Chamrajnagar

CC/203/2010

Manjunatha - Complainant(s)

Versus

Canara Bank - Opp.Party(s)

Mr.J.S.

04 May 2011

ORDER

ORDER

1. The complainant has brought the complaint against the O.P. for deficiency of service by alleging that it has not sanctioned the loan though he was eligible for it.

 

1. In brief, the facts of the complaint are that the complainant had submitted loan application on 09.12.2009 to the O.P. under PMEGP loan scheme. After filing loan application the O.P. sought some documents  for sanctioning of loan.

 

1. One of the requirements was the legal opinion from the panel of advocates of the O.P. with regard to the title, interest and encumbrance of the property offered as security. The panel advocate has given opinion that the complainant has a valid and marketable title to the said property.

 

1. The loan was sought for Packing and Processing unit. The complainant has got necessary license from the concerned authorities, permission from Pollution Control Board, license from the Director of Industries and Commerce and detailed estimation of the proposed construction.

 

1. After lapse of five months the complainant wrote a letter on 07.04.2010 to the Customer Service Cell for releasing of loan  and a copy was submitted to the National Commission for SC/STs, Ombudsman of RBI, Chalavadhi Mahasabha, Editor of Dalitha Voice & Consumer  Redressal Forum. O.P. after that sent letter to the complainant  the reasons for not considering  the loan application. The O.P. has refused to sanction loan  as the complainant has wrote letters to various authorities against O.P.

 

1. The O.P. has admitted about the submitting of the loan application by the complainant and has denied all the allegations made against it by the complainant.

 

1. The O.P. has stated that the complainant’s application has been rejected for the following reasons.
   1. Alienation order for industrial purpose is not on record.
   2. As per the LSR the complainant’s vendor Madaiah has acquired the property through government grant under registered sale deed dt.28.07.2008  stated that the said property is ancestral property.
   3. LSR has not approved by the Bank.
   4. The legal opinion is only suggestion to the bank, sanction of the loan  is on the  basis of procedural aspect, at the same time bank authority may accept the LSR or  reject the same.

 

1. The following points arises for consideration.

1. Whether there is deficiency by the O.P.?

 

1. The findings on the following point is affirmative.

 

REASONS

1.  The admitted facts are that the complainant being an unemployed youth has submitted loan application to the O.P. under PMEGP loan scheme. The panel advocate of the O.P. had given opinion that the complainant has a valid and marketable title to the said property.

 

1. The O.P. did not sanction the loan and the complainant wrote letters to the various authorities alleging that the O.P. has not released the loan. After that a copy was sent to the O.P., it in turn sent letter to the complainant by stating that he has not produced alienation  of agriculture property for industrial purpose and there is difference of measurement of site offered as security.

 

1. The documents produced by the complainant shows that the complainant has acquired the property from one Madaiah to whom the same was allotted by the Kollegala Town Panchayath. This shows that the vendor had a valid and marketable  title and he has sold the said property to the complainant. Considering  this, the stand of the O.P. that the complainant does not have a valid and marketable title  cannot be accepted.

 

1. The next ground  on which the loan has not been sanctioned is that the relevant documents pertaining  to alienation of agriculture property for industrial purpose has not been submitted.

 

1. The complainant has purchased the site and not agriculture property and considering this  the reason to reject the loan application cannot be acepted. The stand taken in the version is that the alienation order for industrial purpose is not in record. As stated earlier the project is coming up on the site purchased   by the complainant  and not an agriculture property.

 

1. The other ground   in the version is that Madaiah has acquired the property through Government grant and sold sale deed shows as his ancestral property. This cannot be considered for rejection of the loan application  for the reason that though the vendor has mentioned in the sale deed as stated in the version, as  the facts discharges that the vendor of the complainant has sold the site which has been granted  by Kollegala Town Panchayath and this shows that he had an absolute  right and title over the property  before he sold the same to the complainant.

 

1. It has been laid down in 2004 CPJ 85, PUNJAB NATIONAL BANK V/S SATYA PRAKASH that when the required formalities have been done by the complainant  and security has been furnished for reimbursement and  it is the bank’s duty to sanction and disburse the loan.

 

1. It has also been cited in the said decision PMRY scheme does not provide for accepting the security before releasing the loan. However in the said decision it has been further stated by following the decisions of  the National Commission decision  PARAMANANDA TRIPATI V/S CANARA BANK and  others the that bank’s duty to look to the eligibility and credit worthness  of the borrower before releasing of loan. In the present case the complainant has offered security  the site which he had acquired and it has a marketable title.

 

1. As per the above decision the only thing is that the bank has to see past performance and validity of the project being carried out by the creditor before sanctioning of loan. The bank has not rejected the loan application on this ground  which would show that the project is viable  and apart from this the complainant has offered  security as sought.

 

1. Considering the above, it can be said that there is deficiency of service  by the bank in not sanctioning  and disbursement of the same under PMEGY scheme  which has made for encouraging the unemployed youth to earn their livelihood by self-employment.

 

1. In view of the above following

 

ORDER

The complaint is allowed.

1. The bank is directed sanction and disburse the loan by principle laid down in  2004 CPJ 85 between Punjab National Bank V/s Satyaprakash.
2. The complainant is entitled to  cost of Rs.1,000/- from the  O.P.