Kerala

Idukki

CC/162/2020

Sojan P S - Complainant(s)

Versus

HDFC Bank - Opp.Party(s)

Adv: K B Selvam

11 Apr 2023

ORDER

 

DATE OF FILING : 23/11/2020

IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, IDUKKI

Dated this the 11^th day of April 2023

Present :

              SRI.C.SURESHKUMAR                                               PRESIDENT

              SMT.ASAMOL P.                                                          MEMBER

              SRI.AMPADY K.S.                                                        MEMBER

CC NO.162/2020

Between

Complainant                                :  Sojan P.S.,

                                                        Panamkunnel House, Prakash P.O.,

                                                        Madapra Kara, Upputhodu Village,

                                                        Idukki Taluk, Idukki District – 685 609.

                                                         (By Adv.K.B.Selvam)                                                           And

Opposite Party :                       :  1 .  HDFC Bank Ltd.,

                                                          Retail Loan Service Centre First Floor,

                                                          Vettoor Building, Shastri Road,

                                                          Kottayam – 686 001.,

                                                          Kottayam Village, Kottayam Taluk.

                                                           (By Adv.Saraswathi P.) 

                                                    2 . The Branch Manager,

                                                          Union Bank of India, Thankamani P.O.,

                                                          Thankamani Village, Idukki Taluk,

                                                          Idukki District – Pin – 685 609.     

                                                           (By Adv.Sijimon K Augustine)

O R D E R

SRI.AMPADY K.S., MEMBER

 

Complainant filed this complaint raising the following allegations against opposite parties.

 

1 . Complainant had bought a car and it was financed by 1^st opposite party. Complainant  remitted  the  entire  amount  to  the  1^st  opposite party.

(Cont....2)

-2-

Thereafter the 1^st opposite party sent Loan Closure Letter and the No Objection Certificate on 27/07/2019.  After completion of the loan amount, the complainant transferred ownership of the car to another person.

2 . The complainant is the President of a farmers group named  Haritha J.L.G in Kamakshi Grama Panchayath Ward VII, formed on 02/05/2019 and  registered (Reg.No-TKMNY/06/FARM.J.L.G/2020).  M/s Haritha J.L.G. group jointly applied for a loan aggregating to Rs.2,00,000/- before the 2^nd opposite party for agriculture promotion.  After the verification of application submitted by the Haritha J.L.G,, the 2^nd opposite party rejected the application for the reason that Mr.Sojan P.S., (President of M/s Haritha J.L.G.) availed an auto loan (Personal) of Rs. 4,38,950/- in SETTLED status showing written off amount Rs.2,77,391/-.  However, the bank cannot consider extending finance to Mr.Sojan P.S.    Moreover the group consists of 3 members only excluding the President Mr.Sojan P.S.  This does not satisfy the required group size to form a JLG which is as per the rating norms for financing JLG, mentioned in ICNo.12631 dated 02/12/2014 and District Credit Plan.

3 . Auto loan agreement between the complainant and 1^st opposite party is terminated on 27/07/2019.  But the 1^st opposite party did not remove the complainant’s name from the CIBIL rating.  It is a serious deficiency in service. It to be compensated.  The 2^nd opposite party has rejected the application because of the Low CIBIL Rating of Mr.Sojan P.S.  Due to this, the loan amount of the other three persons was not sanctioned by the 2^nd opposite party.

4 . Actions of the opposite parties are to suffer the complainant and it caused severe mental pain and to defame complainant and the significant matter is that complainant has paid the entire amount to the 1^st opposite  party and  received  NOC.   The  actions  of  the  1^st  opposite  party  is  a  serious

(Cont....3)

-3-

deficiency in service, and it curtailed the customer right of the complainant.  Hence complainant had no other way  than  approach this Hon’ble Court.

Complainant prayed for the following reliefs.

1 . 1^st opposite party may be directed to grant  No Objection Certificate and remove Complainant’s name from CIBIL as a defaulter.

2 . 2^nd opposite party may be directed to disburse the Loan Amount aggregating Rs.2,00,000/- to M/s Haritha JLG.

3 . Rs.20,000/- may be allowed as cost of the complaint and Rs.2,00,000/- as compensation from 1^st opposite party.

4 . Any other reliefs that is fit to the ends of justice on the cause of the petition.

Both opposite parties filed separate  written version.

Contentions of 1^st opposite party are as under:-

1 . The complaint lacks bonafides and is liable to be dismissed at the threshold.  The complaint is not maintainable against the opposite party.  The complainant has approached this Hon’ble Forum by suppressing material facts and by averring misleading false statements.  The complainant has approached this Hon’ble Forum with unclean hands and for unfair enrichment.

2 . The complainant has not disclosed any details of  the car loan account availed from the 1^st opposite party as alleged.  The complainant had intentionally not disclosed the loan account number.  Hence, the opposite party bank is unable to verify car loan details, if any availed by the complainant and unable to prepare version in the above complaint.

(Cont....4)

-4-

3 . The complainant claimed to have settled the loan account with 1^st opposite party.  The opposite party bank submits that CIBIL is a Credit Bureau licensed by RBI and regulated by Credit Information Companies Regulation Act, 2005 and guidelines issued by RBI.  This opposite party  had reported settlement of loan account to CIBL authority for settled account as per the Credit Information Companies Regulation Act, 2005 and guidelines issued by RBI.  In case of settlement of loan account, the bank would issue settlement letter wherein customer would agree that the settlement of loan account would affect CIBIL score which inturn affect the borrowing capacity of the complainant.  This is specifically mentioned in the settlement letter issued to the customer.

4 . This opposite party has absolutely no role in accepting or rejecting the loan facility sought from the 2^nd opposite party.  The entire allegations raised in the complaint are absolutely incorrect and hence denied.

5 . This opposite party has not committed any deficiency of service or unfair trade practice.  There is no cause of action in preferring the above complaint and the cause of action shown against this opposite party are false, frivolous and vexations and hence denied.  The complainant is not entitled  for compensation or any amount from the opposite party.  The complainant is not entitled for any reliefs from this opposite party.  The directions sought against the opposite parties are liable to be rejected by this Hon’ble Commission.

6 . It is reiterated that the complainant had not disclosed any details of the car loan account.  Hence, it is humbly submitted that this Hon’ble Commission  may permit the opposite party to file detail version/ counter upon production of loan details by the complainant.  So, 1^st opposite party prayed for dismissal of complaint with costs.

(Cont....5)

-5-

Contentions of 2^nd opposite party are as stated below.

1 . The complaint is not maintainable either in law or on facts.  The present complaint is only an experimental one devoid of any merits or bonafides.  The complainant has no cause of action against this opposite party.  The complainant has no consumer relationship with this opposite party.  The complaint itself is bad for non-jointer of necessary parties.

2 . All the averments in para 1 of the complaint is strictly to be proved by the  complainant himself.  All the averments and allegations in para 2 to 3 of the complaint is denied being false.  It is true and admitted that on record, complainant is the president of M/s Haritha Joint Liability Group having four members.  It is admitted that this opposite party received a loan proposal for an amount of Rs.2 Lakhs submitted jointly by the complainant and three members of said Haritha JLG.  On receipt of said application, the 2^nd opposite party, sent said proposal to USK Katappana, competent authority, for processing.  After due verification of documents submitted by Haritha JLG, their application was rejected by the competent authority stating that in the CIBIL report of said JLG, President, Mr.Sojan P.S., ie, the complainant, shown “presence of severe delinquency” in relation to an auto loan availed by the complainant.  As per the RBI Circular, loan availed by an SHG, may not  be utilized for financing to a defaulter member of the bank.  Hence this opposite party bank is not in a position to consider, extending finance to Mr.Sojan P.S., ie, the complainant.  Required minimum group size to form a JLG is 4 members, as per the rating norms for financing JLG, mentioned in IC No.12631 dated 02/12/2014 of District Credit Plan.  After excluding the complainant herein, who having adverse entries in CIBIL Report, the group consists of 3 members only which does not satisfy the required group size.  Hence the loan proposal of Haritha JLG was rejected by the competent authority and that was properly intimated by this opposite party.  Financial

(Cont....6)

-6-

institutions usually try to mitigate the risk of lending to borrowers by making a credit analysis on individuals and institutions applying for new credit facilities or loan.  Financial Institutions in India rely on credit scores given by Credit Information Companies formed under the Credit Information Companies (Regulation) Act. 2005.  A credit score in effect represents the credit worthiness of an individual.  Credit scores are used by credit institutions like banks and other financial entities to evaluate the potential risk passed by lending money to consumers and to mitigate loans due to bad debt.  By the very nature of Credit Score, it has positive or negative impact on the financial credibility of an individual.  Due to the presence of severe delinquency in CIBIL score of the complainant, this opposite party bank, as per the guidelines, not in a position to consider him and due to the absence of minimum required members for JLG, loan proposal of the Haritha JLG was happened to be rejected.  There is no deficiency from the part of this opposite party and this opposite party did all as per the guidelines and circulars of RBI.

3 . The complainant has not sustained any damages or mental agony due to the acts of this opposite party and the loan of the JLG was happened to be rejected only due to the adverse entry in the CIBIL score of the complainant. This opposite party has considerable discretion in the matter of sanctioning of loans and grant cash credit facilities and the final decision whether or not to lend or advance any funds to any party rests with the bank concerned.  Moreover,  denial of credit facility does not amount to deficiency in service.  The Hon’ble National Commission clearly stated that, “Non grant of financial accommodation or non grant of loan by a bank does not amount to deficiency in service.”  (M/s Nataraj Borewell Services Vs Assistant General Manager, Indian Bank).    The complainant has no consumer relationship  with  this  opposite  party.  The  above  numbered  complaint is

(Cont....7)

-7-

malafide one without any factual footing.  The complainant is not entitled for any damage from this opposite party.  Complainant is not entitled for any of the reliefs claimed in the complaint against this opposite party.   

Hence 2^nd opposite party prayed for dismissal of complaint with compensatory cost.

Complainant filed proof affidavit and produced following documents which were marked as Ext.P1 to Ext.P4 as follows.

Ext.P1series(2 in Nos.) – Loan closure letter and no objection certificate issued by 1^st opposite party to complainant.

Ext.P2 – Copy of receipt No.143601920701 dated 26/07/2019 in respect of payment of Rs.2 Lakhs by complainant.

Ext.P3 series (11 in Nos.) –Copy of application form and other documents in respect of loan application of M/s Harita JLG, Kamakshi, filed before 2^nd opposite party.

Ext.P4 – Loan application rejection letter dated 13/10/2020 issued by 2^nd opposite party to M/s Haritha JLG, Thankamany.

Complainant was not present for cross examination on 08/03/2023 in spite of specific directions from this Commission.  Certain adjournments were sought on medical ground which were allowed earlier.  Directions for appearance on 08/03/2023  were given under these circumstances.  No application or representation was made for the complainant.  Opposite party’s counsel submitted that opposite parties has no oral evidence.  Hence evidence of  complainant and opposite parties was closed.  Heard the opposite parties.

As the complainant was not present for cross examination, this complaint is disposed off with the materials available on record.

(Cont....8)

-8-

On a perusal of the pleadings of both sides and the documentary evidence adduced by complainant, following points arise for consideration.

1 . Whether there is any deficiency in service  on the part of opposite parties alleged by the complainant?

2 . If so, for what reliefs complainant is entitled to?

3 . Order to be passed?

Point Nos.1 and 2 are considered together

It is an admitted fact that complainant had availed a personal auto loan which was settled between him and 1^st opposite party.  1^st opposite party have issued loan closure letter as well as NOC which were available in Ext.P1series documents.  As per the loan closure letter, it is clear that a settlement was agreed between 1^st opposite party and complainant and the loan was closed.  Accordingly NOC was issued by 1^st opposite party for removing the hypothecation of the vehicle to the insurance company and to RTO.  The main allegation of the complainant  is with regard to rejection of loan of Rs.2 Lakhs by 2^nd opposite party due to the low CIBIL score which was the result of improper handling of closure of his earlier loan with 1^st opposite party.  If any default is made in timely repayment of loan amounts, the CIBIL  score would be reduced.  The credibility of borrower is ascertained from the CIBIL score.  Auto loan seems to be terminated under a settlement arrived between 1^st opposite party and complainant.  He has not proved that he was punctual in remitting the loan instalments.  No payment details were produced by him.  So 1^st opposite party cannot be blamed in this matter.  Allegation against 2^nd opposite party  are found to be not correct.  There is no consumer service provider relationship between complainant and 2^nd opposite party.  No service is availed from 2^nd  opposite party on payment of any consideration.

(Cont....9)

-9-

Here, application was only submitted before them which after processing the loan application, they have refused to grant loan to M/s Haritha J.L.G. on sufficient grounds.  Public money is utilized by banks for various loans issued by them.  It is the duty of the bank to ensure prompt payment of the loan.  As the complainant being the president of M/s Haritha JLG who was not prompt in paying his auto loan and also based on the ground that there are only 3 members remaining in the group which was not sufficient for granting the loan application was rejected by 2^nd opposite party.  Hence action of the 2^nd opposite party cannot be considered as any deficiency in service.  As complainant has miserably failed to prove his allegation with cogent evidence, we are of the considered view that there is no deficiency in service on the part of opposite parties and therefore complainant is not entitled to any of the reliefs as prayed for in the complaint.  Hence Point Nos.1 and 2 are answered as above.

Point No.3

In the light of our findings on point Nos.1 and 2, we have no hesitation to hold that complaint is not maintainable in the eye of law.  Hence the complaint is liable to be dismissed.   Point No.3 is answered accordingly.

In the result complaint is dismissed without costs.

Complainant shall take back extra copies filed without delay.

Pronounced by this Commission on this the 11^th  day of April 2023.

                                                                                                Sd/-

                                                                            SRI.AMPADY K.S., MEMBER

                                                                                             Sd/-                                                                   

                                                                 SRI.C.SURESHKUMAR, PRESIDENT  

                                                                                            Sd/-

                                                                        SMT.ASAMOL P., MEMBER

(Cont....10)

-10-

 

APPENDIX

Depositions :

On the side of the Complainant :

PW1- Sojan

On the side of the Opposite Party :

Nil

Exhibits :

On the side of the Complainant :

Ext.P1series(2 in Nos.) – Loan closure letter and no objection certificate  

               issued by 1^st opposite party to complainant.

Ext.P2 – Copy of receipt No.143601920701 dated 26/07/2019 in respect of

               payment of Rs.2 Lakhs by complainant.

Ext.P3 series (11 in Nos.) –Copy of application form and other documents in

               respect of loan application of M/s Harita JLG, Kamakshi, filed

               before 2^nd opposite party.

Ext.P4 – Loan application rejection letter dated 13/10/2020 issued by 2^nd

              opposite party to M/s Haritha JLG, Thankamany.

On the side of the Opposite Party :

 

Nil

 

                                                                                               Forwarded by Order  

 

 

                                                                                          ASSISTANT REGISTRAR