Delhi

North East

CC/312/2012

Shri Jaswant Roy - Complainant(s)

Versus

HDFC Ltd. - Opp.Party(s)

10 Jan 2020

ORDER

 DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: NORTH-EAST

GOVT. OF NCT OF DELHI

D.C. OFFICE COMPLEX, BUNKAR VIHAR, NAND NAGRI, DELHI-93

 

Complaint Case No.  312/12

 

In the matter of:

	Shri Jaswant Roy S/o Shri Karan Singh R/o 101/7 Village-Tahirpur, Delhi-110095	Complainant
	Versus
1           2	HDFC Ltd. The Capital Court Outer Ring Road Olof Palme Marg, Munirka New Delhi-110067   HDFC Bank Ltd. Delhi Office: 2nd Floor Express Building, Bahadur Shah Zafar Marg New Delhi-110002	Opposite Party        Deleted

 

DATE OF INSTITUTION:       JUDGMENT RESERVED ON:               DATE OF DECISION      :

17.08.2012 10.01.2020 10.01.2020

N.K. Sharma, President

Ms. Sonica Mehrotra, Member

 

Order passed by Ms. Sonica Mehrotra, Member

 

ORDER

1. Concise facts of the complaint sufficient for deciding the case on merit are briefly recapitulated as the complainant being a practicing lawyer and his wife, a public prosecutor both applied for Home Loan of Rs. 30 Lacs from OP vide application no. 605066890 through one of its Loan Department Head and Executive who visited complainant’s resident and explained the formalities for procuring home loan and requisite documents need for the same and assured sanction of the loan on seeing income proofs of complainant and his wife and told them that 55% of their salary multiplied by Rs. 1 Lac could be granted as loan amount or 90% of value of property. On assurance and being convinced by OP, the complainant handed over loan processing fee cheque of Rs. 11,236/- vide cheque no. 084784 drawn on SBI bank Savings Bank Account no. 31847144869 to the Executive of OP who assured the complainant that the entire processing fee amount would be refunded in case the loan not granted / processed. The complainant being assured of grant of home loan, made a substantial payment to the builder with which he had booked the premises but in the middle of the process and after the processing fee cheque was encashed by OP, Head of Loan Department of OP informed the complainant that verification of residence of complainant has come negative for which other residence proofs were required and subsequently the loan disbursement was declined by OP on the pretext of requirement of one document or the other. The complainant made correspondence with OP in early June 2012 via emails expressing his displeasure for non grant of loan despite assurance but non responsiveness was shown by OP in this regard. Lastly, the complainant issued a legal notice dated 10.07.2012 to OP demanding refund of the processing fees amount alongwith compensation. However, OP did not respond to the legal notice. Therefore feeling aggrieved at the false assurance of OP to process home loan which was later declined despite realization of processing fees of the same causing mental agony, financial loss and harassment to the complainant, the complainant, alleging deficiency of service and negligence on the part of OP, filed the present complaint praying for issuance of direction against OP to refund the processing fee of Rs. 11,236/- alongwith compensation of Rs. 4 Lacs on account of loss @ 18% interest p.a. from the date of filing of complaint till realization.
2. Complainant has attached copy of emails dated 05.06.2012 and 08.06.2012 to OP, copy of legal notice dated 10.07.2012 and original passbook issued by SBI highlighting the check debit Rs 11,236/- on 24.05.2012.
3. Notice was issued to the OP on 04.09.2012. The complainant filed the original DD no. 2259905 dated 22.06.2012 issued by Housing Development Finance Corporation Ltd. (HDFC Ltd.) drawn on HDFC bank Ltd. in favour of complainant’s wife for a sum of Rs. 9,736/- as refund of processing fee. OP entered appearance on 04.10.2012 and was handed over complete set of paper book to file written statement. However, OP on the next date of hearing i.e. 01.11.2012 filed an application under Order 1 Rule 10 CPC for impleading HDFC Ltd., as a necessary party and deletion of OP from the array of parties on grounds that the loan dispute pertains to HDFC Ltd. not OP since housing loan issuance and / or rejection is sole discretion of HDFC Ltd. with which the complainant had correspondence and documentation and is evident and fortified from refund cheque of Rs. 9,736/- dated 22.06.2012 also issued by HDFC Ltd., but not made a party by the complainant in the  present complaint whose presence is necessary for just adjudication of the case as OP and HDFC Ltd. are two separate legal entities and cannot be sued for each other’s acts. Therefore, OP prayed for impleadment of HDFC Ltd. and deletion of its name. The complainant filed reply to the said application opposing the same on grounds that OP was a necessary party being a part of HDFC Ltd. and is no separate entity from HDFC Ltd. as home loans are also sourced through it.  However, the complainant too filed an application for impleadment of HDFC Ltd. as being a necessary party and both application were allowed vide order dated 26.04.2013 to the extent of impleading HDFC Ltd. as OP2 and deletion of OP1 to be decided at the final disposal of complaint. The said application was partly allowed by this Forum. OP1 filed its written statement in which it took the preliminary objection that the dispute in the complaint pertains to a housing loan which was to be sanctioned by HDFC Ltd. wherein OP had no role to play, and therefore the complaint was bad for mis-joinder and non-joinder of necessary party since the complaint has not been filed against HDFC Ltd. and only against OP whereas the housing loan facility was to be provided by HDFC Ltd. which alone is liable for redressal of complainant grievance, if any. OP resisted the complaint on grounds that the complainant was not a consumer u/s 2(1)(d) of CPA qua OP as he has not availed of any service from the OP bank. OP urged that it is not liable for any action of HDFC Ltd. in terms of Section 230 of contract Act and that it is a banking institution wrongly arraigned as a party to the complaint with ulterior motive and malafide intent. It further resisted the complaint on grounds that no documentary proof has been placed on record for alleging deficiency of service or loss suffered and that there exists no privity of contract between OP and complainant. Lastly, denying any deficiency of service on its part, OP prayed for dismissal of the complaint and reiterated the grounds taken in the application for impleadment of HDFC Ltd. in its defence by submitting inter alia that the process fee paid by complainant to HDFC Ltd. was duly returned by them for reasons only known and to be explained by HDFC Ltd. for non sanctioning of loan.
4. On amended memo and amended complaint filed by complainant, notice was issued to the OP2 on 10.05.2013. OP2 entered appearance on 02.09.2013 and was handed over complete paper book. OP1 was proceeded against ex-parte vide order dated 09.09.2013 and its application under Order 9 Rule 7 was dismissed by this Forum vide order dated 29.11.2013 as non maintainable in view of Forum having no jurisdiction of review of its own orders.
5. Written statement was filed by OP2 in which while admitting being engaged in the business of giving financial assistance in the form of loan scheme, one of them being individual home loan, it took the preliminary objection that complainant had not provided complete documents of property despite various reminders and failed to furnish the sanction plan of the proposed property to be purchased  by him in absence of which the home loan could not be disbursed and sanctioned since the valuer of OP2 gave a negation valuation report in absence of sanction plan. On merits, OP2 controverted the complaint on grounds that it has already refunded the processing fee amount of Rs. 9,736/- vide cheque no. 151402 drawn on OP1 to the complainant through courier on 17.09.2012 and the same was acknowledged by complainant on 18.09.2012 but has not been encashed by him. OP2 stated that the sanction of loan is dependent on several considerations viz income, credit history, civil records, age factor and legal and technical appraisal of property against which loan is to be availed. OP2, while acknowledging receipt of loan application form and process fee cheque from the complainant, submitted that his loan application could not be processed for want of legible copy of sanction plan of property despite several follow ups for which reasons no loan could not be disbursed / sanctioned and therefore after deducting an amount of Rs. 1,500/- from processing fee of Rs. 11,236/-, a sum of Rs. 9,736/- was refunded back to the complainant on 17.09.2012. OP2 urged that the process of loan sanction is spread across credit appraisal department, legal department and technical department for approval and the technical report of the property came as negative as approved site plan was not available which was conveyed to the complainant’s wife. Lastly, OP2 submitted that despite process fee  being non refundable it still released the amount in favour of the complainant as a special case but the cheque via courier was returned twice undelivered due to non availability of complainant. In light of defence thus taken prayed for dismissal of the complaint.
6. Rejoinders to the written statement of OPs were filed by the complainant in rebuttal to their respective defence and complainant controverted their stands by submitting that he had provided all documents of the property including sanction plan after which OP2 never asked for any further document or contacted the complainant to provide site plan. Complainant submitted that the amount refunded by OP2 was not the entire amount and was given almost on the expiry of the validity of the instrument. Complainant urged that the processing fee was encahsed by OP2 even though the loan was not sanctioned despite assurance by executive of OPs that the loan shall be sanctioned failing with the entire processing fee would be refunded. Complainant submitted that the loan has been disbursed on the said property by some other bank as the property was /is free from all encumbrances. Lastly, complainant alleged that OPs have adopted malpractice of not refunded processing fee and giving false assurance to customer for which they should be penalized and prayed for relief so claim. Complainant filed evidence by way of affidavit exhibiting the documents relied upon as Ex. CW 1/A to CW 1/J and reiterated his grievance made out in the complaint.
7. OP1 filed evidence despite having been proceeded against ex-parte and is therefore not being dealt with / considered the same being struck off record. This Forum in hearing held on 24.11.2017 took strong exception to the conduct of OP1 for filing evidence despite having been proceeded against ex-parte and dismissal of its setting aside application as a flagrant breach of provision of law and imposed a cost of Rs. 2,000/- to be deposited with Consumer Legal Aid.
8. Evidence by way of affidavit was filed by OP2 exhibiting the documents relied upon viz authority letter, negative valuation report prepared by Tanuj Kumar and Associates, Valuers as received from its Technical Department alongwith photographs of site, copy of cheque with dispatch no. 43941392876 dated 17.09.2012 file remarks and copy of email correspondence dated 04.06.2012 and 05.06.2012 regarding request for clear copy of compounding plan from Sales Manager of home loan of OP2. The said documents were exhibited as Ex.RW – 2/A to Ex.RW-2/D.
9. Written arguments were filed by all parties to reemphasis their respective grievance / defence. On directions issued by this Forum in hearing held on 01.03.2019 to OP2 to place on record justification by affidavit for deduction of Rs. 1,500/- from the processing fee under which head / guidelines, OP2 could not place on record any cogent explanation or documents to justify the said deduction and merely filed an affidavit of its senior manager on 30.08.2019 stating that the deduction of Rs. 1,500/- was towards processing charges as miscellaneous amount having been spent by OP.
10. We have heard the rival contentions of all parties and have given our anxious consideration to the documentary documents placed before us. The matter now falls for adjudication. It is  not in dispute that the complainant had paid a sum of Rs. 11,236/- to the OP as processing fee for sanction of home loan in May 2012 but the home loan could not be sanctioned and a sum of Rs. 9,736/- was refunded by OP2 to the complainant  after deducting miscellaneous charges from the originally paid amount by the complainant in June 2012 but was dispatched in September 2012 as can be compared from the covering letter with the refund cheque and the AWB issued by Blue Dart through which it was couriered. The dispute pertains to non disbursal of home loan by OP2, (OP1 being alleged as part of OP2) for wrongful reason of non-submission of sanction plan alleged by OP2 but which non-sanction caused financial loss and harassment to the complainant and even the process fee was wrongfully deducted without any cogent explanation. To the first grievance of the complainant regarding non-disbursal of home loan by OP2, it is settled proposition of law that non-disbursement of loan for sufficient reason is not deficiency of service held by Hon'ble Supreme Court in Vishwalakshmi Sasidharan Vs Branch Manager, Syndicate Bank (1997) 10 SCC 173. The Hon'ble National Commission in Velappan Nair, Manager, Kerala State Co-operative Bank Vs K.P. Suran 2003 (3) CPR 44 (NC) held that complainant has no vested right of being granted loan applied for and therefore no deficiency of service can be alleged against the bank since it is for the financial institution to decide whether or not to even sanction the loan. Further, Hon'ble National Commission in Lakshmi Fabricators Vs Union of India (1994) 1 CPJ 101 (NC) held that it is entirely within the discretion of the bank to decide whether a particular project deserves financial assistance or not keeping in view several factors. The Hon'ble National Commission in Asha Sharma Vs Union of India (1992) 1 CPJ 244 (NC) held that there is no deficiency of service where the bank did not provide loan to a customer because it is for the bank to satisfy itself whether the applicant for Bank’s financial assistance was credit worthy and the project to be financed was technically feasible and economically viable. The Hon'ble National Commission in Corporation Bank Vs Somenath Gupta 1999 (III) CPJ 44 (NC) held that whether the loan is to be given or not is a decision to be taken by the bank.  Therefore in light of the settled proposition of law exhaustively dealt in the aforestated legal discourse / citations, this issue is decided in favour of OP2 and we are in agreement with the stand taken by OP2 that the sanctioning of loan is the discretion of the bank and when the bank does not find the case fit for sanctioning the loan it is entitled to refuse the same. However, the wrongful deduction of Rs. 1,500/- by OP2 towards ostensible miscellaneous charges not specified / explained from the processing fee amount of Rs. 11,236/- is completely unjustified and remains uncorroborated. We therefore hold OP2 guilty of deficiency of service only to the extent of having wrongfully deducted Rs. 1,500/- and refunding Rs. 9,736/- to the complainant in June 2012 but not having dispatched it immediately but after almost three months nearing the expiry date of the instrument / DD. We therefore direct OP2 to refund Rs. 1,500/- alongwith interest @ 6% p.a. from the June 2012 till January 2019 to the complainant. We further direct the OP2 to pay a sum of Rs. 10,000/- to the complainant as compensation for harassment for engaging in more than seven year long litigation inclusive of litigation charges. No order / direction is passed against OP1 as OP2 is the parent company of OP1 and there may such likes under its umbrella and it is OP2 which provides financial services viz housing finance, loan against property, non residential premises loan and property services and is directly engage with home loans and we are in agreement with the defence taken by OP1 in this regard in as much as the processing fee cheque was also received in consideration for sanction of home loan by OP2 and refunded by OP2 as well, both OPs being separate entities and discretion of housing loan lying solely with OP2. We therefore allow the application of OP1 for deleting it from the array of parties which issue was to be decided as per order of this Forum dated 26.04.2013 at the final disposal of the complaint which has thus reached with passing of this order. Let the order be complied by OP i.e. HDFC Ltd. (HDFC Bank Ltd. being deleted) within 30 days of receiving of copy of this order.
11.  Let a copy of this order be sent to each party free of cost as per regulation 21 of the Consumer Protection Regulations, 2005.
12.   File be consigned to record room.
13.   Announced on  10.01.2020

 

(N.K. Sharma)     President

(Sonica Mehrotra)  Member