IN THE DISTRICT CONSUMERS’ DISPUTES REDRESSAL FORUM AT MYSORE<br /> <br /> PRESENT: 1. Shri.D.Krishnappa<br /> B.A., L.L.B - President <br /> <br /> <br /> 2. Smt.Y.V.Uma Shenoi<br /> M.Sc., B.Ed., - Member<br /> <br /> CC 252/07 DATED 20-11-2007<br /> <br /> ORDER<br /> <br /> Complainant <br /> (By Sri.T.H.Shankaranarayana., Advocate)<br /> Vs. <br /> Opposite Parties 1 <br /> (By Sri.O.S.B., Advocate)<br /> <br /> Nature of complaint : Deficiency in service<br /> Date of filing of complaint : 05.07.2007<br /> Date of appearance of O.P. : 02.08.2007<br /> Date of order : 24.09.2007<br /> Duration of Proceeding : 1 MONTH 22 DAYS<br /> <br /> <br /> PRESIDENT <br /> <br /> MEMBER<br /> <br /> <br /> Sri.D.Krishnappa,<br /> President<br /> <br /> 1. The Complainant has come up with this Complaint against the Opposite party under section 12 of the Consumer Protection Act, 1986 with his grievance that he had his transaction with Karnataka Bank Ltd., availed loan of Rs.75,00,000/- as the same was insufficient, he approached the Opposite party Bank with a request for loan facility up to Rs.1 crore inclusive of the existing loan with Karnataka Bank, the Opposite party collected Rs.57,182/- on 03.02.2007 through a cheque towards stamp duty for the loan of Rs.1 crore out of which Rs.50,000/- towards the stamp duty and Rs.7,182/- towards incidental charges and processing charges. After giving an application for sanction of loan he approached the Opposite party several times but it did not respond, he got issued a legal notice on 23.07.2007, after lapse of more than a month, after receipt of the notice the Opposite party got issued reply through his advocate contending that due to certain internal policies, it could not sanction the loan and the amount paid Rs.57,182/- has been appropriated towards the processing fee. That he also got issued a second and third legal notice on 30.08.2007 and on 29.08.2007, the Opposite party sent reply that his application for loan has been rejected. Therefore, contending that he has been put to lot of inconvenience and hardship has prayed for a direction to the Opposite party to refund Rs.57,182/- with interest at 21%, and to award compensation of Rs.10,00,000/- with other ancillary relief.<br /> 2. The Opposite party has filed version admitting the receipt of an application filed by the Complainant for taking over the loan he had obtained from Karnataka Bank but denied to had promised sanctioning of loan with lower rate of interest as stated by the Complainant. It has further contended that the application given for sanctioning of loan needs to be processed with several processes including the viability of loan repayment, technical report and other opinion it is for that purpose Rs.57,182/- was collected from the Complainant and that amount has been appropriated towards the processing charges denying all other allegations has contended that due to internal policies loan could not be sanctioned and thus has prayed for dismissal of the Complaint.<br /> 3. In the course of enquiry into the Complaint allegations, the Complainant and one Anand.D for the Opposite party have filed their affidavit evidence. The Opposite party has filed copy of the loan application and terms of the loan. Heard the counsel for both the parties and perused the records.<br /> 4. On the above contentions, following points for determination arise.<br /> 1. Whether the Complainant proves that the Opposite party has caused deficiency in its service by either not sanctioning the loan, or in rejecting his application and also by withholding the amount it had received?<br /> 2. To what relief the Complaint is entitled too?<br /> 5. Our findings are as under:-<br /> Point no.1 : In the Affirmative.<br /> Point no.2 : See the final order.<br /> <br /> REASONS<br /> <br /> 6. Point no. 1:- The Complainant in his Complaint and affidavit evidence though has contended that an agent of the Opposite party Bank had approached him for getting a loan sanction from the Opposite party, but that has been denied by the Opposite party. However, the fact that the Complainant approached the Opposite party Bank applied for sanction of one crore loan also by taking over the loan sanctioned by the Karnataka Bank to the Complainant and payment of Rs.57,182/- by the Complainant to the Opposite party are not in dispute. On the other hand, the Opposite party has admitted. It is the claim of the Complainant that after filing an application for sanction of loan to the Opposite party he paid a sum of Rs.57,182/- to the Opposite party on 03.02.2007 and till he received a reply on 29.08.2007 from the counsel for the Opposite party he was kept in dark without even informing him as to the sanction of loan or rejection of his application has remained unrebutted by the Opposite party.<br /> 7. The Complainant besides attributing in action to the Opposite party in processing application for loan after receipt of Rs.57,182/- further contended that despite his contacting the Opposite party and issue of legal notice dated 23.07.2007 and 30.08.2007, the Opposite party did not respond to his requests has been supported by the copies of the legal notice referred to above under which the Complainant through his advocate appraised the Opposite party in it not taking any action of his application for sanction of loan and requested the Opposite party to sanction the loan. But, the Opposite party who after receipt of the above notices exhibited its silence, but only through reply dated 29.08.2007 for the first time came with a contention that due to internal policies they could not sanction the loan and rejected the proposal of the Complainant by further adding that amount of Rs.57,182/- has been appropriated towards processing and incidental expenses. As could be seen from the affidavit evidence of both the parties, exchange of legal notices and reply given by the Opposite party, the Opposite party who received the loan application of the Complainant somewhere in February 2007 also received a sum of Rs.57,182/-, but thereafter did not do anything in the matter, but kept quiet. The Opposite party who received the legal notice dated 23.07.2007 and 24.07.2007 kept quiet without even responding to the Complainant or replying to his notice. Thereafter, the Complainant rushed another notice on 30.08.2007, but the Opposite party for the first time on 29.08.2007 after 7 months after the receipt of the application and the cash of Rs.57,182/- came out with a plea that due to internal policies it could not fulfill the request of the Complainant. What the internal policies of the Opposite party is not made clear. The Opposite party has not come open to say whether the Complainant was not eligible for loan or taking over his previous loan from the Karnataka Bank for want of proper security or any other legal requirements, nothing is spelled out by the Opposite party. Even if the application of the Complainant for sanction of loan and taking over of loan was lacking with any requirements of any type including adequate security or legal requirement, the Opposite party could have informed the Complainant to meet its requirements by affording him an opportunity to meet its requirements. The Opposite party never raised its little finger pointing to any short comings or inadequacies of the Complainant in meeting its requirements for sanction of loan. The Opposite party as could be seen from the case papers has not come up with any non-cooperation or short comings of the Complainant which prompted it to refuse the sanction of loan. Therefore in the absence of any short comings on the part of the Complainant, the Opposite party could have come open as to what is the reason or internal policies under which they kept silent and came open to tell the rejection of the application after lapse of about 7 months that too by recting to a legal notice. No doubt, on mere filing an application by a customer to sanction of loan a public undertaking bank or any bank or financial institute for that matter is not bound to sanction of loan, but once it entertains an application for sanction of loan receives the processing charges or any other legal charges should process the application for sanction of loan if it is satisfied, if not satisfied inform the applicant to meet its requirements, it is thereafter it can take a decision either sanctioning of loan or rejection of the application, but by offering reasons to do so. In the instant case as could be seen that the Opposite party as already stated by us above accept stating due to internal policies it could not fulfill the request of the Complainant has not assigned any reasons for having kept quiet on the application of the Complainant for all these months. Which in our view is nothing short of a grave deficiency.<br /> <br /> 8. Coming to the claim of the Opposite party regarding appropriation of Rs.57,182/- paid by the Complainant towards incidental and legal charges are concerned, we are not finding any such conditions of payment of such large sum of money as processing charges. The Opposite party has produced a copy of the sanction letter in which there is a coloumn indicating processing fee (non-refundable). In this coloumn it is stated that a sum of Rs.57,182/- is towards administrative fee and Rs.6,237/- towards tax and education cess and that amount of Rs.57,182/- collected – to be collected at the time of disbursement. Therefore, the provision in the sanction letter reads that amount could be collected at the time of disbursement of the loan sanctioned. As pointed out by us above, the application given by the Complainant which is supplied by the Opposite party itself do not indicate the payment of Rs.57,182/- towards processing charges or other charges for which the Complainant had agreed so as to bar the Complainant from claiming that amount. Therefore, the Opposite party itself cannot after receiving certain amount from the customers without even showing towards what it has spent and how much it has spent cannot contend to have appropriated it towards processing charges and other charges. The Opposite party being a public undertaking bank which is required to maintain the account of the money meticulously by accounting paise to paise cannot arbitrarily say that it has appropriated Rs.57,182/- towards the processing charges. Even if it had done it should furnish detail accounts to the Complainant if not atleast to this Forum as how it has defrayed that amount. Even during the course of arguments, the counsel for the Opposite party was called upon to furnish details as how the Opposite party has spent that amount, but the Opposite party has failed to furnish those details. It is under these circumstances, we hold that the Opposite party did not even make any attempt to get the loan application of the Complainant processed either technically or legally to satisfy itself and spent that amount, therefore the Opposite party has no right to retain the Complainant’s amount with it has not proved to have rendered any service to the Complainant and legally spent that amount. As such, we answer point no.1 in the affirmative and pass the following order:- <br /> ORDER<br /> <br /> 1. The Complaint is allowed.<br /> 2. The Opposite party is directed to refund a sum of Rs.57,182/- to the Complainant with interest at 18% p.a. from 03.02.2007 till the date of payment.<br /> 3. The Opposite party is also directed to pay compensation of Rs.5,000/- towards mental agony to the Complainant within 60 days from the date of this order, failing which it shall carry interest at 9% p.a. from this day till the date of payment.<br /> 4. The Opposite party is also directed to remit a sum of Rs.5,000/- to the Consumer Legal Aid Account maintained by this Forum within 60 days from the date of this order, failing which it shall carry interest at 9% p.a. till the date of payment.<br /> 5. The Opposite party shall also pay cost of Rs.1,000/- to the Complainant.<br /> 6. Give a copy of this order to each party according to Rules.<br /> <br /> (Dictated to the Stenographer, transcribed by him, transcript revised by us and then pronounced in the open Forum on this the day 22nd November 2007)<br /> <br /> <br /> <br /> <br /> <br /> (D.Krishnappa) <br /> President <br /> (Y.V.Uma Shenoi)<br /> Member<br /> <br />