<br /> COMPLAINT FILED: 25.09.2008<br /> <br /> BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE (URBAN)<br /> <br /> <br /> 04th DECEMBER 2008<br /> <br /> <br /> PRESENT :- SRI. A.M. BENNUR PRESIDENT <br /> SMT. M. YASHODHAMMA MEMBER <br /> SRI.A.MUNIYAPPA MEMBER <br /> <br /> COMPLAINT NO.2098/2008<br /> <br /> <br /> COMPLAINANT Sri.K.K.Radhakrishna,Proprietor,M/s.Yankee Builders,No.1059, 5th ‘A’ Main,3rd Block, 3rd Stage,Basaveshwaranagar,Bangalore – 560 079.Advocate – Sri.D.PrabhakarV/s.<br /> OPPOSITE PARTIES 1. The Managing Director,Karnataka State Financial Corporation,Head Office at No.1/1,Thimmaiah Road,Bangalore – 560 052.2. The Deputy General Manager,Karnataka State Financial Corporation,Jayanagar Branch Office,8th Floor, Jayanagar Shopping Complex,4th Block, Jayanagar,Bangalore – 560 011.Advocate – Sri.T.K.Vedamurthy<br /> <br /> <br /> O R D E R<br /> <br /> <br /> This is a complaint filed U/s. 12 of the Consumer Protection Act of 1986 by the complainant seeking direction to the Opposite Party (herein after called as O.P) to refund a deposit of Rs.37,708/- and pay a compensation of Rs.2,00,000/- and for such other relief’s on an allegations of deficiency in service. <br /> <br /> The brief averments, as could be seen from the contents of the complaint, are as under:<br /> <br /> Complainant being an engineer a licenced PWD Contractor thought of entering into Joint Development of a multistoried flats. In that regard he was in need of some financial assistance, hence he contacted the OP to sanction him a loan of Rs.60,00,000/-. To process the said loan OP demanded him to pay Rs.37,708/- as a processing fee. Complainant did make payment of the same on 29.10.2007. Though OP vide its letter dated 28.11.2007 sanctioned the loan of Rs.60,00,000/- but thereafter some how on some flimsy reasons and grounds failed to release the said loan in time in spite of the repeated requests and demands made by the complainant. Complainant has complied all the requirements. With all that OP is not satisfied it went on imposing certain unwarranted impracticable unenforceable terms and conditions, which are not agreeable to the complainant. Even after lapse of more than 2 – 3 months from the date of sanction OP failed to release the same. Being fed up with the hostile attitude of the OP, complainant sought for cancellation of the said loan by addressing a letter on 03.04.2008 and claimed to refund of the deposit that is paid. All his efforts went in futile. On insistence OP came up with a defence that they have already cancelled the said loan and intimated the same to the complainant vide letter-dated 31.03.2008. The said letter never reached the complainant. The hostile attitude of the OP caused him both mental agony and financial loss. Hence he felt deficiency in service on the part of the OP. Under the circumstances he is advised to file this complaint and sought for the reliefs accordingly.<br /> <br /> 2. On appearance, OP filed the version denying all the allegations made by the complainant in toto. According to OP complainant and the Landlord are bound to execute the Mortgage Deed by producing all necessary original documents. Though OP gave sufficient and reasonable opportunity to the complainant to comply the said requirements it went in vain. Complainant failed to fulfill the obligations set out in the loan sanction communication. Under such circumstances OP without finding any other way is forced to cancel the said loan on 31.03.2008, which is communicated to the complainant. As such there is no deficiency in service on the part of the OP. It is a discretion of the OP to sanction or not to sanction, release or not to release the sanctioned loan keeping in mind the better interest of the OP institution about the timely recovery of the said huge funds. Before filing a complaint mandatory notice is not issued. Complaint is devoid of merits. Among these grounds, OP prayed for the dismissal of the complaint.<br /> <br /> 3. In order to substantiate the complaint averments, the complainant filed the affidavit evidence and produced some documents. OP has also filed the affidavit evidence and produced the documents. Then the arguments were heard.<br /> <br /> 4. In view of the above said facts, the points now that arise for our consideration in this complaint are as under:<br /> <br /> Point No. 1 :- Whether the complainant has Proved <br /> the deficiency in service on the part of <br /> the OP?<br /> <br /> Point No. 2 :- If so, whether the complainant is <br /> entitled for the relief’s now claimed?<br /> <br /> Point No. 3 :- To what Order?<br /> <br /> <br /> 5. We have gone through the pleadings of the parties, both oral and documentary evidence and the arguments advanced. In view of the reasons given by us in the following paragraphs our findings on:<br /> Point No.1:- In Affirmative<br /> Point No.2:- Affirmative in part<br /> Point No.3:- As per final Order.<br /> <br /> <br /> R E A S O N S<br /> <br /> 6. At the outset it is not at dispute that the complainant availed a loan of Rs.60,00,000/- from the OP. In that regard for processing of the said loan he has paid fee of Rs.37,708/- on 29.10.2007. It is also not at dispute that OP did sanction the loan on 28.11.2007 and imposed certain terms and conditions with regard to repayment. Complainant on the receipt of the said sanction letter complied all the necessary requirements as contemplated but still OP failed to release the said huge loan even after lapse of 2 – 3 months. The repeated requests and demands made by the complainant went in futile. Hence complainant wrote letter on 03.04.2008 seeking for closing the said loan account and return the deposit amount. Again it went in vain. Hence he felt deficiency in service on the part of the OP.<br /> <br /> 7. As against this it is specifically contended by the OP that they did sanction the said loan but complainant is obliged to execute Mortgage Deed along with the owners of the said land by producing all the necessary documents of title, but he failed to do so even after lapse of considerable time. When once OP admits the sanction of the said loan if complainant failed to comply the terms and conditions about the execution of certain documents and if failed to fulfill the obligations set out in the loan sanction letter OP would have caused the notice in writing to the complainant to comply the same but no such document is produced to substantiate the said defence. Here we find the deficiency in service.<br /> <br /> 8. When we go through para.7 of the version it discloses that the refund of the part LAFD is generally considered in the event of Rejection of loan by OP. When that is so, why OP has not considered the refund of the part of the fees paid by the complainant that too when his loan is cancelled is not known. So this hostile attitude of the OP in our considered view again amounts to deficiency in service.<br /> <br /> 9. Of course OP have got a right to protect the interest of the institution, they have to satisfy themselves whether the borrower has got the better title over immovable property that is going to mortgaged whether he has got a salable title and a sound party to repay the said loan. Before sanction of the said loan OP would have got verified the status of the borrower. It appears it has not taken such steps and later on come up with the defence that complainant failed to fulfill the obligations of the loan sanction letter.<br /> <br /> 10. It is further contended by the OP that because of the default on the part of the complainant they did not release the said loan. The documents produced by the OP goes to show that the said loan has been cancelled on 31.03.2008 before the receipt of the letter dated 03.04.2008 addressed by the complainant to close the said account and refund the deposit. It is specifically contended by the complainant that the so called loan cancellation letter dated 31.03.2008 is not at all received by him. We find force in the contention of the complainant. OP has not produced any piece of document to show that the said letter dated 31.03.2008 wherein the loan was cancelled has been communicated to the complainant. When we go through the copy of the said letter it does not bear the date. Though whole letter is in computerized printing in the said letter date is written in hand as 31.03.2008. It appears in order to save their skin out of sin. OP must have thought of releasing the said letter on the receipt of the claim made by the complainant under letter dated 03.04.2008. Under such circumstances we feel the approach of the OP is not fair.<br /> <br /> 11. As already observed by us the discretion vest with the OP to sanction or not to sanction, release or not to release the loan. That discretion can’t be questioned but still the point remains for consideration is whether the arbitrary act of the OP has caused mental agony and financial loss to the complainant and whether such an act amounts to deficiency in service. In view of the elaborate discussions made by us in the above said paras as well as in view of defence set out in para.7 of the version we are of the opinion that there is a deficiency in service on the part of the OP. Justice will be met by directing the OP to refund 50% of the processing fee paid by complainant along with some litigation cost. With these reasons we answer point nos.1 and 2 accordingly and proceed to pass the following: <br /> <br /> O R D E R<br /> <br /> The complaint is allowed in part. OP is directed to refund Rs.19,000/- and pay a litigation cost of Rs.500/- to the complainant. This order is to be complied within four weeks from the date of its communication.<br /> <br /> (Dictated to the Stenographer and typed in the computer and transcribed by him, verified and corrected, and then pronounced in the Open Court by us on this the 04th day of December 2008.) <br /> <br /> <br /> <br /> <br /> MEMBER MEMBER PRESIDENT<br /> <br /> <br /> <br /> Vln* <br /> <br /> <br />