BEFORE THE MANDYA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANDYA PRESENT: 1. SIDDEGOWDA, B.Sc., LLB., President, 2. M.N.MANOHARA, B.A., LLB., Member, 3. A.P.MAHADEVAMMA, B.Sc., LLB., Member, ORDER Complaint No.MDF/C.C.No.118/2009 Order dated this the 26th day of February 2010 COMPLAINANT/S Sri.H.Gopalaiah, S/o Javan Dasaiah, R/at 2nd Division, Siddarthanagar, Malavalli Town. (By Sri.K.M.Sreekantaswamy., Advocate) -Vs- OPPOSITE PARTY/S 1. The Area Manager, Life Insurance Corporation (LIC), H.F.Ltd., 2nd Floor, Hotel Govardhan Complex, Sri.Harsha Road, Mysore 01. 2. The Manager, LIC of India, M.C.Road, Mandya. (By Sri.Harisha K.P., Advocate for 1st O.P. & Sri.S.Sudarshan., Advocate for 2nd O.P.) Date of complaint 16.10.2009 Date of service of notice to Opposite parties 30.11.2009 Date of order 26.02.2010 Total Period 2 Months 26 Days Result The complaint is dismissed. However, there is no order as to costs. Sri.Siddegowda, President 1. This complaint is filed under section 12 of the Consumer Protection Act, 1986 against the Opposite party claiming compensation of Rs.1,00,000/- alleging deficiency in service. 2. The case of the Complainant is that in order to construct a house, he applied for loan to the 1st Opposite party which agreed for the sanction of the loan. The Complainant submitted plan, licence renewed at two times, along with income certificate and also salary certificate, pension certificate. Even, the 1st Opposite party Officers inspected the site and has spent amount for inspection and other purpose. Because of delay of years in sanctioning the loan, the Complainant approached the 1st Opposite party on several times and they were telling that the file was sent to the higher Officers and dragged on the matter. Therefore, the Complainant without alternative borrowed the loan from relatives on interest and started the construction. The Complainant wrote a letter to release the loan or to pay the compensation of Rs.1,00,000/-, but he was sent letter with false reasons stating that loan cannot be sanctioned and this reply was given after 4-5 years. Hence, the 1st Opposite party has committed deficiency in service. Even, the Opposite parties have taken two LIC policies for security and other documents. The Complainant was put to mental agony and monitory loss. Therefore, the Opposite parties have committed deficiency in service. Hence, the present complaint is filed. 3. The 1st and 2nd Opposite parties notices were served. 4. The 1st Opposite party has filed version admitting that the Complainant has approached the 1st Opposite party for additional of housing loan, since he had availed department loan. Denying all other allegations it is admitted that the Complainant got issued a legal notice, but it is false that he issued a legal notice to the 1st Opposite party demanding compensation of Rs.1,00,000/- and to release the loan. It is false that the 1st Opposite party has taken two LIC policies and other named documents. The Complainant had filed an application on loan on 10.08.2004, the 1st Opposite party issued a loan offer letter on 23.09.2004 subject to submission of all original documents from KPTCL. The 1st Opposite party has also issued a terms and conditions forming part of loan offer letter to the Complainant, wherein it is mentioned that the Company shall have right to decide, in its sole discretion, the type of mortgage or any other security or additional security it may require and he shall be bound to execute the mortgage accordingly and furnish any such other or additional security. As per the conditions, the Complainant did not bring the original documents from KPTCL for hypothecation and the loan was rejected on the same ground. The Complainant gave a requisition on 14.07.2006 that he has failed to submit the requirements within 3 months and requested to renew the sanction. On 20.07.2007, the Complainant gave an application for revalidation, in which he has clearly admitted that he has not fulfilled the 2nd charge terms and conditions within time. The complaint is barred by limitation. Since, the complaint is filed after two years from 23.09.2004 when the loan was rejected on the ground of non production of original documents. The Opposite party has not committed any deficiency in service and therefore, the complaint is liable to be dismissed with costs. 5. The 2nd Opposite party has filed version contending that 2nd Opposite party is unaware of any of the averments made in the complaint. The 2nd Opposite party is not a necessary party to this proceedings as it is not a party to the alleged transaction with 1st Opposite party. The Complainant has not alleged any deficiency in service on the part of 2nd Opposite party. The 1st Opposite party is neither a subsidiary or a wing of the 2nd Opposite party. In fact, both the institutions are working independently without being connected to each other, whereas the 2nd Opposite party is made as a party by the Complainant to create territorial jurisdiction to file the present complaint. Therefore, the complaint is to be dismissed with heavy costs. 6. During trial, the Complainant is examined and has produced documents Ex.C.1 to C.10. On behalf of the 1st Opposite party a witness is examined and documents Ex.R.1 to R.4 are produced. 7. We have heard the counsel for the Complainant and 1st & 2nd Opposite parties have filed written arguments. 8. We have perused the records. 9. Now the points that arise for our considerations are:- 1. Whether this Forum has no jurisdiction to entertain the complaint? 2. Whether the complaint is barred by limitation? 3. Whether the 1st Opposite party has committed deficiency in service? 4. Whether the Complainant is entitled to the compensation sought for? 10. Our findings and reasons are as here under:- 11. POINT NO.1:- The undisputed facts borne out from the materials on record are that the Complainant is working in KPTCL and he has obtained loan from the department for construction of house and again he applied to 1st Opposite party Finance Company for sanction of loan in 2004 and as per Ex.C.1 on 15.04.2006, the 1st Opposite party pleased to approve housing loan of Rs.2,63,000/- on conditions. As per Ex.C.2 to 2nd Opposite party, the Complainant submitted two LIC policies for assignment in favour of 1st Opposite party. As per Ex.C.5, 1st Opposite party issued a loan offer letter dated 23.09.2004 to an extent of loan of Rs.3,00,000/- and to clear at 7 years subject to conditions. As per Ex.C.9 dated 12.03.2007, the 1st Opposite party issued letter stating that they have in principle approved a housing loan on conditions for the amount of Rs.3,00,000/- and Ex.C.10 is the requirement sheet, Ex.C.10(a) also another requirement sheet. The Complainant has deposited Rs.1,500/- to the 1st Opposite party by cash as UPF fees and another Rs.250/- as stamp fees, miscellaneous which are not refundable as per Ex.C.7 and C.8. 12. The 2nd Opposite party has taken contention that to avoid territorial jurisdiction, the 2nd Opposite party has been made a party without claiming any relief and alleging deficiency in service against the 2nd Opposite party and further, contended that there is no connection between the 1st & 2nd Opposite parties in the matter of loan. On these grounds, it is contended that this Forum has no jurisdiction to entertain the complaint. 13. Of course, the Complainant has admitted in his evidence that there is no connection between 1st & 2nd Opposite parties in respect of loan transaction sought by the Complainant and there is no Branch of 1st Opposite party at Mandya. But, the contention of the Complainant counsel is that the Complainant has submitted two LIC policies through 2nd Opposite party at Mandya for assignment in favour of 1st Opposite party. Perusal of Ex.C.2 reveals that 2nd Opposite party has received two LIC policies of the Complainant for assignment in favour of 1st Opposite party. Therefore, some part of transaction creating cause of action at Mandya has taken place, if 2nd Opposite party has nothing to do with the sanction of loan by 1st Opposite party and there is no connection between 1st & 2nd Opposite parties, there is no question of receiving two LIC policies from the Complainant by 2nd Opposite party on behalf of 1st Opposite party. Therefore, since part of cause of action has arisen at Mandya. We have to hold that this Forum has jurisdiction to entertain the complaint and in fact, the 1st Opposite party has not at all taken the defence that transaction has taken only at Mysore and not at Mandya and this Forum has no jurisdiction to entertain the complaint. Under these circumstances, we have to hold that the complaint is maintainable before this Forum. 14. POINT NO.2:- The 1st Opposite party has contended that the complaint is barred by limitation on the ground that the Complainant applied for loan on 10.08.2004 and the 1st Opposite party issued loan offer letter on 23.09.2004 subject to submission of all original documents from KPTCL and since the Complainant did not comply the terms, the loan was rejected on the ground of non production of original documents on 23.09.2004. But the 1st Opposite party has not at all filed any document to show that the Complainant was informed about rejection of the loan on 23.09.2004. Admittedly as per Ex.C.5, the 1st loan offer letter is dated 23.09.2004. Again on 15.04.2006 as per Ex.C.1 there is another loan offer letter subject to conditions. Again as per Ex.C.9 on 12.03.2007 there is another loan offer letter subject to conditions. The latest letter Ex.C.4 is dated 13.05.2009 in which the 1st Opposite party has informed that they have not released the loan, since the original documents pertaining to the property were not deposited and directed him to collect the documents produced, this letter is in reply to the letter to the Complainant dated 04.05.2009 marked as Ex.C.3. So, only as per Ex.C.4 on 13.05.2009 the loan was rejected by 1st Opposite party and in view of the loan offer letters as per Ex.C.1, C.5, C.9 there is continuing cause of action, since his application was not rejected in writing. So from the refusal letter dated 13.05.2009 the complaint is filed within 2 years and hence the complaint is not barred by limitation. 15. POINT NO.3:- The grievance of the Complainant is that the 1st Opposite party has committed deficiency in service. But, the contention of 1st Opposite party is that the Complainant did not comply the conditions of the loan offer letter and he did not produce the original documents of the property offered as security. 16. Now, if we peruse the documents it is clear from the loan offer letters Ex.C.5, C.9 and C.1 that the loan was approved on conditions on production of the original documents of the property. In fact, in Ex.C.10 and C.10(a) to the knowledge of the Complainant, it is a must for submission of the original documents and documentation. The contention of the Complainant is that as per the direction of the 1st Opposite party, he obtained the no objection certificate from KPTCL as per Ex.C.6 and produced to 1st Opposite party and did not sought for the original documents. But, that plea cannot be accepted, because under Ex.C.6 the Complainant was permitted to raise further loan on the second mortgage loan of the house property, which was already mortgage to KPTCL. But, as per the loan offer letters and Ex.C10 and C.10(a), the Complainant did not comply the production of original documents for documentation to release the loan. Therefore, the Complainant is at fault in not producing the original documents of the house property as per the conditions of loan offer letters and the Opposite party is justified in refusing to release the loan and hence, the Complainant has failed to prove the deficiency in service by 1st Opposite party. In fact, the grant of loan and disbursal of the loan amount by the financial institution is entirely discretion of the lender institution and they are not to be defaulted. Therefore, the Complainant is not entitled to the compensation sought for. 17. In the result, we proceed to pass the following order; ORDER The complaint is dismissed. However, there is no order as to costs. (Dictated to the Stenographer, transcribed, corrected and then pronounced in the open Forum this the 26th day of February 2010). (PRESIDENT) (MEMBER) (MEMBER)
