ORDER

SRI.H.R. SRINIVAS.  PRESIDENT

1.     This is the Complaint filed by the Complainant against the Opposite Party (herein referred to as OP) under Section 12 of the Consumer Protection Act 1986 for the deficiency in service in not crediting the entire loan amount sanctioned in spite of executing the mortgage deed by deposit of title in respect of the loan sanctioned and for Rs.4,00,000/- as compensation for causing him mental agony and also to waive off the interest amount on the loan amount disbursed to him as he has to pay the amount obtained from private persons by paying heavy interest since OP did not reimburse the payment made by him and for cost of litigation and for such other reliefs as the Hon’ble District Commission deems fit.

2.     The brief facts of the complaint are that: the Complainant is a engineering graduate in mechanical branch. After completion of his engineering graduation, he joined TCS company as an engineer. He intended to do his MS in mechanical engineering and management at Technical university of Hamburg – Hamburg in Germany. He admitted his application for admission to the said institution. They sent the admission certificate for the academic year 2017-18 by setting the dead line for enrolment as on or before 01.10.2017. They also advised him that the cost of study and living expenses would be 800 Uros per month. He approached OP bank during the month 2017 for an educational loan of Rs.18,00,000/-  to pursue his studies at Germany and also offered to mortgage the property of his parents by depositing the documents as security to the loan. 

3.     The properties were verified by the advocate of OP and collected Rs.3,000/- towards the same. The said properties were evaluated for Rs.42,95,000/- by property valuator one Sri N Venkatesh, for which was has  charged Rs.2,500/-. At the time of sanctioning the loan, and according to the terms and conditions, OP agreed to reimburse the amount if the education loan is sanctioned.  In anticipation of the sanction of education loan and reimbursement of the amount paid, himself got some finance arrangement to the extent of Rs.9,00,000/- and  out of the said amount he deposited Rs.6,78,830 with Kotak Mahindra Bank, Koramangala branch on 18.08.2017. The same was blocked to get VISA from Germany. He booked air ticket by paying Rs.32,000/-  and the remaining amount was used by him to get the foreign currency.

4.     It is contended that on 29.11.2017, OP sanctioned  education loan of Rs.14,00,000/-. Since he was in Germany, OP called his father to the Sub-registrar office to get the property intend to be secured for the loan to be registered.  The same was registered in favour of the OP.  Inspite of request, OP did not reimburse the amount spent by him even though, loan was sanctioned.

5.     OP insisted him to execute and sign the documents in their presence.  He came to India by spending Rs.40,000/- as Air ticket charges to execute the documents.  When he approached OP for release of loan amount, they refused to do so and hence he has to send a registered letter, as the said amount was badly required to clear the liabilities made for 1^st and 2^nd semester studies and to pursue the 3^rd and 4^th semester course.  OP refused to release the amount and hence he had to issue a legal notice by paying Rs.3,000/- to his advocate on 03.10.2018.  By 15^th of October 2018 OP offered to disburse the loan amount of Rs.6,24,000/- only and transferred the said amount to his account at Germany which was sufficient for him to pursue 3^rd and 4^th semester course.  They could not clear the earlier liabilities incurred by him and his father to pursue the studies at Germany.  They are paying heavy interest on the said amount.  Even the OP did not give him the copy of the agreement and the terms and conditions of the loan sanctioned.  He sent some of the receipts and payments towards the 1^st and 2^nd semester and requested Ops to release and reimburse the said portion of the amount which OP did not do it.  On 27.11.2019 OP demanded him to submit three receipts, health insurance and life insurance certificate. He handed over the same on 10.12.2019 when he had come to India.  College marks card of the semesters and the insurance policy also submitted. When he sought for the statement of accounts in respect of his education loan details of interest charge, OP did not clarify the mistake and informed that the same will be complained to the zonal office for correction. Even they have collected original sale deed of his mother for verification and did not return the same for one reason or the other.

6.     OP is a member of banking code and standard board of India which is an autonomous institution to monitor and ensure the compliance of banking codes and standards adopted.  He had to write a letter on 24.12.2019 regarding not reimbursing or disbursing the full sanctioned loan amount, levying of improper interest, collecting documents for verification not and returning the documents and hence there is deficiency in service. He also informed that they will be held responsible for damages for deficiency in service. After the said letter on 10.12.2020 OP replied through their advocate denying all the allegations.  They even stated that the accounts are not maintained manually and hence there is no question of charging of excess interest and also taken the contention that his parents did not approach them for return of the documents.  The computer calculation cannot be justified as whatever that has been fed to the computer program will generate the statement. Only on  10.01.2020 they returned the documents of his mother.  From the beginning the OP have tortured them to a maximum extent without disbursing and reimbursing sanctioned loan amount due to which he could not concentrate on his studies and hence could not complete his degree well in time. Even now he is pursuing his studies. His father being a senior citizen was put to much tension and blood pleasure gone up. Himself and his family members had to suffer sleepless nights because of this act of OP. Hence there is deficiency in service on the part of OP and prayed the forum to allow the complaint.

7.     Upon issuance of notice, OP appeared through its counsel, filed its version. Contending that the complainant approached OP for education loan of Rs.18,00,000/- and sanctioned Rs.14,00,000/- as education loan for which the complainant was eligible after scrutiny of the documents produced towards collateral security. As per the terms and condition of the sanction letter date d 18.11.2017, complainant offered collateral security, executed the documents by way of registered mortgage by deposit of title on 11.12.2017. To reimburse the fee paid by the complainant, the same should be done within 6 months from the date of receipt of the payments to the institution by the complainant. OP sanctioned loan on 18.11.2017 and the complainant availed the same only 29.11.2018.

8.     As per the RAPC condition, in the event of any delay in completing the pre-disbursement terms, the entire undisbursed limit under the sanction would lapse after a period of six months from the date of sanction or the financial year ends whichever is earlier. OP has contended that it is not within its knowledge as to obtaining loan from other persons privately to the extent of Rs.9,00,000/- on paying to high interest. OP is bound by the norms and guidelines laid by the RBI and hence cannot disburse funds other than for the purpose of sanction. At that time, complainant demanded for release of the amount sanctioned to pay to the persons who have paid him money to pursue his studies, which has given room for OP to believe that funds may be intended for other purpose other than paying the education fee. 

9.     It has admitted having sanctioned the loan and intimating the same to the complainant. Complainant did not comply the terms of sanction of education loan dated 18.11.2017.  As per the terms of sanction, complainant was supposed to be personally present for execution of the loan document and only afterwards OP could release the loan amount that too after the complainant producing the demand letter issued by the concerned educational university.  At every time, complainant was stating that he required this amount to clear his liabilities which is a clear indication that he needed money to clear other liability which is against the terms and conditions of the loan sanction.  Hence OP did not proceed to release the loan. Further OP has sent the GPA to his father which is again not permissible, as the execution of the loan document has to be made before the officer of the bank in order to avoid misappropriation of the funds and rout the funds only to meet the purpose for which it was sanctioned.  A sum Rs.6,24,000/- was released towards the education after following the due process and guidelines laid down by the bank. No excess interest has been levied on the amount sanctioned.  Non-completion of the studies in time, is purely on the potential of the complainant and OP has nothing to do with it, and for which OP cannot be held responsible.  Denying all the other allegations against in the complainant, OP prayed the forum to dismiss the complaint.

10.   In order to prove the case, both parties filed their affidavit evidence examined themselves as PW-1 and RW-1 and produced documents. Arguments Heard. The following points arise for our consideration:-

1) Whether the complainant has proved deficiency in service on the part of the Opposite Party?

2) Whether the complainant is entitled to the relief prayed for in the complaint?

11.   Our answers to the above points are:-

POINT NO.1 :   In the Affirmative

POINT NO.2 :   Partly in the affirmative.

                        For the following.

REASONS

POINT No.1:-

12.   On perusal of the complaint, version evidence and documents of both sides, it is clear that the complainant wanted to pursue his higher studies at TUHH Technological University at Hamburg Germany for which he approached OP bank for a educational loan of Rs.18,00,000/-. After the appraisal, OP sanctioned Rs.14,00,000/- during on 18^th  November 2017 towards education loan.  The complainant’s father and mother executed their property for collateral security have registered same in favour of the bank for the whole loan amount of Rs.14,00,000/-.  The complainant went to Germany to pursue his higher studies by making financial arrangement on his own to the extent of Rs.9,00,000/- to get VISA and other formalities to be observed went to Germany, he could not execute and register the document s needed for the release of the sanctioned amount. Nearly after one year of the sanction of the loan the complainant executed the documents, also insisted for reimbursement of the amount which he has spent.

13.   Op on the ground that, the said amount was not utilized within six months or within the completion of the financial year did not release the amount spent by him and reimbursed the same for which the complainant has to suffer a lot.

14.   Though the OP has taken the stand as per the guidelines of the bank, the letter dated 15.11.2018 by the Bangalore Zonal office to the branch office clearly directs the Nelamangala branch i.e OP bank recommended for according permission to Nelamangala branch for disbursement of the loan. The said letter is self-explanatory in respect of the deficiency of the Nelamangala branch officer in not releasing the sanctioned loan to the complainant (reimbursement of the expenses already incurred while getting admission to 1^st and 2^nd semester of the course at TUHH).

15.   To be noted here that inspite of the complainant executing the required documents towards the loan OP has not released the said amount. Only after issuing the notice, it released Rs.6,24,000/- to complete his education on 29.10.2018. When this is taken into consideration this is a clear case of deficiency in service on the part of OP in not releasing the education loan amount to the complainant. 

16.   The whole and sole object of providing education loan as envisaged by the Government of India is that no person should be deprived of the education , whether it is under graduate level or a post graduate level or higher education only on account of financial problems. When such being the case, OP refusal to release the amount required to pursue the education of the complainant for the 1^st year and it refused to reimburse the claim / the amount he has spent towards the education for the 1^st year at Hamburg Germany.  Though he might have requested the OP to release the said amount in order to pay to the borrowers from whom he borrowed the money to pursue the 1^st year education, that does not mean that OP has to suspect the bona fides of the complainant. As complainant claims that he has produced some receipts and documents to claim reimbursement, which OP has not at all taken into consideration. 

17.   OP ought to have sought for proper documents  for reimbursement of the amount. OP has sit on too technical point inspite of a clear direction by the zonal office to release the amount. Hence we are of the opinion that the OP has committed deficiency in service in not responding to the needs of the poor student who was in need of financial assistance to pursue his higher studies that too when the loan was sanctioned against offering the collateral security which worth more than three times of the loan amount sanctioned. Hence we answer POINT NO.1 IN THE AFFIRMATIVE.

POINT NO.2.

18.   Naturally a person who want to study at abroad out of the education loan obtained, if the said facilities are denied he will be put to lot of mental strain and agony and depression.  His whole family would be under financial stress and they are liable to pay huge interest from the persons from whom they have borrowed the money in order to facilitate their son to pursue higher studies, when the release of loan got delayed sanction. Probably, with a hope and anticipation that the bank would release the amount spent towards the educational expenses of complainant, if his parents have borrowed the amount and thought that the same would be repaid to the borrower immediately after the bank releasing the 1^st installment of the loan. When OP denied to reimburse the education expenses and other related expenses, naturally the complainant as well as his parents have suffered immensely and the said sufferance cannot be measured in terms of money.

19.   In view of this though the complainant has sought Rs.4,00,000/- as damages on this count we are of the opinion that if a sum of Rs.2,00,000/- as damages if awarded to the complainant would be just, proper and reasonable as the OP has withheld a sum of Rs.7,76,000/- without there being any valid reasons. That too in spite of the directions given by the zonal office to obtain the documents and release the amount and further have made the complainant to approach this forum by spending time, money and energy for which Ops directed to pay Rs.20,000/- as litigation expenses. Hence we answer POINT NO.2 PARTLY IN THE AFFIRMATIVE and pass the following:

ORDER

1.  The complaint is allowed in part with cost.

2. OP is directed to release/reimburse the amount to the extent of the documents furnished by the complainant and need be seek for documents.

2. OP is hereby directed to pay a sum of Rs.2,00,000/- to the complainant towards damages for causing physical and mental strain and Rs.20,000/- towards cost of the litigation expenses.

4. OPs are hereby directed to comply the above order within 30 days from the date of receipt of this order and submit the compliance report to this commission within 15 days thereafter.

5. Send a copy of this order to both parties free of cost.

Note: You are hereby directed to take back the extra copies of the Complaints/version, documents and records filed by you within one month from the date of receipt of this order.

(Dictated to the Stenographer over the computer, typed by him, corrected and then pronounced by us in the Open Commission on this day the 13^th day of SEPTEMBER 2021)

MEMBER                        PRESIDENT

ANNEXURES

1. Witness examined on behalf of the Complainant/s by way of affidavit:

Copies of Documents produced on behalf of Complainant/s:

Ex P1: Copy of the Certificate of Admission from TUHH.

Ex P2: Copy of the  Valuation Report.

Ex P3: Copy of the Loan approved letter with mortgaged documents.

Ex P4: Copies of the request for disburse education loan amount (4 in Nos.)

Ex P5: Copy of the GPA from Preetham JB to the complainant.

Ex P6: Copy of the Legal notice dated 03.10.2018.

E x P7: Copy of the mail correspondences (7 in Nos.)

Ex P8: Copy of Certificate of Insurance

Ex P9: Copy of the loan account statement

Ex P10: Copy of the  Sale deed of Sowbhagya C

Ex P11: Copy  legal notice dtd 24.12.2019

Ex P12: Copy of the reply to our legal  notice dtd: 05.01.2020.

2. Witness examined on behalf of the Opposite party/s by way of affidavit:

RW-1: Sri Vikaram S.Doddamani, Branch Manager of OP bank.

Copies of Documents produced on behalf of Opposite Party/s

Ex R1: Copy of the loan applicant dtd: 10.07.2017

Ex R2: Copy of the sanction letter dtd :18.11.2017.

Ex R3: Copy of the  guarantors consent letter dtd:09.10.2018.

Ex R4: Copy of the loan agreement dtd.09.10.2018.

Ex R5: Copy of the registered equitable mortgage by deposit of title deeds dtd: 11.12.2017.

Ex R6: Copy of the email communication dtd: 29.12.2017.

Ex R7: Copy of the representation dtd: 03.09.2018.

MEMBER                        PRESIDENT

RAK*