CONSUMER DISPUTES REDRESSAL FORUM

Palakkad, Kerala

Dated this the 1^st day of April 2014

  CC/101/2013

PRESENT : SMT. SEENA. H, PRESIDENT                                                                      Date of filing: 19/06/2013

                   : SMT. SHINY.P.R ,MEMBER

   : SMT.SUMA K.P, MEMBER

T.S.Mohammemd Zakkariya,

Thazhathethil House,

Thottakkara (P.O),

Ottappalam, Palakkad.                                                                       : Complainant

(Party in person)                                                                               

                                                                          Vs

The Manager,

State Bank of India,

Ottapalam Branch

Palakkad.                                                                                             : Opposite party        

 (By Adv.P.Jayan)                                                                    

                                                                           O R D E R

By Smt. Suma. K.P, Member

          The case of complainant is that he had applied for Education loan for his son Said Fazil.T.M  on 23.11.2010. The said loan was sanctioned as education loan No. 31511009752 for an amount Rs. 10, 00,000/- ( Rupees Ten Lakhs only). From the said amount of Rs.3,00,000/- (Rupees Three Lakhs only ), was disbursed to the complainant as  1^st  instalment. The complainant alleges that at the time of sanctioning, the opposite party promised that the interest for the amount will be granted as subsidy from the Government and he had to pay the interest only after the completion of the course.  Since the complainant belongs to the OBC community and having an annual income below Rs. 2,50,000/-( Rupees Two Lakh and Fifty Thousand only) he is eligible to get interest subsidy from the government.  After a year the complainant enquired about the interest subsidy to the Opposite Party and they told that the bank will deduct the interest at once in a year.  After six months the complainant noticed  that interest upon the loan amount is considerably increasing hence he approached the  opposite party . Only then opposite party informed him that the loan sanctioned was not an education loan but it was a career loan.  The complainant submits that he had availed such a huge  sum  only upon the assurance of the Bank Manager that he will be provided with interest subsidy. At the time of availing loan, he was under the impression that the course duration will be two years.  But unfortunately duration of course went on and the interest had also gone up.  Hence the complainant had to repay the instalment drawn so as to  close the said loan.  He also alleges that the manager promised him to sanction a new education loan if the complanant’s son discontinued from the present institution by closing the above mentioned  loan and joined in another institution.  Accordingly the complainant discontinued his son and admitted him in  a new Academy ( Academy  of Carver Aviation Pvt. Ltd.) at Pune.   The complainant alleges that the bank had committed deficiency of service by sanctioning career loan instead of education loan there by he was not eligible for the interest subsidy. Opposite party has also not granted  the new education loan as promised. Hence the complaint is filed praying for an order to grant interest subsidy and also for compensation for mental agony suffered for closing the sanctioned loan, and for transferring his son to a new academy.   Hence the complainant has approach before the Forum seeking an order to grant an amount of Rs. 10,00,000/- ( Rupees Ten Lakhs only) as compensation for mental agony suffered by his  son and himself.

          The complaint was admitted and notice was issued to opposite party for appearance.  Opposite party entered appearance and filed version contenting the following.    The above complaint is not maintainable either in law or in facts. It is filed on an experimental basis without any bonafides.The opposite party contented that the complainant had availed the career loan and not an educational loan. He had applied for a career loan and it was sanctioned as  career loan. This fact was informed to him at the time of filing application and, at the time of sanctioning. The complainant was made aware of the said fact and knowing all the features of the particular loan he had  accepted it. The Opposite party had never promised that he is eligible for the interest subsidy of the said loan. At the time of availing the loan the complainant told the opposite party that he is running  an establishment   in the name of Swiss jewellery and was an assessee of income taxes so that there will be no problem of repayment. Believing his words opposite party had sanctioned such a huge amount as career loan. The Opposite party had never informed the complainant to repay the amount Rs. 3,00,000/- ( Rupees Three  Lakhs  only) so as to sanction a new Education loan if complainant  jointed his son in a new institution.  According to the information of opposite party the complainant’s son had  returned discontinuing his  present course .  This complaint is filed on an experimental basis there by shifting the responsibility upon the opposite party. Complainant has not entitled for any interest subsidy   since his son had returned   without completing the course.   Complainant had also filed an application before Banking Ombudsman seeking  the same relief which was dismissed   stating the real facts. The allegation in the complaint that opposite party had committed deficiency of service by sanctioning career loan instead of education loan and there by complainant suffered huge mental agony is absolutely false. The opposite party already informed the complainant that he was sanctioned a career loan and it is revealed from the letter   given by the complainant at the time of disbursing   the 1^st instalment . The opposite party contented that since the complainant had initiated unnecessary legal proceeding stating false contention opposite party is not liable to provide any further loans. Hence the complaint has to be dismissed with compensatory cost.

Issues that arise for consideration

1. Whether there is any deficiency of service as alleged in the complaint?
2. If so, what is the relief and cost entitled to the complainant?

          The evidence adduced by the parties consists of the respective affidavits and documents. Ext. A1 to A9 was marked on the side of complainant. Ext. B1 was marked on the side of opposite party. Complainant was cross examined as PW1 . Opposite party manager was examined as DW1. Complainant’s witness was examined as PW2.

          Heard both parties. We have perused  all the relevant document produced before the forum. It is obvious from Ext. A1 that complainant had preferred an application for educational loan for his son for joining   commercial pilot licences course (CPL ) at Sha-Shib Flying  Academy Guna. From  Ext. A2  it is revealed that opposite party had sanctioned a term loan of Rs. 10 Lakhs as education loan for the purpose of expenses relating to education for the above mentioned course  with floating rate of interest 11.75% ( at SBAR) monthly basis by pledging a collateral security of 12 cents of land and house under SR No.11/12A, Ottapalam II village.  Through Ext.A3. Complainant had applied to the opposite party bank claiming interest subsidy since the interest subsidy was not provided. Only then the bank had replied through Ext.A4 that the above loan is a career loan and it is not included in the interest subsidy scheme. Opposite party had also stated that the interest subsidy is not provided for those students once they discontinued the course midstream. From Ext.A5 it is seen that complainants had registered with academy of Carver Aviation Pvt.Ltd. to undertake the commercial pilot license course at Pune for which an amount of Rs.24,50,200/- is the fees required.  The complaint filed by the complainant against opposite party before the banking ombudsman was dismissed on the ground that the bank has intimated the complainant that the pilot training course does not come under the purview of education loan. Further, complainant is not entitled for interest subsidy as career loan is not included in the interest subsidy scheme and also this benefit is not available for the students who leaves  the course midway.   Even then ombudsman had observed that the complainant is at liberty to approach any other Forum for the redressal of his grievance. When the Assistant Manager of opposite party was examined as PW2 she had deposed that as per the norms of the bank    the interest subsidy will be provided for education loan, who is having   an annual income less than 4.5 lakhs. According to the sanction letter of the said complainant the loan was sanctioned as carrier loan. If the complainant had stated that his annual income is 2.5 lakhs he will be eligible for interest subsidy.  She had also deposed that education loan is provided only for approved courses and the Bank actually intended to provide career loan to this complainant. If the particular application was not available in stock, they use to provide another application by changing the nomenclature. But in this particular application  (Ext. A1) the bank had not changed the nomenclature of the application form.  Hence it

is presumed that loan sanctioned by the opposite party was an education loan and not a career loan.   Considering the above facts we are of the view that the opposite party had sanctioned career loan to the complainant instead of education loan.  But this fact was not intimated to the complainant at the time of  sanctioning first instalment.  Opposite party had produced Ext.B1 showing that complainant had already  known about the loan as career loan.  But during examination complainant had deposed that he was asked to sign certain blank papers which  might have created as Ext.B1. The validity of the Ext.B1 document was challenged by the complainant. From the above discussions we are of the view that the opposite  party had committed deficiency of service since the complainant was not intimated that the loan sanctioned to him was a career loan. Moreover from Ext.A9 it is seen that the opposite party’s personnel  had intimated a letter showing  that the loan sanctioned was car loan. Complainant had known the above fact only at the time of denial of interest subsidy and he was forced to repay the amount availed by him which created financial hardship and mental agony to the complainant. In the above context  we are of the view that opposite parties had committed gross deficiency of service. Hence we direct the opposite party to pay an amount of Rs.10,000/- as compensation for the mental agony suffered by the complainant along with Rs.1,000/- towards cost of litigation. The aforesaid amount shall be paid within one month from the date of receipt of order, failing which the whole amount shall carry 9% interest per annum from the date of order, till realization.

Pronounced in the open court on this the 1^st day of April  2014.

                                                                                    Sd/-

                                                                               Smt. Seena. H

                                                                                    President 

                                                                                      Sd/-

                                                                                       Smt. Shiny. P.R

                                                                                             Member

                                                                                      Sd/-

                                                                                       Smt. Suma K.P

                                                                                            Member

APPENDIX

Exhibits marked on the side of the complainant

Ext. A1 –  Application  cum appraisal form for Education Loan to Opposite party

Ext. A2 - Sanction Letter  issued from SBI Ottappalam   Branch to complainant                                             dated 23/11/2010.

Ext.A3  -  photo copy of  letter sent by complainant to opposite party dated

              09/02/2013.

Ext.A4  -  Reply dated 11/02/2013 issued by opposite party  to complainant.

Ext.A5 -   Concern letter dated 05/06/2012 from Carver Aviation Pvt. Ltd.

Ext.A6 -   photo copy of  Education Loan Statement dated 05/06/2013.

Ext.A7 -  photo copy of  Housing loan statement dated 17/06/2013

Ext.A8 -   photo copy of  Banking Ombudsman judgment dated 01/04/2013.

Ext.A9 -    letter sent by opposite party to complainant 15/10/2013

Exhibits marked on the side of the opposite parties

Ext. B1 - Letter sent to opposite party by the complainant.

Witness examined on the side of complainant

PW1  -   T.S.Mohammemd Zakkariya,

PW2  -   Latha  Devi K.R

 Witness examined on the side of opposite parties

DW1     Harikrishnan. R

Cost allowed

Rs. 1,000/- (Rupees one thousand only) allowed as cost of the proceeding.