By Smt. Padmini Sudheesh, President:
The case of complainant is that the complainant has availed a loan from District Co-operative Bank, Kunnamkulam Branch for Rs.50,000/- by mortgaging his immovable property of 19½ cents. He has committed default in repayment of the loan. The interest rate of the loan was 14.5%. The over due amount at 2005 November was Rs.45,690/-. So the bank initiated coercive proceedings and when enquired it was intimated that if the loan has been renewed the complainant can escape from the present proceedings. Since the interest rate was 14.5% and it was learnt that the respondent Bank is giving loan at the rate of 9% the complainant approached the respondent in 2005 November. As per the request of respondent Bank a letter dated 28.11.05 has been obtained from District Co-operative Bank, Kunnamkulam Branch and shown to respondent. It was also intimated to the respondent about the due amount outstanding with the District Co-operative Bank. In spite of all these the respondent expressed their willingness to grant loan for Rs.50,000/-. The documents which are essential for the loan also prescribed to complainant. The complainant arranged the entire documents prescribed in the list given by respondent. A legal report has been obtained from the panel Advocate of respondent in favour of complainant. As per the legal report the complainant has obtained encumbrance certificate for the period of 8.9.00 to 1.1.04. The complainant has done several efforts to get the entire documents prescribed by respondent and also the panel advocate. But the respondent did not grant loan to complainant. This is a serious deficiency in service on the part of respondent. Hence the complaint.
2. The counter averments in brief are that the respondent had conducted a housing loan mela during the month of October 2005 in order to attract customers who were in need of financial assistance as housing loan. In the said mela many interested customers approached the bank including the complainant. It is to be noted that in this connection the bank did not charge or collect any amount from the customers. When the complainant approached the bank he had disclosed that he had already availed loan from Thrissur District Co-operative Bank Kunnamkulam Branch and wanted the respondent bank to take over the existing liability of loan from Thrissur District Co-operative Bank Kunnamkulam Branch. This respondent bank in principle agreed to do so provided the complainant makes available all the relevant documents pertaining to his property for legal clearance in tune with the terms and conditions regarding repayment of loan etc. The complainant produced photostat copies of documents along with legal report to the bank. Thereafter the respondent bank contacted the Thrissur District Co-operative Bank Kunnamkulam Branch to ascertain the present position of the loan and also to intimate about the proposed taking over of the liability by this bank. The said bank issued a letter to this respondent stating the present position of the loan. From the letter this respondent bank came to know that the complainant had actually availed of a sum of Rs.90,000/- as loan. In the letter it is also stated that since the complainant was a defaulter in repayment of the loan amount his account was treated as Non Performing Asset (NPA) from 30.10.04 onwards. So the respondent righteously declined to take over the liability of the complainant. The bank reserves the right and authority either to sanction or reject the same for valid reasons. The bank had not given any assurance to the complainant. There is no deficiency in service from respondent. Hence dismiss.
3. The points for consideration are that:
(1) Was there any deficiency in service from respondent?
(2) If so, reliefs and costs.
4. The evidence consists of oral testimonies of PW1, RW1, Exts. P1 to P5, Exts. R1 and R2.
5. Points: The complaint is filed against the respondent Bank alleging deficiency in service against sanctioning loan to the complainant. The complainant who had availed loan from Thrissur District Co-operative Bank Kunnamkulam Branch committed defaults in payment and when coercive proceedings started by the bank decided to renew the loan. He approached the respondent and disclosed everything to the respondent. It is his case that outstanding liabilities with the Thrissur District Co-operative Bank Kunnamkulam Branch, the attachment proceedings etc. were revealed to respondent. Even after knowing about the things the respondent agreed to grant a loan for Rs.50,000/-. It is his case that towards the loan the respondent wanted to produce some documents. The complainant arranged the entire documents prescribed in the list given by respondent. But the loan has not been sanctioned. So the complainant alleges deficiency in service on the part of respondent.
6. The respondent seriously contested the claim of complainant by stating that the bank reserves the right and authority either to sanction or reject the same for valid reasons. According to the bank this prerogative on the part of the bank cannot be subjected to questioning by the complainant under any circumstances.
7. The complainant is examined as PW1 and deposed that the passbook of earlier loan shown to the respondent bank manager from which it can be seen the outstanding liability. He denied that the liability is not informed to the respondent bank in the box. He deposed that the bank committed deficiency in service. The complainant produced Ext. P1 to P5 documents in which Ext. P6 is the advertisement given by the respondent bank with regard to the housing loan. There are four purposes stated in Ext. P6 in which one of the purposes is taking over of liability existing in other banks. While cross examining PW1, it has been asked “ (In Malayalam words)
Loan account (In Malayalam words) take over (In Malayalam words) .” So the respondent has the case against the advertisement made by them as per Ext. P6. The respondent has no case that Ext. P6 is not an advertisement of Canara Bank. So as per Ext. P6 it is clear that they have right to take over the liability existing in some other authorized financial institutions.
8. The respondent produced Ext. R2 copy of a circular showing take over of borrowal accounts from other banks. It is true that we also agree with the version of bank that the bank has got the sole discretion to sanction or reject a loan for valid reasons. But in this case the respondent bank agreed to take over the liability of complainant at first. It is admitted in the counter also. In the counter it is stated that the respondent bank in principle agreed to do so makes available all the relevant documents required. The complainant produced Ext. P2 the list of documents required by respondent. It is his case that he has suffered difficulty in collecting the documents by approaching several offices and as a man suffered mental agony to arrange documents. After all legal report has been obtained from the panel advocate of respondent bank and he advised in favour of complainant and also directed to take another encumbrance certificate. So the respondent wanted to arrange several documents to avail the loan. After arranging all the documents the respondent declined to reject the taking over of liability of complainant. In the counter the respondent admitted that the complainant had disclosed that he had already availed loan from Thrissur District Co-operative Bank Kunnamkulam Branch and wanted the respondent bank to take over the existing liability. If it is the policy of bank it should have been disclosed at the earliest. This is not done. It is a serious deficiency in service on the part of bank.
9. The manager is examined as RW1 and she stated that as per Ext. P6 there is bar in taking over of liability. She also admitted that as per Ext. P3 there is no bar to take over the liability of complainant. According to her it is the policy of bank in rejecting or sanctioning the loan. We do agree with the bank with this aspect. But after making huge efforts in procuring and producing the documents the respondent simply rejected the claim of complainant. It is their duty to reject the request of complainant at the earliest. This is not done. It is also a deficiency in service on the part of respondent bank. So the complainant is entitled to get compensation from the bank.
10. In the result the complaint is allowed and the respondent is directed to pay Rs.5000/- (Rupees five thousand only) as compensation with costs Rs.600/- (Rupees six hundred only) to the complainant within two months from the date of receipt of copy of this order. If the amount is not given within the prescribed time the respondent is liable to pay interest for the compensation amount at the rate of 12% from today till realization.
Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the open Forum this the 20th day of October 2011.
