Complaint filed on: 05.08.2013                                                     Disposed on: 12.01.2017

BEFORE THE IV ADDL DISTRICT

CONSUMER DISPUTES REDRESSAL FORUM, BENGALURU

 1^ST FLOOR, BMTC, B-BLOCK, TTMC BUILDING, K.H.ROAD, SHANTHINAGAR, BENGALURU – 560 027       

CC.No.1443/2013

DATED THIS THE 12^th JANUARY OF 2017

PRESENT

SRI.H.Y.VASANTHKUMAR, PRESIDENT

SRI.D.SURESH, MEMBER

SMT.N.R.ROOPA, MEMBER

Complainant: -                     

Smt. Mythili Ramachandra Hegde

S/o Sri.H.P.Sridhara Murthy

No.1865, 1^st Main road, 2^nd Stage

Kumaraswamy Layout

Bengaluru-560078

By Adv. Sri.S.Raghu

V/s

Opposite party:-       

M/s. Axis Bank ltd,

Retail Asset Centre

No.08, 3^rd floor,

“Sona towers”

32^nd E Cross, 4^th T Block

Jayanagara

Bengaluru-560041

Represented by its Branch Manager

By Adv. Sri.V.Suresh

ORDER

Under section 14 of consumer protection Act. 1986.

SRI.H.Y.VASANTHKUMAR, PRESIDENT 

            The Complainant has been alleging the deficiency in service against the Opposite party/Axis Bank, for not showing proper justifiable reason for not sanctioning/releasing the loan and has claimed the total compensation amount of Rs.9,58,300/-.

          2. The case of the Complainant in brief is that she had applied to the Opposite party/Axis bank in first week December 2012 by filing the loan application to purchase the residential property. After processing the loan application and completing the verification, the loan of Rs.22,08,982/- was sanctioned subject to legal and technical clearance vide its letter dated 06.12.2012. The legal scrutiny report from his panel advocate was received on 11.12.2012 about the proposed property. At the request of the Opposite party she entered in to agreement to sell with the sellers to furnish the same to the bank. Advance of Rs.7,50,000/- was paid agreeing to pay Rs.24,50,000/- on or before 17.01.2013 and to get the sale deed registered.  A week thereafter she was informed by the bank that her vendor who is illiterate will have to be authenticated by their bankers. Her sellers got their identity verified and confirmed through their bankers SBM along with two affidavits. The Opposite party then asked to execute necessary loan papers. Accordingly she done with her father/guarantor on stamp paper on 27.12.2012. Five blank signed cheques were also taken by her, on 04.12.2013 and on 06.12.2013, when the Opposite party bank sanctioned the loan of Rs.22,50,000/-. The Opposite party informed to CIBIL on both occasions. The result is that the increased borrowings were shown as Rs.44,50,000/-. Refusal to sanction the loan by Opposite party bank affected her. Thereby she could not get the loan from other financial institutions also, based on the above CIBIL rating result. Her financial position was impaired permanently. She had to forego 20% of the advance amount from agreement holder and able to recover only Rs.6 lakhs. The legal notice dated 11.04.2013 was not replied by the Opposite party. Though all formalities and requirements were completed on 27.12.2012, the Opposite party did not release as agreed.  Thereby she was unable to complete the sale transaction on or before 17.01.2013 in terms of the agreement and was informed by e-mail dated 14.01.2013. The Opposite party failed to inform the reason for releasing the amount and status of the loan sanctioned. On 28.01.2013 she learnt personally on enquiry that her vendor being illiterate, the bank would not allow financing for purchase of properties of illiterate persons. The Opposite party returned all loan documents executed by her through messenger by hand delivery on 05.02.2013. The Opposite party reported to CIBIL about her financial market by mis leading the reports which made her to suffer from mental agony. Hence, she filed this complaint.

          3. The Opposite party has filed the version denying the allegations made against it and contending that the loan was not at all approved and it had not updated to CIBIL as loan sanctioned and as alleged. Without proper appraisal of facts the Complainant acted upon her own beliefs, detrimental to her interest, despite explanation made to her clearly. She had approached to seek the loan facility under “Power Home” loan facility. Being the private bank as per RBI norms, it has been lending loans to customers. The prospective borrower had to prove his credibility - financial, legal and technical - to satisfy soundness, integrity and credit worthiness etc. The preliminary sanctioned letter subject to legal and technical clearance indicated that she had to prove legal and technical evaluation reports in her favour, within the validity period of 180 days from the date of sanctioned letter. After the receipt of the loan application dated 04.12.2012 it started processing and she was informed on 06.12.2012 about her qualification to proceed subject to result and further compliances. She misconstrued the title sanction letter as final sanction letter, though it was clearly mentioned there in that it is subject to terms & conditions, where in clause 20 & 25 also shows about the sole discretion of the bank. On receipt of the legal scrutiny report, it came to light that the prospective vendors of the Complainant could tender their acceptance only by LTI. The internal policy of the bank did not authorize to accept such transactions and it was conveyed to the Complainant during her visits. She could have availed said loan by mortgaging different property but she did not comply the same.  The bank had not informed her to authenticate her vendor’s identity with affidavits as alleged. Rejection of loan by bank is incurable and loan cannot be sanctioned. The bank swiftly completed the processing with in 11.12.2012, after receiving loan application dated 04.12.2012. After rejecting of the loan application proforma forms became infructuous and instead of destroying them, the Complainant used them to file this complaint on false grounds to gain illegally. The loan agreement dated 27.12.2012 neither bears the signature/seal of the officials of the Opposite party bank. Proforma copies of loan documents are being falsely used as executed loan documents. The bank has not received any such blank cheques or ECS mandate from the Complainant. The bank has acted with due care to safeguard the interest of the Complainant. There is no deficiency on its part. The complaint becomes liable to be dismissed.  

          4. The Complainant and the bank officials have filed their affidavit evidences. The Complainant has relied on Ex-A1 to Ex-A13 documents and Opposite party has relied on Ex-B1 to Ex-B3 documents. Written arguments were filed by both the parties. Arguments were heard.

          5. The consumer disputes that arise for consideration are as follows:

1. Whether the Complainant establishes that not releasing of house loan to her after scrutiny of the loan documents becomes the deficiency in service by the Opposite party bank ?
2. To what order the parties are entitled ?

6. Answers to the above consumer disputes are as under:

1) Negative

2) As per final order – for the following      

REASONS

          7. Consumer Dispute No.1: The undisputed facts reveal that the Complainant submitted the loan application and got the power home sanction letter Ex-A1/Ex-B2 dated 06.12.2012, where in the Opposite party bank informed to mortgage the property in the form and manner prescribed by it within 180 days subject to the terms & conditions no.1 to 30 mentioned therein.  The Complainant submitted the declaration cum confirmation deed Ex-A2. Later she submitted the number of documents for scrutiny. Ex-A3 to Ex-A8 are such papers relied on by her. On 28.01.2013 she requested the bank and accordingly she was informed that loan was not processed due to left thumb policy of the bank and her bank do not agree for any home loan disbursement, where the vender provides LTI for any agreement. On 28.01.2013 again she sent the message expecting the answer whether the loan would be disbursed or not and if loan is cancelled to give in writing as to why loan sanction has been cancelled after giving the loan sanction letter. She sent the legal notice dated 11.04.2013 to the bank as per Ex-A10 through post as per Ex-A11 and later filed this case along with Ex-A13 CIBIL report. Wherein the score no.806 is mentioned with describing scoring factors with further particulars that she had the current balance of Rs.22 lakhs against the sanction loan of Rs.37 lakhs.

          8. Through Ex-A1 the Opposite party bank has informed the terms & conditions 1 to 30 to the Complainant and among them the condition no.4, 16, 19, 20, 22, 23, 24, 25 read as here under:

          4) The loan is subject to satisfactory compliance of all terms & conditions as stipulated in the legal opinion report, the title of which should be clear and marketable given by the banks approved lawyer.

          16) You will ensure that the property is transferred in your name and the necessary tax assessment is completed. All taxes on the property should be promptly paid.

          19) The disbursement of the loan is subject to the execution/submission of necessary documents, which forms part of the overall sanction communication from us.

          20) This sanction letter supersedes all previous sanction letters, if any for the above mentioned approval number.

          22) AXIS BANK is entitled to add to, delete or modify all or any of the aforesaid terms & conditions

          23) The processing Fees and/or login fees are non-refundable.

          24) The sanctioning of loan facility is at the sole discretion of AXIS bank

          25) This sanction letter shall remain in force till the validity period mentioned in this sanction letter from date of sanction. However, the revalidation is subject to and at the sole discretion of the bank, on application of the borrower/s

          9. The legal scrutiny report/opinion Ex-A3 while concluding at final certification stage mentioned that the valid and marketable title referred is on the basis of documents produced before him and they are subject to production of the encumbrance certificate for the period from 29.09.2012 till date and at the end it is ended with specific note as her under:

                    This report is generated based on an examination of photocopies of various documents denoted herein and does not certify as to the authenticity of such documents. We recommend a physical examination of all original documents prior to conclusion of any transaction relating to the properties denoted herein. The report is limited to certifying the prima facie legal right, title and interest of the present owners based on the representations, and documents referred above for the said periods. However, in order to thwart the possible undisclosed risk/s of existing/impending litigation/s and land acquisition proceedings, please ask the panel engineer of your bank to make enquiry in the neighbour hood of the property during his routine visit/s.   

          10. In Ex-A1 power home sanction letter issued for plot re sale purchase, the Complainant and her co-applicant were informed to complete the process within validity period of 180 days. The said 180 days end in first week of June 2013. After receipt of the legal scrutiny report Ex-A3 dated 11.12.2012. Ex-A3 does not show the date when it was furnished to the bank.  The enquiry about the property and risk started after 11.12.2012 to know about the credibility of legal and technical aspects.

11. The Opposite party is the private limited dealing with public money and has got responsibility to deal with public money with utmost care as per RBI guidelines and accordingly has taken care.  The bank is given with sole discretion as per the explained terms 22, 24 and accordingly exercised its right by seeking the opinion of banks panel advocate. The Complainant in her written arguments at no.6 admitted that on 31.12.2012 she was informed about bank panel’s opinion with direction to produce further documents. Such discretionary power cannot be questioned by the Complainant so as to defeat the contractual terms. It is not the case of the Complainant that in furtherance of scrutiny report she furnished needful documents and compliances to the satisfaction of the bank authorities. Hence merely because of scrutiny report is filed by advocate as per Ex-A3, it does not empower her to snatch the credit facility as of right, as against the opinion of panel advocate.  

          12. The allegations regarding the CIBIL reports supported by Ex-B3 entries denied by the Opposite party. The loan entries to be done by computer system of the banks which inter linked with CIBIL.  Such entries dated 04.12.2012 and repeated entry dated 05.12.2012 were updated and no entry is found as alleged by the Complainant to show her obligations towards the amount of Rs.44,50,000/-. The loan amount was also shows Ex-B3 as the enquired amount and not as the sanctioned amount. The Complainant has not explained how the said entries under the head enquiries made effected her financial status to become impaired permanently. The CIBIL entries are utilized for knowing about her financial dealings and obligations and not to disqualify her, if she becomes capable to furnish the required securities and formalities.

          13. The Complainant had 6 months time to deal with the loan transaction. The bank had not imposed the condition to complete the transaction within 17.01.2013. The Complainant was not asked to enter in to agreement with the said vendors. The Complainant had the option with the Opposite party/bank either to purchase any other sites or to give the security of any other property to her loan transaction to comply the legal and technical clearance. She has not done so.  Her contention that Ex-A3 legal opinion itself clearly gives clear and marketable title cannot be accepted in view of the provisions made for further enquiry there in to the satisfaction of the bank authorities.  Ex-A3 cannot over take the sole discretionary power of the bank. It appears that the Complainant proceeded in hurried manner in entering in to agreement to sell dated 12.12.2012 before seeking the opinion of the bank based on Ex-A3. It appears that before the bank authorities proceeded further on Ex-A3, she entered in to agreement. Such hurried act now cannot be stated as the result of the act of the Opposite party bank. Hence the Complainant has no right to seek any amount towards the sale agreement as she had sufficient opportunity till first week of June 2013 to continue her attempts towards taking loan.  The reply of the bank relating to its sole discretion cannot be considered as exercised arbitrarily against the interest of the customers.  Hence there is no deficiency on the part of the bank as alleged by the Complainant. Accordingly the Consumer Dispute No.1 answered in the negative.

          14. Consumer Dispute No.2: In view of the finding of Consumer Dispute No.1 the Complainant deserves to get the following:

ORDER

          The Complaint of the Complainant is here by dismissed. No order as to costs.

          Supply free copy of this order to both the parties. 

          (Dictated to the Stenographer, got it transcribed, typed by her/him and corrected by me, then pronounced in the Open Forum on 12th day of January 2017).

Documents marked on behalf of Complainant:

Documents produced on behalf of Opposite party