D.o.F:17/08/2009
D.o.O:14/12/2010
IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD
CC.NO. 189/09
Dated this, the 14th day of December 2010
PRESENT:
SRI.K.T.SIDHIQ : PRESIDENT
SMT.P.RAMADEVI : MEMBER
Varkey Paulose,S/o C.K.Varkey,
Cheerakathottathil House, Peral,
Mogral Po, Kumbla, Kasaragod : Complainant
(Adv.Benny Jose, Kasaragod)
1.P.K.Narayanan, Franchise in charge,
ICICI Bank ,City Center,2nd floor,Kasaragod.
(Exparte)
2. Manager, ICICI Bank , Kasaragod Branch : Opposite parties
City Center,Ground floor,Kasaragod
3. Chairman, ICICI Bank Ltd,
Land Mark, Raise course circle, Vadodara,
Mumbai-390007
(Adv. Rajesh V Nair, Thalassery)
ORDER
SRI.K.T.SIDHIQ : PRESIDENT
The case of the complainant is as follows:
Complainant is a businessman doing various businesses including vegetable vending in his shop by name and style Sulabha Super market at Kumbla. Complainant constructed a big residential building spending more than 15 lakhs. Since he could not get the huge amount due to him from various sources he availed a bank loan of `10,00,000/- from SBI Kasaragod. Even then construction could not be completed. Later while he was in financial stress opposite parties 1&2 approached him and as part of canvassing customers, 1st opposite party told that ICICI Bank will arrange loan and the loan he already availed from SBI will also be taken over by them. Accordingly after much discussion from Calicut opposite parties 1&2 agreed to sanction loan interest @ 10 1/2 % per annum that is a lower rate compared to SBI. The complainant thereafter produced many documents including property documents to get the loan. Being guarantor, the property documents of his wife is also submitted. Later a valuer was appointed to assess the value of the property. The valuer, on his initial visit seeing the house construction is not completed, told that he cannot value house in such condition. Hence complainant completed the construction by purchasing the building materials on credit and also availing hand loans from friends. In the mean while he stopped repayment of loan availed from SBI on the assurance of opposite parties that they will take over the loan . Subsequently after completion of the house the valuer again surveyed and assessed the value of property and the legal advisor of opposite parties firm scrutinized all his documents. Opposite parties 1&2 then assured that the loan would be sanctioned immediately. Since another 6 months elapsed by waiting complainant directed to produce fresh possession certificate. It was also submitted. Meanwhile SBI Kasaragod initiated loan recovery proceedings against complainant since he did not repay the loan. When this fact was informed, 2nd opposite party issued a letter to the Manager SBI Kasaragod intimating that the loan of complainant will be cleared by ICICI Bank and they have already sanctioned the loan to the complainant. Thereafter opposite parties 1&2 instructed the complainant to open a current account in order to facilitate the release of loan amount. Accordingly, complainant opened a current A/c depositing `10000/- in the name of his firm. ‘ Sulabha super Market’ as instructed by 2nd opposite party. In the meantime 2nd opposite party also instructed to take an ICICI Prudential life insurance policy as a pre-condition for sanctioning the loan. Therefore complainant remitting `25000/- obtained policy No.000027626 commencing the risk from 3/12/06. After few days again when complainant contacted opposite parties 1&2 it was told that there is some complication since the account is opened in the name of Sulabha Super market and told the complainant to open as account in the very same name shown in the loan application. Hence after closing the said account he opened another account in his individual capacity. Thereafter opposite parties 1&2 assured the complainant that the loan amount will be credited in his account and it was further told that they will directly handover the D/D for closing the loan to SBI. For that an irrevocable power of attorney is also obtained from complainant authorizing them to collect the original title deeds and documents from SBI. Thereafter chequebooks were also issued in the new account in the name of complainant. After a few days 2nd opposite party summoned the complainant and said that there is a printing mistake in the name of complainant and therefore after printing the correct name fresh cheque book will be issued to him. Again complainant waited for another 6 months. Again fresh possession certificate is also furnished. By then fresh cheque books is received and 2nd opposite party asked the complainant to issue 24 signed cheque leaves in the name of ICICI Bank Ltd. It was done in May 2007. After accepting the bunch of cheque leaves opposite parties 1&2 assured the complainant that the loan amount will be credited in his account within a few days and asked the complainant to verify it from his account. But though complainant checked his account for few days no loan amount was credited. Finally lost his hope he contacted opposite parties 1&2 but they could not give any proper answers and they requested the complainant to wait another few days. But was of no avail.
By that time the individuals from whom complainant borrowed money and the shop owners from whom he purchased building materials on credit began to pester him even to the extent of publicly insulting and humiliating him. To make the matters worse the SBI officials also threatened him stating that they would start securitization proceedings and include his name in the black list. Complainant even thought of committing suicide. To avoid tragedies he sold his house for a throw away price and cleared the dues to SBI and other personal debts and shifted to a rented house. Complainant paid `1163410/- to clear the dues and when he approached ICICI Bank for loan the dues were below `10,00,000/-. The complainant has constrained to roam around the office of opposite parties nearly 2 years expecting the loan. Complainant spent ` 25000/- for availing the ICICI Prudential life insurance policy as a predisbursement condition of loan . He spent `3000/- as legal expenses, ` 25000/- towards valuers fee and he spent more than `160000/- to clear the loan dues because of the delay in repayment and the incidental expenses for collecting various document. Further he had a loss of `1800000/- including the actual market value and the sale price of his house. Hence the complaint claiming the above amounts.
2. Though notices were issued to all opposite parties by registered post notice to Ist opposite party returned unclaimed even after intimation is served on Ist opposite party. Hence notice to Ist opposite party is deemed to have served and Ist opposite party had to be set exparte. Opposite parties 2&3 appeared through Adv.Rajesh V Nair and filed the version.
According to opposite parties 2&3, the allegations in the complaint are not correct. The complaint is not maintainable and it is liable to be dismissed for defective cause title since ICICI bank is not made a party and only the officials are made as parties. Complainant approached the bank for loan for doing business. Hence it is for commercial purpose. Therefore complainant is not a consumer. The complainant had submitted an application for a loan of 25 lakhs for doing business in the name of his establishment Sulabha Super market and the application is signed by the complainant in his capacity as the proprietor of Sulabha Super Market. The complainant is trying to link his construction of his house with that of the loan for which he had approached the opposite party. The opposite parties have its norms in the matter of extending loan facilities to borrowers and that the collateral security should be in order and also should be valued to the extend of the exposure of risk. The complainant had not completed the construction of the house though he availed the loan from SBI for constructing the house. It shows that he had diverted his earlier loan amount. The sanction letter is issued subject to the other formalities being made aware to the borrower. In the instant case the name of borrower was C.V.Paulose but all the records shown the name C.V.Poulose. The names are spelled and no notarized affidavit was given. There were few other documents like declaration cum undertaking, identity cum declaration. In the possession certificate, which was issued to the complainant, had such discrepancies with regard to his name and as a result the delay set in for which the complainant is to be blamed. The non-repayment of loan to SBI is a fault of the complainant. It is because of lack of money complainant could not repay the loan and hence his account with SBI became NPA (Non Performing Asset). The complainant should prove that the opposite party issued letter to SBI to the effect that the arrears and loan would be cleared upon the loan being sanctioned. The issuing of new chequebook in view of the printing mistake is no way relevant to the above case and the alleged loan was never withheld in view of the confusion in the name. The complainant was only given an in principle sanction. The sanctioning of loan and disbursing the loan is the exclusive domain of the opposite party and as a banker for reasons known to them the loan need not be sanctioned nor disbursed. In this case complainant wanted to divert the agricultural loan, which was sought for doing vegetable business to take over the existing loan and that, the complainant had lot of debts, which was hidden in the declaration form. The non-completion of the house even in 2006 for the loan availed in 2004 shows that complainant did not have means to complete the construction of the house. If so the projection made by the complainant as if he was earning huge income was without any basis. The investigation made by the opposite parties revealed that the complainant was in arrears of installment to loan and the value of the asset was also artificially jacked up and that his neighbor sold the property only for `15000/- per cent but the valuation certificate brought did not match the price in reality. Since the complainant tried to cheat the opposite party with false records and the property is over valued complainant was found to be not a bonafide person and hence the loan amount was not disbursed. There is no basis for the claim of complainant. Complainant is not entitled to seek refund of `25000/- paid for insurance policy much less the charges paid to the valuer and the legal charges for the title scrutiny. The opposite party is not liable to pay the alleged sum of `160,000/- said to have paid to SBI at the time of repayment of loan. The complaint lacks bonafides . Hence it is liable to be dismissed.
3. Complainant filed proof affidavit reiterating what is stated in his complaint. Exts.A1 to A32 marked. One witness, the surveyor who assessed the value of the house examined as PW2. On the side of opposite parties DW1, Sri. N. Unnikrishnan, Credit Manager of ICICI Bank in Coimbatore filed proof affidavit in support of the contentions. Ext.B1 marked through DW1. Both sides heard and all the documents perused carefully.
4. The points to be considered in this complaint are;
1. Whether the complainant has suffered any loss, hardships and mental agony on
account of the non-disbursement of the loan?
2. Is there any deficiency in service on the part of opposite parties?
3. If so,what is the order as to relief and cost?
5. Points Nos 1&2 are considered together for the sake of brevity:
The claim of the complainant is ` 1,80,00,000/- for the losses ,hardships and mental agony suffered on account of non-granting of loan to him. In order to support his claim Exts A1 to A32 documents produced. Ext.A1 is the loan sanction letter dtd.30/6/06 of the ICICI Bank. As per Ext.A1 letter it is seen that the ICICI Bank has sanctioned a loan of ` 2.23 million to the complainant. The Annexure I attached to the loan sanction letter shows that the loan is intended for agriculture. One of the pre-disbursement conditions is that the life insurance for the applicant favoring ICICI bank has to be taken for `1,00,000/-. Page 48 of Ext.A1 shows the details of title deeds and documents submitted by the applicant for availing loan.
6 Ext.A2 is the copy of the letter dtd.18/1/07 issued by Suneesh K.G the sales Manager of ICICI bank Ltd Kasaragod to the Manager of State Bank of India Kasaragod asking him to mention the outstanding amount due to the Bank from the complainant. Ext.A2 indicates that the opposite parties were well aware about the loan already availed by the complainant from SBI and its pendency. Ext.A3 is an irrevocable Power of attorney executed by the complainant dtd.25/10/06 to ICICI Bank to hand over the cheque to be issued by ICICI bank towards the full repayment of the existing loan facility in all and final settlement. Ext.A4 is the copy of the lawyer notice issued by the counsel for complainant to opposite parties. Ext.A5 is the reply notice to Ext.A4. Ext.A6 is a request to extend the time for settlement of loan to till 31/3/2007 and to drop legal action initiated against the complainant. Ext.A7 is the valuation report prepared by Sivaprasad M.D a registered Engineer with respect to the dwelling house of the complainant with photos. According to the valuer the land and building will fetch 44,53,486/-. Exts.A8&A9 are the chequebooks. Ext.A8 is said to be the chequebook in which the name of the complainant is incorrectly spelt and Ext.A9 is the name corrected chequebook. Ext.A10 is the copy of the certificate dtd.23/3/2006 issued from SBI Kasaragod branch showing the details of housing term loan availed by the complainant. Ext.A11 is the declaration submitted by the complainant to opposite party to close the account maintained in the name of Sulabha Super market. Ext.A13 is the fitment certificate issued by Adv.Shyam Kumar after scrutinizing the title deeds of the complainant. Ext.A14 is the letter dtd.29/12/006 issued by the Chief Manager of SBI Kasaragod to 2nd opposite party. In that letter the SBI Manager is informed 2nd opposite party that the balance required for closing the housing loan is ` 1076441/- and they confirm to release the documents pertaining to the loan to 2nd opposite party’s representative on receipt of the outstanding amount including penal charges if any on the date of closing the account i.e. 31/12/06. Ext.A15 is the copy of the letter to the Manager of SBI Kasaragod in response to the Ext.A15. Ext.A16 is the deed of guarantees executed by the complainant and his wife to ICICI bank as part of the processing the loan. Ext.A18 is a certificate of net worth prepared by one Srinivas Shenoy a chartered Accountant. According to him the net worth of C.V. Paulose is `7145760/- Ext.A19 is the copy of the notice issued by State Bank of India Kasaragod branch to complainant U/s 13(2) of the SARFAESI Act before repossessing the secured assets pledged to them. Ext.A20 is the affidavit submitted by the complainant before the 2nd opposite party bank. Ext.21 is the declaration submitted by the complainant before opposite party in the matter of mortgage by deposit of title deeds in respect of his immovable properties. Ext.A22 is the certificate showing the present market value of the property of Leelamma Paulose the wife of complainant. Ext.A23 is the master facility agreement executed by ICICI bank Ltd and complainant. Ext.A24 is the confidential approval note and term sheet prepared by the opposite party with respect to the property and details of complainant. Ext.A25 is the possession certificate issued by V.O. Kumbla and Ext.A26 is the encumbrance certificate issued by S.R.O Kasaragod with respect to the property of the complainant. Ext.A27 is the statement of account of complainant with respect to the account maintained in SBI Kasaragod from 24/2/2005 to 31/3/2006. Ext.A28 is the documentation information Memorandum prepared by opposite party. Ext.A29 is the letter of authority issued by the complainant to Manager SBI Kasaragod requesting the SBI to handover the documents deposited before them to ICICI Bank Ltd on receipt of amounts due and payable to them ICICI bank. Ext.A30 series are the blank signed cheque leaves (19 Nos.) submitted before the ICICI Bank drawn on ICICI bank Kasaragod branch. Ext.A31 is the declaration cum undertaking executed by the complainant favoring ICICI Bank. Ext.A32 is the certificate issued by SBI kasaragod stating that the loan of the complainant closed on 31/10/07.
7. On a bare perusal of the documents produced above that was submitted before the opposite parties for granting loan itself makes it clear that complainant had taken much time efforts and pain to prepare the documents and he has not suppressed any material information in order to get the loan. But he was not given the amount as offered ever after sanctioning the loan.
8. In the affidavit submitted by the complainant he stated that since the opposite parties did not grant the loan even after executing and submitting all the documents he faced with securitization proceedings of the SBI Kasaragod under SARFAESI Act and therefore constrained to sell his house for a lesser price than its actual market value. Moreover he unnecessarily took the ICICI prudential policy for` 25000/- and spent ` 5000/- for preparing the valuation report and legal opinion. Further for opening a current account he deposited `10,000/- Moreover when he applied for loan, the loan due to SBI was below ` 10,00,000/-. But to close the said account he constrained to pay `1163403/-. In addition to these specific loans he borrowed on higher rate of interest for closing the loan . That apart in anticipation of getting the loan from opposite parties he availed several hand loans from several persons and they humiliated him restraining him on road, since he could not repay the amount in time.
9. Against the pleadings and evidence both by oral and documentary adduced by the complainant. The opposite parties only produced Ext.B1. It is the copy of the Trader Finance application form (loan application form) submitted by the complainant as the proprietor of the Sulabha Super Market to the opposite party bank.
10. In defense the contentions raised by the opposite parties are very feeble and it is raised only for the sake of defense. One of the contentions is that ICICI bank is not made a party. Instead of that the Chairman and Manager is impleaded as parties. The said contention is not tenable, such technical defenses are available only under the Code of Civil Procedure and not before the Consumer Forum, where the aggrieved consumers submit their grievances who is not having any legal knowledge. The contention that the loan was intended for commercial purpose is also not maintainable since none of the documents Exts.A1 to A32 produced by the complainant or opposite party show that the loan was sanctioned was in the name of complainant’s commercial establishment. On the contrary it show that the loan was sanctioned in the name of complainant in his individual capacity.
11. To substantiate this contention learned counsel for opposite parties 2&3 Sri.Rajesh V Nair produced an unreported order of the Hon’ble National Commission M/s Silver tone Motors (Pvt)Ltd and another vs ICICI Bank (CC No.159/2009 of NCDRC) order dtd.12/4/2010. The said order is not applicable to the case on hand. In the said decision the complainant was one Pvt.Ltd Company manufacturing Skoda Cars. But in the instant case the complainant is an individual and the chequebook Exts.A8, A9 and A30 series issued to the complainant is also in his individual name and not in the name of any commercial establishment.
12. Another contention of opposite parties is that the loan was sanctioned only in principle. But Ext.A1 nowhere says that the loan is sanctioned only in principle. The loans will be sanctioned only if all the requirements of the lender are satisfied. Therefore raising further technical contentions about the financial status, documents etc of the borrower does not arise . In other words once the loan had been sanctioned, the queries raised by the opposite party become irrelevant. Though it is settled that as far as the disbursement of loan is concerned, it is the discretion of the bank as it is the sole prerogative of the financial institution whether to lend the loan or not and the Consumer Forum could not interfere in the same. But in the present case it is clear that the complainant has been unduly harassed. The loan after having been sanctioned was not disbursed which forced the complainant to sell his property including his house to avoid the legal proceedings initiated by SBI Kasaragod under SARFAESI Act.
13. Apart from that as part of the pre disbursement condition of loan complainant has to avail an ICICI prudential life insurance policy by remitting ` 25000/- which subsequently became lapsed. . So as per the pre disbursement condition of the loan the ICICI life insurance policy is a mandatory requirement. The complainant has taken a lifetime super policy of ICICI prudential for the benefit 125000/- with annual premium ` 25000/- for granting loan. Ext.A17 is the said policy. The complainant has constrained to avail the ICICI prudential life insurance policy only because it being one of the pre disbursement condition of loan. If this is not restrictive trade Practice then what else it is? Sec.2(1)(nnn) of Consumer Protection Act defines Restrictive Trade Practice as follows:
Sec.2(1)(nnn) Restrictive Trade Practice means” a trade practice which tends to bring about manipulation of price or its conditions of delivery or to affect flow of supplies in the market relating to goods or services in such a manner as to impose on the consumers unjustified costs or restrictions and shall include:-
a) delay beyond the period agreed to by a trader in supply of such goods or in providing the services which has led or is likely to lead to rise in the price:
b) any trade practice which requires a consumer to buy, hire or avail of any goods or, as the case may be , services as condition precedent to buying, hiring or availing of other goods or services (emphasis supplied)
From the above it is clear that opposite parties committed restrictive trade practice by imposing a pre disbursement condition to grant loan that is to insure the life of the applicant favoring ICICI prudential life insurance policy for 1 lakh rupees.
14. Further anticipating that the opposite parties will take over the loan already availed from SBI Kasaragod, complainant stopped the repayment of loan and that further is saddled wirth payment of interest additionally. That part he has spent ` 5000/- for preparing the valuation report and legal fitment certificate. Moreover he also opened a new current account depositing ` 10,000/-, which is the minimum, required for opening a current account in ICICI bank.
15. From the facts, circumstances narrated and discussed above it is clear that opposite parties committed not only deficiency in service but also committed restrictive trade practice and there by complainant sustained heavy loss hardships and mental agony.
16. Regarding the sale of property and house at a lesser price due to the threat of securtaization proceedings of the SBI, complainant has not produced any document or adduced any evidence regarding the actual market value of the property and the difference between the market value and the actual price paid . Hence the claim on that account is not acceptable.
17.Point No3; relief & Costs:
For the foregoing discussions above we allow the complaint partly. The complainant is entitled to get refund of all the amounts he spent towards the loan processing including the interest he additionally paid to SBI Kasaragod at the time of closing the loan. In addition to that he is also entitled for compensation for the mental agony he suffered. The numerical details are shown below.
For preparing the valuation report and legal fitment certificate ` 5000/-
For opening a current A/c in ICICI bank ` 10,000/-
For taking ICICI prudential life insurance policy `25000/
Interest he additional incurred to lose the SBI loans `1,64,000
Compensation for mental agony and sufferings and other losses ` 1,00,000/-
Cost of these proceedings ` 5000/-
Therefore, the complainant is entitled to get a sum of ` 3,04,000/- from the opposite parties together with a cost of ` 5000/- On receipt of the said sum complainant shall surrender his life insurance policy and also close the current account opened with ICICI Bank for getting the loan. Opposite parties are also restrained from imposing predisbursement condition like life insurance policy etc for granting loan in future to their loaneessince it amounts to restrictive trade practice as envisaged under 2(1) (nnn) of the Consumer Protection Act. Time for compliance is limited to 30 days from the date of receipt of copy of the order. Failing which opposite parties shall further liable to pay interest @ 10% p for ` 3,04,000/- from the date of complaint till payment.
Exts
A1 - loan sanction letter dtd.30/6/06 of OPs
A2-- dtd.18/1/07 - copy of the letter issued by sales Manager of ICICI bank Ltd kasaragod to the Manager of S B I kasaragod
A3-25/10/06A3 Power of attorney executed by the complainant to OPs.
A4- copy of the lawyer notice
A5 -reply notice to Ext.A4
A6 - request to extend the time for settlement of loan
A7 - valuation report
A8&A9 - chequebooks
A10- dtd.23/3/2006- copy of the certificate issued from SBI Kasaragod
A11 - declaration submitted by the complainant to opposite party
A13 - fitment certificate
A14- dtd.29/12/006 - letter issued by the Chief Manager of SBI Kasaragod to 2nd OP
A15- copy of the letter to the Manager of SBI Kasaragod
A16 - deed of guarantees
A17 -policy
A18 is a certificate of net worth prepared by one Srinivas Shenoy a chartered Accountant. A19- copy of the notice issued by State Bank of India Kasaragod.
A20 - affidavit submitted by the complainant before the 2nd OP.
A21- declaration submitted by the complainant before opposite
A22 - certificate showing the present market value of the property complainant.
A23 - master facility agreement executed by ICICI bank Ltd and complainant.
A24-confidential approval note and property and details of complainant
A25- possession certificate issued by V.O. Kumbla
A26- Encumbrance certificate issued by S.R.O Kasaragod
A27-statement of account of complainant
A28-documentation information Memorandum prepared by opposite party.
A29- letter of authority issued by the complainant to Manager SBI Kasaragod
A30 series- blank signed cheque leaves (19 Nos.)
A31 - declaration cum undertaking executed by the complainant favoring ICICI Bank.
A32- certificate issued by SBI kasaragod stating that the loan of the complainant closed on 31/10/07.
B1- copy of the Trader Finance application form
PW1- Varkey Poulose-complainant
DW1- Sri N Unnikrishnan Credit Manager of ICICI Bank in Coimbatore
MEMBER PRESIDENT
