Kerala

StateCommission

A/15/574

MANAGER SYNDICATE BANK - Complainant(s)

Versus

PRASANNAKUMARI A - Opp.Party(s)

G S KALKURA

27 Feb 2017

ORDER

KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

VAZHUTHACAUD, THIRUVANANTHAPURAM

APPEAL NO.574/2015

JUDGMENT DATED: 28/02/2017

(Against the order in CC 249/2010 on the file of CDRF, Kasargod)

PRESENT:

SHRI. K. CHANDRADAS NADAR     : JUDICIAL MEMBER

SHRI. V.V. JOSE                                   : MEMBER

APPELLANTS:

1. Syndicate Bank,

            Vorkady Branch,

            R/by its Manager.

 

2. The Chairman,

            Syndicate Bank,

            Manipal.

 

(By Adv: Sri. R.S. Kalkura & G.S. Kalkura)

                                                                                                            Vs.

RESPONDENTS:

1. Prasanna Kumari. A.,

            D/o. A.Gopalakrishna Bhat,

            Residing at Aranthady House,

            Kalliyoor, Vorkady. P.O.,

            Kasargod.

 

 

 

 

2. A. Gopalakrishna Bhat,

S/o. Late Thimmayya Bhat,

R/at Aranthady House,

Kalliyoor, Vorkady. P.O.,

Kasargod.

 

(By Adv: Sri. B.A. Rajeevan)

 

JUDGMENT

SHRI.V.V. JOSE       : MEMBER

            This is an appeal filed by the opposite party under section 15 of the Consumer Protection Act, 1986 against the order in CC No.249/2010 dated 20.05.2015 in the file of District Consumer Forum, Kasargod, directing the appellant / opposite parties to pay a compensation of Rs.1,00,000/- with a cost of Rs.5,000/- to the complainants.

            2.        complainants are alleging deficiency of service on the part of opposite party bank as they rejected the education loan application of the complainant on the ground that complainant No.2 is a judgment debtor of opposite party bank, irrespective of guidelines of Reserve Bank of India. 1^st opposite party filed version admitting the loan application under “Sind vidya Scheme” but not sanctioned as the 2^nd complainant was an intentional defaulter of opposite party.   He is liable to repay a loan obtained by a Thimmappa and others for which bank has filed OS 13/1995 on the file of Sub Court Kasargod.  On the other hand complainant No.2 herein and his brothers filed OS 63/1995 for declaration and in alternative for correct determination of amount due.  And counter claim for repayment of the excess amount if any.  Both cases were jointly tried and decreed. OS13/97 filed by bank was dismissed.  The appeal filed against the dismissal is pending before the Hon’ble High Court.  Opposite party bank was directed by RBI and their Head Office, whenever such a dispute is pending no fresh loan could be given to such parties.  The application filed by the complainant is not considered for the said reason.  There is no personal vendetta or any deficiency of service.

            3.        Complainant filed proof affidavit.  Exts. A1 to A13 were marked also.  Complainant No.2 was examined as PW1.  Opposite parties neither filed affidavit nor produced any documents.  They didn’t entered into the box also.

4.        Heard both side.  Two issues were considered i.e. any deficiency of service in non-sanctioning of educational loan and if so the reliefs entitled.       The case of the complainant is that 1^st complainant is a student admitted to Engineering course on merit.  2^nd complainant is her father.  Their application for educational loan was refused on the ground 2^nd complainant is a judgment debtor of the opposite party.  The main contention of opposite party is that PW1 / 2^nd complainant is a defaulter.  So loan cannot be sanctioned to his daughter who is the student.  Ext.A13 is a common judgment in OS 63/95 and 13/97, of Sub court, Kasargod.  Ext.A12 is decree in OS 13/97.  OS 63/95 was decreed in favour of the complainant coupled reading of these documents show that claim of 1^st opposite party was rejected and PW1 is the 6^th defendant in OS 13/97.  In Ext.A9 the allegation of opposite parties is that as a judgment debtor complainant’s request cannot be considered.  This contention was not acceptable to the forum.  Even after issuance of notice, opposite party was not ready to help a needy student.  It is evident from Ext.A 11.  According to the forum below it is a clear case of deficiency in service and dereliction of duty casted upon nationalized banks by government and Reserve Bank of India.  Opposite party never cared to cooperate with the proceedings.  They never entered into the witness box or produced any documents to defeat the allegation of the complainants.  The evidence of PW1 clearly proves that he is eligible for compensation.  According to the forum the act of the opposite party of refusing the educational loan to an eligible student is against the diction of Hon’ble High Court and directions of Reserve Bank of India and it amounts to deficiency of service and unfair trade practice which entitle the complainant for relief and ordered accordingly.

            5.        Aggrieved by the above order the opposite parties preferred this appeal on various grounds.  They allege that the district forum failed to appreciate that the loan application filed by complainant is a joint application.  The second complainant was a judgment debtor.  The suits filed by bank and 2^nd complainant is pending in the Hon’ble High Court.  So bank was not in a position to grant any loan to a defaulter as a party to a loan application.  The appellant questioned the locus standi of the complainant to institute a complainant as he cannot be considered as “consumer” as defined under Consumer Protection Act as there was no contract or obligation to grant loan to the complainant.

            6.        They again allege that the judgment relied on by the District Forum V12 2012(1) KLT 755 was overruled by the Division Bench of the Hon’ble High Court in 2013 (1) KLT 649.

            7.        Heard both sides.

            The Lower court records were also perused.  The complaint was filed on 2010 seeking grant of educational loan of Rs.7,00,000/-  damages of  Rs.50,000/- and cost and such other relief.  It is admitted that the 1^st complainant for pursuing her education in Engineering applied for an educational loan through her father, the 2^nd complainant.   The education loan was refused by the appellant on the ground that the grandfather of the 1^st complainant had a loan and the same was defaulted and suit was filed for recovery and on dismissal of the same appeal is pending before the Hon’ble High Court.  Appellant alleged that as per precedent and practice of bank no loan can be granted to a defaulter.  Hence the educational loan was refused.

            8.        We have gone through Ext.A12 which is a suit filed by the appellant herein against six persons in OS 13/97 in Sub court Kasargod.  One Gopalakrishna is the 6^th defendant.  The prayer is to direct defendant 1 and 3 to pay sum of Rs.94,720/-.  There is no relief against 6^th defendant.  However the suit was dismissed with cost against appellant.  Similarly another suit OS 63/90 by A. Thimmappa Bhat which was jointly tried with OS 13/97.  OS 63/97 was decreed against the appellant.  The appellant states that appeal is pending before the Hon’ble High Court.  As per the precedent custom and practice of the bank no fresh loan can be given until former disputes ends finally.  No document contain of any specific laws, rules, or provisions are brought before us for conceiving this point.  The loan applicant is the student who is a minor and she was represented by her father.  If the ‘sind vidya’ loan is defaulted the student alone is liable to be proceeded with under the RBI guidelines as admitted by the parties.  When there is no specific law prohibiting grant of education loan in the given circumstances the refusal is a clear deficiency of service.  We find force in their argument of the complainant.  In the suit by bank which was ended up in dismissal, the complainant is not sought for any direction as per Ext. A12.  Education loan cannot be refused to a needy and eligible candidates on flimsy grounds which is against the objects of the purpose of education loan.  Hence we do not find any infirmity in the order of the Lower Forum.

            9.        The prayer of the complainant was to grant the educational loan and damages of Rs.50,000/- when the complainant was disposed of in 2015 we infer that the first relief has become infructurous.    Complaint was not amended.  Hence the complainant is not entitled for the first relief. While considering the second relief the prayer of the complainant is to grant damages of Rs.50,000/- and cost.  The complainant has not pleaded or prayed for a higher compensation.  However the lower forum has allowed a compensation of Rs.1,00,000/-.  The reason for granting a higher compensation than what is prayed for is not made mentioned by the lower forum.  It is true that higher compensation can be granted by the lower forum considering the peculiar circumstances, but the lower forum has not attributed any peculiar reasons to enhance the compensation. In the appeal memorandum the appellant has stressed the said act of the lower forum is illegal and wrong.  We find force in that argument, in the above reasons.  In the absence of any peculiar reasons the forum ought to have confined the limit of compensation only up to the amount prayed for.  The forum below erred in this aspect.  So we find that the compensation granted by the lower forum is excessive and beyond pleadings.  Hence we are inclined to modify the amount of compensation to Rs.50,000/- as against Rs.1,00,000/- allowed by the forum below.  To this limited purpose we modify the order of the lower forum reducing the compensation to Rs.50,000/-.  On all other aspects the order of the lower forum is perfectly in order, legal and justifiable.

            10.      The object of granting an educational loan is well demonstrated by the Government and covered by the parameters fixed by RBI would show that a student can apply for an educational loan by himself without any security or guarantee of parents.  When the banks rejects such applications attributing conditions which are not enunciated in the RBI circular will prejudice such applicants and denying a valuble right to such applicants.  In this case the bank has rejected the application merely on the pretext that her father / guarantor or his predressors owes some dues is apparently disentitled them to take contention that student was not a consumer is not appreciated by us.  The girl could have by herself and if she made such an application there were no other grounds to decline the education loan.  In such circumstances she is have cause of action against the appellant.

 

 

            In the result, the appeal is partly allowed, we modify the order of the lower

Forum directing the opposite parties / appellant to pay a compensation of Rs.50,000/- with a cost of Rs.5,000/- to the complainant within 30 days from the date of receipt of this order.

 

V.V. JOSE      : MEMBER

 

K. CHANDRADAS NADAR : JUDICIAL MEMBER

 

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KERALA STATE CONSUMER DISPUTES

REDRESSAL COMMISSION, VAZHUTHACAUD,

THIRUVANANTHAPURAM

 

APPEAL NO.574/2015

JUDGMENT DATED: 28/02/2017

 

                                                                                               

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