Haryana

Yamunanagar

CC/593/2011

Narinder Kumar Aggarwal S/o Avadh Bihari Lal - Complainant(s)

Versus

Punjab and Sind Bank - Opp.Party(s)

J.S.Deswal

27 Feb 2017

ORDER

BEFORE THE DISTT.CONSUMER DISPUTES REDRESSAL FORUM YAMUNA NAGAR JAGADHRI

 

                                                                                               Complaint No. 593 of 2011.

                                                                                                Date of Instt. 06.06.2011

                                                                                                Date of Decision:27.02.2017.

 

1. Narinder Kumar Aggarwal aged 60 years son of Sh. Avadh Bihari Lal,
2. Amit Aggarwal aged about 35 years son of Sh. Raj Kumar, both residents of          C-3/1095, Chorliyan Street, Jagadhri, Tehsil Jagadhri, District Yamuna Nagar.

                                                                                                              ..Complainants

     Versus

Punjab & Sind Bank, Sarasvati Vidya Mandir School Branch, Opp. Aggarsain College, Jagadhri, Tehsil Jagadhri, Distt. Yamuna Nagar through its Manager.

 

                 ..Respondent

 

BEFORE:         SH. ASHOK KUMAR GARG …………….    PRESIDENT

                          SH. S.C. SHARMA  …………………………MEMBER

           

Present:      Sh. J.S. Deswal, Advocate, counsel for complainants. 

                    Sh. J.S.Anand, Advocate, counsel for respondents.

ORDER (Ashok Kumar Garg, President).

1.                          Complainants have filed the present complaint Under Section 12 of the Consumer Protection Act, 1986.

2.                      Brief facts of the present complaint, as alleged by the complainants, are that complainants applied for building loan in the month of February, 2010 which was sanctioned by the respondent (hereinafter respondent will be referred as OP Bank) on 17.03.2010 and first installment of said loan amounting to Rs. 2,50,000/- was released on 17.03.2010 and second installment of Rs. 2,75,000/- was released in the month of June, 2010 and balance amount was not paid by the OP Bank. Thereafter, on 10.08.2010, the complainant received a letter that sanctioned map of building plan has not been submitted and as such they are unable to disburse the balance amount of the loan to the complainants. Upon which, complainants submitted the copy of sanctioned site plan to the Op Bank but again second letter dated 07.12.2010 was received in which it was stated that complainants have not completed the building and has not utilized the amount. In reference to that letter complainants sent a reply on 09.12.2010 to the Op Bank and submitted a project report on 03.01.2011 but despite that no amount of balance loan was released. Thereafter, OP Bank issued a letter on 11.03.2011 alleging therein that complainants constructed the shops instead of house and thereby mis-utilized the loan and it was further mentioned to adjust the said loan, so that the same can be completed into commercial loan, but this letter is based upon wrong facts as before the sanctioned of the housing loan, the complainants submitted the building plan to the OP Bank and after perusal of the said plan loan was sanctioned and in the said plan, the residential portion as well as the commercial portion has been clearly mentioned and the Op Bank keeping in view of the plan, the loan was sanctioned and two installments were released after proper verification of the construction raised by the complainant and proper utilization of the amount of first installment. Even otherwise also, it is mandatory for the Bank Authorities to release the second installment only when the first installment has been properly utilized so it does not lie in the mouth of the OP Bank to say that the amount of loan paid to the complainant has been mis-utilized. The complainants have spent the amount of both the installments of the loan plus the amount of margin money from their own pocket and this fact can be ascertained from the existing structure of the building constructed by the complainants and since June, 2010, the balance amount of the loan has been wrongly withheld without any reasons which is clear cut deficiency in service and negligence on the part of the OP Bank. The loan has been sanctioned as per site plan of the building, in which the nature of building has been shown, which is commercial as well as residential, but if at all, there was any provision of converting the loan into commercial loan in that eventuality also, the same cannot be converted for whole of the building, because a major portion of the building is residential and commercial interest cannot be charged for that. The complainants requested the OP Bank to release the payment of balance loan amount but the OP Bank refused to release the same. Hence, this complaint praying therein that the OP Bank be directed to release the balance amount and also to pay compensation as well as litigation expenses.

3.                     Upon notice, OP Bank appeared and filed its written statement by taking some preliminary objections such as complaint is not maintainable as there is no deficiency in service on the part of OP Bank; complainant has no locus standi to file the present complaint; complainant has no cause of action; the complaint is false and frivolous to the knowledge of the Op Bank and on merit it has been admitted that complainant had applied for housing loan for construction of his house and not building loan as alleged, accordingly, the loan was sanctioned on execution of necessary documents for construction of his house. Later on the complainant approached the Op bank and furnished an affidavit stating therein that he had availed housing building loan but he is using the loan amount for construction of commercial unit. He also stated in the affidavit dated 18.08.2010 that he undertake to pay interest on the loan amount on commercial rates and that his loan case may be considered accordingly. The complaints were also received from the neighbourer of the complainant and also legal notices informing the Op Bank that complainant is misusing the loan taken by him for construction of house by constructing a commercial unit at spot. In this way, complainant committed fraud with the OP Bank and so the complainant has breached the terms and conditions of the loan agreement. As such, the OP Bank has stopped the payment of further installments of the loan to the complainants. It has been further mentioned that complainant before sanctioning the loan had submitted the site plan of house and not commercial building, so, there is no deficiency in service or negligence on the part of OP Bank whereas complainants are guilty of playing fraud with the OP Bank and breaching the terms and conditions of the loan agreement. Lastly, prayed for dismissal of complaint.

4.                     In support of the case, complainant Narender Kumar tendered into evidence his affidavit as Annexure CX and documents such as counter part of bank voucher dated 08.06.2010 as Annexure C-1, letter dated 18.10.2010 issued by Op Bank as Annexure C-2, Counter part of the voucher as Annexure C-3, Photo copy of letter dated 07.12.2010 issued by Op Bank as Annexure C-4, Photo copy of letter dated 07.12.2010 written by complainant to the OP Bank as Annexure C-5, Letter dated 11.3.2011 issued by the Op Bank to the complainant as Annexure C-6, Photo copy of site plan sanctioned by M.C. on dated 22.05.1992 as Annexure C-7 and closed the evidence on behalf of complainants.

5.                     On the other hand, counsel for the Op Bank tendered into evidence affidavit of Tirath Singh Senior Manager as Annexure RW/A and documents such as photo copy of letter dated 10.08.2010 as Annexure R-1, Photo copy of letter issued by the complainant to the Bank as Annexure R-2, Photo copy of letter dated 11.03.2011 issued by Bank as Annexure R-3, Photo copy of letter dated 07.12.2010 issued by Op Bank as Annexure R-4, Attested copy of account statement as Annexure R-5, Photo copy of legal notice issued by Sh. G.D.Gupta Advocate to the Punjab and Sind Bank for taking action against Narender Gupta complainant as Annexure R-6, Photo copy of sanction letter as Annexure R-7, Photo copy of appraisal note of the Op Bank as Annexure R-8, Photo copy of reply of the legal notice sent to the G.D.Gupta as Annexure R-9, Photo copy of earlier legal notice dated 20.11.2010 issued by G.D.Gupta, Advocate, as Annexure R-10, Photo copy of second copy of legal notice dated 20.11.2010 as Annexure R-11, Photo copy of reply of legal notice dated 29.12.2010 as Annexure R-12, Photo copy of legal notice issued by G.D.Gupta dated 25.11.210 as Annexure R-13 and photo copy of legal notice issued by G.D.Gupta dated 24.12.2010 as Annexure R-14, Copy of plaint filed by the Bank for recovery of amount against the complainant as Annexure R-15 and by way of additional evidence counsel for the OP Bank tendered photo copy of affidavit submitted by the complainant as Annexure R-16 and closed the evidence on behalf of OP Bank.

6.                     We have heard the learned counsel for both the parties and have gone through the pleadings as well as documents placed on file very minutely and carefully.

7.                     The only version of the complainants is that the OP Bank wrongly and illegally withheld the remaining loan amount of Rs. 5,00,000/- out of sanctioned loan amount of Rs. 10,00,000/- sanctioned for construction of the building in the month of February, 2010 after paying first installment of Rs. 2,50,000/- released on 17.03.2010 and second installment of Rs. 2,75,000/- released in the month of June, 2010. Learned counsel for the complainant further argued that due to non-releasing the balance amount of loan, the complainants have suffered huge financial loss on account of increase in the rates of the material as well as on other account and draw our attention towards the affidavit of the complainant Annexure CX. Learned counsel for the complainant further draw our attention towards the copy of reply sent by the OP Bank to Sh. G.D.Gupta Advocate on dated 13.12.2010 Annexure R-9 by Jagminder Singh Anand Advocate and argued that the OP Bank has mentioned in this reply that loan has been disbursed to said Narinder Kumar in accordance with banking rules and norms and no fraud has been committed with anybody. Further, it has been mentioned in the reply that the complainant has specifically submitted an affidavit that he is constructing commercial building instead of house building and said that he is ready to pay up to date interest on commercial rate of the interest as per banking rules. Learned counsel for the complainant further draw our attentions towards the copy of site plan Annexure C-7 approved by the Municipal Committee in the year 1992 and lastly prayed for acceptance of the complaint.

8.                     On the other hand, counsel for the Op Bank argued at length that there is no deficiency in service or unfair trade practice on the part of Op Bank and draw our attention towards the copy of sanctioned letter Annexure R-7 and appraisal note Annexure R-8 and argued that a house loan of Rs. 10,00,000/- was sanctioned in favour of the complainant which is duly evident from the copy of sanction letter Annexure R-7 as in this letter nature of land has been shown as plot and under the head remarks house loan (HLA) is mentioned and in the another column under the head repayment programe an installment of Rs 12000/- each for a period of 216 months i.e. 18 years has been mentioned. Meaning thereby that house loan was sanctioned by the Op Bank in favour of the complainants not the commercial loan but as the complainants were using the said loan for commercial purpose, hence, the Op Bank has rightly withheld the remaining loan amount. Learned counsel for the OP Bank further draw our attention towards the copy of affidavit Annexure R-16 and argued that complainant No.1 has also admitted in his affidavit that he is using the loan amount only for construction of commercial unit and he is ready to pay the rate of interest of the entire loan amount at the rate of commercial. Learned counsel for the OP Bank further argued that the Op Bank has also filed a recovery suit against the complainant which is pending before the Civil Court (Junior Division),Jagadhri and listed for 16.02.2017 in the court of Sh. Chetra Gupta and lastly prayed for dismissal of complaint as from these documents it is clear that complainants are guilty of playing fraud with the OP Bank and breaching the terms and conditions of the loan agreement.

9.                     After hearing both the parties at length, we are of the considered view that there is a deficiency in service and unfair trade practice on the part of OP Bank as from the perusal of the notices/replies issued by Sh. G.D.Gupta Advocate Annexure R-9 to R-14, it is duly evident that OP Bank under the pressure of these notices/ replies withheld the remaining loan amount sanctioned to the complainant otherwise OP Bank has failed to place on file any site plan which was got verified by its official prior to sanctioning and disbursing the loan amount to the complainant. When the Op Bank had released first installment amounting to Rs. 2,50,000/- on 17.03.2010 and after that released second installment in the month of June, 2010 amounting to Rs. 2,75,000/- then it cannot be presumed that the official of the Op Bank was not ever visited the site of the complainant. Even, as per guidelines and rules of the OP Bank it is mandatory to inspect the site prior to disbursing the loan to any person. Further from the perusal of site plan placed on file by the complainant Annexure C-7 which is duly proved by Municipal Committee, Jagadhri, it is evident that the complainant was constructing the shops on the ground floor and was constructing residential portion on the first floor. Meaning thereby that complainant was got the loan from the OP Bank for construction of the building not only for housing loan. Further, the OP Bank has not placed on file any search report/ title report obtained from their panel advocate in support of their version and as per banking rules it is mandatory to obtain the title report as well as search report. We have also perused the statement of account of the complainant maintained by the OP Bank Annexure R-5 in which the OP Bank has charged Rs. 5515/- on account of processing fee and Rs. 2758/- on account of inspection charges. So, it cannot be said that the official of the OP Bank has not inspected the site of the complainant prior to disbursing the loan amount to the complainant. Although, the complainant has submitted his affidavit Annexure R-16 mentioning therein that he is using the loan amount only for construction commercial unit but at the same time in the same affidavit he has also given his undertaking that he is ready to pay the interest of the entire loan amount at the commercial rates. So, the OP Bank cannot take any advantage from this document i.e. affidavit Annexure R-16. It is not the case of the OP Bank that there was any differences between the rate of interest for commercial unit or house building as no such cogent evidence or circular has been placed on file by the Op Bank.

10.                   The arguments advanced by the counsel for the Op bank that a civil suit is pending in the Civil Court, Jagadhri regarding the recovery of loan amount from the complainant and this Forum have no jurisdiction to entertain and try the present complaint is not tenable as no such certified copy of that suit has been placed on file by the OP Bank even date of filing of the suit has also not been disclosed by the OP Bank. However, proceedings before the Consumer Fora are in addition and not in derogation of the provision of any other law for the time being enforce as mentioned in section 3 of the Consumer Protection Act. The present complaint has been filed only for seeking direction and granting compensation for mental agony and harassment whereas that alleged suit is for recovery suit.

11.                   Further, the plea of the Op Bank that complainant had committed fraud with the Op Bank and has breached the terms and conditions of the loan agreement is also not tenable as no such loan agreement has been placed on file by the OP Bank. Even the OP Bank has admitted this fact in the reply of legal notice sent by Sh. J.S. Anand Advocate on behalf of the Op bank on 13.12.2010 Annexure R-9 that loan has been disbursed to the said Narender Kumar in accordance with the banking rules and norms and no fraud has been committed with anybody. The complainant has obtained the loan after mortgaging his property in the favour of Bank and Bank has charged the service charges as well as interest from the complainant. Hence, it cannot be said that the complainant does not fall under the definition of Consumer and also not hired the services of the OP bank when the OP Bank has charged the processing charges as well as inspection charges from the complainant for granting the loan then how the Op Bank can allege that complainant has played a fraud with the Op bank.

12.                   In the circumstances noted above, we are of the considered view that the OP Bank has wrongly and illegally with held the remaining loan amount due to the reason best known to the official of the OP Bank. However, as a considerable time has been lapsed i.e. 7 years as the loan was sanctioned in the year February/March,2010, so it will not appropriate to direct the Op Bank to release the remaining amount of Rs. 5,00,000/- but the complainant can be compensated by way of some compensation.

13.                   Now the ultimate question is as to what should be the reasonable compensation to which the complainant is entitled. The Hon’ble Supreme Court in case of Gaziabad Development Authority Vs Balbir Singh 2004 Volume 5 SCC page 65 has defined in the legal sense that it may constitute actual loss or expected loss and may extent to physical, mental or even emotional suffering and insult injury and loss, thus the Forum in the act is entitled to award not only value of the goods or services but also to compensate a consumer for injustice suffered by him. In the present case, the complainant has claimed a sum of Rs. 50,,000/- on account of mental agony, physical harassment and financial loss and Rs. 11,000/- as cost of litigation as well as Rs. 1,00,000/- as cost of building material due to increase in prices but as the complainant has not placed on file any documentary evidence that he has suffered any financial loss on account of hike in the price etc. So, we have no option except to grant the compensation by way of guesswork keeping in view the circumstances of the case we are of the view that a lump sum compensation of Rs.20,000/- ( twenty thousand only) would be adequate to meet the end of justice in this case.

13.                   Resultantly, we partly allow the complaint of complainant and direct the Op Bank to pay Rs. 20,000/- as compensation for mental agony harassment as well as Rs. 5,000/- as litigation expenses within 30 days failing which complainant shall be entitled to recover the interest at the rate of 7% per annum for the defaulting period. Copies of this order be sent to the parties concerned free of costs as per rules. File be consigned to the record room after due compliance.

Announced in open court. 27.02.2017.

                                    (S.C.SHARMA)                                    ( ASHOK KUMAR GARG)

                                     MEMBER                                             PRESIDENT  

                                                                                                    DCDRF,YAMUNANAGAR