IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated this the 26th day of October, 2022
Present: Sri. Manulal V.S. President
Smt. Bindhu R. Member
Sri. K.M. Anto, Member
C C No. 210/21 (filed on 20-09-21)
Petitioner : Priya,
W/o. Prathapan,
Sowparnika Palamuttom,
Kurumpanadu P.O.
Madappally village,
Changanacherry Taluk,
Kottayam – 686536.
(Adv. Pushpa P. Abraham)
Vs.
Opposite parties : (1) The General Manager,
Repco House Finance Ltd.
Alexander Square, Third Floor,
Old No.34/35
New No.2, Sardar Patel Road,
Guindy, Chennai – 600032.
(2) Branch Manager.
Repco House Finance Ltd.
No.XXI, 448 E2 (Old No.XVII/526 E First Floor, West Nada, Thirunakkara
Kottayam – 686001.
(For Op1 and 2,Adv. Kuruvilla Varghese)
O R D E R
Smt. Bindhu R. Member
The complaint is filed under Section 35 of the Consumer Protection Act, 2019.
The complainant approached the opposite parties for a housing loan for which she had submitted all the title deeds, revenue records etc. Subsequently the bank had sought legal opinion report also in which the lawyer who submitted the report had clearly stated that the complainant had a valid and enforceable title and the loan could be sanctioned. After all these procedures the opposite party rejected the loan on the ground that the complainant had failed to comply with their requirement for including her father and mother who had executed the title deed no883/98 as co applicants. There is no mention in the legal opinion or anywhere about the disqualification of the complainant to get the loan without her parents as co-obligants. The complainant had to collect all the documents to submit before the opposite party in expectation of the loan and the act of the opposite parties to deny the loan without any valid reason is an unfair trade
practice and deficiency of service and hence this complaint.
Receiving the notice from this commission, the opposite parties appeared
before this Commission and filed version jointly.
The opposite parties contended that the complainant is not a consumer of the company and hence the complaint is not maintainable. The company had to ascertain the repaying capacity of the prospective borrower, obtain legal report over the property, make valuation of the property before agreeing to sanction the loan. The opposite parties asked the party to subscribe the signature of the parents as co obligants for the loan. It is the practice of the company to include the living senior citizen parents who are the settlers of the security property under settlement deeds, to protect the interest of the company. The legal advice is always subject to the company’s policies. The company is guided by the instructions from the Head office and the branch cannot act contrary to such guidelines. The branch manager can act only in accordance with the guidelines, of the controlling office and hence could not accede to the request of individuals, which are contrary to the company’s guidelines and policies.
It is a prudent practice of the opposite parties to make the donor(s) /Settler(s) as party to the loan to avoid the consequences of subsequent cancellation of the gift/settlement after the sanction/disbursement of loan. As in the State of Kerala Registration of Mortgage is not made mandatory further the stamp duty also is heavy, the sub registrar himself would not have the notice of the existing charge and the document can be cancelled by the parties either by way of unilateral or bilateral without any bar. Further the enactment of senior citizenship Act has empowered the cancelation of the gift, the donor /settler as party irrespective of there being recital of life interest or not. Here the loan was not rejected, but the complainant was asked to comply the condition to add the settlers as parties and on which the complainant herself refused and demanded for return of the documents vide letter dated 5.3.21.and filed this case. As this was a voluntary action of the complainant, there is no deficiency of service on the part of the opposite party.
Both parties adduced evidence through proof affidavit along with documents. Exhibits A1 toA7 were marked from the side of the complainant and Exhibit B1 was marked from the side of the opposite parties.
We have given a thoughtful consideration over the pleadings and evidence and the points to be decided are ;
1. Whether there is any deficiency in service on the part of the opposite
parties?
2. If so what are the reliefs?
Points 1 and 2
The complainant’s case is that the opposite parties had rejected her loan for not making her parents as co obligants whereas the opposite parties affirm that the denial is not a deficiency in service as it is for protecting the interest of the opposite parties because of the enactment of the Parents and Senior Ctizens Act.
1. The complainant applied for a housing loan by submitting all the documents including her title deed which was a settlement deed executed by her parents. The opposite parties during the process of the loan application had took the legal opinion report from its advocate. The legal opinion clearly states that the mortgagor Priya, the complainant herein had got a valid and enforceable title and
she was very much entitled to be made as the mortgagor for the loan. Nowhere in the legal opinion there is any mention of any impediment in the title of the mortgagor. The opposite parties contend that though the legal opinion is clear, it was the discretion of the opposite party company to see whether the loan could be sanctioned or not. They could act only according to the guidelines for the housing loan.
2. The opposite parties contented that the complainant is not their consumer as she was only an applicant. But the complainant has paid Rs.7,050/- as per Ext.A2 towards the processing fees and hence the complainant is a consumer of the opposite party.
In consumer Protection Act, 2019, deficiency means as per S.2(11) : “any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service and includes –
- any act of negligence or omission or commission by such person which casue loss or injury to the consumer’; and
- Deliberate withholding of relevant information by such person to the consumer”.
So any act of negligence or omission also amounts to deficiency in service. Here the opposite parties had omitted to inform the complainant about all the pre-conditions for obtaining a loan.
Under Section 2(42) of Consumer Protection Act 2019 defines “Service” means service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, telecom, boarding or loading or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;
3. In Arun Bhatiya vs HDFC Bank and ors settled that “A person who avails any banking service falls within the scope of the definition of “consumer” under the Consumer Protection Act, and can take recourse to legal remedies provided in the Act,” the Supreme Court has reaffirmed”.
1. Moreover, RBI also has made clear that The RBI has formulated a Charter of Customer Rights for banks based on global best practices in consumer protection. The Charter enshrines broad, overarching principles for protection of bank customers and enunciates the following five basic rights of bank customers:
1.Right to Fair Treatment
2. Right to Transparency, Fair and Honest Dealing
3. Right to Suitability
4. Right to Privacy
5. Right to Grievances Redress and Compensation.
So the complainant having the right to fair treatment should have informed about the conditions prior to the processing of the loan.
4. The opposite parties explain that they did not reject the loan of the complainant but demanded to add her parents also as co obligants due to the enactment of the senior citizens Act and its consequences. Whatever be the guidelines and the conditions of the opposite parties to sanction any loan, the opposite parties are bound to intimate the complainant before receiving the processing charge and before starting all the processing. If the complainant had been intimated about the conditions earlier, the complainant would have got an opportunity to decide whether to proceed with the loan or not.
4. As the opposite party did not state anywhere in their application form or intimated the complainant in any other mode, about the condition of adding the parents/executants of the settlement deed by which she was entitled for the ownership and possession of the property, it is seen as a deficiency of service and unfair trade practice from the part of the opposite party. Though the opposite party contended that they all the right to reject the loan as per the condition in the loan application form, there is only an arbitrary, unilateral clause stating that “RHFL reserves the right to reject any application at any stage without assigning any reason sourcing channel(if DSA /DST)” They had received Rs.7080/- for the processing of the loan. So they were bound to give proper service to the complainant which includes explaining her everything about the status of the loan. The opposite parties has stated that they had intimated all the branches to do according to the guidelines but the complainant was not informed before accepting the processing charge. The complainant being a common house wife who approached the opposite parties to fulfil her dream of a new house of her own. But the opposite parties without treating her fairly, raising arbitrary conditions put her in severe mental agony and hardships. This is a serious deficiency of service from the part of the opposite parties which is to be compensated.
Hence in the light of above discussion we find that the complainant is a consumer in all aspect and the complaint is very well maintainable before us. We further find that the opposite parties have committed deficiency in service and unfair trade practice. Hence we allow the complaint in part as follows:
The opposite parties are directed to give Rs.30,000/- towards compensation for the mental agony and sufferings within 30 days of receipt of the order failing which the award amount shall carry 9% interest from the date of Order till realisation.
Pronounced in the Open Commission on this 26th day of October, 2022
Smt. Bindhu R. Member Sd/-
Sri. Manulal V.S. President Sd/-
Sri. K.M. Anto, Member Sd/-
Appendix
Exhibits marked from the side of complainant
A1 – Copy of deed
A2 –Copy of letter dtd.05-03-21 issued by 2nd opposite party
A3 – Copy of legal scrutiny report dtd.08-01-21 issued by Adv. Kuruvilla Varghese to 2nd opposite party
A4 – Copy of journal voucher issued by 2ndd opposite party
A5 – copy of Adhar card
A6- copy of tax receipt vide thandaper No.4243
A7 – Copy of possession certificate dtd.14-12-20 by Madappally village office
Exhibits marked from the side of opposite party
B1 – Specimen loan application form
By Order
Assistant Registrar
