BEFORE THE MANDYA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANDYA<br /> <br /> PRESENT: 1. SIDDEGOWDA, B.Sc., LLB., President,<br /> <br /> 2. M.N.MANOHARA, B.A., LLB., Member,<br /> <br /> 3. A.P.MAHADEVAMMA, B.Sc., LLB., Member, <br /> <br /> ORDER<br /> <br /> Complaint No.MDF/C.C.No.53/2009<br /> <br /> Order dated this the 20th day of August 2009<br /> <br /> COMPLAINANT/S <br /> <br /> Sri.R.Y.Ramakrishna S/o <br /> Yalakkigowda, R/o Cheeny <br /> Village, Nagamangala Taluk, <br /> Mandya District.<br /> <br /> (By Sri.Yogananda., Advocate)<br /> <br /> -Vs-<br /> <br /> OPPOSITE PARTY/S<br /> 1. The Manager, <br /> State Bank of Mysore, <br /> Nagamangala Branch, Nagamangala, <br /> Mandya District.<br /> 2. The Deputy General Manager, <br /> State Bank of Mysore, <br /> Regional Office, Mysore. <br /> (By Sri.C.Boregowda., Advocate)<br /> <br /> Date of complaint 15.05.2009<br /> Date of service of notice to<br /> Opposite parties 01.06.2009<br /> Date of order 20.08.2009<br /> Total Period 2 Months 19 Days<br /> Result The complaint is partly allowed, directing the 1st Opposite party to sanction and release loan of Rs.1,00,000/- after submission of the documents produced before the Forum, by the Complainant and further directed to pay compensation of Rs.10,000/- with cost of Rs.1,000/- to the Complainant within 2 months. <br /> <br /> Sri.Siddegowda,<br /> President<br /> <br /> 1. This complaint is filed under section 12 of the Consumer Protection Act, 1986 against the Opposite parties for a direction to release the loan of Rs.1,04,000/- and to pay compensation of Rs.50,000/- with costs.<br /> 2. The case of the Complainants is that the 1st Complainant is a customer of the 1st Opposite party Bank and he is drawing salary through this Bank. His son i.e., 2nd Complainant is prosecuting his studies in Engineering at K.V.G. College, Sullia. For that purpose, 1st Complainant applied loan for Rs.1,80,000/- on 11.07.2007. Though, all the required documents were secured along with the loan application. The 1st Opposite party without giving any reason, rejected the education loan application. At that time, the 2nd Complainant was studying in 4th Semister. The 1st Complainant borrowed loan from his friends, so that the 2nd Complainant could continue education. Again, the 1st Complainant on 28.07.2008 for the education of 2nd Complainant applied for loan and the 1st Opposite party saying that loan of Rs.1,04,000/- could be granted and at that time, the 2nd Complainant was studying in 6th Semister. The 1st Complainant got sanctioned the loan through the letter dated 08.11.2008 of 2nd Opposite party. The 1st Opposite party secured all the essential documents in respect of the education loan and obtained signatures and even secured the required bond paper. Even, 1st Opposite party secured the documents and got filled up the application for opening the account from 2nd Complainant. In spite of obtaining all the documents all of a sudden the 1st Opposite party has cancelled the order of sanctioned loan and when enquired 1st Opposite party gave evasive answer. Therefore, the Complainant gave petition to Ombudsman, General Manager, Bangalore and Deputy Manager on 02.01.2009 against the Opposite party. In spite of it, the Opposite party did not give any answer and no order was issued in respect of sanction of loan. Therefore, 1st & 2nd Opposite parties have committed deficiency in service. On account of this, Complainants have suffered mental agony and further by borrowing loan of Rs.25,000/- from one Krishnegowda and Rs.50,000/- from Ramesh and Rs.50,000/- from Jayaramegowda with interest at 3% the 1st Complainant allowed his son to continue the education. Therefore, the present complaint is filed. <br /> 3. The 1st Opposite party has filed version and 2nd Opposite party has adopted the same. It is contended that the complainant do not come under the provision of Section 12 of the C.P.Act, and Opposite party has not committed any deficiency in service. Admitting that the 1st Complainant for the education of 2nd Complainant applied for loan on 28.07.2008, the documents submitted by the 1st Complainant along with the loan application, Xerox copies, 1st Opposite party sent them to the Head Office for sanction and the Head Office informed to get the original documents and to sanction the loan as per the rules, specifically stating to get the previous year marks card and original CET copy. Denying other allegations, it is pleaded that the loan application and required documents were obtained from the Complainant and filling up the application sent to the Head Office, Mandya & Mysore as per rules. The Head Office issued the order dated 19.02.2009 stating that the requisition for loan is not in time at the Bank and since the previous year marks card and original CET documents were not furnished to the Bank, there is delay and getting the previous marks card and original documents, loan may be sanctioned. Thereafter, when 1st Opposite party asked the Complainant to produce original documents, they did not furnish within time. Therefore, the loan was not released and with held and for this 1st Opposite party is not liable. It is denied that the complainants have suffered mental torture and for prosecution of the education, 1st Complainant borrowed loans from his friends with interest at 3%. The Opposite parties have not committed any deficiency in service. Hence, the present complaint be dismissed with costs. <br /> 4. During trial, the 1st Complainant is examined and even he has examined two witnesses and produced the documents Ex.C.1 to C.19. On behalf of the Opposite parties, the 1st Opposite party is examined, no document is produced.<br /> 5. We have heard both the sides.<br /> 6. Now the points that arise for our considerations are:-<br /> 1. Whether the 1st Opposite party has committed deficiency in service in canceling the loan sanction?<br /> 2. Whether the Complainant is entitled to the direction to release the loan?<br /> 3. Whether the complainant is entitled to the compensation and costs?<br /> 7. Our findings and reasons are as here under:-<br /> 8. The undisputed facts are that the 1st Complainant is a Consumer of the 1st Opposite party Bank and the 1st Complainant applied for education loan for the 2nd Complainant, who is studying Engineer Course in Sullia College as per the documents. It is an admitted fact that the Complainants have submitted documents for sanction of the loan. According to the 1st Complainant, the 1st Opposite party informed that the loan of Rs.1,04,000/- could be sanctioned. As per Ex.C.9 1st Opposite party recommended for the loan and submitted the records to the 2nd Opposite party. In the evidence, 1st Opposite party admitted after satisfaction the documents submitted by the Complainants are proper, he recommended for sanction of the loan and as per Ex.C.9, 2nd Opposite party sent letter dated 06.11.2008 with subject of loan showing the limit of Rs.1,00,000/- informed 1st Opposite party that as the limit of the loan proposal comes under the Branch Manager discretionary powers, they are returning the proposal and Manager is advised to consider the loan on merits and submit the CR report. As per Ex.C.10 also 1st Opposite party recommended for loan of Rs.1,00,000/- and submitted the proposal.<br /> 9. According to the Complainants, though the loan was sanctioned by the 1st Opposite party first, later without any reason has failed to release and disburse the loan and hence, has committed deficiency in service. All the loan applications, documents were returned to the Complainant and has produced before the Forum. According to the Complainant’s evidence, the Opposite party Bank informed in January 2009 that the loan was sanctioned and he had produced all the original marks card and other documents and retaining the Xerox copies, the original documents were returned back. According to the Complainant, the 1st Opposite party had informed to come tomorrow to draw the amount. It is admitted by 1st Opposite party that S.B.I. Life Insurance application Ex.C.18 for 2nd Complainant was also obtained and even the application to open the account of 2nd Complainant was obtained as per Ex.C.14. Though, the Complainant has filed application for loan on 28.07.2008, the Opposite party has struck of that date and written the date as 11.10.2008 in red ink. Because in Ex.C.10 1st Opposite party has written the date as 28.10.2008 while recommending for loan of Rs.1,00,000/-, because first page was filled up by another person. Why the date is altered is not explained by the 1st Opposite party.<br /> 10. Now, as per the letter of 2nd Opposite party, 1st Opposite party has powers to sanction and release the loan and to consider the loan on merits. According to the Complainant, he had furnished all the documents sought for by 1st Opposite party. According to the Opposite party, 2nd Opposite party had directed to get the previous marks card and original CET letter and the Complainant did not produce, therefore the loan was not sanctioned. But no letter from 2nd Opposite party Office is produced to show that he had directed to produce previous marks cards and original CET letter. It cannot be understood, the word “C¸À®Ä ¹.E.n.AiÀÄ £ÀPÀ®£ÀÄߔ . Further, though 1st Opposite party deposed that the previous marks cards and CET order copy were not produced so far and otherwise he would have examined the documents to sanction the loan and release the amount, this evidence cannot be accepted at all, because there is no document to prove the same. Further, if the loan was not sanctioned, there was no question of obtaining the stamp paper as per Ex.C.3 and further execution of the agreement as per Ex.C.16. Naturally, only in case of sanction of loan, getting the execution of the agreement as per Ex.C.16 arises. Further, even the application for opening the account in the name of 2nd Complainant as per Ex.C.14 was obtained and even the application for S.B.I. Life Insurance of 2nd Complainant was obtained, apart from other required documents like letters from the College, Study Certificate, Expenditure Certificate and Salary Certificate and No Due Certificates of 1st Complainant, even the copies of marks cards were produced. Even Bank Challan issued by CET as per Ex.C.1 is produced. It is natural that the Bank will keep the Xerox copies of the marks cards after comparing with the original marks cards. The pleading and evidence of 1st Opposite party that the Complainants were asked to produce the certified copy of the marks card and CET order cannot be believed, since the CET order letter would be with the college and no letter is addressed to the Complainant at all that apart from document produced, they are asked to produce certified copy of the CET order and certified copy of the previous marks cards. Even there is no letter of 2nd Opposite party directing 1st Opposite party to get the CET letter copy and previous marks cards certified copies. Therefore, this theory is concocted by 1st Opposite party just to defend is irresponsible attitude. It cannot be accepted that loan was not sanctioned for want of required documents, when the agreement Ex.C.16 with stamp paper Ex.C.3 and account opening application Ex.C.14 and S.B.I. Life Insurance application Ex.C.18 were obtained. Therefore, it is proved that though the loan was sanctioned by 1st Opposite party, but to the reasons best known to the 1st Opposite party has not released the loan, but cancelled the sanctioned loan because no document from 1st Opposite party is produced to show the cancel of the loan for the reasons relied upon in the version. Under these circumstances, the Opposite party has committed deficiency in service in cancelling the loan and not releasing the loan.<br /> 11. The Complainant sought for direction to the Opposite parties to sanction and release the loan of Rs.1,04,000/- and also compensation of Rs.50,000/- and other expenditure of Rs.10,000/- with costs. According to the Complainant, since the loan was not released by the 1st Opposite party, he borrowed loan of Rs.25,000/- from his friends Krishnegowda, Rs.50,000/- each from his friends Jayaramegowda and Ramesh at the rate of 3% p.a. interest and allowed his son to continue the education and he has suffered mental agony. The Complainant examined C.W.2 Ramesh and C.W.3 Krishnegowda M. and Krishnegowda has produced the copy of On-demand Pronote Ex.C.17. It is contended that On-demand Pronote Ex.C.17 and evidence of C.W.2 and C.W.3 cannot be believed. As per the complaint, after the refusal of release of the education loan, the 1st Complainant borrowed loan from his friends. As per the evidence of the 1st Complainant that he was informed in January 2009, the loan was sanctioned. But, the evidence discloses that the loan was borrowed in August 2008 itself and in fact he applied loan on 28.07.2008 as per Ex.C.11. Therefore, it is doubtful to believe that Complainant has borrowed loan from his friends as alleged. It may be that he has borrowed the loan after non-release of the loan. Naturally, when the education loan is not sanctioned, the parents will be put to burden and they suffered mental torture for raising the amounts for prosecuting the studies of their children.<br /> 12. Though, the sanctioning of loan is the discretionary power of the Bank, but the discretionary should be based on sound reasons and should not be vimsicle and capricious and refusal to sanction the loan must be with proper reasons, so that an applicant could no the reasons for not sanctioning the loan. As per the version of the 1st Opposite party, the 1st Opposite party is ready to release the loan if documents are produced. The Complainant has produced Ex.C.1 the Bank challan for having depositing the amount to the CET cell for getting the seat of B.E. in Sullia College. Therefore, the requirement of the CET allotment order to the 2nd Complainant would be in the custody of the college and Ex.C.1 document is sufficient to prove that the 2nd Complainant got the seat allotted by CET cell, otherwise the Canara Bank sponsored by the CET would not have accepted the amount and this challan would be issued by the CET cell to deposit the fee prescribed by it. Therefore, there is no justification for cancelling the sanction of the loan by 1st Opposite party. Further, for the mental agony and suffering undergone by the Complainant not releasing the loan and canceling the loan, the Complainants are entitled to compensation.<br /> 13. In the result, we proceed to pass the following order;<br /> ORDER<br /> The complaint is partly allowed, directing the 1st Opposite party to sanction and release loan of Rs.1,00,000/- after submission of the documents produced before the Forum, by the Complainant and further directed to pay compensation of Rs.10,000/- with cost of Rs.1,000/- to the Complainant within 2 months. <br /> <br /> (Dictated to the Stenographer, transcribed, corrected and then pronounced in the open Forum this the 20th day of August 2009).<br /> <br /> (PRESIDENT) (MEMBER) (MEMBER)