PER SHRI. S.S. PATIL - HON’BLE MEMBER :

1) This is the complaint regarding the deficiency in service on the part of Opposite Parties as they did not sanction the loan as advertized by them in the newspaper inspite of collecting huge amount from the Complainant.

2) The facts of this complaint as stated by the Complainant are that the Opposite Parties have given an advertisement in the Time of India News Paper dtd.18/07/06 in respect of providing loan to the needy persons against the property. They also mentioned their contact phone numbers as 09884082769/04455902642. The Complainant was in need of a top up housing loan of 1 Crore against property owned by him. Therefore, the Complainant contacted Opposite Party No.2 who responded positively and quoted interest rate as 4.3% p.a. at reducing balance with a payment period of 15 years with holiday maximum 3 years against a mortgage. He also told about the service charges as 1% initially and 1% after disbursement. He also asked the Complainant for the following documents to be forwarded to Opposite Party No.2 –

        a) Property proof, b) Salary Slip, c) IT Returns for 3 years, d) Rental income proof, e) Bank account extract of last 6 months.

        After accepting the above documents, the Opposite Party No.2 asked for Complainant’s personal interview with an application fee, verification fee and valuation fee, amounting to Rs.1,000/- & Rs.10,000/- respectively. The Complainant visited Opposite Party No.2 & then to Opposite Party No.1.

3) The Opposite Party No.2 on 06/08/06 asked the Complainant for a deposit of Rs.50,000/- & Rs.49,900/- deposited each in account of Opposite Party No.1 & Opposite Party No.2 in ICICI Bank, through his ICIICI Bank account. Thereafter, Opposite Party No.2 asked for two business class air tickets of Jet Airways for coming to Mumbai for verification of the property of the Complainant at Powai Mumbai (from Chennai to Mumbai & Bank, and accommodation expenses.) These things were arranged and Opposite Parties visited Mumbai. They verified the property and documents and then invited the Complainant & his wife to visit Chennai on 20/08/06 to collect the loan amount. However, on 19/08/06, on the pretext of D.D. being not ready, Opposite Parties asked the Complainant to cancel the visit. Again Opposite Party No.2 asked the Complainant to deposit Rs.25000/- in the account of Opposite Party No.2 at Chennai. The Complainant complied with this demand also.

4) On 04/09/06, the Opposite Party No.1 informed the Complainant that the Complainant should give 10 Lacs as deposit for one month and accordingly Opposite Party No.2 directed the Complainant to deposit 5 Lacs each in the accounts of the Opposite Party No.1 & 2 (Total 10, Lacs in accounts of both the Opposite Parties). Thereafter, they promised the disbursement of the entire loan amount within 2 days. The Complainant could deposit only Rs.3 Lacs each in their accounts and sought time for depositing balance amount of Rs.4 Lacs. After a week, the balance amount was also deposited. Thereafter, Opposite Parties have continued to give promises of disbursement but so far no loan amount has been disbursed by the Opposite Parties.

5) The Complainant has further stated that thus the Complainant sought the services of the Opposite Parties by way of sanction of top up housing loan of 1 Crore. He paid the necessary consideration for the same as per the Opposite Parties demand. He also furnished the necessary documents. However, Opposite Parties failed to provide the requisite service.

6) On 21/09/2007, Opposite Party No.2 asked the Complainant to make written request for return security deposit, service charges and other expenditures. Accordingly, the Complainant gave a written application on 22/09/07, following this Opposite Parties deposited an amount of Rs.50,000/- in the Complainant’s account of ICICI Bank A/c. No.040601501585 on 01/10/07 and further promised to return the balance. All these tactics caused mental agony & harassment to the Complainant financial loss & physical harassment. The Complainant has stated that the above acts of the Opposite Parties amount to unfair trade practice & gross deficiency in service. Therefore, the Complainant is seeking a refund of Rs.11,60,636/- with interest @ 12% p.a. alongwith compensation of Rs.7,50,000/- for mental torture and the cost of the complaint.

7) The Complainant has attached the xerox copies of the following documents in support of his complaint. An advertisement appearing in Times of India Newspaper ddt.18/07/06, statement of account of the Complainant, Jet Airways itinerary receipts, guest invoice, Complainant’s letter, Complainant’s ICICI Bank account statement.

8) The complaint was admitted and notices were served on the Opposite Parties. Opposite Parties filed their joint written statement wherein they denied the allegations of deficiency in service and unfair trade practice and specifically stated that this Forum does not have the jurisdiction to entertain the complaint as the entire cause of action has taken place outside Mumbai as well as Opposite Parties do not reside or carry on business in Mumbai. They have also stated that this Forum does not have the pecuniary jurisdiction.

9) The Opposite Parties have further stated/admitted that the advertisement was given by Opposite Parties, advertising only that Opposite Parties will facilitate in arranging loans from Chennai based financiers against property, business, cheques and projects. The advertisement given by them, never advertised that Opposite Parties shall provide loan. It was also informed to the Complainant by the Opposite Parties that their fees would be 5 Lacs each for facilitating acquiring of loan. The conditions would be as follows –

           Fee would be non refundable and does not have any relation to providing loan. Fees would be for the work to be done by the Opposite Parties for Complainant to acquire loan etc.

10) The Opposite Parties have further stated that they never requested the Complainant to make arrangements like air tickets and hotel facilities but the Complainant himself has requested them to verify his property at Mumbai. Accordingly he made arrangement for them and they visited on 16/08/06.

11) The Opposite Parties have denied that the Complainant had deposited Rs.3 Lacs each in their accounts and thereafter the balance was also deposited. No such deposit was deposited in the accounts of the Opposite Parties. They have also averred that the value of the property of the Complainant was not equivalent to the value of the loan sought by the Complainant. They requested the Complainant to reduce the loan amount but the Complainant refused. Therefore, it was very difficult for them to find out the financer for the Complainant still they were trying hard to find the financer for the Complainant.

12) The Opposite Parties have further stated that, the Complainant came to Chennai on their own for obtaining loan facility. They also denied that they promised to visit Mumbai on 19/09/07 and 21/09/07 for disbursement of loan. The Opposite Parties never asked for Bank details. However, the Opposite Parties have admitted that the Opposite Party No.2 deposited a sum of Rs.50,000/- on 22/09/07 at the request of the Complainant.

13) It is further alleged that the transactions between the Complainant and the Opposite Parties are contractual in nature and governed by Indian Contract Act. The averments in the complaint, if are taken to be true, it would constitute breach of contract and the appropriate relief is to be sought from the Civil Court. The Complainant is not a consumer. It is further averred that the Opposite Parties never acknowledged their liability of Rs.12,10,636/-. The Opposite Parties have stated that they deposited the amount of Rs.50,000/- in the account of the Complainant on 01/10/07 on request of the Complainant to lend him some money to overcome the financial crises.

14) It is further stated that eh Exh. ‘E’ filed by the Complainant is made up and its contents were never delivered to them. Finally Opposite Parties have prayed that the Complainant is not entitled to any of his prayers in his complaint.

15) Thereafter, the Complainant filed his affidavit of evidence and written argument wherein he has reiterated the facts mentioned in the complaint and denied the points raised in the written statement of the Opposite Parties. During the course of pleading the Ld.Advocate for the Opposite Parties sought leave for discharge from the matter as there were no instructions from the Opposite Parties. Opposite Parties did not file written argument. We heard the Ld.Advocate for the Complainant and perused the papers submitted by both the parties and our findings are as follows.

16) The Complainant read the advertisement appeared in times classified in Time of India Newspaper dtd.18/07/06 at his residence in South Mumbai. The contents of the advertisement were as follows –

      “Loan against property/business/project/cheque, cheque discount @ low int. ph.044 55902642, 09884082769.”

         The Opposite Parties have not denied these contact numbers. In their written statement they have admitted that they had given an advertisement in Times Classifieds of Time of India dated 18/07/06, they have admitted that “the advertisement was issued by Opposite Parties advertising only that Opposite Parties will facilitate in arranging loans from Chennai Financiers against property business, cheque and projects. From this admission it is established that they gave the advertisement in respect of loans at low interest. Any reader of the advertisement would understand that the persons having the contact phone numbers mentioned in the advertisement are there. They would be giving loans against the property etc. In consequence, the Complainant contacted the Opposite Parties on the above said phone numbers and requested Opposite Party No.2 for the loan. The advertisement mentioned above does not state that the Opposite Parties were only to facilitate or arrange the loan for the needy persons. It would be the common impression of a reader of the advertisement in the newspaper that the person giving advertisement is willing to provide loan facility against the property etc. Accordingly the Complainant after reading the advertisement was under the impression that the Opposite Party No.1 & 2 who were the contact number holders are there who would provide them required loan. Therefore, the Complainant contacted the Opposite Parties. The Complainant was in need of loan facility. As per the instructions of the Opposite Parties, the Complainant has transferred the following sums into the bank account of the Opposite Parties. Exhibit ‘B’ shows the following amounts transferred in the account of Opposite Parties –

17) Exhibit ‘C’ shows that the Complainant has incurred an expenses of air fare of Rs.50,840/- for the Opposite Parties. Opposite Parties induced the Complainant to buy these tickets for the Opposite Parties to come to Mumbai for verification of the property.

18) The Complainant also has incurred expenses of Rs.23,996.98 when the Opposite Parties visited Mumbai on the pretext of verifying & valuating the property of the Complainant as a security for sanction of loan (Exh. ‘D’).

19) Because of the promise of the Opposite Parties that they would sanction a loan of one crore, the Complainant has invested Rs.11,74,636.98 by way of transferring some amounts in the accounts of the Opposite Parties and incurring expenditures towards the airfares and hotel expenses for the Opposite Parties. In response to the promise of the Opposite Parties, the Complainant has transferred a huge amount of Rs.10,99,800/- in the bank accounts of the Opposite Parties. The Complainant has honestly admitted that out of this amounts, the Opposite Parties transferred an amount of Rs.50,000/- in the bank account of the Complainant on 01/10/07. Therefore, the Complainant has sustained the loss of Rs.11,24,636.98 only. The Complainant has not produced any documents showing expenditure for their journey to Chennai. Therefore, these expenses are not taken into consideration.

20) As stated earlier, there is nothing in the advertisement that the Opposite Parties would be only a facilitator as claimed by the Opposite Parties in their pleadings. The Opposite Parties have harped that they tried their level best to arrange a loan for the Complainant from the Chennai based financiers. However, they have not disclosed any identity of any financier with whom they tried for the loan amount. Even they have not filed any document to show as to what efforts they made for sanctioning the loan, from these unknown financiers.

21) The Opposite Parties have raised the objection in respect of the jurisdiction of this Forum. In this respect, as stated earlier, the advertisement appeared in Times of India published in South Mumbai. The Complainant read this advertisement at his residence situated at South Mumbai. The Complainant holds bank account at South Mumbai. The money has been transferred from South Mumbai. The property verified as security for the loan is situated in South Mumbai. Opposite Parties came all the way from Chennai to Mumbai by air route and visited the Complainant’s place at South Mumbai. All these events occurred in the jurisdiction of this Forum. Section 11 (2)(c) clearly states that even if cause of action partly arises in the jurisdiction of the Forum, such Forum has the power to entertain the complaint. Cause of action is the bundle of events and the above said so many events took place in the jurisdiction of this Forum. The Complainant has prayed for the amount less than 20 Lacs. This Forum does have the powers to entertain the complaint in which the value of the services and compensation is less than 20 Lacs. Therefore, this Forum does have the territorial as well as pecuniary jurisdiction to entertain this compliant.

22) The Opposite Parties have alleged that the Complainant is not a consumer and only Civil Court has the authority to deal with the case. However, in this case the Complainant has availed the services of the Opposite Parties for obtaining loan as mentioned in the advertisement given by the Opposite Parties. The Complainant agreed to pay the consideration for the services offered by Opposite Parties, but no service was provided to the Complainant. It is also alleged by the Opposite Parties that the amount i.e. Rs.10,00,000/- would be their fee for sanction of the loan & it would be non-refundable. However, there is nothing on record that such an huge amount can be a fee for sanctioning the loan. It is not a condition or term given in writing to the Complainant. The Opposite Parties cannot rely and come with such imaginary terms and conditions which were not mentioned either in an advertisement or which are not documented. These are the unwritten, undocumented imaginary terms used by the Opposite Parties for appropriating the money of the needy persons who believe in the classified advertisements published in the newspaper like Times of India.

23) Further the Opposite Parties have taken the said huge amount of fee from the Complainant, but they have not rendered any service. They have not sanctioned the loan. Even, there is not an iota of efforts done by the Opposite Parties towards the sanction of loan. We carefully examined the only document i.e. the written statement filed by the Opposite Parties. There is absolutely nothing to show that they have provided any service in this behalf. If one perused the events chronologically and the bank documents as well as other expenditure incurred by the Complainant, it appear that the Opposite Parties have applied the tactics in order to take out money from the Complainant who was in need of a loan. Therefore, in view of the above mentioned facts and circumstances we are of the candid view that this Forum has proper jurisdiction to deal this complaint. The Complainant is the consumer. He had agreed and paid the consideration to Opposite Parties for the service that was to be provided by the Opposite Parties. However, Opposite Parties absolutely failed to provide any service by not sanctioning loan as promised by them in their advertisement given in well known, prestigious newspaper viz “Time of India Classifieds”. Thus, the Opposite Parties are grossly deficient in service as well as they have indulged in unfair trade practices and thus, induced the Complainant to transfer amount mentioned above in their Bank accounts causing monetary loss to the Complainant. Therefore, the Complainant is entitled for the refund of the money which was transferred in the accounts of the Opposite Parties, the expenditure incurred by the Complainant for Opposite Parties and for which he has produced the documentary evidence. However, the compensation of Rs.7,50,000/- sought by the Complainant for mental torture and financial loss is exorbitant. A compensation of Rs.10,000/- would be just & proper for the mental agony caused to the Complainant. Hence, taking into consideration the documentary evidence, facts and circumstances of the case and above said observations, we pass the order as follows -

O R D E R

 i.Complaint No.23/2008 is partly allowed.

ii The Opposite Party No.1 & 2 are jointly and/or severally liable for the deficiency in service & for unfair trade     

practice adopted by them.

iii.Opposite Party No.1 & 2 are directed to pay jointly and/or severally Rs.11,24,636.98 (Rs.Eleven Lacs Twenty Four Thousand Six Hundred Thirty Six and Ninety Eight Paise Only) to the Complainant with interest @ 9% p.a. from 01/09/06 till realization.

iv. Opposite Party No.1 & 2 are also directed to pay jointly and/or severally to the Complainant a compensation of Rs.10,000/- (Rs. Ten Thousand Only) for mental torture and a cost of Rs.5,000/- (Rs. Five Thousand Only) towards legal expenses.

v. Opposite Party No.1 & 2 are directed to comply with the above said order within jointly and/or severally within 30 days from the date of receipt of this order.

vi. Certified copies of this order be furnished to the parties.