THE CONSUMER DISPUTES REDRESSAL FORUM, KOZHIKODE.
C.C.511/2014
Dated this the 27th day of September, 2018
(Smt. Rose Jose, B.Sc, LLB. : President)
Smt.Beena Joseph, M.A : Member
Sri. Joseph Mathew, M.A., L.L.B. : Member
ORDER
Present: Rose Jose, President:
This petition is filed by the petitioners under Section 12 of Consumer Protection Act, 1986 for an order directing the opposite party bank to pay them Rs.12,08,169/- the loss sustained by them due to the deficiency in service on the part of the opposite party with 12% interest from 1st January 2014 onwards and a compensation of Rs.5,00,000/- for the mental and other hardships suffered and also cost of the proceedings.
The petitioners’ case is that they have applied for a housing loan before the opposite party during the month of January 2014 for the purpose of purchasing a property and to build a house there believing the assurance made by the opposite party through advertisement that all applications for loans made to them would be sanctioned within one week of the application and they had entered into an agreement for the purchase of a property with its owner. As per the agreement, the purchase is to be complied within 6 months from the date of execution of sale deed. For the said loan purpose opposite party had collected Rs.40,169/- as processing charge by debiting this amount from the account of the 1st petitioner on 24/01/2014. But even after many days opposite party has not sanctioned the loan or given any definite reply for the delay to the queries of the petitioners, through e-mails, phone calls and even meeting the officers of their branch office personally by the 1st petitioner in his trips from abroad for this specific purpose.
After 5 months on 06/06/2014 they issued a lawyer notice to opposite party, narrating the facts and calling upon them to sanction the loan without delay with a warning if not, they will initiate legal proceedings against them for the loss and hardships. Though the opposite party received the notice, they have not complied with the demands in that notice or send a reply. The non-granting of the loan amount even after collecting processing charge is unfair trade practice and also amounts to deficiency in service on the part of the opposite party bank which caused much mental agony and other hardships to them apart from the financial loss sustained as stated under various heads. Hence this petition seeking reliefs.
The opposite party filed version denying all the allegations raised against them as false and without any basis. They admitted that as for all the banks are concerned, they are also giving advertisement regarding loans. But the advertisement itself is not an assurance to give a loan to a specified person on production of a sale agreement. It is also admitted that the petitioners had applied for a loan before them for the purchase of property and construction therein. After considering the petitioners financial status, they sanctioned the loan, but it is contended that if there is collateral security all the banks shall take two steps. At first they verify the financial status and other repayment capacity of the applicant and formally sanction the application for loan. Secondly the applicant shall produce all the documents regarding the property to be deposited as security and these documents should be verified and satisfied by the bank before granting the sanctioned loan amount.
It is submitted that, after production of the documents by the applicants the officials of the bank verify all the documents since some technical requirements has to be fulfilled which are governed by rules and regulations.
Here the petitioners’ property intended to be purchased was found along the river side. On their verification with the Local Self Government Department, it was confirmed that there is no provision for granting building permit for said property. Hence the technical requirement was not fulfilled in the petitioners’ application. The said property has not meet the general technical guidelines of the bank and so they could not grant the sanctioned loan amount. All these facts were explained to the petitioner by the bank officials and they are realized the facts also. It is stated that, they suspect that the petitioners had prepared the sale deed with the seller crookedly to defeat the bank knowing that the said property is in river shore. There is no unfair trade practice or any deficiency in service on their side in not granting the loan amount to the petitioners as alleged. The petitioners has not suffered any financial loss or mental agony or other hardships due to any of their acts and so they are not liable to compensate the petitioners for the loss if any sustained by them. They have acted only as per the rules and regulations of the bank. The petitioners are not entitled to get any of the reliefs sought for in the petition and hence prayed to dismiss the petition with their cost.
The matters to be decided are:
- Whether there is any unfair trade practice or deficiency in service on the part of the opposite parties?
- Reliefs and costs if any?
Evidence consists of the affidavit filed by the petitioners Ext. A1 to A14 and deposition of PW1.
Point No. 1: The specific case of the petitioners are that, believing the advertisement assuring sanctioning of loans within one week of application, they had submitted a loan application before the opposite party bank during the month January 2014 for the purchase of a property and for building a house therein. Based only on the assurance on the part of the opposite party bank, they had entered into Ext. A3 agreement dated 15/01/2014 for the purchase of 12 cents of property from one Sri. Muraleedharan situated at Olavanna Grama Panchayat, Resurvey No.123/3 and paid Rs.5,06,000/- as advance. They have constructed a compound wall in that property spending Rs.71,560/- as per Ext. A4. They had also purchased stamp paper for Rs.2,25,000/- as per Ext. A5 for executing the sale deed. The opposite party had collected Rs.40,169/- as processing charge and they had paid Rs.90,000/- as insurance premium in connection with sanctioning of the loan. Apart from these expenses he had lost Rs.2,40,000/- by way of loss of salary by taking leave from the job to visit the opposite party bank from abroad and had spent Rs.32,000/- as flight charge for the to and fro journey also. But even after spending all these amounts and much time and efforts, the opposite party bank has not granted the sanctioned amount and thereby they sustained a huge financial loss as stated above apart from the mental agony and other hardships suffered. This is unfair trade practice and also deficiency in service on the part of the opposite party and so they are liable to compensate the losses sustained by them.
According to the opposite party advertisement itself is not an assurance to give a loan to a specified person for which many things are to be satisfied by the bank such as the financial stability of the applicant and the legal validity of the deed of the title deed of the property offered as security.
They have sanctioned the loan after satisfied with the financial stability of the petitioner for the repayment of the loan amount with interest. But in this case on inspection of the property intended to be purchased by the petitioners was situated along the river side and on enquiry and verification with the Local Self Government Department, it was confirmed that there is no provision for granting building permit for the said property. So the technical requirements was not fulfilled and since the petitioners’ property will not meet the general technical guidelines of the banks they are unable to grant the loan amount. This has been informed to the petitioner in their reply letter dated 06/08/2014 to the lawyer noticed issued to them by the petitioners.
After cross examination the petitioners produced some additional documents in support of their averments and was marked as Ext. A12 to A14. They produced Ext. A12 which is the copy of building permit issued to Sri. Muraleedharan from Olavanna Grama Panchayat for the construction of building in his property in Re Survey No. 123/3 from whom the petitioners agreed to purchase the property as per Ext. A3 agreement and that too situated in the same Resurvey Number to disprove the statement of the opposite party that there was no provision for granting building permit where the petitioners intended to purchase the property. The 1st petitioner was examined as PW1. In cross PW1 had stated that “he also had got permission from the Panchayat to build a house in that property along with 4 other persons and he had submitted that sanction documents at the bank as and the copy of the same is with him also. (PW1 Page No. 3&4). If so the said document is very important in this case to prove the case of the petitioners since the only reason stated by the opposite party for not granting the loan amount is that there was no permit from the Panchayat for building house in that property intended to be purchased by the petitioners as per Ext. A3 agreement. But the petitioners has not produced the copy of the said document before the Fora to prove their said statements. Moreover the reason for the denial of loan amount was clearly stated by the opposite party in their reply to the lawyer notice of the petitioners Ext. A2. This reply letter A2 was dated 06/08/2014 but the petitioner had produced Ext. A12 document which is the building permit issued to Sri. Muraleedharan from Olavanna Grama Panchayat before the Fora to prove that Sri. Muraleedharan has got permission to build a house in that property only on 15/02/2017. If the petitioners had produced the said document before the opposite party earlier, then they might have granted the loan amount since the opposite party in their reply letter to the lawyer notice of the petitioners (Ext. A2) had stated that if the petitioners identify a property which meet the technical requirements of the bank, they are still ready to grant the credit facility to them.
Ext. A6 is the copy of “Power Home Sanction Letter” issued to the petitioners by the bank. In Ext. A6 it is clearly stated that the aforesaid sanction of the loan will be subject to clear legal and technical requirements and other terms and conditions mentioned therein. It means that sanction of the loan is not enough to grant the loan amount which requires completion of other formalities mentioned in Ext. A6. Moreover Ext. A6 is dated 22/01/2014 and Ext. A3 sale agreement is dated 15/01/2014. This shows that the petitioners had entered into Ext. A3 agreement even before sanctioning of the loan application by the opposite party bank. It is to be noted that getting a loan from the bank is not a legal right of the applicant for which the bank has to follow their own procedures to their satisfaction. It is for the applicant to produce all the required documents before the bank to their satisfaction for sanctioning or granting a loan amount. Since sanctioning of loan and granting the loan amount is quite different, the opposite party cannot be held liable for the financial loss or other hardships suffered by the petitioner due to their own acts. The petitioners have to wait till the loan amount has been credited to their account or issuing demand draft for the sanctioned amount by the opposite party bank, before entering into Ext. A3 agreement.
Moreover the opposite party had questioned the genuineness of Ext. A3 agreement as according to them it is a forged document for the purpose of this petition. The date of sale agreement as per Ext. A3 is 15/01/2014, whereas in the petition and in Ext. A1 lawyer notice it is stated as 22/07/2013. Anyway the mistake happened regarding the year of agreement when quoted can be treated as a typographical error inadvertently happened, but what about the mistake regarding the date and month also? Moreover in cross PW1 would say that “Ext. A3 is not prepared by my own interest but as instructed by the bank and its original was prepared by me in 2013 and that was not in my home but submitted before the bank” (Page 7&8 PW1). PW1 also deposed that “during September 2013 I came to my place and the agreement was prepared at that time” (Page 9 PW1). So the date, month and year of the agreement in Ext. A3 and the date, month and year quoted in the petition and lawyer notice and the date stated by PW1 in his deposition seems quite contradictory.
Since there is no evidence before us to see that the petitioners had produced the relevant documents especially the so called “sanction documents which he claimed to be received from Olavanna Panchayat is very important in this case before the opposite party bank to their satisfaction for granting loan amount. In this circumstance we cannot attribute any unfair trade practice or deficiency in service on the part of the opposite party bank in not granting the loan amount to the petitioners and hence they are not liable for the financial loss or other hardships suffered by the petitioners consequential to the agreement entered even before sanctioning or granting the amount by the opposite party. But at the same time opposite party insisted the petitioner to take insurance policy for sanctioning the loan and as such the petitioner had taken insurance policy after remitting Rs.90,000/-. Thereafter the opposite party had refused to disburse the loan amount for the reason that they are not satisfied with the documents produced. If so the opposite party should have demanded “Taking the policy” only after satisfied with the document produced. The said act of the opposite party forced the petitioner to raise that much of money unnecessarily with much effort over and above the amount paid as processing charge. The said act of the opposite party is unfair business practice and also deficiency in service on their part for which they are liable to compensate the petitioner for his losses and sufferings. Point No. 1 found accordingly.
Point No. 2: The opposite party had collected Rs.40,169/- as processing charge. Since the petitioner has not received any benefit from the opposite party bank, they have no right to retain the whole amount, and is liable to return Rs.35,169/- to the petitioner after taking Rs.5,000/- as processing charge.
In the result, the following order is passed.
The opposite parties are ordered to refund Rs.35,169/- (Rupees thirty five thousand one hundred sixty nine only) with 9% interest from the date of collection of the amount till payment and Rs.25,000/- (Rupees twenty five thousand only) as compensation for unnecessarily forcing the petitioner to take insurance policy before finalizing the disbursement of loan amount and Rs.5,000/- (Rupees five thousand only) as cost of the proceedings to the petitioner within 30 days from the date of receipt of this order.
Dated this the 27th day of September, 2018
Date of filing: 08/10/2014
SD/-MEMBER SD/-PRESIDENT SD/-MEMBER
APPENDIX
Documents exhibited for the complainant:
A1. Copy of lawyer notice along with a/d card and postal receipt
A2. Reply notice
A3. Copy of sale agreement
A4. Copy of bill dated 21/02/2014
A5. Copy of stamp papers
A6. Copy of power of sanction letter
A7. Copy of e-mail between complainant and opposite party
A8. Copy of cheque
A9. Summary of account
A10. Account statement of complainant
A11. Copy of passport
A12(a). Cash receipt issued by Olavanna Panchayath
A12.(b). Building permit
A12(c) Specification and Report of the proposed building
A12(d) Sire plan of proposed house
A13. Reply received from RDO under RTI Act
A14. Notice received from Taluk Office, Kozhikode and Order of District Collector
Documents exhibited for the opposite party:
Nil
Witness examined for the complainant:
PW1. Pradeep Kumar (Complainant)
Witness examined for the opposite party:
None
Sd/-President
//True copy//
(Forwarded/By Order)
SENIOR SUPERINTENDENT
