Tamil Nadu

Nagapattinam

CC/45/2013

L.Arumugam - Complainant(s)

Versus

The Branch Manager, IOB, Sirkazhi. and 2 others. - Opp.Party(s)

M.Jawaharlal

02 Mar 2015

ORDER

                                                                                                    Date of Filing      : 06.11.2013

                                                                                                     Date of Disposal: 02.03.2015

           

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM,

NAGAPATTINAM

 

PRESENT: THIRU.P.G.RAJAGOPAL, B.A.B.L.,         …..PRESIDENT

    THIRU.A.BASHEER AHAMED,B.Com., …. MEMBER I

                   Tmt. R.GEETHA, B.A.,                             …. MEMBER II

 

CC. No.45/2013

 

DECIDED ON THIS 2^nd    DAY OF MARCH 2015.

 

Arumugam, Age 45,

S/o Lashminarayanan

West Street, Thadalan Kamarajarpuram,

Sirkali Taluk, Nagapattinam District.                                … Complainant

                                                                                      

                                                                /versus/

 

1. The Branch Manager,

     Indian Bank,

     Thenpathi Branch,

     Sirkali.

2. District Manager,

    TAHDCO Ltd.,

     Nagapattinam.

3. The District Collector,     

    Collectorate, Nagapattinam.                                          … Opposite parties

 

 

            This complaint having come up for final hearing before us on 17.02.2015, on perusal of the material records and on hearing the arguments of Thiru.M.Jawaharlal, Counsel for the complainant, Thiru.E.Selvaraj, counsel for the 1^st opposite party, Government Pleader, Counsel for the 2^nd and 3^rd opposite parties and having stood for consideration, till this day the Forum passed the following

 

 

 

ORDER

     By the President, Thiru.P.G.Rajagopal, B.A.B.L., 

          This complaint is filed by the complainant u/s 12 of the Consumer Protection Act 1986. 

        2. The gist of the complaint filed by the complainant is that based on the concurrence of the 1^st opposite party to grant loan to the complainant, the 2^nd opposite party sanctioned the subsidy of Rs.2,25,000/- and sent a letter to the 1^st opposite party recommending the sanction of the loan of Rs.7,25,000/- to the complainant the balance of Rs.50,000/- payable by the complainant towards margin money for starting a Welding Workshop and subsequently the 1^st opposite party refused to sanction the loan stating that the people of below caste, would not repay the the loan and hence the rejection letter has been sent to the 2^nd opposite party.  The complainant had been to the 1^st opposite party branch for about 25 times in connection with the demand of the loan amount and had spent huge amount towards obtaining the project report, lease deed for the site to run the business and to get other documents such as the income certificate, etc.  The 1^st opposite party has committed deficiency of service by subsequently refusing the sanctioning of the loan to the complainant.  Hence the complainant prays for an order to direct the 1^st opposite party to sanction the loan of Rs.7,25,000/-, to pay the compensation of Rs.1,00,000/- for the mental agony, inconvenience and expenditure caused to the complainant owing to the deficiency of service of the 1^st opposite party, to pay the cost of this litigation and grant such and other reliefs as this Forum would deem fit.

                        3. The gist of the written version filed by the 1^st opposite party is that the allegation that the 1^st opposite party, told the complainant that the people of below caste would not repay the loan and hence loan could not be sanctioned is false and the 1^st opposite party has nothing to do with the expenditure incurred by the complainant for getting the project report and other certificates in connection with his loan application. The Field Officer of the 1^st opposite party on enquiry came to know that the complainant did not have any experience in the welding works and the complainant’s residential place is not within the service area of the 1^st opposite party and further he was engaged in Arrack selling having many criminal cases registered against him. As he was not having any experience in the welding works his application for the loan was rejected by the 1^st opposite party and there is no other motive or reason for the rejection of the complainant’s application for the loan.  The 1^st opposite party, as the complainant had acquaintance with him as the customer of the bank, readily gave consent for advancement of the loan amount and under the bonafide impression that the complainant might have been well qualified and experienced with welding works, he sent the Format-III to the 2^nd opposite party. Taking advantage of the mistaken submission of the Format-III, the complainant cannot compel the 1^st opposite party to advance loan to him.  As a matter of right in as much as the 1^st opposite party, as the custodian of the public funds has every right to return the loan application of the complainant in the interest of protecting the public money of the Bank.  Only on the Field Officer enquiring  about the competency and qualification of the complainant for sanctioning the loan he came to know that the complainant had no technical qualification in the welding, laths and fabrication and prior experience in that field and further it was brought to light that the complainant had committed the offences for pending of illicit  arrack and there had been many criminal cases in the Judicial Magistrate Court of Sirkali and further the quotation given by Sri Meenakshi Engineering Works is not a reliable one in as much as the said establishment is  only a welding and lath factory and not a manufacturer of any machines and further the residence place of the complainant is also not coming within the service area of the 1^st opposite party Bank. Hence based on the report of the Field Officer the TAHDCO loan application was rightly returned by the 1^st opposite party who duly informed the 2^nd and 3^rd opposite parties as well as the higher officials of the Bank.  Therefore there is no deficiency of service on the part of the 1^st opposite party and he has not caused any mental agony, inconvenience or expenditure to the complainant as alleged by him.  The complaint is therefore liable to be dismissed.

                        4. The gist of the written version filed by the 2^nd opposite party is that the application of the complainant for the sanctioning of the loan was received through on line on 23.01.2013, interview was conducted on 26.02.2013 and the committee selected the complainant for sanction of the loan for establishing the welding workshop. His application with proposal was forwarded to the 1^st opposite party on 18.03.2013.  The Form-III proposal for sanctioning for subsidy was received from the 1^st opposite party by the 2^nd opposite party on 26.03.2013 and after concurrence of the District Collector; the subsidy was released.  As far as the 2^nd and 3^rd  opposite parties are concerned the 2^nd opposite party has duly recommended the sanctioning of loan for the complainant, released the subsidy and sent it to the lead Bank of the 1^st opposite party’s bank and there is no deficiency of service on their part.  Therefore the complaint is liable to be dismissed as against the 2^nd and 3^rd opposite parties.  Further there is no relationship of the consumer and service provider between the complainant and the 2^nd and 3^rd opposite parties and therefore the complaint is not maintainable under law.

                        5. The complainant has filed his proof affidavit reiterating all the averments made in the complaint and filed 11 documents which are marked as Exhibits A1 to A11.  The 1^st opposite party has filed his proof affidavit in proof of his defence and filed 8 documents which are marked as Exhibits B1 to B8. The 2^nd opposite party has filed his proof affidavit and filed one document which is marked as Exhibit B9.  Written arguments have been submitted by the complainant and the 1^st and 2^nd opposite parties.

                        6.  Points for consideration:-

 

                        1. Whether there is any deficiency of service on the part of the 1^st  opposite party?

                                       2. Whether the complainant is entitled to any relief? If so to what relief?

                        7. Point 1: The main allegation of the complainant as against the 1^st opposite party is that he applied for loan under the Entrepreneur Development Programme to establish a welding workshop.  The 1^st opposite party consented for advancement of the loan to the complainant by way of sanction proposal in Format-III based on which the 2^nd and 3^rd opposite parties recommended for the disbursement of the loan of Rs.10,00,000/- out of which the subsidy of Rs.2,25,000/- was granted by the 2^nd opposite party, but ultimately the 1^st opposite party has wantonly refused to sanction the loan to the complainant with ulterior motive after the complainant’s making of preparations, such as preparation of the Project Report and submitting the documents for the commencement of the business and thus has committed deficiency of service.  The complainant has deposed oral testimony before this Forum and is also cross examined by the 1^st opposite party. 

8. The complainant has filed Exhibit A1, the acknowledgment given by the 2^nd opposite party for receiving the application from the complainant under the Entrepreneur Development Programme, Exhibit A2, the call letter for interview Exhibit A3, the proceedings of the District Collector for sanction of the loan and the release of the subsidy, Exhibit A4, the Xerox copy of the Family Card of the complainant, Exhibit A5, the Identity Card of the complainant issued by the Election Commission of India, Exhibit A6, the income certificate issued to the complainant by the Zonal Deputy Tashildar, Sirkali, Exhibit A7, the residence certificate issued to the complainant by the Tashildar, Sirkali, Exhibit A8, the Xerox copy of the Community Certificate issued by the Tashildar, Sirkali, Exhibit A9, the Service Certificate issued by Sri Meenakshi Engineering works, Exhibit A10, the Project Report of the complainant’s proposed workshop sent to the General Manager TAHDCO, Nagapattinam, A11, the letter sent by the 1^st opposite party to the 2^nd opposite party returning the loan applications of three applicants including the complainant are filed on the side of the complainant.

                        9.  The contention of the 1^st opposite party is that the allegation of the complainant that the 1^st opposite party wantonly denied the sanctioning of TAHDCO loan to the complainant alleging on the face of the complainant that the people of his community would not repay the loan and therefore the loan amount could not be sanctioned is totally false and the loan could not be sanctioned to the complainant only for two reasons namely, his place of residence was not within the service area of the 1^st opposite party’s Branch and the complainant was also not credit worthy. 

10. On the side of the 1^st opposite party, Exhibits B1, The Xerox copy of the application sent by the complainant to the 2^nd opposite party under the Entrepreneur Development Programme Exhibit B2, the statement of account of the complainant with the 1^st opposite party, Exhibit B3, the First Information Report No.617/2012 of the Sirkali Police Station against the complainant Exhibit B4, the report of pre sanctioning visit for TAHDCO scheme loan by the 1^st opposite party, Exhibit B5, the letter of the 1^st opposite party sent to the Assistant General Manger, Indian Bank, Zonal Office, Kumbakonam Exhibit B6, the letter of the Assistant General Manger, Indian Bank, Zonal Office, Kumbakonam sent to the 1^st opposite party, Exhibit B7, the letter of the 1^st opposite party sent to the 2^nd opposite party and Exhibit B8, the another letter of the 1^st opposite party sent to the 2^nd opposite party are marked as evidence. On the side of the 2^nd opposite party Exhibit B9, the Format -III, sent by the 1^st opposite party to the 2^nd opposite party with respect to the TAHDCO loan of Nagapattinam District is filed.

                        11. The reasons stated by the 1^st opposite party for returning the loan application of the complainant is that the complainant is not credit worthy that he was not residing under the service area of the bank and he had not bought the instruments required for the proposed welding shop from manufacturer dealer in welding materials and further he used to sell arrack and some court cases are also pending against him.  As stated in the various Exhibits B4, B7 and B8, based on the said documents, the Assistant General Manager, Indian Bank, Zonal Office, Kumbakonam under Exhibit B5, has recommended for the return of the loan application of the complainant and accordingly under Exhibit B6, the 1^st opposite party has returned the application under the TAHDCO scheme to the 2^nd opposite party.  The reasons stated is that the complainant does not belong to the service area of their branch.  Exhibit B9, the Format- III is the document signed by the 1^st opposite party and forwarded to the 2^nd opposite party, in pursuance of which the latter has released the subsidy amount of Rs.2,25,000/- and recommended the sanctioning of bank loan of Rs.7,25,000/-.  The opposite party no.2 has categorically deposed during the course of his cross examinination by the 1^st opposite party that they are granting subsidy only based on the Format-III submitted by the concerned bank.  The Format-III, Exhibit B9 signed by the 1^st opposite party is submitted to the 2^nd opposite party which is not denied at all.  While Exhibit B9, Format-III had been submitted on 26.03.2013  the letters returning the TAHDCO application are sent by the 1^st opposite party only subsequent to the said forwarding of the Format-III.  The TAHDCO application for loan had been returned by the 1^st opposite party for the reasons that the borrower was not credit worthy and did not belong to their service area.  The said letter sent by the 1^st opposite party returning the TAHDCO application of the complainant to the 2^nd opposite party is Exhibit B8.  The 2^nd opposite party has already deposed during the course of the cross examination “Mdhš eh§fŸ khåa¤ bjhif tH§Ftnj mªj t§»æ‹ gçªJiuahd got« 3‹ mo¥gilæšjh‹” Therefore it is clearly proved that Format III, Exhibit B9 is the basic and primary document on the basis of which the 2^nd opposite party used to release the subsidy amount thereby recommending the TAHDCO loan amount to the concerned complainant.

                        12. In this case the 1^st opposite party had submitted the Exhibit B9, the Format III and subsequently returned the TAHDCO application of the complainant on the ground that he had been not credit worthy besides not coming under the service area of their Bank.  The 1^st opposite party ought to have made thorough enquiry regarding the borrowers’ credit worthiness’, his competency and experience to do the business, the particulars regarding his residence and the place of business, prior to submitting the said Format -III.

                        13. On the other hand the 1^st opposite party mechanically submitted the said Format-III to the 2^nd opposite party and has caused the release of the subsidy amount of Rs.2,25,000/- as prelude towards sanctioning of the loan by the 1^st opposite party.  The 1^st opposite party has started the investigation regarding the credit worthiness and other pros and cons on the part of the borrower to sanction the loan, only after the said release of the subsidy amount before sanctioning the loan amount which act ought to have been done by him before submitting the Format- III, the Exhibit B9 to the 2^nd opposite party. Had the 1^st opposite party done the investigation prior to the submission of the Format-III he could not have submitted the Format-III which tantamounts to acceptance for advancing the loan amount to the borrower.  Had the complainant expressed his refusal to sanction the loan amount to the complainant in the Format- III, the complainant would not have wasted his energy, time and money towards taking steps and getting the documents such as the preparation of the Project report and various other certificates from the various officials.  Therefore the act of the 1^st opposite party in mechanically submitting the Format-III which is indication of his concurrence for sanctioning loan to the complainant and subsequently returning his loan application on the ground that the borrower was not credit worthy and his place of residence is not within his service area is definitely deficiency of service on his part.

            14. No doubt it is held by the Hon’ble National Commission in the decision reported in 2010 (4) CPR, page no. 815

The Manager, Andhra Bank & Another… Petitioners

              /Vs/

M.Jayaraj & Others                                    … Respondents

In which it is held that it is not obligatory on the part of the petitioner to sanction loan and merely because loan has not been sanctioned no deficiency can be attributed on the part of the petitioners unless action his shown as malafide. Therefore the mere returning of the TAHDCO loan application of the complainant by the 1^st opposite party to the 2^nd opposite party is not deficiency of service but the rejection of the application after having sent his concurrence report in Format No.III for sanctioning the loan is sheer deficiency of service on the part of the 1^st opposite party.

                        15. Point 2: In the result, the complaint is partly allowed.  The complainant is not entitled to the relief of a direction of this Forum to the 1^st opposite party to advance the loan amount to the complainant as it is purely within the discretion of the 1^st opposite party. As the 1^st opposite party has committed deficiency of service by returning the loan application of the complainant after submission of his proposal for loan under Format No.III, thereby causing the release of the subsidy of Rs.2,25,000/-(Rupees two lakhs and twenty five thousand only) in favour of the complainant’s loan  the 1^st opposite party is directed to pay the sum of Rs.10,000/-(Rupees ten thousand only) to the complainant towards his mental agony and waste of his energy, time and money  towards taking steps and collecting the documents for getting the loan amount from the 1^st opposite party and also to pay the sum of Rs.3,000/-(Rupees three thousand only)  towards cost of this litigation. The 1^st opposite party is directed to pay the said compensation of Rs.10,000/-(Rupees ten thousand only) to the complainant within thirty days from the date of this order, failing which the said amount shall carry an interest at the rate of 12% per annum from the date of this order till the date of the payment.

This order is dictated by me to the Steno-Typist, transcribed, typed by him and corrected and pronounced by me on this 2^nd day of March 2015.

 

 

    MEMBER I                                    MEMBER II                                 PRESIDENT

List of the documents filed by the complainant:-

Ex.A1/Dt.24.01.2013: The Xerox copy of the Acknowledgment for submission of loan

   application of the complainant on Online.

Ex.A2/Dt.18.02.2013: The Xerox copy of the calling letter for interview sent by the 2^nd

   opposite party to the complainant.

Ex.A3/Dt.30.03.2013: The Xerox copy of the the proceedings of the District Collector, in

     favour of the 1^st and 2^nd  opposite parties for advancement of

     loan to the complainant.

Ex.A4/Dt.                   : The Xerox copy of the Family Card of the complainant.

Ex.A5/Dt.                   : The Xerox copy of the Identity Card of the complainant issued by

   the Election Commission of India

 Ex.A6/Dt.                  : The Xerox copy of the Income certificate of the complainant given

    by the Tashildar, Sirkali.

Ex.A7/Dt.                   : The Xerox Copy of Nativity certificate of the complainant given by

   the Tashildar, Sirkali.

Ex.A8/Dt.05.10.2012: The Xerox Copy of the Community certificate of the complainant

   given by the Tashildar, Sirkali.

 Ex.A9/Dt.                    : The  Xerox copy of the Service Certificate of the complainant

   relating to the Welding & Turner works given by one Sri

    Meenakshi Engineering, Sirkali.

Ex.A10/Dt.31.01.2013: The Xerox  Copy of  the Project Report relating to the proposed

     Welding, Lath and Fabrication works of the complainant.

Ex.A11/Dt.22.05.2013: The Xerox copy of the letter sent by the 1^st opposite party to the

     2^nd opposite party returning the loan application.

 

 

List of the documents filed by the 1^st opposite party:-

Ex.B1/Dt.                   : The Xerox copy of the TAHDCO On line application of the

   complainant .

Ex.B2/Dt.08.04.2014: The Xerox copy of the statement of account of the complainant

    with the 1^st opposite party.

Ex.B3/Dt.05.11.20012: The Xerox copy of the FIR filed by the Sirkali Police Station

    against the complainant.

Ex.B4/Dt.12.04.2013: The Xerox copy of the report of the 1^st opposite party’s pre

              sanctioning visits for  TAHDCO scheme loan.

Ex/B5/Dt.13.04.2013: The Xerox Copy of the letter sent by the 1^st opposite party to the

     Assistant General Manager, Indian Bank, Zonal office,

     Kumbakonam.

Ex.B6/Dt.15.04.2013: The Xerox copy of the  letter sent by Assistant General Manager,

   Indian Bank, Zonal office, Kumbakonam to the 1^st opposite party

Ex.B7/Dt.19.04.2013: The Xerox copy of the  letter sent by the 1^st opposite party to the

   2^nd opposite party.

Ex.B8/Dt.22.05.2013: The Xerox copy of the another letter sent by the 1^st opposite party

    to the  2^nd opposite party.

Ex.B9/Dt.26.03.2013: The Xerox copy of the Format-III, given by the 1^st opposite party

    to the 2^nd opposite party.

.

 

    MEMBER I                                    MEMBER II                                 PRESIDENT

 

                                                                                                                                                      DISTRICT CONSUMER DISPUTES

REDRESSAL FORUM,

NAGAPATTINAM.

 

CC.No.45/ 2013

Order Dt.: 02.03.2015.