Telangana

Khammam

CC/34/2015

Koppaka Nageswar Rao, S/o. Late Venkateswara Rao, Khammam - Complainant(s)

Versus

The Branch Manager, State Bank of Mysore, Khammam Branch 41080 and Two Others - Opp.Party(s)

Sri. Siddamsetty Venkateswarlu & Sri P.L.N Rao

16 Nov 2018

ORDER

BEFORE THE DISTRICT CONSUMER FORUM AT KHAMMAM

Dated this, the 13^th day of November, 2018.

 

          CORAM:     1. Sri. P. Madhav Raja, _{B.Sc., M.Li.Sc., LL.M.,}– President

2. Sri. R. Kiran Kumar_{, B.Sc., LL.M.} – Member

     

C.C. No. 34/2015

Between:

 

Koppaka Nageswar Rao, S/o. Late Venkateswara Rao,

Age: 58 years, Occu: Retd. Employee,

R/o. H.No.10-2-48, Mamillagudem,

Khammam City and District.                                    …Complainant   

 

And

 

1. The Branch Manager, State Bank of Mysore,

Presently known as State Bank of India, Mamata Hospital Road,

Khammam City and District.

 

2. The Assistant General Manager,

State bank of Mysore, presently known as State Bank of India,

N.S.T. Road, Khammam City and District.

 

3. The Deputy General Manager,

State Bank of India, Administrative Office,

(Zonal Office), Clock Tower Centre, Nalgonda,

(Added as per order in IA.No.103/2017, dt. 19-01-2018)                        

…Opposite Parties

 

This C.C. is coming on before us for final hearing in the presence of          Sri Siddamsetty Venkateshwar Rao, Advocate for Complainant; and of Sri V.S.Chandra Sekhar, Advocate for Opposite Parties Nos. 1 to 3;  upon perusing the material papers on record; upon hearing and having stood over for consideration, this Forum passed the following order;

 

O R D E R

(Per Sri. R. Kiran Kumar, Member)

 

 

This complaint is filed under section 12(1) of the Consumer Protection Act, 1986. 

 

1.       The averments made in the complaint are that the complainant had worked as scientist in the Ministry of Commerce at Bangalore, he was retired from service, drawing pension of Rs.10,000/- from the opposite party Bank since 1982 onwards and he is a old customer to the opposite party bank.  The complainant submitted that his son by name Koppaka Venkata Abhiram, he studied up to B.Tech in Amrutha School of Engineering, Koyambathur and to continue his higher studies i.e. M.S. at United States of America, he applied for admission in Northwest Missouri State university, Maryville, USA and University of Houston Clear Lake, USA, accordingly he got admission in both universities, out of which he choose the University of Houston Clear Lake. The complainant further submitted that he has to get bank financial assistance for his son higher education, the complainant approached the opposite party No.1 bank in the month of November 2014 and applied for educational loan for an amount of Rs.25,00,000/-.  The complainant further submitted that all the required property documents of Flat No.102, Sai Towers, Saibaba Temple Lane, Mamillagudem, Khammam Town for security of the loan amount as well as his 3 years I.T. returns and also his sons educational qualification certificates like mark memos, B.Tech. Degree certificate, Transfer Certificate, Conduct Certificate etc., along with joining college particulars submitted to the Opposite Party No.1 Bank.  It is further submitted that after verifying all the necessary documents  the Branch Manager of opposite party No.1 had issued a sanction letter dt. 22-11-2014.  And also after satisfying all the preliminary requirements the Manager of opposite party No.1 send the complainant to his bank Panel Advocate for getting legal opinion for sanctioning of the loan amount and also send the complainant to the Architect for getting estimation of the property value.  After getting the legal opinion and the estimated property value the complainant submitted the same before the opposite party No.1 for processing of the loan amount, on that opposite party No.1 recommended the loan on the reduced amount of Rs.20,00,000/-.  The complainant further submitted that for the entire loan process the complainant had spent an amount of Rs.30,000/-.  The son of the complainant got Visa and the journey date was also confirmed, even though the loan was not sanctioned, the complainant made rounds to the opposite party No.1 Bank to know about the sanction of the loan, in the meanwhile the opposite party No.1 informed to the complainant that the loan was sanctioned and the complainant was under the impression the cheque or demand draft will be issued within one or two days.  To his surprise the complainant received a phone call from the opposite party No.1 bank that the said education loan was declined on that the complainant immediately approached the opposite party No.1 bank and enquired about the same, on that the opposite party No.1 bank had furnished the letter issued by the opposite party No.2, as the loan has been declined due to academic credentials of the student is unsatisfactory and is far from encouraging and other various reasons. The Reserve Bank of India has clearly stated that, top priority will be given to the Education Loans, because the students future is depends on the same. But the Opposite parties rejected the loan.  It clearly showing the recklessness and inefficiency of service and also the Opposite parties did not care the risk of the student at the time of crucial movement. The complainant further submitted that if the Opposite parties not satisfied with the educational track record of the complainant’s son, the Opposite parties have to reject the complainant’s application in the begging stage itself, then the complainant will search for another source or else another bank for educational loan, but the Opposite parties failed do so and processed the loan, for which the complainant suffered a lot with mentally and physically.  Hence, filed this complaint.

 

2.       On behalf of the complainant, the complainant filed the following documents and the same were marked as Exs.A-1 to A-16.

 

Ex.A.1   :-is the photocopy of Educational Loan Scheme, Gnana Mithra – Application cum Appraisal Form.

Ex.A.2:- is the photocopy of Certificate dt:22-11-2014 issued by State Bank of Mysore , Khammam Branch.

Ex.A.3   :- is the pre-sanction Inspection Report (Residence of the Applicant) dt:10-12-2014.

Ex.A.4:- is the pre-sanction Inspection Report (Residence of the Applicant) dt:23-02-2015.

Ex.A.5   :-is the letter submitted by the complainant to Opposite party No.1 dt:25-02-2015.

Ex.A-6 is the re-submission letter dt:25-02-2015 from Opposite party No.1.

Ex.A-7 is the letter dt:10-04-2015 from Opposite party No.1.

Ex.A-8 is the Office copy of Legal Notice dt:04-06-2015 along with Postal Acknowledgements.

Ex.A-9 is the reply notice dt:16-06-2015.

Ex.A-10 is the Certificate  dt:07-08-2015 issued by Sundaram Finance Limited in the name of K.Vijayalaxmi.

Ex.A-11 is the Certificate dt:07-08-2015 issued by Sundaram Finance Limited in the name of D.N.S.Raja.

Ex.A-12 is the Account Statement from 01-04-2015 to 31-07-2015 pertaining to the complainant, issued by Corporation Bank, Khammam branch.

Ex.A-13 is the statement of account  Housing Loan of complainant from           01-04-2015 to 31-07-2015.

Ex.A-14 is the Valuation Report given by Kinnera Architects Engineers,          dt:22-11-2014. 

Ex.A-15 is the Title report on property of complainant issued by Sri V.S.Chandra Sekhar, Advocate Khammam, dt:19-11-2014.

Ex.A-16 is the Report of Investigation Title in respect of immovable property dt:19-11-2014.

 

3.     On receipt of the notice, the Opposite Parties appeared through their counsel, and filed Counter, in their counter the Opposite Parties admitted that the complainant approached the Opposite Party No.1 branch for sanction of educational loan.  The Opposite Parties further submitted that, in general process, after party approached the bank for any loan, the bank has to obtain legal opinion from the advocate and valuation report from valuer for processing the loan subject to fulfillment of the Cibil Consumer Credit Information Report.  In this case, after obtaining legal opinion and valuation report and submitted in the bank, the Opposite Party No.1 bank forwarded the same to the regional office,  Hyderabad on 10-12-2014 subject to fulfillment of Cibil Consumer Credit information Report.  Later, the Opposite Party No.1 got the Cibil Consumer Credit Information report and found that the complainant is having two housing loans and one education loan to his elder son, which were obtained from other banks and also he is guarantor of vehicle loan and these all loans showing an outstanding of more than the limit.  The Opposite Parties further submitted that, the Regional Office, Hyderabad had sent a letter on 13-02-2015 to the complainant to resubmit after fulfilling the observations as required, regarding his regularization of his liability under the loans obtained by him from various banks.  The Opposite Party No.1 had informed the same to the complainant, the complainant requested the Opposite Party No.1 bank stating that he is going to regularize his outstanding loan amounts and requested the Opposite Party No.1 bank to sent the application again for consideration.  Thus the complainant had failed to regularize the above said loan, in those circumstances, the Regional office, Hyderabad vide letter dt:10-04-2015 declined the application of the complainant with an observation that the existing repayment track record of the complainant is poor, very much unsatisfactory and delinquencies exist to the CIBIL record.  The Opposite Parties further submitted that there is an existing educational loan has not been brought out in the proposal and also in the self declaration   and short credit report CRD and CRI, which amounts to hiding of facts and non disclosure of existing liability by the complainant.  the Opposite Parties further submitted that  in view of the above reasons there is no fault on their part for non sanctioning of the loan  and it is on the part of the complainant, who failed to submit the accounts by fulfilling the requirements and non disclosure of the existing liability in his self declaration and also submitted that the sanctioning letter issued only subject to the fulfillment of terms and conditions and satisfaction of  requirements.  In light of the   above facts the Opposite Parties prayed to dismiss the complaint.

 

4.     On behalf of the Opposite Parties, the following documents were filed and marked as Ex.B-1 to B-4.

 

Ex.B.1:-is the True copy of Educational Loan Scheme, Gnana Mithra – Application cum Appraisal Form.

Ex.B-2 is the photocopy of Cibil Consumer Credit Information Report               dt:12-12-2014.

Ex.B-3 is the photocopy of Cibil Consumer Credit Information Report             dt:14-02-2015.

Ex.B-4 is the photocopy of letter addressed by the Asst.General Manager, R.O.-III , Central Zone, Hyderabad to the Opposite Party No.1             dt:13-02-2015.

 

5.       Written Arguments of both parties filed. 

6.       Heard oral arguments from both sides.

 

7.      Upon perusing the material papers on record, now the point that arose for consideration is,

     

Whether there is any deficiency of service committed by the Opposite Party Bank against the complainant?

 

POINT NO.1

In this case the son of the complainant studied B.Tech. in Amrita School of Engineering, Coimbatore and he wants to continue his higher studies i.e. M.S. at United States of America.  He applied for admission in University of Houston Clear Lake,  USA for that the complainant approached the Opposite Party No.1 Bank and applied for education loan for an amount of Rs.25,00,000/-.  According to the complainant he submitted all required property documents of Flat No.102, Sai Towers, Mamillagudem, Khammam Town and District for security of the loan amount, 3 years IT returns and also submitted his son education qualification certificates like Marks Memos, B.Tech. Degree Certificate, Transfer Certificate, Conduct Certificate, Study Certificate along with joining college certificate.

 

According to the complainant, the Manager of Opposite Party No.1 Bank after verifying all the necessary documents, had issued a sanctioning letter dated:22-11-2014.  And also the Manager of Opposite Party No.1 Bank sent the complainant to their Bank Panel Advocate for getting Legal opinion for sanctioning of the loan amount and also to the Architect for getting estimation of the property value.  According to the complainant after furnishing all the papers, Opposite Party No.1 reduced the loan amount from Rs.25,00,000/- to Rs.20,00,000/- and recommended for the same,  for the entire bank process the complainant had spent Rs.30,000/-  According to the complainant, his son got VISA and the date of journey was also conformed, even though the loan was not sanctioned, for that complainant made rounds to the Opposite Party No.1 bank, to the surprise, complainant received phone call from the Opposite Party No.1 bank that the education loan was declined by the Opposite Party No.2 due to the academic credentials of the student is unsatisfactory and far from encouraging.  According to the complainant he spent six months time for obtaining and sanctioning of the education loan amount, even after completion of all bank formalities as per the guidelines of Reserve Bank of India, the Opposite Parties intentionally declined to sanction loan to defraud the complainant with an intention to harass him.  As the Opposite Parties failed to sanction the education loan in a stipulated time and declined, which amounts to deficiency in service for that the complainant approached the Forum for redressal.

 

It is an undisputed fact that the complainant approached the Opposite Parties for sanction of educational loan, on the approach of the complainant the Opposite Party No.1 bank forwarded the same to their Regional Office, Hyderabad on 10-12-2014 subject to fulfillment of Cibil Consumer credit information Report. After getting the Cibil Consumer Credit information report the bank found that the complainant is having two housing loans and one educational loan to his elder son, which were obtained from other banks and also he is guarantor of vehicle loan, these all documents showing an outstanding of more than the limit.  On the information given by the Opposite Party No.1 bank, the complainant requested the Opposite Party No.1 bank that he is going to regularize his outstanding, as the complainant failed to regularize the same, the Regional Office, Hyderabad declined the application of the complainant. 

         

The Andhra bank and Another Vs Jayaraj and Others I (2014) CPJ 68(NC) in this case, the Hon’ble National Commission observed that “it was not obligatory  on the part of Petitioner to the sanction loan   merely because  loan has not been sanctioned, no deficiency can attributed on part of Petitioner, unless action is shown as malafide”. And also in UP Financial Corporation and Other Vs NAINI Oxygen Acitalin Gas Ltd. and Another I (2014) CPJ 70 (NC) and in Maharastra State Finance Corporation and others Vs Sanjay Shankersa Mamarde III(2010) CPJ 33 (SC).  Wherein the Hon’ble National Commission observed that “a corporation being an independent autonomous statutory body having its own constitution and rules to abide by, and function and obligation to discharge, in the discharge of its functions, it is free to act according to its own right.  The views it forms and the decisions it takes would be on the basis of the information in its profession and the advise it receives and according to its own prospective and calculations.  In such a situation, more so in commercial matters, the court should not risk their judgments for the bodies to which that task is assigned. It was held that; unless its actions is malafide, even a wrong decision taken by it, it is not open to challenge.  It is not for the courts or a third party to subsequite its decision, however more prudential , commercial or business like it may be, for the decision of the corporation”

           In view of the above decisions and facts circumstances of the case  we do not find any irregularities or deficiency in service on the part of Opposite Parties as such this point is answered accordingly against the complainant.

 

In the result, this complaint is dismissed.

(Dictated to the Stenographer, typed and transcribed by her, corrected and pronounced by us in the open Forum, on this the 13^th day of November, 2018.)

 

 

 

  Member                  President    

      District Consumer Forum,

                Khammam.

 

APPENDIX OF EVIDENCE

WITNESSES EXAMINED:-

 

For Complainants                                                  For Opposite parties  

       None                                                                          None

DOCUMENTS MARKED:-

 

For Complainant                                                    For Opposite parties

   

Ex.A1:	is the photocopy of Educational Loan Scheme, Gnana Mithra – Application cum Appraisal Form.	Ex.B1:	- is the True copy of Educational Loan Scheme, Gnana Mithra – Application cum Appraisal Form. -
Ex.A2:	is the photocopy of Certificate dt:22-11-2014 issued by State Bank of Mysore , Khammam Branch.	Ex.B2:	is the photocopy of Cibil Consumer Credit Information Report               dt:12-12-2014.
Ex.A3:	is the pre-sanction Inspection Report (Residence of the Applicant) dt:10-12-2014.	Ex.B3:	is the photocopy of Cibil Consumer Credit Information Report             dt:14-02-2015.
Ex.A4:	is the pre-sanction Inspection Report (Residence of the Applicant) dt:23-02-2015.	Ex.B4:	is the photocopy of letter addressed by the Asst.General Manager, R.O.-III , Central Zone, Hyderabad to the Opposite Party No.1             dt:13-02-2015.
Ex.A5:	is the letter submitted by the complainant to Opposite party No.1 dt:25-02-2015.
Ex.A6:	is the re-submission letter dt:25-02-2015 from Opposite party No.1.
Ex.A7:	is the letter dt:10-04-2015 from Opposite party No.1.
Ex.A8:	is the Office copy of Legal Notice dt:04-06-2015 along with Postal Acknowledgements.
Ex.A9:	is the reply notice dt:16-06-2015.
Ex.A10:	is the Certificate  dt:07-08-2015 issued by Sundaram Finance Limited in the name of K.Vijayalaxmi.
Ex.A11:	is the Certificate dt:07-08-2015 issued by Sundaram Finance Limited in the name of D.N.S.Raja.
Ex.A12:	is the Account Statement from 01-04-2015 to 31-07-2015 pertaining to the complainant, issued by Corporation Bank, Khammam branch.
Ex.A13:	is the statement of account  Housing Loan of complainant from           01-04-2015 to 31-07-2015.
Ex.A14:	is the Valuation Report given by Kinnera Architects Engineers,          dt:22-11-2014.
Ex.A15:	is the Title report on property of complainant issued by Sri V.S.Chandra Sekhar, Advocate Khammam, dt:19-11-2014.
Ex.A16:	is the Report of Investigation Title in respect of immovable property dt:19-11-2014.

 

 

 

 

   Member                 President    

      District Consumer Forum,

                Khammam.