IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated this the 24th day of August, 2023
Present: Sri.Manulal.V.S, President
Smt.Bindhu.R, Member
Sri.K.M.Anto, Member
CC No. 41/2014 (Filed on 27/01/2014)
Complainants : 1. James Joseph,
Chethalangattu House,
Koothrappally P.O,
Karukachal,
Changanacherry - 686 540.
2. Lalu James, W/o James Joseph,
Chethalangattu House,
Koothrappally P.O,
Karukachal,
Changanacherry - 686 540.
(Both by Adv: Chandramohan.V)
Vs.
Opposite parties : 1. The General Manager,
District Co -operative Bank Limited,
Kottayam – 686 001.
2. The Branch Manager,,
District Co -operative Bank Limited,
Karukachal Branch,
Changanacherry - 686540.
(Both by Adv: Sunny George Chathukulam)
O R D E R
SRI.K.M. ANTO, MEMBER
The complaint is filed under Section 12 of the Consumer Protection Act 1986.
The brief of the complainants’ case is as follows.
The first opposite party is the General Manager of the District Co-operative Bank, Kottayam and second opposite party is the Branch Manager of the Karukachal Branch of the District Co-operative Bank. The opposite party bank had sanctioned a Housing Loan for Rs.15 lakhs to the complainants on 08/03/2012. The opposite parties had released an amount Rs.4,50,000/- to the complainants as the first instalment. The opposite parties had realized an amount of Rs.29,500/- from the complainants being the Processing fee and Insurance fee.
The complainants had pledged 230 grams gold ornaments for Rs.5,57,500/- with the opposite party bank. The opposite parties declined to give the second and third instalment of the sanctioned loan. The complainants were unable to complete the construction of the house and to take the pledged ornaments. This act of the opposite parties had caused much mental agony and difficulties to the complainants. This complaint is filed for getting an order to the opposite parties to release the balance of Rs.10.50 lakhs of the housing loan, and for getting compensation of Rs.1,00,000/- from the opposite parties.
On admission of the complaint, copy of the complaint was duly served to the opposite parties. The opposite parties appeared and filed their version.
The versions of the opposite parties are as follows.
A Housing Loan of Rs.15 Lakhs was sanctioned to the complainants on 19/06/2012. The first installment of Rs.4,50,000/- was released to the complainant on 19/06/2012 itself. The opposite parties had not realized an amount of Rs.29,500/- as processing fee and insurance fee from the complainants. The Housing Loan of Rs.15 Lakhs was sanctioned as per the plan and estimate submitted by the complainants. The complainants were informed that the second instalment of Rs.4.5 lakhs will be released only after completing the structure work of the second floor. After availing a loan for a double storied building, the complainants had changed the plan and had constructed only the first floor. Due to this, the opposite parties were not able to release the second instalment of the loan. The complainants had constructed the building deviating from the plan and estimate submitted before the opposite party bank. Due to this reason the future instalments were not released to the complainants.
The complainants had availed four gold loans for an amount of Rs.5,57,500/- from the second opposite party.
1. The complainants had pledged 14 grams and 300 milligrams of gold ornaments for Rs 27,500/- on 11/12/2012 with 13% interest
2. The complainants had pledged 100 grams and 100 milligrams of gold on 08/01/2013 and had availed Rs.2, 50,000/- with 14 % interest
3. The complainants had taken Rs.1,37,000/- by pledging 55 grams and 800 milligrams of gold ornaments on 15/01/2013 with 13% interest
4 .The second complainant had pledged 58 grams and 600 milligrams of gold ornaments on 15/01/2013 for Rs.1,43,000/- with 13% interest.
The 100 grams and 100 milligrams of gold pledged on 08/01/2013 were sold in auction after giving proper notice to the complainants. Even though notice was issued to the complainants to close the three gold loans by remitting the dues, the complainants had not taken any steps to close the gold loans. There is no deficiency in service on the part of the opposite parties.
The complainants filed proof affidavit and marked documents Exts A1 to A9(Series). Opposite parties filed proof affidavit and marked documents Exhibits B1 to B12. The second opposite party filed interlocutory application for appointing an Expert Commissioner. The Expert Commissioner was appointed and the report was marked as Ext C1. On the application of the complainants an Advocate Commissioner was appointed and the Advocate commissioner report was marked as Ext C2.
On the basis of the complaint, version of the opposite parties and evidence adduced, we would like to consider the following points.
1 Whether there is deficiency in service on the part of the opposite parties ?
2 If so, what are the reliefs and costs?
For the sake of convenience we would like to consider Points No 1 and 2 together.
POINTS 1 & 2 :
On going through the complaint, version of the opposite parties and evidence on record it is evident that the opposite parties had sanctioned a Housing Loan of Rs 15,00,000/- to the complainants on 19/06/2012. The complainants had submitted the plan and estimate for the construction of a double storied building in 4.30 ares of land in Survey No 59/9 of Karukackal Village before the opposite parties for availing the Housing Loan. An amount of Rs.4,50,000/- was credited to the account of the complainants on 19/06/2012 as the first instalment of the loan amount.
Ext.A1 is the copy of Pass book of the complainants with the second opposite party bank having Account No.4610, which shows a deposit of Rs 4,50,000/- by loan on 19/06/2012.
Ext.A5 and Ext.B12 is the letter bearing No.5398 dated 08/03/2012 issued to the complainants by the first opposite party with regard to the sanctioning of Housing Loan for an amount of Rs.15,00,000/- for the construction of new house for a period of 240 months. The property offered as security is having an extent of 04.30 Are land as per Document No.35/1985 in Survey No.59/9 of Karukachal Village. The Loan is to be repaid with 15 % interest in 234 equal monthly instalments.
Ext.A6(series) were Gold Loan receipts of the four Gold Loans of the complainants with the second opposite party dated 11/12/2012, 06/01/2013, 15/01/2013 and 15/01/2013.
Ext A8 is the No Objection Certificate issued by the Karukachal Grama Panchayath for the construction of the house of the complainants and Ext.A9(series) are the Photos of the house under construction.
Ext.B1 is the copy of the plan submitted by the complainants before the opposite parties having an elevation of a two storied building with a plinth area of 95.21 square meters for the ground floor and 77.925 square meters for the first floor.
Ext.B2 is the copy of the estimate submitted by the complainants before the opposite parties. As per Ext.B2, the total estimate for the construction of the house is Twenty Lakhs.
Ext.B3 is the copy of the auction notice issued on 04/09/2013 to the first complainant intimating that if the arrear amount of Rs.2,71,400/- was not remitted within 7 days of receipt of the notice, the amount will be realized by auction of the pledged gold vide Gold Loan No.4547. Ext.B4 is the acknowledgement card for Ext.B3 notice.
Ext B5 is the copy of the auction notice issued on 25/10/2013 to the second complainant intimating that if the arrear amount of Rs.30,932/- was not remitted within 7 days of receipt of the notice, the amount will be realized by auction of the pledged gold vide Gold Loan No.4512. Ext.B6 is the acknowledgement card for Ext B5 notice.
Ext B7 is the copy of the auction notice issued on 26/10/2013 to the first complainant intimating that if the arrear amount of Rs.51,743/- was not remitted within 7 days of receipt of the notice, the amount will be realized by auction of the gold pledged vide Gold Loan No.4572. Ext.B8 is the acknowledgement copy of the Ext. B7 auction notice.
Ext B9 is the copy of the auction notice issued on 26/10/2013 to the second complainant intimating that if the arrear amount of Rs.1,58,442/- was not remitted within 7 days of receipt of the notice, the amount will be realized by auction of the gold pledged vide Gold Loan No.4570. Ext.B10 is the acknowledgement card for Ext. B9 auction notice.
Ext.B12 and Ext.A5 is the Loan sanction letter dated 08/03/2012 which contains the terms and conditions of the loan. The main terms and conditions are as follows.
2. The sanctioned Loan amount can be availed on executing the Loan agreement, Guarantee, Receipt, Promissory Note, Gehan/Mortgage Deed etc. by the borrower/s and Surety/ies.
5. The sanctioned loan shall be disbursed in 3 instalments. The borrower(s) agree the loan shall be utilized only for the purpose for which it has been applied for/granted and shall not utilize the same for any other purpose. The instalments shall be disbursed only on satisfactory report of the bank official with regard to the utilization of the amount/instalment disbursed. The bank reserves the right to recall the entire loan amount together with interest, cost, levies and other charges at any times as per the discretion of the bank in case of breach of any conditions mentioned herein.
11. The bank, RBI, NABARD, Government authorities etc. have the liberty to conduct inspection in the security property and premises without permission at any time.
15. The bank shall have the right to reduce the loan amount herein sanctioned without any reason if such a course is desired necessary by the bank.
On the basis of the above discussion it is evident that the opposite parties had disbursed the first instalment of Rs.4.5 lakhs to the complainants on 19/06/2012.
This clearly shows that the complainants had executed the loan agreement and other conditions as given in Clause 2 of the terms and conditions of Ext.B12. The opposite parties declined to release the remaining portion of the housing loan to the complainants stating that the second instalment of Rs.4.5 lakhs can only be released after completing the structure work of the second floor of the proposed house. Even though the opposite parties in their version and proof affidavit claimed that the complainants were informed that the second instalment of Rs.4.5lakhs of the loan will be released only after completing the structure work of the second floor, no documentary evidence has been adduced by the opposite parties.
The opposite party’s contention is that the complainants had constructed only a single storied building deviating from the Ext.B1 plan and Ext.B2 estimate submitted for availing the loan.
As per Clause 11 of Ext.B12, the bank can conduct an inspection of the security property and premises at any time without the permission of the complainants. As per Clause 5 of Ext.B12 the instalments shall be disbursed only on a satisfactory report of the bank official with regard to the utilization of the amount disbursed. But the opposite party failed to produce any such report prepared by the bank official after conducting an inspection in the security property and premises to establish that the complainants had deviated from the Ext.B1 plan and had constructed only a single storied house and not utilized the allotted loan amount for the construction of the house.
Moreover it is pertinent to note that in Ext.C1 report, the Expert Commissioner reports that the structure of first floor is constructed but not completed. The difference with the plan is only with the sit out and a car porch which is additionally included. The opposite parties have no case that the sanctioned loan amount was not utilized for the construction of the house.
In Ext.C2 Advocate Commissioner reported that wooden window frames, door frames made in teak wood, wooden logs were kept in the said property and 50% of the construction of the house is completed. The construction of the second floor, plastering and plumbing works are remaining to be completed.
This clearly establish the fact the complainants had utilized the disbursed loan amount of Rs.4,50,000/- for the construction of the house. The complainants were unable to complete the construction of the house due to the non-receipt of the balance amount of loan from the opposite parties. It is pertinent to note that the complainants had started the construction of the house in the year 2012 believing the Ext.A5 and Ext.B12 Loan sanction letter issued by the opposite parties. As per Clause 15 of the terms and conditions of Ext.B12, the opposite parties can reduce the loan amount on the basis of an inspection report. This was also not followed by the opposite parties. The Consumer Protection Act 1986 is a social benevolent legislation intended for the protection of rights of the consumers from exploitation of the service providers. The act of the opposite parties in withholding the balance of the sanctioned housing loan contrary to the conditions given in Ext.A5 and Ext B12 Loan sanction letter is fault, imperfection and shortcoming which has been undertaken to be performed by the opposite parties amounts to deficiency in service as per Consumer Protection Act 1986. The complainants have suffered much mental agony and financial loss and sufferings due to the act of the opposite parties which have to be duly compensated.
According to the complainants they pledged the gold ornaments for mobilizing fund for the construction of the house. The Exts. B5 to B10 clearly shows that the opposite parties had taken all the necessary measures to recoup the gold loan amounts given to the complainants. We do not find any deficiency in service on the part of the opposite parties with respect to gold loans.
On the basis of the above discussion, Points No 1 and 2 are found in favour of the complainants.
We allow the complaint and pass the following orders.
1. The opposite parties are directed to release the remaining portion of the loan amounting to Rs.10,50,000/- (Rupees Ten Lakhs and Fifty Thousand only) to the complainants within 30 days from the date of receipt of the copy of this order.
2. The opposite parties are directed to pay Rs.1,00,000/- (Rupees One Lakh only) as compensation for the mental agony and hardships of the complainants due to the deficiency in service on the part of the opposite parties.
3 The opposite parties are further restrained from charging any interest or penal charges on the Rs.4,50,000/- given to the complainants on 19/06/2012 for the period from 27/01/2014, the date of filing of this complaint to the date of this order.
The order shall be complied within 30 days from the date of receipt of the copy of this order, failing which the compensation amount shall carry 9% interest from the date of order till realization.
Pronounced in the Open Commission on this the 24th day of August, 2023
Sri.K.M.Anto, Member Sd/-
Sri.Manulal.V.S, President Sd/-
Smt.Bindhu.R, Member Sd/-
APPENDIX :
Exhibits from the side of the Complainants :
A1 - Copy of Pass book of the complainants with the 2nd opposite
party bank having Account No.4610
A2 - Postal receipts of complainants’ complaint addressed to
the 1st & 2nd opposite parties
A3 - Postal Acknowledgement Cards
A4 - Estimate bill dated 05/03/2013 for the purchase of cement
A5 - Copy of 1st Opposite party’s letter No.5398 dated 08/03/2012
issued to the complainants with regard to sanctioning of
housing loan
A6 (series) - Copy of gold pledge receipts issued by the 2nd
opposite party (4 Nos)
A7 - Copy of Ist complainant’s letter dated 18/12/2013
addressed to the 1st opposite party
A8 - No Objection Certificate dated 01/02/2012 issued
by the Secretary, Karukachal Grama Panchayath
A9(series) - Photographs of the house under construction(4 Nos)
Exhibits from the side of Opposite Parties :
B1 - Copy of the plan submitted by the complainants
B2 - Copy of Estimate submitted by the complainants
B3 - Copy of the auction notice dated 04/09/2013 issued to
the first complainant
B4 - Copy of Acknowledgement card for Ext.B3 notice
B5 - Copy of the auction notice dated 25/10/2013 issued
to the second complainant
B6 - Copy of Acknowledgement card for Ext B5 notice
B7 - Copy of the auction notice dated 26/10/2013 issued
to the first complainant
B8 - Copy of Acknowledgement of Ext. B7 auction notice
B9 - Copy of the auction notice dated 26/10/2013 issued
to the second complainant
B10 - Copy of Acknowledgement card for Ext. B9 auction notice
B11 - Complainant’s letter dated 05/03/2017 addressed to the
Registrar of Cooperative Societies
B12 - Loan sanction letter dated 08/03/2012
Commission Reports :
C1 - Expert Commission Report
C2 - Advocate Commission Report By Order, Sd/-
Assistant Registrar
