Karnataka

Chitradurga

CC/25/2015

P.Krishnamurthy S/o. Malleshappa - Complainant(s)

Versus

The Manager, Lakshmi Vilas Bank - Opp.Party(s)

Shri.M.Suresh

03 Dec 2015

ORDER

COMPLAINT FILED ON : 19/02/2015

     DISPOSED ON: 03/12/2015

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHITRADURGA

CC. NO. 25/2015 DATED:  3rd December 2015

 

PRESENT :-     SRI. T.N. SREENIVASAIAH      PRESIDENT                                      B.A., LL.B.,

                        SRI.H.RAMASWAMY,               MEMBER

                                         B.Com., LL.B.,(Spl.)

                        SMT.G.E.SOWBHAGYALAKSHMI,       

                                         B.A., LL.B.,               MEMBER

 

 

COMPLAINANT	P. Krishnamurthy, S/o Malleshappa, Prop. Murthy Textiles and Tailors, Dummi Complex, B.D. Road, Chitradurga.   (Rep by Sri. M. Suresh,  Advocate)
OPPOSITE PARTIES	The Manager, Lakshmi Vilas Bank, Behind Head Post Office, Holalkere Road, Chitradurga.   (Rep by Sri. L. Madhusudhan,  Advocate)

 

SRI. T.N. SREENIVASAIAH. PRESIDENT.

ORDER

The complainant has filed a complaint U/s 12 of C.P. Act 1986 against the OP for a direction to the OP to pay Rs.8,309/-, the amount collected from the complainant, Rs. 50,000/- towards damages, Rs.20,000/- towards mental agony  and costs etc.

2.     The brief facts of the case of the complainant are that, he is running a Textiles and Tailor Business in the name and style as "Murthy Textiles & Tailors.  Being an Account Holder, complainant approached the OP Bank for financial help for his business and the OP agreed to give loan for a sum of Rs.20,00,000/- and issued a letter to get documents for mortgage.  It is stated that, OP told the complainant to approach Mr. L. Madhusudhan, Advocate to get opinion for the purpose of mortgage loan and after obtaining the documents, the said Advocate gave his legal opinion by collecting legal fee of Rs.3,000/-.  Thereafter, complainant approached OP's Valuator Mr. M.K. Ravindra, Engineer and he inspected the property of complainant and issued valuation certificate by receiving Rs.5,000/-.  Complainant has spent Rs.5,000/- for collecting required documents from City Municipal Council Sub-Registrar and approached the OP after attending all the legal formalities but, the OP has not taken proper care in sanctioning the loan to the complainant.  OP Bank has collected Rs.95/- on 10.10.2014 and Rs.320/- on 12.10.2014 as Folio Charges, Rs.2,500/- on 13.10.2014 towards valuation fee and Rs.5,394/- on 10.11.2014 towards processing charge from the account of the complainant without any information or consent and failed to sanction the loan as assured.  Thereafter, complainant approached State Bank of India and obtained a loan of Rs.20,00,000/- by mortgaging his property.  It is stated that, on 29.12.2014, complainant issued a legal notice through his advocate and the OP sent a untenable reply and the cause of action arose to file this complaint on 29.12.2014 when the legal notice was issued.  The act of the OP in not sanctioning the loan amounts to deficiency of service on the part of OP so, he sustained financial loss and mental agony and etc., and prayed for allow the complaint.

 

3. On service of notice OP appeared through Sri. L. Madhusudhan, Advocate and filed its version admitting about the complainant has an account with the OP Bank and has approached for financial assistance but, denied that, OP has agreed to sanction the loan to the tune of Rs.20,00,000/-.  OP has admitted about the obtaining of legal scrutiny report from the bank panel advocate and paid Rs.3,000/- towards LSR charges according to the guidelines of the OP Bank.  It is further admitted that the complainant has obtained valuation report from the Panel Engineer and Rs.2,500/- has been debited towards the same from his account.  It is denied that, complainant has spent Rs.5,000/- for collecting required documents from the CMC and Sub-Registrar office.  It is further stated that, collection of charges by the OP Bank is mandatory and the same is liable to be paid by the complainant.  OP has debited the amount after completion of the formalities with the consent and knowledge of the complainant.  It is submitted that, as per the requirements, the complainant obtained LSR from the panel advocate and valuation report from the Panel Engineer.  The complainant furnished other relevant papers to the OP along with the above said two documents and soon after receipt of the same, OP sent proposal on 09.10.2014 to the Regional Office, Bangalore for approval and in turn the Regional Office sent approval letter dated 13.10.2014 and the OCC limit approved by the Regional Office was to the tune of Rs.12,00,000/- with compounding interest, the complainant was entitled based on the documents of the property owned by the complainant.  After the sanction of the loan, OP several times informed the complainant to avail OCC limit as per the sanction letter, for which the complainant did not turn up to avail the loan facility by mortgaging his property.  The charges collected by the OP are incidental charges which are required to be borne by the complainant.  The professional fee paid to the Advocate and the Engineer is because of the work done by them based on the sanction by the Regional Office, Bangalore.  It is further stated that, in spite of repeated requests complainant did not turn up to avail loan facility and finally on 29.10.2014 he received all the papers for the reasons best known to him and there is no deficiency of service on the part of OP and prayed for dismissal of the complaint.

4. Complainant himself examined as PW-1 by filing affidavit evidence and documents are marked at Ex.A-1 to Ex.A-8. 

5.     On behalf of OP No.2 one Sri. D. Sumankumar, the Manager of OP examined as DW-1 by filing affidavit evidence and documents are marked at Ex.B-1 to Ex.B-7. 

 

        6. Arguments heard.

 

7. Now the Points that arise for our consideration for the decision of the complaint are that:

 

Point No.1:- Whether the complaint proves that, Op has committed deficiency in service on its part and he is entitled for compensation as stated in his complaint?

 

Point No.2:- What order?

 

        8. Our findings on the above points are as follows:

 

        Point No.1:- Affirmative.

        Point No.2:- As per the final order.

 

                                        ::REASONS::

      9. Point No. 1:- It is not in dispute that, complainant is running a Textiles and Tailor Business in the name and style as "Murthy Textiles & Tailors.  He approached the OP Bank for financial help and the OP agreed to give loan for a sum of Rs.20,00,000/- and issued a letter to get documents for mortgage and OP told the complainant to get opinion for the purpose of mortgage loan and he has obtained the legal opinion by paying legal fee of Rs.3,000/-.  Thereafter, OP's Valuator/Engineer  inspected the property of complainant and issued valuation certificate by receiving Rs.5,000/-.  Complainant has spent Rs.5,000/- for collecting required documents from City Municipal Council and Sub-Registrar and approached the OP to get the loan but, the OP has not taken proper care in sanctioning the loan to the complainant.  It is also not in dispute that, OP Bank has collected Rs.95/- on 10.10.2014 and Rs.320/- on 12.10.2014 as Folio Charges, Rs.2,500/- on 13.10.2014 towards valuation fee and Rs.5,394/- on 10.11.2014 towards processing charge by debiting the amount from the account of the complainant and failed to sanction the loan as assured. 

 

10.  It is the main contention of the complainant that he approached the OP to get the loan by producing all the relevant documents as advised by the OP but, spite of the same, OP has not sanctioned the loan on the ground that, the OCC limit approved by the Regional Office was to the tune of Rs.12,00,000/-, which the complainant was entitled based on the documents of the property of the complainant and thereby he sustained financial loss and mental agony and OPs have committed deficiency of service so, this complaint has been filed. 

 

       11.  In support of his contentions,  complainant has relied on his affidavit evidence in which he has reiterated the contents of complaint.  Complainant has also relied on documents like copy of letter dated 19.08.2014 requesting the complainant to submit the documents marked as Ex.A-1, Copy of legal opinion from the panel Advocate marked as Ex.A-2, Copy of valuation report issued by the panel Engineer marked as Ex.A-3, Photo copy of house belongs to complainant marked as Ex.A-4, Copy of legal notice dated 29.12.2014 which is marked as Ex.A-5, Copy of reply notice dated 05.01.2015 which is marked as Ex.A-6, Copies of Statement of Account marked as Ex.A-7 and Ex.A-8 which shows the debiting of amount from the account of the complainant towards Xerox charges, Folio charges etc., to the tune of Rs.8,309/- and they are not in dispute. 

 

12.  On the other hand, it is argued by the Advocate for OP that, complainant has an account with the OP Bank and has approached for financial assistance but, denied that, OP has agreed to sanction the loan to the tune of Rs.20,00,000/-.  OP has admitted about the obtaining of legal scrutiny report from the bank panel advocate and paid Rs.3,000/- towards LSR charges according to the guidelines of the OP Bank and also valuation report from the Panel Engineer by paying Rs.2,500/-, which is mandatory and the same is liable to be paid by the complainant.  It is denied by the OP that, complainant has spent Rs.5,000/- for collecting required documents from the CMC and Sub-Registrar office.  As per the requirements, the complainant obtained LSR from the panel advocate and valuation report from the Panel Engineer.  Soon after receipt of the same, OP sent proposal on 09.10.2014 to the Regional Office, Bangalore for approval and in turn the Regional Office sent approval letter dated 13.10.2014 and the OCC limit approved by the Regional Office was to the tune of Rs.12,00,000/-, which the complainant was entitled based on the documents of the property owned by him.  After the sanction of the loan, OP several times informed the complainant to avail OCC limit as per the sanction letter, for which the complainant did not turn up to avail the loan facility by mortgaging his property.  The charges collected by the OP are incidental charges which are required to be borne by the complainant.  The professional fee paid to the Advocate and the Engineer is because of the work done by them based on the sanction by the Regional Office, Bangalore which is best known to him and there is no deficiency of service on the part of OP.

 

13.   In support of its contention, OP has relied on the affidavit evidence of its Manager in which it has reiterated the contents of version and also relied on documents like copy of application for Bank Facility  marked as Ex.B-1, Copy of legal opinion dated 29.09.2014 obtained from the panel Advocate marked as Ex.B-2, Copy of valuation report issued by the panel Engineer marked as Ex.B-3, Copy of letter dated 07.10.2014 written by the complainant to the OP marked as Ex.B-4, Copy of loan statement issued by the Navakarnataka Credit Co-op Society Ltd., marked as Ex.B-5, Copy of proposal form sent to Regional Office marked as Ex.B-6, Copy of Sanction intimation marked as Ex.B-7 and they are not in dispute.   

 

 14. We have carefully gone through the records submitted by both the parties.  It is seen that, the complainant approached the OP Bank for financial assistance and the OP agreed to sanction the same by collecting the amount towards Folio, Legal Opinion and Building Valuation Report charges etc. Thereafter, OP failed to sanction the mortgage loan as assured on the ground that, the Regional Office has approved the OCC limit to the tune of Rs.12,00,000/- only based on the valuation of the property of the complainant and it has no power to sanction the loan to the tune of Rs.20,00,000/-.  OP Bank knows very well that, it has no power to sanction mortgage loan to the tune of Rs.20,00,000/-, then the OP Bank simply collected the money from the complainant for Legal Opinion and Valuation Report charges.  Later the OP Bank says, it has sent the entire records to the Regional Office for sanctioning the loan and further says the Regional Office has sanctioned the loan for Rs.12,00,000/- only by that time, the OP Bank was already return the entire documents to the complainant.  The complainant has not accepted the amount of Rs.12,00,000/- and take back the documents whatever he submitted to the OP Bank and the complainant further submitted that, he obtained the loan from other Bank for Rs.20,00,000/- by mortgaging the same documents. 

 

15.  The OP Bank knows very well that, it has no power to sanction the loan to the tune of Rs.20,00,000/- to the complainant, it simply collected the Legal Opinion, Property Valuation Report and other charges from the complainant, which amounts to deficiency of service on its part, which caused mental agony and financial loss to the complainant.  Hence, we come to the conclusion that, the complainant is entitled for compensation as per the order.  Accordingly, this Point No.1 is held as partly affirmative to the complainant. 

        16.  Point No.2:- For the foregoing reasons, we pass the following.

 

ORDER

       It is ordered that the complaint filed by the complainant U/s 12 of CP Act 1986 is hereby partly allowed.

 

The OP is hereby directed to pay a sum of Rs.8,309/- to the complainant along with interest at the rate of 6% p.a from the date of complaint till realization. 

 

It is further ordered that, the OP is directed to pay a sum of  Rs.10,000/- towards mental agony and Rs.5,000/- towards costs of the proceedings. 

 

It is further ordered that, the OP is hereby directed to pay the above amount to the complainant within 60 days from the date of this order. 

 

 

        (This order is made with the consent of Members after the correction of the draft on 03/12/2015 and it is pronounced in the open Court after our signatures.)

 

 

 

MEMBER                     MEMBER                      PRESIDENT

 

-:ANNEXURES:-

Complainant by filing affidavit evidence taken as PW-1

Witness examined on behalf of Complainant:

                                        -Nil-

On behalf of OP one Sumanakumar, Manager by filing affidavit evidence taken as DW-1

 

Witnesses examined on behalf of OPs:

-Nil-

Documents marked on behalf of Complainant:

01	Ex-A-1:-	Copy of letter dated 19.08.2014
02	Ex-A-2:-	Copy of legal opinion from the panel Advocate
03	Ex-A-3:-	Copy of valuation report issued by the panel Engineer
04	Ex-A-4:-	Photo copy of house belongs to complainant
05	Ex-A-5:-	Copy of legal notice dated 29.12.2014
06	Ex-A-6:-	Copy of reply notice dated 05.01.2015
07	Ex-A-7 & 8:-	Copies of Statement of Account

 

Documents marked on behalf of OP:

01	Ex-B-1:-	Copy of application for Bank Facility
02	Ex-B-2:-	Copy of legal opinion dated 29.09.2014 obtained from the panel Advocate
03	Ex-B-3:-	Copy of valuation report issued by the panel Engineer
04	Ex-B-4:-	Copy of letter dated 07.10.2014 written by the complainant to the OP
05	Ex-B-5:-	Copy of loan statement issued by the Navakarnataka Credit Co-op Society Ltd.,
06	Ex-B-6:-	Copy of proposal form sent to Regional Office
07	Ex-B-7:-	Copy of Sanction intimation

 

 

MEMBER                   MEMBER                        PRESIDENT

Rhr.