BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM

VAZHUTHACAUD, THIRUVANANTHAPURAM.

PRESENT

SRI. G. SIVAPRASAD : PRESIDENT

SMT. BEENAKUMARI. A : MEMBER

SMT. S.K.SREELA : MEMBER

O.P. No. 260/2004 Filed on 22.06.2004

Dated : 30.09.2011

Complainant ;

S. Sundaresan, T.C 42/10(7) , CLRA-126, Kilikode Lane, Sreevaraham, Thiruvananthapuram.

(By adv. H.K. Radhakrishnan)

Opposite parties :

1. The Manager, ICICI Bank, Housing Finance Company Ltd; 5^th Floor, Karimpanal, Statue Avenue, Statue Junction, G.H. Road, Thiruvananthapuram.

    

2. Rupak. D, Executive ICICI Bank, Housing Finance Company Ltd., 5^th Floor, Karimpanal, Statue Avenue, Statue Junction, G.H. Road, Thiruvananthapuram.

(By adv. K.G. Mohandas Pai)

This O.P having been heard on 11.08.2011, the Forum on 30.09.2011 delivered the following:

ORDER

SRI. G. SIVAPRASAD: PRESIDENT

The facts leading to the filing of the complaint are that complainant had applied for a housing loan in continuation of the loan availed for an amount of Rs. 75,000/- on 25.05.2003, that complainant submitted an abstract estimate for a total amount of Rs. 1,50,000/- and the same was accepted, that subsequently an inspection was conducted by the engineer of the approved panel of ICICI Bank and on the basis of the report a letter was sent to the complainant informing the sanction of the loan to the tune of Rs. 1,00,000/-, that he signed all papers and agreement booklet along with 13 numbers of cheques and handed over the same to 2^nd opposite party, out of that 13 cheques from Nos. 902259 to 902270 one cheque was handed over to the 2^nd opposite party as processing fee for Rs. 375/-. The cheques were dated 07.08.2003 and 07.07.2004, that the engineer and executive engineer visited many times to the complainant's house and sanction letter was received by the complainant, that even after 4 months the said loan amount was not disbursed to the complainant. Opposite party presented the cheque for Rs. 375/- which was honoured by the complainant. Opposite parties have no right to present the said cheque for Rs. 375/- without sanctioning the loan amount. Opposite parties have not returned the signed agreement executed by the complainant. Hence this complaint to direct opposite parties to pay an amount of Rs. 10,000/- as compensation.

Opposite parties entered appearance and filed version contending interalia that complaint is not maintainable, that complainant applied for a loan which was duly rejected after processing the same, that it is true that based on the application of the complainant a principle sanction of a loan to the tune of Rs. 1,00,000/- was granted, that it was subject to technical and legal scrutiny and loan would be confirmed only on the positive affirmation by the technical and legal advisors appointed by the opposite parties, that the averment that the engineer inspected and on that basis the loan was sanctioned are bald and baseless, and that the loan was not technically cleared, later after the visit of the engineer concerned the loan was refused by the opposite party considering the existing exposure over the same property. Normally the loan is sanctioned in three stages- pre sanction, post sanction and disbursal stages. In this case the complainant gave copies of the documents for the pre sanction of the loan and a cheque for the non-refundable processing fees to meet the legal, technical charges etc. At this stage the complainant was also told regarding the documents necessary in the post sanction stage. The processing charge paid if any is non-refundable and cannot be claimed refund, whether loan is sanctioned/availed of or not. Loan sanctioned is provisional and subject to legal and technical clearance of property. No cheque leaves were collected or submitted by the complainant. No amount is recovered from the complainant except the administrative charges. The signing of booklet if any was premature. It was only unilateral. Unless the same mutually understood and signed it does not constitute a concluded contract. Even if cheques are collected by the 2^nd opposite party the same are not presented nor intended to be presented unless the contract is concluded. The sanction letter obtained by the complainant is only a provisional which does not confer any privileges, priorities or rights. According to the enquiry it is revealed that 2^nd opposite party has already returned the alleged cheque leaves to the complainant's wife. Complainant is not entitled for any reliefs prayed for. No loss or damage sustained to the complainant due to the action of the opposite parties. No loan was agreed to be given to him. The allegation of the complainant is baseless. Hence opposite parties prayed for dismissal of the complaint with costs to the opposite parties.

The points that arise for consideration are:-

1. Whether there is deficiency in service on the part of the opposite parties?

2. Whether the complainant is entitled to compensation?

    

In support of the complaint, complainant has filed affidavit and has marked Exts. P1 to P5. In rebuttal 1^st opposite party has filed affidavit and has marked Exts. D1 to D3.

Points (i) & (ii):- Admittedly, complainant has applied for a loan. It has been the case of the complainant that the said loan was sanctioned by opposite parties, but loan amount was not disbursed. It has also been the case of the complainant that opposite party sent a letter to the complainant informing the sanction of the loan to the tune of Rs.1,00,000/-. It has also been the case of the complainant that as per the direction of the opposite party, documents were brought and signed all papers and agreement booklet along with 13 number of cheques. Even after 4 months the loan amount was not disbursed to the complainant. Complainant's evidence consisted of oral testimony of the complainant and Exts. P1 to P5. Ext. P1 is the letter dated June 5, 2003 addressed to the complainant by the authorized signatory of the opposite party. A perusal of the said letter reveals reference of application No. 777-1777364 (Direct). It is stated in the letter as follows: “Based on your application, ICICI Home Finance company Ltd. acting as duly constituted attorney of ICICI Bank Ltd. is pleased to convey ICICI Bank's in-principle sanction the facility mentioned below to you on, inter alia, the terms and conditions set out below and subject to the execution of a loan agreement and other documents between yourselves and ICICI Bank as per ICICI Bank's policy and format”. A careful perusal of the letter reveals that loan amount sanctioned is Rs. 1,00,000/-, loan tenor 228 months, lending rate on the date of sanction is 10.25%, amount of EMI Rs. 917/- payable monthly, administrative charges Rs. 500/-, security as may be specified by ICICI Bank from time to time in its sole discretion, and type of product Resident Indian Home Loan. There are 2 special conditions mentioned : (1) Loan sanctioned must be restricted to 70% of the estimate and 45% of the market value of the property financed (2) Loan is subject to legal and technical clearance/verification of the property. The other terms and conditions detailed overleaf are also applicable to the facility. Ext. P2 is the cheque submission form. Ext. P3 is the copy of the advocate notice. Ext. P4 series are postal receipts and acknowledgement card. Ext. P5 is the reply sent by opposite parties. Complainant as PW1 has been cross examined by opposite parties. In his cross examination it has been admitted by PW1 that opposite party has received Rs. 375/- as administrative charges. No process fee charged. It has been deposed by the complainant that he has handed over 12 cheques to opposite parties on the date of provisional sanction of the loan. PW1 in his cross examination, has deposed that the cheques are post dated and first cheque dated 07.08.2003 and last cheque dated 07.07.2004. When asked about the name of the official who demanded the cheques, PW1 said he does not know the name of the person. He has further deposed that the validity of the cheque is for 6 months. Opposite parties' evidence consisted of oral testimony of the 1^st opposite party and Ext. D1 to D3. Ext. D1 is the copy of the loan application. As per Ext. D1 he has applied for a house loan for maintenance purpose of existing house floor and door painting. Estimate of required funds is Rs. 1,50,000/-, loan requested for Rs. 1,00,000/-. Ext. D2 is the letter dated 25.07.2003 issued by authorized signatory of the opposite party to the complainant stating that they are unable to offer the home loan on perusal of information provided by the complainant. Ext. D3 is the copy of the home loan documentation. 1^st opposite party has been examined as DW1. On being asked about whether the loan sanction intimation was given to the complainant on 05.06.2003, DW1 has deposed that only the provisional sanction has been given. Ext. P1 is the letter showing provisional sanction. On being asked under what head opposite party has collected Rs. 375/- from the complainant, DW1 has deposed that the said amount was collected as loan technical verification fee. It has been admitted by the opposite party that all documents including cheque leaves would be collected before final sanction of loan. There is no material on record to show that opposite party has collected process fee from the complainant. On being asked when was cheque returned to complainant and whether any recorded receipt from her, DW1 said 'No'. Though opposite party agreed to furnish the original of Ext. D3 the same has not been furnished so far. DW1 denied the suggestion that cheque was sent to Bombay office. In his re-examination DW1 said administration fee is not refundable. He has further added that administration fee implies legal verification and technical verification fee. On being asked about provisional sanction he said income status would be collected first. On assessing the income the capacity to repay the loan is determined. If the loanee is able to repay the loan the provisional sanction would be given. On being asked about the disbursement sanction DW1 said disbursement will be determined on verification of documents. It is to be noted that loan sanctioning is purely the discretion of the bank. According to opposite parties there are 3 stages of sanctioning – pre sanction, post sanction and disbursement stage and complainant has given copies of the documents for the pre- sanction of the loan and a cheque for non-refundable processing fee to meet the technical and legal charge. It is the stand of the opposite party that processing charge is not refundable and cannot be claimed refund whether loan is sanctioned or not. According to opposite party loan sanction is provisional and subject to legal and technical clearance of the property. It is to be noted that opposite party has collected Rs. 375/- towards non-refundable charge. In the version it is averred that no cheques are collected or presented by opposite parties as alleged except the cheque for Rs. 375/-. Further no cheques were collected or submitted by the complainant. Ext. P2 is the cheque submission form issued by opposite parties in which applicant has never affixed his signature. In cheque submission form 12 cheques numbered from 902259 to 902270 are mentioned. In the purpose column it is mentioned for EMI. Amount of cheque mentioned is Rs. 970/-. Further it is mentioned in the version that 2^nd opposite party has collected cheques if any, the same were returned to complainant's wife. It is admitted by complainant that the first cheque was dated 07.08.2003 and last cheque was dated 07.07.2004. Admittedly, the cheque is valid for 6 months. There is nothing on record to show that complainant's wife had received the cheques from the bank or opposite party had returned the cheques to the complainant's wife. At the same time it should be mentioned that as the cheque became stale there will be no use in future. Even if opposite party is directed to return the cheque it will have no use. Loan sanction is determined on various criteria of the loan giving bank as such it is purely the discretion of the bank. The only amount opposite party has collected from the complainant is Rs. 375/-, but according to opposite party the said amount is not refundable whether the loan is sanctioned or not. It is further to be noted that complainant had availed a loan earlier from the opposite party prior to the rejection of the present loan. There may be reasons on the part of the parties to deny the loan. We cannot overlook the statement of the opposite party that the loan was refused by opposite party considering the existing exposure over the same property. Further we cannot overlook the statement by the opposite party that loan sanction is subject to technical and legal scrutiny and the loan would be confirmed only on the positive affirmation by legal and technical advisors appointed by the opposite party. There is no material from the side of the complainant to prove otherwise thereby we are of the view that there is substance in the submission of the opposite party that loan was refused by the opposite party considering the existing exposure over the same property. If loan is not sanctioned the complainant is entitled to get back the entire documents submitted for loan. In this case according to complainant along with agreement he had given 12 cheques towards EMI. Normally opposite party is bound to return the said cheques since the loan was not sanctioned. Opposite party has deposed that cheque was returned to the wife of the complainant. But there is no material to substantiate that aspect. At the same time admittedly the cheques furnished are dated from 07.08.2003 to 07.07.2004. Even if complainant got returned the said cheques, he will have no use since it became stale. No purpose will be served by getting back the alleged cheques. Considering the over all situation of the case we are of the view that there is nothing to attribute any deficiency on the part of the opposite parties. As such complainant is not entitled to get any compensation as claimed in the complaint. Complaint has no merits at all which deserves to be dismissed.

In the result, the complaint is dismissed. Parties are left to bear and suffer their costs.

A copy of this order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to the record room.

Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Forum, this the 30^th day of September 2011.

Sd/-

G. SIVAPRASAD : PRESIDENT

Sd/-

BEENAKUMARI. A : MEMBER

Sd/-

S.K. SREELA : MEMBER

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O.P. No. 260/2004

APPENDIX

I COMPLAINANT'S WITNESS :

PW1 - S. Sundaresan

II COMPLAINANT'S DOCUMENTS :

P1 - Letter dated 05.06.2003 addressed to complainant

P2 - Cheque submission form.

P3 - Copy of advocate notice dated 18.08.2003.

P4 - Postal receipts and acknowledgement card.

P5 - Reply sent by the counsel of opposite party dated 05.11.2003.

III OPPOSITE PARTY'S WITNESS :

DW1 - Sunil Kumar

IV OPPOSITE PARTY'S DOCUMENTS :

D1 - Copy of Home Loan application.

D2 - Copy of letter dated 25.07.2003

D3 - Copy of home loan documentation.

Sd/-

PRESIDENT

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