BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM<br /> VAZHUTHACAUD, THIRUVANANTHAPURAM.<br /> <br /> PRESENT<br /> SRI. G. SIVAPRASAD : PRESIDENT<br /> SMT. BEENAKUMARI. A : MEMBER<br /> SMT. S.K.SREELA : MEMBER<br /> <br /> O.P.No.302/2002 Filed on 15.07.2002<br /> Dated : 28.04.2008<br /> <br /> Complainant :<br /> S. Mohanan, Panayatheri Karakkattuvila Puthen Veedu, Balaramapuram P.O.<br /> (By adv. Sri. D. Sukritha Raj)<br /> Opposite parties :<br /> 1.The Regional Manager, Indian Bank, Regional Office, Indian Bank Towers, Near Ayurveda College, Thiruvananthapuram.<br /> 2.The Manager, Indian Bank, Balaramapuram Branch. <br /> (By adv. Sri. P. Krishnankutty Nair)<br /> <br /> This complaint is disposed of after the period so specified under the Consumer Protection Act, 1986. Though the case was taken up for orders by the predecessors of this Forum on 27.05.2004, the order was not prepared accordingly. This Forum assumed office on 08.02.2008 and re-heard the complaint. This O.P having been heard on 04.04.2008, the Forum on 28.04.2008 delivered the following:<br /> <br /> <br /> ORDER<br /> SMT.S.K. SREELA ; MEMBER<br /> <br /> The case of the complainant is as follows: The complainant is an unemployed youth, but has expertise in handicrafts. The Handicrafts Marketing and Service Extension Centre, Vellayambalam, Tvpm had issued a request to the 2nd opposite party for sanctioning an amount of Rs. 25000/- to the complainant towards financial assistance to handicrafts artisans, for which subsidy was also agreed by the Government. The said loan has been approved by the Handicrafts Department for wood carving items. But since the loan has not been granted to the complainant by the opposite parties even after repeated requests which amounts to deficiency in service on their part. No reply has also been sent by the opposite parties to the advocate notice sent on behalf of the complainant. The delay in granting loan and the denial of the same has been caused loss and mental agony to the complainant for which the complaint has been filed claiming Rs. 50000/- towards compensation for deficiency in service from the opposite parties. <br /> <br /> The opposite parties 1 and 2 have filed a joint version contending as follows: That the address of the 1st opposite party is wrong, the Head Office of the Bank is a necessary party and hence this complaint is bad for non-joinder of necessary parties. The complainant was recommended by Assistant Director, Development Commissioner(Handicrafts) for a loan of Rs. 25000/- subject to the lending terms and conditions of this opposite parties and as guided by the Reserve Bank of India and it was without any reference to the antecedents of the complainant. On verification, the 2nd opposite party came to know that the complainant availed loan from Thiruvananthapuram District Co-operative Bank Ltd., Pravachambalam and hence the complainant is not entitled to get loan as it will result in double financing. Sanctioning of financial or other aid is a discretionary power on the part of the Bank and refused to sanction the financial aid in the bonafide exercise of discretion will not constitute a deficiency in service as held by National Commission. The complainant has not cleared the loan from the 1st lending bank and hence the loan was rejected and the matter was communicated to the Assistant Director, Development Commissioner(Handicrafts) on 27.03.2002. Since the complainant has not paid any consideration for loan application, he is not a consumer and opening of account, non-grant of loan etc. comes under the purview of Banking Ombudsman since 1995 and hence this complaint is not maintainable and this Forum has no jurisdiction to entertain the complaint. Hence prayed for dismissal of complaint with costs of Rs. 2500/- to these opposite parties. <br /> <br /> The complainant has filed affidavit and Exts. P1 to P6 were marked on his side. Opposite parties have no documentary evidence. <br /> The issues to be considered are:-<br /> (i)Whether there is deficiency in service on the part of the opposite parties ?<br /> (ii)Reliefs and costs.<br /> <br /> Points (i) & (ii) : The basic facts of the case are that the complainant desirous of making wood carving items was recommended by the Handicrafts Marketing and Service Extension Centre, Vellayambalam, Thiruvananthapuram for sanctioning a loan for an amount of Rs. 25000/- towards financial assistance from the Indian Bank, the opposite parties. But the loan was not granted by the opposite parties. The complainant alleges that the denial of loan amounts to deficiency in service on the part of the opposite parties and has filed this complaint against them for the same. The opposite parties have contended that the complainant's loan was rejected since the recommendation to grant loan to the complainant was not supported with factual details of his antecedents. Moreover the opposite parties contended that the complainant is not a consumer as defined in the Consumer Protection Act, since the complainant has not paid consideration and has quoted the citation 1991(1) CPR 613 and 1997(3) Banking Law Journal 229 in support of their contentions though the details of the relevant decisions have not been produced. But, the National Commission in III (1992) CPJ 48(NC) in Union Bank of India Vs. Mohendar Kumar produced by the complainant in support of his case, has held that 'person approaching Bank for getting advance of a loan falls within the definition of the expression 'consumer' contained in the Consumer Protection Act. Hence in the light of the above, it is found that the complainant comes under the defiinition of Consumer as envisaged in Sec. 2(1)(d) of the Consumer Protection Act. <br /> <br /> The main contention of the opposite parties is that the grant of loan is discretionary on the part of the bank and loan can be granted only for deserving applicants. Hence they allege that on verification of the antecedents of the complainant, they have come to know that the complainant has availed a loan from Tvpm District Co-operative Bank, Pravachambalam for the same purpose and having availed a loan for the same purpose from one Bank no loan for the same purpose can be granted to the same person by another nationalised bank and hence his application for loan was rightly rejected and the same was communicated to the assistant Director, Development commissioner on 27.05.2002. But the complainant alleges that though there was a direction by the Government as per Ext. P1 to grant loan, the opposite parties have not considered the same and has not disbursed the loan. Here the pertinent point to be considered is that whether the act of the opposite parties in not disbursing the loan is justifiable. Ext. P1 is only a recommendation to the opposite parties to grant a loan of Rs. 25,000/- to the complaint. On going through Ext. P1 it is clear that it is not an order or sanctioning of loan. It is only a recommendation to the opposite parties for granting a loan. The opposite party bank have rejected the claim of the complainant after due verification. When an application for loan is received by the Bank, the Bank is the only authority to find the credit worthiness of a party. The Bank has to safeguard its interest. Bank is a public financial institution and the funds involved are public money. In this case, no assurance has been given by the Bank for sanction of loan and the Bank has never agreed to advance any loan to the complainant which the complainant has failed to prove otherwise. The claim of the complainant has been seen rejected after due verification. It is a well settled position that the power of advancing loan is the discretion of Bank. The National Commission in 1(2003) CPJ 62 has held that no deficiency in service can be attributed in non-disbursement of loan. It is open to the Banking company to take a decision in good faith, in the exercise of its bonafide discretion as to whether it is safe to make advances of public funds to any person. In this circumstance, the Bank in its discretion if decides not to grant loan after consideration of relevant facts and circumstances, no deficiency in service can be attributed on their part. In view of the above discussions no negligence is found on the part of the opposite parties and this Forum is of the view that there is no deficiency in service or unfair trade practice on the part of the opposite parties in not granting loan to the complainant. <br /> <br /> In the result the complaint is dismissed.<br /> <br /> <br /> 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.<br /> <br /> Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the Open Forum, this the day of 28th April, 2008.<br /> <br /> G. SIVAPRASAD,<br /> President.<br /> <br /> <br /> BEENAKUMARI. A : MEMBER<br /> <br /> <br /> S.K. SREELA : MEMBER<br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> O.P.No. 302/2002<br /> APPENDIX<br /> <br /> I COMPLAINANT'S WITNESS : <br /> NIL<br /> II COMPLAINANT'S DOCUMENTS :<br /> P1 - Original copy of letter No. 69535/IV(6)/2001-02 dated 15.02.2002 issued by the Office of the Development Commissioner (Handicrafts), Handicrafts Marketing & Service Extension Centre, Vellayambalam to the complainant.<br /> <br /> P2 - Copy of letter dated 21.03.2002 addressed to the opposite parties.<br /> <br /> P3 - Original postal receipt dated 21.03.2002.<br /> <br /> P4 - Copy of advocate notice dated 22.04.2002 addressed to the opposite parties. <br /> <br /> P5 - Original postal receipt dated 22.04.2002.<br /> <br /> P6 - Two acknowledgement cards addressed to the opposite parties.<br /> <br /> III OPPOSITE PARTIES' WITNESS :<br /> NIL<br /> <br /> IV OPPOSITE PARTIES' DOCUMENTS :<br /> NIL<br /> <br /> <br /> PRESIDENT