Andhra Pradesh

Chittoor-II at triputi

CC/71/2018

T.Vijaya Raghava Reddy, S/o Late T.Muni Reddy, aged 64 years. - Complainant(s)

Versus

The Senior Branch Manager, Central Bank of India, TIRVIJ, Tirupati. - Opp.Party(s)

V.Upendra Reddy, P.Sireesha

02 Aug 2019

ORDER

Filing Date: 02.11.2018

Order Date:02.08.2019

 

 

 

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II,

CHITTOOR AT TIRUPATI

 

 

      PRESENT: Sri.T.Anand, President (FAC)

               Smt. T.Anitha, Member

 

 

 

FRIDAY THE SECOND DAY OF AUGUST, TWO THOUSAND AND NINTEEN

 

 

 

C.C.No.71/2018

 

 

Between

 

 

Sri.T.Vijaya Raghava Reddy,

S/o. late. T.Muni Reddy,

Hindu, aged about 64 years,

Retd. Employee, Aadhaar No.8370 0475 6002,

Cell No.9440766018,

D.No.1/62, Srinivasapuram,

Tiruchanoor Road,

Tirupati – 517 501.                                                                          … Complainant.

 

 

And

 

 

1.         The Senior Branch Manager,

            Central Bank of India,

            Tirupati.        

 

2.         The Senior Regional Manager,

            Central Bank of India,

            Vijayawada.

 

3.         The Zonal Manager,

            Central Bank of India,

            Hyderabad.                                                                            … Opposite parties.

 

 

 

 

 

 

            This complaint coming on before us for final hearing on 31.07.19 and upon perusing the complaint and other relevant material papers on record and on hearing Sri.V.Upendra Reddy, counsel for the complainant, and Sri.K.Jagadeeswar, counsel for the opposite party No.1, and opposite parties 2 and 3 remained exparte, and having stood over till this day for consideration, this Forum makes the following:-

 

ORDER

DELIVERED BY SRI. T.ANAND, PRESIDENT (FAC)

ON BEHALF OF THE BENCH

           

            This complaint is filed under Section –12  of C.P.Act 1986, praying for  direction to the opposite party bank, to renew loan account No.3246471593 of the complainant, to pay compensation to a tune of Rs.5,00,000/- for causing mental agony due to deficiency in service and to pay Rs.20,000/- towards litigation expenses.

            2. The facts of the case in brief are:-  The complainant availed Cent Mortgage Over Draft Loan from opposite party No.1, under account No.3246471593 dt:25.03.2013 for Rs.20,00,000/- limit. The complainant has been regularly paying the monthly installments to the opposite parties. The opposite party No.1 is claiming  over rate of interest on the overdraft loan account as per their wishes, whims and fancies inspite of regular payments by complainant. The opposite parties illegally insisted the complainant to settle other loans obtained by his family members, until then the renewal of overdraft facility cannot be done. The complainant stated that due to failure of monsoons every year, the agricultural loan availed by his wife could not be paid, and she is eligible for special consideration under ‘Mission Recovery Scheme’. Unfortunately, opposite party No.1 has rejected her request for extraneous reasons. The complainant made a representation on 04.06.2018, asking opposite party No.1, to renew his loan account by submitting necessary documents. But opposite party No.1 on 12.10.2018 issued notice to the complainant asking him either to renew or close the loan account No.3246471593 on or before 22.10.2018, besides settling the loans of his family members. The complainant met opposite party No.1 to renew his account. Opposite party No.1 issued letter dt:29.06.2018 stating that complainant is financially sound and getting very good income to clear all his family debts.  Opposite party No.1 in their letter dt:12.10.2018 stated that complainant income is not sufficient, so renewal cannot be done. The statement of account submitted by opposite party No.1 shows that on 24.03.2018 complainant’s loan account was renewed without any consent from the complainant. The complainant is having every right to seek renewal of his loan from opposite party. The agricultural loan obtained by complainant’s wife and the other loan obtained by his daughter are no way connected to the complainant’s loan. The mortgage overdraft loan availed by the complainant is against his own property. Deficiency in service is apparent as the opposite party made the complainant to wait for months without resolving the issue.   A banking corporation shall do nothing – by an act or an omission, in writing, orally or in any other manner – that involves taking advantage of the distress of a customer, his mental or physical weakness, his ignorance, his unfamiliarity with a language or his inexperience, or the exertion of undue influence on him, all in order to bring about a service transaction on unreasonable conditions or to give or receive a consideration unreasonably different from the normal consideration. It is prayed to allow the complaint.

            3.  Opposite party filed the written version contending as follows. The averments in the complaint are denied. It is submitted that the complainant availed ‘Cent Mortgage Over Loan’ from opposite party No.1, under account No.3246471593 dt:25.03.2013, for Rs.20,00,000/- limit. But it is false to say that since the date of loan, complainant was regular in paying monthly installments to the opposite party and that insptie of regular payments, opposite party No.1 claimed over rate of interest on the overdraft loan facility. The complainant is called upon to prove the same. The allegations in para.2 of the complaint that there are other loans obtained by complainant family members and opposite party No.1 wantonly insisted the complainant to settle those loans, until then OD facility cannot be extended and loan cannot be renewed. Further the averments that agricultural loan availed by complainant’s wife could not be paid due to successive failure of monsoon every year is also denied. It is further denied that complainant’s wife is eligible for special consideration under ‘Mission Recovery Scheme’ and that unfortunately opposite party No.1 had rejected her request for hidden reasons. It is denied that complainant made representation on 04.06.2018 asking the opposite party No.1 to renew his loan account by submitting necessary documents. The allegation made in para.5 of the complaint is totally denied. The allegations made in para.6 of the complaint that there is deficiency in service on the part of opposite parties, as the complainant was made to wait for months together hoping that the loan will be renewed is also false. The allegations in para.7 of the complaint about the claim of Rs.5,00,000/- towards compensation is baseless. So, also the allegations in para.8 of the complaint. Opposite party No.1 submitted that complainant and his daughter Mrs. T.Sumana, jointly availed Over Draft limit of Rs.20,00,000/- and the said OD limit was due for renewal on 24.03.2018. As per the terms and conditions of the loan, 2% penal interest over and above the regular rate of interest is to be charged on the outstanding balance after the due date. The borrowers have not renewed the limit before due date.  The             1^st opposite party has got right to charge 2% higher rate of interest. Inspite of repeated reminders on 20.04.2018 and 02.05.2018, to complainant and his daughter to produce required documents, they did not submit the required documents in time and also failed to meet the 1^st opposite party personally. Opposite party No.1 issued notice to borrowers on 29.06.2018 and on 02.08.2018 stating the reasons for not renewing OD limit of Rs.20,00,000/-. The complainant is also not eligible for renewal of OD limit due to their existing loan deductions, which exceed threshold limits as per the terms specified in the scheme and as such 1^st opposite party has not renewed the limit. The complainant stood as guarantor to the agricultural loan availed by his wife Mrs. Jyothi and the subject loan became NPA. Inspite of repeated reminders, they failed to clear the NPA loans. Therefore, notices were issued to them to repay the due amounts. Subsequently, complainant wife offered one time settlement for her 4 NPA loans for a meager 40% of total dues and the said offer was not accepted by 1^st opposite party and her proposals were rejected and the same was communicated to them on 28.03.2018. Hence, the allegation that complainant is linked to the loans availed by his wife and daughter is not correct. As per the norms of RBI and Banking Rules, opposite party No.1 did not renew the OD limit. Hence, there is no deficiency in service on the part of opposite party, and prayed to dismiss the complaint with costs.

            4.  Complainant filed chief affidavit as P.W.1 and got marked Exs.A1 to A6. On behalf of opposite party No.1 Sri.K.Upendra Reddy, Senior Manager, Central Bank, has filed affidavit as R.W.1 and got marked Exs.B1 to B5.

            5.  The point for consideration is whether there is deficiency in service on the part of opposite parties? If so, to what extent the complainant is entitled to the reliefs sought in the complaint?

            6.  Point:-  The complainant had filed the following documents in support of his contention that opposite party committed deficiency in service, by not extending OD limit facility to the extent of Rs.20,00,000/-, and thereby complainant suffered mental agony and financial loss, and as such opposite party is liable to pay compensation besides extending loan OD facility up to Rs.20,00,000/-. Ex.A1 is office copy of legal notice dt:20.10.2018, issued by complainant to the opposite parties alleging that there is deficiency in service on their part in not extending loan OD facility. Ex.A2 is notice issued by opposite party to complainant dt:12.10.2018, wherein it is requested the complainant either to renew or close the OD facility by 22.10.2018, repay full outstanding balance of housing loan of Mrs. Sumana and Mr.K.Satish Kumar before 31.10.2018, and to repay total outstanding dues before 22.10.2018 and close 4 NPA loans availed by Mrs. RM Jyothi, wife of complainant, for which complainant stood as guarantor. Ex.A3 is another notice issued by opposite party No.1 dt:29.06.2018 to the complainant giving details of different loans. It is further stated that total deduction, which includes salary deduction (Rs.11527), Existing loan EMIs (78148) and Notional OD interest (Rs.18600) comes to Rs.1,08,275/- which is more than 60% of gross total income and as such they made it clear that the OD limit cannot be renewed for Rs.20,00,000/-, and further they requested the complainant to close few existing loans, thereby reducing EMIs to the tune of Rs.32,000/- to be eligible for OD limit of Rs.20,00,000/-. It is also stated that complainant is a guarantor for 4 defaulted loans and unless these loans are fully repaid and closed, OD renewal can’t be done. Further it is stated that as per letter dt:20.04.2018 they have already requested the complainant to settle 4 agricultural loans. Ex.A4 is another letter of request dt:04.06.2018 for renewal of loan account of the complainant. He requested for renewing Cent Mortgage Loan No.3246471593 for Rs.20,00,000/- in the said letter. Ex.A5 is notice issued by opposite party No.1 to the complainant dt:02.05.2018 stating that they have renewed Rs.20,00,000/- on 24.03.2017 and asked the complainant to produce some documents. The bank authorities also requested the complainant to pay entire due amount of loans mentioned within 7 days of receipt of the notice, failing which they will proceed legally to recover the dues.   

            7.  The counsel for opposite party in their written arguments relied upon the following citations – (1). Sree kanaka Durga Hatcheries Pvt. vs. State Bank of India, (2). State Bank of India vs. M/s. Chacko Varghese, (3). The Branch Manager, Corporation Bank vs. P.Surender, in support of his contention that it is the discretion of the bank to extend OD loan facility or non-renewal of OD facility, and it will not amounts to deficiency in service. It is the case of opposite party that complainant and his daughter Mrs.T.Sumana, jointly availed Over Draft limit of Rs.20,00,000/-, and the OD limit was due for renewal on 24.03.2018. As per the terms and conditions of the loan, 2% penal interest over and above the regular rate of interest is to be charged on the outstanding balance after the due date. The borrowers have not renewed the limit before due date. Therefore, opposite party No.1 has got right to charge2% higher rate of interest. Inspite of repeated reminders dt:20.04.2018 and 02.05.2018, complainant did not produce required documents, and they never met opposite party No.1 personally at any point of time for renewing OD facility. Ex.B1 dt:02.05.2018, shows that opposite party No.1 informed the complainant to submit certain documents to renew the OD Account. In Ex.B1, it is requested the complainant, to pay entire overdue amount within 7 days of receipt of the notice. Ex.B2 dt:29.06.2018 shows the details of loans belonging to complainant and his daughter. The outstanding balance and EMIs to be paid for each loan is mentioned in Ex.B2. It is an admitted fact that complainant is guarantor for all 4 defaulted loans and it is made clear by opposite party that unless these loans are fully paid or closed, OD renewal cannot be done. In their previous letter dt:20.04.2018 also, opposite party bank requested the complainant to settle all the 4 agricultural loans within 7 days. But it is evident that no repayment is made with regard to the loan accounts mentioned in Ex.B2. In Ex.B3 dt:02.08.2018, the bank cautioned the complainant that the OD limit will turn to NPA in that month, and hence the complainant and his daughter were requested to repay  dues with regard to 4 agricultural loans. Ex.B4 is final reminder issued to complainant and his daughter, asking them either to renew the OD limit or close the loan account by repaying the debt. In Ex.B4, it is requested the complainant either renew or close OD facility before 22.10.2018, repay full outstanding balance of housing loan of Mrs. Sumana and Mr.K.Satish Kumar before 31.10.2018, and to repay entire outstanding dues before 22.10.2018 and close the 4 NPA loans availed by Mrs.RM Jyothi, W/o. Vijaya Raghava Reddy, for which complainant is the guarantor.

            8.  The complainant counsel submitted that non-renewal of OD loan facility by opposite party without valid reasons is nothing but deficiency in service on their part and as such complainant is entitled for compensation besides renewal of OD facility to the extent of Rs.20,00,000/-. In Sree Kanaka Durga Hatcheries Pvt. Vs. State Bank of India on 22.05.2002 rendered by NCDRC, it is held that “It is for the financial institutions really to decide whether to or not to enhance the facilities or even to sanction the loan. There will also be no deficiency of service if the loan is sanctioned by the bank subject to certain conditions which remain unfulfilled on account whereof loan is not disbursed”. In Branch Manager, Corporation Bank vs. P.Surender on 24.09.2012 rendered by APSCDRC, it is held that “The District Forum could not have directed the bank to release the loan amount in favour of the complainant. It cannot be said that the bank did not exercise discretion in good faith. In order to safeguard the interest of public fund, it could either exercise discretion or not. The complainant could not show any guidelines issued by RBI or any terms under the scheme stating that the bank was bound to issue credit facility to him. When the bank has informed its opinion about non-feasibility of the project, we cannot direct the bank to release the amount”. In another decision State Bank of India vs. M/s. Chacko Varghese on 27.03.2012 rendered by SCDRC, Panaji, Goa, it is held that “in view of the law laid down that final decision whether or not to lend or advance any funds to any party rests with the Bank concerned. In view of the law laid down by the National Commission, the District Forum was not right to entertain the complaint or awarding damages to the complainant and therefore allowed the appeal”.

            9.  On perusal of the documentary evidence and legal position submitted by the counsel for opposite party, we are of the view that there is no deficiency in service on the part of opposite parties, as they have valid reasons for non-renewing OD loan facility to the extent of Rs.20,00,000/-, as requested by the complainant, and hence complaint is dismissed.

            10.  In the result, complaint is dismissed. No costs.                           

            Dictated to the stenographer, transcribed and typed by him, corrected and pronounced by me in the Open Forum this the 2^nd day of August, 2019.

 

       Sd/-                                                                                                                      Sd/-                          

Lady Member                                                                                               President (FAC)

 

 

 

APPENDIX OF EVIDENCE

 

 

Witnesses Examined on behalf of Complainant/s.

 

PW-1: Sri Tokala Vijaya Raghava Reddy (Chief Affidavit filed).

 

Witnesses Examined on behalf of Opposite PartY/S.

 

RW-1:  Sri K. Upendra Reddy (Chief Affidavit filed).

 

EXHIBITS MARKED ON BEHALF OF THE COMPLAINANT/s

 

Exhibits (Ex.A)	Description of Documents
	Office copy of Legal Notice issued to the opposite parties. Dt: 20.10.2018.
	True copy of Notice issued by the opposite party No.1 to the complainant regarding the Final Reminder for either Renewal or Closure of your over draft limit Account No. 3246471593. Dt: 12.10.2018.
	Photo copy of Notice issued by the opposite party No.1 to the complainant regarding the Renewal of Cent Mortgage Overdraft limit of Rs.20.00 lakhs vide Account No. 3246471593.  Dt: 29.06.2018.
	Photo copy of Letter of request for Renewal Loan Account of the Complainant. Dt: 04.06.2018.
	True copy of Notice issued by the opposite party No.1 to the complainant regarding the Renewal of Cent Mortgage Overdraft Account No. 3246471593 of Rs.20,00,000/-.  Dt: 02.05.2018.
	True copy of Statement of Account from 01.04.2017 to 20.10.2018 issued by Central Bank of India, Tirupati (Branch Code: 2088).

 

 

EXHIBITS MARKED ON BEHALF OF THE OPPOSITE PARTY/s

 

Exhibits (Ex.B)	Description of Documents
	Photo copy of Notice issued by the opposite party No.1 to the complainant regarding the Renewal of Cent Mortgage Overdraft Account No. 3246471593 of Rs.20,00,000/-.  Dt: 02.05.2018.
	Photo copy of Notice issued by the opposite party No.1 to the complainant regarding the Renewal of Cent Mortgage Overdraft limit of Rs.20.00 lakhs vide Account No. 3246471593.  Dt: 29.06.2018.
	Photo copy of Notice issued by the opposite party No.1 to the complainant      (Ref: Our Letters to your Dt: 02.05.2018 and 29.06.2018) regarding Cent Mortgage Overdraft limit of Rs. 20.00 lakhs vide Account No. 3246471593. Dt: 02.08.2018.
	Photo copy of Notice issued by the opposite party No.1 to the complainant      (Ref: Our Notices to you Dt: 20.04.2018, 02.05.2018, 29.06.2018 and 02.08.2018) regarding Final Reminder for either Renewal or Closure of your over draft limit Account No. 3246471593. Dt: 12.10.2018.
	Legal Notice issued to Complainant Counsel from Opposite party Counsel . Dt: 29.11.2018.

 

 

                                                                                                                                     Sd/-

                                                                                                                President (FAC)

    

     // TRUE COPY //

// BY ORDER //

 

Head Clerk/Sheristadar,

          Dist. Consumer Forum-II, Tirupati.

 

 

  Copies to:-   1.  The complainant.

                        2.  The opposite parties.