BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I, U.T. CHANDIGARH

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Chhote Lal, resident of H.No.107, VPO Behlana, Near Airport, Chandigarh

….…Complainant

                                V E R S U S

The State Bank of India, through its Chief Manager, Administrative Office (Pb.) Chandigarh, SCO No.103-107, Sector 17-B, Chandigarh.

                                        ..…Opposite Party

CORAM:          SH.LAKSHMAN SHARMA                         PRESIDENT

                    SH.ASHOK RAJ BHANDARI            MEMBER

                    MRS.MADHU MUTNEJA                        MEMBER

PRESENT:          Sh.Deepak Aggarwal, Adv. for the complainant.

OP exparte. 

PER SHRI ASHOK RAJ BHANDARI, MEMBER

               Succinctly put, the complainant owned residential plot in Nagar Panchayat, Zirakpur.  He along with his son Naresh, approached OP Bank seeking loan of Rs.3,80,000/- for construction of house.  Thereafter, OP got the application form signed from complainant on 21.4.2009.  All necessary documents, as detailed in Para-2 of the complaint, were also supplied to the OP Bank for grant of loan.  Besides this, the Op Bank has also obtained one account payee cheque of Rs.2200/- from the complainant with an assurance to get it encashed only if the loan is sanctioned.  However, the OP Bank did not sanction any such loan to the complainant nor returned his documents.  Moreso, the OP bank illegally and arbitrarily, without sanctioning loan to the complainant, got encashed the cheque of Rs.2200/- from his account on 5.5.2009.  The matter was taken with the OP Bank many times but to no avail.  Neither the documents were returned, nor Rs.2200/- was refunded  nor the loan was sanctioned.  As a result, the complainant had to borrow amount from other sources and raised the construction.  Hence this complaint has been instituted alleging the acts of OP as gross deficiency in service and indulging in unfair trade practice, due to which the complainant had to suffer great mental tension, physical harassment and financial loss.

2]             Notice of the complaint was sent to the OP, which was received back with the report of Process Server that the person present at Bank refused to accept it.  Refusal is a good service, hence OP was treated as served.  However, neither the Chief Manager of OP Bank has appeared in person nor any authorized agent has appeared on his behalf, therefore, the OP was proceeded as exparte. 

3]             Complainant led evidence in support of his contentions.

4]             We have heard the ld.Counsel for the complainant and have also perused the record. 

5]             The facts of the case are that the complainant had applied for a loan of Rs.3,80 lacs for construction of a residential house from the OP Bank on 21.4.2009 and submitted certain documents for the grant of loan as per the requirements of the OP.  The contention of the complainant is that he had also given a cheque of Rs.2200/- as processing fee for the sanction of the loan with the assurance that the said cheque of Rs.2200/- would be encashed by the OPs only if the loan is sanctioned.  However,  the OP Bank did not sanction any such loan to the complainant nor returned the documents to him but encashed the cheque of Rs.2200/- on 5.5.2009 from his Savings Bank Account, which according to the complainant is deficiency of service on the part of OP and hence this complaint.  

6]             Notice was sent to the OP for appearance but the OP refused to accept the summons and none appeared on behalf of the OP, therefore, the OP was proceeded exparte on 6.7.2010.

7]             We have gone through the entire case thoroughly and perused the pleadings/averments of the complainant and also all the document annexed along with complaint.

8]             No doubt that the complainant had applied to the OP Bank for a loan of Rs.3.80 lacs on 21.4.2009 and also submitted certain documents for the sanction of the said loan but the same was not sanctioned by the OP Bank.  It is also a fact that a sum of Rs.2200/- paid by the complainant as processing fee was encashed by the OP  Bank on 5.5.2009.

9]             The case of the complainant is that since the loan applied for by him was not sanctioned by the OPs and also that the OPs had encashed the cheque of Rs.2200/- without sanctioning the loan to him, there is deficiency in service as well as unfair trade practice on their part.

10]            The contention of the complainant is not supported by any case law or any other solid arguments.  It is an established law that the lending bank has the sole prerogative of sanctioning or not sanctioning any particular loan to anyone.  So far as the processing fee is concerned, the amount in question is very small i.e. Rs.2200/- only.  The purpose of charging the processing fee from the prospective borrower is that the lending bank has to get all the documents submitted by the person verified, the credentials of the would be borrower have to be verified and fully established and also all other formalities have to be done before the loan could be sanctioned.  The payment of the processing fee is a part and parcel of the pre-sanctioning of loans procedure of the lending bank.  As a matter of fact, unless the loan application is appropriately processed, no decision could be taken by the lending bank as to whether the loan in question needs to be sanctioned or rejected.  Therefore, in our view, the processing fee paid for the aforesaid purpose is not refundable to the complainant.  So far as the compensation and other amounts claimed by the complainant are concerned, these are only consequent events for which no compensation can be granted.       

11]            It is once again emphasized that any lending bank is at full liberty and it is their sole discretion to sanction or not to sanction any loan  in favour of any person.  No one has any kind of right whatsoever to claim the sanction of any amount of loan from any bank. It is also a well known fact that the money lying with the bank is a public money kept in trust for the benefit of the depositors and it is the prime duty of the bank to safeguard the interests of the depositors.  Therefore the safety and security of the funds entrusted to the Bank and being lent to the borrowers is a very significant event for any bank and they have to take all kind of precautions and safeguards while lending money to the borrowers.  In nut-shell refusal to sanction loan to an applicant by the Bank is neither a deficiency in service nor indulgence in an unfair trade practice on its part. 

12]            Keeping in view the above detailed analysis, in our considered opinion, there is no deficiency in service or indulgence in any unfair trade practice on the part of the OP Bank.  The present complaint has no weight, merit and substance whatsoever and therefore, it deserves rejection.  In view of this, we dismiss the complaint.  However, the respective parties shall bear their own costs.

                Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

12.08.2010                                                                 Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

                                                                Sd/-

                                                        (ASHOK RAJ BHANDARI)

MEMBER

Sd/-

MADHU MUTNEJA

MEMBER

‘Om’