IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM
Dated this the 22nd day of August, 2022
Present: Sri. Manulal V.S. President
Sri. K.M. Anto, Member
C C No. 125/2021 (filed on 23-07-2021)
Petitioner : Joji Philip,
S/o. Philip,
Cheenkannickal,
Santhipuram P.O.
Nedungadappalli,
Kottayam – 686545
Rep. by Power of Attorney Holder
Jisha George,
W/o. Joji Philip,
Cheenkannickal,
Santhipuram P.O.
Karukachal village.
(Adv. Soniyamma Joseph and
Adv. V.T. Rejimon)
Vs.
Opposite Parties : (1) Union Bank of India,
Rep. by Chairman and Managing
Director,
Union Bank Bhavan,
236 Vidhan Bhavan Mar,
Nariman Point, Mumbai
Pin – 400021.
(2) Branch Manager,
Union Bank of India,
Karukachal, Kottayam,
Pin – 686540.
(For Op 1 and 2, Adv. R. Venugoapala Pillai)
O R D E R
Sri. Manulal V.S. President
The complaint is filed under Section 35 of the Consumer Protection Act, 2019
Brief facts of complainant’s case are that the complainant is the power of attorney holder of her husband joji Philip who is working abroad at Oman. Husband of the complainant approached the opposite party bank for housing loan of Rs.15,00,000/- in January 2020 and submitted the required documents. Husband of the complainant opened an account with the opposite party bank as directed by the opposite party. Thereafter when the complainant enquired about the loan, the first opposite party informed the complainant that the second opposite part verified all the documents produced by the complainant and found that complainant has produced all the required documents and the processing of the application was going on. However on 7-10-20 the first opposite party informed the complainant that the loan could not be sanctioned and returned all the documents to the complainant. It was further informed to the complainant that she had not produced any documents to prove that there was transactions’ with second opposite party in last year and the loan could not be sanctioned. It is averred in the complaint that the he has not informed this to the complainant at any time. The complainant has produced the details of transactions during the last one year in the bank account which was maintained by the State Bank of India, Karukachal Branch. It is the main grievance of the complainant that due to the delay of 9 months to consider his application and incorporation of new condition which was not disclosed to him he could not construct the house. It was submitted by the complainant that they had to spend money on plan and estimate, and other documents and without any proper reason the opposite party bank denied to sanction the loan. The act of the opposite parties amounts to deficiency in service. Hence this complaint.
The opposite party appeared before the commission and by way of written version resisted the claim of the complainants.
It was submitted by the opposite parties that the complainant opened a savings bank account with the opposite party on 14-2-20 and thereafter made a proposal request for sectioning of housing loan and submitted certain documents including the title deed, revenue records, and some other connected papers. Karukchal branch of the 1st opposite party is only a lead generating centre and processing and sanction of loan is at centralized loan point at Kottayam. After the submission of documents, the complainant left India by the end of February 2020. While submitting the documents itself, branch has informed the applicant and required him to arrange for one guarantor of good means and produce evidence for income generation during the loan repayment period including foreign bank account statement for a period of one year where his periodical continuous income is reportedly credited.
Thereafter Jisha George who is the co-applicant and wife of the complainant requested the bank some time for arranging their guarantor and finally in the month of September 2020, she had informed the bank that one Smt. Leena Saxena working in north India is willing to stand as guarantor and she is expected here in Kerala within a short time. She has been then assured that income proof to the satisfaction of the bank would also be produced without further delay. Accordingly loan proposal was sent to the centralized loan point at Kottayam . However, the loan point centre required immediate production of evidence in respect of income generation during the loan repayment period including foreign bank account statement for a period of one year where his periodical continuous income reportedly credited. The applicant failed to produce such evidence called for by the bank. The applicant failed to produce documents such as job cards, foreign bank account statement with credit of income every month or such other document evidencing continuous income generation that he can repay the loan repayment installments as per proposed sanction without fail. Guarantor to a loan for a non-resident is a precondition as per bank’s loan policy. Without assessing repayment capacity of an applicant borrower bank cannot approve a loan proposal. Since the complainant could not produce required documents, the bank expressed its inability to sanction the housing loan.
Evidence of this case consists of deposition of Pw1 and exhibits A1 to A8 from the side of the complainant. Dinu .V. Divakar who is the Branch head and Principal Officer of the second opposite party filed proof affidavit in lieu of chief examination and marked Exhibit B1 from the side of the opposite parties.
We have carefully considered the record placed before us and also argument put forth by learned counsel of both the parties.
We find that there are two key questions which arise for our consideration i.e.
i) Whether the opponent bank has committed deficiency in service?
ii) If so what are the reliefs?
As regards to the point No.(i), the main ground of deficiency in service as alleged by the complainants against the opponent bank is that despite fulfilling all the required documents the opponent bank failed to sanction the loan amount without any proper reasons and cause inordinate delay to inform him about the non stationing of the loan . According to the learned counsel for the opposite parties that, it is a settled principle that the financial institutes including banks cannot be forced to sanction or disburse the loan and it is within its jurisdiction even to cancel the loan already sanctioned if it finds any risk in disbursement of loan. The only source of repayment is the income of the complainant is his income from his job as submitted by him. It appears that the opposite parties considered the loan application of the complainant and directed him to produce evidence in respect of income generation during the loan repayment period including foreign bank account statement for a period of one year where his periodical continuous income reportedly credited and in addition to that a Guarantor to the loan. Therefore within its discretion the opponent bank did not reject the loan application. The sanction of loan and disbursement of it, is the discretionary powers of bank or financial institute. Hence, denial of disbursement of loan cannot therefore be treated as deficiency in service or unfair trade practice.
However, we are of the view that even if the bank has above said discretionary powers, should use the same in such a manner that the applicant should not suffer any harassment. In the present case, the opponent bank denied the loan after getting all relevant documents which were required by them in including the details of transactions during the last one year in the bank account
which is maintained by the State Bank of India , Karukachal Branch. The opposite parties bank as such, ought to have taken all required information at the time of receiving the application form of loan so as to avoid unnecessary harassment of the borrowers i.e. present complainant. As submitted by learned counsel for the complainant they had filed title deed, Prior title deed, land tax receipt, encumbrance certificate for last 30 years, site plan, location sketch, possession and non attachment certificate, approved building plan and permit, valuation of property , income proof and bank statement for last 12 months. They had also filed legal opinion from banks advocate. Pw1 would depose that the opposite parties never requested him to produce the foreign bank account statement for a period of one year. On perusal of page 39 of Exhibit B1 we cannot see any condition like the production of the foreign bank account statement for a period of one year. Thus it reveals that complainants were unnecessarily subjected to run from pillar to post causing them physical, mental and financial harassment. Therefore we do conclude that opposite parties bank is guilty of deficiency in service to the extent of making the complainants to fulfil all the required documents for sanction of loan and thereafter denied the loan.
Considering our aforesaid observations and facts of the case as mentioned above we are inclined to grant compensation towards the expenditure incurred by complainants for search report, and other such miscellaneous expenses. It is revealed from the record that the complainants have spent money on all these items. Hence we partly allow the complaint and pass the following order.
Opposite parties are directed to pay to the complainant a compensation Rs.10,000/- with interest @ 6% p.a. from the date of filing of complaint within a period of 30 days. Failing which it shall pay enhanced rate of interest @ 7% per annum from the date of this Order till realization.
No order as to cost.
Pronounced in the Open Commission on this the 22nd day of August, 2022
Sri. Manulal V.S. President Sd/-
Sri. K.M. Anto, Member Sd/-
Appendix
Witness from the side of complainant
Pw1 – Jisha Joji
Exhibits marked from the side of complainant
A1 – Copy of possession certificate dtd.03-01-2020 from Karukachal Village Office
A2- Copy of location sketch dtd.04-01-2020
A3 – Copy of certificate of encumbrance on property dtd.04-01-2020
A4 – Copy of site approval and building permit dtd.04-02-2020
A5 – Employment card dtd.04-09-2019
A6 – Building plan dd.
A7 – Declaration dtd.17-02-2020
A8 –Power of attorney
Exhibits marked from the side of opposite party
B1 – Copy of Master circular – Union Home Scheme issued by opposite party
By Order
Assistant Registrar
