IN THE CONSUMER DISPUTES REDRESSAL  COMMISSION, KOLLAM

Dated this the     27^th   Day of  July  2021 

  Present: -  Sri.E.M.Muhammed Ibrahim, B.A, LL.M. President

        Smt.S.Sandhya Rani, Bsc, L.L.B,Member

                   Sri.Stanly Harold, B.A.LLB, Member

                                                                                                     CC.222/17

S.Sanil Kumar                                   :         Complainant

Sunil Bhavan,Valiyakavu

Chaliyakkara P.O

Valakodu-691333

Punalur.

V/s

1. Upabhokthru Parathi Parihara  Cell:   Opposite parties

         Zonal Office, Indian Bank Towers

       MG Road, Thiruvananthapuram-695001.

2. Manager

         Indian Bank

         28/121

       Vazhavila Main Road

       Opp. Petrol Bunk

       Punalur Branch-691305.

       [By Adv.M.G.Vijayamohanan]

          FINAL   ORDER

E.M.MUHAMMED IBRAHIM , B.A, LL.M,President

          This is a case based on a consumer complaint filed  u/s 12 of the Consumer Protection Act 1986. 

The averments in the complaint in short are as follows.  On 08.09.2017 the complainant demanded a loan of Rs.6,50,000/- for starting a Diary farm unit.  Accordingly on 28.09.2017 a loan of  Rs.4.50,000/- was granted by the 1^st  opposite party bank.  Rs.1,00,000/- was allotted out of the loan sanctioned to the complainant  on 28.09.2017 on furnishing documents such as titled deed, village records, legal advice from the advocate etc.  Thereafter the opposite party  directed the complainant to start the construction of cow shed and also to furnish the receipts regarding the purchase of cows.  Accordingly the complainant started to collect materials for the construction of cow shed and also constructed 3 pits for depositing cow dung.  Yet another pit was also constructed for depositing cow urine.  He has also constructed the foundation of the cow shed by purchasing one load rubles and one load rock sand and also by deputing 16 laboures on different days.  However on completion of  the above said works the opposite parties have recalled the loan by stating that the value of the property to be mortgaged is not sufficient.  The above act of the opposite parties caused much embarrassment and mental agony to the complainant and it has affected the reputation of the complainant among the local people.  The complainant is having his wife, 2 children and aged parents.  The above act of  the opposite parties have caused difficulty in proceeding with his life.  In the circumstances the complainant prays to direct the opposite parties to return the expenses incurred by him which will come to the tune of Rs.250904/- on 11 counts which are specially stated in the complaint.

          Opposite parties No.1&2 filed detailed common version raising the following contentions.  The petition is not maintainable either in law or on facts.  However the opposite parties would admit that the complainant approached the 2^nd opposite party bank and made a request for granting agricultural loan of Rs.6,00,000/- for starting dairy farming by offering equitable mortgage of 15.87 ares of property worth Rs.8,00,000/- as security for the loan.  As per the project submitted by the complainant the Manager of the 2^nd opposite party has agreed to sanction a loan of Rs.4,50,000/- subject to valuation of the property by the bank’s panel engineer and disbursed Rs.1,00,000/- as first stage.  After visiting the property, the panel engineer observed that the said property is not at all saleable one having no vehicle access and hence not mortgagable and has valued the property only for Rs.63480/-.  The bank has realized that the intention of the complainant was to obtain subsidy from NABARD by availing loan in the name of existing cows  and also by showing false and fabricated bills and property. 

          As per the rules of the bank cows must be purchased under the supervision of  purchasing committee.   The doctor must certify the condition of the cows.  Without complying with the above procedure the Manager cannot accept the deal.  But the applicant’s intention was to obtain the loan and claim subsidy in the name of the existing cows.  The complainant/customer is found to be undesirable to the bank.  But he was not ready to realize the situation.  However he volunteered to close the loan and take back the documents and created trouble to the bank and threatened the manager.  Bank is not responsible for his poor economic conditions or unemployment.  Bank manager did not advice him for any construction or work.  Production of proper documents and other things are mandatory for granting of loan.  Petitioner himself requested to close the loan and withdrawn the loan documents and has given the same in writing also.  Bank is not aware and responsible for any other expenses incurred by him.

          In view of the above pleadings the points that arise for consideration are:-

1. Whether there is any deficiency in service or any unfair trade practice on the part of the opposite parties with regard to the recalling of loan already sanctioned to the complainant for starting mini  dairy farm unit?
2. Whether the complainant has sustained any financial loss and mental agony on account of cancellation of loan transaction as alleged?
3. Whether the  complainant is entitled to get the reliefs sought for in the complaint?
4. Reliefs and costs.

Evidence on the side of the complainant consists of the oral evidence of PW1 to 3 and Ext.A1 to A10 documents.  Evidence on the side of the opposite party No.1&2 consists of the oral evidence of DW1&2 and Ext.D1 to D6 documents. 

Complainant has filed notes of argument.  Both sides have not turned up and advanced any oral arguments.  Opposite parties have also not filed any notes of arguments,  though sufficient opportunity was granted.

Point No.1&2

          The gist of the case of the complainant is that the opposite party bank has cheated him by recalling the loan already sanctioned after causing him to incur heavy expenses and made necessary arrangements on the basis of the assurance given by the bank and also on the basis of the 1^st installment of the loan transferred to his bank account by the 2^nd opposite party.  The specific contention of the opposite party is that as the complainant has attempted to obtain loan from the bank illegally, that the mortgaged property is having only lesser value of Rs.63480/- as per the valuation report and hence the 2^nd opposite party bank has withdrawn from the loan sanctioned to the complainant.

          According to the complainant the denial of the loan facility after the same has been sanctioned by the opposite party bank is not the bonafide exercise of discretion  vested in the bank and that the denial of the loan after releasing Rs.1,00,000/- as 1^st installment is arbitrary and unreasonable we find force in the above allegations.  The oral evidence of PW1 to 3 coupled with Ext.A1 to A7 documents would show that the complainant/PW1 on 08.09.2017 has applied for getting a loan of  Rs.650000/- with the opposite party bank for starting a mini diary farm unit.  As instructed by the 2^nd opposite party the  complainant has produced original title deed, documents obtained from the village office and also legal advice obtained from the  lawyer.  After verifying the above documents the 2^nd opposite party bank has sanctioned a loan of Rs.4,50,000/- on 28.09.2017 and the 2^nd opposite party has also released an amount of Rs.1,00,000/- from out of the said amount to the account of the complainant as 1^st installment of the loan and also directed the complainant to construct the cattle shed and purchase cow and produce receipts regarding payment of consideration of the cow. 

Ext.D1 is the loan sanction ticket dated 28.09.2017.  It is clearly stated in Ext.D1 that the loan of  Rs.450000/- has been sanctioned for the purpose of purchasing 4 cows and  setting up a cow shed and purchase of milking machine.  Ext.D2 is the details of assets and liabilities furnished by the complainant/borrower  wherein it  is stated that 40 cents of land in Thinkalkarikkam village has been offered as security and the total value of the land is Rs.800000/-.  Ext.D3 loan application would indicate that apart from the equitable mortgaging of above property personal security of Mrs.Viji Sanal, the wife of the applicant has also offered by the applicant. 

The oral evidence of DW1&2 and  Ext.D4 valuation report prepared by the panel Engineer would indicate the defects of the mortgaged property which are as follows. There is no proper road access for about 200 metrs from the Oil Palm Estate road.  But the customer has informed him that the access is through the path way on the side of a canal(kaithodu) on the eastern side and the oil palm estate road is used with their permission.  It is true that DW1&2 have deposed that the path way to the property shown in the location sketch is not existing,  that the property is a land locked one, that  the area is water logged and it is generally called chathuppu and  that the property is not saleable and hence not mortgagable. However the said Panel Engineer who visited the property and prepared Ext.D4 report is not examined in this case.  The above report appears to be incorrect in view of Ext.D5 series photographs of property offered as security by the complainant.  On seeing the photographs of the land it is clear that the land is not marshy or water logged area but it is a rubber plantation wherein apart from rubber trees there are coconut tree, arcnut  tree and pepper wine plants.  Ext.D5 series photographs would clearly indicate that rubber trees were fully grown good in quality  and yielding one.  Ext.D6 is the location sketch and certificate which would indicate that one kaithodu passing one side of the property and there is a private road starts from oil palm road and ends at the complainant’s property.  This sketch/documentation certificate has been seen prepared by the village  officer for the purpose of producing before the opposite party bank in connection  with loan. 

DW1 the then Assistant Manager of Indian Bank has deposed that  there is no defect in the title deed in respect of the property  offered as mortgage that the panel engineer has reported that the way shown in the sketch is not available and the value of the property has been shown inflated rate.  However DW1 would admit that in Ext.D6 path way to the property is shown but actually there is no such path way.  According to DW1 she has visited the property and found that there is no path way for the ingress and egress to the property.  The oral evidence of DW2 also would  show that he has also visited the property along with the panel engineer for preparing the valuation report.  However he is not aware of the boundaries/eluka of the property.  Towards the end of cross examination DW2 would admit that he has not entered into the property.  He would further admit that the fair value assessed by the Government as per A8 title deed of the mortgaged property is Rs.221500/-.  Ext.A8 title deed would indicate that the complainant has purchased the property on 15.02.2013 which is 4 and odd years prior to the date of applying for the loan.  In the said document the consideration is shown as 2,21,500/- for the entire 40 cents of property and stamp value and registration fee for the said amount is given as per the above valuation.  There is no chance of creating such a document like Ext.A8 for the purpose of availing loan after 4 and odd year.  The description of the property and its boundaries would clearly indicate that it is pandarapattam purayidam surrounded by other properties on its  4 sides.  It is also brought out in evidence that  the panel engineer has not properly visited the property and that is why he has stated in Ext.D4 that it is marshy land against the descriptions in title deed and Ext.D5 series photographs of the said property produced by the opposite parties.  It is also clear from Ext.D4 valuation report that neither DW1 nor DW2 visited the mortgaged property along with the Panel Engineer.  As per Ext.D4 when the panel engineer visited the property nobody other than the complainant was present.  The panel engineer who prepared D6 report is also note examined even though the content of D4 report is disputed by the complainant.

Usually the land value of the property would not fully reflect in the title deed.  The value of the property used to be shown in the titled deed  is depending upon the fair value.  Here the fair value has been fixed much earlier than the date of executing title deed.  During the 4 and odd years from the date of purchase of the property its value might have been doubled at least.  Even if the property would not fetch Rs.8,00,000/- as claimed by the complainant it would fetch at least Rs.5,00,000/-.  Even if the mortgaged property would not fetch as much value as claimed by the complainant personal security of the wife of the complainant has also been offered which is evident from Ext.D3 loan application.  If the complainant failed to pay the loan amount or any installment of the loan the bank can very well proceed either against the property or against the wife of the complainant who stands as a surety or against both and in such circumstances the apprehension of the opposite party bank the value of the property is less than the value claimed by the complainant is baseless. Legal opinion attached to the complaint would clearly indicate that the advocate who prepared the legal opinion has recommended to receive the property as security for the loan.  In the said report it is stated that the complainant is legally competent to create charge over the security property and that this property can be accepted as security  for the loan.

In view of the materials available on record  we  are of the view that the recalling of the loan already sanctioned  to the complainant  on the basis of which the complainant has acted upon   by expending  a huge amount for starting dairy farm unit is not justifiable at all.  The bank ought to have deputed a panel engineer or valuator well before sanctioning the loan and disbursing the 1^st installment.  It is purely an unfair trade practice on the part of opposite party bank to withdraw the loan after sanctioning and releasing 1^st installment especially when the complainant on the basis of that installment received has started construction work of the dairy farm unit purchased 2 cows, one milking machine and incurred other expenses.

The oral evidence of PW1 to 3 coupled with A1,A6,A7 series and A9 documents would establish that on the basis of the instruction of the 2^nd opposite party Manager of the opposite party bank the complainant has made  necessary arrangements for the construction of cow shed by purchasing and unloading m-sand, metal and also clearing the site by deputing 16 men on different dates.  He has also constructed 3 pits of different size  for storing the cow dung.  He purchased 2 cows from one Indukomalan for Rs.99000/- and also met an expenses of Rs.2000/- towards transporting charges of the cows.  The complainant has also obtained an amount of Rs.50,000/- as hand loan from Renjith Cherukadavil for the purpose of conducting the diary farm project  and paid Rs.2500/- as legal opinion fee and the 2^nd opposite party has realize Rs.2865/- towards processing fee and bank has also reduced Rs.339/- towards interest from him that he has expended Rs.3000/- as travelling expenses to obtain loan amount and that he has also purchased a milking machine worth Rs.51520/- for the purpose of his dairy unit. It is also brought out in evidence that the complainant has lost the subsidy of Rs.1,12,500/- being 25% the loan amount of Rs.4,50,000/- which he would have been received from NABARD  if  he started functioning of the mini dairy farm unit.

It is also brought out in evidence that the complainant has sustained not only monitory loss but also mental agony due to the withdrawal of the loan after granting the same and dispersing of a portion of the loan  and also after the complainant started to set up the dairy farm unit. In view of the facts and circumstances of the case we are of the view that there is clear deficiency in service  and unfair trade practice on the part of the opposite party bank in recalling the loan sanctioning order and unilaterally withdrawing from the loan agreement and that the complainant has sustained monitory loss as claimed in the complaint apart from compensation for the mental agony sustained by the complainant.  The points answered accordingly.

Point No.3

          In the result complaint stands allowed in the following terms.

          The 2^nd opposite party Bank is directed to pay Rs.2,50,904/- being the loss sustained by the complainant on account of recalling of the loan sanctioned for  starting mini dairy farm unit and unilaterally withdrawing from the loan agreement. 

The 2^ndopposite party is further directed to pay Rs.25000/- to the complainant as compensation for the mental agony sustained.

The 2^nd opposite party is also directed to pay Rs.10,000/- to the complainant as costs of the proceedings.

          The 2^nd opposite party is directed to comply with the above directions within 45 days from the date of receipt of a copy of this order failing which the complainant is entitled to recover the said amount with interest @9% except for the costs from the date of complaint till realization from the  present Manager and also from the assets of the Indian Bank,  Punalur branch.        

Dictated to the Confidential Assistant  Smt. Deepa.S transcribed and typed by her corrected by me and pronounced in the  Open Commission this the 27^th   day of  July  2021.

E.M.Muhammed Ibrahim:Sd/-

            S.Sandhya Rani:Sd/-

            Stanly Harold:Sd/-

           Forwarded/by Order

           Senior Superintendent

INDEX

Witnesses Examined for the Complainant:-

PW1    : Sanilkumar.S

PW2    : K.S.Vinodkumar

PW3    :Komalan

Documents marked for the  complainant

Ext.A1 series              :  Copy of Bank passbook

Ext.A2                        : Copy of loan sanction ticket

Ext.A3                        : Copy of single/joint promissory note

Ext.A4                        : Copy of price chit

Ext.A5 series              : Copy of possession certificate and location sketch

Ext.A6                        : Quotation dated 29.09.2017

Ext.A7                        : Copy of photographs

Ext.A8                        : Copy of title deed

Ext.A9&A10              : Cheque& cheque return form

Witnesses Examined for the opposite party:-

DW1               :           Susan Antony

DW2               :           Bindu Sekar 

Documents marked for opposite party:-

Ext.D1            :           Sanction ticket

Ext.D2            :           Details of assets and liabilities

Ext.D3            :           Form-1 Application for agricultural credit

Ext.D4            :           Valuation Report

Ext.D5            :           Photographs (2 Nos)

Ext.D6            :           Copy of location sketch and certificate

E.M.Muhammed Ibrahim:Sd/-

           S.Sandhya Rani:Sd/-

           Stanly Harold:Sd/-

           Forwarded/by Order

          Senior Superintendent