Zonal Officer,Canara Bank Circle Pffice Administrative Officer,Loans and Advances Section Branch Officer, Canara Bank
...........Respondent(s)
BEFORE:
Complainant(s)/Appellant(s):
OppositeParty/Respondent(s):
OppositeParty/Respondent(s):
OppositeParty/Respondent(s):
ORDER
Date of Filing: 19.02.2008 Date of Order: 24.06.2008 BEFORE THE I ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SESHADRIPURAM BANGALORE-20 Dated: 24th DAY OF JUNE 2008 PRESENT Sri. Bajentri H.M, B.A, LL.B., President Smt.C.V. Rajamma, B.Sc., LL.B., PGDPR, Member Sri. M. Nagabhushana, B.Com, LL.B., Member COMPLAINT NO: 458/2008 Sri. N. Sanjeevappa, No.9, Sanchaya Nanjaarasappa Layout, Behind Canara Bank Colony, Nagarabhavi Road, BANGALORE 560 072. COMPLAINANT - V/S - 1. The Circle Officer / Divisional Manager, Canara Bank Circle Office, 1st Floor, I.M.A House, B.N. Nagara, HUBLI 580 029. 2. The Divisional Manager, Loans and Advances Section, Canara Bank Head Office, J. C. Road, BANGALORE. 3. Section Officer, Canara Bank, Vinobhanagara, DAVANAGERE. .....OPPOSITE PARTIES ORDER With intention to construct a house in the vacant site bearing No.45 situated at Vinobhanagara, Davanagere, the complainant submitted an application on 25.04.2007 seeking loan from Canara Bank, Vinobhanagara Branch, Davanagere. After the spot inspection and other formalities the said Bank forwarded the application to the Circle Office of the Canara Bank at Hubli, but the said Office did not approve the loan in time. The complainant never received any information or endorsement from the Bank regarding the loan applied, inspite of contacting the Circle Office of the Bank as well as Vinobhanagara Branch. On 05.10.2007 he approached the Head Office of the Canara Bank at Bangalore, and also gave representation to the customer grievance cell of the Bank. After about five months the Vinobhanagara Branch of the Bank informed the complainant that it is not possible to sanction the loan. On account of inordinate delay in intimating about the inability to sanction the loan the complainant is put inconvenience. If the Bank had informed that it is not possible to sanction the loan within a reasonable time, it was possible for him to approach other Financial Institutions to obtain loan and to construct the house. As a result of delay in intimating about non-sanction of the loan due to escalation in the price of the building materials, he has to incur more expenses besides the mental agony suffered by him. Hence, the complaint for direction to opposite parties pay Rs.3,91,350/- on account of the following :- 1. Rs. 800/- spent for preparing the documents. 2. Rs.2,500/- towards licence for construction of the house & other fees. 3. Rs. 750/- towards Advocates fee. 4. Rs.2,500/- for preparing the plan and estimate. 5. Rs. 800/- towards correspondence and Telephone expenses. 6. Rs.2,500/- towards conveyance expenses for traveling from Bangalore to Davanagere. 7. Rs.10,000/- towards the conveyance expense of the surety S. N. Gurucharan from Calcutta & Bombay. 8. Rs.25,000/- towards mental agony and physical strain. 9. Rs.3,45,500/- towards escalation in the price of building materials. TOTAL 3,91,350/- 2. In the version the contention of the opposite parties is as under:- The complainant applied for loan from opposite party No.3 for construction of the house in Site No.45 situated in Vinobhanagara, Davanagere. After spot inspection by the Branch Manager of the Bank the application was forwarded to the Circle Office at Hubli. The allegation that the Circle Office did not accord sanction loan in time and that there was no response from the Branch Manager is false. Suitable reply has been given to the letter dated: 05.10.2007. The application was forwarded to the Circle Office at Hubli, as opposite party No.3 had no authority to sanction the loan. The complainant visited opposite party No.3 Bank in July/August-2006 to enquire about the Housing Loan Scheme of the Bank. It was informed that he being more than 55 years old the housing loan proposal needs to be forwarded to the regional Office at Davanagere and that his earning son is required to join for applying the loan. During February-2007 the complainant again visited the Bank and informed that he is involved in completing the formalities like licence, approval of plan etc. In the last week of April-2007 the complainant visited the Bank of the opposite party No.3 for submission of the loan application and informed that the delay in submission of the application is due to the delay in getting approval of plan and licence. The loan application was not signed by Mr. Gurucharan, the son of the complainant as required. The complainant informed that his son is working at Calcutta and assured to get the signature during his visit to Bangalore. In the meanwhile the powers given to the branches of the Bank to sanction various loans including the housing loans were revised. In respect of housing loan to the individuals aged 55 and above, the powers of Regional Office and Circle Office were withdrawn and those powers were given to Head Office of the Bank at Bangalore. These aspects were informed to the complainant and the probable delay was brought to his notice. With the consent of the complainant the proposal was forwarded to Circle Office, Hubli on 25.06.2007. The complainant had regular telephonic discussions with opposite party No.3 and he was apprised about the progress and the time required as three offices are involved in the process of sanction of housing loan. The Circle Office at Hubli sought certain clarifications as to whether the proposal is for second unit, whether the applicant has availability of 40% Net Take Home Salary after deduction of housing loan installments and whether he is able to contribute 25% margin and pay extra 0.25% interest. The complainant was asked to reply those clarifications and was also informed during the second week of August-2007 to secure the salary mandate with the employer of his son for recovery of the housing loan. The complainants monthly Net Pension is Rs.2,038/-. He has availed loan under Cansite Scheme of the Opposite Party Bank for purchasing residential site from Chandra Layout Bank and he is required to pay Rs.4,510/- per month towards the said loan. After some time the complainant informed that the employer of his son is not agreeable to register the salary mandate, which is one of the requirements. The complainant was also unable to furnish details regarding his financial capability to meet the repayment schedule of the proposed loan. The complainant narrated different sources of income like house rent, income from private job other than pension, but was unable to produce any documents supporting his earning capacity. Since the complainant failed to furnish the details, the Bank was unable to consider the proposal for housing loan at Davanagere. The monthly income of the complainant to meet the requirement of repayment of loan was not satisfactory as such the loan proposal was not favourably considered. Therefore, the failure to sanction the loan will not amount to deficiency in service on the part of the Bank and as such the complainant is not entitled to the relief prayed for. 3. In support of the respective contentions both the parties have filed affidavits and have produced documents. We have heard the arguments on both sides. 4. The points for consideration are:- (1) Whether the complainant has proved deficiency in service on the part of the opposite parties ? (2) Whether the complainant entitled to the relief prayed for in the complainant ? 5. Our findings to the above points is in the negative for the following :- REASONS 6. Admittedly, the complainant applied for housing loan on 25.04.2007 and as per the letter dated: 09.10.2007 the Bank expressed its inability to consider the loan proposal and thus it took about five months to inform the complainant that the proposed loan cannot be sanctioned. In the letter 09.10.2007 the Bank gave the following reasons to reject the loan application. This has further reference to the series of teletalks the undersigned had with you on the captioned subject. As informed to you during our detailed telephonic discussion during first week of September and subsequent teletalks, we express our inability to consider your proposal on account of the following :- 1. The inability expressed by you to register the mandate with your sons (Mr. N.S. Gurucharan) employer i.e. DTZ International Property Advisers Pvt. Ltd. Bangalore for recovery of installments through salary. 2. Your monthly income is inadequate to meet the requirement of obligations 8. Therefore the Bank expressed its inability to consider the loan proposal made by the complainant, because the complainant failed to obtain salary mandate from the employer of the son of the complainant for recovery of the installments through the salary of the son of the complainant, and the Bank found that the monthly income of the complainant is inadequate to meet the requirement of recovery obligations. Even in the letter dated: 13.08.2007 the Bank had insisted to obtain the salary mandate from the employer of the son of the complainant and to furnish particulars with regard to the income of the complainant. When the complainant himself failed to furnish the salary mandate of his son through the employer and to satisfy the Bank that his income is insufficient to meet the repayment schedule of the loan, he cannot find fault with the Bank. If at all any delay was caused in intimating the complainant about the inability to sanction the loan, the same was on account of the complainant himself not complying with the requirement of the Bank to consider his loan application. It is the discretion of the Bank to sanction or refuse loan applied by the customer. If the Bank is not satisfied with the financial status of the applicant for repayment of the loan, it is entitled to refuse the loan applied for. Therefore, refusal to sanction loan itself will not constitute deficiency in service on the part of the Bank. In the decision reported in I (1993) CPJ 11, in the case of Ashok Prahbakar v/s State Bank of India & Others on which the learned counsel for the opposite party relied upon the Honble National Commission has held that it is for the Bank and Financial Institutions to decide whether to assist any Industry with term and working capital loans and if in the judgment they find that a party is not credit worthy or the project proposed to be financed is unviable, it cannot be maintained that the refusal to finance the unit constitutes deficiency in the Banking Service to which the Industry is entitled to from the Banks and Financial Institutions 9. In the case on hand as mentioned in the letter dated: 09.10.2007 the Bank found that the monthly income of the complainant was inadequate to meet the requirement of recovery obligations. The complainant also failed to obtain the salary mandate from the employer of his son. Thus, when the Bank was not satisfied with the credit-worthiness of the complainant it had the discretion to reject loan applied by the complainant. This act of the opposite party Bank will not amount to deficiency in service and as such, we hold that the complainant is not entitled to the relief prayed for in the complaint. In the result, we pass the following :- ORDER 10. The complaint is dismissed. No order as to costs. 11. Send a copy of this Order to both the parties free of costs immediately. 12. Pronounced in the Open Forum on this 24th DAY OF JUNE - 2008. MEMBER MEMBER PRESIDENT
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