State Consumer Disputes Redressal Commission
Baldev Singh vs Canara Bank on 31 May, 2012
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
SECTOR 37-A, DAKSHIN MARG, CHANDIGARH
First Appeal No. 07 of 2008
Date of institution : 02.01.2008
Date of Decision : 31.05.2012
Baldev Singh s/o Sh. Jagjit Singh @ Ranjit Singh s/o Boota Singh, R/o
Village Gurditttiwala, Tehsil Zira, District Ferozepur.
....complainant/Appellant.
Versus
1. Canara Bank, Mallanwala through its Branch Manager.
2. Mr. Sachdeva, Branch manager Canara Bank, Mallanwala, Tehsil
and District Ferozepur.
...Respondents/OPs
First Appeal against the order
dated 25.10.2007 of the District
Consumer Disputes Redressal
Forum, Ferozepur.
Before:-
Shri Jagroop Singh Mahal, Presiding Judicial Member.
Shri Jasbir Singh Gill, Member.
Shri Vinod Kumar Gupta, Member.
Present:-
For the appellant : Sh. Sukhbir Singh, Advocate for Sh. Nakul Sharma, Advocate For respondent no.1 : None For respondent no.2 : None JAGROOP SINGH MAHAL, PRESIDING JUDICIAL MEMBER:
This is complainant's appeal under section 15 of the Consumer Protection Act (hereinafter referred to as the 'Act') against the order dated 25.10.2007 passed by the Learned District Consumer First Appeal No.7 of 2008 2 Disputes Redressal Forum, Ferozepur (hereinafter referred to as 'the District Forum') dismissing his complaint.
2. The brief facts of the case are that complainant Baldev Singh wanted to make improvement on his agricultural land. The canara Bank launched a KISSAN CREDIT CARD SCHEME under which the complainant applied for a crop loan to the tune of Rs.5 lacs from Canara Bank at its Mallanwala Branch, Ferozepur. In this regard all the formalities were completed by the complainant to the satisfaction of the Ops and his land measuring 42 kanals and 9 marlas situated at village Bandala was mortgaged vide mortgaged deed dated 11.01.2007 registered with the office of Sub Registrar, Ferozepur in favour of the above bank. Thereafter, the loan account was opened in Canara Bank, Branch Office, Mallanwala from where the loan amount was to be released by OP no.2 who made a demand of illegal gratification to the tune of 10% of the loan amount but the complainant refused to pay the same. The OPs therefore did not release the amount due to which the complainant suffered mental tension and harassment and had to incur extra expenditure in incurring the loan from the other bank at a higher rate of interest. He therefore, prayed for a compensation of Rs.50,000/- for mental tension and harassment Rs.5,500/- as costs of litigation with interest @ 18% per annum till the amount of loan is released.
3. The bank/OP no.1 opposed the complaint on the ground that the complaint is not maintainable and the District Forum has no jurisdiction to entertain the same. The complainant was alleged to have concealed material facts from the Forum and was not entitled to any relief. The OP no.2 also raised objections on similar grounds. It was admitted that Canara First Appeal No.7 of 2008 3 Bank launched a Kishan Credit Card Scheme and the complainant had applied for a loan of Rs.5,00,000/- and mortgaged his land measuring 42 Kanals 9 Marlas in favour of the Bank. It was alleged that loan documents were yet to be signed and loan account was yet to be opened when the complainant pressurized the Branch Manager OP no.2 to release the loan without complying with the formalities to which the OP No.2 did not agree. It was denied it the OP Bank refused to release the loan.
4. Both the parties were given opportunity to produce evidence in support of their contentions.
5. After hearing the Ld. Counsel for the parties and perusing the record, the Ld. District Forum dismissed the complaint vide impugned order dated 25.10.2007. The complainant has challenged the same through this appeal.
6. We have heard the arguments of the Ld. Counsel for the appellant and have perused the record as none appeared for the OP/respondent.
7. The case of the respondents is that the Ops are not bound to release the loan and put the financial interest of the bank in jeopardy and, therefore, they are fully competent to refuse to disburse the loan where there is even a slightest doubt about the paying capacity of the complainant legally the stand is correct but the question is whether there was any justifiable reason to deny the loan to the complainant. In the present case, it was mentioned in para 4 of the reply that the complainant was not completing the bank formalities and the public money, therefore, cannot be thrown away without safeguarding the interest of the bank and First Appeal No.7 of 2008 4 without completing the required formalities. Two grounds given by the OP respondent bank for not releasing the amount are that the complainant was not completing/signing the documents needed for disbursal of the loan and secondly, the report about the mortgage of the complainant's property was to be entered in the Roznamcha of the Patwari and the Bank Manager was yet to verify the same. The learned counsel for the appellant argued that these are lame excuses and in fact, all the documents had already been executed by the complainant. He has referred to the fact which is admitted by the OP respondent bank that the complainant had applied for the crop loan of Rs.5 lacs which means that he submitted a proper application needed therefor. Ex.C4 contains the documents which were obtained by the complainant from the concerned offices and were handed over to the bank. These are 8 documents as follows : -
1. Jamabandi for the year 2003-04 Village Bandala
2. Copy of Khasra Girdawaris Kharif 2006
3. Jamabandi for the year 2000-01
4. Copy of Khasra Girdawaries Kharif, 2006
5. Non-encumbrance certificate from 1.4.1993 to 19.12.2006
6. No due certificate
7. Surplus Area Certificate
8. Affidavit of Baldev Singh On the basis of these documents, the OP respondent bank had obtained the opinion of Ashok Kumar Gupta, Advocate which is Ex.C4.
He was of the opinion that the complainant has a valid, absolute, clear and marketable title in the aforesaid property as per the documents mentioned above. Thereafter, the complainant executed a mortgage deed in favour of First Appeal No.7 of 2008 5 the bank and this fact also has been admitted by the OP. Vide this mortgage deed, the complainant mortgaged 42 Kanals - 9 marlas of his agricultural land in their favour. It was got registered with the Sub-Registrar concerned, Whether a person who has performed all these acts would refuse to sign documents is unimaginable. In fact, the persons like OP No.2 can tell lies but the circumstances do not. A person who is in need of a crop loan, who has procured a number of documents from the offices who approached the bank and mortgaged his agricultural land would not pressurize the Bank Manager nor would refuse to execute any documents. The contention of the OPs, in this respect, is, therefore, far from truth.
8. As regards the report to be lodged with the Halqa Patwari regarding the mortgage which the bank manager was alleging that he was to verify, is meaningless. The rights of the parties are to flow from the registered mortgage deed which has already been got registered in favour of the OPs. Making an entry in the Roznamcha by the Patwari on its basis is just a ministerial act and is to be got done by the bank at any time by producing the mortgage deed. The loan, therefore, could not have been refused to the complainant on any such ground but it appears the OPs could not find out any excuse to conceal the truth and, therefore, they have coined this one to camouflage the reality. It was mentioned by the OPs in para 4 of the reply that all these documents were taken away by the complainant and he left the bank by threatening OP No.2 with dire consequences. When the complainant was following the due procedure, there must be compelling circumstances with the complainant to take such a step. According to the complainant, OP No.2 demanded 10% of the loan as illegal gratification to which he did not agree and, therefore, the First Appeal No.7 of 2008 6 manager refused to release the loan. There appears to be truth in this contention though the complainant is the only person to prove this fact. On the other hand, OP No.2 has filed his affidavit denying this allegation. It is, however, not understood that if the formalities had not been completed as alleged by OP No.2, then, why the loan account was opened in the bank, copy of which is Ex.C3. In fact, it is the last step and, thereafter, only the release of the amount was left, which according to the complainant was not done due to the reason that he refused to pay illegal gratification to OP No.2. As regards Ex.P7 and Ex.P8 which have been relied upon by the learned District Forum, we are of the opinion that these documents are not admissible in evidence. Ex.P7 is purported to be a letter written by Kashmir Singh and signed by some other persons whereby Kashmir Singh stated that no demand of illegal gratification was made by OP No.2 in his presence and his name has been unnecessarily dragged by the complainant as a witness in this episode. Kashmir Singh did not file his affidavit to support this contention. It is not explained by the OPs as to why the affidavit of Kashmir Singh was not obtained if the facts mentioned in Ex.P7 were correct. Ex.P7 is not per se admissible. It, therefore, cannot be read in evidence.
9. Similarly, Ex.P8 and Ex.P9 are purported to be Panchayat decisions vide which it was mentioned that the complainant came in the Panchayat and admitted that OP No.2 had not demanded illegal gratification from him. Ex.P8 and Ex.P9 are not proved by any signatory of the same. The affidavit of none of the signatories was filed by the OPs to support this contention. Ex.P8 and Ex.P9 are not signed by the complainant. If the complainant had been present and had admitted to this First Appeal No.7 of 2008 7 effect, there is no reason why his signatures were not obtained on these documents. The fact that the complainant filed the present complaint three months later on 15.03.2007 falsifies this version that the complainant admitted that no such demand was made by OP no.2. The learned counsel argued that OP No.2 being a bank manager was in a capacity to influence any co-villager to whom he can grant loan to any extent and even in adverse circumstances. We are, therefore, of the opinion that none of these documents proves the innocence of OP No.2.
10. The fact that all the formalities for sanction of loan were compelled and even the bank account was opened proves that loan had been sanctioned, there must have been some unusual demand by OP No.2 which was not met by the complainant, due to which, he refused to release the loan. The reason given by OP No.2 for non-release of the loan does not appear to be correct.
11. It is also the case of the respondents that the complainant is not a consumer because no loan has been advanced to him and there is no consideration. We do not find any merit in this argument. The complainant has moved an application for the sanction of loan and he had procured all the documents needed therefore. The said request was processed by the OP respondent bank. The consideration for the service is that the complainant would get the loan and would pay interest thereon. It therefore, cannot be said if the relationship of consumer and service provider was not established between the parties.
12. The contention of the complainant is that when the loan amount was to be released OP no.2 Branch Manager demanded illegal First Appeal No.7 of 2008 8 gratification, the complainant refused to pay the same due to which the disbursement of the loan was with held. In some what similar circumstances in case " Rajcello Chemproducts ltd. Vs. Punjab & Sind Bank " III (2008) CPJ 317 (NC) loan was sanctioned but the amount was not released to the complainant. After about 7 months the bank appointed a technical expert to justify non disbursal of the loan amount. The bank took the stand that it was delayed due to the bank but the same was not accepted and the deficiency in service on the part of the bank was held to be proved and compensation was allowed in the said case. In another case "Saroj Vs. Mahindra and Mahindra Finance Co. Ltd." IV (2008) CPJ 217 (NC) the loan was not released to the complainant due to which he could not operate his transport vehicle. The Consumer Fora awarded him cost and compensation which though was reduced in appeal, yet Hon'ble National Commission upheld the order of the State Commission. We may also refer to the case "ICICI Bank Ltd. Vs. k.Venkatareddy" i (2009) CPJ 91 (NC) it was held by the Hon'ble National Commission that non disbursement of sanctioned loan amounts to deficiency in service on the part of the bank. In another case "Akhilesh Kumar Pandey Vs. Bank of Baroda and Anr." II (2009) CPJ 309 (NC) the loan was not disbursed, the complainant alleged harassment by the bank which was bound to discourage intending entrepreneur. In that case also the compensation of Rs.40,000/- was awarded by the learned District Forum and the same was enhanced in Revision Petition to Rs.60,000/-. In case "Jagmohan Lal Mohan Vs. ICICI Home Finance Co. Ltd." II (2010) CPJ 189 it was held that disbursement of loan amount or not is sole prerogative of financial institution. In that case the petitioner was forced, as in the present case to First Appeal No.7 of 2008 9 approach another bank to get loan and incurred extra additional expenses. In that case also the compensation for mental agony and harassment was awarded in addition to the relief granted by the lower forum. In case "IDBI Home Finance Vs. Ajoy Kumar Mallick" IV (2010) CPJ 324(NC) also the loan amount was not disbursed and the complainant prayed for compensation which was allowed by the District Forum. In that case also the compensation was allowed by the Consumer Fora. In view of these authorities it becomes clear that where the loan was sanctioned but the amount was not disbursed to the complainant it amounts to deficiency in service on the part of the bank. It was held in all the cases mentioned above that the relationship of consumer and service provider existed between the parties.
13. However, in these proceedings, we are of the opinion that the OP bank cannot be compelled to release the loan to a person to whom they do not want to advance the loan. No such order, therefore, can be passed to direct the OP to release the loan amount to the complainant. Moreover, the complainant claims that he has already obtained the loan from some other bank at a higher rate of interest and, therefore, we are of the opinion that he does not require this loan. The request of the complainant, in this respect, cannot be accepted.
14. We, however, cannot lose sight of the fact that the complainant had spent not only a considerable amount of money in procuring the documents but has wasted his valuable time in the process. He had been waiting to get the loan but the same was refused on frivolous grounds due to the attitude of OP No.2 which certainly caused him mental tension and harassment for which he needs to be compensated by the First Appeal No.7 of 2008 10 bank. We have already held that the reasons given by OPs for refusing to release the loan are not genuine. The OPs should, therefore, pay a sum of Rs.50,000/- as compensation to the complainant for mental and physical harassment caused by them to the complainant and refusing to disburse the loan.
15. In view of the above discussion, we are of the opinion that the complaint was liable to succeed but has been wrongly dismissed by the learned District Forum. The efforts made and the harassment suffered by the complainant was not, at all, considered by the learned District Forum. The present appeal is, therefore, liable to succeed and the same is, accordingly, allowed. The impugned order passed by the learned District Forum is, therefore, set aside and the complaint is allowed. The OPs are directed to pay to the complainant a sum of Rs.50,000/- towards mental agony and harassment caused to him. This amount shall be paid by the OPs to the complainant within 30 days from the date of receipt of a copy of this order, failing which, the OPs would be liable to pay the same along with interest @ 9% per annum since the filing of the complaint i.e. 15.6.2007 till the amount is actually paid. In that eventuality, the OPs shall also pay him litigation costs of Rs.5,500/-.
16. In order to safeguard the interest of the bank, it is made clear that they are at liberty to recover the aforesaid amount from OP No.2 after affording him an opportunity of being heard if and so required under the Rules governing the service conditions of the branch manager. First Appeal No.7 of 2008 11
Copies of the orders be supplied to the parties free of costs.
(Jagroop Singh Mahal) Presiding Judicial Member (Jasbir Singh Gill) Member (Vinod Kumar Gupta) Member May 31,2012 rashmi /paritosh