To Standard Charted bank, Dated: Friday, 04
December 2009



Despite my repeat reminders, the bank has failed to remove my default status
from CIBIL website. Because of this I have lost reputation as well as
opportunity to take another loan from nationalized bank. This has happened
despite the fact of having and showing all documented clearance
certificates, no dues pending certificate and statement of account showing
nil balance.



I am forced to take a legal action if things are not sorted out in next 2
days.



Thank you,



Rohit Dutta



Managing Director

Syselog India pvt. Ltd.



+91 (0) 98 11 999 310

C.C.NO.132/2009
Monday, the 14th day of December, 2009

M/s. Seethal Cotton Traders,

Rep. by proprietor,

Kantilal G. Vora,

S/o. Gangji Vohra,

27-A, Palanisamy Lay out,

Thadagam Road, R.S. Puram,

Coimbatore – 641 002. --- Complainant

Vs.

1. M/s. The Standard Chartered Bank,

Rep. by its Manager,

R.S. Puram, Coimbatore – 641 002.

2. M/s. The Regional Manager,

Standard Chartered Bank,

SME Banking, 19, Rajaji Street,

Chennai – 600 001.

---- Opposite Parties



This case coming on for final hearing before us on 26.11.09 and 10.12.09 in the presence of Thiru. S.Kothandaraman and Thiru. S.Sivadas Advocates for complainant and, Thiru. R & P Partners Advocate for the opposite parties and upon perusing the case records and hearing the arguments and the case having stood over to this day for consideration, this Forum passed the following:

ORDER

Complaint under Section 12 of the Consumer Protection Act, 1986 seeking direction against the opposite party to refund of the fee of Rs.1,01,124/- with interest @ 18% p.a. to the complainant, to pay a sum of Rs.5,00,000/- towards compensation for mental agony caused due to deficiency in service, and to pay Rs. 25,000/- towards cost of the proceedings.

The averments in the complaint are as follows:

1. The complainant is a business firm engaged in the trade of cotton bales. The complainant was approached by the 1st opposite party for availment of a vide an e-mail dated 5.11.2007, offering various schemes of the1st opposite party. The 1st opposite party’s staff have given in writing certain requirements that are essential for the sanctioning of the Letter of Credit. After the complainant agreed for the same, the 1st opposite party’s staff one Mr.Devaraj.D in the designation of Relationship Manager, has sent an email to the complainant calling for the following requirements:-

1. Bank Statement with existing banker.

2. Sanction letter of existing banker.

3. Repayment statement with existing banker.

4. Audited Figures.

5. Income Tax Returns.

6. Personal returns of guarantors and

7. Company profile.

2. All the above requirements called for were furnished by the complainant. On fully satisfying themselves to the credit worthiness of the complainant, the 1st opposite party consented for the loan facility to the complainant and intimated their offer quoting their charges and interest rates. The 1st opposite party was clear in their decision and hence communicated to the complainant in their letter dated 20.12.2007, that the Processing Fee was reduced and the Final-One-time processing Fee was Rs.90,000/- . No other condition or requirement was sought from the complainant other than those discussed earlier and hence the complainant agreed for the scheme. The complainant was also sanctioned a Loan Facility of Rs.1,00,00,000/- without calling for collateral Security. The complainant also opened an FD of Rs,10,00,000/- vide Term Deposit Account No. 43530063942.

3. On 28.12.2007, the complainant sent an application for issuance of Letter of Credit under UCP 600 in favour of M/s. Mulchandbhai & Sons, for Rs.20,00,000/- for 90 days. The 1st opposite party said they would issued the Letter of Credit and based on the assurance the complainant had entered into various deals with their suppliers. Suddenly to the shock of the complainant, the 1st opposite party called for Collateral Security and Un-Dated Cheques. The LOC was not at all issued. The frustrated complainant requested the 1st opposite party to close his accounts and refund the amounts deposited by him. After repeated requests, the 1st opposite party refunded the Term Deposit but failed to return processing Fee though they had promised the same earlier.

The counter Statement filed by the opposite parties are as follows:

4. The complainant has clearly concealed various facts and hence not approached this Honourable forum with clean hands. The complainant is not a Consumer as per definition of Sec.2 d(ii) of the Consumer Protection Act, 1986 as the complainant has availed service of the opposite party for complainant’s business/commercial purpose. The complainant has sought for refund of ‘upfront fee’ which the complainant is not entitled to seek. The opposite party denies the list of documents mentioned in para II 3 since this is exhaustive list of required documents and securities applicable for the offered amount to be sanctioned.

5. The Offer Letter called shortly as LOBA (=Letter of Banking Arrangement) has the detailed of the other documents to be submitted by the applicant customer The offer was accepted by the complainant by duly signing the offer letter. After accepting the offer letter, making dispute is not correct. Mere payment of the net processing is not sufficient for extention of Loan facility. LOBA referred above mentions the conclusive list of terms and conditions. The net processing fees communicated by the opposite party bank was Rs.90,000/- not including 12.36% service tax there of Rs.11,124/-.The opposite party bank neither assured that the same will be sanctioned on the sole basis of application nor has encouraged the complainant to enter into any deals with other parties.

6. In fact, the complainant has been requested by the opposite party bank to fulfill the pending documentation with regard to the security Cheques being the only tangible collateral for 80% of this majorly unsecured financing facility of Rs.1,20,00,000/- of L/C. This requirement is mandatory as per the banking product guidelines and one of the expressed conditions in the letter of Banking arrangement i.e.LOBA. It is a clear and proven fact that the customer complainant has paid the processing fee after knowing the terms and conditions of the credit facility sanctioned. The processing fee was adjusted towards the portion of the cost incurred by the bank for conducting various verifications and validations for sanction of the credit facility.

7. It is an admitted fact by the complainant that the complainant itself cancelled the said credit facility for the reason best known to it. Having agreed to submit the security cheques which is very explicitly mentioned in the LOBA, the complainant cannot now claim that it has cancelled the credit facility due to the fact that the bank has requested it to submit security cheques. The processing fee is not refundable as the request for credit facility was processed and subsequently the sanction letter (LOBA) was issued which was duly signed by the complainant and the bank incurred cost for conducting various verifications and validations prior to sanctioning the facility. The opposite party bank did not “fail” to issued a “granted” L/C as it was never “granted” “offered subject to conditions” and those “conditions” were “agreed upon” by the complainant who latter could not fulfill the “conditions”.

8. The processing fee is not refundable as the request for credit facility was processed and subsequently the sanction letter (LOBA) was issued which was duly signed by the complainant and the bank incurred cost for conducting various verifications and validations prior to sanctioning the facility. The complainant incurred any loss by the ablosed Act by the opposite party. There is no deficiency of service on the party of the opposite party bank what so ever.

9. The complainant and the opposite parties have filed Proof Affidavit along with documents Ex.A1 to A15 was marked on side of the complainant and B1 to B3 was marked on side of the opposite parties. The list of authorities filed by the complainant as follows:-

1. IV (2009) CPJ 3 (Supreme Court) Page No. 3

2. IV (2009) CPJ Page .317

3. 2001 (1) CPR. (Supreme Court) Page .7

4. 1 (1994) CPJ Page 193.

The List of authorities filed by the opposite parties :

1. IV (2007) CPJ 312 (NC)

2. IV (2007) CPJ 313 (NC)

3. IV (2007) CPJ 199 (NC)

4. III (2007) CPJ 316 (NC)



The point for consideration is

1. Whether the complainant is a consumer and this complaint is maintainable before this Forum.

2. Whether the opposite parties have committed deficiency in service? If so what relief the complainant is entitled to?



ISSUE 1

10. The case of the Complainant is the opposite party who has sanctioned Rs.1,00,00,000/-without insisting security, but all of a sudden called security and undated cheques , but the complainant requested the opposite party to close his account and refund the amount deposited by him but the opposite party failed to do so.

11. The contention of the opposite party is the complainant is not a consumer, having agreed to submit security cheques as per LOBA agreement, the complainant cannot now claim that he has canceled the credit facility due to the fact that the bank has demanded security cheques. The Processing fee is not refundable. There is no deficiency in service.

12. The complainant in para 3 of the complaint has stated that he engaged in the trade of cotton Bales. Mr. Kantilal G. Vora has not done the business under his name, but in the name of a sole proprietory concern in a professional manner employing various workers. As per B1 to B3 Mr. Kantilal G.Vora is engaged in business including (1) Mr. M/s. Sheetal Cotton Traders, (2) M/s. Sheetal Udhyog, (3) M/s. Sheetal Pratisthan, having offices at the same address “F/6, MIG Block, Periaswamy Road, R.S. Puram, Coimbatore” for which facilities were sought out for by Mr.Kantilal G.Vora the complainant. So the loan amount is only for commercial purpose. In the proof affidavit in para 1 also the complainant admitted that the complainant is a trader engaged in the trade of cotton bales. Hence it is clear that the complainant has sought loan for the business purpose and it will not come under the definition of ‘livelihood’ as far as the Consumer Act is concerned. Since the complainant is not a consumer as defined under “The Consumer Protection Act”, this complaint is not maintainable before this Forum.

Issue No. 2

13. During the course of banking transaction whenever customer seeks loan facility the bankers will ask for details and documents. But the customers are not entitled to avail loan facilities without furnishing details and other documents. In the present case the contention of the opposite party is having agreed to submit the security cheques which is very explicitly mentioned in the LOBA, the complainant cannot now claim that it has cancelled the credit facility due to the fact that the bank has requested it to submit security cheques. Having signed the LOBA the complainant is bound the terms and conditions mentioned thereon: The facility letter dated 18.01.2008 is marked as Ex.B3. In Col .7 under the heading “Processing Charges it is clearly mentioned that 0.75 on the sanctioned amount for Letter of Credit facility (i.e.on INR 12,00,000/- ) to be paid unfront on acceptance of the facility letter. In the same document in col. 10 such an pre conditions are given and in col. 11 special conditions are mentioned. As per these three conditions Undated security cheque worth INR 112 to be submitted before disbursement. The bankers are insisting for non-refundable upfront fee for processing the application, which involves various activities by the various officials in the bank, which the customers are liable to pay if they require the necessary loan. Mere payment of upfront fee by the customer not creates any customer eligible for loan. As per Ex.B3 the facility letter dated 18.01.2008 Serial No. 10 and 11 under the caption pre conditions and special conditions clearly mentioned that the security cheques have to be issued. The complainant is fully aware that he has to pay non-refundable deposit but merely alleged that the complainant is not aware of the non refundable deposit. Having signed by the LOBA the complainant is bound the terms and conditions mentioned there. The complainant has not filed any documents to prove the alleged loss incurred by him. The deficiency in service cannot be alleged without attributing fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be performed by a person in pursuance of a contract or otherwise in relation to any service.

14. Hence for the above said reason, we are of the view that there is no deficiency in service on the part of the opposite parties.

In the result the complaint is dismissed. No Costs.

Pronounced by us in Open Forum on this the 14th day of December, 2009.