COMPLAINT NO. 1700 OF 2009

D.Shekhar S/o Devappa, A/a 50 yrs,

Shri Lakshmi Venkateswara Nilaya

No.55, First Cross, 3rd Main,

Pipeline, RPC Layout, 2nd Stage,

Bangalore – 560 040.

…. Complainant.

V/s
01. LIC Housing Finance Ltd.,

The registered and Corporate

Office, Bombay Life Buildings,

2nd Floor, 45/47, Veernariman Road,

Mumbai-400 001.

Represented by its Chairman.

02. The Manager (Operations)

Sri. H.S.Subramanya,

LIC Housing Fianance Ltd.,

Hayes Road,

Back Office, Bangalore – 025.



03. Smt.Suman, Branch Manager,

Major,



04. Nanda Nagaraj, Record Section, Major,



(3) & (4) Opposite Party are in the LIC

Housing Finance Ltd., Back Officer, Hayes Road,

Bangalore – 560 025.

…. Opposite Parties

-: ORDER:-



This complaint is for a direction to the Opposite Parties to forthwith return all the original documents of title given at the time of raising the loan, to pay compensation of Rs.1,00,000/- and notice charges of Rs.5,000/-, on the following grounds:-



The complainant had raised loan with Opposite Parties on the security of the immovable properties. He discharged the entire loan by paying the balance amount of Rs.3,18,000/-. After discharging the loan, he requested Opposite Party No.2 to return the documents of title. By the letter dated 19/05/2009 Opposite Party No.2 informed that the original documents of title have been temporarily misplaced and will be returned soon after they are traced. Opposite Party No.2 also addressed a letter to the Sub-Registrar on 08/05/2009. The complainant had arranged for the marriage of his daughter on 04/06/2009 and had requested Opposite Party No.2 to return the original title deeds as he wanted to raise loan of Rs.25,00,000/- from a 3rd party on the security of the property. Since the documents were not returned, the 3rd party financier refused to advance the loan. As a result, the complainant was put to great hardship and injury. He also requested Opposite Party No.2 to advance the loan of Rs.25,00,000/- on the security of the property, but the Opposite Parties declined to sanction the loan. The present market value of the property is Rs.60,00,000/-. He also issued legal notice dated 28/05/2009 calling upon the Opposite Parties to return the documents or to grant the loan of Rs.25,00,000/-. But in spite of receipt of notice, the Opposite Parties failed to comply with the demand. Hence, the complaint.



2. In the version, the contention of the Opposite Parties is as under:-

The complainant had availed loan from Opposite Party No.1 and has discharged the entire loan. As security for the loan, the complainant had mortgaged the property bearing No.47, 5th Cross, AAzadnagar, Bangalore and after closure of the loan amount, the complainant requested for return of the title deeds. On 19/05/2009 they sent letter stating that the title deeds of the property are temporarily misplaced and they will be delivered soon after they are traced. The contention that the complainant had arranged for the marriage of his daughter on 04/06/2009 and a 3rd party had come forward to give loan of Rs.25,00,000/- on the security of the property is not within the knowledge of the Opposite Parties. The contention that the property is worth Rs.60,00,000/- is not correct. The request of the complainant for loan of Rs.25,00,000/- was not considered since the complainant paid the housing loan with great difficulties and the Opposite Parties had given maximum benefit of waiver of portion of the interest as such as per the rules and the credit policy of the Opposite Parties, the complainant is not eligible for fresh loan. The Opposite Parties grant loan for the purpose of purchase of house or development housing projects and not for any other purpose. The original title deeds are misplaced and are not yet traced in spite of best efforts. They are trying their level best to find out the title deeds and the same has been intimated to the complainant. As such there is no deficiency in service on the part of Opposite Parties. There are voluminous title deeds and documents in their record room at Bangalore. It will take some time to trace the documents pertaining to the property of the complainant. Soon after the documents are traced, they will be delivered to the complainant. They have also issued endorsement dated 28/05/2009 stating that the title deeds are temporarily misplaced. They are ready to furnish the certified copy of the sale deed at their cost subject to the complainant furnishing the details. Opposite Party Nos. 3 & 4 are not personally answerable for misplacing of the documents. They are employees of Opposite Party No.1. As such they are neither necessary nor proper parties to the proceedings. On these grounds, the Opposite Parties have prayed for dismissal of the complaint by recording the undertaking given by them to deliver the documents soon after they are traced.

3. In support of the respective contentions both parties have filed affidavits. The complainant has produced exhibits P1 to P4. We have heard the arguments on both side.



4. The points for consideration are:-



1. Whether the complainant has proved deficiency in service on the part of Opposite Parties?



2. Whether the complainant entitled to the reliefs prayed for in the complaint?



5. Our findings are:-

Point No(1) : In the Affirmative as

Against Ops. 1 & 2



Point No(2) : As per final order

For the following:-



-:REASONS:-

6. Admittedly Opposite Parties 3 &4 are the employees of Opposite Parties 1 & 2. No liability can be fixed against Opposite Parties 3 & 4 in their individual capacity and as such the complaint against them is liable to dismissed.



6. The fact that the complainant had raised housing loan with Opposite Parties 1 & 2 on the security of the immovable property and had deposited the original documents of title and that the complainant had discharged the entire loan is admitted. When once the entire the loan is discharged, it is obligatory on the part of Opposite Parties to return the original documents of title deposited by the borrower. From what is stated in the letter dated 19/05/2009, it is clear that the original documents of title deposited by the complainant are misplaced in the office of the Opposite Parties and therefore they are not returned so-far. By just saying that the documents are temporarily misplaced, the Opposite Parties cannot absolve their liability to the borrower. It was necessary on the part of Opposite Parties to maintain the documents deposited by the borrowers properly and to return the documents to the borrowers soon after the loan is discharged. Alleging non return of the documents, the complaint is filed on 20/07/2009. Therefore for about three months after the discharge of the loan, the documents are not returned to the complainant. However, the contention of the complainant that he wanted loan of Rs.25,00,000/- for the purpose of marriage of his daughter and an individual financier refused to advance the loan for want of documents does not find support from material. As such we are unable to uphold this contention of the complainant that he could not avail the loan from a 3rd party for want of documents. But the fact remains that in spite of clearing the entire loan the Opposite Parties have failed to return the original documents of title and this act of the Opposite Parties clearly amounts to deficiency in service. Non return of the original documents of title appears to have subjected the complainant to some amount of mental agony and inconvenience. As such the Opposite Parties are liable to compensate the complainant in that regard. Considering the facts and circumstances of the case, in our opinion it is just and proper to give some more time to Opposite Parties to trace and return the original documents of title to the complainants and also to award compensation of Rs.10,000/- for the mental agony and inconvenience suffered by the complainant. In the result, we pass the following:-


-:ORDER:-

1. The complaint is ALLOWED against Opposite Parties 1 & 2 and dismissed against Opposite Parties 3 & 4.
2. The Opposite Parties 1& 2 are directed to trace and return the original documents of title to the complainant within three months from the date of the order and also to pay compensation of Rs.10,000/- (Rs.Ten Thousand only).
3. In case the Opposite Parties 1 & 2 fail to trace the documents, they shall issue a public notice in the leading daily news paper regarding the loss of the original documents of title and furnish the complainant with certified copy of the documents.
4. Send a copy of this order to both parties free of costs, immediately.
5. Pronounced in the Open Forum on this the 17th Day of NOVEMBER 2009

CONSUMER CASE NO. : 75/S/2009. DATED : 17.12.2009.

BEFORE PRESIDENT : SMT. ANITA DEBNATH,

Ex-Member of W.B. Higher Judicial Services and

Addl. Dist. & Session Judge,

President, D.C.D.R.F., Siliguri.
MEMBERS : SMT. PRATITI BHATTACHARJEE

&

SRI ASIT RANJAN DAS.


COMPLAINANT : SRI TARUN KANTI PAL,

C/O Ashok Sen,

University Avenue, Opp. Gate No.-2,

P.O.- N.B.U.,

Dist.- Darjeeling, PIN – 734 013.

Tele No.94347 61888/0353-2582828.
O.P. : AREA MANAGER,

LIC Housing Finance Ltd.,

(Jeevan Deep Building, Ground Floor,

Sevoke Road, Siliguri.

Ph. No. 0353-2523788/2523822/2536766.

FOR THE COMPLAINANT : Self.



FOR THE OP : Sri M. K. Sehanobis, Advocate.
J U D G E M E N T

This is a case under Section 12 of the Consumer Protection Act, 1986 for refund of money to the tune of Rs.15,000/- together with compensation of Rs.60,000/-.

The case of the complainant runs as follows :-

The complainant took a House Building Loan amount of Rs.2,00,000/- from the OP against the loan Account No. 51020119 on mortgaging LIC Policy No.452222777 (Money Back). LIC, Islampur issued a cheque bearing No.0929663 dated 30.03.05 amounting to Rs.15,000/- in favour of the OP. The said amount was received on 25.04.05 and issued a Demand Draft on 29.04.05 with the statement. But the said Demand Draft

Contd…….P/2

-:2:-



was not received by the complainant nor the amount was deducted/adjusted against the principal loan amount. Even the OP did not disclose mode of posting or in which address it was so sent. The said loan amount was completely paid by the complainant in the month of April, 2009. Even then he did not get the original policy bond bearing No.452222777. The complainant issued notice to the OP but no fruitful result was achieved. Hence this case supported by affidavit.

The OP contested the case by putting W.V. denying each and every allegation as made therein with a specific defence that the case is not maintainable.

It is further alleged that the claim is barred by limitation as the disputes pertaining to the period of 2005 and thereby after elapse of more than two years the claim as prayed for is not entertainable.

It is further alleged that the OP sent the Demand Draft of Rs.15,000/- in the year 2005 but it has not been intimated to the OP in time and after a long period it has so been intimated. It is further alleged that on receipt of the amount of Rs.15,000/- from the LICI on 25.04.05, the same was refunded to the OP on 29.04.05 by Demand Draft. It is further alleged that there is no latches or negligence on the part of the OP for which the claim is not entertainable or suffers from deficiency of service as alleged.

The W.V. has been submitted on verification.

Upon consideration of the pleadings of the respective parties the following points are framed for adjudication :-

1) Is the case maintainable in law ?

2) Is the case barred by limitation ?

3) Is there any deficiency in service or Unfair Trade Practice on the part of the OP ?

4) Is the complainant entitled to get decree as prayed for ?

5) To what other relief/reliefs as the complainant prayed for ?



Point No.1 & 2.



Since the Ld. Advocate on behalf of the OP advanced argument that the cheque in question was received from LICI on 25.04.05 and the claim has been launched only on 09.09.2009 long after elapse of two years thereby the case is not maintainable and hit by law of limitation as provided under Section 24 (A) of the Consumer Protection Act, 1986 as amended.

Admittedly, the cheque in question i.e. amount of Rs.15,000/- towards the claim of Money Back Policy was received by the OP on 25.04.05 from the LICI. Though the OP



Contd…….P/3

-:3:-



took a specific defence that the said money was refunded by way of Demand Draft on 29.04.05 whether it was sent or not or received by the complainant or not is the main issue/dispute involved in the instant case which would be considered later on in the main issue. But when the defence of law of limitation has been urged it would be decided first.

Section 24(A) clearly provides that the limitation period in the manner that the District Forum, the State Commission or the national Commission shall not admit a complaint unless it is filed within two years from the date on which the cause of action has arisen.

Here according to the complainant notice was issued to the Manager, LICI Housing Finance dated 23.10.08 wherein it has been alleged/intimated that an amount of Rs.15,000/- under a cheque was issued by the LICI Office in their favour and it has already been encashed from UBI, Islampur Branch on 14.05.05. But the same has not been issued or paid in his favour for which the addressee was requested to look into the matter with an intimation as to whether the said amount was adjusted with the principal loan amount or not. In reply it has been intimated by letter dated 25.10.08 that the said amount was refunded on 29.04.05 by way of Demand Draft.

Now the question is whether the case is hit by law of limitation. It is specifically pleaded that the loan as taken from the OP was fully recovered from the complainant who paid the entire amount in the month of April, 2009 and after its full payment satisfaction of loan amount such enquiry was made whether the said amount of Rs.15,000/- was adjusted towards the principal loan amount or not. So, it is evident that the cause of action arose as incorporated from the month of April, 2009 and the date when it was so enquired from the OP by letter dated 23.10.08 and reply dated 25.10.08 against the said letter as issued by the OP.

There is no doubt that the case is to be instituted within two years from the date when the cause of action will arise as provided under section 24 (A) of the Consumer Protection Act, 1986. But in the instant case the amount by way of cheque was sent by the LICI to the OP towards the scheme of Money Back Policy and the said policy was mortgaged by the complainant in securing the loan from the OP. There is no evidence that the said amount was actually adjusted towards the principal loan amount. When the money is lying with the OP and encashed the same from the UBI, Islampur Branch and when the said amount has not been adjusted towards the principal loan amount under the law said money was kept by the OP as a trusty and so long it would not be paid or adjusted towards the principal loan amount it remains with the OP it is a



Contd…….P/4

-:4:-



recurring cause of action i.e. continuing process by which the law of limitation as provided under Section 24 (A) of the Consumer Protection Act, 1986 will not apply. Further more we are of the view that after full payment of the loan amount to the OP the cause of action arises for making enquiry about the fate of that cheque or the amount as encashed by the OP. So, the cause of action arises on the date when the full payment against the loan under the contract was paid by the complainant to the OP.

Under this facts and circumstances, this Forum is of the view that it is a continuing process with regard to cause of action and thereby the case does not hit under Section 24 (A) of the Consumer Protection Act, 1986 and/or the case is not hit by law of limitation.

The complainant took service on consideration and when the service has hired or availed of on consideration the complainant is a ‘Consumer’ under Section 2(1)(d)(ii) of the Consumer Protection Act, 1986.

When the claim of the complainant has been denied by the OP and one’s assertion has been denied by the other the nature of dispute comes within the purview of ‘consumer dispute’ as provided under Section 2(1)(e) of the said Act of 1986.

Therefore, the case is quite maintainable and does not hit by law of limitation.

The issues are thus disposed of in favour of the complainant on contest.



Point No.3 – 5.



The sole case of the complainant is that against the Money Back Policy being No.452222777 and another policy were mortgaged before the OP for the purpose of securing a loan of Rs.2,00,000/-. The said loan amount under the contract was fully paid in the month of April, 2009. Meanwhile the LICI issued a cheque amount of Rs.15,000/- against the said Money Back Policy in favour of the OP and the same was encashed by the OP on 14.05.05. The said OP did not adjust the said amount towards the principal loan amount nor it was paid to the complainant despite encashing the same.

On the other hand the defence case of the OP is that the said amount was sent to the complainant by way of Demand Draft by post.

The complainant in support of his case has furnished Statement of Account issued by the OP in favour of the complainant. From the said statement there is an endorsement of refund of the said sum of Rs.15,000/-. But save and except no other document has been furnished to show that the said amount in the form of Demand Draft was actually sent by the OP to the complainant. It further reveals that the complainant issued various letters to the OP but no reply is received from their end.

The OP took a specific defence that said amount was sent by way of Demand

Contd…….P/5

-:5:-

Draft. But no scrap of paper has been furnished on behalf of the OP to establish that the manner of sending the said Demand Draft in favour of the Complainant or any receipt that the said Demand Draft was actually received by the complainant. Mere assertion is not sufficient to come to a conclusion that the said amount by way of Demand Draft was actually received by the complainant against the money under the Money Back Policy nor any receipt was submitted/furnished by the OP to establish that the said Demand Draft was actually sent to the complainant by the OP by any manner or by post. If it be sent by post or through any other manner there must be some document/receipt to establish about the sending of the Demand Draft or receipt thereof.

Under this facts and circumstances, this Forum is of the view that the defence case has not been established by any cogent, oral or documentary evidence. Thereby the OP fails to establish their such defence.

The OP has also not furnished any document to substantiate that the said amount of Rs.15,000/- was adjusted against the principal loan as taken by the complainant from the OP. If that be so, when the said sum has not been adjusted or paid to the complainant and when the entire sum under the loan has already been paid by the complainant the amount of Rs.15,000/- under the Money Back Policy sent by LICI to the OP the said money belongs to the complainant and when it has not been proved by sending the same by post or any manner thereof or receipt of payment thereof the case of the complainant is sustainable and the complainant is entitled to get the said money under the Money Back Policy as received by the OP from the LICI.

Under the Act as provided under Section 2(1)(g) of the Consumer Protection Act, 1986 which defines the term ‘deficiency’ and it means any fault, imperfection, shortcoming of inadequacy in the quality, nature and manner of performance.

‘Service’ as defined under Section 2(1)(o) of the said Act of 1986 it means service of any description which is made available to potential users.

Admittedly, service was taken/hired or availed of on consideration and the Insurance Company granted the loan in terms of the agreement and the said loan was fully recovered from the complainant under the agreement and admittedly, when the said cheque amounting to Rs.15,000/- was received by the OP from the LICI and when it has not been adjusted against the principal loan amount or paid to the complainant by any manner it clearly proves there is negligence on the part of the OP who does not render service properly and it comes within the purview of shortcoming or inadequacy of quality of service of the OP as provided under Section 2(1)(g) & (o) of the said Act, 1986 and it also falls Unfair Trade Practice on the part of the OP. Such conduct of the OP

Contd…….P/6

-:6:-

is not appreciable and desirable also in a business transaction thereby the public can not have any faith or can trust the Insurance Company.

Under this facts and circumstances, we are further of the view that when there is deficiency of service on the part of the OP not satisfying the bonafide claim of the complainant with regard to the refund of the said sum of Rs.15,000/- towards the cheque as issued by the LICI in favour of the OP against the Money Back Policy the complainant is entitled to get a decree for Rs.15,000/- from the OP.

Since there is shortcoming of performance and service has not been properly rendered and no reply was given to the complainant despite issuing several letters to the OP it causes mental pain, agony and sufferings and harassment to the complainant and as such if the interest be paid from the date of encashment dated 14.05.05 it would be sufficient towards the compensation as claimed for.

In the result, the case succeeds and the issues are disposed of in favour of the complainant.

Hence, it is,

O R D E R E D

that the Consumer Case No.75/S/2009 is allowed on contest in part against the OP with cost of Rs.1,000/-.

The complainant is entitled to get a sum of Rs.15,000/-(Fifteen thousand rupees) only with interest @ 9% p.a. from the date 14.05.05 till the realization of the full amount.

The OP is directed to pay the decretal sum together with the interest as accrued thereon for the decretal sum within 45 days from the date hereof failing which the complainant is at liberty to put the decree in execution.

Let Xerox copies of this Judgement and Order be supplied to the parties free of cost.

Consumer Complaint No

942 of 2009

Date of Institution

07.07.2009

Date of Decision
10.12.2009

Ms. Prem Lata, Ravinder Kumar Gupta, Amit Gupta through Ravinder Kumar r/o House No.2270, Sector 15, Panchkula.

….…Complainants

V E R S U S

L.I.C. Housing Finance Ltd., SCO No.2445-46, Sector 22-C, Chandigarh.



..…Opposite Party



CORAM: SH.JAGROOP SINGH MAHAL PRESIDENT

SH.SIDDHESHWAR SHARMA MEMBER

DR.(MRS) MADHU BEHL MEMBER



Argued by: Sh. Gian Inder Sharma, Adv. for complainants.

Sh. O.P. Narang, Adv. for OP



PER SHRI JAGROOP SINGH MAHAL, PRESIDENT

Succinctly put, the complainants executed an agreement with the owner of H.No.601, Sector 11, Panchkula for purchase of the house total cost of which was Rs.55.00 lacs and Rs.10.00 lacs was given as earnest money. They contacted OP for the purpose of advancement of loan who vide their letter dated 13.9.2008 sanctioned a loan of Rs.22.75 lacs for which an amount of Rs.21,750/- was paid as process, legal fee and for preparation of other documents. The matter with regard to disbursement of loan thereafter kept on lingering and vide letter dated 30.1.2009 the OP informed that the loan could not be disbursed because of problem in the title. As the complainants were in need of money so they took loan of Rs.20.00 lacs from the Union Bank of India. Due to the refusal by the OP at the eleventh hour the complainants had to face lot of hardship as the party extended the date only after negotiating with a sum of Rs.3.50 lacs otherwise the earnest money would have been forfeited. Hence this complaint alleging that the aforesaid acts of the OPs amount to deficiency in service and unfair trade practice.

2. In their written reply the OP admitted that the amount of Rs.22.75 lacs was sanctioned but it has been submitted that the loan was sanctioned under the belief that the borrower would submit the documents in original at the time of disbursement. It has been stated that the complainants deposited Rs.11,375/- as upfront fee whereas they were required to deposit Rs.22,775/- i.e. 1% of the sanctioned amount. It has been pleaded that there was no delay on the part of the answering OP to release the fund because it had to be done only after satisfying itself as to whether permission to sell the shares of the minors has been received by the guardian of the minors from the ld. Court Panchkula which as per the orders dated 1.11.2008 was passed in favour of only one minor child i.e. Ms. Ruchika. Denying all the material allegations of the complainant and pleading that there has been no deficiency in service or unfair trade practice on their part prayer for dismissal of the complaint has been made.

3. Parties led evidence in support of their contentions.

4. We have heard the learned counsel for the parties and have also perused the record.

5. It is admitted by the OP that when an application was moved by the complainants they sanctioned the loan vide Annexure R-1. It is also admitted that the said loan has not been released so far. The reason given by the OP is that two of the sellers of the house, for the purchase of which the loan is applied for, are minors; that permission of the Guardian Judge has been obtained in respect of only one of the minors and not of the other due to which they declined to release the loan. The learned counsel for the complainants has argued that in fact the loan was sanctioned when two of the sellers were minors and the position rather improved because the permission for sale of the share of one of the minors has since been obtained. It is argued that if the complainants are not interested in purchasing the share of the other minor and, therefore, the loan could not be cancelled by the OP on this ground. When the OP very well knew that two of the sellers are minors they should not have sanctioned the loan till the permission was obtained from the Guardian Judge to sell their share. If even in spite of sellers being minors the loan was sanctioned, the OP cannot subsequently cancel the same.

6. The learned counsel for the OP has referred to para 2(v) of the reply in which it is mentioned as the reason for cancellation of loan that though the copy of the agreement (to sell) is stated to have been attached with the application for loan but the original agreement was not produced by the complainants. It is interesting to believe that if the original agreement was required to be seen by the officials of the OP then why they did not insist for that before sanctioning the loan. Even without producing the original agreement if they sanctioned the loan that means that production of the original was not necessary at all and the OP believed the correctness of the said agreement. Otherwise also, if a copy of the agreement had been produced, regarding which there is no allegation of tampering, the loan cannot be subsequently cancelled on this ground that the original was not produced. These conditions should have been satisfied and verification of documents should have been done by the OP before they issued the sanction of the loan. When once they have sanctioned the loan then they are bound to disburse it unless something such happens thereafter due to which the recovery of the loan is likely to become difficult. It is not so in the present case.

7. The learned counsel for the complainants in support of his contention has referred to the authority in the case of Basavaraj Vs. ICICI Home Finance Co. Ltd. & Ors.-II (2008) CPJ 94 in which also the loan was sanctioned but the amount was not released despite all required documents had been submitted. It was held to be deficiency in service on the part of the Respondent. In another case Shri Mahavir Urban Co-op. Credit Society Ltd. Vs. Mahendera K. Jain-I(2008) CPJ 462 (NC) decided by the Hon’ble National Commission, the loan was sanctioned yet the amount was not disbursed and the conclusion arrived at by the ld. District Forum and the Hon’ble State Commission that there was deficiency in service on the part of the petitioner was upheld by the Hon’ble National Commission. The facts of the present case are also squarely the same.

8. It appears the OPs are adopting an unfair trade practice in this respect. Whenever an application is moved they proceed to sanction the loan immediately without verifying the eligibility of the applicant or the genuineness of the documents attached therewith. The purpose behind it is to swallow the process fee to which they are otherwise not entitled. The procedure adopted by the OPs is, therefore, totally wrong because the OPs are acting in a reverse mode by first sanctioning the loan and thereafter asking for the documents. There is another defect in this procedure that the OPs are trapping the gullible customers who are given to believe under the garb of the sanctioning order that they would get the loan and should not approach any other bank or financial institution for this purpose. The applicants then go on having rounds of the OP bank under the hope that they have already got the loan sanctioned and the same would be released without any delay but their hopes are shattered when the entire process is started by the OP thereafter asking the applicants to bring one document after the other and having rounds of their office causing them unnecessary harassment and ultimately refusal of the loan on one ground or the other. This is, therefore, an unfair trade practice which is being adopted by the OP to harass its customers.

9. Though the OP has not disbursed the loan amount yet it is planning to digest the amount of Rs.1,123/- deposited vide Annexure R-3 and Rs.11,657/- vide Annexure R-4 towards the processing fee. If ultimately the service is not rendered (meaning thereby that the loan is not disbursed) the OPs are not entitled to any such fee. If there is any processing of the documents, it is to safeguard the interest of the OP and, therefore, the OP is liable to pay for that and not the customers whose loan is rejected on the excuse of verification. The party whose interests are protected and to whom the service is being rendered must pay for the processing charges which in this case is the OP itself. In order to cancel the loan of the complainants they cannot ask the complainants to pay for the same. The OP are, therefore, not entitled to digest the amount of Rs.1,123/- and Rs.11,657/-.

10. It is true that we should not direct the OPs to disburse the loan but they must pay to the complainants an amount by way of compensation for causing them harassment and wasting time and ultimately canceling the loan which had already been sanctioned. In order to get the loan from some other bank the complainants had to pay Rs.3,50,000/- to get the time of agreement extended and they have prayed for Rs.one lakh as compensation. We are of the opinion that the OP should pay Rs.50,000/- to the complainant on account of the deficiency in service and unfair trade practice adopted by it as referred to above.

11. In view of the above discussion we are of the opinion that the present complaint must succeed and the same is accordingly allowed. The OP are directed to refund to the complainants the sum of Rs.11,657+Rs.1,123/- = Rs.12,780/-alongwith interest @ 12% per annum since the date of deposit till its payment to the complainants alongwith Rs.50,000/- as compensation and Rs.5,000/- as costs of litigation within thirty days from the date of receipt of copy of the order. If the amount is not paid within the aforesaid period the OP would be liable to pay the entire amount alongwith penal interest @ 12% per annum since the filing of the present complaint i.e. 7.7.2009 till its payment to the complainants.

12. Since a wrong procedure is being adopted by the official(s), the OP would be free to recover the amount of compensation of Rs.50,000/- and litigation costs of Rs.5,000/- from its official(s) responsible for adopting the wrong procedure and guilty of unfair trade practice, of course after following due procedure of law.

Certified copies of this order be sent to the parties free of charge. The file be consigned.

Complaint No. 518/8.8.2008
Date of order: 10.12.2009
Jagdanand Mishra son of Sh. C.S. Mishra, resident of 120-B, Shastri Nagar, Opp. G.T. B. Hospital, Ludhiana.

(Complainant)
Vs.
1. LIC Housing Finance Limited, SCO-12, Feroze Gandhi Market through its Branch Manager/Area manager.
2. Devinder Mittal, Authorised representative of LIC Housing Finance Limited, SCO-12, Feroze Gandhi market, Ludhiana, R/o 381-A, industrial Area-A Cheema Chowk, Ludhiana.

(Opposite parties)



COMPLAINT UNDER SECTIN 12 OF THE CONSUMER PROTECTION ACT, 1986.

Quorum:

Sh. T.N. Vaidya, President.

Smt. Priti Malhotra, Member.
Present:

Sh. C.S. Channa Advocate for the complainant.

Sh. B.S. Rampal Advocate for opposite party.



O R D E R

T.N. VAIDYA, MEMBER:

1. Complainant working as Manager, HDFC bank, Feroze Gandhi Market, Ludhiana, wanted to purchase a house. For such purpose entered into an agreement with one Manpreet Singh owner of 100 Sq. Yds. house situated at Bhai Himmat Singh Nagar, Ludhiana, located on Khasra no.1532, Khata No.415/446, village Gill No.2, vide Jamabandi for the year 2000-01. But the house as revealed by vendor Sh. Manpreet Singh was under mortgage with UTI Bank, Ludhiana for Rs.7,50,000/-. The complainant agreed to purchase the same and an agreement was executed with him. Thereafter, approached the opposite party for loan of Rs.6,50,000/- and was required by opposite party no.1 to deposit Rs. 5000/- and Rs. 3369/- in the account of opposite party no.2 as processing fee. Complainant deposited Rs.5000/- in cash and cheque of Rs.3369/- with opposite party no.2 and completed other formalities to obtain the loan. UTI Bank also agreed to settle the account of Manpreet Singh for Rs.7,50,000/-. On 7.5.2008 was intimated by opposite party no.2 that his loan was sanctioned vide letter dated 8.1.2008, but delivered to him on 7.5.2008. 24 EMI cheques as security were taken from him. As agreed, on 10.6.2008 complainant with his vendor Sh. Manpreet Singh and advocate of the opposite party appeared before the Sub Registrar, Ludhiana, for execution of the sale deed. Sale deed was executed by Sh. Manpreet Singh and Mr. Khanna Advocate of opposite party obtained the same from Sub Registrar and gave to the opposite party. Despite it, opposite party failed to disburse the loan of Rs.6,50,000/- to UTI bank or to the complainant. Rather, they presented his EMI cheques without issuance of disbursement cheque of the loan. They have realized EMI amount of Rs.19,149/- from the complainant and thereafter complainant stopped payment of his cheques due to illegal conduct of the opposite party. By not disbursing the loan, opposite parties are claimed deficient in services by resorting to unfair trade practice. Consequently, this complaint under section 12 of the Consumer Protection Act, 1986 claiming Rs.1,25,000/- due to financial loss, Rs. 50,000/- for harassment from them.

2. Opposite parties contested the complaint on the ground that it is not maintainable, as the complainant has not come with clean hands and has concealed the material facts. He is estopped by act and conduct to file the complaint, which is bad for non joinder and misjoinder of parties. Also averred that there is no deficiency in service on their part and he has no locus standi to institute the complaint. It is pleaded that complainant applied for loan to purchase the house from Sh. Manpreet Singh. In loan application, complainant mentioned himself employee of Kotak Mohindra Bank, Ludhiana and submitted income proof. He along with submitted photocopy of the sale agreement, photocopies of two previous sale deeds dated 9.11.2005 and 9.8.2006 and other documents. He promised to handover the original sale deeds and the agreement, to opposite party at the time of disbursement of the loan to the complainant, at the time of registration. Complainant had agreed to mortgage his property in favour of the opposite party no.1 as security by depositing the original sale deed after registration. After sanctioning of loan of Rs.6,50,000/- vide letter dated 8.1.2008 complainant executed the loan documents on 8.1.2008. All documents qua loan were handed over to the complainant. Thereafter, complainant deposited certified copies of the Jamabandi and furnished non encumbrance certificate, in favour of Sh. Manpreet Singh owner of the property issued by Sub Registrar, Ludhiana East and West. In these certificates, it was mentioned that the property was free from all encumbrances and charges. Complainant also executed an affidavit in this behalf. Thereafter, the opposite party prepared loan cheque of Rs.6,50,000/- in favour of owner Sh. Manpreet Singh on 31.3.2008 and requested the complainant to execute the registered sale deed and accept the loan amount and instructed that his equitable monthly installment has been started. But complainant intimated that owner of the property was out of station, so, after his coming back, will execute and register the sale deed and that he will pay equitable monthly instalments to the opposite party. Then opposite party wrote letter to the firm of advocates i.e. M/s S R M partners, Ludhiana to collect all original documents and deliver cheque to the owner of the property. But when the advocate appointed by them reached the office of Sub Registrar to deliver the cheque, demanded original documents of the property from the complainant and owner of the property, he was surprised to know that the property was mortgaged with UTI Bank. So, it revealed that intention of the complainant was to cheat the bank. Therefore, their advocate refused to deliver the cheque to the seller and the same was cancelled and closed the loan account of the complainant after reversing the entries of the payment received from the complainant. Complainant qua it was intimated. Therefore, claimed that there is no deficiency in service on their part.

3. Parties adduced their evidence by way of affidavits and documents in support of their respective contentions.

4. We have heard the arguments addressed by the ld. counsel for the parties, gone through file, scanned the documents and other material on record.

5. It is argued on behalf of the complainant that before settling the loan amount with the opposite party, they were conveyed and intimated that the property intended to be purchased by the complainant from Sh. Manpreet Singh was already mortgaged with UTI Bank for Rs. 7,50,000/- and in support copy of the purchase agreement containing such stipulation was also given to the opposite party. Further he argued that opposite party after sanctioning of the loan, made the complainant to get the sale deed executed in his favour from Sh. Manpreet Singh in presence of advocate of the opposite party, but they refused to handover or disburse the loan amount of Rs.6,50,000/-. In the mean time, opposite party had also started encashing the EMI cheques of the complainant and in this way, they had drawn Rs.19,149/- from his account. Therefore, he says that opposite parties are guilty of misconduct by resorting to unfair trade practice.

6. Aforesaid submissions are contested to be wrong and incorrect by ld. counsel for the opposite party. He argued that the complainant committed fraud and cheated the opposite party by suppressing the factum of encumbrance of the property to be purchased by him from Sh. Manpreet Singh. Copy of the agreement of purchase so delivered by him to opposite party, did not contain any such stipulation of encumbrance of the property on account of loan of Rs.7,50,000/- taken against it by vender Sh. Manpreet Singh. He further argued that EMI cheques of the complainant were encashed as the cheque was prepared and the execution of the sale deed thereafter was delayed by the complainant himself on account of absence of his vendor. He further contended that it was at the time of registration of the sale deed when original documents were sought from the complainant that advocate of the opposite party came to know from the agreement that the property was already encumbered and was not free from encumbrances. But qua it complainant had given false certificate and affidavit to the opposite party. Therefore, opposite party was justified in refusing to provide the loan, due to trick played with them by the complainant by suppressing the factum of encumbrance on the property.

7. It is in the aforesaid scenario first question for determination whether factum of encumbrance of the property was brought by the complainant to the notice of the opposite party, before they agreed to sanction the loan amount of Rs.6,50,000/- for purchase of a house from Sh. Manpreet Singh.

8. Vide agreement Ex.C.1, complainant had agreed to purchase house from Sh. Manpreet Singh and sale deed was to be executed on or before 3.12.2007. It is mentioned in this agreement Ex.C.1 that for purchase of the house Sh. Manpreet Singh had taken loan of Rs.7,50,000/- from UTI Bank, Ludhiana. Ex.R.4 is also photo copy of the sale agreement, vide which the complainant had agreed to purchase the house from Sh. Manpreet Singh. But contents at page no.2 of the agreement filed by opposite party as Ex.R.4, are different from page 2 of this agreement Ex.C.1 relied by the complainant. In Ex. R.4 photocopy of the agreement, there is no reference that the property was already incumbered for Rs.7,50,000/- with UTI Bank on account of loan taken by Sh. Manpreet Singh from that bank. We do not know who posses the original of this agreement. However, it is apparent that copy of the agreement which has come from possession of opposite party, does not contain any reference of the property being encumbered. Whereas, copy so provided by the complainant speaks so.

9. Opposite parties have also placed on record two certificates Ex.R.7 and R.8 issued by Sub Registrar (West) and Sub Registrar, Ludhiana, both dated 3.3.2008 certifying that the property in question owned by Sh. Manpreet Singh is free from all sorts of encumbrances and charges. Also copy of affidavit Ex.R.9 dated 26.3.2008 of the complainant is placed to the effect that the property to be purchased by him from Sh. Manpreet Singh is free from encumbrances, having no lien or charge. Same is born out from copies of the Jamabandi Ex.R10 to R.12.

10. In these scenario, it is made out that the complainant in addition to filing own affidavit Ex.R.9 also gave non encumbrance certificate Ex.R.7 and R.8 dated 3.3.2008 to the opposite party to the effect that the property was not encumbered and was free from any type of lien or charge. It was probably for such reason that he had given forged copy of agreement Ex.R.4 to the opposite party not containing reference of encumbrance of the property.

11. If in such scenario, opposite party refused to release the loan, they can not be blamed or termed to be guilty of resorting to unfair trade practice. Because, complainant tried to be over smart and clever by suppressing factum of encumbrance of the property to be purchased from Sh. Manpreet Singh. Hence, advocate engaged by the opposite party for registration of the sale deed, in such circumstances was justified for not handing over the loan cheque of Rs. 6,50,000/- to the complainant or Sh. Manpreet Singh and opposite party would be justified in cancelling the cheque. Thereafter, the opposite party issued the letter Ex.R13 dated 23.6.2008 posted vide UPC certificate Ex.R.14 to the fact that he did not disclose the factum of encumbrance of the property earlier. Sought clarification from him why cheque may not be cancelled along with his loan application. But there was no response from him. Also he was intimated that he can take back the payment deposited by him after fulfilling the formalities.

12. In such circumstances, we find no fault in action of the opposite party for cancelling the loan application of the complainant and not paying the loan amount to him. Consequently, complaint having no merit, deserves to be dismissed, which order we accordingly pass. Parties to bear their own costs. Despite dismissal of the complaint, complainant shall be entitled for refund of the amount realized from him by the opposite party by encashing his cheques. Copy of the order be supplied to the parties free of costs. File be completed and consigned to record.