(Delivered on 30/01/2019)

Per Mr. B.A. Shaikh, Hon’ble Presiding Member

1. This is an appeal filed by the original opposite party ( for short OP) No. 1/United Bank of India, Branch Yavatmal, feeling aggrieved by an order dated 7/11/2013, passed by District Consumer Forum, Yavatmal by which the consumer complaint bearing No. 175/2012 filed by the respondent No. 1 herein against the appellant and respondent No. 2 has been partly allowed.
2. The case of the respondent No. 1 as set out by him in the aforesaid consumer complaint in brief is as under.

1. The respondent No. 1 is an educated unemployed. The Government had implemented the scheme called as ‘Seed Capital Scheme’ for educated  unemployed persons. As per that scheme loan amounting to Rs. 50,000/-  to Rs. 5,00,000/- was given to such person.
2. The respondent No. 1 was   interested in obtaining the said loan for his self employment under the aforesaid scheme. He collected all the necessary documents and submitted the same along with an application to the respondent No. 2 on 15/03/2010 for obtaining loan for purchasing Xerox machine. The respondent No. 1 also took training through Industrial Development Training Center from 3/1/2011 to 7/1/2011 and obtained the training certificate. The respondent No. 2 submitted that the said application along with all the documents to respondent No. 1 for sanctioning of the loan. The respondent No. 1 sanctioned loan of Rs. 80000/- as per letter dated 13/09/2010 for above purpose. The respondent No. 2 also furnished surety papers of two sureties  as demanded by respondent No. 2. The respondent No. 2 forwarded one cheque of Rs. 10,000/- dated 12/05/2011 towards subsidy and one cheque of Rs. 6,000/-  dated 12/05/2011 towards Seed Capital to the appellant. The respondent No. 2 informed the appellant that as the loan is sanctioned, he started his business by obtaining loan of Rs. 80,000/- as above.
3. However, though, the respondent No.  1 paid visits to the appellant from time to time, the said loan was not disbursed to him by the appellant. The respondent No. 1 also handed over one stamp paper of Rs. 100/- signed by him and thereafter also the appellant did not disburse the loan.  The respondent No. 1 therefore could not start his business. Hence he filed the consumer complaint under Section 12 of Consumer Protection Act, 1986 against the appellant and respondent No. 1 alleging deficiency in service on their part and seeking  direction to the appellant and respondent No. 2 to pay him compensation of Rs. 65,000/- for loss sustained by him and also for direction to the appellant to pay him loan as sanctioned and also to pay him litigation cost of Rs. 5,000/-

3. The appellant/original OP No. 1  filed reply to the said complaint and thereby resisted it. The defence set up by the appellant in brief is that, it was ready to disburse the loan to the respondent No. 1 but the respondent No. 1 did not sign the documents of Hypothecation as required for security of repayment of loan and hence the loan was not disbursed to him. It was therefore requested by the appellant that complaint may be dismissed.
4. The respondent No. 2 also resisted that complaint by filing reply to it. It admitted that on the application of respondent No. 1 for loan, the respondent No. 2 paid  subsidy and the Seed Capital to appellant in the month of June 2011 but the appellant did not disburse the loan and therefore the respondent No. 2 filed letter dated 27/08/2012, by which the appellant was instructed to disburse the loan. Hence it  requested that the complaint as against it may be dismissed.
5. The District Consumer Forum below after hearing both the parties and considering evidence brought on record did not accept the defence set up by the appellant/original OP in the reply as above and came to the conclusion under impugned order that it cannot be believed that the respondent No. 1 did not come forward to sign the security documents when loan was already sanctioned to him. Moreover, the District Consumer Forum also observed that no document is produced on record by the appellant to show that  at any time it had called upon the respondent No. 1 to come forward to sign security documents. Therefore the Forum below held  that the appellant rendered deficient service to the respondent No. 1 by not disbursing the loan. Hence the Forum passed the impugned order and thereby partly allowed the complaint. The Forum directed the appellant that if any application is made by respondent No. 1 for loan, then it shall sanction the amount of loan  as sanctioned on his earlier application and then the said loan be disbursed to him and subsidy and Seed Capital deposited with it by the respondent No. 2 be adjusted in the sanctioned loan for starting the alternate occupation by the respondent No. 1. The Forum below also directed the appellant to pay compensation of Rs. 50,000/- to the respondent No. 1 for the loss sustained by him due to depriving him from employment and also to pay him further compensation of Rs. 10,000/- for physical and mental harassment and litigation cost of Rs. 3,000/-. The Forum also directed that  if the compliance of the direction given in clause Nos. 2 and 3 of the operative part of that order is not made then the aforesaid amount will carry interest at the rate of 10 percent per annum from the date of complaint till realization of that amount by the respondent No. 1. The Forum below dismissed the complaint as against respondent No. 2 on finding that the respondent No. 2 has not rendered  deficient service to the respondent No. 1. Thus feeling aggrieved by that order, the original OP No. 1/bank has filed this appeal.
6. The learned advocates of the appellant and respondent No. 1 filed written notes  of arguments and the same are  treated as their oral submission.

     We have also perused entire record and proceeding of the appeal.

7. The learned advocate of the appellant in the written notes of arguments  filed by her, reiterated the aforesaid case of the appellant as set out in the reply and submitted that the appellant/bank has never refused to disburse the loan to the respondent No. 1. The respondent No. 1 has not completed necessary formalities of the appellant/bank as per banking norms and regulations. Therefore the appellant/bank has rightly not released the loan amount in favour of respondent No. 1. Hence she requested that the impugned order may be set aside.
8. On the other hand, the learned advocate of the respondent No. 1 in his written notes of arguments reiterated the aforesaid case of the respondent No. 1 as set out in the consumer complaint  and submitted that the Forum below has properly applied its judicial mind and passed the legal and correct order. He therefore requested that appeal may be dismissed with cost.
9. It is pertinent to note that the respondent No. 2 already deposited subsidy of Rs. 10,000/- and Seed Capital of Rs. 6,000/- with the appellant and that the appellant also sanctioned the loan of Rs. 80,000/- after necessary documents were submitted by respondent No. 1 to the appellant. The appellant has not disbursed the loan on the sole ground that the respondent No. 1 has not come forward to sign the security documents as required for disbursement of the loan. The appellant has not explained as to why it has not issued any letter in writing to the respondent No. 1 to call upon him to come & sign security documents. In our view, there was no question of not signing the security documents by the respondent No. 1 when he already completed all the formalities required for obtaining the loan under the hope of getting the loan with subsidy and Seed Capital. The appellant has not substantiated    the aforesaid defence by producing any documents on record. Therefore we are not inclined  to hold that the appellant did not disburse the loan malafidely. We thus hold that appellant  rendered deficient service to the respondent No. 1 and thereby caused loss to  him ( respondent No. 1.) Therefore we are of the considered view that the Forum below has rightly directed the appellant that if the respondent No. 1 has made any application for loan for the purpose of alternate occupation, it shall grant the said loan adjusting therein the subsidy and Seed Capital deposited with it deposited by respondent No. 2. Moreover, the Forum below has rightly directed the appellant to pay the respondent No. 1 compensation of Rs. 50,000/- for the loss caused to him due to non disbursement of the loan. The Forum below has rightly awarded, further compensation of Rs. 10,000/- to the respondent No. 1 from the appellant for physical and mental harassment caused by it to the respondent No. 1. However, we find that the interest at the rate of 10 percent per annum awarded by the Forum shall be applied in case of failure by the appellant in payment of Rs. 50000/- awarded by the Forum within 30 days of receipt of the copy of the said order. Hence the following order is passed.

ORDER

1. The appeal is partly allowed as under.

          The direction given by the District Forum below in clause No. 5 of the operative part of the impugned order about application of interest in case of default is modified and substituted to the effect that in case of default of payment of compensation of Rs. 50,000/- by the appellant to the respondent within 30 days from the date of receipt of copy of the impugned order, the amount of Rs. 50,000/- shall carry interest at the rate of 10 percent per annum from 7/9/2012 i.e. from the date of the complaint till realization of the amount of Rs. 50,000/- by the respondent No. 1.

2. Rest of the impugned order is maintained.
3. Copy of the order be furnished free of cost to both parties.