Kerala

Idukki

CC/122/2021

Benny PL - Complainant(s)

Versus

Shyamkumar V G - Opp.Party(s)

13 Feb 2023

ORDER

DATE OF FILING : 31.8.2021

IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, IDUKKI

Dated this the 13^th  day of   February, 2023

Present :

SRI. C. SURESHKUMAR                  PRESIDENT

SMT. ASAMOL P.                             MEMBER

SRI. AMPADY K.S.                           MEMBER

CC NO.122/2021

Between

Complainants                                          :  1. Benny P.L., S/o. Luka,

                                                                   Poonthuruthil House,

                                                                   Idukki Colony P.O.,

                                                                   Vazhathoppe, Idukki – 685 602.

       2. Linny Maria Benny, D/o. P.L. Benny,

                                                                   Poonthuruthil House,

                                                                   Idukki Colony P.O.,

                                                                   Vazhathoppe, Idukki – 685 602.

 (Both by Adv: S.K. Muraleedhara Kaimal)

And

Opposite Parties                                       : 1. Shyamkumar V.G.,

                                                                   Branch Manager,

                                                                   State Bank of India,

                                                                   Idukki, Painavu.

      2.  State Bank of India,

                                                                   Represented by its Deputy General Manager,

                                                                   State Bank of India,

                                                                   Administrative Office,

                                                                   3^rd Floor, Shanmugham Road,

                                                                   Ernakulam – 682 031.

(Both by Adv: Thomas K.J.

& Aleesha K. Jose)

O R D E R

 

SRI. C. SURESHKUMAR, PRESIDENT 

 

1. This is a complaint filed under Section 35 of the Consumer Protection Act of 2019 (the Act, for short).  Complaint averments are briefly discussed hereunder :

 

          1^st complainant is a resident of Vazhathoppu in Idukki District and customer of Idukki branch of State Bank of India, represented by 1^st opposite party, its Manager.  2^nd opposite party is the bank as such, represented by its Deputy General Manager, having its office at Ernakulam.  1^st complainant had availed an Over Draft facility of Rs.10 lakhs in connection with his cement brick manufacturing unit and foreign education loan of Rs.51,00,000/- for studies abroad of 2^nd complainant, his daughter, namely, Linny Maria  Benny.    Apart  from  these two smaller loans were also availed by him.                                                                                                                             (cont….2)

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1^st complainant used to meet 1^st opposite party on a weekly basis.  While so, he had applied for another foreign education loan for studies of 2^nd complainant in Thomson River University.  Course duration was from 6.7.2021 to 31.12.2022.  Cut off date to remit Rs.31,985/- fee including of 2 semesters was 31.12.2020, instead of November, 2020. All loan papers were submitted as required by 1^st opposite party in August, 2020 itself.  Upon enquiries with regard to processing of loan, 1^st complainant was repeatedly assured by 1^st opposite party that the loan will be sanctioned and he was asked to wait.  1^st complainant was asked to remit his share of study expenses amounting to Rs.8,96,436/- as instalments to university, out of the total loan amount.  This was paid for which a receipt dated 28.9.2020 was received.  Last letter intimating admission and fee remittance issued by Visa Documentation Advisor to the University was dated 16.12.2020.  When the 1^st complainant approached 1^st opposite party with the letter and receipt evidencing remittance of his share of academic fee, 1^st opposite party again repeated his assurances that the loan will be sanctioned soon.  When asked about the delay in sanctioning, no reasons were given by him.  On 28.12.2020, a letter was issued to 1^st opposite party enquiring about the delay in sanctioning of loan for which there was no reply.  Hence on 29.12.2020,  a complaint was lodged by 1^st complainant with 2^nd opposite party regarding the same.  Though the 2^nd letter was also received on 1.1.2021, no reply was given by 2^nd opposite party.  Complainant was informed by regional manager of SBI at Thodupuzha that, sanctioning of loans is to be recommended by 1^st opposite party.  Complainant submits that due to inaction, latches and gross negligence of opposite parties in sanctioning the loan, 2^nd complainant could not seek admission, which had caused  loss and damages to a tune of Rs.35 lakhs.  For ventilating their grievances, 1^st complainant had lodged a complaint with Banking Ombudsman, who had refused to admit the complaint for technical reasons. A  2^nd complaint was lodged curing defects on 9.2.2021.  1^st opposite party had informed 1^st complainant that the loan sanctioned is only to the extent of Rs.7 lakhs, earlier on 2.2.2021, on the security property pledged  for the 2 loans already availed.  Complainant had to borrow money at 24% interest for remitting R.6 lakhs to the university which was remitted through Idukki Branch of Union Bank of India.  Loan was given by one Jose Urumbananickal. For arranging remaining expenses, complainant had sold his non-patta land to the very same Jose for Rs.26 lakhs,  while the property was worth Rs.60 lakhs.  As per 2^nd complaint, upon direction by Ombudsman, bank had granted a compensation of Rs.5,000/- to 1^st complainant.  It had also expressed it’s readiness and willingness to provide further loan on additional security by e-mail.  Despite this, 1^st opposite party had refused to accept additional security offered. 1^st complainant had then e-mailed request for additional loan along with security documents.  However, no action was taken to sanction additional loan, upon security of additional property offered.  Enrolment services of university favouring the 2^nd complainant had issued a letter accordingly to her, dated18.8.2021, along with statement of account as on 17.8.2021.  These documents were also not acted upon by 1^st opposite party.  Complainants submit that sanctioning of loan was within the powers of 1^st opposite party.  He had purposefully delayed grant of loan and had only                                                                                                     (cont….3)

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sanctioned an amount of Rs.7 lakhs and not the full amount sought for as additional loan.  Both complainants submitted that delay in processing the loan and non grant of additional loan  by 1^st opposite party despite submission of sufficient security, amounts to deficiency in service on the part of opposite parties.  For his latches, 1^st opposite party is also made personally liable in the complaint. Complainants submit that they are entitled to get back Rs.34 lakhs, the loss sustained due to panic sale of his 1 acre non-patta land and by borrowal of Rs.6 lakhs at 24% interest and also for loss sustained due to raising of required amount to be paid to university,  all totaling to Rs.51 lakhs from opposite  parties jointly and severally.  Both complainants seek damages of Rs.2 lakhs as compensation for pain and sufferings and  Rs.15,000/- as litigation costs.

 

          2.  Both opposite parties have entered appearance after receiving notice.  1^st opposite party has filed a written version which was adopted by 2^nd opposite party also.  Contentions taken by opposite parties in the written version are briefly discussed hereunder :

 

          According to them, there is no cause of action for this complaint.  Hence complainants cannot be considered as consumers of opposite parties as per the Act.  There was no deficiency in service from their side.  It is incorrect to say that the  all loan papers as required by opposite parties for 2^nd education loan were duly submitted in August 2020.  Complainants have not provided sufficient collateral security for sanctioning the loan.  1^st complainant is a regular customer of 1^st opposite party.  He had  availed a Micro Small and Medium Enterprises Cash Credit loan of Rs.10 lakhs from 1^st opposite party.  For this, he had provided collateral security of his property covered by sale deed No.1046/2004 of Arakkulam SRO.  He had availed another loan in 2019 being study education loan of Rs.51 lakhs for his younger daughter.  Same property was offered as security for this loan also.  Property was again valued by an approved valuator of the Bank, who had fixed its realizable market value.  Other than this, 1^st complainant had availed a Guaranteed Emergency Credit Line loan of Rs.1,85,000/- during the pandemic period and funded interest term loan of Rs.45,967/-.  Guaranteed Emergency Credit Line loan is still pending.  FITL loan has been repaid in full.  These being the circumstances, it can be seen that 1^st opposite party had provided loans when applied for by 1^st complainant in accordance with banking norms on the basis of security offered by him.  1^st complainant used to visit the bank frequently in connection with the loans. On all those occasions 1^st opposite party had asked for furnishing of additional security since property offered as collateral was already burdened by 3 loans as per the valuation report by  valuator, in accordance with the eCircular issued by higher authorities.  Collateral already offered was not sufficient to cover the 2^nd education loan.  Despite repeated requests by 1^st opposite party, 1^st complainant has not provided the requisite collateral.  Therefore, 2^nd education loan of Rs.35 lakhs could not be sanctioned as such.  1^st complainant had made preferred a complaint before 2^nd opposite party. He was informed from the office of 2^nd opposite party that 2^nd education loan cannot be                                                                                                                           (cont….4)

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sanctioned without sufficient security.  Regional manager has also informed the complainants to provide sufficient collateral security.  There is no inaction, latches and gross negligence on the side of opposite parties.  They  are not to be blamed if the 2^nd complainant was not able to secure admission.  No loss was caused to complainants due to the latches of opposite parties either.  Processing of 2^nd loan had started on the date when application for the same was received.  Non-sanctioning of same was only due to non-furnishing of sufficient security by complainants.  Opposite parties are only employees of the Bank and they cannot go beyond or against directions, norms and circulars issued by bank authorities from time to time.  It is incorrect to say that requisite funds for getting admission were procured by sale of non-patta land worth Rs.60 lakhs at a low price,  owing to which 1^st complainant had sustained a loss of Rs.34 lakhs.   Evidence produced to prove this is only an agreement for sale.  Sale of non-patta land by a non-registered agreement for the same cannot be accepted as a lawful act and consequentially such loss cannot be claimed legally.  Besides, non-patta land in that area will not fetch such a huge price.  Extent of property shown in the letter and documents are not tallying.  Contentions that 1^st complainant was always ready and willing to offer further security, but he was not asked for additional or new security, till 2.2.2021 are false.  Complainants have never provided any additional SARFAESI  compliant collateral security for the loan.  Since property offered as security was not sufficient collateral, opposite parties had informed the complainant accordingly where upon complainants had responded that they will be again returning for processing of loan.  Instead they have filed a complaint before Banking Ombudsman alleging that this matter was not informed to them in writing.  Till date, no additional security has been furnished for the grant of loan.  Further contentions that Rs.6 lakhs was borrowed at interest rate of 24% from Jose Urumbananickal are false.  Such lending is not legal either.  It is incorrect to say that the grant of additional loan was within the recommending powers of 1^st opposite party alone.  Such recommendation can be only done in accordance with the banking norms and circulars issued by higher authorities.  Upon receiving information from their superiors, opposite parties have informed 1^st complainant that he and 2^nd complainant are eligible only for Rs.7 lakhs as loan and not for Rs.35 lakhs.  That for sanctioning Rs.35 lakhs, additional SARFAESI  complied collateral security is required.  There was no personal play by 1^st opposite party in the transaction.  Additional educational loan to the sanctioned limit of Rs.7 lakhs was also not disbursed as further collateral was not furnished.  There is no deficiency in service from the side of opposite parties.  Complainants are not entitled for the reliefs sought for from them.  Complaint has been filed with the intention of extorting money and also to compel and pressurize opposite parties to sanction additional loan without sufficient security.  Both parties pray for a dismissal of complaint with costs on these premises.

 

          3. After filing of written version, case was posted for steps and then for evidence.  On the side of  complainant, he himself was examined as PW1.  Ext.P1 to P10 were marked on his side.  No oral evidence was tendered from the side of opposite parties.                                                                                                                  (cont….5)

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Ext.R1, copy of e-mail issued by ombudsman intimating them about the grant of compensation of Rs.5,000/- alone was sought to be marked without formal proof.  This was accordingly marked as Ext.R1.  We also notice that opposite party No.1 has submitted copy of a circular issued by Chief General Manager, dated 26.5.2020 containing revised instructions with regard to security to be furnished for loan above Rs.7.5 lakhs and upto Rs.1.5 crores.  This is marked as Ext.R2, without formal proof.  As there was an omission to mark the same before closure of  evidence.  Now the point which arise for consideration are :

1)  Whether there was delay in processing 2^nd educational loan  to complainants ?

2)  Whether non sanctioning of same would amount to deficiency in service ?

3)  Whether there was deficiency in service from the side of opposite parties ?

4)  Whether complainant is entitled for reliefs prayed for in the complaint ?

5)  Final order and costs ?

 

4. Point Nos.1 to 4 are considered together :

 

          It was contended by learned counsel for complainants that there was inordinate delay in processing the 2^ndeducation loan application.  Hence complainant had to approach Banking Ombudsman.  Exts.P5 and P6 are 2 complaints preferred earlier to opposite parties 1 and 2 in this regard.  1^st complaint made to the ombudsman was not taken on file due to technical reasons.  Hence 2^nd complaint was made.  Banking ombudsman had found that there was delay in responding to the loan application preferred by complainant and had awarded Rs.5,000/- as compensation.  Counsel submitted that compensation amount was too meager and it was not acceptable to complainants.  Since the amount was deposited in the bank account of 1^st complainant directly, there was no occasion for not accepting the same as such.  Able counsel further added that mere acceptance of the compensation amount granted by ombudsman will not be a bar for preferring this complaint for getting  adequate and fair compensation owing to the latches on the part of opposite parties.  In the instant case, 2^nd education loan was preferred in August 2020.  Cut off date was 31.12.2020.  Though loan application was submitted with requisite loan documents, it was kept pending unnecessarily.  Despite repeated enquiries with regard to processing of loan account, complainants were not given any reply except for false assurance that the loan will be sanctioned without delay.  Since money was not  forthcoming despite 1^st complainant having paid Rs.8,96,436/- as instructed by 1^st opposite party towards their share of total fees payable, loan was not processed.  This had led to filing of complaints mentioned above namely, Exts.P5 and P6 and finally culminated in the proceedings before the Ombudsman. To arrange initial payment, 1^st complainant had to take a loan from PW2 at an interest rate of 24% per annum.  He had to sell his non-patta land as evidenced by Ext.P4, having an extent of 1 acre, which was at that time worth Rs.60 lakhs, at a low price of Rs.26 lakhs, to PW2.  Evidence of PW2 in this regard supports the case of complainants.  Complainant had sustained a loss of Rs.34 lakhs.  Availing of loan at 24% interest has also caused                                                                                                                      (cont…..6)

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financial loss to him.  All total, for arranging monies owing to non-sanctioning of education loan, complainant had sustained a loss of Rs.51 lakhs.  Bank is guilty of not processing the 2^nd education loan in time and further, in non-sanctioning the same.  Upon directions from ombudsman as is evidenced from Ext.R1 itself, bank had to process the loan.  However, 1^st opposite party  had reduced the loan amount to a measly sum of Rs.7 lakhs.  Though complainant had provided sufficient security, loan to the extent applied for, was not given.  Even the additional loan amount sanctioned was not furnished despite furnishing sufficient collateral.  Both instances, delayed processing of loan and non-grant of reduced loan amount owed constitute deficiency in service on the part of opposite parties.  Since 1^st opposite party had personally committed the latches, he is liable personally to compensate complainants apart from his liability as a servant of bank, represented by opposite party No.2.  Complainant had sought for a compensation of Rs.2 lakhs and litigation costs of Rs.50,000/- which are fair and reasonable, under the circumstances.  Able counsel also pointed that PW1 has not mounted the box to tender evidence despite there being personal allegations against him.  This also is to be considered in favour of complainants.  Able counsel concluded by submitting that complaint is to be allowed in all aspects.

 

          Learned counsel appearing for opposite parties 1 and 2 would submit that PW1  has admitted that the loan was applied for at a time when whole country was in the grip of pandemic.  It is evident from the pleadings and evidence of PW1 himself that he had availed 4 loans in total earlier to the disputed transaction.  1^st loan was an overdraft facility of Rs.10 lakhs and 2^nd one was education loan of Rs.51 lakhs.  He was also given 2 smaller loans of which one was for Rs.1,85,000/- and other  Rs.45,967/-.  Same collateral was offered for all the 4 loans.  Of these, loan for Rs.45,967/- was closed.  Learned counsel pointed out that it was 1^st opposite party, who had sanctioned all the 4 loans.  If the opposite party were to be ill-disposed towards complainants, these loans could have also been delayed or not sanctioned.  It could be seen from the pleading of  complainant himself that he was a regular customer of  bank and he was, on a weekly basis, meeting 1^st opposite party also.  He has not raised any specific allegation of enmity, displeasure or there being any bad relations between them.  In his affidavit also no such case is projected.  That being so, complainants’ case that PW1 purposefully delayed sanctioning of 2^nd educational loan and had later reduced the additional loan limit, cannot be believed.  It is true that 1^st opposite party has not mounted the box to give evidence in this regard.  However, evidence tendered by PW1 himself along with documents would be sufficient to prove that there was no  latches or negligence in not processing the 2^nd educational loan or in reducing the loan limit and thereafter in not granting the same also.  In this context,  learned counsel would also submit that same collateral on the basis of which earlier loans were granted were offered by complainants as security for the grant of 2^nd educational loan.  Sum applied for was Rs.35 lakhs.  Evidently, the collateral will not be sufficient as per the eCircular issued by Chief General Manager of the bank.  Security requirement for loan above Rs.20 lakhs and upto                                                                                                            (cont….7)

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Rs.1.5 crores is 110% of loan amount + accrued interest during course and moratorium period.  Security already furnished covering earlier 3 loans did not meet the requirement as per the circular.  Complainants were therefore requested to furnish additional collateral security.Since1^st complainant used to frequently visit the bank on a weekly basis, he was informed in person by 1^st opposite party that additional collateral was required.  Though the 1^st opposite party would say that he will produce sufficient documents for additional collateral, he has not done so.  It was only in the later portion of December, 2020 that the 1^st complainant preferred Exts.P5 and P6.  Thereafter he had moved the Ombudsman.  1^st complaint was dismissed for the reason that one month notice period has not elapsed.  Hence complainants had preferred 2^nd complaint which was disposed off as is evidenced from Ext.R1 communication.  Ext.R1 would disclose that the bank was directed to compensate the complainant for not timely responding to complainant within reasonable time.  This amount was received by complainants also.  Argument that the amount was directly deposited and therefore protest could not be lodged, cannot be accepted.  Complainants could have sent their protest to the ombudsman directly.  This was not done.  Besides, complainants have no case in the complaint that the amount was accepted in protest.  Having accepted the compensation granted by ombudsman, complainants cannot prefer a 2^nd complaint for the same reason before this Forum.  Learned counsel pointed out that a copy of complaint filed before ombudsman was not produced by complainants.  If the complaint or a copy of the same were to be produced before this Court, it would be shown that complainants have raised grievances with regard to non-sanctioning of the loan as claimed by them, within reasonable time.  Hence it is to be presumed that both complainants have preferred a petition before the ombudsman with regard to alleged delay in sanctioning of loan for which the ombudsman has granted compensation also.  This has been accepted without protest and therefore the present complaint cannot be maintained before this Commission.  Counsel added that as per the banking norms, complainant was entitled for only Rs.7 lakhs for the 2^nd loan applied for on security already furnished.  As per eCircular, 110% of value of the property is to be reckoned in relation to the loan amount applied for.  Therefore, the collateral which was already burdened by 3 pending loans taken by 1^st complainant was found to be not sufficient.  PW1 has admitted that on all occasions, valuator of the bank had valued the property to ascertain its worth in connection with Over Draft facility and earlier loans.  The same valuator had opined that this property was not sufficient security for the 2^nd educational loan of Rs.35 lakhs.   It was under these circumstances that complainants were requested to furnish fresh security for the new educational loan.  They have not done so.  As far as evidence of PW3 is concerned, it could be seen that loan was sanctioned by other bank upon fresh security and hence there was no delay in processing the same.  In the present case, fresh security was not furnished by complainants.  PW3 has also admitted during his cross examination that 115% value is necessary to accept security for the loan granted.  Non-release or non-sanctioning of loan upon failure of complainants to furnish sufficient security cannot be considered as deficiency in service.  Complaint is ill-motivated.  It is                                                                                                            (cont….8)

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filed only to harass 1^st opposite party and also to seek whether further loan can be obtained without furnishing any new security.  Hence complaint is to be dismissed with costs of opposite parties.

 

          Thus, these are the rival contentions.  We shall first deal with the evidence tendered in this case by both sides.  On the side of complainants, there is oral evidence of PW1 and Exts.P1 to P10.  No oral evidence was tendered by opposite parties.  Ext.R1 alone was marked.  However, we deem it necessary that copy of eCircular produced along with written version should also to be considered in this case.  Hence it is marked as Ext.R2.  Office shall make endorsement to make this effect upon the document. 

 

          Grievance of complainants is delay in processing the 2^nd educational loan and subsequently non-grant of the same.  According to them, there is no reason for delay in processing and ultimately, refusal of the loan.   Opposite parties, on the other hand would contend that delay occasioned and subsequent non granting of 2^nd education loan was due to non furnishing of  fresh security.  Considering evidence tendered by both sides, it appears to us that case of opposite parties is more probable than that of complainants.  Complainant has admitted in the complaint itself that he had availed 4  loans earlier which were sanctioned by PW1, who was the then manager of the branch.  One was OD facility of Rs.10 lakhs and other a foreign education loan taken for his daughter Liya Rose Benny.  Loan amount was Rs.51 lakhs.  That apart, 2 more loans were granted to the complainant by 1^st opposite party, details of which are given in the written version.  One is GECL facility of Rs.1,85,000/- and other was FITL loan of Rs.45,967/-.  1^st complainant had provided collateral security of his property covered by sale deed No.1046/2004 of Arakkulam SRO for all these loans.  These facts are not disputed by complainant in their proof affidavit.  It is also mentioned in the complaint that 1^st complainant used to meet 1^st opposite party at least once in a week.  Complainant has no case that 1^st opposite party was ill-disposed towards them, no such specific instance is mentioned. No case that bribes or favours were asked for either.  1^st opposite party had already granted 4 loans to complainants.   Disputearose when 2^nd education loan for Rs.35 lakhs, was not given by opposite parties.  As per complaint, loan was applied in August 2020.  According to complainants and as per Ext.P1, cut off date to remit fees was December 31, 2020, instead of November, 2020.  This fact is not disputed by opposite parties. Ist Complainant would submit that the loan application was kept in abeyance without any reason.  Whenever he had met 1^st opposite party, he was assured that loan will be sanctioned and was asked to wait for the same.  On the other hand, 1^st opposite party has pleaded that on every occasion, he had requested 1^st complainant to provide fresh security for the 2^nd education loan, since this was not furnished by 1^st complainant, processing got delayed.  In the absence of any ill will or bad motives, as mentioned earlier, we find it difficult to believe that 1^st opposite party had deliberately slowed down the processing of 2^nd education loan application.    We also notice that there were no written requests for speeding up  loan processing, from the                                                                                                             (cont….9)

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side of complainant, till 28.12.2020, the date on which Ext.P6 complaint was sent to 1^st opposite party.  Therefore case projected by 1^st opposite party that delay was owing to non-furnishing of requisite security from the side of complainant appears to be more probable from the circumstances which have surfaced from complainants pleadings and evidence, despite the fact that there is no oral evidence by opposite parties.  It is also seen from evidence of PW1 that he has admitted that loans are sanctioned only after obtaining legal opinion from the lawyer of bank.  He has also admitted that in connection with all loan applications, authorized valuator of the bank  inspects the property and values the same.  Under these circumstances,   contentions that loans are  sanctioned only upon recommendations of 1^st opposite party alone or that opinion of 1^st opposite party is sufficient for the grant of loans, cannot be accepted.  1^stopposite party has no discretion to grant a loan except in accordance with banking norms, circulars of Reserve Bank of India and directions issued from time to time from his superiors.  There is a procedure for processing and sanctioning of loans above a certain limit.  Firstly, legal opinion will be necessary.  Before that, property will have to be valued to consider its worth as collateral.  This may take some time, one or two months, under normal circumstances.  In the instant case, we notice that opposite parties have pleaded that despite repeated requests, made in person by 1^st opposite party to 1^st complainant, fresh or additional collateral security for the 2^nd education loan was not given.  We also notice that copies of complaint filed before the banking ombudsman were not produced by complainants before us.  According to opposite parties, main grievance in this complaint was with regard to delay in processing.  Upon a consideration of Exts.P5 and P6, this appear to be probable. Non production of copy of complaint preferred before Ombudsman raises an inference that it related to the grievance voiced in this complaint also.  Banking ombudsman had upon the 2^nd complaint filed by complainants, as per Ext.R1, found that there was delay in responding to them and had therefore ordered a compensation of Rs.5000/- in this regard, to them.  The amount was deposited into the bank account of 1^st complainant.  His contention that he was unable to register his protest with regard to quantum of compensation ordered, as it was deposited into his bank account, is not at all convincing.  He could have easily sent a written protest, either to ombudsman or to opposite parties.  He has not done so.   Having approached the Ombudsman and having accepted the compensation ordered without protest, complainants cannot now come with a new complaint seeking compensation on the basis of same allegations. They have  no case that compensation awarded is not acceptable to them  for any reason. They  have  no case that present complaint is for more compensation than what has been granted.

 

Opposite parties have pleaded that complainants were unable to provide sufficient SARFAESI complied collateral security, that this was in accordance with banking norms.  Loan amount was reduced upon verification by Retail Assets Credit Centre.  Collateral furnished earlier for the 3 loans was only sufficient for a subsequent amount of Rs.7 lakhs. Complainant has no case that they were satisfied with reduced loan of                                                                                                            (cont…10)

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Rs. 7 lakhs. Though it is pleaded repeatedly that complainants were prepared to furnish adequate security for 2^nd education loan, during cross examination PW1 has admitted that same collateral on the basis of which earlier loans were granted was offered as security for the 2^nd loan also. This is not disclosed in complaint. Evidently, this  was not acceptable to bank and therefore it had insisted for SARFAESI compliant security.  Entire facts and pleadings of complainant would go to show that complainants wanted to get a 4^th loan also on the basis of collateral security already offered by them.  It is the discretion of bank to accept the security offered or to reject it.  The discretion is guided by banking norms and guidelines set by RBI and circulars issued by higher authorities.  We find no mistake or misuse of discretion from the side of 1^st opposite party in insisting for SARFAESI compliant security for the reduced loan of Rs.7 lakhs.  In this context, it would be necessary to advert to evidence tendered by PW3, manager of Union Bank.  PW3 had given evidence that he had sanctioned global education loan for the studies of complainant after accepting sufficient collateral for the same.  That property having collateral worth of 115% of loan amount was accepted as such.  Thus complainants had sufficient land/property unencumbered by earlier liabilities.  However, they were not prepared to furnish this property as additional security for the 2^nd educational loan applied for from opposite parties. But they had furnished the same as collateral for the education loan applied for from Union Bank of India.  Rs.25 lakhs were sanctioned as loan by PW3,  Ext.P8 is the letter of sanction issued by PW3 for the said loan. For processing and granting 2^nd loan fresh security was given. Hence the fact that Ext.P8 loan was sanctioned without delay will not  in any way better the case of complainants that 2^nd loan application was not processed in time by opposite parties and further that additional loan amount was not sanctioned on the basis of same security.  Though RACC may have found that the collateral which was already burdened by 3 loans had a further worth of Rs.7 lakhs, it was by no means sufficient for granting second loan of Rs.35 lakhs. Discretion employed by 1^st opposite party in seeking fresh security for the new education loan cannot be found fault with.

 

          Coming to the evidence of PW2 and Exts.P4 copy of agreement, admittedly, Ext.P4 is evidencing only an agreement for the sale.  As per Ext.P4 itself, sale is of 1 acre of possession land in Sy. No.161/1 in Idukki Village.  PW2 is the same person from whom 1^st complainant claims to have taken loan at 24% interest on account of alleged non-sanctioning of 2^nd loan.  However, PW2 has denied this in box.  He has deposed that he has not given any loan repayable with interest at 24%. It has also come out that PW2 is an old acquaintance of 1^st complainant. Apart from Ext.P4, no document to prove that 1^st complainant was in possession of 1 acre non-patta land in the said survey number and village is produced.   No  Commission was taken out to ascertain the existence of the land and possession of the same by 1^st complainant.  In so far as the claimed worth of non-patta land is concerned, there is no evidence to prove that it was worth Rs.60 lakhs as claimed by complainant.  Evidence of PW2 that he had purchased the property as he thought  that the deal was profitable to him or his brother will not improve the case of                                                                                                            (cont…11)        

• 11  -

complainant in this regard.  Normally, a prudent person will not purchase property at a higher price. There is no reliable evidence that 1^st complainant had possessed any non patta land and there is no convincing evidence that it was worth Rs60 lakhs either.

 

          In short, complainants have not succeeded in proving that delay occasioned in processing of 2^nd educational loan was owing to any deliberate latches or negligence from the side of opposite parties.  Similarly, they have not succeeded in proving that the loan  was refused by 1^st opposite party in his own interests without any reasons is also not proved.  Probabilities are that 2^nd loan was not processed, within reasonable time and further it was refused due to non-furnishing of requisite security demanded by opposite parties.  Therefore, these 2 instances will not amount to deficiency in service.  That being so, we find that complainants are not entitled for any of the reliefs prayed for in the complaint .  Point Nos.1 to 4 are answered accordingly. 

 

5.  Point No.5 :

 

          In the result, this complaint is dismissed, considering the circumstances, without costs. 

 

                    Pronounced by this Commission on this the   13^th  day of February, 2023

 

 

                                                                                                Sd/-

SRI. C. SURESHKUMAR, PRESIDENT 

 

 

                             Sd/-

 SMT. ASAMOL P., MEMBER

 

 

                        Sd/-

SRI. AMPADY K.S., MEMBER

 

 

 

 

 

 

 

 

                                                                                                          (cont…12)

 

 

 

• 12  -

 

APPENDIX

 

Depositions :

On the side of the Complainant :

PW1        -   Benny.

PW2        -   Jose Mathew U.M.

PW3        -   Rathik. R.

On the side of the Opposite Party :

Nil.

Exhibits :

On the side of the Complainant :

Ext.P1    -   Copy of letter from International Admissions & Enrolment Services to

2^nd complainant.

Ext.P2    -   Copy of counter foil from SBI, Idukki, for payment of Rs.8,96,436/-.

Ext.P3    -   A certificate issued by Visa Documentation Advisor.

Ext.P4    -   Copy of agreement dated 25.11.2020.

Ext.P5    -   Copy of complaint given by complainant to 2^nd opposite party.

Ext.P6    -   Copy of complaint given by complainant to 1^st  opposite party.

Ext.P7    -   Letter by banking ombudsman to complainant.

Ext.P8    -   Copy of loan sanction letter from Union Bank of India.

Ext.P9    -   Counter foil from Union Bank of India, Idukki, for payment of Rs.6,00,733.90/-

Ext.P10  -   Copy of judgement of High Court of Kerala in WP(C) No.21303 of 2021.

On the side of the Opposite Party :

Ext.R1    -  Copy  of e-mail issued by ombudsman intimating grant of compensation.

Ext.R2    -  Copy of eCircular of Chief General Manager.

 

 

 

                                                                                      Forwarded by Order,

 

 

 

                                                                                 ASSISTANT REGISTRAR