FA.No.472/2011 against C.C.No.90/2009 District Forum, Nellore.

Between

1. The Area Manager, LIC Housing Finance

    Limited, II floor, Sri Rajeswari Towers,

    Trunk Road, Nellore Town, S.P.S.R.

    Nellore District.

2. The Area Manager, LIC Housing Finance

    Limited, I floor, PMR Plaza, VV Mahal Road,

    Tirupathi Town, Chittoor District.

3. The Manager Operations, LIC Housing Finance

    Limited, situated at No.305, HUDA, Maitrivanam

    Ameerpet, Hyderabad-500 038.

4. The Regional Manager, LIC Housing Finance

    Limited, situated at Hayes Road, Bangalore.                           ..Appellants/

                                                                                                Opp.parties. 

                   And

Smt.N.Prasunamma W/o.K.V.Subba Reddy

Hindu, aged 53 years, working as Head

Mistress, residing at Plot No.16,

Akuthota Dibba, Kota Village and Mandal,

S.P.S.R.Nellore District.                                                              Respondent/

                                                                                                Complainant  

Counsel for the Appellants                     :  M/s S.Siva Shankar

Counsel for the Respondent                :  Mr.P.Ganga Rami Reddy

          QUORUM: SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER.

AND

SRI T.ASHOK KUMAR, HON’BLE MEMBER.

TUESDAY THE EIGHTEENTH DAY OF SEPTEMBER,

TWO THOUSAND TWELVE

Order (Per SRI T.ASHOK KUMAR, Hon’ble Member)

                                                                        ***

          This is an appeal filed by opposite parties against order dated 22-11-2010 on the file of District Forum, Nellore made in C.C.90/2009.

          For convenience sake the parties as arrayed in the said complaint are referred to hereunder.

          The brief facts of the complaint are as under:

          The complainant is working as Headmistress in Z.P.High School, Kothapalem and she owns a plot at Kota. She borrowed housing loan from LIC Housing Finance Limited through second opposite party for construction of house by depositing documents pertaining to the said plot and hypothecating the house under A/c.no.048006830 and borrowed Rs.2,50,000/- on 11-4-2000.  During pendency of the said loan, LIC Housing Finance Limited sanctioned another sum of Rs.2,00,000/- to her through opposite party No.1 under A/c.No.048008228 on 28-7-2002 on the security of the same document and the said documents are with opposite party No.1 only.  During the pendency of the second loan,  the complainant obtained another loan for Rs.3,00,000/- for further development of her house and the same was sanctioned on 16-7-2005 by opposite party and it was also sanctioned on the same documents on which she borrowed the said other loans.  The complainant is an income tax assesse.  Her house requires some more additions and renovations and therefore she applied for further loan of Rs.3,75,000/-and LIC Housing Finance Limited sanctioned it  vide letter in File No.802065 dated 24-7-2008.  The amount is to be released by opposite party No.1 but so far it was not released.  The complainant approached opposite party No.1 for release of the amount and she was informed by opposite party no.1 that documents pertaining to her house property were misplaced somewhere and after tracing those documents, the loan amount will be released.  Even though one year elapsed from the date of sanction of the said loan, the amount was not released by opposite party No.1.  The documents pertaining to her house property are either with opposite party No.2 or with opposite party No.1.  and they were not returned to her.  Therefore opposite parties 1 and 2 alone are responsible for the misplacement of the documents pertaining to her house property.  Since opposite party no.1 did not release the loan amount, she got issued a legal notice demanding the loan amount after releasing her documents pertaining to her house property to enable her to obtain loan from some other financial institution. Even though all the opposite parties received the notices, there was no response from them and that attitude of opposite parties amount to deficiency in service and thus prayed to allow the complaint to direct the opposite parties to pay damages of Rs.3,75,000/- to furnish particulars of the amount due by her regarding the existing loan and also to return her documents and also pay compensation of Rs.2,00,000/- and costs of the complaint to her.

          Opposite party No.1 filed counter resisting the complaint denying the allegations made in the complaint and disputing the complaint whereas opposite parties 2 to 4 adopted the same counter for them .  The brief facts of counter of opposite party No.1 are as under:

          It is true that the complainant availed the loans 1 to 3 referred to in the complaint and also deposited documents pertaining to her house property with it and thereafter the complainant applied for loan of Rs.3,75,000/- for fourth time and the same was also sanctioned but at the time of disbursing the loan amount, it was found that the original documents which were deposited with opposite party No.2 were mixed up with some other documents and were not traced.  Under the said circumstances, opposite party No.1 requested the complainant to give some time for tracing the original documents but in the meanwhile she filed the complaint.  When existing loans of the complainant with their bank are still continuing, until and unless the said loans are cleared, the complainant is not entitled for return of the original documents and that there is no deficiency in service on the part of the opposite party no.1 and thus prayed to dismiss the complaint.

          Both sides filed evidence affidavit reiterating their respective stands aforesaid.  ExS.A1 to A10 were marked by the complainant and no documents were marked on behalf of the opposite parties. 

          Having heard both sides and considering the material on record, the District Forum vide impugned orders allowed the complaint in part directing opposite party No.1 to release Rs.3,75,000/- loan amount which was sanctioned by LIC Housing finance Limited to her and also to pay Rs.20,000/- towards compensation together with costs of Rs.2,000/- within 30 days from the date of communication of order and the case against opposite parties 2 to 4 was dismissed.

          Aggrieved by the said order, opposite parties filed this appeal and mainly contended that since the documents were misplaced, loan amount of Rs.3,75,000/- was not disbursed and that unless the complainant comes with new documents like duplicate sale deed with due publication and also after giving police complaint etc., or alternatively a gift deed or a declaratory judgement copy etc., the appellants cannot disburse the loan amount and that the District Forum cannot direct LIC Housing Finance Limited to release loan amount of Rs.3,75,000/- as it has no power to direct the financial institutions to release the loan amount and that the District Forum only can give finding of deficiency of service, if any, and that awarding of compensation and other directions given by the District Forum are not sustainable either on facts or in law and thus prayed to set aside the said orders by allowing the appeal.

          Heard both counsel with reference to their respective contentions.

          Now the point for consideration is whether the order of the District Forum is sustainable or it requires any modification?

          Even though the District Forum dismissed the complaint against opposite parties 2 to 4, they also joined in the appeal.

          There is no dispute that the complainant availed three loans referred to in the complaint and that she applied for fourth loan of Rs.3,75,000/- for renovation/modification of her house at Kota and that LIC Housing Finance Ltd., sanctioned the said loan also vide letter in file No.802165 dated 24-7-2008 during the pendency of the earlier loans.  According to the complainant, the said fourth loan of Rs.3,75,000/- was not released to her by opposite party No.1 and when she approached for release of loan, she was informed that the documents pertaining to her house property were misplaced and that until and unless the said documents are traced, the loan amount could not be released.  In the grounds of appeal, specifically opposite parties contended that they have traced the original documents of the complainant and they are readily available and  that unless the complainant makes payment of the total outstanding balance loan amount, the documents cannot be returned to her. Probably for the said reason, the District Forum did not order for return of the documents to the complainant.  Opposite party No.1 was at fault in misplacing the original documents of the complainant and for their mistake even though the said 4^th loan  of Rs.3,75,000/- was sanctioned to her, she was deprived of the said amount which certainly resulted in financial inconvenience and hardship to her and the said lapse of not releasing the loan certainly amount to deficiency in service.  The Consumer Forum or State Commission as the case may be cannot compel the financial institutions to grant loan but certainly have power to direct such financial institutions to release the granted loan holding that not releasing the granted loan amount to deficiency in service.  If the complainant was not competent to pay instalments of 4^th loan, keeping in view the outstanding loans, the opposite parties ought not to have granted the 4^th loan but having satisfied with the security offered by the complainant and the paying capacity of the complainant who is an income tax assessee, opposite party No.1 was not justified in withholding the said sanctioned loan that for no fault on the part of the complainant and for the fault of opposite party No.1 in misplacing the documents of the complainant.  When the opposite parties misplaced the original documents, it is unreasonable for them to ask the complainant to file sale deed with due publication and also after giving police complaint or alternatively a Gift deed or declaratory judgement copy etc.,  Therefore the contention of the opposite parties in the said context could not be appreciated in their favour.

          The opposite parties contended  that the Execution Petition No.6/2011 is filed by the complainant against 1^st appellant for penalising U/s.27 of the Consumer Protection Act, 1986 is pending and that District Forum has dismissed the complaint against appellants/opposite parties 2 to 4 and that appellant No.3 had to release the loan from Hyderabad and when case against appellant No.3 is dismissed, the appellant No.1 who is at Nellore cannot release the loan and thus the order under appeal is erroneous.  Probably for the said reason all the appellants have jointly filed the appeal though the complaint was dismised against opposite parties 2 to 4.  Now there is no difficulty for this Commission to give suitable directions to all the appellants/opposite parties jointly and severally to release the sanctioned loan to the complainant duly fixing proper repayment schedule basing on the already sanctioned loan proceedings and the documents so submitted by the complainant which are admittedly traced by the opposite parties.  However, in the circumstances of the case, it is not desirable to award compensation of Rs.20,000/-  and it can be scaled down to Rs.5,000/- while maintaining the costs of Rs.2,000/- awarded by the District Forum as it is. 

          In the result this appeal is allowed in part and the order of the District Forum is modified directing the opposite parties 1 to 4  jointly and severally to release an amount of Rs.3,75,000/- , loan sanctioned by LIC Housing Finance Limited to the complainant and pay only Rs.5,000/- as compensation for deficiency in service etc. together with costs of Rs.2,000/- while setting aside the remaining order.  There shall be no oder as to costs in this appeal.  Time for compliance four weeks from the date of receipt of order.

                                                                                      Sd/-MEMBER.

                                                                                      Sd/-MEMBER

JM                                                                                Dt.18-9-2012