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2009 DIGILAW 160 (UTT)

ICICI HOME FINANCE CO. LTD. v. TARA DUTT MUTHPAL

2009-04-09

C.C.PANT, IRSHAD HUSSAIN

body2009
ORDER (Per : Justice Irshad Hussain, President): Common questions of law and facts are involved in these appeals hence are disposed of by this order. 2. All the above named complainant-respondent applied for grant of housing loan from the appellants and deposited administrative charges and stamp-papers for execution of loan agreement with the appellants. They were sent intimation that ICICI Home Finance Company Ltd. acting as duly constituted attorney of ICICI Bank Ltd. is pleased to convey ICICI Bank’s in-principle sanction the facility on the terms and conditions set out in the communication. Later on the loan was not released in their favour, hence alleging deficiency in service the complaint were filed against the appellants for award of compensation in addition to return of the charges paid to the appellants. 3. Opposite parties-appellants contested the matter inter-alia, on the ground that the complainants did not comply with the terms of sanctioned advice for the loan proposals and the appellants have in exercise of their discretion and in accordance to their best judgments after taking into account various relevant factors decided not to finally sanction the loan to the complainants. According to them the terms and conditions of the grant of loan having not been complied by the complainants, no deficiency in service has been made and the complainants were liable to be dismissed. 4. The District Forum on consideration of the material on record of the all five cases accepted the contention of the complainants that the appellants Bank having consented to give Housing Loan subsequently refused to release the loan made deficiency in service entitling the complainants to receive compensation for mental agony and harassment apart from expenses incurred in getting the loan from the appellants. In Consumer Case No. 07/2004, the complainant Sh. Tara Dutt Muthpal was awarded compensation of Rs. 30,000/- with interest @ 9% per annum from the date of filing of the complaint till payment in addition to litigation expenses of Rs. 1500/- 5. In the Complaint Case No. 06/2004, the complainant Sh. Harish Chandra Sharma was awarded compensation of Rs. 45,000/- with interest at the above rate and cost of Rs. 1500/-. 6. In Consumer Case No. 08/2004, the complainant Sh. Charu Chandra Sharma was awarded compensation of Rs. 45,000/- together with interest as stated above and cost of Rs. 1500/-. 7. In Complaint Case No. 68/2004, the complainants Sh. Harish Chandra Sharma was awarded compensation of Rs. 45,000/- with interest at the above rate and cost of Rs. 1500/-. 6. In Consumer Case No. 08/2004, the complainant Sh. Charu Chandra Sharma was awarded compensation of Rs. 45,000/- together with interest as stated above and cost of Rs. 1500/-. 7. In Complaint Case No. 68/2004, the complainants Sh. Om Prakash Singh and Smt. Uma Devi (Husband and wife) were awarded compensation of Rs. 20,000/- with interest at the above rate and cost of Rs. 1500/-. 8. In Consumer Case No. 09/2004, the complainant Smt. Kulwant Kaur was awarded compensation of Rs. 2,06,400/- with interest at the above stated rate and Rs. 1500/- as cost. 9. We have heard the submission of learned counsel for the parties and perused the material on record. Perusal of the in-principle sanction of loan intimations sent to the complainants by the appellants clearly indicate that the sanction of the loan was subject to legal and technical clearance/verification of the property and further that the other terms and conditions detailed overleaf were also applicable to the facility. The complainants were cautioned to refer to the enclosed leaflet for the applicable conditions. The attached leaflet to the intimation contain terms and conditions and the conditions clearly imply that in the matter of the sanction of the loan the Bank shall have the discretion and act in accordance with its best judgment after taking into consideration any material fact which has been concealed and/or becomes subsequently known to it. In view of it, learned counsel for the appellants persuasively submitted that despite the intimations sent to the complainants the Housing Loan has not been finally sanctioned and released when it had been found that the complainants do not have title to the land/property on which construction of the house has been proposed and for which the application for loan sanction has been submitted besides other shortcomings. 10. 10. With reference to the submission of the learned counsel, it need to be pointed out that in none of the five cases the complainants were found to have title of the land/property in their favour and that in all but one case namely Complaint No. 68/2004, the agreements of sale of the land in favour of complainants were not registered as contemplated by section 17 of the Registration Act, 1908 and on that basis the appellants were well within their right to refuse the sanction of the loan to those complainants. We see no merit in the submission of the learned counsel for the complainants that the appellants were well aware of this fact and decided to process the loan sanctioned and called upon the complainants to deposit the administrative charges for this purpose and the appellants were thus estopped from questioning the title of land/property of the complainants and then to take the decision not to sanction the loan to the complainants. Housing Loan is advanced to genuine persons and since none of these complainants for want of title to land/property fall in that category, the appellants could very well be said to have exercised their discretion and in accordance with their best judgments to refuse final sanction of the loan to the complainants. Therefore, by the action of the appellants under these peculiar circumstances, these complainants should not have been held to have suffered from mental agony and harassment thereby entitling them to receive compensation from the appellants. 11. The above inference also holds goods in the matter of the complainant Case No. 68/2004. The complainants were also not having clear title of the land in their favour on account of a mere of patta of the land granted by the State Govt. in their favour and also on account of the fact that they were not able to obtain sanction of the local authority to their construction plan which has been prepared with the help of their Architect. Unless and until the local authority/town planner had approved the map the mere sketch map of the proposed construction was of no avail for the purposes of arriving at best judgment in favour of these complainants by the appellants. If the appellants for the above reason decided not to finally sanction the loan, the appellants can not be attributed making deficiency in service. If the appellants for the above reason decided not to finally sanction the loan, the appellants can not be attributed making deficiency in service. In our view in none of these cases, the appellants have made any deficiency in service in refusing the final sanction of Housing Loan and the District Forum was not justified in holding otherwise and to award compensation to the complainants by the impugned orders. 12. Complainants have deposited merely administrative charges for processing their applicants for sanctions of loan and therefore they were also not entitled for refund of the same from the appellants. The reason being that the fault lay with the complainants those have failed to fulfill the terms and conditions of the intimation letter which were in fact merely sanctioned advice and not final decision to disburse the loan to the complainants. 13. For the reasons aforesaid, we come to the conclusion that the District Forum fell in error in partly allowing the complaints so as to award compensation to the complainants of these above cases by the impugned order dated 30-07-2005. Therefore, the impugned orders can not be legally maintained and are liable to set aside. 14. All these appeals are hereby allowed and the orders dated 30.07.2005 are set aside and the Complaint Case Nos. 07/2004, 08/2004, 06/2004, 68/2004 and 09/2004 are hereby dismissed. Parties to bear their own cost. 15. Let the copies of these judgments be placed on the records of Appeal nos. 196/2005, 197/2005, 198/2005 and 199/2005.