Syndicate Bank vs MAXIE ANDRADE

- THIS appeal, by the opposite party, is directed against the order dated 20.10.1992, passed by the District Forum, D.K. District, Mangalore, in Complaint No. CPA/DK/7/91-92 directing the O.P.-Bank to pay a sum of Rs. 1,000/- as compensation to complainant. The facts, briefly stated, are as follows :

THE Complainant was selected for admission to B.Sc. degree in Nursing at K.M.C., Manipal in August 1990; so that complainant applied for an Education Loan of Rs. 10,000/- to the opposite party-Bank. It is the further case of the complainant that the opposite party-bank had agreed to sanction a loan of Rs. 6,000/- and asked her to open S.B. A/c. and she opened the'' said account. When the father of the complainant approached the bank on 18.3.1991 and requested for sanction of the loan, the bank refused to sanction the loan as the loans taken by her father were outstanding and he was also a co-obligant in respect of two other loans. THE complainant sought compensation on the refusal to sanction educational loan under priority sector by the opposite party. THE complainant averred that the act of the opposite party in refusing the sanction of the loan is arbitrary and illegal. 2. THE opposite party filed its version and averred that the educational loan application of complainant was rejected as the father of the complainant had not regularised the over-due loans. During enquiry, the complainant examined herself as C.W.-1 and got Exs. C-1 to C-10- marked in evidence. On the part of the opposite party, Exs. R-1 to R-5 were marked in evidence.

The District Forum appreciating this material placed on record by the parties, held deficiency of service on the part of the opposite party-bank in refusing to sanction the educational loan and in that view awarded the compensation of Rs. 1,000/- to the complainant.

WE have called for the records and received. WE have perused the records and we have also heard the learned Counsel for the parties. It is not disputed that the complainant had applied for sanction of educational loan in sum of Rs. 10,000/- and she also opened a savings bank account in the opposite party-Bank. When her father sought the sanction of the loan subsequently the opposite party-Bank refused to sanction the loan. The opposite party-Bank has averred that it was refused because the father of the complainant was over-due to the Bank on some accounts and was also coobligant in respect of two other loans. Ex. C-2 is the procedure of the syndicate Bank relating to sanction of loan for educational purpose to be advanced on priority sector. The relevant portion, in Ex. C.2, reads as under : XX XX XX The translation of the above portion in Ex. C-2, reads as under: "If the study is in the foreign country, the life insurance is equal to the total loan amount. If the study in within the country, in addition to the student''s parents a solvent surety acceptable to the Bank."

IT is not the case of the complainant that she or her father did offer any acceptable surety to the bank seeking the sanction of loan. The opposite party-bank, having regard to the fact that the father of the complainant was over-due on some accounts and he was also co-obligant on two other loan accounts, exercised the discretion in refusing to grant loan sought for by the complainant. We are of the opinion that the refusal by the bank to sanction the financial aid in favour of the complainant, having regard to these facts and in the circumstances of the case, cannot be classified as deficiency of service. The National Commission in Pondicherry Aerators v. Managing Director, Pondicherry Industrial Promotion Development and Investment Corporation, reported in I (1992) CPJ 33 (NC), while considering such a circumstance held as under: "After taking into consideration the points put forward by both parties we are of the opinion that we shall not be able to interfere in this matter, as we have held in earlier cases too, that sanctioning of financial or other aid or continuing of the same is a discretionary power on the part of the financier or the Industrial Development Corporation and refusal to sanction the financial aid in the bona fide exercise of the discretion will not constitute a deficiency in service. Hence this petition is dismissed. There will be no order as to costs."

IN the present case, the Bank having regard to all these circumstances, exercised the discretion in refusing to sanction the loan, so it cannot be classified as deficiency in service.

THE District Forum has not properly considered the material on record and, therefore, the finding recorded by it in granting compensation to the complainant is clearly erroneous and unsustainable. ORDER In the result, therefore, this appeal is allowed and the order dtd. 20-10-1992, recorded by the District Forum, D.K. District, Mangalore, in Complt. No. CPA/DK/7/91-92 is set aside. Consequently the complaint is dismissed. THE parties are directed to bear and pay their own costs in this appeal. Appeal allowed.