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RAJASTHAN STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, JAIPUR
Hon’ble Mr. Justice Sunil Kumar Garg, President;
Mrs. Sushma Tanwar & Mr. T.P. Gupta, Members
S.B.B.J., NAROLI DANG—Appellant
versus
RAMKESH & ORS.—Respondents
Appeal No. 2832 of 1997—Decided on 13.1.2006
Counsel for the Parties :
For the Appellant :Mr. Balwant Kumar, Advocate.
For the Respondent:Mr. N.K. Mishra, Advocate.
A decision taken by the bank in good faith, in the exercise of its bona fide discretion, cannot be challenged in the forum below.
Headnote:
Consumer Protection Act - Loan Disbursement - The court held that the bank's decision to refuse a loan due to a general ban on providing loans was justified and not a deficiency in service. The bank promptly informed the applicant and returned the file to the recommending officer, providing an opportunity to seek a loan from another bank. The court emphasized that a decision taken by the bank in good faith, in the exercise of its bona fide discretion, cannot be challenged in the forum below.
Fact of the Case:
The complainant applied for a loan recommended by the District Udyog Officer, but the bank refused to advance the loan due to a general ban on providing loans.
Finding of the Court:
The court found that the bank's refusal to grant the loan was justified, and no deficiency in service was committed. The appeal was allowed, and the complaint was dismissed.
Issues: The main issue was whether the bank's refusal to advance the loan constituted a deficiency in service.
Ratio Decidendi: The court emphasized that a decision taken by the bank in good faith, in the exercise of its bona fide discretion, cannot be challenged in the forum below.
Final Decision: The appeal was allowed, the impugned order was set aside, and the complaint was dismissed. No costs were awarded.
Mr. T.P. Gupta, Member—This appeal has been filed by the appellant under Section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as ‘1986 Act’) against the order dated 18.11.1997 passed by the learned District Forum, Sawai Madhopur whereby the complaint of the complainant-respondent was allowed.
2. The brief facts giving rise to this appeal are that the complainant-respondent had applied for a loan of Rs. 10,000 under the drip scheme to the District Udyog Officer, Sawai Madhopur. On this, in his letter dated 16.2.1996, the District Udyog Officer, Sawai Madhopur recommended the application to the appellant-Bank for grant of loan to the complainant. Accordingly, the respondent approached the appellant on 15.3.1996 for disbursement of loan that refused to advance loan to the respondent. The respondent, therefore, filed a complaint in the learned District Forum claiming the loan amount and damages of Rs. 25,000.
3. In reply, the appellant-bank replied that although loan was recommended, it could not be sanctioned to the respondent because its Regional Manager had imposed general ban on providing loans. As such, the file of the complainant was returned to the District Udyog Officer, Sawai Madhopur on 22.3.1996 so that he could consider the question of sanctioning loan to the complainant by some other Bank.
4. After hearing both the parties, the learned District Forum allowed the complaint.
5. Aggrieved by this order of the learned District Forum, the appellant has come up before us in appeal.
6. We have heard the arguments and submissions made on behalf of both the parties, perused the impugned order passed by the learned District Forum and considered the materials placed on record.
7. The learned Counsel for the appellant has contended that the learned District Forum has failed to appreciate that it is the discretion of the Bank to give loan or not and in this case as there was ban by the officers of the Bank for giving loan, the loan was refused without any delay and no deficiency in service was committed by the Bank. The learned Counsel for the respondent has supported the impugned order.
8. We have considered the rival contentions of both the parties. There is great force in the contention of the learned Counsel for the appellant. In this case, it is not in dispute that the complainant approached the appellant on 15.3.1996 when the complainant was told that as there is ban on giving loan by the Bank, the loan amount cannot be given to him. It is also on record that the appellant returned the file of the complainant to the District Udyog Officer, Sawai Madhopur on 22.3.1996 and informed him that the loan cannot be given to the complainant. Therefore, the appellant had taken prompt action in the matter and had informed the District Udyog Officer of the reasons for not able to advance financial assistance to the complainant. When there was general ban on the Bank for grant of loan, the appellant had rightly refused to give loan to the complainant. At the same time, it had given an opportunity to the complainant to get his loan from some other Bank through the District Udyog Officer, Sawai Madhopur.
9. It is also to be appreciated that it is not a case where the reason given by the Bank for refusing to advance financial assistance was found to be false one. Had that been the case, the position would have been different. But a decision taken by the Bank in good faith, in the exercise of its bona fide discretion, cannot be challenged in the Forum below and such Forum cannot substitute its judgment for the decision of the Bank. As held by the Hon’ble National Commission in Niwas Spinning Mills Ltd. v. Bank of India, III (2003) CPJ 190 (NC)=2004 NCJ 49 (NC), the Bank has to safeguard its interest and no deficiency is committed by the Bank in refusing to give loan amount to the appellant. A similar observation was also made by the Hon’ble National Commission in Sree Kanaka Durga Hatcheries Pvt. Ltd. v. State Bank of India,
