District Consumer Commission Imposes Cost Of Rs. 1 Lakh On Bank Of Baroda For Deficiency Of Service, Also Awards Litigation Cost

The District Consumer Commission at Chandigarh has partly allowed the consumer complaint and has directed the Bank of Baroda (“Bank”) to pay a compensation of Rs.1 Lakh for rendering deficient services along with litigation cost of Rs.15,000/-.

Brief Facts:

The Complainants secured a housing loan of Rs. 50 Lakhs from the Bank in 2018 to take advantage of the benefits offered by the Pradhan Mantri Awas Yojana. Subsequently, in August 2020, they received an SMS stating that an Application ID had been generated for the Pradhan Mantri Awas Yojana - PMAY (U) – Class to track the status of the application. However, despite a long wait, they did not receive any response or benefit. Even multiple emails and reminders to the Bank were of no avail.

Contentions of the Opposing Parties:

The Bank in its reply admitted the disbursal of the loan. However, it contended that neither the complainants approached to register for the scheme after the loan was sanctioned nor did they submit any documents related to the scheme. It argued that the complainants might have applied for the PMAY Scheme online, resulting in the generation of an application number of which the Bank had no knowledge. The Bank emphasized that it had no information and so did not respond to any such emails. Furthermore, the Bank clarified that the complainants only utilized their services for the disbursement of the home loan and did not avail of any other services.

The National Housing Bank, denying allegations on it clarified that the Bank had entered into an MOU with HUDCO for the implementation of PMAY-CLSS. HUDCO would serve as the central nodal agency responsible for processing subsidy applications related to home loans provided by Bank. It further mentioned that no record matching the complainant's provided Loan Account number had been found among the claims accepted by it.

HUDCO stated that as a Central Nodal Agency, its role is to work with the data provided by Primary Lending Institutions. The Bank uploads the borrower's claim on the AWS Portal, and after verifying the details, an application ID is generated. The Agency then processes the claims and rejects the claims if there are any discrepancies that are visible on the bank's page.

It stated that the subsidy claim was uploaded by the Bank but was rejected by the Portal due to an incorrect installment number and a mismatch between cumulative loan disbursement and the disbursement submitted up to the previous installment. It asserted that it cannot be held responsible for this, as it was the Bank’s failure to upload the revised claim form after the rejection. Moreover, the complainant is not a consumer of HUDCO.

Observations of the Commission:

The Commission Presiding Member Surjeet Sharma and Member B.M. Sharma observed that the Bank's claim of complete ignorance about the complainants' application has been contradicted by HUDCO with whom the Bank has an MOU for the scheme. As per HUDCO, the Bank had uploaded the complainants' claim in 2020 which was rejected due to errors in the installment number and cumulative loan disbursement. The Bank failed to upload the revised claim form, which was their responsibility, not the complainants'. Moreover, the Bank did not refute receiving the emails sent by the complainants. It is also evident that the complainants were unable to process and finalize their application without the Bank's involvement. This constitutes a deficiency in service on the part of the Bank causing mental agony, harassment, and loss to the complainants.

It also observed that both the Bank and HUDCO do not dispute that the credit benefit under the scheme is granted by the Government of India and not by them. Therefore, concluding the complaint against Bank regarding deficiency in service is valid, as it does not involve the government. However, the complaint against HUDCO regarding the credit benefit or subsidy claim is not applicable to Commission as it was prompt in attending the application. 

The Commission dismissed the complaint against National Housing Bank and HUDCO. It also rejected the claim of complainants for the grant of subsidy as being not maintainable before the Commission. It also ordered the Bank to comply with the said directions within a period of 45 days failing which they shall be liable to pay additional cost of Rs.20,000/- apart from above relief.

Case: Abha Dobriyal vs Bank of Baroda

Click Here To Read/Download Order