Illegal Debit Of Processing Fee; District Commission Holds Union Bank Liable For Deficiency Of Service

It held that the Bank should have waived the processing charges as per their festive offer rather than intentionally debiting Rs. 17,700/- from his account. It directed the Bank to pay Rs. 17,700 with 9% interest per annum, Rs. 10,000 towards compensation for mental agony, and Rs. 10,000/- towards litigation costs.

Brief Facts:

The Complainant filed a complaint against the Bank alleging that the Bank granted a Home Loan of Rs. 36 Lakh to the Complainant and his spouse as joint holders. During the loan application and sanction process, the Bank waived the processing charges of Rs. 17,700, as given in the sanction letter.

Despite repeated attempts to reach the Bank, there was no response, and the legal notice sent by him was not answered. The Complainant argued that the Bank's actions demonstrate negligence, deficiency in services, unfair trade practices, and misrepresentation.

The Complainant filed a complaint before District Commission seeking a refund of the illegally debited processing charges of Rs. 17,700 with interest, reimbursement of related expenses amounting to Rs. 31,000, and an additional payment of Rs. 53,923 from the Bank.

Observations of the Commission:

The Commission observed that instead of waiving the processing charges for the home loan, the Bank deducted the charges from the complainant's account. Additionally, it observed that Point No. 9 of the Sanction Letter had been altered to exclude the clause related to processing fee waiver. Further, the Bank had advertised a festive offer of a 100% waiver on processing charges for home loans sanctioned between 06/09/2019 and 31/12/2019 under specific schemes. Based on this offer, the complainant applied for a home loan, which was approved on 7th December 2019, falling within the festive offer period.

The Commission held that the act of the Bank constituted a deficiency of service and unfair trade practices since it should have waived the processing charges as per their festive offer, as mentioned in Point No. 9 of the Sanction Letter. However, the Bank intentionally debited Rs. 17,700/- from the complainant's account, contrary to the festive offer. Moreover, letters and notices were sent to the Bank requesting a refund with interest, but the Bank failed to comply with it.

In conclusion, the District Commission directed the Bank to pay an amount of Rs. 17,700/- along with 9% interest per annum to the complainant. Additionally, the Bank was also held liable to pay Rs. 10,000 for mental agony and Rs. 10,000/- towards litigation costs.

Case Title: Amit U. Gosar vs. Union Bank of India

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