SBI Ordered to Refund money to Home Loan Applicant for deducting Legal Charges, Read full case here
In a recent ruling, the District Consumer Disputes Redressal Commission-II has directed the State Bank of India (SBI) to refund Rs 6,628 to a home loan applicant, along with 6% interest, for wrongfully deducting the amount from his savings account. The commission found SBI guilty of “deficiency in service and unfair trade practices.” As a result, the bank was also ordered to pay Rs 10,000 in compensation for the harassment caused to the customer, Ravi Choudhary.
What Happened?
Ravi Choudhary, a resident of the Panjab University Residential Complex, had applied for a home loan through SBI. As part of the loan application process, the bank requested that Choudhary submit two signed cheques for legal verification and property valuation fees. However, complications arose because the property was located outside Chandigarh, which caused delays in the loan process.
The bank’s appointed lawyer refused to carry out the legal verification due to the location of the property. SBI then instructed Choudhary to get the necessary legal verification and property valuation done by its approved advocate and valuer in Sonepat, where the property was located.
How the Dispute Arose
Choudhary followed the bank’s instructions and contacted advocate S K Jain, completing all the required formalities and paying the necessary fees directly in cash. After that, his home loan was approved and sanctioned. However, despite Choudhary informing SBI that he had already paid the fees to the legal and valuation experts, the bank still deducted Rs 6,628 from his savings account.
Upon contacting the bank to resolve the issue, Choudhary was informed that the amount had been deducted for legal verification services, even though he had already paid these fees himself. Despite sending a legal notice to SBI on July 2, 2021, the bank failed to take any corrective action.
Choudhary Takes Legal Action
Frustrated by the bank’s lack of response, Choudhary approached the District Consumer Disputes Redressal Commission-II, claiming that SBI’s actions were a clear case of service deficiency and unfair trade practices. He sought a refund of Rs 6,628 along with interest and compensation for the mental harassment caused.
SBI’s Defence
In its defence, SBI argued that as per the home loan agreement, the customer was responsible for covering all legal and other expenses related to the loan. They claimed that the amount deducted from Choudhary’s account was legitimate, as it was paid to the appointed advocate for legal verification services. SBI further stated that they had never asked Choudhary to handle the legal verification and valuation on his own.
The Verdict
After hearing both sides, the consumer commission ruled in favour of Choudhary, concluding that SBI had wrongfully deducted the amount from his account and had failed to provide adequate service. The commission ordered the bank to refund the Rs 6,628 with 6% interest and pay Rs 10,000 in compensation for the harassment caused. This case highlights the importance of banks ensuring transparency in their services and properly addressing customer grievances to avoid such disputes.
