The District Consumer Disputes Redressal Commission, Kangra (Himachal Pradesh) bench, consisting of Mr Hemanshu Mishra (President), Ms Arti Sood (Member), and Mr Narayan Thakur (Member), held the State Bank of India (SBI) accountable for unjustly penalizing borrowers who failed to timely furnish the completion certificate for a house financed through the SBI Realty Home Loan Scheme. The commission noted that SBI demanded the certificate six years later without prior notification to the complainants.
Complainants’ Loan and Circumstances
Mr. Narendra Prem Chand Rana and Mrs. Richa Rana jointly applied for a house loan under the SBI Realty Home Loan scheme, intending to purchase land and construct a house. SBI sanctioned a loan of Rs. 40,00,000/- for a plot acquired at Rs. 50,00,000/-. The house construction completed in 2017 with a valid completion certificate, which was promptly submitted to SBI in the same year. Due to pandemic-related delays, the certificate was provided to SBI in May 2022.
SBI did not request the completion certificate between 2017 and 2021. In 2021, upon SBI’s request, the complainants submitted the required documentation. Subsequently, SBI imposed a substantial penal interest of Rs. 9,52,993/- in the complainants’ account statement without providing any prior explanation.
Legal Proceedings and Bank’s Defense
The complainants filed a consumer complaint with the District Consumer Disputes Redressal Commission, Kangra. SBI raised preliminary objections, disputing jurisdiction, maintainability, cause of action, and locus standi. The bank argued that the SBI Realty Home Loan Scheme was distinct from a regular house loan, emphasizing compliance with Town and Country Planning Regulations.
Commission’s Findings
The District Commission referred to the loan agreement terms, highlighting provisions for penal interest in case of payment default or irregularities. It noted that penal interest was initiated without any default on the complainants’ part. SBI failed to communicate the reason for the imposed penal interest.
The commission held SBI liable for a gross deficiency in service, emphasizing the bank’s failure to communicate and the untimely demand for the completion certificate after six years.
Verdict
The District Commission directed SBI to refund the penalty amount of Rs. 9,52,993/-, along with penal interest recovery interest of Rs. 34,639/-. SBI was instructed to pay a compensation of Rs. 1,00,000/- to the complainants, Rs. 15,000/- for litigation costs, and Rs. 25,000/- as punitive damages.
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