Legal Question in Banking Law in India

I have applied for a loan of Rs.5,00,000 with LIC Housing Finance Limited (LICHFL referred thereafter), SCO 2445-46, Sector 22-C, Chandigarh for renovation/improvement of my flat situated at flat No.410,GHS-33,Sector-20, Panchkula-Haryana in September�2009. LICHFL have asked for originals of all the documents which were duly submitted at the time of application. The documents submitted are Share certificate of membership of the society, Allotment letter, No-dues certificate, List of members of society registered with HUDA, original receipts for payment of money to society, Permission to mortgage from the secretary of society.

The loan was sanctioned vide their sanction letter File No.663212 dated 06/10/2009 and all the terms were duly acknowledged to LICHFL.

The upfront fees paid Rs.1103/- at the time of submission of application and Rs.4412/- at the time of acceptance of sanction letter. (Total fees paid Rs.5515/-).

LICHFL limited have asked for stamp papers and all the documents including six cheques, ECS sanction letter from Oriental bank of commerce have submitted to LICHFL. LICHFL have asked me to come to their sector 22 office for disbursement of loan in December�2009.When I visited office I was told that the loan sanctioned can not be distributed as per instructions from legal department but no specific reasons were given. They also asked me to wait for the call from their office.

To my surprise I have received letter (without any Letter no.) dated 31.12.2009 from Area Manager asking me to submit �conveyance deed in my favour� for the flat or else collect all the original document from their office. Shocked by such treatment by your office I visited the sector 22, Chandigarh office and explained them that all the documents available with us are submitted at the time of application and there is no conveyance deed with any society flat holder in Panchkula. This document was never asked earlier and it is impossible for any flat holder in Haryana to submit this letter.

The concerned official Mr. Charanjit Singh have shown their inability of any help and frustrated with their attitude I have no option but to take all my original documents.

I have also asked them for the return of upfront fees Rs.5515/- since the loan was never disbursed but they till date have not returned my upfront fees saying this is non-refundable.

Its been almost five months that I am being harassed by LICHFL neither they have given me loan nor they returned my upfront fees. I addition to the above the amount spent on cost of stamp papers and amount of time and money spend on communicating with are still to be counted. I have to borrow money from other costly source to get the job of my flat renovation done which still to be counted.

In my case also their is clear case when the application was submitted to LICHFL, the LICHFL was aware that the loan is against the society flat in Haryana where the society flat holders are only given share certificate by the management of the society and no individual conveyance deed are done by each society flat holders with HUDA (Haryana urban development Authority). Knowing the facts at the time of application itself that there is no conveyance deed available with me for the flat they have asked and rejected my loan application on legal ground after taking the upfront fees.

Please advice can I claim the refund of Non-refundable processing charges and other cost like cost of stamp papers etc from LIC Housing Finance Limited on the basis that the LICHFL have once sanctioned the loan and then rejected it on some legal grounds which they know at the time of issue of sanction letter. The basis they adopted is conveyance deed in favour of allottee of society flat but as per HUDA (Haryana urban development authority) the Conveyance dees is done wbetween society and HUDA and never done between individual members and HUDA. As intention was to swallow the upfront fees.

Regards

Vikas Kathpalia


Asked on 3/17/10, 4:38 am

2 Answers from Attorneys
J. Radhakrishnan independent Practice

Give notice to the Managing Director of LICHFL by registered post ack..due for return of the process fees and for compensation for deficiency of service. If no redress is there, make a complaint to the Insurance Ombudsman for Punjab & Haryana. if no relief is granted by him, file a case in the District consumer Disputes Redressal forum.

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Answered on 3/17/10, 10:51 am
Sudershan Goel India Law Offices of Sudershan Goel - Advocate

You are entitled to receive back the amount paid for disbursement but may not get back the

'loan processing fee' paid at the time of application. Try to settle the dispute amicably. Any kind of litigation may be costly and time consuming causing you more harm than any good.

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Answered on 3/17/10, 7:41 pm


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