Ombudsman

BEFORE THE BANKING OMBUDSMAN, C/O RBI, SAIFABAD, HYDERABAD Between Mrs. Una Sasirekha, W/o, Mr. Una Rajeswar Patro Sashiraj Palace, Door No. 49-27-10, Madura Nagar, Visakhapatnam—530 016 …………….............. Complainant And 1) Bank of Baroda Main Branch, Visakhapatnam represented by it’s Senior Branch Manager, Door No. 30-15-76, Daba gardens, Visakhapatnam—530 020 2) The General Manager, Executive for Public Grievance (Operations, Services & Planning) Bank of Baroda-Head Office, Suraj Plaza -1, 6th floor, Sayajiganj, Maganwadi, Baroda-390005.

………….……………Respondents

Complaint filed against Bank of Baroda Main branch, Visakhapatnam For charging prepayment penalty in Housing Loan A/C, taken over by SBI The complainant respectfully submits her complaint as under: 1) That family members of complainant were the bonafide and valuable customer to the Respondent No. 1. The family members of complainant were making banking transaction with Respondent No. 1 for last 15 years. The family members of complainant were also contributing a lot to the Income A/c of Respondent No. 1 by way of paying commission for Demand Drafts issued by it for the business need of the family members of the complainant and operating 2 no interest accounts i.e. current Accounts & some fixed deposit accounts with the Respondent No. 1. 2) That for the business requirement of Shri Sunil Patro, S/o complainant approached the Respondent No. 1 for working capital facility to M/S Kamadhenu Traders, which is a proprietorship concern. Respondent No. 1 considered the request of Shri Sunil Patro, Proprietor of M/S Kamadhenu Traders and sanctioned a working capital facility for a

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limit of Rs.7.80 lacs in the form of BOB Byapar Scheme in the year 1999. Complainant mortgaged the vacant land in plot No. 10, Survey No. 33, Maduranagar, Near Sankaramatham, Allipuram Ward, Visakhapatnam owned by the complainant to the Respondent No. 1 as collateral security for the aforesaid working capital facility. 3) That for family need complainant applied for Housing loan to the Respondent No. 1 for construction of residential House on the aforesaid vacant land vide her application dated 05/05/2002. Considering her application Respondent No.1 pleased to sanction a Housing Loan facility for Rs.10.00 Lacs payable in 120 months with 12 months moratorium period and the loan facility was provided to the complainant on 10/06/2002 by way of Term Loan A/C 1144 with Respondent No.1. 4) That complainant started construction of house on the aforesaid plot in due course. Considering her family need complainant intended to construct further more floors on the constructed building and requested the Respondent No. 1 for additional Housing Loan of Rs.10.00 lacs in the month of January 2003. However, it was declined by the Respondent No. 1 even though the valuation of the mortgaged building was around Rs. 30.00 lacs. 5) That observing bare necessity of further construction in the same building, the complainant approached State Bank of India at its housing loan mela on 15/02/2003 for availing loan facility from it to satisfy complainant’s requirement. SBI considered the request and pleased to sanction Rs. 10.00 lacs as additional loan on take over of existing Housing Loan of Rs. 10.00 lacs with Respondent No.1. 6) That complainant was in need of fund for further construction of the building and SBI delayed in releasing aforesaid loan facility; in this circumstance the complainant approached Indian Overseas Bank for getting immediate loan facility at it’s Housing loan mela on 29/06/2003. IOB also agreed to sanction aforesaid loan facility as agreed by SBI. The complainant approached Respondent No. 1 to negotiate the course of release of property papers of mortgaged property described in Para 2, deposited with Respondent No. 1 for take over of aforesaid loan facilities of complainant and her son with Respondent No. 1, by Indian Overseas Bank. In this circumstance, Respondent No. 1 agreed to provide additional Housing Loan Rs. 10.00 lacs to complainant which they had previously declined and informed the complainant to submit an application in this regard.

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Accordingly, complainant submitted one application and availed additional Housing Loan of Rs. 10.00 lacs by way of Term Loan account No. 1037, on 21/07/2003. 7) That M/S Kamadhenu Traders was incurring loss in it’s business in 2003 and the complainant had borrowed Rs. 8.00 lacs from Shri Sunil Patro, S/o Complainant and Proprietor of M/S Kamadhenu Traders by way of family borrowing. The complainant requested Respondent No. 1 to provide further Housing Loan of Rs. 10.00 lacs by which she can repay back the family borrowing of Rs. 8.00 lacs to her son Shri Sunil Patro, Proprietor M/S Kamadhenu Traders, which she had already utilized for construction and furnishing of the building on the land described in Para 2 and in return Sunil Patro can repay back the total dues of M/S Kamadhenu Traders to Respondent No. 1 and close the account i.e. OD 4107 with the Respondent No. 1. But Respondent No. 1 declined to provide further Rs.10.00 lacs Housing Loan as described hereinabove. Rather, Respondent No. 1 was informed that the limit availed by M/S Kamadhenu Traders may be transferred to some other firm, which signifies monopolistic attitude of Respondent 1. 8) That in response to previous correspondence with State Bank of India the complainant got an offer from State Bank of India to Provide Rs. 30.00 lacs Housing Loan on the above property by way of take over of Rs. 20.00 lacs Housing Loan from Respondent 1. Compelled with negative response from Respondent No. 1 with regard to Rs. 30.00 lacs Housing Loan as discussed in Para 7 and getting a positive response from State Bank of India, complainant intended to switch over to State Bank of India and accordingly requested to Respondent No. 1 to hand over all the property papers deposited with Respondent No. 1 with regard to the mortgage created as per Para 2 on receipt of Rs. 20.00 lacs from State Bank of India and rest amount from the complainant by way of cash. Accordingly, all the above loan accounts with Respondent No. 1 were closed on 25/09/2003 and complainant availed Housing Loan facility of Rs. 30.00 lacs with State Bank of India, Dwaraka Nagar Branch, Visakhapatnam on the same day. However, Respondent No. 1 charged Rs. 50,000/- as prepayment penalty in the above two housing loan account, which was paid to them for closer of those account with them, is unjust. This is only by way of coercion to a customer, which is voidable as per law. Therefore, it was to be returned back to complainant on her request under Section 72 of

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Indian Contract Act. However Respondent No. 1 is adamant to repay back the above claim to the complainant. 9) That complainant also submitted her above complaint to Respondent No. 2 for redressal of her grievance. However, Respondent No. 2 also expressed his inability for waiver of aforesaid prepayment penalty paid to Respondent No. 1. 10) That Rs. 1000/- was debited from the Savings Bank account of the complainant i.e. SB 17212 with the Respondent No. 1 as the document verification charges for above two Housing Loan accounts on 25/09/2003 without the consent of the complainant. It is also unjust to the complainant.

PRAYER The complainant prays before Hon’ble Banking Ombudsman for an order against Respondent No. 1 & 2 for recovery of Rs.50000/- (Rupees fifty thousand only) paid to Respondent No. 1 as prepayment penalty, Rs. 1000/- (Rupees one thousand only) debited from the SB A/C 17212 with Respondent No. 1, Rs. 5000/- (Rupees five thousand) as cost and any other order as Hon’ble Banking Ombudsman thinks fit.

Place: Date:

COMPLAINANT

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