Loan denied after sanctioning: UCO Bank to pay over 4L

Written by PTI | New Delhi | Updated: Sep 4 2014, 21:42pm hrs
The national consumer commission has asked UCO Bank to pay over Rs four lakh to a farmer, who was denied the loan by it after the money was sanctioned.

The National Consumer Disputes Redressal Commission (NCDRC), presided by Justice V K Jain, asked the bank to pay the sanctioned loan amount of Rs 4 lakh, besides Rs 25,000 as compensation and litigation charges, to the Haryana based farmer, Shamsher Singh.

The NCDRC's order came while dismissing a review petition filed by the bank against Haryana state consumer commission's order, which had upheld the district consumer forum's order, directing it to pay the money.

The national commission noted that bank's ground to deny loan disbursement was totally unjustified as before sanctioning the loan, it had scrutinised all the documents filed by Singh.

About the bank's contention of land being situated beyond territorial jurisdiction of its concerned branch, the NCDRC said, " our view, the petitioner Bank ought to have gone into this aspect before sanctioning the loan, when complainant had given all the details of his land along with supporting documents, while applying for the loan.

"Having sanctioned the loan on the basis of the documents furnished by complainant, petitioner Bank was not justified in refusing to disburse the loan, unless the declaration made by the complainant was later found to be false or the documents furnished by him were found to be forged."

The NCDRC passed its order, noting that it was not the case that Singh had submitted a false declaration or filed forged documents in support of his claim about the measurement of the land.

"The petitioner Bank, having sanctioned the loan, could not have refused to disburse it solely on account of the land in question being situated beyond the territorial jurisdiction of the concerned branch," it said.

In his complaint filed before the district forum, Singh had told that he had applied for grant of a loan of Rs five lakh under a scheme called Kisan Credit Card, mortgaging his agricultural land with the Bank, which sanctioned him Rs four lakh loan.

However, later the Bank refused to disburse money. Aggrieved by this, Singh approached district consumer forum, seeking disbursal of the loan.