SPECIAL OFFICER-/Opp. Party vs D.JOHN

THE complainant applied to the S.P.S.P.L. Sattur Co-operative Housing Society for loan for construction of a house. Along with his application, he submitted the sale deed, the encumbrance certificate, sketch, the mortgage deed, receipt for having paid subscription as a member of the society and legal opinion given by the legal advisor. THE complainant incurred Rs. 6,000/- as expenses in this regard. THE society accepted the loan application and recommended the sanction of Rs.1,60,000/-and forwarded the file on 16.5.1996 to the first opposite party namely the Tamilnadu Co-operative Housing Federation Limited, Chennai. THE first opposite party has failed to peruse the records and take steps to sanction the loan. THE persons who applied after the complainant have been sanctioned loan. It appears that the first opposite party lost the file. Thus, there has been deficiency in service as a result of which the complainant has been put to great hardship and mental agony. THErefore, the complaint is made to recover a sum of Rs. 1 lakh as compensation and for return of all the documents submitted by the complainant.

THE first opposite party contended that there is no privity of contract between the first opposite party and the complainant. Since several applications are received from various societies, there is bound to be a delay. THE complainant has accepted that if there is a delay that he would accept the same. THE first opposite party was prepared to disburse the amount. THE documents are safe with the first opposite party. Only if an application is made to second opposite party, it will be considered. THEre is no deficiency in service. The second opposite party contended as follows: Even at the time he made an application the complainant has stated that he will not hold the opposite party responsible if there is a delay. The resolution sanctioning the loan was forwarded to the Federation. If there is a delay in payment of the loan on that account alone compensation can be prescribed. In spite of repeated intimation to the complainant that the money of Rs. 1,60,000/- was ready for disbursement, he has failed to receive the same. Hence, the complaint be dismissed.

The lower Forum namely District Consumer Disputes Redressal Forum, Virudhunagar at Srivilliputhur directed the opposite parties to return the documents and pay a compensation of Rs. 5,000/-. Hence, the present Appeals.

IT is the accepted position that an applicant for a loan cannot, as a matter of right, insist upon sanction of loan and if a loan is not sanctioned, that will not give him a cause of action to complain and that there is a deficiency in service. The granting of a loan is in the discretion of the Society. Here in this case, the society has forwarded a resolution recommending the sanction of loan. The first opposite party being the Apex Body has to deal with several such requests for sanction of loan. For loan, all the Housing Societies have to necessarily apply to the first opposite party and hence it can be taken as established that the second opposite party would have received numerous applications from the societies all over Tamil Nadu for sanctioning of loan. That being the case, there is every possibility of delay occurring in such matters. IT is not in dispute that the complainant has while applying for a loan agreed that he would not hold the society liable for any delay caused. Further, the sanctioning of a loan by the society is the business of the society. A Housing Society is constituted to help the members to get loan for construction of houses. Therefore, the purpose and object of the Housing Society is to help the members to put up houses and with that view loans are sanctioned by them. That, in short, is the aim and goal of the society and thus it becomes the business of the society. Therefore, if any dispute arises relating to the business of the society, then Section 90 of the Co-operative Societies Act makes it clear that the affected person can only resort to the provisions of the Co-operative Societies Act cannot move a Civil Court or initiate any other proceedings. In such a situation, the remedy of the person aggrieved would be to resort the provisions of the Co-operative Societies Act and that a proceedings before the Consumer Forum will not lie. Therefore, in such circumstances, it follows that the remedy of the complainant is elsewhere. In this view of the matter, it has to be held that the order of the lower Forum has to be necessarily set aside. Consequently these two appeals namely A.P. Nos. 184 and 185/1999 are allowed setting aside the order of the lower Forum. The complaint will stand dismissed but in the circumstances there will be no order as to costs. However, that part of the order directing the return of the documents produced by the complainant before the opposite parties/Society/Federation will remain untouched and the appellants are directed to return the document to the complainants forthwith. Appeal allowed.