YASHWANT AMBADAS DABEER vs SENIOR BRANCH MANAGER, L.I.C. OF INDIA

THIS appeal, by the complainant, is directed against the order dated 16.10.1992, passed by the District Forum, Belgaum, in Complaint No. 75/92, dismissing the complaint of the complainant. 2.The facts, briefly stated, are as follows: 3.The complainant sought a direction to the opposite party L.I.C. of India, of which admittedly the complainant is the policy holder, to grant a loan of Rs. 50,000/- with 25% increase in rates and a compensation of Rs. 5,000/- towards house construction loan, that is under "own your home" scheme. 4.The opposite party appeared and filed its version. They submitted that the documents furnoshed by the complainant were not strictly in accorddance with the condition laid down for processing the loan application and so they were not inclined to sanction the loan in favour of the complainant. The District Forum, Belgaum, on consideration of material placed on record by the parties, held that the material furnished by the complainant to the opposite party, that is, L.I.C. authorities was not sufficient to grant loan in favour of the complainant. In that view, the District Forum, Belgaum, dismissed the complaint of the complainant. 5.We have called for the records and received. We have perused the pleadings of the parties and records placed on record. We have also heard the appellant and the learned Counsel for the respondent. 6.The District Forum, Belgaum, has considered the material aspect of the matter and at para 5 of its order, has observed thus: "5. Under the scheme in question while sanctioning a loan to its policy holders it was incumbent upon the LIC to scrutinise the application for loan strictly in accordance with the procedures laid down for processing the loan applications. THIS is more so when the LIC is dealing with the trust and faith entrusted by the policy holders whose money is at its disposal. It is but natural that the LIC is justified in scrutinising the particulars of the property to be mortgaged to it, the purpose for which the loan is to be advanced and also the capacity of the person who has sought for a loan to repay. The LIC is not justified in granting loans to its policy holders under the "Own Your Home" Scheme in a matter of fact manner where any act of side tracking the procedure laid down for processing the loan application is granting the loan is bound to affect the interest of the policy holders in general who having trust and faith in the LIC have invested their money. The money with the LIC, is nothing but a public money and if cannot be mis-used by granting loans to each and every policy holder arbitrarily as it likes. The LIC is required to act as a trusty in a fiduciary capacity and the safety and security of the policy moneys is an essential matter of duty for the LIC to ensure in the course of investment of this moneys. Looking to the evidence on record it can be said that the opponents have used their authority in a proper and justifiable manner rejecting the loan application of the complainant. The evidence on record consists of the various documents produced by the opponents as well as by the complainant and also those documents which were called upon to be produced by the complainant from the opponents custody go to show that the opponents have taken prompt action to consider the loan application of the complainant. It cannot, therefore, be said that a deliberate delay has been caused by the opponents in considering the application of the complainant. Though the application was written on 3.5.1990, it was signed and presented by the complainant in the presence of a witness one Shri Shivaram, a LIC agent on 28.5.1990. THIS fact is clear from the original loan application produced by the opponent and admitted by the complainant." 7. The National Commission in Essex Farms (Pvt.) Ltd., and Another v. Punjab National Bank and Another, reported in Volume-I (1992) CPJ Page 111 (NC), while considering such a circumstance, has observed, thus: "It is in the discretion of the Bank to determine whether credit has to be allowed to a party to the extent of sanctioned limits, keeping in view how the party is discharging his obligaions towards the Bank such as repayment of the credit and interest thereon, provision of adequate and acceptable security and the management of the scheme/project or the activity for which credit has been agreed to be provided by the Bank. Again the Bank has to satisfy itself that the assets which are offered as security are good and free from encumbrance, the title of the party in the goods or property is clear and that the valuation of the assets is just and fair. It is for the Bank to determine whether the party''s credit worthiness and if so the extent to which it should be allowed credit and against what security. The refusal of the Bank to enhance the existing sanctioned limits of credit or even to continue to grant credit to the extent of the limits already sanctioned cannot and does not constitute a breach of Bank''s obligations towards its debtors. It is primary duty of the Bank to ensure that the money of the deposits which it invests in the form of credit is safe."

Therefore, it is clear that it is in the discretion of the L.I.C. authorities to determine whether the loan has to be sanctioned to a party keeping in view how the party was able to discharge his obligations towards the L.I.C. such as mortgaging of the proper property to the Opposite Party to the loan account. 9. In the present case, admittedly, the complainant had mortgaged the house property to the Corporation Bank and at the same time he wanted to have the loan sanctioned by the LIC and his say was that on sanctioning the loan he would clear the Corporation Bank loan and get the property released. 10. Having regard to these facts and in the circumstances of the case, the refusal to grant loan by the LIC does not constitute an act of negligence on the part of the LIC and it does not amount to deficiency of service. 11. Having regard to these facts and in the circumstances of the case, we do not find any justifiable ground to interfere in the order recorded by the District Forum, Belgaum. ORDER In the result, therefore, this appeal fails and it is dismissed. The parties are directed to bear and pay their own costs in this appeal. Appeal dismissed.