R. Ranjit, Member

This appeal is filed by the opposite party against the order dated, 31.10.2017 in CC.501/15 on the file of Consumer Disputes Redressal Forum, Ernakulam (for short the District Forum). The District Forum by its order has directed the opposite party to pay an amount of Rs.10,000/- as compensation for the monetary loss and mental agony suffered by the complainant and also directed an amount of Rs.3000/- to be paid as costs of the proceedings.

2. The case of the complainant is that the complainant and his father approached the opposite party HDFC Bank for a loan of Rs.6,00,000/-. For processing the loan, as demanded by the opposite party though he had paid an amount of Rs.3090/- as processing fee the opposite party rejected his loan application without assigning any reason. They also refused to refund the processing fee. Therefore the complainant filed the complaint for refund of the processing fee of Rs.3090/- and also for compensation.

3. The opposite party/HDFC Bank filed version contending that at the time of submitting the loan application itself the complainant was informed that he should pay a non refundable processing fee of Rs.3090/- and he had paid the amount after understanding the stipulation in the loan application. It is also specifically stipulated in the declaration signed by the complainant in the loan application, that the processing fee will not be refunded. There is no negligence or deficiency of service on the part of the opposite party in not refunding the processing fee.

4. Opposite party filed a transfer petition before this Commission alleging that the President of the Forum remarked that he will award heavy compensation against opposite party unless he settles the matter and therefore they felt that they will not get justice from the Forum. While the transfer petition was taken up for consideration by this Commission, the counsel for the opposite party handed over a cheque of Rs.3090/- to the complainant being the processing fee collected by them. This Commission thereafter dismissed the transfer petition directing the District Forum to determine the quantum of compensation which the complainant was entitled to.

5. Evidence consisted of the oral testimony of the complainant as PW1 and Exts.A1 and A2 marked on his side. Opposite party adduced oral evidence as DW1 and their Exhibits were marked as Exts.B1 and B2.

6. The District Forum found that the complainant has suffered much mental agony and loss, since the complainant had to approach the Bank for about one year to get back the processing fee. Forum on the basis of this finding passed the impugned order.

7. Heard the counsel for the appellant and perused the records. The learned counsel for the appellant contended that in the loan application the complainant has stated that his monthly income was only Rs.15,500/- and he could not pay an amount of Rs.6000/- from his total salary of Rs.15,500/- after meeting all the expenses, hence the loan application was rejected by the bank. The finding of the Forum that the bank ought to have sanctioned the home loan to the complainant is hence erroneous and unjustified. No financial institution can sanction loan to every person who approaches the financial institution. His repayment capacity is to be considered first. He further contended that in the loan application itself it clearly stated that the processing fee once paid will not be refunded. The processing fee is taken for processing and scrutinizing the loan application. The opposite party has informed the complainant at the time of remitting the processing fee itself that the processing fee was not refundable. It is permissible under by the guidelines of the National Housing Bank and Reserve Bank of India. It is charged in the interests of the public as well. Therefore there is no illegality in charging processing fee which is taken for scrutiny of loan application and documents. This practice is prevailing in every bank including nationalised banks. He further contended that the Branch Manager of the appellant bank cannot take a decision by himself for refund of the processing fee. Therefore the Manager forwarded an application to the head office requesting to refund the processing fee and the head office sanctioned the same. The cheque is issued from the head office and not by the manager. So during the pendency of the transfer petition the appellant returned the processing fee. Therefore there is no delay or deficiency in refunding the processing fee to the complainant.

8. The main grievance of the respondent/complainant is that he had approached the bank authorities several times for getting back the processing fee and the bank authorities were reluctant to refund the processing fee. It took about one year to get back the processing fee, hence for sufferings he is to be adequately compensated. The bank took up the contention that the declaration at the end of the application itself, clearly stipulates that the processing fee was not refundable and was collected for scrutiny and other legal expenses. However we find that the appellant bank could have rejected the loan application then and there. As urged by the appellant themselves, going through the loan application itself, it can be seen that the complainant was not having enough salary to repay the loan. Thus there was no need to take the processing fee. The opposite party did not adduce any evidence. They should have rejected the loan application without taking any steps to process the loan. They should have given back the amount to the complainant without any delay. They refunded the amount after about one year and that too only when they took up the matter before this Commission by way of Transfer Petition. The Branch Manager should have taken immediate steps to release the amount to the complainant which was not done by him. The amount was given only after they dragged the complainant to this Commission by way of Transfer Petition. The above acts and omission on the part of the appellant shows wanton deficiency of service. There was unexplained and inordinate delay on the part of the appellant in refunding the processing fee. Naturally, the respondent/ complainant had to undergo much mental agony and hardship and monetary loss. For the delay

caused, the complainant is to be adequately compensated. The District Forum in this circumstances has ordered a sum of Rs.10,000/- as compensation and Rs.3000/- as costs, which we feel is just and reasonable under these circumstances. We do not find any discrepancy in the order of District Forum warranting interference therewith. The appeal is devoid of merits and is liable to be dismissed. In the result appeal is dismissed. Both parties to suffer their respective costs. Release the amount of Rs.6500/-, the statutory amount deposited by the appellant, to the complainant/respondent which shall be adjusted towards the compensation and costs ordered, on filing proper application.