Bank told to pay family over Rs 7 lakh student loan row

MUMBAI: The state consumer commission on Wednesday brought to book Central Bank of India for refusing to hand over deeds of a house to a family despite having repaid in lump-sum a student loan of Rs 7 lakh. The commission said the bank’s legal notice shocked the complainant’s wife and she suffered a paralysis attack and died. The bank will now pay the family around Rs 25,000 as costs of the appeal.
A loan of 12.5 lakh was taken by Harpahelsingh Bhansingh in 2001 for a five-year term, to send his daughter abroad to study.For security against the loan, he mortgaged his house in Kopri colony, Thane. A moratorium period of 12 months after completion of education or six months from date of securing employment was agreed to by two parties. Unfortunately, Bhansingh’s daughter failed to obtain a work permit and returned to India, after which the bank deemed the loan a non-performing asset and demanded a one-time settlement of 7 lakh.
In lieu of receiving the settlement, the bank failed to return the title deed of the mortgaged property and a no-dues certificate to the family. The bank sent out a fresh notice six months after repayment of the settlement amount, seeking recovery of Rs 9.4 lakh. Bhansingh’s wife died after suffering a shock and a paralytic attack. The bank did not respond to requests from the son, who needed the title deeds to avail a loan for his higher education. In light of this, Bhansingh moved the district forum, which deemed the fresh notice illegal and demanded return of the title deeds of the property.
The bank filed an appeal with the state commission, contesting the district forum order, claiming the order was without jurisdiction. Due to deficiency in service by the bank, the state commission dismissed its appeal. The bank should have been “ever vigilant” to protect the consumer’s interests, the commission said, ordering it to compensate Bhansingh’s family.