Upholding the orders passed by the fora below, the national consumer disputes redressal commission (NCDRC) directed Bank of Baroda to pay Rs1 lakh each as compensation to two students who had obtained an education loan. NCDRC held that there was a deficiency in service on the part of the Bank in not claiming and depositing the interest subsidy in the loan accounts of the student borrowers.
In an order last week, the bench of Justice RK Agrawal (president) and Dr SM Kantikar (member) of NCDRC says, "The plight of the respondents, who were students and had taken an educational loan to pursue further studies and though they were eligible to receive the interest subsidy as per the scheme notified by the Union government but were being denied the same, as well as the resultant mental and physical agony suffered by them cannot be imagined and, therefore, the district commission has rightly issued the said direction, which has been affirmed by the state commission."
However, referring to an order passed by the Supreme Court, the bench says compensation cannot be awarded under multiple heads. "...there was a deficiency in service on the part of the Bank in not claiming and depositing the interest subsidy in the loan accounts of the respondents, the direction to pay any interest on the amount of compensation was not warranted in the facts and circumstances of the case."
Bank of Baroda was directed to pay a compensation of Rs1 lakh each to the student borrowers without any interest and Rs5,000 each as litigation expenses.
In 2010, two brothers, Ankur Singhal and Shubham Singhal from Rajasthan, took an education loan from Bank of Baroda after being admitted to the four-year B Tech course. Every year, they were required to deposit the interest charged on the principal amount. The instalments of the principal amount were to be paid after one year of completing the course or six months of getting the job, whichever was earlier.
After some time, the Union government launched a scheme under which the interest charged on the education loan for five years was to be given to the student borrowers as a subsidy. Ankur and Shubham stated they were eligible for the scheme and submitted relevant documents to the Bank.
However, they did not receive full subsidies under the scheme. In response to their query under the right to information (RTI) Act, Bank of Baroda admitted that its officers were responsible for that lapse.
Even after that, the subsidy was not provided to the students, which amounted to unfair trade practice and gross deficiency in service on the part of the Bank, as also monetary loss and physical and mental agony to them.
Both Ankur and Shubham then filed complaints before the Tonk district commission, praying for the relief.
Bank of Baroda contended that the brothers got jobs in 2015 and had not deposited a single instalment, making them defaulters and thus they filed the complaint. "Neither was there any deficiency on its part, nor had it received any subsidy for the respondents. Whatever amount had been deposited by the respondents, the same had been adjusted in their loan accounts," the Bank stated.
The district forum, however, found that there was a deficiency in service on the part of the Bank of Baroda in not claiming the interest subsidy at the appropriate time and not depositing the same in the loan accounts of Ankur and Shubham.
Allowing the complaint, the district forum directed Bank of Baroda to pay them a compensation of Rs1 lakh each and Rs15,059 and Rs70,809 as a monetary loss to the brothers. These amounts were directed to be credited in the loan accounts of Ankur and Shubham along with 9% simple interest from the date of filing of the complaints.
Bank of Baroda then filed an appeal before the Rajasthan state commission. However, holding that there was no ground to interfere with the well-reasoned orders passed by the district forum, the state commission dismissed the appeals.
Bank of Baroda then approached the NCDRC.
The bench noted that the Bank had accepted that both Ankur and Shubham were eligible for the subsidy scheme. However, in its reply filed before the district forum, Bank of Baroda stated that the respondents had not filed any application for the scheme.
"Being one of the eminent and leading Banks of the country, Bank of Baroda was not expected to state so. The mere fact that Ankur and Shubham had taken the educational loan from it and were admittedly eligible to receive the interest subsidy as per the relevant provisions of the scheme notified by the Union government was sufficient for the Bank to take appropriate steps in the matter. Ankur and Shubham were not required to request the Bank to release the interest subsidy to them as per the scheme," the NCDRC observed.
While disposing of the appeals, the bench says, "As far as the merits of the matter are concerned, we find that the Bank have nothing to say and have also partly accepted the orders passed by the fora below by indemnifying the monetary loss suffered by the respondents."
(Revision Petition Nos2863/64 of 2018 Date: 12 April 2023)