Surat: Holding a nationalised bank responsible for failing to process a home loan borrower’s application for a Pradhan Mantri Awas Yojana (PMAY) subsidy, the Navsari Consumer Disputes Redressal Commission (CDRC) has directed Bank of Baroda to pay Rs 3.75 lakh to the consumer along with 9% interest.The amount includes the Rs 2.35 lakh PMAY subsidy the borrower was deprived of and Rs 1.4 lakh towards additional interest paid on the home loan. The commission also awarded Rs 5,000 as compensation for harassment and litigation expenses.The commission rejected the bank’s contention that the subsidy was granted by the govt and that the bank could not be held liable for its non-disbursal. It held that the bank had failed to take the necessary steps to process the consumer’s subsidy application.According to the complaint, Navsari resident Kiran Tandel and his wife approached Bank of Baroda in 2019 for a home loan under the PMAY scheme. Acting on the bank’s instructions, Tandel completed the required documentation through the bank’s empanelled advocate and architect. On June 4, 2019, the bank sanctioned a Rs 17.70 lakh ‘Baroda Gruh Loan – PMAY Loan’.After availing the loan, Tandel regularly paid an EMI of Rs 15,361 and also executed the mortgage deed and purchased loan insurance. However, despite repaying the loan, he did not receive the promised PMAY subsidy.On Feb 28, 2023, Tandel emailed the bank seeking details about the subsidy. The bank responded that the matter was “in progress”. Unsatisfied with the reply, he sent five reminders in March 2023 seeking information about the status of the application, but did not receive any details regarding the steps taken by the bank.Tandel subsequently approached the Navsari CDRC, seeking payment of the Rs 2.35 lakh subsidy, reimbursement of Rs 1.40 lakh in additional interest that he claimed to have paid because the subsidy was never credited, and compensation for harassment.During the proceedings, Tandel’s counsel argued that the bank had negligently failed to forward the subsidy application to the govt. The counsel also contended that if there had been any defect in the PMAY application, the bank would not have sanctioned the loan under the PMAY scheme in the first place.The bank, in its written reply, argued that it merely facilitated the loan and was not responsible for sanctioning the subsidy, which is granted by the govt. It further claimed that the borrower had violated PMAY eligibility conditions by giving an undertaking that he did not own more than two immovable properties.Rejecting the defence, the commission observed that the PMAY application itself showed that the consumer had declared he did not own any immovable property. It also noted that the bank failed to produce any evidence showing the steps it took to process the subsidy application with the govt.“The bank neither informed the consumer about any defect in the application nor produced records of having pursued the subsidy claim. It continued to collect loan instalments, indicating that the application was treated as valid,” the commission observed.Holding that the consumer lost the subsidy solely because of the bank’s failure to process the application, the commission directed the bank to pay Rs 2.35 lakh towards the PMAY subsidy, Rs 1.4 lakh towards the additional interest burden, both with 9% interest, besides Rs 5,000 towards compensation and litigation costs.
