Allowed

Bijoy.P., v. Bank of Baroda

Kerala HC16 Jun 2020WP(C)/5092/2019

Case brief

AI extract

What is this about?

The High Court of Kerala held that banks are obligated to process Mudra loan applications and must communicate reasons for rejection. The petition was allowed, directing the bank to process the application within specified timelines.

What did the court decide?

Direc tes petitioners to submit loan application within one week for processing within two weeks; directs bank to inform grounds for rejection if ineligible.

Bijoy.P., Vs Bank of Baroda — Consumer Protection | Kerala HC (2020)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE V.G.ARUN

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TUESDAY, THE 16TH DAY OF JUNE 2020 / 26TH JYAISHTA, 1942

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WP(C).No.5092 OF 2019(J)

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PETITIONER/S:

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BIJOY.P., AGED 33 YEARS S/O.GANGADHARAN, PALATHINGAL HOUSE, KUNDUBAZAR KOTTAKKAL, MALAPPURAM-676503.

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BY ADVS. SRI.SHERRY J. THOMAS SRI.RENISH RAVEENDRAN

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RESPONDENT/S:

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1 BANK OF BARODA, KOTTAKKAL BRANCH, REPRESENTED BY ITS MANAGER, 1ST FLOOR, VADAKKAN COMPLEX, OPPOSITE ARYA VAIDYA SALA CHARITABLE HOSPITAL, KOTTAKKAL-676503.

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2 RESERVE BANK OF INDIA, REGIONAL BRANCH, BANERJI ROAD, ERNAKULAM NORTH, KALOOR, ERNAKULAM, KERALA 682018 REPRESENTED BY ITS GENERAL MANAGER (OFFICE IN CHARGE).

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3 CIBIL TRANS UNION CIBIL LIMITED, (FORMERLY CREDIT INFORMATION BUREA (INDIA) LIMITED), ONE INDIABULLS CENTRE, TOWER 2A, 19TH FLOOR, SENAPATI BAPAT MARG, ELPHINSTONE ROAD, MUMBAI-400013.

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4 MICRO UNITS DEVELOPMENT AND REFINANCE AGENCY LIMITED (MUDRA LTD.), MSME DEVELOPMENT CENTRE, C-11, G-BLOCK, BANDRA KURLA COMPLEX, BADRAE, MUMBAI-400051.

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5 ADDL.R5. THE UNION BANK OF INDIA,

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W.P.(C) No.5092 of 2019

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KOTTAKKAL BRANCH, THAZHATHANGADI, MALAPPURAM ROAD, KOTTAKKAL-676503. (IMPLEADED VIDE ORDER DATED 28-02-2020 IN IA NO. 2/2020).

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R1 BY SMT.R.REMA, SC, BANK OF BARODA R3 BY ADV. SRI.C.AJITH KUMAR R4 BY ADV. SHRI.P.VIJAYAKUMAR, ASG OF INDIA R5 BY ADV. SRI.SADCHITH.P.KURUP R5 BY ADV. SRI.ASP.KURUP

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 16.06.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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W.P.(C) No.5092 of 2019

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Dated this the 16^th day of June, 2020

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JUDGMENT

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The petitioner had applied for a Loan of

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Rs.4,00,000/-, under the Mudra Loan Scheme, set

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up by the Government to support the micro enterprise sector.

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2. The grievance of the petitioner is that

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the first respondent Bank refuses to process the loan application, citing various reasons, including the reason that the CIBIL Score of the petitioner is below average. The learned Counsel for the petitioner submits that the reasons stated for low CIBIL score is default in making repayments to a credit card account. It is submitted that the petitioner had never applied for or obtained a credit card at any point of time.

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W.P.(C) No.5092 of 2019

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3. A statement has been filed on behalf of the first respondent Bank pointing out that the petitioner had earlier opened current account with the Bank, had been issued with cheque book and offered facilities. The 'welcome kit' sent by the Bank in address provided by the petitioner was returned with the endorsement 'addressee not known'. There was no transaction in the account and inspection revealed that no business was being conducted by the petitioner from the address provided by him. The learned Counsel for the petitioner denied the allegations to be baseless.

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4. Whatever be the reasons, I am of the considered opinion that the Bank is under an obligation to process the loan application and in the event of the petitioner being found not eligible for the loan, to intimate the reason for

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W.P.(C) No.5092 of 2019

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rejection of the loan application.

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In the result, the writ petition is disposed of, directing the first respondent Bank to accept the petitioner's loan application and process the same. If the petitioner is found not entitled for the loan, to inform the petitioner about the reasons for rejecting his application. The petitioner is directed to re-submit the loan application within one week, in which event, the Bank shall process the application and do the needful in accordance with its policy and guidelines, within a period of two weeks thereafter. The writ petition is disposed of as above.

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SD/V.G.ARUN JUDGE

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Scl/ 16.06

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W.P.(C) No.5092 of 2019

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APPENDIX

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PETITIONER'S/S EXHIBITS:

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EXHIBIT P1 THE TRUE COPY OF SALARY CERTIFICATE.

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EXHIBIT P2 THE TRUE COPY OF LICENSE ISSUED BY KOTTAKKAL MUNICIPALITY TO THE PETITIONER FOR HIS BUSINESS OF SALE OF BOARD PAINTING AND ADVERTISING DATED 21/12/2017.

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EXHIBIT P3 THE TRUE COPY OF THE RENT DEED.

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EXHIBIT P4 THE TRUE COPY OF PROJECT REPORT.

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EXHIBIT P5 THE TRUE COPY OF THE SALIENT FEATURES OF MUDRA LOAN PUBLISHED BY THE AUTHORITIES.

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EXHIBIT P6 THE TRUE COPY OF THE NO DUE CERTIFICATE ISSUED FROM THE UNION BANK OF INDIA DATED 10/12/2018.

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EXHIBIT P7 THE TRUE COPY OF THE LETTER ISSUED BY THE UNION BANK OF INDIA DATED 27/1/2019.

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EXHIBIT P8 THE TRUE COPY OF THE LETTER DATED 27/12/2018 ISSUED BY THE BANK OF BARODA.

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EXHIBIT P9 THE TRUE COPY OF THE STATEMENT DATED 17/1/2019.

Bijoy.P., v. Bank of Baroda

Case brief

What is this about?

What did the court decide?

Bijoy.P., v. Bank of Baroda

Case brief

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What did the court decide?

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