Pay ₹2.54L to borrower for failing to promptly refund surplus amount: Ranga Reddy consumer panel to SBI
It directed the bank to pay the remaining amount of Rs 2,14,481 along with 9% interest from April 20, 2021
By - Sistla Dakshina Murthy
Representational Image
Hyderabad: Ranga Reddy District Consumer Disputes Redressal Commission has directed State Bank of India (SBI) to pay Rs 2,54,481 along with 9% interest for failing to promptly refund the surplus amount to a borrower following the auction of his seized car.
The panel came down heavily on the SBI for deficiency in service.
It directed the bank to pay the remaining amount of Rs 2,14,481 along with 9% interest from April 20, 2021. In addition, the Commission ordered SBI to pay Rs 30,000 as compensation for mental agony and Rs 10,000 towards litigation costs, warning that failure to comply within 45 days would attract an enhanced interest rate of 12%.
Background of the case
The complainant, M. Jaipal Reddy of Bachupally, availed a vehicle loan of Rs 6 lakh in 2017 from SBI’s Dulapally branch to purchase a Maruti Swift Dzire car.
Due to financial difficulties during the COVID-19 pandemic, he defaulted on EMI payments. As a result, the bank seized the vehicle in March 2021 and auctioned it on April 20, 2021, for Rs 4.20 lakh.
Surplus amount withheld
After adjusting outstanding dues and charges, the borrower was entitled to a surplus of about Rs 2.14 lakh. However, the bank allegedly delayed returning this amount and continued to levy what the complainant termed “unnecessary charges.”
Aggrieved by the delay, Jaipal Reddy approached the Ranga Reddy District Consumer Disputes Redressal Commission seeking relief.
Bank’s defence rejected
During the hearing, SBI cited various reasons for the delay and offered to refund only Rs 67,000. The Commission rejected these arguments, holding that the bank’s conduct clearly amounted to a deficiency in service.
Commission’s directions
Refund Rs 2,14,481 with 9% interest from April 20, 2021.
Pay Rs 30,000 as compensation for mental agony.
Pay Rs 10,000 towards litigation costs.
If unpaid within 45 days, the amount will carry 12% interest.
The ruling underscores that banks are duty-bound to promptly return surplus amounts after auctioning seized assets and cannot burden consumers with unjustified delays or charges.
