I have applied for a loan of Rs.5,00,000 with LIC Housing Finance Limited (LICHFL referred thereafter), SCO 2445-46, Sector 22-C, Chandigarh for renovation/improvement of my flat situated at flat No.410,GHS-33,Sector-20, Panchkula-Haryana in September’2009. LICHFL have asked for originals of all the documents which were duly submitted at the time of application.

The loan was sanctioned vide their sanction letter File No.663212 dated 06/10/2009 and all the terms were duly acknowledged to LICHFL.

The upfront fees paid Rs.1103/- at the time of submission of application and Rs.4412/- at the time of acceptance of sanction letter. (Total fees paid Rs.5515/-).

LICHFL limited have asked for stamp papers and all the documents including six cheques, ECS sanction letter from Oriental bank of commerce have submitted to LICHFL. LICHFL have asked me to come to their sector 22 office for disbursement of loan in December’2009.When I visited office I was told that the loan sanctioned can not be distributed as per instructions from legal department but no specific reasons were given. They also asked me to wait for the call from their office.

To my surprise I have received letter (without any Letter no.) dated 31.12.2009 from Area Manager asking me to submit “conveyance deed in my favour” for the flat or else collect all the original document from their office. Shocked by such treatment by your office I visited the sector 22, Chandigarh office and explained them that all the documents available with us are submitted at the time of application and there is no conveyance deed with any society flat holder in Panchkula. This document was never asked earlier and it is impossible for any flat holder in Haryana to submit this letter.

The concerned official Mr. Charanjit Singh have shown their inability of any help and frustrated with their attitude I have no option but to take all my original documents.

I have also asked them for the return of upfront fees Rs.5515/- since the loan was never disbursed but they till date have not returned my upfront fees saying this is non-refundable.

Its been almost five months that I am being harassed by LICHFL neither they have given me loan nor they returned my upfront fees. I addition to the above the amount spent on cost of stamp papers and amount of time and money spend on communicating with are still to be counted. I have to borrow money from other costly source to get the job of my flat renovation done which still to be counted.

Request you to immediately look into this and issue instruction to the concerned official Mr. Charanjit Singh to refund of upfront fees.
I also further request your goodself to issue instructions to concerned official to stop this practice to taking the upfront fees and then rejecting the case of customers. You must be aware in a recently decided case in consumer forum (The Tribune details December’17’2010 attached) where forum has said:-
“The forum in its orders stated that whenever an application is moved they proceed to sanction the loan immediately without verifying the eligibility of the applicant or the genuineness of the documents attached therewith. The purpose behind it is to swallow the process fee to which they are otherwise not entitled.
The procedure adopted by the company is, therefore, totally wrong because they are acting in a reverse mode by first sanctioning the loan and thereafter asking for the documents.
There is another defect in this procedure that the companies are trapping the gullible customers who are given to believe under the garb of the sanctioning order that they would get the loan and should not approach any other bank or financial institution for this purpose.”
I am sure their will be huge gap in the loans sanctioned and loans disbursed by LICHFL as most of the loans are not disbursed after the upfront fees are eaten by LICHFL.
In my case also their is clear case when the application was submitted to LICHFL, the LICHFL was aware that the loan is against the society flat in Haryana where the society flat holders are only given share certificate by the management of the society and no individual conveyance deed are done by each society flat holders with HUDA (Haryana urban development Authority). Knowing the facts at the time of application itself that there is no conveyance deed available with me for the flat they have asked and rejected my loan application on legal ground after taking the upfront fees.
This is clear case of Harassment by LICHFL limited and intention is to take the non refundable upfront fees and then reject the case.I strongly protest against this treatment.
Request you to please immediately refund my upfront fees of Rs. 5515/-, cost of stamp papers Rs.1500/- and others costs Rs.31700/- (Money spent in last 3-5 months in follow-up and Interest paid for alternative funds arrangements etc.) which could be counted and details could be submitted.
Regards
Vikas Kathpalia