Thursday, 15 November 2018

Ease of Doing Business - How Dena Bank, CIBIL Harass Ordinary Indians

By Giffenman

India may have climbed the global scale in 'Ease of Doing Business'. But this letter below shows the extent of harassment a small Gujarati businessman, domiciled in India, faced from Dena Bank and CIBIL as he tried to run his business and educate his daughter with a non delivered educational loan.

The case in a nutshell:

Vipul Vora took a business loan from Dena Bank which was repaid in full. However Dena Bank held on to the ownership documents.

Vipul Vora's daughter took an educational loan to be paid directly to the college his daughter was studying in abroad. The loan never reached the daughter's college. Dena Bank insisted that Vipul Vora should repay the non-delivered loan amount. To coerce him to pay up the educational loan Dena Bank impounded the business documents used as collateral in the earlier business loan. 

CIBIL has used the Dena Bank's version of events to lower Vipul Vora's credit rating causing him great monetary and emotional distress.

Vipul Vora has been paralysed as he cannot grow his business without the impounded ownership documents and with no hope of the case being easily resolved.


------ Copy of Legal Notice sent by Vipul Vora to Dena Bank and CIBIL (Sic)

RVD/OG/MD ___October, 2018

To,
1. The Chief Manager,
Dena Bank,
Vashi Sector 19 Branch,
K-34, Masala Market,
APMC Market – II, Vashi,
Navi Mumbai 400705.


2. The Zonal Manager
Dena Bank, Zonal Office,
272 Amrut Industries, Gokhale Road
Opposite Gokul Society Bus Stop,
Gokul Nagar, Thane West 400 602


3. The General Manager
Mr. Sanjeev Dhobal
Dena Bank, 5th Floor,
C-10, Dena Bank Building,
G block, Band BKC, Bandra East,
Mumbai 400 051.


4. TransUnion CIBIL Limited
(Formerly: Credit Information Bureau (India) Limited)
One Indiabulls Centre, Tower 2A, 19th Floor, Senapati Bapat Marg, Elphinstone Road, Mumbai - 400 013.


Dear Sirs,

Sub: Deficiency in service, loss of reputation and claim for damages
----------------------------------------------------------------------------
We are concerned for our clients Mrs. Jagruti Vipul Vora and Mr. Vipul Vora and Ms. Shayali Vora, all residing at E-38, 1:2 Shanti Niketan CHS, Sector 4, Nerul – 400 706, who have instructed us to address to you as under:-

1. Our clients state as under:


a. Our client Ms. Shayali Vora was at all material times in or about 2010 to 2016 pursuing her M.B.B.S. course through Crimea State Medical University, Ukraine[Till 2014] and then Federal Medical University, Russia. (“the University”);

b. On account of annexation of Crimea by Russia in or about 2014, Crimea came under the control of Russia and consequently the University was at that material time then on May 2016 is governed by the laws of Russia;

c. Our client Ms. Shayali Vora received an invitation letter from the Crimea State Medical University for completing her 12 semester MBBS course with the Crimea State Medical University on or about September 2010;

d. Our client Ms. Shayali Vora(“the Borrower”) applied to you No. 1 for granting her an Education Loan of Rs.1,95,000/- (Rupees One Lakh Ninety Five Thousand Only)in order to enable her to complete her final semester at the Federal Medical University, Russia which was then governed by the laws of Russia;




e. The Borrower’s application for an Educational Loan was sanctioned by you No. 1 under the DENA VIDYALAXMI LOAN SCHEME. The Borrower had to leave for the University on September 2015 and you No. 1 insisted that in order to pay the amount of the Educational Loan to the University, the Borrower would have to execute a DENA VIDYALAXMI LOAN AGREEMENT (“Loan Agreement”) with you. You handed over a printed standard form of the Loan Agreement to the Borrower, who only signed without filling in the blanks in the Loan Agreement including the date of the Loan Agreement. Our client Mr. Vipul Vora handed over to you the signed copy of the Loan Agreement and your representatives promised Mr. Vipul Vora that they would fill in the blanks in the Loan Agreement in terms of the application of the Borrower and thereafter provide a copy of it to our clients. The Borrower was required to report to the University on or before 15th September 2015 and therefore she left India on 12th September 2015;

f. After constant follow up, your representatives provided to our client Mr. Vipul Vora copy of the Loan Agreement. Our client Mr. Vipul Vora noticed that the date of the Loan Agreement signed by the Borrower was 6th December 2015. Our clients were shocked and surprised to see that your representatives had inserted a sum of Rs.2,35,000/- instead of Rs.1,95,000/- as the amount of loan sought by the Borrower in the Loan Agreement signed by the Borrower. Our client Mr. Vipul Vora immediately brought the above mistake of the amount in the Loan Agreement to the notice of your representatives, however, your representatives informed him that they could not lend a small amount for educational loan to the Borrower as it was not commercially feasible. Our clients required the loan amount and in view thereof did not raise any issue at that time;

g. Our clients submit that while applying for the Education Loan, the Borrower was asked to fill A2 Form, as per Crimea State Medical University as indicated in their invitation letter and the Borrower pointed it out to the representatives of you No. 1., Before filling Form A2, our clients informed the representatives of you No. 1 about the sanctions by the USA against Russia and Crimea territories under the control of Russia which included non-transfer of US dollars to the above mentioned Region. Our clients also informed your representative No. 1 that Crimea, Ukraine where the University was located is under the control of Russia and that payment could not be made in US dollars. In view of the aforesaid our clients requested you No. 1 to transfer the Educational Loan Amount either in Russian currency or Indian currency to the Borrower’s savings account so that the Borrower can withdraw the same from ATM in Russia Main Land and pay her fees;


h. On and after 4th January 2016, our client Mr. Vipul Vora enquired with you No. 1 regarding the status of the transfer of the loan amount to the University. Your representative No. 1 informed him that the loan amount is being processed. Finally, in or about 5th January 2016, your representatives No. 1 informed our client Mr. Vipul Vora that they had Processed the Transfer through their associate Bank Citibank to pay the loan amount to the University in US Dollars through Bank of New York Mellon, New York[ Diversion of Funds other then the intended Purpose as per Indian Law, Clause 9 of Agreement, as loan was applied as per the Indian Laws] and that in terms of the international process of the transfer of US Dollars the loan amount required the License of the OFAC, US Treasury, USA. Bank of New York Mellon had stopped the transfer to the University under the instructions of OFAC Treasury, USA on account of the sanctions by USA against Russia and made Fixed Deposit in the name Of DENA BANK, Sender Bank.;

i. Our client Mr. Vipul Vora was shocked and surprised at the aforesaid grossly negligent conduct of your representative No. 1 (which they termed it as erroneous). He asked your representatives No. 1 about the manner in which you No. 1 intended to get back the loan amount to which you replied that you were considering applying for a license to OFAC Treasury, USA to get the refund of the loan amount. It has been over 2years 9 months since the grossly negligent transfer of public funds of Bank Loan by your representatives No. 1 to the USA, but you have not taken any steps to get the loan amount back, save and except to harass our clients as stated in sub-paragraph k. below;

j. In view of the aforesaid shocking disclosure made by you No. 1 about the non-transfer of the loan amount to the University, our clients had no option but to pay to the University from their own funds after taking a gold loan from Greater Bank;

k. Instead of obtaining refund from the USA of the loan amount negligently transferred by you No. 1, your representatives No. 1 started demanding payment of the loan amount from our client. Our clients informed you No. 1 that they were not liable to pay to you the loan amount, since the Loan Agreement was not honoured by you by paying the loan amount to the University[Agreement Clause No.8B], however, your representatives kept on harassing our clients. Your representatives No. 1 illegally and unauthorized withheld the securities provided in a Term Loan Account granted by you No. 1 to a Partnership Firm “Sai Pharma” (“the Firm”) in which our client Mr. Vipul Vora was a partner even though the Term Loan had been fully paid by the Firm;

l. On account of your illegal tactics aforesaid, the Borrower informed to OFAC Treasury, USA, for the release License[ Application made by Ms. Shayali Vora on 7th January 2016] to release the loan amount along with the Swift Report and also bought to the notice of OFAC Treasury, USA the above facts, which in turn led to conversion of the loan amount into commercial category and the License application was rejected;

m. After constant follow up and requests by our client Mr. Vipul Vora to your representatives, you No.1 informed our clients that you had in June 2018 finally applied to OFAC Treasury, USA, for a License for release of the loan amount from Bank of New York Mellon, USA. You also returned the securities of the Firm to the Firm which had been illegally and unauthorized withheld along with the funds in Sai Pharma and Vipul Vora’s Account, which were closed on 6th June 2017 by you No. 1;

n. Not satisfied with the shocking ordeal you had put our clients to, you No.1informed No.4that our clients were loan defaulters and consequently No. 4 even with the knowledge[By personal Visits to the Office and Mail Communications] of the above events have lowered the credit ratings of our clients. The aforesaid conduct of you No. 1 was malicious and made with the deliberate intention to harm the financial credit worthiness of our clients with No. 4 as also their reputation in society;
o. Our clients state that you No. 1 were grossly negligent in transferring the loan amount by US Dollars. As a banker you were aware or ought to have been aware that US Dollars could not have been transferred to the University on account of the sanctions of the USA against Russia. You were informed by our clients of the fact that US Dollars could not be transferred to the University and yet you did not pay heed to the warning and transferred the loan amount by US Dollars.

p. Our clients state that for about two years you did not take any steps to obtain refund of the loan amount from the USA. Your conduct is blameworthy in the sense that you were unconcerned about the public money of Indian Bank lying in the USA.

q. Our clients state that you illegally and unauthorised withheld the securities of the Firm (in which our client Mr. Vipul Vora is a partner) in spite of the fact that all the payments under the Term Loan granted by you to the Firm had been made to you and the account was clean and clear, in order to pressurise our clients to pay to you the loan amount even though you had not performed your promise under the Loan Agreement.

Our clients state that you No. 1 have defamed them by giving wrong and false information to No. 4 about our clients being loan defaulters and due to which No. 4 has lowered the credit ratings of our clients and Transmitted Electronically wrong information to Various Financial Institutions;

s. Our clients state that you No. 1 are a public sector bank. Public money is parked in your bank. You are required to utilize public money deposited with you for the welfare of society. You are required to act with utmost care and caution in carrying on your duties. Last but not the least, you required to act honestly and with integrity in dealing with your account holders, creditors including your borrowers and other stake holders. Our clients further submit that it has pained them immensely to be associated with you not to mention the losses, mental agony and harassment that have been caused to them.


2. In the circumstances aforesaid:-

(a) Our clients hereby request you No. 4, to remove the information provided to you No. 4 by No. 1 in respect of our clients’ being “loan defaulters” of No. 1, from your website and publish the correct CIBIL ratings of our clients on your website and, if you so desire No. 4, our clients are prepared to provide to you any information or document with regard to the above; and

(b) Call upon you No. 1 to pay to our clients individually and to company a sum of Rs. 5,00,00,000/- for breach of contract, loss, gross negligence, defamation, mental agony and harassment among other things within 15 days from the date of receipt of this notice by you, failing which our clients shall be constrained to adopt such legal proceedings against you as they may be advised at your entire risk as to the costs and consequences, which please note.

Yours faithfully,
Malvi Ranchoddas & Co.
Partner

--------End of letter.

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