SBI moves NCDRC to transfer case by Madras High Court judge over home loan default

State Bank of India has approached the National Consumer Disputes Redressal Commission (NCDRC) seeking the transfer of a consumer complaint filed by Madras High Court judge, Justice Nisha Banu over a dispute arising from an overdue home loan repayment..The Bank has sought a transfer of the case to a forum outside Tamil Nadu since Justice Banu is sitting High Court judge, as first reported by the Indian Express..Records available on the NCDRC website reveal that the Bank filed a transfer petition before the coram of Justice AP Sahi and member Inderjit Singh.The original complaint was filed by Justice Banu through her son and lawyer Dayakant Kevin Rai against New India Assurance Company and SBI before the District Consumer Disputes Redressal Commission in Madurai.SBI’s lead counsel, Advocate Jitendra Kumar, said that since Madurai district came under the jurisdiction of the Madras High Court, the Bank felt it might not get a fair hearing before the District Commission..SBI has also filed an application seeking an interim stay on the proceedings before the District Commission until its transfer petition is heard finally. On August 9, the last date of hearing in the matter, the District Commission was informed of the transfer petition and the hearing on the original complaint was accordingly adjourned to October 10.The NCDRC, meanwhile, is scheduled to hear SBI’s transfer petition on September 23..The dispute between Justice Banu and SBI pertains to a home loan the judge had availed in 2010 for constructing a two-storey house on two adjoining plots she owns in Madurai.At the time, Justice Banu was an advocate practicing before the Madras High Court. She availed a house construction loan and mortgaged the property of ₹29.20 lakh with a 20-year repayment period, SBI said. She also mortgaged another property she owns in Madurai to secure the loan. The loan was insured by the New India Assurance Company.The judge paid her EMIs on such loan for the first two-and-a-half years. However, in 2012, Justice Banu got into a dispute with the private contractor over the alleged use of sub-standard construction material for the house..In 2013, she asked SBI to stop further disbursement of the loan and stopped paying the EMIs on her loan. By this time, SBI had already disbursed ₹22 lakh of the loan amount.The EMIs due in December 2018, and January and February 2019 were not paid. As per the Bank, the outstanding amount that remains unpaid by Justice Banu comes to around ₹40 lakh..The judge then filed a consumer complaint against the contractor, one John Ignatius, before the State Consumer Disputes Redressal Commission, claiming he had used sub-standard construction material and seeking compensation. The proceedings resulted in the demolition of whatever portion of such house that had already been constructed. In 2015, following the State Commission’s order, Justice Banu was paid a compensation of over ₹20 lakh with12 per cent interest..In 2016, Justice Banu was elevated as a judge of the Madras High Court.Meanwhile, she approached the NCDRC in appeal, and was awarded another ₹25 lakh as compensation on July 10, 2019..Since Justice Banu is a sitting judge of the High Court, the Bank says it has been unbale to seize the mortgaged property and recover the loan default amount.The Bank says it “sent” the judge “repeated reminders to pay the outstanding amount.” It also reminded her that she had secured “hefty compensation” against the demolition of her partly constructed house and that she was liable to pay her home loan dues.Justice Banu asked SBI to instead settle the outstanding amount by making a claim before the insurance company..The insurance company, however, said that the insurance cover availed by Justice Banu pertains to its the ‘Standard Fire and Special Peril Policy’ and does not cover demolition of the partially constructed house..in 2021, the loan was classified by SBI as a non-performing asset (NPA) as per Reserve Bank of India (RBI) guidelines.In June this year, Justice Banu through her son filed a complaint before the District Commission, Madurai against the General Manager of the New India Assurance Company through which she had secured insurance for the house that was being constructed, the SBI, and one more respondent party..Justice Banu has asked in her complaint that she paid a sum of ₹46 lakh with interest, the insured amount, and ₹1 crore as compensation for mental agony. She has also sought a refund of all the money already paid towards previous EMIs on the housing loan.The judge has claimed that New India Assurance and SBI colluded to not pay her the insurance amount despite the house having been demolished..Justice Banu and her counsel P Gokulnath of Gandhi Associates, who represents her before the District Commission in Madurai, could not be reached for comment.