CONSUMER COMPLAINT No. 68 OF 2008

Between:

K.Chandra Shekhar Reddy S/o Koti Reddy, Age: 58 years,

Occ: Business, R/o H.No.5-7-212, Miryalguda Road,

Nalgonda Town.

…Complainant.
AND

The General Manager, The Nalgonda District Co-operative

Central Bank Limited, Nalgonda.

…Opposite Party.

This complaint came on before us for final hearing on 30-11-2009, in the presence of Sri A.Muralidhar Rao and Sri G.S.Chakravarthy, Advocates for the Complainant, and Sri B.Ravi, Advocate for the Opposite Party, and on perusing the material papers on record, and having stood over for consideration till this day, the Forum passed the following:
O R D E R
BY SRI K.VINODH REDDY, MALE MEMBER



1. It is the say of the complainant that he used to run a business in

the name of M/s Sai Ramana Industries at Kesharajupally Village of Thipparthy Mandal, Nalgonda District, for that he had approached the Opposite Party bank to avail the loan facility where they had sanctioned loan vide letter No.DEB/D6/1994-95 in the year 1995 under Loan Account No.54/NFS and the same was utilized by him, for that he had



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submitted registered sale deed bearing No.1104/1966 and document bearing No.4402/1993 of his residential house bearing No.5-7-212, Miryalguda Road, Nalgonda Town as collateral security to the Opposite Party.

He further says that he had cleared the entire loan along with interest in the year 1998, for that the Opposite Party authorities had issued a Clearance Certificate on 17-09-1998, after obtaining the Clearance Certificate he had approached the Opposite Party to get back his collateral security papers but the Opposite Party dodged the matter on pretext or other.



In the year 2003 the Opposite Party had demanded him to pay an amount of Rs.1,71,061/- stating that he was still due that amount to the bank, in fact he had paid entire loan amount along with interest to the bank and the share capital was also returned to him by the Opposite Party in the year 1998.



As the Opposite Party did not return his collateral security papers he had approached the Hon’ble High Court who directed the Opposite Party to appoint an arbitrator to solve the problem in the year 2004, for that the Opposite Party had appointed a Senior Inspector who passed the orders on dated 12-5-2004 with an observation that the proceedings were illegally initiated Under Section 71 of A.P. Co-operative Societies Act, where the section 61 of A.P.Co-operative Societies Act was right to initiate action on him by the Opposite Party. As these orders were passed in the month of May, 2004 the Opposite Party authorities have not taken any steps either to initiate action under section 61 of A.P.Co-operative Societies Act where he is ready to face and prove that he was

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not due any amount to the bank. Thereafter he had approached the Opposite Party several times asking them to return his documents but they did not respond, for that he had issued a notice through his advocate on dated 7-6-2004 requesting them to return the title deeds, but the Opposite Party did not respond.



After a long time on 12-11-2008 the complainant had approached the Opposite Party to take back the title deed documents but in response to that request by letter, the Opposite Party had came up through a letter dated 20-11-2008 with a contention that he was still due to pay an amount of Rs.1,70,924/- with further interest stating that the No Due Certificate issued on dated 17-2-1998 was an invalid one.



Demanding him to pay the above amount along with interest from 1998 to 2008 is illegal where the Opposite Party did not take any action against him which itself clearly shows that he was not due any amount to the Opposite Party. He came to know that the entire file concerning his loan was misplaced and the documents were also not traceable by the Opposite Party, for that only the Opposite Party is dragging the matter which is illegal.



Hence he prays that Forum should summon the Opposite Party to enquire about this matter and punish them as per law to the maximum extent and direct the Opposite Party to return back his title documents along with costs of Rs.5,000/-.



2. The Opposite Party in his counter admits that the complainant used to run a business on the name of M/s Sai Ramana Industries, for



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that they had sanctioned a loan of Rs.7,96,000/- under Loan Account No.54/NFS on the request of the complainant and at the time of availment of loan the complainant had deposited title deeds registered sale deed bearing No.1104/1996 and its link document bearing No.4202/1993 in respect of house bearing No.5-7-212, Miryalguda Road, Nalgonda Town with them towards collateral security.



He denied that the complainant had cleared off the entire loan along with interest in the year 1998, for that a Clearance Certificate was issued on dated 17-09-1998. He says that the General Manager of District Co-operative Central Bank Limited is only the competent person to issue any such type of certificates. Here in this case the Clearance Certificate which was issued by the Assistant Branch Manager is not at all a valid one and it was falsely brought up by the complainant, where the execution of loan document were in between the complainant and the General Manager.



He further submits that the bank has every right to recast the accounts of all loans and in that process the bank had recalculated the interest on the loan account of the complainant where the complainant fell due an amount of Rs.1,70,924/- towards interest which is recoverable. As the due was detected after some time he had demanded the complainant to clear all the dues, for that the complainant brought up an invalid clearance certificate stating that the Assistant Manager had issued it. Regarding the above dispute they had appointed an arbitrator who is Senior Inspector of the District Co-operative Central Bank Limited, Nalgonda after enquiry he had passed an order on dated 12-5-2004 opined that the issue requires detail enquiry and the provisions

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laid down under section 71 of A.P.C.S.Act are narrow. Therefore he referred that the same dispute may be resolved under Section 61 of A.P.C.S. Act. He denies that the complainant had approached them several times in claim of title deeds and issued a notice through his advocate on dated 7-6-2004.



He admits that recently the complainant made an application to them on dated 12-11-2008 requesting them to return his title documents, for that they had issued a reply stating that the complainant was still due an amount of Rs.1,70,924/- to them with further interest informing the complainant that No Due Certificate issued to the complainant on dated 17-09-1998 was an invalid one. As the complainant is still due the above said amount the question of returning the title deeds will not arise.



As the complaint is barred by limitation where the cause of action will arise only from 17-11-1998 but not on 20-11-2008 as stated by the complainant in his complaint, where mere correspondence of letters will not save the limitation. Hence the complaint may be dismissed with costs.



3. The counsel for the complainant had filed the affidavit of the complainant along with documents which are marked as Exs.A-1 to A-6 for proof on record and filed written arguments. The counsel for the Opposite Party filed the affidavit of the Opposite Party and produced the documents which are marked as Exs.B-1 to B-4 for proof on record.



4. Now the points that arise for consideration in this complaint are:



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1) Whether this complaint filed by the complainant is

within the limitation or not?

2) Whether this Forum has jurisdiction to adjudicate this

complaint or not?

3) Whether there was deficiency in service on the part of the Opposite Party or not?

4) Whether the complainant is entitled for the claim he made in his complaint or not?





5. POINT No.1: It is not in dispute that the complainant had availed the loan facility given by the Opposite Party who used to run his business in the name M/s Sai Ramana Industries at Kesharajpally Village of Thipparthy Mandal, Nalgonda District, in total he availed a loan of Rs.7,96,000/- from the Opposite Party bank under Letter No.DEB/D6.1994-95 in loan account No.54/NFS, for that he had deposited the title deeds and sale deeds bearing Nos.1104/1966 and 4402/1993 respectively pertaining to the residential house bearing No.5-7-212 of Nalgonda Town as collateral security. It is the contention of the complainant that the Opposite party is demanding him further amounts showing that he was still due an amount of Rs.1,71,061/- in the year 2003 to the bank in the above said loan account, whereas in 1998 itself he had cleared off the loan along with interest and obtained a Clearance Certificate on dated 17-09-1998 from the Manager, District Co-operative Central Bank Limited, Nalgonda Branch.



On receiving notice from the Senior Sales Officer and Arbitrator, NDCC Bank Limited, Nalgonda on dated 11-12-2003, which is marked as EX.A-2 the complainant had approached the Hon’ble High Court and filed a Petition No.2545/2004, on dated 12-2-2004 they disposed off the Writ Petition stating that “In this Writ Petition the apprehension of the Petition is that third respondent might issue certificate for recovery under section 71(1) of the Act without considering representation/reply

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of petitioner dated 12-1-2004. It is made clear that as and when an order is passed under section 71(1) of the Act, the Registrar competent to deal with the matter is bound to consider reply/explanation submitted by borrower. This observation would safeguard the interest of petitioner. If any order is passed against petitioner, it is open to him to challenge the same before the A.P. Co-operative Tribunal” which is marked as Ex.A-6.





Basing on that, on dated 12-5-2004 the Senior Inspector/Sales Officer and Arbitrator, NDCC Bank Limited, Nalgonda disposed off the application filed by the Branch Manager NDCC Bank Limited, Nalgonda Branch against the complainant, under section 71 of A.P.C.S. Act VII of 1964 gave the observation that “Since the matter pertains to the point of consideration that the question of amount due from Sri K.Chandrasekhar Reddy, Prop.M/s Sai Ramana Industries, Kesharajpally does not arise as the amount said to have been due is repaid and a Certificate to this extent is issued by the Bank officials itself stating that the entire loan is cleared by the Respondent/defaulter herein. The petitioner herein to whom an opportunity is given for defending the objection raised by the loanee is silent except filing a xerox copy of loan ledger of the individual. The main cause of action in this case is Clearance Certificate issued by the Branch Manager. This created a litigation/confusion between the petitioner society and respondent/defaulter.





In view of the above all I am of the opinion that the issue requires a detailed enquiry, and it seems to be, some bank employees are involved



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in it, in issuing Clearance Certificate to the defaulter. For fixing civil and

criminal responsibilities in this regard against the persons responsible, the provisions laid down under section 71 of the APCS Act are narrow.



This is a fit case to refer the matter to an ‘Arbitrator’ who will dispose off the case under section 61 of the APCS Act.



Hence the Petitioner bank/Respondent (loanee) may approach the appropriate authority for appointment of an ARBITRATOR under section 61 of APCS Act, 1964 duly following the procedure laid down under APCS/Rules for its disposal.





With this, the reference filed under section 71 of the APCS Act VII

of 1964, by the Petitioner bank against Sri K.Chandrashekhar Reddy R/o Nalgonda, M/s Sai Ramana Industries is dismissed/closed“, which is marked as Ex.A-3.





As the above application filed by the Branch Manager NDCC Bank Limited, Nalgonda Branch was disposed off on dated 12-5-2004 where the cause of action arose on the same day this complaint filed by the complainant in this Forum on dated 20-12-2008 is barred by limitation, mere correspondence of letters which are marked as Exs.A-4 and A-5 between the complainant and the Opposite Party in the year 2008 will not give life to the cause of action for limitation.



6. POINT No.2: Coming to the point of jurisdiction of this Forum as it was referred by the Senior Inspector in his observation while disposing



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off the application filed by the Branch Manager NDCC Bank Limited, Nalgonda Branch, before him that Section 71 of A.P.C.S. Act, 1964 is narrow, but the Petitioner Bank/Respondent (Loanee) may approach the appropriate authority for appointment of an Arbitrator under section 61 of A.P.C.S. Act, 1964 duly following the procedures laid down under A.P.C.S. Rules.



Whereas Section 121 of A.P.C.S. Act, 1964 which was amended in the year 2000 an insertion was given in Section 121 Sub Section (1) saying that “Save as otherwise expressly provided in this Act all orders, refusals, decisions or awards passed or directions issued or actions taken in accordance with this Act are the rules made there under shall be final subject to the provisions for appeal, revision and review and no such order, refusal, decision, award, direction or action taken shall be liable to be called in question in any court or Forum”.





As the Senior Inspector/Sales Officer and Arbitrator, NDCC Bank Limited, Nalgonda advised the both parties in disposing off the application filed by the Branch Manager NDCC Bank Limited, Nalgonda Branch, that either of the parties may approach the appropriate authority for appointment of an Arbitrator under section 61 of A.P.C.S. Act, 1964. This Forum does not have jurisdiction to adjudicate this complaint as per section 121 sub section 1 of A.P.C.S. Act, 1964, wherein no direction can be questioned or decided against that by this Forum, where the provisions of CP Act 1986 shall be in addition to and not in derogation of the provisions of any other law for the time being in force.



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7. POINT Nos.3 & 4: Under the above observations in Point Nos.1 and 2 where there is no limitation and jurisdiction to entertain this complaint by this Forum we feel that there is no necessity to discuss about the merits of this complaint, hence the complaint filed by the complainant can be dismissed.

In the result, the complaint is dismissed.
Dictated to Steno-Typist, transcribed by him, corrected and pronounced by us in the open Forum on this 04th day of December, 2009.