Complaint No.209/03.08.2009

Decided on : 30.12.2009


Sh.Karamjeet Singh S/o Sh.Harnek Singh, Proprietor, M/s K.S.Agriculture Works, Link Road, Near Sidhu Nursing Home, Mansa.


..... Complainant.


VERSUS


1.

State Bank of Patiala, Main Branch, Mansa through its Manager.


2.

Assistant General Manager, State Bank of Patiala, Amrik Singh Road, Bathinda.


3. General Manager, State Bank of Patiala, Mall Road, Patiala.


..... Opposite Parties.


Complaint under Section 12 of the Consumer Protection Act, 1986.

.....


Present: Sh.Ranjeet Singh, Advocate counsel for the complainant.

Sh.S.P.Gupta, Advocate counsel for the Opposite Parties.

Quorum: Sh.George, President.

Sh.Sarat Chander, Member.

Smt.Neena Rani Gupta, Member.


ORDER:-

Sh.George, President:

The present complaint has been filed by the Complainant under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as Act) against the opposite parties with the allegations that the complainant manufactures agriculture implements in his shop in the name and style of "K.S.Agriculture Works" and secured a limit of Rs.3,00,000/- bearing Account No.55097376109 from the OPs. Due to recession, the complainant accompanied with Sh.Narinder Pal Singh approached the OP No.1 on 25.08.2008 for discontinuing the said CC limit and inquired about the amount outstanding in his account. On the asking of the OP, the complainant deposited a sum of Rs.30,000/-, including interest, and the OP further assured him that his CC limit account including interest calculated upto 31.8.2008 would be closed and he may deposit the amount, if any, outstanding in his name after 31.8.2008 or receive back, if due. The complainant approached the OP No.1 on 03.09.2008 and thereafter several times alongwith Sh.Narinder Pal Singh to collect his registry, but every time his request was turned down on one pretest or the other. According to the statement of account, supplied by the OPs, in April, 2009, no amount was outstanding towards the complainant, rather he was liable to receive a sum of Rs.980/- from them, which they have not paid till date. The OPs have played a fraud and are thus not returning the excess amount received from him alongwith the registry and No Due Certificate. He has sought direction to the OPs for refund of Rs.980/- alongwith the registry and No Due Certificate and claimed compensation to the tune of Rs.50,000/-, alongwith litigation expenses.

2. The opposite parties contested the allegations of the complainant and filed written reply resisting the complaint taking preliminary objections that the complainant, is not the 'consumer' within the purview of its definition given in the Act, that the complainant has obtained the loan for commercial purposes; that plea of fraud, cheating and mis-representation has been taken by the complainant, which cannot be decided by this Forum in summary manner; that the complainant has concealed the material facts from the knowledge of this Forum and since the OPs were going to sell the mortgaged property through auction, as such, this Forum has no jurisdiction to entertain and try the complaint, and it deserves dismissal.

3. On merits, issuance of CC limit in the sum of Rs.3,00,000/- in the name of the complainant, is admitted, but it was declared as Non Performing Assets as per RBI guidelines and further action was taken accordingly. The complainant then approached the OPs and deposited Rs.30,000/-, subject to deposit of Rs.30,500/- being expenses of publication, valuation and other charges. No interest and other charges are debited to in the Non Performing Assets account, rather they are kept separately, which was duly admitted by the complainant. The legal notice served upon them by the complainant was duly responded and he was made aware that Rs.30,500/- is still outstanding towards him. Since the complainant failed to deposit Rs.30,500/- alongwith interest, therefore, the title deed was not returned to him. All other facts narrated by the complainant not admitted as correct.

4. In order to prove the allegations, the complainant brought on record his own affidavit Ext.C-1, copy of statement of account Ext.C-2, copy of legal notice EXt.C-3 and closed the evidence, whereas the OPs in order to controvert the evidence of the complainant, has brought on the record copy of order dated 3.7.2009, representation of the complainant Ext.OP-2, copy of letter of the OPs Ext.OP-3, copy of postal receipt Ext.OP-4, copy of reply of legal notice Ext.OP-5, copy of auction notice Ext.OP-6, legal notice dated 8.5.2009 Ext.OP-7, affidavit of Sh.S.K. Grover, Manager Ext.OP-8 and letter dated 24.6.09 Ext.OP-9.

5. We have heard the learned counsel for the parties and perused the entire record of the case carefully.

6. Learned counsel appearing on behalf of the complainant vehemently contended that the OPs without any rules, regulations and cause is not returning his 'Title Deed' and 'No Due Certificate', despite the fact that he has cleared all the dues, as per the account statement of the OP No.1 Ext.C-2 as on 25.8.2008. He further urged that in fact an amount of Rs.28,950.23 ps were debited in the CC limit of the complainant, as the complainant deposited an amount of Rs.30,000/- on 25.5.2008 and after adjusting all the dues, as per the statement of account Ext.C-2, an amount of Rs.980/48 ps remained in credit of the complainant. Learned counsel further urged that when the complainant approached the OP No.1 for release of his Title Deed as well as No Due Certificate, firstly the OP No.1 did not listen to the requests of the complainant and he tried to linger on the matter on one pretext or the other. Resultantly, the complainant served notice Ext.C-3 dated 8.5.2009 through his counsel by registered post calling upon the OP No.1 to release his 'Title Deed' and also 'No Due Certificate'. The OP No.1 replied to the notice on 15.6.2009 through Sh. S.P.Gupta, Advocate, but the same is not exhibited. However, it is placed on the record whereby the OP No.1 informed the complainant that he has still to pay about an amount of Rs.30,500/-, which amount OP No.1 spent for publication etc and this amount could not be reflected in the statement of account Ext.C-2. Learned counsel further urged that the OP No.1 has not mentioned any rules, regulations or instructions either issued by the competent authority of the OP bank or by the Reserve Bank of India, to the effect that the complainant is liable to bear the expenses, such as publication in the newspaper, regarding sale of mortgage property and also any such advertisement made through television or pamphlet etc, incurred by the OP bank and is also recoverable from the CC holder i.e. the complainant. The learned counsel also urged that as per auction notice Ext.OP-6, the mortgage property was to be auctioned on 14.6.2008 and thus expenditure, if any, incurred by the OP No.1 must have been reflected in some bank account and it should have been brought to the notice of the complainant on 25.8.2008 when he deposited the amount of Rs.30,000/- in his CC limit account and after adjustment of all the dues, an amount of Rs.980.48 ps were shown in the credit of the complainant. Learned counsel further urged that the process of sale of the mortgage property was never completed as the notice of auction was issued for auction to be held on 14.6.2008, but in fact auction was never conducted. Learned counsel urged that the complainant has been harassed unnecessarily by the OP No.1 in retaining his 'Title Deed' as well as for non issuance of 'No Due Certificate' continuously for about a year and despite serving legal notice, the OP No.1 has not justified retention of his 'Title Deed' as well as issuance of 'No Due Certificate'.

7. Learned counsel appearing on behalf of the OP vehemently controverted the arguments put forward by the learned counsel for the complainant and he strongly urged that the CC limit was sanctioned in favour of the complainant for commercial purposes and, therefore, the Consumer Forum has no jurisdiction to entertain the complaint. He has also urged that allegation of fraud, cheating and misrepresentation has been alleged by the complainant against the OPs and, therefore, this Forum has no jurisdiction to look into and decide the allegations. The learned counsel also urged that the OPs were moving to sale the mortgaged property through auction under The Secrutisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and for that purpose, notice has already been published in the newspaper regarding the sale of the property and advertisement through television etc. The pamphlets were also distributed and the OP No.1 had spent an amount of Rs.30,500/- approximately on this process before the complainant visited the bank premises at Mansa and wanted to deposit Rs.30,000/- in the bank and the complainant said that the charges for publication, advertisement through television, pamphlets, valuation and interest, if any, will be paid by him lateron. This amount could not be reflected in the statement of account of the complainant because the account of the complainant had already been classified as ' Non Performing Assets'. As per the Reserve Bank of India's guidelines, no interest is debited to "NPA" account, rather the same is calculated and kept separately. Learned counsel finally contended that in view of Chapter III Enforcement of Security Interest, Section 13, Sub-sections (7) & (8) of The Secrutisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the OPs are entitled to claim the expenses incurred for auction of the mortgage property in order to realize the entire amount of debt i.e. the CC limit loan from the complainant.

8. We have considered the arguments put forward by the learned counsel for the OPs. Sub-Sections (7) & (8) of Section 13 of the above referred Act are reproduced herein below:-

(7) Where any action has been taken against a borrower under the provisions of sub-section(4), all costs, charges and expenses which in the opinion of the secured creditor have been properly incurred by him or any money which is received by the secured creditor shall in the absence of any contract to the contrary be held by him in trust to be applied firstly in payment of such costs, charges and expenses and secondly in discharge of the dues of the secured creditor and the residue of the money so received shall be paid to the person entitled thereto in accordance with his rights and interests.

(8) If the dues of the secured creditor together with all costs, charges and expenses incurred by him are tendered to the secured creditor at any time before the date fixed for sale or transfer, the secured asset shall not be sold or transferred by the secured creditor and no further step shall be taken by him for transfer or sale of that secured asset.

9. The careful examination of Sub-Section (7) reveals that it will be applicable only in case the auction is conducted and the auction becomes final and whatever amount realized from auction, the costs, charges and expenses etc. are to be adjusted out of that amount whereas according to Sub-Section (8), the amount of all costs, charges and expenses incurred by the OPs can be realized from the debtor by the secured creditor, if the debtor appears before the date fixed for the sale or transfer etc and the secured assets are not sold or transferred by the secured creditor. In the present case, neither any pleading nor any evidence has been brought on the record by the OPs that the complainant appeared before them before the date of auction and offered to deposit costs, charges and expenses incurred by the OPs for holding auction alongwith remaining loan amount under CC limit. Sub-Sections (7) and (8), therefore, do not help the OPs in any manner, either to withheld the 'Title Deed' or to refuse issuance of 'No Due Certificate'.

10. It also appears from the record brought before this Forum that the CC account statement Ext.C-2 as on 31.8.2008 is showing an amount of Rs.980.48 ps in credit of the complainant. The complainant served a notice upon the OP No.1 Ext.OP-7 dated 8.5.2009 which was replied to by him vide reply dated 15.6.2009 wherein the complainant was informed that he is liable to pay about a sum of Rs.30,500/-, which the bank has spent for publication etc. His statement of account Ext.OP-9 reveals that OP No.1 has prepared the account on 24.6.2009 which shows an amount of Rs. 21000/- as SRESI charges, valuation charges Rs.1000/-, TV ad. for sale of property Rs.6000/-, pamphlet for sale advertisement Rs.2500/-. However, as to whether the OPs have infact spent this amount and paid to the concerned persons, no evidence has been brought to this effect on the record. No receipt for the charges incurred for payment of Rs.21000/-, Rs.1000/-, Rs.6000/- and Rs.2500/-, as referred to above, has been placed on the record as to how and on the basis of which documents these entries were made in the account of the complainant on 24.6.2009 remained unexplained. Whereas the complainant has deposited the entire amount, whatever was due from him to the OPs as on 25.8.2008. When he deposited the amount of Rs.30,000/- as per his account statement concerning CC limit Ext.C-2 after adjustments of his dues, an amount of Rs.980.48 ps were shown in the credit of the complainant. That the contention raised on behalf of the OPs that this Forum has no jurisdiction, appears to be without any substance for the reason that the complainant was paying the required amount of interest on his credit limit and, therefore, he is definitely a 'consumer' and the OPs a 'service provider' for consideration. That the OPs should have credited the claimed amount of Rs.30,500/- in the account statement of the complainant, on the day, it became due to the OPs from the complainant and should have been brought to the notice of the complainant by way of notice or otherwise. That the auction notice Ext.OP-6 showing that auction was scheduled for 14.6.2008, means that the OPs must have spent some amount, i.e. the claimed amount whatsoever it may be, in the first week of June, 2008, whereas, the complainant deposited an amount of Rs.30,000/- on 25.8.2008 i.e. after more than two months of the auction date i.e. 14.6.2008, as to what prevented the OPs to claim the said amount by serving the notice upon the complainant immediately after the complainant deposited the amount of Rs.30,000/- on 25.8.2008, to make it known to the complainant, that his 'Title Deed' and 'No Due certificate' will be issued to him only after deposit of the aforesaid amount, quoting the 'rules', 'regulations', 'instructions', 'provisions of law' or 'terms of his agreement', under which the complainant was required to pay this amount. Even in the reply to the complaint and affidavit filed by Sh.S.K. Grover, Manager of the OP bank Ext.OP-8, there is no mention of any rules, regulations, by-laws, instructions and terms and conditions of CC limit of the complainant, under which the complainant is liable to pay the amount, if any, spent by the OP for publication of the sale of mortgage property etc.

11. We would like to mention here that in Lucknow Development Authority versus M.K.Gupta 1993(III) CPJ 7 (SC), the Hon'ble Apex Court has strongly criticized such arbitrariness on the part of the officers of the public authorities. In the said case, the Hon'ble Apex court has observed that "the authority empowered to function under a statute while exercising power discharges public duty. It has to act to observe general welfare in common good. In ordinary matters a common man, who has neither the political backing nor the financial strength to match the inaction in public oriented departments, gets frustrated and it erodes the credibility in the system where it is found that exercise of discretion was malafide and the complainant is entitled to compensation for mental and physical harassment then the officer can no more claim to be under any protective cover. The court further directed the department concerned to pay the amount to the complainant from the public fund immediately, but to recover the same from those who are found responsible for such unpardonable behaviour by dividing it proportionately where there are more than one functionary."

12. Taking into consideration the facts, circumstances, the evidence of both the parties and the law laid down in the authority ibid, we accept the complaint and are of the considered view that the complainant is not liable to pay any sum, as has been shown to have been spent by the OP No.1, as per statement of account Ext.OP-9 dated 24.6.2009, rather the complainant is entitled for an amount of Rs.980.48 ps alongwith interest accrued on this amount.

13. The facts and circumstances of the case further reveals that the complainant has been put to unnecessary harassment, mental tension and inconvenience by the OP No.1 by withholding the 'Title Deed' of the complainant and non issuance of 'No Due Certificate' for more than one year and, therefore, the complainant is also entitled for reasonable and adequate amount of compensation from the OPs, which in the facts and circumstances of the case, we assess to the tune of Rs.50,000/-. The amount of Rs.50,000/- shall be recoverable by the State Bank of Patiala from the Branch Manager of the State Bank of Patiala, Main Branch, Mansa, who is infact, responsible for withholding the 'Title Deeds' and 'No Due Certificate' of the complainant not only in illegal manner, but also whimsical exercise of the public functions. The complainant is also entitled for the 'Title Deed' and 'No Due Certificate' from the OP No.1 within 45 days.

14. Compliance of this order be made by the OP No.1 within a period of 45 days from the date of receipt of the copy of the order, which shall be supplied, to the parties, free of costs, as permissible, under the rules. File be indexed and consigned to record.