BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-I,

CHITTOOR

Present:- Sri. V. Parthasaradhi Rao, B.A., L.L.B., President

Kum.S.R.Sumathi, B.A., B.L., Female Member

Sri.K.Subramanyam Reddy, B.A., B.L., Male Member

Tuesday, the (24th) Twenty fouth day of March, Two thousand and Nine

C.C. No. 04 /2009


Between


G. Radha Reddy, S/o Chinnagantla Reddy,
Aged 38 years, Hindu, cultivation, residing at
Pichigundlapalle Village, Belupalle Post,
Baireddipalle Mandal, Chittoor District.
… Complainant.

And

Indian Bank, Baireddipalle Branch,
Rep., by its Branch Manager,
Baireddipalle Post, Town & Mandal,
Chittoor District.

… Opposite Party.

This complaint coming on before us for final hearing on 05.03.2009 and upon perusing the complaint, written versions, affidavits, material documents and on hearing Sri A.Jyothiram counsel for the complainant and Sri S.Vijaya Bhasar Rao counsel for opposite party and having stood over till this day for consideration, the Forum made the following:-

ORDER

DELIVERED BY Sri.K.Subramanyam Reddy, B.A., B.L.,Male Member
ON BEHALF OF THE BENCH

1) This is a complaint filed by the complainant U/Sec. 12 of C.P.Act, 1986 for directing the opposite party to return the gold jewels (6 items) and for Rs. 40,000/- towards compensation for deficiency in service and Rs. 10,000/- towards litigation expenses.

2) The material averments in the complaint dt. 26.12.2008 in brief are as follows :-
The complainant submits that he is having agricultural lands in his village. On 26.09.2005 the complainant availed a Drip Loan by pledging Title Deed/ Pass Book of his landed property and subsequently he has discharged the same. The complainant again approached the opposite party for crop loan. On 13.02.2007 the opposite party agreed to give crop loan for Rs. 45,000/- from the opposite party/ bank by pledged title deed/ pattadar pass book of his agricultural lands and the said loan is subsisting.

The complainant further submits that on 20.02.2007 the complainant availed Rs. 55,000/- under agricultural jewel loan by pledging the gold jewels. Recently the Government of India passed a scheme i.e Agricultural Debt Relief Scheme, waiving loans of agriculturists and the complainant is also one of the beneficiary and his name was also displayed on the Notice Board of the opposite party. Immediately after noticed the same the complainant approached the opposite party to receive gold jewels along with necessary records. But the opposite party evading to return the same on some pretext or other. Hence the complainant got issued legal notice dt. 17.10.2008 to the opposite party demanding the opposite party to return the gold jewels, having received the legal notice, failed to comply the same. Thereafter the complainant personally approached the opposite party but in vain. On 10.12.2008, the complainant sent a requisition U/Sec. 6 of Right to Information Act, through his counsel by requesting the opposite party to furnish particulars of jewel loan waived under Agricultural Debt Relief Scheme passed by the Government of India, but failed to comply the same.

The complainant submits that the opposite party refused to return the gold jewels of the complainant by stating that the complainant has obtained Drip Irrigation Loan and also Crop Loan are pending and also the complainant stood as guarantor for the Drip Loan amount raised by another person and hence, the complainant is due all 3 loans to the opposite party. The opposite party stated that it has got a general lien over the securities including the jewels of the complainant and the opposite party can hold the gold jewels of the complainant till the loans due by the complainant are paid and discharges.

The complainant submits that the complainant already discharged Drip Irrigation loan and availed crop loan by pledging the Pattadar Pass Book/ title deeds of his lands. Hence if any default by the complainant under the above said crop loan, the opposite party may recover the said loan by filing a civil suit under Mortgage, but not applicable in this complaint. There is clear deficiency on the part of opposite party.

Hence the complainant approached this Forum for redressal of his grievances. Under the above said circumstances the complainant prayed this forum to direct the 1st opposite party
a) Directing the opposite party to return the gold jewels (6 items) under J.L.No.1072/07 dt. 20.02.2007 pledged by the complainant and waived the loan under Agricultural Debt Relief Scheme-08 to the complainant..
b) to pay an amount of Rs. 40,000/- towards damages for causing mental agony; and
c) to pay an amount of Rs. 10,000/- as costs of litigation.

3) The opposite party filed his Written Version on 16.02.2009 and admitted that the complainant availed crop loan and the same is pending, but no legal opinion is obtained and no equitable mortgage is created for this crops loan. It is also admitted fact that the complainant availed agricultural jewel loan and the same is waived off under agricultural loan waiver scheme granted by the Government of India.

The opposite party submits that the complainant has obtained crop loan from the opposite party is over due, for which the opposite party sent demand notices, but the complainant did not discharge the same, a sum of Rs. 56,166/- is due as on 31.10.2009. The complainant stood as guarantor for Drip Irrigation Loan availed by one Chinna Gantla Reddy son of Gangi Reddy of Pichigundlapalle and the same is due. Hence the opposite party shall have a lien on the ornaments pledged in respect of any other sum of sums of money which the borrowers may be liable to pay to the Bank, as such this opposite party has got right to hold ornaments of the complainant until he discharge the entire dues to the opposite party. There is no deficiency of service on the part of opposite party. Hence complaint may be dismissed.

4) On behalf of complainant the complainant filed his Chief Affidavit in support of pleas raised in the complaint and same is marked as deposition of PW-1 and he also relied upon 5 documents and same are marked as Ex.A1 to A5. Ex.A1 is the Notarized copy of S.B account pass book of the complainant in S.BNo.11036 issued by opposite party. Ex.A2 is the Notarized copy of Jewel loan car No. 824 dt. 20.2.07 issued by opposite party. Ex.A3 is the office copy of legal notice dt. 17.10.2008 with postal acknowledgement. Ex.A4 is the Office copy legal notice dt. 10.12.2008 issued U/sec. 6 of R.I.Act. Ex.A5 is the served copy of reply notice dt. 19.12.2008 by opposite party.

On behalf of opposite party the opposite party filed his Chief Affidavit in support of pleas raised in the Written Version and same is marked as deposition of RW-1 and he also relied upon 5 documents and same are marked as Ex.B1 to B5. Ex.B1 is the Application for Loan/ Overdraft against pledge of Gold ornaments executed by complainant. Ex.B2 is the true copy of statement of account in respect of crop loan of the complainant. Ex.B3 is the office copy of reply notice sent to the complainant’s counsel. Ex.B4 is the Agreement of guarantee executed by the complainant in favour of opposite party. Ex.B5 is the Xerox copy of Demand Notice dt. 28.11.2008 sent by opposite party to the complainant with postal acknowledgement

5) On the pleadings and on consideration of the material available and upon hearing the parties, the points that arises for consideration :
1) Whether the complainant is entitled for return of the pledged gold jewels from the opposite party after waiving gold loan of the complainant under the scheme of Government of India, under Agricultural Debt Relief Act-08 ? If so, whether there is any deficiency of service on the part of opposite party in retaining gold jewels of the complainant?

2) Whether the complainant is entitled for Rs. 40,000/- towards compensation for deficiency of service on the part of opposite party ?
And
3) to what result ?

6) Both sides filed Written Arguments.

7) Point No. 1 :-
In the case on hand it is an admitted fact that the complainant has availed crop loan for a sum of Rs. 45,000/- on 13.02.2007 from the opposite party bank and it is not discharged by the complainant and further the complainant stood as guarantor for the Drip Irrigation Loan availed by one Chinnagantla Reddy of Picchigundlapalle and same is over due. Again the complainant has availed an agricultural jewel loan for a sum of Rs. 55,000/- from the opposite party/ bank on 20.07.2007 by pledging gold ornaments. The Agricultural Jewel Loan availed by the complainant from the opposite party/ bank is waived by the Central Government of India under the scheme of Agricultural Debt Relief Act-08. But the opposite party has not returned the jewels to the complainant, even after waiving the gold loan under the Central Government scheme, stating that the complainant has availed a crop loan from the opposite party/ bank and the same is over due and further the complainant stood as guarantor for the Drip Irrigation Loan availed by Chinnagantla Reddy and the same is also over due and hence the Bank has got a general lien over the securities including the jewels of the complainant and as per the terms and conditions of the agricultural gold loan the opposite party/ bank has got general lien to retain the gold ornaments pledged with it, in respect of the other two debts, which the borrowers may be liable to pay to Bank, as such the opposite party has got right to retain the gold ornaments of the complainant until the complainant discharge the other dues to the opposite party/ bank.

8) The learned counsel for the complainant argued that at the time of availing agricultural jewel loan from the opposite party, the opposite party has not made it clear to retaine the jewels of the complainant till the discharge of the remaining loans; He further argued that the Drip Irrigation Loan and crop loan are availed by the complainant by creating equitable mortgage and hence if any default by the complainant the opposite party is at liberty to recover the same by filing a civil suit. Retaining Gold jewelley after the debt is cleared amounts deficiency in service by the opposite party.

The learned counsel for the complainant relied upon the following decision I(2009) CPJ- 123 (NC) – Thukaram Anantha Shet Vs Manager, Karnataka Bank Ltd., - where in their lordships held as follows :-
Consumer Protect Act, 1986 – Sections 2(1) (d)(ii) and 2(1)(g) – Jurisdiction – Bank – Non-return of pledged documents after repayment of loan, amounts to deficiency in service on part of bank – Petitioner entitled to approach Consumer Forum – State Commission erred in holding that dispute not adjudicable under C.P.Act – Considering pendency of appeals before Appellate Court, Appropriate reasonable order required to be passed – Loan taken on over draft facility fully paid – Bank directed to deliver documents pledged to complainant – Order to be complied as soon as civil proceedings finalized”.

He also relied upon the following decision IV (2008) CPJ -94 –(NC) – Housing Development Finance Corporation Limited Vs Santha Sundararajan - where in their lordships held as follows :-
Consumer Protection Act, 1986 – Sections 2(1)(g), 14(1)(d) – Banking and Financial Services – Loan discharged – Inordinate delay in returning title deed – Title deed handed over during pendency of complaint – Deficiency in service proved – Rs.2.00 lakh awarded as compensation – Order upheld in appeal”

And also relied upon the following decision II (2008) CPJ -75 –(NC) – Haryana State Co-operative Housing Federation Limited Vs Ishwar Singh & others - where in their lordships held as follows :-
“Consumer Protection Act, 1986 – Sections 2(1)(g), 14(1)(d) – Banking and Financial Services – Loan – property mortgaged as collateral security – Loan amount repaid –‘No Dues Certificate’ issued – Complainant’s property sub-mortgaged by O.P.No.1 to O.P.No.2 – Employee of O.P.No.1 not deposited amount paid by complainant with O.P.No. 2 – Documents not released to complainant – Release of documents cannot be withheld when entire loan amount repaid – O.P.No.1 if failed to satisfy O.P.No.2, liability cannot be sought to be shifted to complainants – O.Ps. liable to return original title deeds – Compensation and cost awarded”.

The above decisions are not applicable to the facts of the present case, since the aspect of General lien in favour of opposite party is not discussed.

The learned counsel for the opposite party argued that the complainant has availed Agricultural Jewel Loan from the opposite party/ bank and that as per the condition No.7 of the loan application, the bank have a general lien on the ornaments pledged in respect of any other sum or sums of money, which the borrower may be liable to pay to the bank either solely or jointly with other persons at any office of the bank. Hence the opposite party/ bank has retained the gold jewels of the complainant as the complainant have not discharged the other loans availed by him from the bank.

9) The learned counsel for the opposite party further contends that U/Sec. 171 of Contract Act, the opposite party /bank has a right to enforce the general lien and the same is mentioned hereunder.
Sec. 171 of Contract Act :-

“171. General lien of bankers, factors, wharfingers, attorneys and policy brokers. – Bankers, factors, wharfingers, attorneys of a High Court and policy brokers may, in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to them; but no other persons have a right to retain, as a security for such, balance, goods bailed to them, unless there is an express contract to that effect”.


In this regard the counsel for the opposite party relied upon National Commission Judgment reported in S.C and National Commission Consumer Law Cases (2005-2008) at Page No. 291 in a case between M. Mallika Vs State Bank of India and another – wherein their lordships held as follows :-
“Consumer Protection Act, 1986, Section 2(1)(g) – Transfer of Property Actg, 1882, Section 60- Contract Act, 1872, Section 171 – Banking service – General lien – Loan – Deposit of document – Non- return after the loan amount returned – Documents not released as the appellants stood guarantee for other firms – Held that notwithstanding the provisions under section 60 of the TPAct, the Bank was entitled to exercise its right of general lien under Section 171 of the Contract Act in order to protect the interest of the bank by ensuring right to retain the document so that other loan accounts of the bank are also cleared by borrowers or guarantor without forcing the bank to file suits”.

Their lordships in the National Commission have taken into consideration the Apex Court judgment in case of Syndicate Bank Vs Vijaya Kumar reported in 1992(2) SCC -330 :-
In Syndicate Bank Vs. Vijaya Kumar (supra) Supreme Court made following observiations about exercise of right of general lien of Bankers as under :

“By Mercantile system the Bank has a general lien over all forms of securities or negotiable instruments deposited by or on behalf of the customer in the ordinary course of banking business and that the general lien is a valuable right of the banker judicially recognized and in the absence of an agreement to the contrary, a Banker has a general lien over such securities or bills received from a customer in the ordinary course of banking business and has a right to use the proceeds in respect of any balance that may be due from the customer by way of reduction of customer’s debt balance.”

The above decision is applicable to the case on hand. In this case also the complainant have not discharged the other loans availed from the opposite party/ bank. Hence the bank has got general lien to retain the gold jewels of the complainant till the other loans are discharged. Hence there is no deficiency of service on the part of opposite party in non returning the gold jewels to the complainant.
Points 1 is answered against the complainant.

Point No. 2 :-
In view of my finding on point No. 1 the discussion of point No.2 does not arise.

Point No. 3 :-
In the result the complaint is dismissed without costs.

C.C.No.18/2009

Between

V.Raghava Reddy,
S/o. Late V.Venkata Reddy,
Rompicherla Road,
Pulicherla - 517 173,
Chittoor District. … Complainant

And

The Branch Manager,
Indian Bank,
Pulicherla – 517 173,
Chittoor District. … Opposite party.
This complaint coming on before us for final hearing on 30.03.09 and upon perusing the complaint, written version and other relevant material papers on record and on hearing Sri.V.Raghava Reddy, party-in-person for the complainant and Sri.K.Ramesh Babu, counsel for the opposite party, and having stood over till this day for consideration, the Forum made the following:-

ORDER

DELIVERED BY SRI. G.V.RAGHAVULU, PRESIDENT

ON BEHALF OF THE BENCH

This complaint is filed under Section-12 of Consumer Protection Act 1986, to pass an order directing the opposite party to return the pattadar pass books and title deeds, to pay Rs.50,000/- towards damages for crop loss and to pay Rs.10,000/- for the harassment given in returning the pattadar pass books and title deeds to the complainant.



2. The averments of the complaint in brief are:- The complainant, who is having account No.13-2971 in the opposite party – bank, obtained loan of Rs.20,000/- by mortgaging his lands pattadar pass books and title deed. In the month of June, 2008 the Government of A.P. has cleared the complainant’s loan under loan subsidy scheme – 2008. The opposite party on 30.06.2008 sent letter to the complainant informing that his loan was cleared under small and marginal farmer’s loan subsidy scheme introduced by the Government of A.P. Since the loan is cleared, the opposite party has to return the said pass books / title deed with loan clearance certificate. But the opposite party did not do so. Hence, from June 2008 to November 2008 the complainant approached the opposite party number of times and requested to give the said pass books / title deed to him, to enable him to get loan from other banks for cultivation purpose. The opposite party was postponing return of the pass books. The complainant addressed letter dt:13.12.2008 requesting the opposite party to give the title deeds and pass books. The opposite party received the said letter on 15.12.2008, but there was no response. Had the opposite party returned the said pass books and title deeds on 30.06.2008 along with loan clearance letter, the complainant would have obtained loan in other banks and raised paddy / mirchy crops in his lands in September, 2008 and got income to a sum of Rs.50,000/-. Hence the complaint.



3. The opposite party resisted the complaint and filed objections. In the objections, while admitting that complainant obtained loan for Rs.20,000/- and the Government of A.P. cleared the loan under loan subsidy scheme- 2008, and denying the other material allegations made in the complaint, it is stated that for the letter dt:13.12.2008 of the complainant, the opposite party by letter dt:29.12.2008 replied that no pattadar pass book or title deed was deposited by the complainant with the bank at the time of availing the loan except submitting 10(1) account. The complainant availed crop loan on 13.06.2003 vide account No.583446369 for Rs.20,000/- by mortgaging his property with the bank. At that time in the place of pattadar pass book and title deed, the complainant deposited only 10(1) account issued by the Panchayat Secretary, Pulicherla, with an endorsement “Raghavareddi pattadar pass pusthakamu pondiyundaledu”. Basing on that endorsement and believing the representation of the complainant, the opposite party sanctioned crop loan for Rs.20,000/-. Subsequently, the said loan was waived as per the Government policy and the same was intimated to the complainant by letter dt:30.06.2008. Thus there is no question of returning any pass book or title deed. As per xerox copy of the affidavit submitted by the complainant to the Pulicherla PACS, it is clear that the complainant has availed loan from the said bank and at that time also he revealed the same fact of non issuance of pattadar pass book and title deed in his name. The officials of Pulicherla PACS also issued certificate to that effect. The Panchayat Secretary of Reddivaripalli, Pulicherla mandal, also issued certificate that no patta pass book or title deed is obtained by the complainant. The complainant only to get wrongful gain and to harass the opposite party filed the complaint. There is no deficiency of service on the part of opposite party. The claim of huge amount of Rs.50,000/- and costs cannot be granted as it is the complainant who is harassing the opposite party by filing fictitious complaint. The complainant has to pay damages to the opposite party for filing the complaint, which would affect the reputation of a Nationalized Bank. The opposite party was served with two third party affidavits subsequent to filing of the complaint to the effect that the third parties have obtained loan and the opposite party collected their pattadar pass book and title deed while sanctioning loan to them. But it is a different aspect and the third parties may have produced their pass book and title deed. So, the third party affidavits are on different account not pertaining to the present transaction and they cannot be looked into. The complaint may be dismissed with costs.



4. In support of the averments made in the complaint, the complainant filed his affidavit. The complainant also filed third party affidavits of Sri.B.Narayana Reddy and Sri.B.Sreemulu Reddy, and 3 documents, which are marked as Exs. A1 to A3. Ex.A1 is letter dt: -Nil- of opposite party sent to the complainant. Ex.A2 is office copy of letter dt:13.12.2008 sent by the complainant to the opposite party. Ex.A3 is xerox copy of first page of S.B.Account pass book issued in the name of the complainant by the opposite party.



5. In support of the case set up in the objections, the opposite party filed his affidavit. The opposite party also filed 7 documents, which are marked as Exs.B1 to B7. Ex.B1 is xerox copy of 10(1) account for fasali 1412 issued in the name of the complainant by the Panchayat Secretary, Pulicherla. Ex.B2 is copy of Ex.A1 letter sent to the complainant informing waiver of his loan. Ex.B3 is the original of Ex.A2 letter sent by the complainant to the opposite party. Ex.B4 is office copy of letter dt:29.12.2008 sent by the opposite party to the complainant. Ex.B5 is xerox copy of affidavit of complainant submitted to PACS, Pulicherla. Ex.B6 is letter dt:25.02.2009 addressed by Pulicherla PACS to the opposite party. Ex.B7 is true copy of certificate issued by Panchayat Secretary, Reddivaripalli, Pulicherla mandal.



6. On behalf of the complainant and opposite party written arguments were filed and we have heard the oral arguments of complainant and the counsel for opposite party.



7. On the basis of pleadings of both sides, the points that arise for determination are:-
1.Whether there is any deficiency in service on the part of opposite party towards the complainant?
2.Whether the complainant is entitled to the reliefs as prayed? If so, to what extent?
3.To what result?



8. Point No.1:- Admittedly, the complainant obtained crop loan of Rs.20,000/- from opposite party on 13.06.2003 by mortgaging his landed property. It is not in dispute that as per the Government policy, the entire loan taken by the complainant was waived and the same was intimated to the complainant under Ex.A1 letter. The complainant’s case is that at the time of obtaining the loan, he deposited pattadar pass books and title deeds, and the opposite party failed to return the pass books and title deeds inspite of repeated requests and Ex.A2 letter. On the other hand, the case of the opposite party is that at the time of sanction of crop loan the complainant deposited only 10(1) account issued by Panchayat Secretary, Pulicherla, with an endorsement that no pass book was issued in the name of complainant and basing on the said endorsement and believing the representation of the complainant they sanctioned the crop loan. As per the complaint, the complainant deposited pass books and title deeds with the opposite party. It is not specifically averred in the complaint, the number of pass books and title deeds deposited by the complainant. The complainant did not file even a scrap of paper to show that at the time of sanction of crop loan he deposited pass books and title deeds with the opposite party. The opposite party filed Ex.B1 copy of 10(1) account said to have been deposited by the complainant at the time of availing loan. In Ex.B1 there is an endorsement to the effect - no pass book was issued in the name of complainant. The complainant after obtaining crop loan of Rs.20,000/- from the opposite party on 13.06.2003 availed Sericulture, shed and crop loan of Rs.1,16,130/- on 02.07.2004 from Pulicherla Primary Agricultural Co-op society by mortgaging his lands. At the time of availing loan from PACS, Pulicherla, the complainant submitted an affidavit to the said society. The opposite party obtained Ex.B5 copy of the said affidavit from PACS, Pulicherla, and filed the same before this Forum. In Ex.B5 affidavit the complainant affirmed that till then i.e. 31.03.2004 pass book and title deed in respect of the lands mortgaged were not issued to him. The PACS, Pulicherla, addressed Ex.B6 letter to the opposite party stating that they have not obtained any pass book and title deed from the complainant since the complainant has submitted an affidavit stating that he has not been given the pass books by the Revenue Authorities. The opposite party also filed Ex.B7 true copy of certificate issued by the Panchayat Secretary, Reddivaripalli, Pulicherla mandal, to the effect that the Revenue Department did not issue pass book and title deed to the complainant. The complainant filed third party affidavits of B. Narayana Reddy and B. Sreemulu Reddy, to the effect that they obtained crop loan from the opposite party by depositing pass book and title deed, and the opposite party is not sanctioning loan to anybody without deposit of pass book and title deed. The above two third party affidavits do not establish the complainant’s case that he deposited pass books and title deeds with the opposite party at the time of availment of crop loan.



9. The complainant addressed Ex.A2 letter dt:13.12.2008 to the opposite party to return the pass books. The case of the opposite party is that they have addressed the original of Ex.B4 letter dt:29.12.2008 to the complainant informing that at the time of availing loan he submitted 10(1) account and did not deposit pass book. The contention of the complainant is that Ex.B4 is fabricated as the opposite party failed to file any postal receipt or acknowledgement to show that the complainant received the original of Ex.B4. It is true the opposite party did not file any postal receipt or postal acknowledgement to show that the original of Ex.B4 was sent to the complainant and the complainant received the same. But it cannot be said that as the opposite party did not file proof of service of Ex.B4 letter, the version of the complainant that he deposited pass books and title deeds with the opposite party is true.



10. The contention of the complainant is that the Panchayat Secretary is not competent revenue authority to issue pass books / title deeds and the opposite party obtained fabricated endorsement on the 10(1) account. It is not the case of the complainant that he did not deposit the original of Ex.B1 with the opposite party. As submitted by the counsel for the opposite party, there is absolutely no reason for the opposite party – Nationalized Bank, to fabricate endorsement. 10(1) account establishes title of the landed property to the agriculturist in whose name it is issued. Ex.B5 shows that the same Panchayat Secretary, Reddivaripalli, attested the affidavit of the complainant. The complainant miserably failed to establish that at the time of availing crop loan from the opposite party he deposited pass books and title deeds with the opposite party. On the other hand, the opposite party establish that at the time of availing crop loan, the complainant deposited 10(1) account representing that pass book and title deed were not issued to him. Had the complainant deposited pass books and title deeds at the time of availing crop loan, there is absolutely no reason for the opposite party not returning the same while intimating that the entire crop loan was waived as per the Government policy.


11. For the above reasons, we find that there is no deficiency in service on the part of opposite party towards the complainant. This point is accordingly answered against the complainant.



12. Point No.2:- In view of our finding on point No.1, the complainant is not entitled to any relief. This point is accordingly answered.



13. Point No.3:- In the result, the complaint is dismissed, but without costs.

ORDER

SHRI. G. SIVAPRASAD, PRESIDENT:

The facts leading to the filing of the complaint are that complainant had availed a Secured Overdraft of Rs. 7,25,000/- from the opposite party, that complainant could not repay the said amount in time due to bad business conditions, that the repayment was made irregular, that the opposite party transferred and classified the said loan into non-performing account on 31/3/2004 and issued notice to that effect to the complainant, and that the agreed rate of interest was 16% per annum. Complainant's husband was the surety of the said loan transaction, and he mortgaged 20 cents of land to the opposite party. The opposite party issued a notice under Section 13(2) of the Securitisation and Re-construction of Financial Assets and Enforcement of Security Interest Act, 2002. The complainant submitted an application for One Time Settlement. But the opposite party did not consider the same. The opposite party took over the mortgaged property and demanded exorbitant amount for settlement of the loan transaction, and the complainant was forced to remit interest at compound rate, interest on interest, penal interest, incidental expenses and memorandum of legal charges. The balance amount due on the date of closure was only Rs.7,39,208/- as per the accounts of the opposite party. The opposite party has no manner of right to ignore the binding direction of the RBI. The opposite party has no right to charge interest as they think fit by way of memorandum of interest account. The complainant demanded the true statement of loan account to the opposite party, but the opposite party never given any statement of account so far. Hence this complaint to direct the opposite party to refund the excess amount of Rs. 3,63,523/- and pay Rs. 10,000/- towards compensation.


2. Opposite party did not file version and opposite party remained ex-parte.

3. The points that arise for consideration are:

1. 
   
   1. 
      
      1. 
         
         1. Whether the opposite party has collected excess amount from the complainant?
         2. Whether the complainant is entitled for refund of excess amount?
         3. Whether there is deficiency in service on the part of opposite party?
         4. Whether complainant is entitled to get compensation? If so, at what amount?

4. In support of the complaint, complainant has filed affidavit in lieu of examination in chief and Exts. P1 to P4 were marked.


5. Points (i) to (iv): It has been the case of the complainant that complainant had availed a secured overdraft of Rs.7,25,000/- from the opposite party on 2/1/2001, that complainant could not repay the said amount in time due to bad business conditions, and that on 31/3/2004 the said loan was put into non-performing account and the same was intimated to the complainant by the opposite party. It has also been the case of the complainant that the agreed rate of interest was 16% per annum, that complainant's husband was the surety of the loan transaction, who mortgaged 20 cents of land with residential building therein to the opposite party, that a notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 was issued by the opposite party, that the said mortgaged property was taken over by the opposite party and an exorbitant amount was demanded by the opposite party for settlement of loan transaction ignoring the binding direction of the RBI, and that complainant was bound to comply all the illegal demands and directions under the threat of the opposite party. Ext.P1 is the copy of advocate notice dated 10/11/2006 sent by the complainant to opposite party, Ext.P2 is the acknowledgment card, Ext.P3 is the postal receipt and Ext.P4 is the current Account Pass book in the name of Devi Store, Market Road, Attingal.

Submission by the complainant is that opposite party had transferred and classified the said loan into non-performing account on 31/3/2004 and issued notice intimating the same to the complainant. Complainant did not produce the said notice. Evidently by Ext.P4, complainant's operation is under current account; complainant herself deposed that interest rate at 16%. A perusal of Ext.P4 pass book would reveal that the said account was in force from 23/12/2000 and the creditor has charged interest from the debtor on periodical rests and capitalised the same so as to make part of the principal. If the interest on periodical rest is not paid by the debtor, normally the interest amount would be debited to the account of the borrower and then it would be capitalised.

In the instant case interest amount is seen debited once in three months up to 31/3/2002 in the account of the complainant and the same is capitalised. Submission by the complainant is that the said loan was transferred and classified in to non-performing account on account of 31/3/2004. On perusal of Ext.P4 pass book, it is found that even after 31/3/2004, there is credit entry and debit entry. It is pertinent to note that the balance amount shown as due on 10/3/2003 was Rs.8,56,998/-. The said balance amount would consist principal sum advanced plus interest amount debited and capitalised. On 31/3/2003, a sum of Rs.1,36,224/- is seen deposited and made the same in the credit entry – thereafter some small amounts are seen debited. The balance amount shown as due on 23/8/2005 is Rs.7,39,008/-.


Then on 7/9/2005 Rs.50,000/- is seen deposited and the same is made in the credit entry and an interest amount of Rs.50,000/- is also seen debited on 7/9/2005. Further on 22/11/2005 Rs.10,000/- is seen credited and Rs.10,000/- is debited as against MO1.Debt interest of Rs.10,392/- is debited on 31/1/2006. On 27/2/2006 Rs.50,000/- is seen put under credit entry, on 28/2/2006 interest of Rs.9,157/- is debited, on 8/3/2006 a sum of Rs.1,50,000/- is seen brought under credit entry and on the same day of Rs.1,80,414/- is seen debited against withdrawal transfer. On 28/3/2006 a sum of Rs.3,00,000/- is entered under credit entry and the same is also seen withdrawn on the same date and debited the same. On 31/3/2006 a sum of Rs.9,952/- is seen debited against interest and the balance amount shown as due as on 31/3/2006 is Rs.7,49,179/-. It is further to be noted that from the very inception of the loan the interest amount is seen debited quarterly which continued up to 31/3/2002 and the same is capitalised. From 01/04/2002 onwards the interest amount is seen debited monthly and capitalised the same. Main thrust argument advanced by the complainant was to the effect that an exorbitant amount was demanded by the opposite party for settlement of loan transaction, that complainant was forced to remit interest at compound rate, penal interest, incidental expenses etc. In this context, it is to be highlighted that recognition of the method of capitalisation of interest so as to make it part of the principal consistently with the contract between the parties or established banking practice does not offend the sense of reason, justice and equity. The underlying principal is that when interest is debited to the account of borrower on periodical rest, it is debited because of it having fallen due on that day. If the interest is not paid on the date due, from that date the creditor is deprived of such use of the money which it would have made if the debtor had paid the amount of interest on the date due.


The creditor needs to be compensated for deprivation. Therefore, the balance amount shown as due on a particular date may include the amount of interest, charged on periodical rests and capitalised with the principal sum actually advanced. In this case, the complainant has not paid the amount of interest on the date due, and interest amount is debited and capitalised. Thereby the balance amount shown as due became lumpy. A perusal of Ext.P4 pass book reveals that opposite party has acted in accordance with the established procedure. No material on record to prove otherwise. Cogent and clinching evidence must be adduced to prove that opposite party collected exorbitant amount contrary to the established procedure. Complainant failed to establish the case. Deficiency in service not proved. Complaint has no merits which deserves to be dismissed.

Sri M.M. Jaffer, S/o Mohideen Saheb,

Aged about 54 years, Vinobha Nagar,

K O P P A.

V/s

OPPONENTS:

1. The Manager, Indian Bank,

Koppa Branch, No.313,

T.M. Road,

K O P P A – 577 126.

2. The Authorised Officer,

Indian Bank, Koppa Branch,

No.313, T.M. Road,

K O P P A – 577 126.

- ::: O R D E R ::: -

1. The complainant has filed this complaint u/s 12 of the Consumer Protection Act against the opponents bank for a deficiency of service in not furnishing the entire statement of accounts and also for a direction to return the original title deeds of the house property along with a compensation of Rs.1,00,000/- and court costs as detailed in the complaint.

2. The facts of the case in brief are as follows:-

He has raised a loan of Rs.3,50,000/- by depositing his house property title deeds situated at Harandoor, Koppa Town and the repayment period provided by the opponents is for 10 years i.e., 120 months and the loan account No.516199601. Such being the case on 11.02.2009, the complainant approached 1st opponent to furnish statement of accounts of his loan for which the 1st opponent has furnished the statement of account and shown that he is in due of Rs.1/- only and they have issued a letter dtd.17.02.2009 directing him to clear the entire amount for which the complainant along with a covering letter dtd.04.03.2009 has paid outstanding balance of Rs.1/- as shown in the account statement and demanded for return of the original title deeds.

But the opponent after receipt of the D.D. issued a notice dtd.05.03.2009, which was received by the complainant on 11.03.2009, wherein they have directed to pay an outstanding loan of Rs.1,07,820/- and subsequently, issued an Intended Sale Notice dtd.05.03.2009 and threatened to sale the house property. As such they have exercised unfair trade practice against him by threatening to sale the house property inspite of repayment of the entire loan by the complainant and caused deficiency of service by issuing a notice for repayment along with notice of intended sale on 05.03.2009. Therefore, the complainant prays for the relief of furnishing entire statement of accounts and to return of the title deeds of the house property along with compensation.

3. After the service of the notice, the opponents have appeared through their counsel and filed version contending that the complainant has filed this false complaint by misleading the Forum and suppressing the truth in order to gain wrongfully from the opponent. The complainant was due of Rs.3,36,049/- as on to 30.06.2005 and he has not paid the said amount within the stipulated period of 60 days from the date of issuance of the legal notice. Therefore, they have taken symbolic possession of the house property under Secularization and Reconstruction Act on 21.10.2005. The complainant has approached earlier at D.R.T., Bangalore in IR No.715/2005, where it was ordered that the complainant has to pay the outstanding balance within four months from the date of order i.e., 03.05.2007. Against to that order the complainant has only paid Rs.45,000/- and subsequently, the wife of the complainant Mrs. Ruksana filed another appeal before D.R.T., which was subsequently dismissed.

As such the complainant has not paid the balance amount and the loan account became non-performing assets and the interest charged separately in memorandum of interest account and in the memorandum of interest account they have shown legal expenses also. As because of this reason, the original account statement showed a balance of Rs.1/-, which was taken by the complainant and the complainant actually is in due of Rs.1,19,087/- as per the memorandum of interest account together with legal expenses. Once again, they have issued a notice under the provisions of Secutarisation Act and subsequently they have issued notice of intended sale in this regard. As such there is no deficiency of service on their part and the complainant has filed this complaint by misleading the Forum.

4. Further the opponents has contended that the complainant has filed the complaint in order to delay the proceedings under the Secutarisation Act and they have not played any unfair trade practice and prays for the dismissal of the complaint and also prays for the direction for the payment of the outstanding loan from the complainant.

5. The complainant has filed his affidavit evidence as P.W.1 along with the documents and the same have been marked as Exs.P1 to P7.

6. One Mr. N. Rajashekaran, Branch Manager of the opponent Bank has also filed his affidavit evidence as RW.1 along with one document and the same have been marked as Ex.R1.

7. We have heard the arguments advanced by both the parties’ counsel.

8. Now, the points that arise for consideration of this Forum are as follows:-

i) Whether there is any deficiency in service on the part of

the opponents?

ii) Whether the complainant is entitled to receive the

original title deeds from the opponents?

iii) What Order?

9. Our findings on the above points are as follows:-
i) Point No.1: In the Affirmative

ii) Point No.2: In the Negative

iii) Point No.3: See, as per order below

- ::: R E A S O N S ::: -

10. Point No.1: The case of the complainant is that he has taken a loan of Rs.3,50,000/- by depositing title deeds of the house property and he has paid the entire loan amount and he has paid the outstanding due of Rs.1/- as shown in the account statement and demanded for return of the title deeds. But the opponent has refused. Hence, he prays for the relief of return of documents.

11. On the contrary, the opponents have taken a contention that the complainant was a chronic defaulter in paying the loan amount. As such, the account became non-performing assets and they have maintained separate memorandum of interest account and he is in due of Rs.1,19,087/- and he failed to repay the said amount. As such, they have issued intended sale notice and submit that there is no deficiency of service and pray for the dismissal of the complaint.

12. On perusal of the Ex.P2, we noticed that outstanding due is Rs.1 from the complainant. But on the overleaf at Ex.P2, we noticed that the memorandum of interest account, which was written in hand, which discloses that the complainant is still in due. The learned advocate for opponents argued that as the complainant was defaulter in paying the loan amount, the said loan account was termed as N.P.A. and shown a balance of Rs.1/-. Simultaneously, they have maintained separate interest account of the complainant. But the opponent has not placed any materials except writing behind the page of Ex.P2 about maintaining of separate memorandum of interest account of the complainant and he has only produced computer generated Home Loan Statement of the complainant, which was marked as Ex.R1.

This does not disclose that a memorandum of interest account and it is pertinent to note that admittedly the Ex.R1 was prepared after filing of this complaint. As such we are of the opinion that the opponents are at deficiency of service in not intimating a clear information with respect to the outstanding due to the complainant. It is also pertinent to note that in Ex.P3 a notice dtd.17.02.2007, the opponents have stated that the complainant is in due and requested to pay the outstanding amount but they have not mentioned any amount in the said letter i.e., Ex.P3. Therefore, the complainant has paid Rs.1/- through D.D. believing that he is only in due of Rs.1/-.

After receipt of the said D.D., the opponent failed to give information with respect to the outstanding due as per the memorandum of interest account to the complainant and they have simply issued a notice dtd.05.03.2009 marked at Ex.P6 demanding the complainant to pay Rs.1,07,820/- and provided an opportunity to the complainant to pay the outstanding due in order to deliver the title deeds. But without giving an opportunity to the complainant, they have issued a notice of intending sale on the same day, which is marked at Ex.P7. As such, we are of the opinion that issuance of notice of intending sale acting under the Securitization Act is arbitrary on the part of the opponent when they have given an opportunity to pay the outstanding due as per Ex.P6 atleast they should provide certain time to the complainant for payment, whereas here the opponents have not done so.

Immediately after issuance of Ex.P6, they have issued notice of intended sale on the same day without giving an opportunity for payment. Thus the opponents are at deficiency of service. Ofcourse, we agree the arguments submitted by the learned advocate for the opponents that the said account was termed as non performing asset and have maintained separate memorandum of interest account and the complainant is in due of Rs.1,19,087/-. But without furnishing a detailed information to the complainant in this respect amounts to deficiency of service. Therefore, the opponents are under obligation to furnish a detailed account statement and memorandum of interest account to the complainant and also liable to pay Rs.5,000/- for the deficiency of service along with court costs of Rs.1,000/- towards the litigation expenses. As such, we answer point No.1 in the affirmative.

13. Point No.2: As far as the return of the title deeds are concerned, the complainant is in due of Rs.1,19,087/- as per the memorandum of interest account. Simultaneously, the complainant has sworn an affidavit stating that he has paid a sum of Rs.5,25,518/- for which he has not produced any materials to substantiate the said payment and on the other hand, there is no such disclosure in Ex.P2. As such, the complainant is not entitled to receive the original title deeds unless he paid the outstanding due. For the above said reasons, we answer this point No.2 in the negative.

14. Point No.3: In view of our findings on above points the complaint filed by the complainant has to be allowed. In the result we pass the following order.

- :::O R D E R::: -

1. The complaint filed by the complainant is partly allowed.

2. The opponents are hereby directed to furnish a detailed account statement maintained by them in memorandum of interest account to the complainant.

3. The opponents are hereby further directed to pay compensation of Rs.5,000/- towards the deficiency of service in not furnishing the memorandum of interest account and also liable to pay costs of Rs.1,000/- towards the litigation expenses, totally Rs.6,000/- to the complainant, within one month from the date of this order, failing which the amount shall carry interest at the rate of 9% P.A. from the date of default till realisation.

Ghanta Veeravenkateswara Rao,

S/O Subbaiah, Aged about 60 years,

O/C Cultivation, R/O Pathuru,

K. Kota, (V&M), W.G.Dist. -- Complainant

Indian Bank, rep.by it’s Branch Manager,

K. Kota (V&M), W.G.Dist. --Opposite Party

O R D E R

The complainant filed the present complaint under Sec. 12 of C.P. Act, with a prayer to direct the opposite party to return the gold ornaments i.e., Chari Chain worth of Rs.42,650/- and also to pay Rs.50,000/- towards damages and costs of the complaint.

The averments of the complaint in brief are that:

2. The complainant is native of Kamavarapukota a village and he is an agriculturist and where as the opposite party is a Bank at Kamavarapukota. The complainant has borrowed a gold loan of Rs.39,000/- over the gold ornament i.e., Chari Chain from the opposite party on 272004 vide Account No.219/36/JL.

Even by the date of the said gold loan there is an agricultural loan account of the complainant to a tune of Rs.10,000/- and it was borrowed on 5-1-1993 which is a secured debt guaranteed over the property of the complainant and renuvable to year to year. Subsequently on 21-2-2006 the complainant has paid the entire amount of Rs.45,380/- which is due under the said gold loan to the opposite party. But the opposite party stopped releasing the gold ornaments under the pretext that unless the pending loan is paid off by him they are not going to release the gold ornaments, that thereupon the complainant requested the opposite party to put it in one time settlement, but the same is not yet all decided so far.

So withholding the gold ornament by the opposite party even after the discharge of the debt is illegal nothing but subjecting the complainant to a lot of mental agony. After making repeated requests and when the opposite party not responded to the request, the complainant got issued a legal notice on 1-8-2008 demanding the opposite party to release the gold ornament, but the opposite instead of releasing the same, got issued a reply dt. 5-8-2008 with false and untenable contentions and also by ascertaining their acts is correct. Thus the present complaint is filed for the aforesaid relief.

3. The opposite party filed version denying the material averments of the complaint and stated that the complainant availed a crop loan of Rs.10,000/- on 5-1-1993 and gold loan of Rs.39,000/- on 23-7-2004 by pledging his gold ornaments. The complainant is a guarantor to his son who availed a crop loan of Rs.10,000/- on 22-1-1992. The complainant’s wife also availed a crop loan of Rs.10,000/- on 18-1-1995.

The complainant, his wife and son are living together and they are members of a joint Hindu family. As the above accounts are over due, the opposite party demanded the complainant to clear off the above loans. The complainant discharged the Gold loan on 21-2-2006 and failed to discharge the other loans. As the complainant did not discharge the other loans and prolonging them, the opposite party exercised it’s lien and retained the Gold articles and the same was duly informed to the complainant. The complainant without discharging the other loans resorted to litigation without any foundation.

The opposite party even after the exchange of Reg.notices, addressed a letter in good faith to the complainant dt.11-11-2008 requesting him for settlement of dues and further informing him concession in reduction of interest, if the amount is paid immediately. The complainant bent upon litigation and filed the present complaint with false and untenable contentions. The bank safe guarding its interest as it is only a custodian of the public money, and there is absolutely no dishonest intention on the part of the bank in exercising the lien. So there is no deficiency in service, as such the opposite party is not liable to pay any compensation or any other relief claimed in the complaint. Thus the complaint is liable to be dismissed with costs.

4. In support of his case, the complainant filed his own affidavit and got marked Ex A.1 to Ex A.6. The Opposite party filed affidavit pleading and got no document marked.

5. Now the points for consideration are;

1) Whether the complainant could prove his case as alleged in the complaint ?

2) Whether the act of the opposite party in not releasing the gold article to the complainant by exercising its right of general lien available under Section 171 of the Contract Act amounts to deficiency of service?

3) Whether the complainant is entitled to the reliefs sought for by him ?

4) To what effect?

Points No. 1 & 2 :

As per the material placed on record by both sides, the admitted facts of the case are that the complainant obtained gold loan of Rs.39,000/- over the gold ornaments from the opposite party on 23-7-2004 and accordingly the complainant executed all the necessary documents in favour of the opposite party.

It is also an admitted fact borne out from the record that on 21-2-2006 the complainant paid the entire amount of Rs.45,380/- which is due under the said gold loan to the opposite party. It is also a fact that when the complainant requested the opposite party to return the gold ornaments to him, the opposite party informed him that they are not going to release the gold ornaments until and unless the complainant cleared off the other agricultural loan taken by him on 5-1-1993. it is the contention of the learned counsel for the complainant that because the complainant had cleared off the due covered under the gold loan, the opposite party is liable to return the gold ornaments to him since he executed the agreement only to the extent of the present gold loan and the opposite party is not having any right to retain the gold ornaments with them on the above said ground. In support of his contention, the learned counsel for the complainant relied upon two decisions reported in 1) 1988 (1) APLJ : 370 (P. Jagadeswar Reddy and The Manager, Andhra bank) and 2) 2001 (3) ALT : 56 (NC)(CPA) (P. Subbian Vs Branch Manager, Canara Bank) on the other hand, the learned standing counsel for the opposite party while relying upon two decisions reported in 1) AIR 1992 SC 1066 followed by 2) AP 1999(2) LS : 11 (K. Sita Vs., Corporation Bank, Rep., by its BM, Aratlakatta, Kakinada, E.G.Dist.,) contended that the opposite party has a general lien under Sec. 171 of the Act and the fact that the gold ornament pledged by the complainant for raising a specific loan does not amount to a contract to the contrary.

It is also further contended that under Sec. 174 of the Contract Act also there is a presumption in favour of the Pawnee in respect of subsequent advances and therefore, the opposite party having every right to retain the gold ornament with them till the complainant clears off the other debt. As such, there is no deficiency on the part of the opposite party in rendering service to the complainant.

As stated above, it is no doubt true that the learned counsel for the complainant in support of his contention relied upon two decisions. One is the decision reported in 1988 (1) APLJ : 370 but it appears that the said decision is over ruled by another decision reported in 1999 (2) LS : 11 followed by the decision reported in Air 1992 SC 1066 which is relied upon by the learned counsel for the opposite party. Therefore, the decision relied upon by by the learned Counsel for the complainant will not help the case of the complainant in any manner.

As far as the other decision relied upon by the learned counsel for the complainant reported in 2001(3) ALT 56 is concerned, that is the case where the respondent-bank therein having failed to receive the repayment of its other dues from the petitioner, and also from some other customers published a notice in the Press calling upon the said parties to redeem their respective securities by a certain date failing which, the bank had indicated its intention to proceed to sell the said securities for realization of its dues. In that regard, the petitioner therein challenging the process of the bank, moved the Law into motion by taking a plea that the notice under Sec. 176 have been very specific and addressed to him and not published, and that the notice does not meet with the requirements of Sec. 176.

But in the case on hand, the contention of the complainant is that in spite of his clearing the due under the gold loan account, the opposite party did not return the gold article to him on the ground that he is having still due under the other loan account. Therefore, the facts and circumstances in the case on hand are different from the facts and circumstances of the case in the decision. Therefore, the decision relied upon by the learned counsel for the complainant is not applicable to the case on hand.

As stated in the earlier paragraphs of the order, it is an admitted fact that the complainant had discharged the entire amount which is due under the gold loan obtained by him. But however, as per the very averments of the complaint, admittedly the complainant obtained agricultural loan to a tune of Rs.10,000/- on 5-1-1993 from the opposite party and still he is having due to the opposite party by the time of clearing of the gold loan on 21-2-2006.

The contention of the learned counsel for the opposite party is that that the opposite party is having a general lien under Sec. 171 of the Contract Act and the fact that the gold ornament was pledged for raising a specific loan does not amount to a contract to the contrary and that under Sec. 174 of the Contract Act also there is a presumption in favour of the pawnee in respect of subsequent advances. It is no doubt true that the complainant having obtained gold loan by pledging gold article, executed the necessary agreement in favour of the opposite party.

But it is not the case of the complainant that there was any such contract to the contrary displacing the presumption available under later part of Sec. 174 or the right of general lien available under Sec. 171 of the Contract Act. In the decision relied upon by the learned counsel for the opposite party reported in 1999(2) AP LS followed by the decision of the Apex Court reported in AIR 1992 (1066) it is held that the banker’s lien under Sec. 171 of the Contract Act will carry over to such pledges and bank can retain pledged goods if the debtor not cleared his amount in connection with other loan.

In the case on hand also, admittedly the complainant, by the date of clearing the gold loan account, had not cleared his amount in connection with the other agricultural loan borrowed by him on 5-1-1993. Therefore, in view of the principal laid down in the decisions relied upon by the learned counsel for the opposite party, the opposite party is having every right to exercise its lien to retain the gold article of the complainant. Further, it is also made clear by the opposite party that the said fact was duly intimated to the complainant, requesting him for settlement of dues and further informing him concession in reduction of interest if the amount is paid immediately. Hence we find that there is no substance in the contention of the learned counsel for the complainant.

POINT No: 3

Therefore, for the reasons stated above, we found that there is absolutely no dishonest intention on the part of the opposite party in exercising lien under Sec. 171 of the Contract Act as such there is no deficiency in rendering service to the complainant on the part of the opposite party. Under the said circumstances, we hold that the complainant is not entitled for the reliefs sought for by him. Thus the complaint is liable to be dismissed. Both the points are answered accordingly.



POINT No: 4:

In the result, the complaint is dismissed. In view of the facts and circumstances, both the parties have to bear their own costs.

P.K.Krishnakumari,

12/A Cantonment,

Near Govt.Guest House, Kannur 1. Complainant



The Senior Manger,

Indian Bank, Kannur

Opposite party



O R D E R



This is a complaint filed under section 12 of consumer protection act for an order directing the opposite party to pay an amount of Rs.20, 00,000/- as compensation.

The case of the complainant is summarized as follows: Complainant received a lawyer notice from her brother P.K.Mohanan informing that her cheque for

Rs.1, 10, 00,000/- issued in favour of Mohanan was dishonoured by opposite party. The complainant was unaware of any such account with the opposite party. So complainant approached opposite party and made verification. It was found that an account bearing No.6169 was started in the complainant’s name by her father on 26.5.1983 before the opposite party for the purpose of encashment of a Demand Draft for Rs.21, 163/- that came in the name of the complainant.


That could be seen and understood from the way in which the account was operated. Keeping an amount Rs.300/- the entire amount was withdrawn in a single transaction by using only first cheque leaf. Thereafter the account has been remained dormant without any operation. It is the second leaf in that cheque book which seen dishonored. The complainant has never issued such a cheque. The cheque presented for encashment was one which was forged by her brother Manoharan. Complainant has already initiated criminal proceedings against Manoharan for forgery and cheating. It is the officials of opposite party who helped Mr.Manoharan to do the same. Complainant has an account bearing No.S.A.No.11890 with the opposite party which was opened on 21.8.96 when the complainant opened this account, the officials did not tell her anything about an account already existing in her name.


The fact that the complainant opened a savings account on 21.8.1996 shows that the complainant was not in the knowledge of a savings account No.6169 when the cheque leaf in a dormant account which remained inoperative for more than 21 Years is received for collection especially a big amount more than a core, the officials and the Manger should have taken extra care before dishonouring the cheque. At least the complainant should have been informed before acting upon such a cheque for huge amount in a dormant account. The opposite party has not followed the rules of inoperative account in this matter which paved the way for a crime. The bank did not suspect any foul play even though the cheque was for a huge amount in an inoperative account. It is the duty of the Bank official to safe guard the interest of the customers.


The very purpose of making rules in the case of inoperative accounts is the protection of best interest of customers. But opposite party did not follow up those rules in this case. The cheque was returned on the very same day for the reason “insufficient fund”. The eagerness shown by the opposite party for returning the cheque on the very same day on which it came for clearness itself shows the dishonesty and negligence. This has put to him sever mental agony and loss. Though notice was sent opposite party did not heed to the same. Hence this complaint.

Pursuant to the notice opposite party entered appearance and filed version in the form of statement. The contentions of opposite party in nutshell are as follow: the complainant is not a consumer. Complainant herself opened a savings bank account in the opposite party’s bank. She was introduced by one P.S.Narayanan, who was an account holder. The initial deposit was Rs.101/- and collection by way of DD has been Rs.21, 163/-.


The amount collected has been withdrawn by her as per cheque No.577301. It is true that the second leaf of that cheuqe book for an amount of Rs.1,10,0,000/- came up for collection and on account insufficient fund the same was dishonored. The complainant is the custodian of the cheque book. The averment that the cheque presented was a forged one by her brother Manoharan to wreak vengeance up on the complainant for demanding partition of the partnership business etc. are matters best known to complainant and Manoharan alone? The opposite party is a Nationalized Bank. Manoharan is not a customer of this bank.


Even if he is a customer the bank is not expected to do undue help to him. When a cheque comes up for collection it is the duty of the Bank either to grand payment or to bounce the same. The purpose of opening another saving account without disclosing the existence of prior account is a matter known to the complainant alone. It is meaningless to say that the manager and the officials of the Bank should take extra care while returning a cheque which was for a huge amount. The cheque, which came up for collection was one which was issued by an account holder of the bank. There was no sufficient amount to honor the cheque so the same was returned.


The bank has no further role in that matter. The account of the customer is a saving bank account wherein interest for the balance amount is calculated and added. The complainant cannot say that she is not aware of the account so long as she keeps the cheque book and pass book with her. From the cheuqe book available with her she has sued one of the leaves to her brother Manoharan which came up for collection. The understanding in between them is known to them alone. When a cheque came up of collection the bank has to see whether there is sufficient fund or not in the account. The bank need not go into deep whether the person issued the cheque has capacity to pay such amount or not.


The complainant is well aware that the account is still alive and not closed. No duty casted up on the bank to inform the issuer since the amount involved is huge. There is no negligence on the side of the bank. Bank has been doing their normal duties. The complainant is not entitled to claim compensation against the opposite party. The alleged cheque was presented by Mr.Manohran. He alone says how he got the cheuqe from the complainant and the real story behind it. So Manohran is a necessary party. Complaint is bad for non-joinder of necessary party. Hence to dismiss the complaint.

On the above pleadings the following issues have been taken for consideration.

1. Whether the complainant is a consumer and the complaint is maintainable?

2. Whether the complainant is entitled for any remedy as prayed in the complaint?

3. Relief and cost.

The evidence consists of Ext.A1 to A8, B1 to B5.

Issue No.1

Admittedly complainant is an account holder of the opposite party bank. Receiving a lawyer notice in respect of dishonouring of a cheque for Rs.1, 10,000/- complainant approached opposite party and on verification it was found that there was an account in the name of complainant’s name. Complainant’s case is that she found that an account bearing No.6169 was opened by her father on 26.5.1983 with the opposite party bank for the purpose of encashment of a Demand draft for Rs.21, 163/- that came in the name of the complainant. It can be seen that the entire amount except a sum of Rs.300/- was withdrawn by using only one leaf. The account has been remained dormant without any operation. It is the second leaf, the subject matter of this complaint which is alleged to have been dishonoured. The specific case of complaint is that she had never issued any such cheque.


According to complainant the cheque presented for encashment was one that was forged by her brother Mohanan, to whom against criminal proceedings have been already initiated by the complainant. Complainant has an account with the bank which was opened on21.8.96. The complainant alleges that the bank officials did not tell her anything about the above said account at the time of taking the account bearing S/ANo.11890 on 21.8.96. The case of the opposite party is that the above said old account was opened by the complainant herself and she was introduced by one P.S.Narayanan who was holding savings bank account No.2374.


Opposite party admits that the second leaf of that cheque book for an amount of Rs.1, 10, 00,000/- came up for collection but contended that the same was dishonored due to insufficiency of fund. Opposite party further contended that the complainant is the custodian of the cheque. It is also contended that unless and until the customer informs the bank to close the account by surrendering the balance cheque with the customer the bank cannot close the account suomoto. Further when the above said cheque came up for collection the bank has to see whether sufficient funds are there to honour the cheque.


In this case there was no sufficient amount to honour the cheque so the same was returned. The bank has no further role in the dispute. Opposite party has also contended that the complainant can not say that she is not aware of the account so long as she keeps the cheque books and pass book with her. The complainant has the case that the officials of the opposite party bank, especially the manager should have taken extra care before dishonoring the cheque when it is issued from the cheque book of a dormant inoperative account which remained inoperative for more than 21 years and that too for an imaginary amount.


Complainant alleges that the opposite party at least should have informed the complainant before acting upon the cheque of a dormant/inoperative account for such a huge amount. If they have taken care of the rules to be followed in the use of an inoperative account this type of crime could have been avoided. There is some substance in the case of complainant with respect to the dealing with the cheque in question which contains a huge amount. The stand that the bank has taken that there is no difference with cheque with fewer amounts and a cheque with huge amount is absolutely wrong.


It has to be treated as a case of rare of the rarest since a cheque bearing more than an amount of 1 crore is not a common affair in a bank in Kannur municipality. The cheque in question is for a huge amount for Rs. 1 crore 10 lakh. It is understandable if it is happened in a bank in a metropolitan city. If the officials are not able to understand the difference between a cheuqe for Rs.1000/- and a cheque for Rs. 1 crore and 10 lakh, that is a sign of something wrong which is difficult to cure. If they are of opinion that both the cheuqes shall be treated equally with equal respect we cannot appreciate our banking system is safe in the hands of these masters, whatever maybe the provisions of law over which they have been taking shelter.



Herein the complainant’s definite case is that she has not opened an account with the opposite party bearing number 6169 on 26.5.1983. That account was started by her father in the name of complainant for the purpose of encashment of a Demand Draft for Rs.21, 163/- that came in the name of complainant. The withdrawal of said amount keeping a nominal amount in the account by the first leaf of cheque itself remains as an indication that the opening of the account was actually intended to encash the said amount and the same can be confirmed with the experience of keeping this account dormant without any transaction for more than 21 years.


She has the case that she was not aware of such account. There is no need to disbelieve her in this aspect. In the ordinary course of dealing if she had been aware of this account, she might have operated it for herself. There is no need to take a second account knowingly. Hence this account and the cheque book issued in connection with the account cannot be considered legally as that of complainant. That is a false account. The second leaf of the cheque book misutilised by her brother whatever maybe the purpose had definitely been a fraudulent act and that amounts to criminal offence. If it is done with knowledge and consent of opposite party that is only an involvement of the same crime.


It is not a question of rights and liability that arose from the provisions of Consumer protection Act. The complainant is not related with the opposite party bank as a consumer though the account had been opened by her father in her name without her knowledge. That account cannot at any rate be legalised. Herein the right of the complainant to seek remedy as consumer does not arise. The complainant is not entitled to claim the status of a consumer to approach the Forum, whereby complaint is not maintainable. The 1st issue is found against complainant.

Since it is found complaint is not maintainable there is no need to go in to other issues. Complainant is at liberty to seek remedy in appropriate civil or criminal courts if so advised.

In the result, the complaint stands dismissed. No order as to costs.

Nice Information on Indian Bank

P.K.Krishnakumari,

12/A Cantonment,

Near Govt.Guest House, Kannur 1. Complainant



The Senior Manger,

Indian Bank, Kannur

(Rep. by Adv.T.A****han Nair) Opposite party



O R D E R

Sri.K.Gopalan, President

This is a complaint filed under section 12 of consumer protection act for an order directing the opposite party to pay an amount of Rs.20, 00,000/- as compensation.

The case of the complainant is summarized as follows: Complainant received a lawyer notice from her brother P.K.Mohanan informing that her cheque for

Rs.1, 10, 00,000/- issued in favour of Mohanan was dishonoured by opposite party. The complainant was unaware of any such account with the opposite party. So complainant approached opposite party and made verification. It was found that an account bearing No.6169 was started in the complainant’s name by her father on 26.5.1983 before the opposite party for the purpose of encashment of a Demand Draft for Rs.21, 163/- that came in the name of the complainant. That could be seen and understood from the way in which the account was operated. Keeping an amount Rs.300/- the entire amount was withdrawn in a single transaction by using only first cheque leaf. Thereafter the account has been remained dormant without any operation. It is the second leaf in that cheque book which seen dishonored. The complainant has never issued such a cheque. The cheque presented for encashment was one which was forged by her brother Manoharan.

Complainant has already initiated criminal proceedings against Manoharan for forgery and cheating. It is the officials of opposite party who helped Mr.Manoharan to do the same. Complainant has an account bearing No.S.A.No.11890 with the opposite party which was opened on 21.8.96 when the complainant opened this account, the officials did not tell her anything about an account already existing in her name. The fact that the complainant opened a savings account on 21.8.1996 shows that the complainant was not in the knowledge of a savings account No.6169 when the cheque leaf in a dormant account which remained inoperative for more than 21 Years is received for collection especially a big amount more than a core, the officials and the Manger should have taken extra care before dishonouring the cheque. At least the complainant should have been informed before acting upon such a cheque for huge amount in a dormant account.

The opposite party has not followed the rules of inoperative account in this matter which paved the way for a crime. The bank did not suspect any foul play even though the cheque was for a huge amount in an inoperative account. It is the duty of the Bank official to safe guard the interest of the customers. The very purpose of making rules in the case of inoperative accounts is the protection of best interest of customers. But opposite party did not follow up those rules in this case. The cheque was returned on the very same day for the reason “insufficient fund”. The eagerness shown by the opposite party for returning the cheque on the very same day on which it came for clearness itself shows the dishonesty and negligence. This has put to him sever mental agony and loss. Though notice was sent opposite party did not heed to the same. Hence this complaint.

Pursuant to the notice opposite party entered appearance and filed version in the form of statement. The contentions of opposite party in nutshell are as follow: the complainant is not a consumer. Complainant herself opened a savings bank account in the opposite party’s bank. She was introduced by one P.S.Narayanan, who was an account holder.

The initial deposit was Rs.101/- and collection by way of DD has been Rs.21, 163/-. The amount collected has been withdrawn by her as per cheque No.577301. It is true that the second leaf of that cheuqe book for an amount of Rs.1,10,0,000/- came up for collection and on account insufficient fund the same was dishonored. The complainant is the custodian of the cheque book. The averment that the cheque presented was a forged one by her brother Manoharan to wreak vengeance up on the complainant for demanding partition of the partnership business etc. are matters best known to complainant and Manoharan alone? The opposite party is a Nationalized Bank. Manoharan is not a customer of this bank. Even if he is a customer the bank is not expected to do undue help to him. When a cheque comes up for collection it is the duty of the Bank either to grand payment or to bounce the same.

The purpose of opening another saving account without disclosing the existence of prior account is a matter known to the complainant alone. It is meaningless to say that the manager and the officials of the Bank should take extra care while returning a cheque which was for a huge amount. The cheque, which came up for collection was one which was issued by an account holder of the bank. There was no sufficient amount to honor the cheque so the same was returned. The bank has no further role in that matter. The account of the customer is a saving bank account wherein interest for the balance amount is calculated and added. The complainant cannot say that she is not aware of the account so long as she keeps the cheque book and pass book with her. From the cheuqe book available with her she has sued one of the leaves to her brother Manoharan which came up for collection.

The understanding in between them is known to them alone. When a cheque came up of collection the bank has to see whether there is sufficient fund or not in the account. The bank need not go into deep whether the person issued the cheque has capacity to pay such amount or not. The complainant is well aware that the account is still alive and not closed. No duty casted up on the bank to inform the issuer since the amount involved is huge. There is no negligence on the side of the bank. Bank has been doing their normal duties. The complainant is not entitled to claim compensation against the opposite party. The alleged cheque was presented by Mr.Manohran. He alone says how he got the cheuqe from the complainant and the real story behind it. So Manohran is a necessary party. Complaint is bad for non-joinder of necessary party. Hence to dismiss the complaint.

On the above pleadings the following issues have been taken for consideration.

1. Whether the complainant is a consumer and the complaint is maintainable?

2. Whether the complainant is entitled for any remedy as prayed in the complaint?

3. Relief and cost.

The evidence consists of Ext.A1 to A8, B1 to B5.

Issue No.1

Admittedly complainant is an account holder of the opposite party bank. Receiving a lawyer notice in respect of dishonouring of a cheque for Rs.1, 10,000/- complainant approached opposite party and on verification it was found that there was an account in the name of complainant’s name. Complainant’s case is that she found that an account bearing No.6169 was opened by her father on 26.5.1983 with the opposite party bank for the purpose of encashment of a Demand draft for Rs.21, 163/- that came in the name of the complainant. It can be seen that the entire amount except a sum of Rs.300/- was withdrawn by using only one leaf.

The account has been remained dormant without any operation. It is the second leaf, the subject matter of this complaint which is alleged to have been dishonoured. The specific case of complaint is that she had never issued any such cheque. According to complainant the cheque presented for encashment was one that was forged by her brother Mohanan, to whom against criminal proceedings have been already initiated by the complainant. Complainant has an account with the bank which was opened on21.8.96. The complainant alleges that the bank officials did not tell her anything about the above said account at the time of taking the account bearing S/ANo.11890 on 21.8.96. The case of the opposite party is that the above said old account was opened by the complainant herself and she was introduced by one P.S.Narayanan who was holding savings bank account No.2374. Opposite party admits that the second leaf of that cheque book for an amount of Rs.1, 10, 00,000/- came up for collection but contended that the same was dishonored due to insufficiency of fund. Opposite party further contended that the complainant is the custodian of the cheque.

It is also contended that unless and until the customer informs the bank to close the account by surrendering the balance cheque with the customer the bank cannot close the account suomoto. Further when the above said cheque came up for collection the bank has to see whether sufficient funds are there to honour the cheque. In this case there was no sufficient amount to honour the cheque so the same was returned. The bank has no further role in the dispute. Opposite party has also contended that the complainant can not say that she is not aware of the account so long as she keeps the cheque books and pass book with her. The complainant has the case that the officials of the opposite party bank, especially the manager should have taken extra care before dishonoring the cheque when it is issued from the cheque book of a dormant inoperative account which remained inoperative for more than 21 years and that too for an imaginary amount. Complainant alleges that the opposite party at least should have informed the complainant before acting upon the cheque of a dormant/inoperative account for such a huge amount.

If they have taken care of the rules to be followed in the use of an inoperative account this type of crime could have been avoided. There is some substance in the case of complainant with respect to the dealing with the cheque in question which contains a huge amount. The stand that the bank has taken that there is no difference with cheque with fewer amounts and a cheque with huge amount is absolutely wrong. It has to be treated as a case of rare of the rarest since a cheque bearing more than an amount of 1 crore is not a common affair in a bank in Kannur municipality. The cheque in question is for a huge amount for Rs. 1 crore 10 lakh. It is understandable if it is happened in a bank in a metropolitan city. If the officials are not able to understand the difference between a cheuqe for Rs.1000/- and a cheque for Rs. 1 crore and 10 lakh, that is a sign of something wrong which is difficult to cure. If they are of opinion that both the cheuqes shall be treated equally with equal respect we cannot appreciate our banking system is safe in the hands of these masters, whatever maybe the provisions of law over which they have been taking shelter.



Herein the complainant’s definite case is that she has not opened an account with the opposite party bearing number 6169 on 26.5.1983. That account was started by her father in the name of complainant for the purpose of encashment of a Demand Draft for Rs.21, 163/- that came in the name of complainant. The withdrawal of said amount keeping a nominal amount in the account by the first leaf of cheque itself remains as an indication that the opening of the account was actually intended to encash the said amount and the same can be confirmed with the experience of keeping this account dormant without any transaction for more than 21 years. She has the case that she was not aware of such account. There is no need to disbelieve her in this aspect. In the ordinary course of dealing if she had been aware of this account, she might have operated it for herself. There is no need to take a second account knowingly. Hence this account and the cheque book issued in connection with the account cannot be considered legally as that of complainant. That is a false account. The second leaf of the cheque book misutilised by her brother whatever maybe the purpose had definitely been a fraudulent act and that amounts to criminal offence. If it is done with knowledge and consent of opposite party that is only an involvement of the same crime. It is not a question of rights and liability that arose from the provisions of Consumer protection Act. The complainant is not related with the opposite party bank as a consumer though the account had been opened by her father in her name without her knowledge. That account cannot at any rate be legalised. Herein the right of the complainant to seek remedy as consumer does not arise. The complainant is not entitled to claim the status of a consumer to approach the Forum, whereby complaint is not maintainable. The 1st issue is found against complainant.

Since it is found complaint is not maintainable there is no need to go in to other issues. Complainant is at liberty to seek remedy in appropriate civil or criminal courts if so advised.

In the result, the complaint stands dismissed. No order as to costs.

consumer case(CC) No. CC/06/294

Dr. F.V.Albin,Melayil, Mathilil.P.O.
...........Appellant(s)

Vs.

Assistant General Manager,Indian Bank,Main Road
...........Respondent(s)


BEFORE:


Complainant(s)/Appellant(s):


OppositeParty/Respondent(s):


OppositeParty/Respondent(s):


OppositeParty/Respondent(s):




ORDER

Complaint for realization of fixed deposit amount, compensation and costs.



The averments in the complaint can be briefly summarized as follows:



The complainant and his wife made a term deposit for Rs.12,500/- with the opp.party bank for 63 months on an interest of 9% per annum as per receipt No.162469 dated15.9.1978. The interest was to be remitted on a monthly basis in his SB account. After maturity of the loan when the complainant demanded the FD amount the opp.party refused to release the amount on the ground that there are exercising a genera lien on the deposit on the ground that the civil suit is pending. Even though the civil suit was settled out of court in October 1999, the amount covered by the fixed deposit and interest were not given. Hence the complaint.



The opp.party filed version contending, interalia that the complaint is maintainable either in law or on facts. The complainant is not a consumer. The opp.party filed OS.No.318 of 1982 before the Sub Court, Kollam against the complainant and others for realization of amount due to the bank. The suit was decreed on 28.2.1987. While the execution proceedings were pending the judgement debtors therein including the complainant approached the bank and expressed willingness to settle the matter and in pursuant to that settlement a sum of Rs.147.73 lakhs was deposited and the matter was fully and finally settled. The deposit of Rs..12,500/- is admitted. The opp.party exercised a general lien over the said deposit in the execution of civil suit pending. The lien is exercised only on the principle amount of fixed deposit and it is not curtailed the right of the depositor to collect interest. Even though the claim of the complainant is a time barred one the opp.party had taken all the earnest efforts to turn out the details of the said deposit and found that the said amount is kept in the bank and the opp.party has no objection to release the fixed deposit to the complainant, whenever they surrender the fixed deposit receipt. Unless and until demanded the opp.party is not bound to renew the deposit on each and every stage of its maturity The opp.party had taken all the earnest efforts to trace out the records and there is no deficiency in service on the part of the opp.party. Hence the opp.party prays to dismiss the complaint.



Points that would arise for consideration are:

1. Whether there is deficiency in service on the part of the opp.parties

2. Reliefs and costs.



For the complainant PW.1 is examined. Ext. P1 to P12 are marked.

No oral or documentary evidence for the opp.party.

POINTS:

As a matter of fact the deposit of Rs.11,500/- as per the Ext.P1 for the period of 63 months from 15.9.1978 and for the amount covered by Ext.P1 is over due are not in disputed. It is also not in disputed that the Fixed Deposit matured on 15.12.1983. After maturity the complainant has demanded the amount but his request was denied on the grounds that the opp.party is exercising a general lien over the deposit which can be seen from Ext.P2. It is also not disputed that the Civil Suit was settled out of court in the year 1999 in full and final

The complainant’s case that he demanded the Fixed Deposit amount and interest accrued there on immediately after maturity is supported by Ext.P2. When the Fixed Deposit was not refunded and a general lien is exercised by the opp.party over the said sum, the complainant has no control over the FD deposit and it is the opp.party who is having control over the amount. So there is force in the contention that the party who is exercising lien on the amount has to renew the FD deposit receipt.

According to the complainant he has deposited the amount on a lower interest than the prevailing interest for FD deposits since he has requested to deposit the interest accrued in his SB account is obvious from the absence of maturity value in Ext.P1. However no evidence was adduced by the opp.party to establish that payment of interest was made monthly by crediting the amount in the SB account of the complainant. No oral or documentary evidence in this regard is adduced by the opp.party. The burden to establish that the interest on the FD was credited in the SB account of the complainant is on the opp.party but they failed to discharge that burden and we are of the view that the complainant is entitled to get interest at the rate admissible to a Fixed deposit for a period exceeding 5 years till the lien is lifted.


Merely because a lien has been impose on the fixed deposit the opp.party cannot refuse to pay interest to the depositor.

It is argued that the complainant has not filed any renewal application if he has chosen to renew the FD on attaining maturity. As pointed out earlier when the bank is exercising lien on the FD covered by Ext.P1, the complainant has no control over the amount and the burden is on the bank to inform the depositor to renew the FD periodically or do it by the bank itself rather than depriving the depositor of the benefit of maximum interest so long as the lien is force .

It is admitted that the lien was lifted on 1999. Ext.P2 to P8 shows that the complainant has attempted to get the Fixed deposit amount released but without success. Even assuming that the opp.party is not bound to renew the FD after the lifting of lien the complainant is entitled to get interest for the deposit at least at the rate of interest applicable to SB account after October 1999. The conduct of the opp.party amounts to deficiency in service and unfair trade practice. Point found accordingly.

In the result the complaint is allowed in part, directing the opp.party to pay the Fixed Deposit amount to the complainant with interest applicable to Fixed Deposits for a period exceeding 5 years from 1978 till October 1999 and thereafter at the rate applicable to SB account. The opp.party are also directed to pay a sum of Rs.5,000/- towards compensation and costs. The order is to be complied with within one month from the date of this order.