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Thread: Canara Bank

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    BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FOURM, BAGALKOT.
    Date of filing:23-09-2008
    Date of Order:12-03-2009
    Consumer Complaint No.178/2008

    PRESENT
    01) Shri. A.M.Pattar, B.A.LL.B. (Spl)
    District Judge(R) President…

    02) Smt.Girija.R.Adakenavar, B.A. Lady Member…

    03) Shri.Dr.U.S.Heranjal, MBBS.M.D (OBG/GGN) Member…


    COMPLAINANT


    • Sri. Mehaboob S/o Husensab Lathi,

    Age:28 Years, Occ: Business & Manager
    Bharat Egg. Works,
    R/o Kamatagi, Tq:Hungund,
    Dist:Bagalkot.
    (By Sri. B.N. Nadagouda, Adv.)

    V/s

    OPPOSITE PARTIES


    • Branch Manager,

    Canara Bank,
    Branch Kamatagi,
    Tq:Hungund, Dist:Bagalkot. (Exparte)


    • Branch Manager,

    United India Insurance Co. Ltd.,
    Melligeri Complex, Bagalkot.
    (By Sri.P.D. Pattar, Advocate)
    O R D E R



    Sri.A.M.Pattar, Dist. Judge (Retd), President.

    This is a complaint filed by the complainant U/Sec.12 of the Consumer Protection Act 1986 (hereinafter referred to as the ‘Act’) claiming insurance amount of Rs.4,50,000/- with interest and for award of Rs.20,000/- for deficiency in service caused by the Op and award of another Rs.20,000/- for mental agony, physical strain etc., along with costs of this proceedings.

    2. The facts of the case in brief are that; the complainant is a permanent resident of Kamatagi Village in Hungund Taluk and is engaged in manufacturing steel furniture, repairing vehicles etc., with the financial assistance of Op1 and Op1 itself got insured all the stock of his garage for the security of loan advance with Op2 under policy No.240104/11/06/11/00001279. The insurance policy was inforce from 22.10.2006 to 21.10.2007. That this being the case in the month of September 2007 as there was a heavy rain fall in Bagalkot, Belgaum and Dharwad Districts the said garage of the complainant was submerged in the Malaprabha River Flood water and all the machineries and other stocks which were stored in his garage were damaged and destroyed causing a loss to the tune of Rs.4,50,000/- and because of that his entire business was closed and he was unable to pay the loan installments to Op1. The complainant informed this fact to the Tahasildar Hungund who visited the spot, but failed to pay any compensation, the complainant also informed Op2 about this fact and requested to pay the insurance amount but the Op2 has also not at all paid any amount and this has caused financial loss and mental agony to him and this amounts to deficiency in service etc., and hence has prayed for allowing the complaint.

    3. Op1 inspite of due service of notice has remained absent and therefore, it is placed as exparte. However Op2 has appeared through the counsel and resisted the claim of the complainant by filing detailed written version denying initially almost all the averments of the complaint, but alternatively and without prejudice to the earlier stand it is stated that an investigator namely Danyakumar J. Danashetty of Bijpaur was appointed to survey about the loss sustained by the complainant and he has submitted his report on 10.10.2007 showing the loss sustained by the complainant at Rs.8000/- only. Since the said loss is less than Rs.10,000/- under general exceptional clause there is no liability to the insurance company. Therefore, the complainant is not entitled to any amount and there is no deficiency in service etc., and hence has prayed for dismissal of the complaint.

    4. The complainant apart from filing his own affidavit has also filed a affidavit of one Shivanand and got marked nine documents as Ex.C-1 to Ex.C-9. As against this the Op has also filed affidavit and got marked five documents as Ex.Op1 to Ex.Op-5.

    5. Heard arguments of both the sides.

    6. Now the point that arises for our consideration are;

    1.Whether the complainant is entitled to the relief as is sought for?
    2.What order?

    Answers to the above Points:-
    1) Partly Affirmative.
    2) As per final order

    R E A S O N S
    7. POINT NO.1:- The fact that the complainant is engaged in manufacturing of steel furniture’s repairing vehicle with the financial assistance of Op1 is not in dispute. It is also an admitted fact that the complainant has insured his work shop under Op2 and the policy was inforce from 22.10.2006 to 21.10.2007. It is also a fact that in the month of September 2007 as there was heavy rain in Bagalkot District, the Workshop of the complainant was submerged in the Malaprabha River Flood water, and because of that the machinery and other materials stored by the complainant were damaged. The complainant has assessed the loss caused to him at Rs.4,50,000/-. It is also an admitted fact that the complainant had preferred a claim with Op2 for award of insurance amount. But after the incident the Op2 appointed one Surveyor to assess the damage or loss caused to the complainant and the surveyor of Op2 namely Danyakumar Dhanashetty has submitted his final survey report as per Ex.Op1 wherein he has estimated the loss sustained by the complainant at Rs.8000/- only. Relying on this report and the general exclusion clause of the insurance policy Op2 has been pleased to repudiate the claim of the complainant on the ground that the loss sustained by the complainant is less than Rs.10,000/- and as per the said general exclusion clause the complainant is not entitled to any amount. However the learned counsel for the complainant submitted that after the said incident the complainant also got surveyed loss sustained by him through one surveyor Sri.Shivanand and he has submitted his report as per Ex.C-8 wherein the loss sustained by the complainant has been shown at Rs.2,64,600/- and therefore the survey report relied upon by the Op2 is false one and prepared in order to get a shelter under general exclusion clause to avoid the payment of the insurance amount to the complainant. The said Surveyor Shivanand has also filed his affidavit stating that he is a technical person to assess the loss of this nature and submitted his report as per Ex.C-8. The fact that this Shivanand is also a technical person and competent person to make valuation of the goods lost or damaged in fire or special peril etc is not disputed by the other side. Though the Op2 has also obtained a survey report as per Ex-Op1 the Op2 has not at all filed the affidavit of the said surveyor Danykumar to show that his assessment of loss is correct one. Because as per this Ex.Op1 the loss sustained by the complainant is only Rs.8000/- whereas the loss sustained by the complainant as per Ex.C-8 is Rs.2,64,600/- and therefore, the possibility of the Op2 in getting survey report to suit its case cannot at all be over ruled. Therefore, we accept the survey report submitted by the complainant as per Ex.C-8. If that report is taken in to consideration then the Op2 cannot take any shelter under general exclusion clause A of the policy. Because every insurance policy unequivocally ensures the insured that in the consideration of his having paid the premium against the risk specified therein the insurance company will pay the value up to the maximum sum insured. The object behind the insurance cover always is to indemnify the insured against the loss suffered by him which is covered under the insurance policy. Recently the Hon’ble National Consumer Disputes Redressal Commission, New Delhi in a case reported in 2009 CTJ 162 (CP) (NCDRC) between National Insurance Company Ltd., and another V/s Gobind Chandra Nayak has held that;
    “The exclusion term of an insurance policy must be read down so as to serve its main purpose of indemnifying the damage suffered by the insured.”

    When the material facts are admitted regarding the subsistence of the insurance policy on the date of the incident and damage caused to the materials of the complainant, the Op2 cannot take the help of general exclusion clause A as is narrated in Ex.Op5 when the policy in question is covered by the special perils policy. Therefore, the Op2 is not justified in denying the claim of the complainant.

    8. Now the point is as to what extent the complainant is entitled to the amount. The complainant in his claim petition has claimed a sum of Rs.4,50,000/-. The loss assessed by the survey of the complainant namely Shivanand is at Rs.2,64,600/-. But on perusal the copy of the insurance policy in question namely Ex.C-2 it is seen that the total sum insured by the complainant was to the extent of Rs.1,95,000/- only. Therefore, the complainant is entitled to the amount only to that extent i.e. Rs.1,95,000/-.

    9. The complainant has prayed for award of Rs.20,000/- for deficiency in service and another Rs.20,000/- for mental agony and physical strain etc. But in this case we are awarding the entire insurance amount to him. Therefore, there is no need to pay any amount towards the above said two counts. However he is entitled to Rs.2,000/- being the costs of this proceedings. With this we answer point No.1 partly in the Affirmative.

    10. Point No.2: In the result the complaint of the complainant is fit to be allowed in part and hence we proceed to pass the following…
    O R D E R
    Complaint of the complainants is allowed in part.

    Opposite Party No.2 is ordered to pay insurance amount of Rs.1,95,000/- (Rs.One Lakh Ninety five thousand only) to the complainant along with Rs.2,000/- (Rs.Two thousand only) being the costs of this proceedings within two months from the date of this order, failure of which Op2 shall pay interest on the above said amount at the rate of 10% per annum from the date of the complaint till complete realization.

    Send free copy of this order to the parties immediately.

    (Dictated to the Stenographer, transcribed, corrected and then pronounced in the open Forum on this 12th day of March 2009)





    (A.M.Pattar)
    District Judge(Rtd)
    President.


    (Smt.Girija.R.Adakenavar)
    Lady Member.


    (Dr.U.S.Heranjal)
    Member.
    Member.

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    IInd ADDL. DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, BANGALORE URBAN

    No.1/7, Swathi Complex, 4th Floor, Seshadripuram, Bangalore-560 020

    consumer case(CC) No. CC/1344/2008

    M/s. Vinay Tracrtor Enterprises,
    ...........Appellant(s)
    Vs.

    M/s. Canara Bank
    ...........Respondent(s)

    BEFORE:


    Complainant(s)/Appellant(s):


    OppositeParty/Respondent(s):


    OppositeParty/Respondent(s):


    OppositeParty/Respondent(s):




    ORDER


    Date of Filing:18.06.2008 Date of Order:17.03.2009 BEFORE THE II ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SESHADRIPURAM BANGALORE-20 Dated: 17TH DAY OF MARCH 2009 PRESENT Sri S.S. NAGARALE, B.A, LL.B. (SPL.), President. Smt. D. LEELAVATHI, M.A.LL.B, Member. Sri BALAKRISHNA. V. MASALI, B.A, LL.B. (SPL.), Member. COMPLAINT NO: 1344 OF 2008 M/s. Vinay Tractor Enterprises No. 26, 1st Floor Raja Ram Mohan Roy Extension K.H. Road, Bangalore 27 Represented by its Prop: H. Chandrashekar Complainant V/S M/s. Canara Bank No. 18, K.H. Road Shanthinagar, Bangalore 560027 Represented by its Chief Manager Opposite Party ORDER By the President Sri. S.S. Nagarale This is a complaint filed under section 12 of the Consumer Protection Act. The facts of the case are that complainant approached opposite party for loan. Opposite party has agreed to sanction loan of Rs. 200 lakhs of OCC loan and Rs. 1300 lakhs term loan. Opposite party has not disbursed the loan in time to the complainant. No documentation was done. However, opposite party has collected Rs. 7,16,300/- from the complainant and Rs. 1,50,000/- towards insurance amount and Rs. 5,000/- as legal fee. Complainant requested to return the said amount. Complainant wrote letter demanding repayment of upfront amount. Opposite party gave evasive reply denying repayment. Opposite party is liable to pay interest. 2. Notice issued to opposite party. Opposite party put in appearance through advocate and defence version filed admitting that opposite party collected sum of Rs. 7,16,300/- inclusive of service tax from the complainant’s current account. Opposite party vide sanction letter dated 26.11.2005 clearly intimated the complainant that he has to pay 1% of loan amount towards upfront fee to the bank. Complainant has agreed for such condition. Accordingly, bank was entitled for sum of Rs. 13,00,000/- from the complainant. However, complainant represented for reduction in the fee and opposite party after getting permission from higher authorities reduced the upfront fee by 50%. Opposite party after giving concession collected sum of Rs. 7,16,300/- from the complainant. Upfront fee collected is towards work involved in processing and sanctioning loan. The allegation that opposite party has collected further sum of Rs. 1,50,000/- towards insurance was false. Opposite party collected Rs. 16,530/- towards valuation fee paid to the valuer. Insurance and legal fees are paid by the party directly to the concerned. Opposite party as per the regulation of bank is entitled to collect legitimate charges. Complainant for the reasons known to him has not availed the loan. There is no deficiency in service. Therefore, opposite party requested to dismiss the complaint. 3. Affidavit Evidences are filed. 4. Arguments are heard. 5. The points for consideration are: 1. Whether the complainant has proved deficiency in service on the part of the opposite party? 2. Whether the complainant is entitled for the refund of the amount? If so, what would be the refund amount? 6. Almost all facts are admitted. It is admitted case of the parties that the complainant had applied for loan with the opposite party bank. The loan was sanctioned by the opposite party bank on 26.11.2005 with certain conditions. However, the complainant has not taken loan amount and the amount has not been disbursed to the complainant. But learned advocate for the opposite party submitted that as per the guidelines and instructions of the bank upfront fee at 1% of loan amount shall have to be paid by the borrower. It is submitted that opposite party bank was infact entitled to get sum of Rs. 13,00,000/- as upfront fee. However, the complainant had made representation for reduction in the upfront fee. The opposite party bank after getting permission from the higher authorities reduced the upfront fee by 50% and concession was given to the complainant. After giving concession the bank collected Rs. 7,16,300/- towards upfront fee and towards service tax. The complainant has given letter to opposite party bank on 01.02.2006. The letter reads as under: “Dear Sir, Sub: Sanction of Term loan of Rs. 13 crores collection of fee at 50% reg Ref: your letter No. CR/288/2006 dated 26.11.2005 We are very much thankful to your kind self for having provided loan facility to the extent of Rs. 13 crores for purchase of property. In your letter it is intimated to us that upfront fee of Rs. 7,16,300/- has bee collected at 50% of rate. We request you to kindly collect Rs. 3,58,150/- only at 25% towards upfront fee. We shall be glad to have your kind action in this behalf. Yours faithfully, For Vinay Tractor Enterprises Sd/- (H. Chandrashekar) Proprietor” 7. As per this letter it is very clear that the bank has collected 50% upfront fee. The complainant requested for giving further concession and requested the opposite party to collect 25% towards upfront fee. But the request of the complainant has not been considered by the opposite party bank. Therefore, he has approached the forum. The opposite party bank has produced guidelines of service charges published by Canara Bank. As per this guidelines bank is authorised to collect upfront fee of 1% of loan amount. However, the bank on request of the complainant referred the matter to higher authorities and concession was given to complainant and collected only 50% towards upfront fee. Collection of service charges or processing fee as per the guidelines does not amount to deficiency in service. On the facts of the case there is absolutely no deficiency of service on the part of the opposite party bank. The complainant himself expressed thanks for giving concession and further requested for collecting 25% towards upfront fee. So under these circumstances there shall not be any grievance by the complainant against the opposite party bank. It is admitted case that rates of service charges have never been fixed by any law. The banks have formulated instructions / guidelines of service charges and as per such guidelines banks are charging service charges and upfront charges. The very fact that 50% concession was given to the complainant itself goes to show that there is no fixed rate of upfront fee to be collected. It is entirely at the discretion of the bank. The representation of the complainant was sent to higher authorities and 50% fee was reduced and accordingly Rs. 7,16,300/- was collected. No fault could be found with the opposite party bank in collecting the upfront fee. The complainant should not have any grievance. The complainant only requested for further reduction of fee. The learned advocate for the complainant argued that the complainant company has sustained heavy loss in business. It is in a financial constraint and difficulty. Therefore, the complainant is seeking some more concession on account of his very bad financial position. The learned advocate for the complainant submitted that the complainant could not have approached the forum had the financial position of the complainant company was good. The opposite party bank has exercised discretion in reducing the upfront fee. The action taken up by the opposite party bank in giving 50% concession is appreciated. Complainant is old customer of opposite party bank. He is in financial trouble. Therefore, he has requested for some more concession. Though there is no deficiency in service on the part of opposite party the forum can exercise its judicial and discretionary power in directing the opposite party to reduce or give some more concession to the complainant in view of his very bad financial situation. On the facts and circumstances of the case and taking into consideration the arguments advanced by both the learned counsels of the parties we feel the ends of justice will be met in ordering the opposite party bank to refund lumpsum amount of Rs. 3,00,000/- to the complainant out of Rs. 7,16,300/- collected towards upfront fee. As regards insurance premium and legal charges the complainant has not produced any evidence or proof to show that opposite party bank has collected Rs. 1,50,000/- towards insurance amount and Rs. 5,000/- towards legal charges. Therefore, the complainant is not entitled for refund of this amount. The opposite party bank has paid Rs 16,530/- to Chandra Shekar & Co. towards Professional Charges. Therefore, the complainant has no right to ask for refund of that amount. On the facts of the case the only order that could be passed is opposite party bank shall refund Rs. 3,00,000/- to the complainant. This order is passed on the facts on particular case. This will not be setting any precedent. The borrower has no right in law to seek refund of the upfront fee since there is no deficiency of service on the part of the opposite party bank. However, in this particular case taking into consideration of loss in business and financial constraint of the complainant we are directing the opposite party bank to give further concession and to refund lumpsum amount of Rs. 3,00,000/-. In the result I proceed to pass the following: ORDER 8. The Complaint is partly allowed. The opposite party bank is directed to refund Rs. 3,00,000/- to the complainant (reverse to the account of the complainant) within 30 days from the date of this order.

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    ORDER




    BEFORE THE MANDYA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANDYA PRESENT: 1. SIDDEGOWDA, B.Sc., LLB., President, 2. M.N.MANOHARA, B.A., LLB., Member, 3. A.P.MAHADEVAMMA, B.Sc., LLB., Member, ORDER Complaint No.MDF/C.C.No.12/2009 Order dated this the 24th day of April 2009 COMPLAINANT/S 1. Sri.Siddaiah S/o Late Kothi Boraiah, 2. Sri.Boraiah S/o Kothi Boraiah, 3. Sri.Channaiah S/o Kothi Boraiah, 4. Smt.Dodda Boramma W/o Chotha, 5. Sri.Duma S/o Siddaiah, All are R/o Hulikere Koppalu Village, Dudde Hobli, Mandya Taluk. (By Sri.P.Narendra Kumar., Advocate) -Vs- OPPOSITE PARTY/S The Manager, Canara Bank, Sindhagatta Branch, K.R.Pet Taluk, Mandya District. (By Sri.A.Sunil Kumar., Advocate) Date of complaint 29.01.2009 Date of service of notice to Opposite party 09.02.2009 Date of order 24.04.2009 Total Period 2 Months 15 Days Result The complaint is dismissed. However, there is no order as to costs. Sri.Siddegowda, President 1. This complaint is filed under section 12 of the Consumer Protection Act 1986 against the Opposite party for a direction to waive off the entire loan of the complainants with compensation of Rs.10,000/-. 2. The case of the complainants is that the complainants have availed the loan of Rs.6,00,000/- from the Opposite party Bank for purchasing tractor, trailer and other implements for agricultural purpose under loan account No.ALFM No.5353. According to the Union Government of India’s Farmers Debt Relief Scheme, the complainants are entitled to the entire loan waive off, but the Opposite party without considering the said aspect has only given waive off to only Rs.2,10,619/- and Rs.9,344/-. When the complainants questioned, the Opposite party given evasive answer. The complainants are entitled to 100% loan waive off and Opposite party has not extended that benefit. Therefore, the Opposite party has committed deficiency in service. Hence, the complaint. 3. The Opposite party has filed version admitting that the loan borrowed by the complainant and giving of loan waiver of Rs.2,10,619/- and Rs.9,344/-. It is denied that the complainants are entitled waiver of the entire loan and Opposite party Bank had given an evasive answer, when questioned by the complainants. The complainants are small farmers and the loan obtained by them is Investment Loan. As per the guidelines of Government of India only the installment of the loan over due on the December 31st 2007 and remaining unpaid until February 29, 2008 will be eligible for the debt relief and not the loan amount as claimed by the complainants. Accordingly, waivement of loan as admissible is given. Therefore, the Opposite party has not committed any deficiency in service and the complaint is liable to be dismissed with cost of Rs.5,000/-. 4. During trial, the 1st Complainant is examined and has produced Ex.C.1 & C.2 documents. The Opposite party is examined and two documents Ex.R.1 & R.2 are produced and also copy of the sanctioned letter. 5. We have heard both the sides. 6. Now the points that arise for our considerations are:- 1. Whether the complainants are entitled to 100% waiver of the loan? 2. Whether the Opposite party has committed deficiency in service in not extending the benefit of 100% waiver of the loan? 3. What order? 7. Our findings and reasons are as here under:- 8. The undisputed facts are that the complainants are small farmers and they have availed loan of Rs.6,00,000/- from the Opposite party Bank for purchasing the tractor and trailer which is termed as investment loan, as per the guidelines of the Government of India in respect of the waiver of agricultural loan. 9. The grievance of the complainant is that the complainants are entitled to waiver of the entire loan due, but the Opposite party has given waiver of loan to the extent of Rs.2,10,619/- + Rs.9,344/- only and hence, the Opposite party has committed deficiency in service in not extending that relief, though the complainants are entitled to 100% waiver of the loan as per the scheme. But the Opposite party has denied the same. The complainant himself has produced Ex.C.2 the guidelines of Agricultural Loan Waivement Scheme 2008. The perusal of this guidelines of the scheme shows, the tractor loan is a investment loan and as per Clause 4(b), the scheme applies to the over due installments along with the interest accrued which is over due as on 31.12.2007 and remaining unpaid until 29.02.2008. As per Ex.R.2, the over due installments is Rs.,133,400/-, the interest till 29.02.2008 is 1,58,946/- and the insurance amount is Rs.13,273/- total amount due is Rs.3,05,619/- and the amount paid by complainant is only Rs.95,000/- and the eligible amount is Rs.2,10,619/-. The complainant has also produced the loan account extract marked as Ex.C.1. As per the sanctioned order, the complainants are given 8 annual installments of Rs.66,700/- and one installment of Rs.66,400/- with interest payable as and when due, but the complainants have paid only Rs.95,000/- from the date of loan till 24.09.2007 and thereafter waiver of loan of Rs.2,10,619/- and Rs.9,334/- was given on 10/12.07.2008. So, the Opposite party has correctly calculated the over due installments as on 31.12.2007 and extended the loan waiver scheme to the complainants and there is no basis that the complainants are entitled to 100% waiver of the loan and the complainants have been given wrong information about the scheme of the waiver of the loan. Therefore, the Opposite party has extended the benefit of loan waiver scheme to the complainants loan account as admissible and Opposite party has not at all committed any deficiency in service at all. Even though, the Opposite party has sough for exemplary cost of Rs.5,000/- for dragging to the Opposite party to the Forum, but they are uneducated small farmers and they were misguided by somebody. Therefore, it is not a case to impose exemplary costs. 10. In the result, we proceed to pass the following order; ORDER The complaint is dismissed.

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    Mr.Avitus Paul Rego @ A.P.Rego,
    S/o late Raphael Rego,
    Aged About 60 years,
    Permanent R/of “Anto –Nivas”,
    Kulushekar, Mangalore,D.K.
    Represented by his wife and
    G.P.A. Holder.
    Mrs.Philomina Rego @ Phyllis Rego,
    W/o Avitus Rego, Aged about 58 years,
    R/at “ Anto – Nivas”, Kulushekar,
    Mangalore,D.K. …….. COMPLAINANT
    (Advocate for Complainants: Sri K.S.N.Rajesh)
    VERSUS

    1. M/s Canara Investments &
    Finance Corporation,
    Swami Vivekanda Commercial
    Complex, Bhavanthi Street,
    Mangalore -575 001.

    2. Mr.Vamana Baliga,
    S/o Late Gopala Krishna Baliga,
    Managing Partner,
    M/s Canara Investments &
    Finance Corporation,
    R/at Flat No.7,
    D.No.3-2-41-C, 2nd Floor,
    NIKKI Apartments,
    Near Lions Club,
    Brahmagiri,
    Udupi Taluk. …. OPPOSITE PARTIES
    (Advocate for Opposite Party No.1 : Exparte)
    (Advocate for Opposite Party No.2: Sri.P.R.Bhandarkar)

    ORDER DELIVERED BY SMT. ASHA SHETTY, PRESIDENT:
    1. The facts of the complaint in brief are as follows:
    This complaint is filed under Section 12 of the Consumer Protection Act alleging deficiency in service against the Opposite Parties claiming certain reliefs.

    The Opposite Party No.1 is a partnership firm having its office at Mangalore D.K. District carrying financial business and Opposite Party No.2 is a Managing Partner of the Opposite Party No.1 firm, in which Complainant claims to have deposited certain sum of money with the Opposite Parties under the Fixed Deposit Receipts, the details of which are given in the schedule here below:

    F.D. Receipt
    No.
    Date of
    Deposit
    Amounts
    Deposited

    Date of Maturity
    Rate of Interest
    001591
    26.4.1999
    25,000/-
    26.4.2001
    10%
    001761
    30.6.2000
    25,000/-
    30.6.2002
    10%

    The Complainant submits that, on the maturity of the above said Fixed Deposit he has approached the Opposite Parties several times, but the Opposite Party postponed the payment on one or the other pretext and failed to pay the amount till this date. Thereafter Complainant issued lawyers notice on 27.11.2008 to the Opposite Parties. In spite of that, the Opposite Parties not paid the amount which amounts to deficiency in service. Hence, the Complainant has filed the above complaint under Section 12 of the Consumers Protection Act, 1986 (herein after referred to as “The Act”) seeking direction from this Hon’ble Forum to the Opposite Parties to pay a sum of Rs.25,000/- with interest thereon at 10% p.a. from 26.4.1999 and Rs.25,000/- with interest thereon at 10% p.a. from 30.6.2000 till payment respectively and further Rs.20,000/- claimed as compensation and cost of the proceedings.





    2. Version notice served to the Opposite Parties by RPAD. Opposite Party No.1 is a firm returned as a door lock and Opposite Party No.2 appeared through their counsel filed version and submitted as follows:
    This Opposite Party denies that he is a partner of the alleged firm and submitted that remaining partners of the alleged partnership firm have not been impleaded in the above complaint and the complaint is barred by limitation and is not maintainable and prayed for dismissal of the complaint.

    3. The points that arise for our consideration in this case are as follows:
    (i)Whether the complaint is barred by law of limitation?

    (ii)Whether the Complainant proves that the Opposite Parties have committed deficiency in service?

    (iii)If so, whether the complainant is entitled for the reliefs claimed?




    (iv)What order?

    4. In support of the complaint, Mrs.Philomina Rego @ Phyllis Rego - G.P.A. holder of the Complainant (CW1) filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on him. Ex C1 to C7 were marked for the Complainant as listed in the annexure. One Sri K.Vamana Baliga, Opposite Party No.2 filed counter affidavit and answered the interrogatories served on him.
    We have heard the arguments and perused the pleadings, documents and evidence placed on record by the respective parties and answer the points are as follows:
    R E A S O N S
    5. Points No.(i) to (iv):
    As far as limitation is concerned, sub Section (2) of Section 24A of the Consumer Protection Act states that not withstanding anything contending Sub-Section (1), the complaint may be entertained after the specified period, if the Complainant satisfies the District Forum within such period. Now it is a well-established proposition that when the person who received the fixed deposit has failed to repay the deposit on the date of maturity, it is a recurring cause of action for the depositor so long as the person who received the deposit has not denied his liability to repay the deposit. The Opposite Parties have no case that they have denied the Complainants’ right to recover the deposit until they filed their version before this Forum. The Complainants’ right is denied for the first time. Therefore, we are of the view that, the Complainant has recurring cause of action until and unless it has been proved that the entire deposited amount has been paid to the Complainant by the Opposite Parties. Hence, the point No.(i) is held in favour of the Complainant.
    The Ex.C1 and C2 are the original Fixed Deposit Receipts issued by the Canara Investments & Finance Corporation (Regd.) i.e. Opposite Party No.1 proved that the Complainant has deposited the amount of Rs.25,000/- each under the above Fixed Deposit Receipts as stated in the schedule of the Complaint herein above. It is also evidenced that the amount under the above Fixed Deposit is already matured for repayment on the date mentioned therein.
    It is significant to note that, in the present case the Opposite Party No.2 appeared through their counsel and filed version and contended that he is not the partner of the firm in one breath and in another breath in Para 3 and 4 of the version that the remaining partners of the alleged partnership firm are not impleaded. If at all the Opposite Party No.2 is not a partner how he knows the remaining partners of the alleged partnership firm not were impleaded. That itself shows that the Opposite Party No.2 is one of the partner and rest of the partners are not made as a party to the proceedings. However, it is a settled position of law that under the partnership firm all the partners of the firm are jointly and severally liable to pay of the debts of the firms. Since the firm made as a party to the proceedings it is not necessary that all the partners are brought on record. Once the order is passed against the firm it is binding on all the partners who ever is on record or not.
    The Ex.C1 and C2 i.e. Fixed Deposit Receipts issued by the Opposite Party No.1 clearly reveals that, the Complainant had deposited Rs.25,000/- each for the period of two years and the said amount deposited amount were matured. The said receipts were issued by the Managing Partner of the above said firm. Since the fixed deposit receipts were issued by the partner of the Opposite Party No.1 and the above said amount deposited by the Complainant with the Opposite Party No.1 under the Fixed Deposit Receipts, the Opposite Party No.1 and its all the partners are jointly and severally liable to refund the amount on the date of maturity or thereafter. And the Ex.C1 and C2 are the Original Fixed Deposit Receipts available before the Forum is sufficient to hold that the amount under the Fixed Deposits are matured for repayment on the date mentioned therein, which date has been already expired. That the entire amount deposited under the above said certificates not repaid by the Opposite Party No.1 and its partners till this date amounts to deficiency in service.
    As far as Opposite Party No.2 is concerned he has taken a defence that other partners who are not impleaded that means the Opposite Party No.2 is very well aware of the partners of the Opposite Party No.1 and the Opposite Party No.2 ought to have produced the partnership deed before the Fora in order to show that he is not a partner of the partner and he is not held responsible. But in the instant case he has taken a simple defence that he is not a partner is not justifiable.
    Under the above circumstances, we hold that the Opposite Parties are jointly and severally hereby directed to pay to the Complainant a sum of Rs.25,000/- with interest at the rate of 10% p.a. (contractual rate) under F.D.R No.001591 from the date of deposit i.e. 26.4.1999 till the date of maturity and Rs.25,000/- with interest at the rate of 10% p.a. (contractual rate) under F.D.R No.001761 from the date of deposit i.e. 30.6.2000 till the date of maturity and thereafter Opposite Parties are liable to pay interest @ 8% per annum from the date of maturity till the date of payment under the two Fixed Deposit Receipts respectively and Rs.1,000/- awarded as litigation expenses. Payment shall be made within 30 days from the date of this order.

    6. In the result, we pass the following:
    O R D E R

    The complaint is allowed. The Opposite Parties are jointly and severally hereby directed to pay to the Complainant a sum of Rs.25,000/- with interest at the rate of 10% p.a. (contractual rate) under F.D.R No.001591 from the date of deposit i.e. 26.4.1999 till the date of maturity and Rs.25,000/- with interest at the rate of 10% p.a. (contractual rate) under F.D.R No.001761 from the date of deposit i.e. 30.6.2000 till the date of maturity and thereafter Opposite Parties are liable to pay interest @ 8% per annum from the date of maturity till the date of payment under the two Fixed Deposit Receipts respectively and Rs.1,000/- awarded as litigation expenses. Payment shall be made within 30 days from the date of this order.

    The F.D.R. if any, deposited by the Complainant be returned fourth with by substituting the certified.


  5. #5
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    Default Canara Bank

    Mr.Prashanth Hegde,
    Aged 32 years,
    S/o Ramachandra Hegde,
    R/at Anantha Padma,
    Sumagara Gundi,
    Moodbidri,
    Mangalore Taluk. …….. COMPLAINANT

    (Advocate: Sri.Bharathraj Hegde)

    VERSUS

    Canara Bank,
    Navabharath Complex,
    Moodbidri-574 227,
    Mangalore Taluk,
    Represented by its Manager. ……. OPPOSITE PARTY

    (Advocate: Sri.M.S.Krishnaprasad.)
    ORDER DELIVERED BY SMT. ASHA SHETTY, PRESIDENT;

    1. The facts of the complaint in brief are as follows:
    This complaint is filed under Section 12 of the Consumer Protection Act alleging deficiency in service against the Opposite Party claiming certain reliefs.
    It is submitted that, the Complainant was working as a lecturer at Alva’s Education Foundation, Moodbidri from 2001 to 2008. During that time the salary of the Complainant was credited to the S.B. Account by the institution. The Complainant approached the ATM centre in the month of July 2008 in order to withdraw of amount for his necessary. During that time the Complainant has unable to withdraw the amount for the reason that his transaction was declined without any intimation to the Complainant inspite of sufficient amount, once again on 27.8.2008 approached the ATM at Mangalore the ATM did not accept the card with an endorsement that ‘your transaction was declined’ in spite of sufficient balance in the Complainant’s account. And thereafter the Complainant approached the Opposite Party bank, the manager of the Opposite Party bank stated that the Complainant account has been blocked as per the letter of Alva’s Education Foundation for the reason that Complainant has left the said institution without any reason/notice and following any service rules. The Complainant submitted that, the action taken by the Opposite Party Bank is illegal and Opposite Party bank is nothing to do with the service matter of the Complainant and contended that the service rendered by the Opposite Party bank amounts to deficiency and filed the above complaint before this Hon'ble Forum under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction from this Hon'ble Forum to the Opposite Party to pay compensation of Rs.25,000/- towards mental agony, tension, inconvenience caused to the Complainant and further compensation and costs of the proceedings.

    2. Version notice served to the Opposite Party by RPAD.
    Opposite Party appeared through their counsel filed version admitted that the Complainant is a holder of S.B. Account with the Opposite Party bank. The employer of the Complainant Alva’s Education Foundation registered is having a current account in the Opposite Party bank. The Complainant was working with the said institution the salary amount payable to the Complainant was being credited to the Complainant’s account from the account of the Alva’s Education Foundation. In the month of July 2008 amount was credited to the account of the Complainant. However the Opposite Party bank had received the letter from the finance officer of Alva’s Education as per their letter dated 23.8.2008 informed the Opposite Party Bank of transfer the sum of Rs.14,450/- by debiting the S.B. Account of the Complainant. In view of the said letter the bank had to take steps and did not immediately debit the Complainant’s account and had withheld the withdrawal of the said amount. And it is submitted that the Complainant account was blocked after receiving the aforesaid letter for about 18 days and contended that there is no deficiency in service and prayed for dismissal of the complaint.

    3. In view of the above said facts, the points now that arise for our consideration in this case are as under:
    (i)Whether the Complainant proves that the Opposite Party has committed deficiency in service?

    (ii)If so, whether the Complainant is entitled for the reliefs claimed?






    (iii)What order?

    4. In support of the complaint, Sri.Prashanth Hegde (CW1) filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on him. Ex C1 to C8 were marked for the Complainant as listed in the annexure. One Mr.M.S.Kamath (RW1), Senior Manager of the Opposite Party filed counter affidavit and answered the interrogatories served on him. Ex R1 and R2 were marked for the Opposite Party as listed in the annexure. The Complainant produced notes of arguments.
    We have considered the notes of arguments submitted by the learned counsels and we have also considered the materials that was placed before the Hon'ble Forum and answer the points are as follows: Point No.(i): Affirmative.
    Point No.(ii) & (iii): As per the final order.


    REASONS


    5. Points No. (i) to (iii):
    It is undisputed fact that, the Complainant had a S.B. Account bearing No.573 in the Opposite Party bank and Complainant also availed the ATM facility through the said S.B. Account. It is also admitted that, the Complainant was working as a lecturer at Alva’s Education Foundation, Moodbidri from 2001 to 2008. During that time the salary of the Complainant was credited to the aforesaid S.B. Account by the institution. It is also further admitted that, in the month July 2008 the salary amount was credited to the account of the Complainant and he had a sufficient balance in his S.B. Account to operate the amount through ATM facility. It is also admitted that, since from July 2008 onwards the Complainant S.B. Account was blocked and he was unable to operate his account and subsequently once again on 27.8.2008 the Complainant approached the ATM centre at Mangalore and ATM centre did not accept the same with an endorsement that “your transaction was declined’ in spite of sufficient balance.
    From the above admitted facts, it is proved that the Complainant was working as a lecturer and his salary was credited to the S.B. Account of the Complainant and the Complainant attempted to withdraw the amount through ATM centre but his transaction was declined by the Opposite Party bank in spite of sufficient balance.
    Now the point for consideration is that once the balance has been deposited to the S.B. Account of the Complainant whether the Opposite Party bank can withheld the amount by blocking his account without there being any notice to the Complainant or any specific order from the court of law. In the present case, the Opposite Party bank taken a defence that the Complainant employer asked the Opposite Party bank to reverse the amount from the account of the Complainant and hence they have blocked the account of the Complainant. It is very strange to note that once the amount has been deposited to the account of the Complainant or the customer, before withdrawing or blocking the amount it is the primary duty of the bank to issue notice to the Complainant before taking any steps. The bank cannot take its measure back and behind of the customer, once the amount has been deposited to the account of the Complainant. In the instant case, it is proved that the Complainant had sufficient balance and the steps taken by the Opposite Party bank is one sided and which amounts to deficiency.

    As far as the compensation is concerned, the Complainant filed a affidavit stating that he was working as a lecturer and his salary was credited to the S.B. Account and he could not withdraw the amount from July 2008 to 11.9.2008 i.e. about two months since he is a employee definitely the salary is very much required to meet the expenses of his family and we do consider that the Complainant definitely put under inconvenience and hence we hereby direct the Opposite Party bank Manager who was acted in this transaction shall pay Rs.3,000/- as compensation for the inconvenience and harassment caused to the Complainant and also pay Rs.1,000/- as cost of the litigation expenses. The Opposite Party bank directed to recover the above said amount from the officer incharge who was blocked account of the Complainant. The Payment shall be made within 30 days from the date of this order.

    6. In the result, we pass the following:
    ORDER
    The complaint is allowed. The Opposite Party bank Manager is hereby directed to pay Rs.3,000/- as compensation for the inconvenience and harassment caused to the Complainant and also pay Rs.1,000/- as cost of the litigation expenses. The Payment shall be made within 30 days from the date of this order.

    Copy of this order as per statutory requirements, be forward to the parties free of costs and file shall be consigned to record room.

  6. #6
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    Default Canara Bank

    D. Mohan Kumar, S/o Jayaraj, aged about 43 years,

    Christian, business, residing at Johns Garden,

    Palamaner Road, Chittoor – 517 001.
    … Complainant

    1. Canara Bank, Chittoor Branch, rep., by

    its Senior Manager, holding his office

    at D.I.Road, 1st Floor, Chittoor.



    2. P. Vijayasekhar, S/o Govinda Chetty,

    Hindu, aged about 42 years, Hindu, residing

    At 17-477, Sundarayya Street, Chittoor.

    … Opposite Parties.

    ORDER

    This is a complaint filed by the complainant U/Sec. 12 of C.P.Act to direct the 1st opposite party to release the gold ornaments pledged under loan account No.AA 7024 to the complainant and pay compensation of Rs. 25,000/- towards mental agony.


    The complainant submits that he availed gold loan of Rs. 56,000/- from the 1st opposite party/ bank by pledging gold ornaments on 02.06.2005. He repaid the loan amount on 24.01.2007. At the time of repayment of the loan amount, the 1st opposite party received back all the relevant documents, which were in possession of the complainant. Inspite of request the 1st opposite party did not release the gold jewels to him. Therefore there is deficiency in service on the part of the 1st opposite party.


    The complainant submits that earlier on 10.10.2003 he obtained car loan of Rs. 1,95,000/- and the 2nd opposite party stood as guarantor for the said transaction. On 19.01.2009 the complainant sent a letter to the 1st opposite party requesting to release the gold jewels to him. On 23.02.2009 the 1st opposite party issued legal notices only to cover up the deficiency of service on their part. The 1st opposite party has caused the auction notice in Telugu Daily in EENAADU news paper on 13.03.2009 fixing the date for auction of the gold jewels on 23.03.2009 at 11.30 A.M.


    The complainant submits that the documents pertaining to car loan do not relate to any lien. Hence the retention of gold loans, inspite of repayment made by the complainant will squarely fall within the definition of service. Hence the 1st opposite party may be directed to release the gold ornaments pledged under loan No. AA 7024 to the complainant and pay compensation of Rs. 25,000/- and the complaint may be allowed.


    The 1st opposite party filed Written Version alleging that on 02.06.2005 the complainant availed loan of Rs. 56,000/- by pledging gold jewels and executed an application cum letter of pledge for loan against the jewellary in favour of this opposite party. This opposite party submits that the complainant availed loan of Rs. 1,95,000/- from this opposite party for the purpose of purchase of car by executing a deed of hypothecation in favour of this opposite party. The complainant committed default in payment of car loan installments and the loan is still subsisting. The 2nd opposite party stood as guarantor for the due repayment of the loan amount availed by the complainant for the purpose of purchase of a car. The complainant was due a sum of Rs. 1,52,422/- and interest from 28.02.2006 to this opposite party. The complainant discharged the gold loan for which the gold was pledged as security. As per the application cum letter of pledge for loan against the gold jewellary executed by the complainant, the bank got every right to retain the gold jewels and sell the same to recover the outstanding loan amount due to this opposite party by the complainant towards the car loan account.


    This opposite party further submits that the important terms that are stipulated under letter of pledge are given hereunder “you are further entitled to hold and sell and appropriate the proceeds of this security to all or any other liability/ liabilities payable by me, in respect of any advance/ financial assistance granted/ to be granted hereafter and owing and that may be owing hereafter to the Bank at any office of the Bank of any account whatsoever whether solely or jointly with others and whether as principal debtor or surety”.

    This opposite party further submits that “the complainant further agreed that the bank may hold the jewels pledged that may be pledged hereafter as security for the repayment of all or any amounts that may outstand at any time, from time to time apart from the personal liability created thereby until this request is cancelled by you or returned to me”. By reading of all the contents of letter of pledge executed by the complainant, this opposite party is empowered to sell the gold jewels pledged and recover the outstanding loan amount. Apart from the contents of letter of pledge, as per the provisions of Contract Act Sec. 171 and Sec. 174, the Bank got general right of lien to retain the gold ornaments pledged for a particular loan even after discharge of that loan for recovery of another loan advanced and to be advanced.


    The opposite party submits that the matter is purely civil in nature. If the complainant feels that there is violation of contract, the complainant has to approach the civil court seeking specific performance of contract and he cannot approach this Forum for return of the pledged gold ornaments. Therefore this Forum has no jurisdiction.


    The 2nd opposite party is unnecessarily shown as party to the complaint. No relief is claimed against him. He is made as party to the proceedings to protract the matter. The complainant is not entitled to seek release of the gold jewels without payment of outstanding car loan amount. The opposite party has got every right to retain the gold jewels. There is no deficiency of service on the part of this opposite party/ bank. The complaint may be dismissed.


    The Points for consideration are :

    1) Whether the 1st opposite party is not entitled to retain the gold ornaments pledged with the bank, even after the gold loan was cleared? If so, whether the 1st opposite party committed deficiency of service?


    2) Whether the complainant is entitled to recover the gold jewellary from the 1st opposite party/ Bank.



    3) Whether the complainant is entitled to claim compensation of Rs. 25,000/- from the Bank? And


    4) To what relief?


    The complainant filed Chief Affidavit of PW-1 and Ex.A1 to A5. The 1st opposite party filed Chief Affidavit of RW-1 and Ex.B1 to B3. Ex.A1 is the copy of challan towards gold loan. Ex.A2 is the copy of Challan towards car loan. Ex.A3 is Certificate of posting. Ex.A4 is Paper publication dt. 13.03.2009 in Telugu Eenadu News Paper. Ex.A5 is the legal notice dt. 23.02.2009 issued to the complainant. Ex.B1 is the application-cum-letter of pledge for loan against gold jewellary executed by the complainant in favour of 1st opposite party. Ex.B2 is the deed of hypothecation executed by the complainant in favour of 1st opposite party in respect of car loan. Ex.B3 is the guarantee letter executed by the 2nd opposite party in favour of 1st opposite party in respect of car loan.


    Point Nos. 1 to 3:-

    The case of the complainant is that the complainant availed Gold loan of Rs. 56,000/- from the 1st opposite party/ bank by pledging gold ornaments on 24.01.2007. The complainant repaid the said loan amount. In spite of clearing the gold loan the, 1st opposite party bank did not release the gold jewels to the complainant. Since the 1st opposite party failed to release the gold ornaments to the complainant it amounts deficiency of service. Therefore the 1st opposite party may be directed to release the gold ornaments in favour of the complainant.


    The case of the 1st opposite party is that the complainant availed two loans one car loan on 10.10.2003 and another one is gold loan on 02.06.2005. The complainant discharged the gold loan on 24.01.2007 and failed to clear the car loan dt. 10.10.2003. The complainant was due a sum of Rs. 1,52,422/- under the car loan, which is earlier to the gold loan. The learned counsel for the 1st opposite party submits that as per the terms and conditions of application-cum-letter of pledge Ex.B1 and in view of Sec. 171 and 174 of the Indian Contract Act, the 1st opposite party has got every right to retain the gold jewels, sell them and appropriate towards outstanding car loan amount due to the Bank. Hence there is no deficiency in service on the part of 1st opposite party/ bank and the complaint is not maintainable.


    It is an admitted fact that the complainant availed two loans from the 1st opposite party/ bank one is Gold loan dt. 02.06.2005 and 2) car loan dt. 10.10.2003. It is also an admitted fact that the complainant cleared the entire gold loan on 24.01.2007. But the Bank refused to return the gold jewels pledged as security to the gold loan on the ground that it has a right of general lien U/Sec. 171 and Sec. 174 of the Indian Contract Act. It is also an admitted fact that the complainant failed to discharge the car loan and was due an amount of Rs. 1,52,422/- to the Bank.


    The learned counsel for the 1st opposite party submits that when there is agreed terms of the contract stipulated in the pledged letter Ex.B1 the complainant can not go back and say that he has not given powers to the bank to retain the jewels and sell the same to recover the amounts, which was already due to the bank.


    While accepting the 1st opposite party / Bank right of general lien U/Sec. 171 of Contract Act, the learned counsel for the complainant seriously contends that the 1st opposite party/ bank can invoke its right of general lien in the case of loans obtained under the contract and future loans thereafter. He further contends that Sec. 171 of the Indian Contract Act is not applicable in the case of earlier loans to the contract subsequently entered into between the parties. In this regard he relied on the decision reported in AIR – 1999 – A.P – 367 in Sita Vs Corporation Bank, Kakinada – wherein their lordships held as follows :-


    “The rule of law with regard to general liens is clearly laid down in the 171st section of the Contract Act. Bankers have such a lien on things bailed with them unless there is a contract to the contrary. It was for the plaintiff in this case to prove the existence of such contract………….It being incumbent on the plaintiff to show that the bank had agreed to give up the general lien to which by law a bank is prima facie entitled, I must say that in my opinion the plaintiff has failed in his proof”.


    ……..The banker’s lien contemplated by S. 171 as such is specific provision relating to banker’s lien and has an overriding effect on general provisions of S. 174 which provide for relationship of pawnee and pawnor in respect of pledged goods. The banker’s lien will carry over to such pledges and bank can retain pledged goods, if the debtor had not cleared his amount in connection with another loan.


    In the above decision their lordships held that the Banker’s have such a lien on things bailed with them unless there is a contract to the contrary. It was further held that the plaintiff in the above case failed to prove existence of any such contract to the contrary. The above decision was rendered in the case of earlier loan transaction only. The plaintiff therein obtained agricultural gold loan on 24.06.1995 and discharged the said loan on 08.09.1990. He also obtained another loan under Gramodaya Scheme on 04.01.1986 and failed to discharge the same. Therefore their lordship held that the bank can retain pledged goods.


    But the learned counsel for the complainant endeavored to convince this Forum that the decision rendered above pertains to the subsequent loan transactions which is not correct. He further contends that the application-cum-letter of pledge Ex.B1 is a contract. The terms and conditions of that contract speak that the gold jewels given under letter of pledge Ex.B1 relates to subsequent loan transaction, but not earlier loan transaction. In this regard he stressed the relevant portion in the contract Ex.B1. It reads that


    ……You are further entitled to hold and sell and appropriate the proceeds of this security to all or any other liability/ies payable by me/us, in respect of any advance/ financial assistance granted/ to be granted hereafter and owing and that may be owing hereafter to the Bank at any office of the Bank or any account what-so-ever whether solely or jointly with others and whether as principal debtor or surety”.


    He contends that the words granted/ to be granted gives meaning present loan under the contract Ex.B1 and future loan thereafter, but not earlier loans. Therefore in view of the contract Ex.B1, the right of lien of any of the 1st opposite party/ bank is against subsequent loans. The learned counsel for the opposite party seriously opposed the interpretation drawn by the complainant’s counsel on the terms and conditions of Ex.B1.


    He contends that the 1st opposite party/ bank can retain the gold jewels as per terms and conditions of contract Ex.B1 and the bank has right of general lien U/Sec. 171 of the Indian Contract Act. The learned counsel for the 1st opposite party/ bank further contends that Sec. 171 of contract Act is a special provision empowering the bank to retain the gold ornaments as a security to the undischarged loan account and Sec. 174 of Indian Contract Act cannot over ride the provision U/Sec. 171 of Indian Contract Act.


    I agree with the contention of the learned counsel for the 1st opposite party/ bank. The effect of Sec. 171 and 174 of the Act was discussed by their lordships in AIR -1999- A.P., Page No. 367 cited supra and held that the bank can retain the gold jewels with it as a security to another loan (earlier loan). Besides that the learned counsel for the 1st opposite party/ bank also relied on the decision reported in 1992-2-CPR – Page 455 – The Branch Manager, Canara Bank Vs P. Moovendan - wherein their lordship held that


    “ It is unfortunate that the attention of the District Forum has not been drawn to the decision of this Commission in Karur Vysys Bank V. A.G.Krishnaswamy (A.P.39/92) (dt. 27.04.1992), where in the same identical point has been decided and that was appeal from the District Forum, Dindigul itself. We therefore hold that the appellant/ opposite party is entitled to retain the jewels as a lien under Section 171 of the Indian Contract Act. Further in the case on hand, the complainant has himself executed Exhibit B2, Agreement under which the Bank is entitled to hold this jewel as security for any other liability payable by the complainant in respect of any financial advance granted and owing and that may be owing hereafter to the bank on any account whatsoever whether solely or jointly with others and whether as principal debtor or as surety. This is a contract to the contrary within the meaning of Section 171 of the Contract Act. In the ground as well, the opposite party is entitled to withhold these jewels as security for the discharge of the earlier loan.”



    The facts of the above case are applicable to the facts of this case. In the above case their lordships held that as per Sec. 171 of Contract Act, the bank has general lien and can withhold the jewels as a security for the discharge of the earlier loan. Therefore both the decisions of the Hon’ble High Court of A.P and Hon’ble Tamilnadu High Court are of the opinion that the Bank can retain pledged goods if the debtor had not cleared his account in connection with the another loan (earlier loan). Therefore there is no deficiency in service on the part of 1st opposite party /bank.

    Points 1 to 3 are answered against the complainant.

    Point No. 4:-

    In the result the complaint is dismissed without costs.

  7. #7
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    Default Canara Bank

    Smt. H.S. Mangala, W/o H.S. Siddappa,

    House-wife, R/o Hiregouja Village and

    Post, Lakya Hobli,

    CHIKMAGALUR TALUK / DISTRICT.

    (By Sri. B.M. Mohan Kumar, Adv.)

    V/s

    OPPONENT:

    The Canara Bank,

    Hiregouza Branch,

    Hiregouza Village and Post,

    Lakya Hobli,

    CHIKMAGALUR TALUK / DISTRICT.

    Represented by its Branch Manager.
    - ::: O R D E R ::: -

    1. The complainant has filed this complaint u/s 12 of the Consumer Protection Act against the opponent for the deficiency of service and for a direction to make entries of Rs.2,58,248/- as shown in the pass book as detailed in the complaint.

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

    The complainant is a customer to the opponent bank by having S.B. Account bearing No.2219 and she used to get her pass book entries regularly and there was a balance of Rs.2,58,248/- in the said S.B. Account as shown in the pass book as on to 15.04.2008. Such being the case, the complainant came to the opponent bank to withdraw the money, but surprisingly the opponent has informed that she has only a balance of Rs.10,928/- in her account.

    But the complainant has not withdrawn any amount and she used to withdraw the amount by issuing cheque and she has not withdrawn any amount through any other means. Subsequently, the opponent has shown many false, fictitious and bogus entries such as withdrawal of Rs.28,450/- dtd.05.08.2007, Rs.85,000/- dtd.03.06.2007, Rs.25,000/- on 05.06.2007, Rs.50,000/- on 18.09.2007 and Rs.10,000/- on 05.02.2008. Later, she obtained a computerized statement and lodged many complaints with the opponent and requested the opponent bank. On the receipt of the requests and complaints, the opponent has not cared to reply the complainant or provided to make use of her balance amount.

    3. Thereafter, she got issued a legal notice to the opponent bank dtd.20.08.2008 calling upon the opponent to rectify the pass book and to credit the amount of Rs.2,58,248/-. But inspite of receipt of the legal notice also, the opponent has failed to credit the said amount as shown in the pass book. Thus, the opponent is at deficiency of service. Hence, the complainant has filed this complaint for the above referred reliefs.

    4. After the service of the notice, the opponent has appeared through their counsel and filed version wherein they have contended that the complainant is having S.B. Account in their bank and transacting with them. Such being the case, one Mr. N. Basavarajan, who was a Cash Clerk during the period from 2001 to 2008 had meddled with a number of account holders by making wrongful entries in the pass book and subsequently died on 23.04.2008. On the complaints of number of account holders, the opponent bank has appointed the Investigation Officers as per the directions of their Head Office.

    The investigation team has thoroughly investigated the grievances of the account holders and set righted the differences credited by said Late Basavarajan by going through the ledger entries, pass book entries and also that of ledger entries of the account holders compared to other account holders’ ledger entries, who are connected with the transaction. As such in this particular complaint also, the investigation officials have investigated the matter by going through the pass book entries and ledger and came to the conclusion that she is eligible for an amount of Rs.1,25,000/-. The investigation officers have thoroughly examined each of the entries in the ledger and the pass book commencing from 01.08.2004 confirming the same with documents available such as withdrawal slips, credit slips and transfer slips.

    a) The following credit entries are entered in the pass book but not found in ledger.

    07.05.2005 by cash Rs.5,000-00. There is no credit slip for this account on this date and further all cash slips of this date are properly accounted.

    26……………. (the month and the year is not clear) by cash Rs.50,000-00. The subsequent entry in passbook is for the date 20-3-2006. The earlier months 26th date were holidays.

    21-8-2007 by Cash Rs.25,000-00. Cash remitted by the party was Rs.25,000-00 but credit was given for Rs.5,000-00. Balance Rs.20,000-00 was credited to S.B. A/c 2872.

    b) Credit found in the ledger but not in the pass book. These credits are unauthorized credits made only for the purpose of passing the cheques issued by the complainant.

    09-08-2006 by S.B. Rs.60,000-00

    17-08-2007 by S.B. Rs.50,000-00

    02-02-2008 by S.B. Rs.25,000-00

    19-02-2008 by A.A.D.V. Rs.20,000-00

    15-04-2008 by S.B. Rs.25,000-00


    c) Debit entries in ledger not found in passbook. The debit entries found in the ledger were considered as unauthorized debits and therefore benefit has been given to the account holder i.e., complainant.

    03-06-2006 Rs.85,000-00

    05-06-2006 Rs.25,000-00

    10-10-2006 Rs.50,000-00

    28-07-2007 Rs.10,000-00

    26-12-2007 Rs.60,000-00

    The investigation officials taking the above matter into consideration have calculated that the complainant is entitled for Rs.1,25,000-00 of her money and not the amount claimed in the complaint.

    5. The opponent has further contended that the opponent bank is a nationalized bank involved with public funds and utmost care has been taken in this complaint and the matter is complicated involving point of law and fact and requires thorough mathematical calculations and detailed oral and documentary evidence has to be lead in. Therefore, the matter cannot be summarily disposed off. Hence, the opponent prays for the dismissal of the complaint as there is no deficiency of service.

    6. The complainant has filed her affidavit evidence as PW.1 along with the documents and the same have been marked as Exs.P1 to P4.

    7. One Sri. Narasimha Suvarna, Branch Manager of opponent Bank has also filed his affidavit along with the documents and the same have been marked as Exs.R1 to R5.

    8. We have heard the arguments advanced by both the parties’ counsels.

    9. 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 opponent?

    ii) If so, whether the complainant is entitled to the reliefs as sought?

    iii) What Order?

    10. Our findings on the above points are as follows:-

    i) Point No.1: In the Negative

    ii) Point No.2: In the Negative

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

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

    11. Point Nos.1 & 2: The case of the complainant is that as per the pass book, she had a balance of Rs.2,58,248-00 in her S.B. Account and when she went to withdraw the amount, the opponent has stated her that she had only balance of Rs.10,928-00 in her account against to the above said amount. Therefore, she prays for the credit of the amount as shown in the pass book in order to utilize the same. Further she alleges that inspite of several requests and service of legal notice, the opponent has failed to do so. Hence, there is a deficiency of service.

    12. On the contrary, the opponent has taken a contention that one late Mr. Basavarajan, who was a cash clerk during his lifetime had meddled with number of account holders by making false entries in the pass book and ledger of the account holders and after his death, an investigation team was appointed and investigated that the complainant is eligible for an amount of Rs.1,25,000/- apart from the available amount as shown in the ledger and the investigation was done by comparing the ledger of the complainant with the pass book entries and other documents. As such there is no deficiency of service on the part of the opponent.

    13. The learned advocate for the opponent has stated that the investigation was done and the documents such as ledger entries, pass book entries and other documents were compared and they concluded that the complainant is entitled to get Rs.1,25,000-00 for which the complainant has cross examined the opponent with respect to the process of investigation. Such being the case, in the absence of elaborate evidence of the investigation officer and a detailed evidence of both orally and documentary, we cannot determine the allegations made by the complainant.

    It is also pertinent to note that the complainant has alleged that she has not made any payments towards the loan and stated in her complaint and affidavit that there are number of illegal, false and fictitious entries shown in the pass book, which requires a detailed evidence with respect to each entries by comparing the pass book and ledger entries. She also denied Ex.R1 and R2 with respect to the payment of Rs.28,456-00 from her S.B.

    Account to her loan account and when she denied her own transfer of money from her account to the loan account, it requires an elaborate expert’s evidence with respect to the transaction made through Ex.R1 and R2. This Forum has to dispose the case summarily and the complaint in hand requires elaborate evidence to adjudicate the allegations made against the opponent. Under these circumstances, the complaint is liable to be dismissed with a liberty to approach the appropriate authority for the reliefs. For the above said reasons, we answer the point Nos.1 and 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 dismissed. In the result we pass the following order.

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

    1. The complaint filed by the complainant against the opponent is hereby dismissed.

    2. The complainant is at liberty to approach the competent authority to get her redressal.

    3. Having regard to the facts and circumstances of the case there is no order as to costs.

  8. #8
    Sidhant's Avatar
    Sidhant is offline Moderator
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    Default Canara Bank

    1. Mr. Dileep Ranjekar,

    R/at: No.6B, Nitesh Mayfair,

    31, Kasturba Road Cross,

    Near British Library,

    BANGALORE-560 001.



    2. Mrs. Nandini Ranjekar,

    W/o. Mr. Dileep Ranjekar,

    R/at: No.6B, Nitesh Mayfair,

    31, Kasturba Road Cross,

    Near British Library,

    BANGALORE-560 001. …. Complainants.


    -V/s-


    1. Canara Bank,

    Cantonment Branch,

    Bangalore-560 001.

    Branch Code: CBK-2502,

    Rep. by its Manager.

    2. Reserve Bank Of India,

    Nrupathunga Road,

    Bangalore-560 001.

    Rep. by its Manager. …. Opposite Parties.

    ORDER

    This complaint is for a direction to the opposite parties to pay jointly and severally interest on the deposit amount of Rs.9,00,000/- for the period from January to Mar-2007 and from 02.03.2007 to 02.03.2008 at the rate of 12% per annum, to pay compensation of Rs.50,000/- towards mental trauma and harassment, Rs.50,000/- towards legal expenses and exemplary damages of Rs.25,000/- on the following grounds:-

    The complainants who are husband and wife made investment of Rs.9,00,000/- in Reserve Bank Of India Relief Bond in the year 2002 with both the opposite parties. The certificate of investment was issued by opposite party No.1 mentioning the date of repayment as 02.03.2008. One of the term of the investment was that interest is payable once in six months namely on first of January and first of July every year. On 03.03.2008 they approached opposite party No.1 for payment of maturity proceeds of the bond understanding that the bond has matured on 02.03.2008 as notified in the certificate of investment. At that time they also noticed that the opposite parties have not credited interest for the period from January-2007 to March-2007 so also for the period from 02.03.2007 to 02.03.2008.

    When they brought this fact of non-payment of interest to the notice of the opposite party they were informed for the first time that the bond had matured for payment on 02.03.2007. They explained to the opposite parties that the certificate of investment clearly specified the date of maturity as 02.03.2008 and not 02.03.2007. Even otherwise there was no intimation from either of the opposite parties at any time before or after 02.03.2007 that the bond was due to mature on 02.03.2007. They requested in writing on 10.03.2008 claiming that the investment matured on 02.03.2008 and not on 02.03.2007. The opposite parties deliberately failed to credit the interest in to the accounts of the complainants for the last one year and they were not informed by the opposite parties about the correct maturity date and non-payment of six months interest for the last one year.

    Both the opposite parties are liable to pay the interest on the investment made. The failure on the part of opposite parties to credit interest, failure to mention the correct date of maturity of the bond and failure to intimate about the date of maturity amounts to deficiency in service on the part of the opposite parties. Having issued the certificate mentioning the date of maturity as 02.03.2008 the opposite parties cannot escape from the liability under the bond. They issued legal notice dated: 26.08.2008 calling upon the opposite parties jointly and severally to pay interest on the amount deposited at the rate of 12% per annum for the period from January to March-2007 and from 02.03.2007 to 02.03.2008 for the delay in payment of the same. But the opposite parties did not comply with the demand. Hence the complaint.

    2. In spite of service of notice opposite party No.2, the Reserve Bank of India has remained absent. Opposite party No.1, the Canara Bank has opposed the claim on the following grounds:-

    The Reserve Bank of India issued a notification to all the Banks to mobilize deposits through bonds as “Reserve Bank of India Relief Bond” and soon after receiving the deposits the concerned Banks should give credit to the account of the Reserve Bank Of India on the very same day. As per the notification the duration of the bond is five years and rate of interest is 8.5% per annum on such deposits and interest is payable half yearly namely on first of January and first of July every year. It is also made clear in the notification that the RBI is not liable to pay interest after five years or on expiry of maturity of the bonds.

    The concerned Bank has to claim the bond amount and interest paid to the depositors from the RBI. Since the amount deposited by the complainants have been transferred to the account of RBI on the date of deposits itself and payment was made to the complainants by opposite party No.1 as against the demand. During this intermediate period, the bond amount was lying with RBI and not with opposite party No.1 as such, the complaint against opposite party No.1 is liable to be dismissed. The complainants invested in RBI Relief fund Rs.9,00,000/- in the year 2002. Opposite party No.1 issued certificate to the complainants on 28.02.2002. It is well within the knowledge of the complainants that the duration of the bond shall be five years from the date of deposit. It is also made clear that RBI will not make payment towards interest to the depositors who have failed to withdraw the amount after five years.

    While writing the maturity date on the bond by over-sight the staff of opposite party No.1 mentioned the same as 02.03.2008 instead of 02.03.2007. The complainants could have got the mistake rectified immediately by seeing the contents of the bond, but they remained silent for more than five years and have not cared to see the contents of the bond or bring to the notice of opposite party No.1 about the discrepancies in the bond. The complainants should have questioned opposite party No.1 immediately when they did not receive interest for the sixth year and could have sorted-out the problem then and there itself. But even at that stage they remained silent and did not bring it to the notice of opposite party No.1. Opposite party No.1 has paid interest up to 02.03.2007 to the complainants and it has no authority to pay interest from 02.03.2007 to 02.03.2008. They deny the contention that the complainants were kept in dark and that they were ignorant of actual date of maturity of the bond until 03.03.2008.

    It is well within the knowledge of the complainants that the duration of the bond is five years and when the bond was issued on 02.03.2002 it should mature on 02.03.2007. The complainants are trying to take advantage of the mistake that occurred by over-sight at the instance of the staff of opposite party No.1. As per the RBI guidelines the complainants are not entitled for the interest on the bond amount which is not withdrawn after the expiry of five years. The complainants are also not entitled for any compensation as they have equally contributed negligence. They are not entitled for interest at the rate of 12% per annum as claimed. On these grounds opposite party No.1 has prayed for dismissal of the complaint.

    3. In support of the respective contentions, both the parties have filed affidavits. We have heard arguments on both sides.



    4. The points for consideration are:-

    (1) Whether the complainants have proved deficiency in service on the part of the opposite parties?


    (2) Whether the complainants entitled to the relief prayed for in the complaint?

    5. Our findings on the above points are:-

    POINT No.1:- In the Affirmative

    POINT No.2:- As per the final order

    REASONS

    POINT Nos. 1 & 2:-

    6. The fact that both the complainants invested Rs.9,00,000/- in Reserve Bank Of India Relief Bond and opposite party No.1 issued the certificate in that regard on 28.02.2002 is admitted. The contention of the complainants, that in the certificate so issued the date of maturity of the bond is mentioned as 02.03.2008 is also not disputed. From the copy of the certificate of investment it is also seen that the date of repayment of the bond amount is mentioned as 02.03.2008. According to opposite party No.1 by over-sight its staff mentioned the date of repayment as 02.03.2008 instead of 02.03.2007.

    It is also the contention of opposite party No.1 that the period of investment is only for five years and this fact was known to the complainants also. However the fact remains that opposite party No.1 issued the certificate of investment clearly mentioning the date of repayment as 02.03.2008. If by over-sight the date of repayment is mentioned as 02.03.2008 instead of 02.03.2007 it is not known why the opposite parties maintained silence till 03.03.2008 without informing the complainants about the actual date of repayment. If the actual date of repayment was 02.03.2007 it is obligatory on the part of the opposite parties to give notice well in advance from the date of maturity informing the complainants that the amount invested by them matures for payment on a particular date. It is not the case of opposite party No.1 that one month in advance the complainants were informed that the investment made by them matures for payment on 02.03.2007.

    By the letter dated: 08.02.2007 the Reserve Bank of India had advised the Banks to draw the attention of the holders to the ensuring maturity of the bonds one month before the date on which the investment in the BLA is due for repayment. When both the opposite parties failed to inform the complainants about the actual date of maturity they cannot now be heard to say that the date of maturity as mentioned in the certificate is wrong and in fact the actual date of maturity is 02.03.2007 and not 02.03.2008. Even otherwise till 03.03.2008 the complainants did not approach the opposite parties for repayment of the amount invested. In the Notification dated: 28.02.2002 issued by the Government Of India it is clearly mentioned that the bonds will also carry post-maturity interest at the rate of 8% per annum.

    Therefore even assuming that the investment made by the complainants matured for payment on 02.03.2007, they are entitled for the post-maturity interest since they have not with drawn the amount on 02.03.2007. Therefore both the opposite parties are liable to pay interest on the investments made till 02.03.2008. This liability is inevitable in view of the date of maturity mentioned in the certificate so also in view of what is stated in the Notification dated: 28.02.2002. However we are not convinced with the claim of the complainants for compensation and costs of Rs.50,000/- towards the litigation expenses. We hold that, the complainants are entitled for interest on the bond amount of Rs.9,00,000/- till 02.03.2008 at the contractual rate. In the result, we pass the following:-

    ORDER

    7. The complaint is Allowed-in-part. The opposite parties are directed jointly and severally to pay interest on the bond amount at the contractual rate for the period from January-2007 till 02.03.2008 and also to pay costs of Rs.1,000/- to the complainants. Compliance of this order shall be made within eight weeks from the date of communication.

  9. #9
    adv.sumit is offline Senior Member
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    Default Canara Bank

    COMPLAINANT:

    Sri. S. Somashekarappa,

    S/o. Siddappa,

    Aged about 44 years, Lecturer,

    R/o. Nagenahalli, Kadur Taluk,

    CHIKMAGALUR DISTRICT.



    V/s

    OPPONENT:

    The Canara Bank,

    Sakarayapattana Branch,

    Sakarayapattana Village and Post,

    Kadur Taluk,

    CHIKMAGALUR DISTRICT.







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

    1. The complainant has filed this complaint u/s 12 of the Consumer Protection Act to resolve the dispute against the opponent for deficiency of service in not allowing the complainant to operate his Savings Bank A/c and to give directions to revoke the lien of S.B. Account, retransfer the amount of S.B. A/c from the loan a/c of Basappa and also to pay compensation of Rs.5,000/- with court costs etc., as detailed in the complaint.

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

    The complainant has alleged that he has opened a Savings Bank A/c bearing No.8623 with the opponent. He has deposited a cheque of Rs.9,610/- for collection with the opponent on 12.08.2008 for which the complainant met the opponent on 10.09.2008 and presented the withdrawal slip to draw the money from his S.B. A/c vide Token No.8 issued by the opponent. Later on the staff of the opponent informed him that the cheque has not been realized but the same cheque was credited to his account on 16.09.2008 by deducting excess collection charges. He has further presented one more cheque for Rs.9,700/- on 20.11.2008 with the opponent bank for which the complainant has presented one more withdrawal slip on 07.01.2009 vide Token No.23 issued by the opponent and the opponent has informed that the cheque has not been realized.

    3. He has further alleged that the opponent has informed him through letter dtd.09.01.2009 that they have exercised their general lien over the S.B. A/c since the complainant stood as a guarantor to the loan availed by one Mr. Basappa and the said loan is overdue as a result of which if the said loan is not cleared the S.B. A/c would be transferred to the said loan account by exercising the general lien for which they have no authority to freeze the S.B.A/c and also to transfer the same to the loan account. Thereby, the opponent has shown negligence attitude in not collecting the amount of the cheque within the prescribed period and also in deducting the excess collection charges by rendering deficiency of service. Hence, this complaint for the above referred reliefs.

    4. After the service of the court notice, the opponent has appeared through their counsel and filed version in which they have taken contention that the complainant lodged a cheque for Rs.9,610/- on 12.08.2008 for collection, which was realized on 16.09.2008 and the same was credited to his S.B. A/c. Therefore, the amount was not paid to the complainant on 10.09.2008 and date on which the complainant has presented withdrawal slip as there was no sufficient funds available in his account. Further one more cheque was lodged for Rs.9,700/- on 20.11.2008 for collection and the credit was given on the same day.


    Further they have contended that the complainant has visited the opponent on 07.01.2009 for withdrawal of money, but the amount was not paid to him since one Mr. Basappa N.V. was indebted to the loan account No.ALMI Loan 1093 for Rs.18,796-00 as on 09.01.2009 for which the complainant stood as a co-obligant for the said loan. As the co-obligant is equally liable for the debts the opponent bank has exercised their general lien on the S.B. Account of the complainant and withheld the amount available in the said account.

    5. The opponent has further contended that inspite of giving information to clear the liability under the loan account No.ALMI Loan 1093 within 7 days, the complainant has approached this Forum. The opponent has not violated any of the provisions of law and his case is involved in point of law and therefore, it cannot be decided in summary proceedings, which requires elaborate evidence to substantiate the case. Therefore, they pray for the dismissal of the complaint.

    6. The complainant has filed sworn affidavit evidence as PW.1 along with the documents and the same have been marked as Exs.P1 to P6.

    7. The opponent has also filed sworn affidavit evidence as RW.1 and produced a document, which has been marked as Ex.R1.

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

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



    i) Whether the opponent has violated his lawful duty in not allowing the complainant to operate his S.B. A/c?

    ii) Whether there is any deficiency in service on the part of the opponent?

    iii) If so, whether the complainant is entitled to the reliefs as sought?

    iv) What Order?

    10. Our findings on the above points are as follows:-



    i) Point No.1: Yes, the op. has violated the

    law in force



    ii) Point No.2: Established



    iii) Point No.3: Yes, he is entitled



    iv) Point No.4: See, as per order below



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

    11. Point No.1(a): The main case of the complainant is that despite maintaining adequate balance in his S.B. A/c No.8623 with the opponent bank, they have not allowed him to operate his account, which is surely a deficiency of service. While the opponent has taken the defence that in exercise of the rights of general lien, the complainant was not allowed to withdraw the money from his S.B. A/c in view of the fact that the complainant stood as a guarantor to one Mr. N.V. Basappa, who has taken loan from the opponent and defaulted himself to the tune of Rs.18,796/- as on 09.01.2009. The issue before us for our consideration is as to whether the opponent has acted as per the provisions of law in the course of his duty in preventing the complainant to draw his hard earned money, which requires our rapt attention in adjudicating the case basing on the testimonies submitted by both the parties.

    b) If we make a comprehensive study of the documents, which is taken on record and marked as Ex.P3 will make it amply clear that the complainant has lodged a cheque for Rs.9,610/- on 12.08.2008 with the opponent for collection, whereas the cheque was realised and credit was given to the complainant’s account only on 16.09.2008, after a gap of 35 days, which is a clear violation of the instructions issued by the Reserve Bank of India. Further, if we ponder over the details mentioned in the affidavit as well as in the cross examination, which has revealed that the opponent has taken considerable delay in giving credit to the S.B. A/c for no fault of the complainant.


    It is also to be mentioned here that the RW.1 has made it very clear in his candid admission in dock box that there was no trouble to produce the involved ledger and covering letter of the D.D. before this Forum. By going through the above deposition, it is crystal clear that they have taken inordinate delay in sending the cheque for realisation and had failed to produce the covering letter showing the date on which it was dispatched for collection to the issuing authority to establish their claim. The RW.1 has stated under oath during the cross examination that cheque will be realised within one or two days if it reaches the other bank. In view of the above callous approach of the opponent, we are of the concerted opinion that the complainant was put to undue mental harassment and financial crisis.


    The Reserve Bank of India has appropriated time frame for crediting the cheques sent to the bank for collection, wherein it is clearly stipulated that for local cheques same day or at the most next day credit to be given and for collection of out station cheques maximum period would be 7 / 10 / 14 days and for any delay beyond this prescribed period the payee of the cheques to be paid interest at the fixed rate or at a specified rate. In order to corroborate our view as stated above, it is quite relevant to mention the case reported by the Hon’ble National Commission, Page No.955 in case of Atul Nanda and others V/s R.B.I. and others, wherein it is reiterated that any violation of the conditions in implementing the above instructions by the institutions, the R.B.I. is made responsible for monitoring the directions given to the banks.


    Therefore, the ratio-decidendi drawn in the above cited case will aptly applicable to the case on hand. So, we are of the opinion that the opponent has violated the stipulated conditions issued by the R.B.I. and also the principles laid down in the above cited case in taking nearly 35 days than the prescribed time limit by the R.B.I. as well as the Hon’ble National Commission for which the opponent has to pay the interest for the delay in crediting the realised amount. Therefore, their action is unjustified and we hold that they have rendered deficiency of service.

    c) Coming to the merit of the case, the contention of the opponent and also the vehement arguments of the learned advocate taking the defence that the opponent has informed the complainant umpteen number of times about the overdue payment towards the loan taken by the principal debtor, which cannot be taken on record in the absence of any valid documents and we found that there is no merit in this case in favour of opponent. It is observed that the opponent has issued one letter dtd.09.01.2009, which is marked as Ex.P2 and the same has been received by the complainant on 13.09.2009 as per his deposition during the cross examination.


    The RW.1 has stated in her oath in the dock box that the Ex.P2 was issued by hand to the complainant and expressed that there is no trouble to produce the delivery register before the Forum. But the opponent has conveniently belied his deposition and failed to produce the documentary proof to that effect and did not establish their claim.


    In this connection, it is relevant to mention the averment of the opponent contending in the affidavit that the liability of the principal debtor was to the tune of Rs.18,796/- as on 09.01.2009. In this connection, if we make a detailed study of the document submitted by the complainant, which is marked as Ex.P5 clearly goes to show that the complainant has presented a withdrawal slip for the second time for Rs.6,500/- on 07.01.2009 much before the communication of Ex.P2 by the opponent side without knowing the default made by the principal debtor, which means the complainant was not fully aware of the debt to be recovered from the principal debtor, whereas the opponent has communicated the same to the complainant only on 09.01.2009, which is marked as Ex.P2.


    If this fact were to be true, what prevented the opponent to pay the amount of Rs.6,500/- on 07.01.2009 itself, when the cheque was presented by the complainant that too when there was sufficient money was available in his account, which is undoubtedly amounting to unnecessary harassment, mental torture and above all the opponent has infringed the legal right of the complainant. Therefore, the deficiency of service will writ large on opponent and opponent is liable to pay damages and hence the doctrine of Res ipsa liquitor get attracted in this case. Accordingly, we hold that the opponent has rendered deficiency in service.

    12. Point No.2(a): The vehement argument of the opponent’s advocate that they have applied their right of general lien to liquidate the loan from the from the guarantor is not a valid ground. No doubt, we do consider that the liability of the surety / guarantor is co-extensive. But at the same time the duty is cast upon the opponent to initiate action against the principal debtor initially and if the principal debtor is not ready to liquidate the loan availed by him, then the role of guarantor will come into play. We have taken a serious note of the manner in which the opponent has taken action against the complainant to liquidate the loan. The opponent cannot straight away proceed against the co-obligant without exhausting the legal remedies available to him and the first charge has to be upon the principal debtor. It is well settled principles of law that guarantor should be afforded reasonable opportunities to express his views in the first instant, without which the bank cannot use coercive measures against him.


    The person giving loan should not take law into his own hands and if at all the bank is decided to recover the loan from the guarantor, he should have taken a legal action instead of preventing him from drawing his hard earned money from his S.B. Account. No doubt that the borrower had failed to liquidate the loan amount inspite of several requests the bank first ought to have taken action and proceeded against the borrower, then the next course of action would be available at the disposal is to proceed against the surety. Therefore, we hold that the action taken by the opponent is unilateral, unconstitutional and guilty of unfair trade practice and the opponent has applied jungle law in this case.

    b) Admittedly the complainant was one of the joint surety for the loan taken and the liability of the surety was joint and several but stoppage of his drawal of money arbitrarily from the banker is considered as an undue harassment, which contravenes the provision of existing laws.

    c) The Advocate representing opponent has quoted the Section 171 of Indian Contract Act in his written arguments explaining how the co-obligant will come under the clutches of the banker we do consider and agree that in addition to the Section mentioned above as per the provision of Section 128 of Indian Contract Act, it is very clear that the liability of the surety is co-extensive with that of principal debtor. What we have noticed in the complaint on hand that the opponent has taken unilateral and unjustified action without bringing to the notice of the complainant about the non-payment of outstanding dues by the principal debtor, is a clear cut violation of existing rules without initiating any action against the principal debtor, which in our opinion the opponent has transgressed the relevant provisions of law.

    d) It is very relevant to quote here that during the cross examination of the RW.1 has candidly admitted that a landed property worth of Rs.2,00,000/- in respect of principal debtor was mortgaged to the bank. When the property worth of Rs.2 lakhs was mortgaged, the first legal action ought to have been initiated against the lonee, but in the instant case to liquidate a paltry sum of Rs.18,796/- a stern action was taken against the co-obligant which is non-est in the eyes of law and the entire proceedings of the opponent against the complainant is undoubtedly ultra-virus and void abinitio and they have failed to produce any documents to establish that they have already taken action against the principal debtor before stopping of the drawal of money by the complainant.


    Further the argument of the opponent that inspite of clearing the liability under the loan account, the complainant has approached this Forum for relief is not a valid ground to adjudicate the case. When the opponent has pre-empted the legal rights of the complainant by slamming the doors in not allowing him to draw the money definitely the Consumer Forum will step-in and salvage the grievances of the complainant. We do not find any point of law in involved in this case as contended by the opponent and it is required our immediate intervention to settle the dispute.

    e)i) To substantiate our view, we quote the guidelines issued by

    Hon’ble Supreme Court of India reported in 2008 C.T.J. 677 S.C. (CP) – 2008 (7) Sec.532, in respect of ICICI Bank V/s Shanthidevi Sharma & Others wherein it is held that the recovery of loans and seizure of vehicles should be done only through legal means. Further, the Reserve Bank of India has issued ten more comprehensive version of guidelines released on 24.04.2008 vide paragraph 6 of the Code of Banks Commitment to customers (BCSBI Code) and the money lenders should not resort to undue harassment viz., persistently bothering the borrower at add hours, using muscle power for recovery of loans etc.,

    We have observed that none of the above guidelines has been applied by the opponent in this case. Therefore, they have violated the above procedure in vogue.

    ii) Further, we quote one more judgement reported by the Hon’ble Delhi State Commission, New Delhi in the case No.FA800 / 2006 dtd.01.12.2008 (I 2009 CPJ-1) in respect of Punjab and Sind Bank V/s Kamal Jeet Singh, wherein it is held as hereunder:

    C.P.A. 1986 Sect.2(i)(g) 2(i)(r) 14 (i)(d) – Banking and financial services-loan installments deducted from complainant pension a/c – complainant joint surety in a loan – Bank has to recover loan from the borrower at the first instance, if fails to recover said loan, only then the role of guarantor comes to play – No deduction / recovery can be made from pension A/c – Deduction not permissible under law, unjustified deficiency in service and unfair trade practice on the part of the bank proved – complaint allowed by Forum – order upheld in appeal.

    The doctrine laid down in the above case will uprightly applicable to the case on hand and our view expressed in the foregoing paragraphs has received the seal of the Hon’ble State Commission, New Delhi and the same doctrine is required to be followed by the opponent in the above case on hand also.

    We refer one more case and rely upon the order of the

    Hon’ble High Court of Karnataka, wherein the Hon’ble Justice J.N. Kumar in his recent judgement while disposing of the case in respect of H.D. Nanda Kumar V/s Tamil Nadu Mercantile Bank has held that the money lender cannot straight away stretch his hands against the surety without initiating any action against the principal debtor.

    13. Point No.3 In view of our findings on above points, the opponent is required to extend prompt service, which is a part of their statutory duty and any unilateral action will attract the penal provisions of the law. In the instant case, preventing the complainant from withdrawal of his legal money by the bank authorities, when the complainant has no knowledge about the debt to be recovered from the principal debtor is unjustified and deserves to be compensated. Accordingly, it is upright and appropriate to award Rs.5,000/- as compensation towards deficiency of service and Rs.1,000/- towards the mental agony along with Rs.1,000/- being the litigation expenditure. In the result we inclined to pass the following order.

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

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

    2. The right of general lien exercised by opponent on S.B. A/c No.8623 of the complainant is hereby reinstated with immediate effect. The opponent is at liberty to liquidate the loan initially from the principal debtor by exhausting legal the remedies available under law.

    3. The opponent is hereby directed to allow the complainant to operate his S.B. A/c with immediate effect.

    4. The opponent is hereby directed to pay the rate of present fixed deposit interest on Rs.9,610/- for a period of 35 days for the delay in giving credit to his S.B. A/c.

    5. The opponent is hereby directed to pay compensation of Rs.5,000/- towards the deficiency of service and Rs.1,000/- towards the mental agony along with Rs.1,000 as court costs, amounting to Rs.7,000/- to the complainant, within one month from the date of receipt of this order, failing which the amount shall carry interest at the rate of 9% P.A. from the date of default till realisation.

    6. Send the copies of the order to the parties.

  10. #10
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    Default Canara Bank

    R. Rajaram,

    S/O. S.Rajee,

    5, Sekkzhiar Street,

    Netaji Avenue,

    Nerkundram, Chennai -107 Complainant



    Vs.

    Senior Manager,

    Canara Bank,

    Shenoy Nagar Branch,

    Amainthakarai, Chennai – 29 Opposite Party







    O R D E R



    1. The case of the complainant is briefly as follows:



    The complainant is a customer of Canara Bank Nerkundram branch. He maintained as S.B. account and also obtained ATM card on 9.1.2008 at about 10.30A.M he used the ATM card at the opposite party ATM centre to withdraw Rs.2,000/-. The transaction is denied, which was seen in the display. Again he tried to withdraw Rs.1000/- by using ATM card on the same day. But again the transaction was denied. Hence he could not withdraw any amount on 9.1.2008. Subsequently, he verified the

    entries in his S.B account and found that on 9.1.2008. Rs.2000/-, Rs.1000/-was debited from his account. He contacted the Manager, Canara Bank Nerkundram Branch and informed about the incident that took place on 9.1.2008. He was informed that due to road repairs in Nerkundram ATM centre was not functioning on that day. Despite several letters, entries made on 9.1.2008 were not reversed. Hence the opposite party committed deficiency in service. Therefore the complainant has filed this complaint claiming Rs.10,000/- as compensation for mental agony and refund of Rs.3000/- being wrongly entries on 9.1.2008 as withdrawn.

    2. The opposite party filed version and contended inter alia that the complainant is a customer of the Canara Bank, Nerkundram Branch and therefore the complaint as against the opposite party is not maintainable. The complainant had used the ATM card for withdrawal of cash at the ATM centre situated at the opposite party Shenoy Nagar Branch and Rs.2000/- on 6.1.2008 and Rs.1000/- on 7.1.2008 were withdrawing and the above two debit entries were made to the complainants S.B account maintained in Nerkundram branch only on 9.1.2008 due to technical reasons on account of road repairs at Nerkundram. Further, confirmation regarding the said ATM transaction was also sought by the FSS support services, DIT Bangalore. The same was informed to the complainant it is only technical reasons, those entries could not be made in the passbook of the complainant on 6.1.2008 and 7.1.2008 but only made on 9.1.2008. There is no deficiency in service on the part of the opposite party.

    3. Proof Affidavits have been filed by both the complainant and the opposite party. Exs.A1 to Exs.A7 were marked on the side of the complainant. Exs.B1 to Exs.B3 were marked on the side of the opposite party.

    4. The points that arise for considerations are:

    1. Whether there is any deficiency in service on the part of the opposite party?

    2. To what relief the complainant is entitled to?

    5. Point No:1

    The case of the complainant is that he was an S.B account holder in Canara Bank Nerkundram Branch and also obtained ATM card in that branch and was being used for withdrawal of money. The complainant had gone to the opposite party ATM branch on 9.1.2008 and tried to withdraw Rs.2000/- by inserting the ATM card. But the amount could not be withdrawn. This transaction was not materialized and in the display it was shown as “denied”. Again he tried to withdraw Rs.1000/- on the same day. But he could not withdrawn Rs.1000/- because the transaction was shown as “denied”. He reported the matter to the opposite party and he was informed that due to road repairs at Nerkundram, the ATM at opposite party branch did not function.


    After sometime he verified the S.B Account passbook entries and found that a sum of Rs.2000/- and Rs.1000/- was debited from his account on 9.1.2008, as if he had withdrawn the said amount by using the ATM card. In fact, he has not withdrawn the amount on 9.1.2008. Though the opposite party would contend that the complainant had account only with the Canara Bank Nerkundram Branch, he has used the ATM card only from the bank of the opposite party which is the same bank. Hence the complaint is maintainable as against the opposite party.


    Ex.A1 would show that the entries were made on 9.1.2008 regarding withdrawal of Rs.1,000/- and Rs.2,000/- using the ATM card by the complainant. Ex.B1 would show that the complainant had withdrawn Rs.2,000/-on 6.1.2008 at 11.38A.M and Rs.1000/- on 7.1.2008 at 11.10 A.M. It was confirmed by the bank under Ex.B2. Even assuming that the complainant had withdrawn Rs.2,000/- and Rs.1,000/- 6.1.2008 and 7.1.2008 entries should have been made on the day of withdrawal in the SB account passbook. But the opposite party made the entry only on 9.1.2008 which is incorrect.


    The reason for wrong entry on 9.1.2008 is due to road repair at Nerkundram. This reason has not been substantiated by the opposite party. Admittedly the complainant had not withdrawn any amount on 9.1.2008. But the entry has been made on 9.1.2008 as if he had withdrawn Rs.2000/- and Rs.1000/- which is factually incorrect. The act of the opposite party amounts to deficiency in service. However the complainant is not entitled to refund of Rs.3000/- since he had already withdrawn the amount on 6.1.2008 and 7.1.2008. The point is answered accordingly.

    6. Point No:2

    In the result, the complaint is allowed. The opposite party is directed to pay a sum of Rs.10,000/- as compensation for mental agony and Rs.1000/- as cost of the complaint to the complainant. The amount shall be payable within six weeks from the date of receipt of copy of this order failing which the amount shall carry interest at the rate of 9% per annum till the date of payment.

  11. #11
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    Default Canara Bank

    M.P. Mastan, S/o Peddanna, R/o D.No. 15-1102,

    Modampalli village, Proddatur, Kadapa District. ….. Complainant.



    Vs.



    1) The Branch Manager, Canara Bank,

    Proddatur Branch, Kadapa Dist.

    2) The Branch Manager, HDFC Bank,

    Proddatur Branch, Kadapa District. ….. Respondents.




    O R D E R





    1. Complaint filed under section 12 of the Consumer Protection Act 1986.



    2. The brief facts of the complaint is as follows:- The complainant had S.B. Account with O.P. No. 2 Bank with account No. 1013170002416. The O.P. No. 2 issued a debit card No. 421424603354727 with insurance coverage of Rs. 5,00,000/-. The complainant paid Rs. 560/- towards cost of the card to O.P. No. 2. The O.P. No. 2 provided a facility to withdraw money from any bank as ATM on payment of Rs. 18/- towards service charges. On 22-2-2009 the complainant used his ATM card with O.P. No.1 bank to withdraw money but the debit card fell into the ATM box and message was displaced on the screen that “this ATM was temporarily out of order”. On the next day the complainant reported the matter to O.P. No. 1, who requested the complainant to contact five days later.


    Again the complainant went to O.P.No. 1 Bank and requested to deliver his ATM card but the O.P. No. 1 bank informed that it was entered in their register about the card collected from ATM Box and it would not be given back directly as the card belonged to other bank. The complainant lost the card at O.P. No. 1 in their ATM box. But they did not handover the same to him. The O.P. No. 1 would have sent the card to O.P. No. 2 bank in case the O.P. No. 1 bank had no permission to handover the card directly to the customer. O.P. No. 1 failed to do the same.


    The O.P. No. 2 also failed to trace out the card by informing to O.P. No. 1. The ATM record on that particular day would show the case of the complainant and the status of transaction. Both O.P. No. 1 & 2 did not take any action. Therefore, the complaint was filed against O.P. No. 1 & 2 to pay compensation of Rs. 35,000/- jointly and severally for suffering and mental agony along with costs and cost of the new card.



    3. The O.P. No. 1 filed a counter that the complainant was an account and card holder of HDFC Bank and HDFC bank was also a member of National Finance Switch. The respondent installed ATM at Jammalamadugu road, Proddatur to withdraw cash by their account holder’s having ATM Card. The respondent permitted other bank ATM card based on the agreement with other banks of National Finance Switch net work. The complainant should have approached HDFC bank for further remedy or for new ATM card which would be issued on free of cost. There was a provision in the bank to settle issue amicably to the satisfaction of the customers in case the complaint was genuine.


    The ATM installed by the respondent was an electronic machine and the transaction would be recorded in a printed format including denial. The respondent searched their records and found no transaction in ATM as alleged by the complainant. The transaction in ATM on the day would start from 00.00 hours till 24.00 hours. The printing journal inside the ATM machine contained number of entries in a paper roll which was difficult to produce.


    The respondent sent a reply to the letter received from the complainant. The letter sent to the complainant was returned and delivered sating that no such addressee was available. The complainant was not residing in the address given in the letter. The complaint was filed without waiting any reply from the Bank. The complainant failed to produce any proof. The HDFC Bank was not added which was necessary to solve the dispute. Hence, the complaint may be dismissed with costs.



    4. After filing of the complaint and after opposite party filed the counter the complainant impleaded O.P. No. 2 as per orders in I.A. No. 140/2009, dt. 25-6-2009.



    5. The O.P. No. 2 filed a counter admitting the account of ATM card of the complainant but the card was not used properly. There was no deficiency of service on the part of the respondent. The respondent was unnecessarily impleaded to get wrongly gain. The complainant filed two complaints i.e. one in Telugu and another in English. In Telugu complaint the respondent was not a party. In Telugu version of the complaint the complainant stated that the deficiency of service was towards respondent No. 1. The respondent was ready to issue card on payment of Rs. 560/-. Thus there was no deficiency of service and the complaint may be dismissed with costs.



    6. On the basis of the above pleadings the following points are settled for determination.

    i. Whether there is any negligence and deficiency of service on the part of the respondents?

    ii. Whether the complainant is entitled to the relief as prayed for?

    iii. To what relief?





    7. On behalf of the complainant Ex. A1 to A3 were marked and on behalf of the respondents Ex. B1 & B2 were marked.



    8. Point No. 1 & 2 The complainant filed a complaint in Telugu in person at the first instance against O.P. No. 1 only. Subsequently he amended the complaint by adding O.P. No. 2 as per orders in I.A. No. 140/2009, dt. 25-6-2009 and then filed neat copy of complaint in English.



    9. The complainant had a Bank account with O.P. No. 2 i.e. HDFC Bank, Proddatur Branch with account No. 10131700002416. He was issued ATM card No. 4214240603354727. Ex. A1 was printed letter evidencing of issue of ATM card to the complainant. On 22-2-2009 the complainant went to O.P. No. 1 at Proddatur to withdraw money from his account by way of ATM card because the card issued by O.P. No. 2 could be used from any bank. The complainant operated but he received a massage with display “as this ATM is temporarily out of order” and the card fell into the ATM Box. He reported the mater immediately to the O.P. No. 1, who requested the complainant to visit five days later.


    The complainant visited again O.P. No. 1, who expressed t hat the ATM card should not be handed over directly but would be sent to the O.P. No. 2 Bank for proper delivery. It was not sent nor delivered. The ATM card was lost in O.P. No. 1 ATM Box. The complainant gave a written complaint to O.P. No. 1 to hand over the ATM card or issue a New card. Ex. A3 was Xerox copy of letter. The complainant filed Ex. A2 a copy of account extract issued by O.P. No. 2. In Ex. A2 there was a transaction at ATM under card No. 4214240603354727 on 21-2-2009. But there was no transaction on 22-2-2009.


    He operated on many occasions properly. The O.P. No. 1 addressed a letter to the complainant that in case of fresh ATM card was required, the complainant would contact O.P. No. 2 bank. Ex. B1 was Xerox copy of letter. Ex. B2 was un-served cover from O.P. No. 1 to the complainant. The O.P. No. 2 admitted the account and ATM card issued to the complainant. The complainant had not withdrawn the amount on 22-2-2009 in view of non functioning of the ATM and he did not get back his ATM card issued by O.P. No. 2 from O.P. No. 1 ATM counter.


    Every day the staff of the bank would open ATM box for various reasons. When the O.P. No. 1 found the card of the complainant it was their duty to send the card to O.P. No. 2 for proper delivery to the complainant. They have not done so. There was no answer regarding the ATM card of the complainant. Therefore, there is negligence and deficiency of service on the part of the O.P. No. 1 only. The O.P. No. 2 was not concerned for the loss of the card at O.P. No. 1 by the complainant. Thus the points are answered accordingly.



    9. Point No. 3 In the result, the complaint is allowed without costs, directing the R1 Bank to get a New ATM card from the R2 Bank and deliver the card to the complainant with Rs. 5,000/- (Rupees five thousand only) towards mental agony and compensation within 30 days from the date of receipt of the order. The case against R2 is dismissed without costs.

  12. #12
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    Default Canara Bank

    Appeal no. FA-9/480



    (Appeal against the order dated 18.05.2009 passed by District Forum(North West) Sharlimar Bagh, in complaint case no. 1193/2008)
    Jagdish Prasad Gupta

    C-303, Sector-1,

    Awantika, Rohini

    Delhi-110085. …..Appellant/complainant.

    Heard in person.

    VS
    Senior Manager,

    Canara Bank

    Sector-5, Rohini,

    Delhi-110085.


    ……Respondent/O.P.


    CORAM



    Justice Barkat Ali Zaidi, President.

    M.L. Sahni, Member





    1. Whether reporters of local newspaper be allowed to see the

    judgment?



    2. To be referred to the reporter or not?





    M.L. SAHNI, MEMBER



    1. Complainant in case no. 1193/2008 has filed this appeal against the order dated 18.5.2009, passed by the District Forum, Shalimar Bagh (North West), Delhi, dismissing his complaint being without substance.

    2. Appellant’s grievance is that the O.P. Canara Bank, Sector-5, Rohini have deducted Rs. 120/- illegally as T.D.S. from his Fixed Deposits. Conversely, the plea of the OP/Respondent before the Ld. District Forum was that TDS was deducted as per Rules, because the Appellant/complainant did not submit Form 15-H.

    3. In this appeal, the complainant has alleged, inter alia, that he had been submitting Form 15-H every year in the month of April-May and that no notice was ever sent to him asking for Form ‘H’, as per the guidelines issued by the Reserve Bank. In support of his assertion, he has furnished copy of such notice dated 15.3.2008 issued to him by the State Bank of Patiala, Sector-3, Rohini.

    4. We have heard the complainant/Appellant in person and have gone-through impugned order.

    5. No guidelines of the Reserve Bank have been produced to the effect that before deducting the TDS, Bank is required to issue any notice, no doubt, so has been done by the State Bank of Patiala. This may be as an abundant precondition. Since , it is not the case of the appellant that despite submitting form 15-H, the OP/Respondent deducted ‘TDS’, therefore , we find no fault with the impugned order. Hence, we dismiss the appeal in limine, being without any substance.

    6. Copy of this order be sent to the District Forum as well as to the parties concerned as per statutory requirements.

  13. #13
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    Default Canara Bank

    Appeal No. FA-09/552
    (Arising out of Order dated 08-06-2009.passed by the District Consumer Forum, 150-151, Community Centre, C-Block, Janakpuri, New Delhi in Case No. 66/2008)

    The Manager … Appellant

    Canara Bank,

    Saving Bank Branch,

    Raja Garden Chowk,

    New Delhi.

    Versus

    Sri Arjun Dass … Respondent

    R/o B-4/58,

    Paschim Vihar,

    New Delhi-110063.
    CORAM

    Justice Barkat Ali Zaidi … President

    Mr. M.L. Sahni … Member



    1. Whether Reporters of local newspapers be allowed to see the judgment?

    2. To be referred to the Reporter or not?

    Justice Barkat Ali Zaidi(Oral)

    1. The short facts of the case are that the respondent complainant had opened two accounts in the Canara Bank, Raja Garden Branch No. (i) CAN SI A/c 87/92 and (ii) Savings Bank Account No. 13634 in the month of November 1992 with the appellant OP bank which the complainant operated till middle of 1993, but as averred, since he became ill he lost his memory, and was not able to operate the accounts for 12 years. Therefore the complainant approached OP in the month of March/April, 2005, to find out, the balance in his accounts and the bank replied, that the records of the bank were destroyed. The bank further averred that after a lapse of 8 years from the year of non operation of the accounts the records of the said accounts are destroyed.

    2. The complainant therefore filed a complaint before the bank ombudsman, and the ombudsman, after hearing both the parties found no deficiency on the part of the bank.

    3. The complainant ultimately therefore filed a complaint before the District Consumer Forum praying that the OP bank be directed to pay him Rs. 35,902/- towards his Savings Bank Account No. 13634 and Rs. 12,000/- towards CAN SI A/c 87/92.

    4. The OP bank opposed the claim quoting Condition No. 1.5.6. of the Manual of Instruction issued by the Head Office of the Canara Bank which provides that “after a lapse of 8 years from the year to which the bound book of the exhausted/closed sheet pertains, it can be taken up for review for the sake of destruction along with other old records.” The OP alleged that Payment Balancing Sheet dated 31.8.94 prepared by the OP, fortunately available with the bank, showed that the aforenoted SB A/c No. 13634 was not mentioned therein, and therefore it can be inferred, that, either the above numbered account was destroyed, or closed, by the complainant on or before this date.

    5. As regards to the another bank A/c No. CAN SI A/c 87/92 the OP stated that it was opened by the complainant for specific purpose, and was interlinked with Savings Bank A/c and it’s purpose was, that in case a share was allotted by any company in favour of the complainant(A/c holder) on his application, then that money will go from ‘CAN SI’ account of the Account Holder to the company, and in case share is not allotted then the money will revert back to the Savings Bank Account of the account holder. The OP also alleged that complainant had not placed any record, with regard to the loss, of his memory.

    6. The defence of the bank is that in their Manual it has been mentioned as follows -

    “after a lapse of 8 years from the year to which the bound book of the exhausted/closed sheet pertains, it can be taken up for review for the sake of destruction along with other old records”

    and since there is no record available now in the bank, it appears that the papers relating to the Accounts have been destroyed.

    7. This plea of the bank was rightly rejected by the District Consumer Forum because from the abovenoted mention in the Manual it cannot be inferred to clearly imply that the bank will be authorized to destroy the Records of the Account, after there has been no transaction in the Account for 8 years. The aforementioned words in the Manual, are confusing and confounding, and cannot be taken as giving a mandate to the bank for destroying Papers, relating to the Accounts after they have not been operated for 8 years. No guidelines of the Reserve Bank have been cited by the bank, which they could have been done. It would be disastrous if the banks were allowed to burn papers, relating to the Account if the account has not been operated for 8 years. That would be very easy way to appropriate Funds of Account Holders, who have not been able to operate their accounts, for one reason or the other. The bank is a trustee and cannot close the Account without intimation to the ‘Account Holder’. For non operation, the Account may become dead, but, it is always subject to revival. The District Consumer Forum was therefore justified in it’s view, that the bank has acted dishonestly, in destroying the Papers relating to the Account, and they are therefore liable to reopen the account, and make the requisite Payment to the Account Holder. The decision of the District Consumer Forum is therefore wholly justified, and there is prima facie no merit in this appeal, which is, accordingly dismissed in limini.

    8. Bank Guarantee/FDR, if any furnished by the appellant,

    be returned forthwith.

  14. #14
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    Default Canara Bank

    FA.No.78/2007 AGAINST C.D.No.309/2005 DISTRICT FORUM-II,

    HYDERABAD.

    Between:

    The Branch Manager,

    Canara Bank, Banjara Hills Branch,

    Banjara Hills, Hyderabad. Appellant/

    Opposite party

    And
    Kum.L.K.Neena Rani D/o.late L.K.Narayana

    Swamy, aged 33 years, R/o.12-2-709/74,

    Navodaya Colony, Mehdipatnam,

    Hyderabad-500 028 temporarily

    Residing at 9, Rain Basera I S.B.T. Sector-17,

    Chandigarh (Uttar Pradesh) rep. by GPA

    Holder Sri L.K.Panesh Babu, S/o.late L.K.Narayana

    Swamy, aged about 36 years, Occupation Advocate

    R/o.12-2-709/74, Navodaya Colony,

    Mehdipatnam, Hyderabad-500 028. Respondent/ Complainant.



    Counsel for the Appellant: Mr.Srinivs Survi



    Counsel for the Respondents. Mr.Md.Muneeruddin



    QUORUM: SMT.M.SHREESHA, MEMBER

    &

    SRI K.SATYANAND, MEMBER

    .

    MONDAY, THE EIGHTEENTH DAY OF JANUARY,

    TWO THOUSAND TEN



    (Typed to the dictation of Sri K.Satyanand,Hon’ble Member)
    ***



    This is an appeal filed by the opposite party against which the District Forum imposed liability as prayed for by the complainant.

    The facts that led to filing this appeal are briefly as follows:

    The complainant is the GPA holder of Kum.L.K.Neena Rani, who received a D.D. dated 4-3-2003 from Mr.MOhd.Akbar towards final settlement in a civil suit pending on the file of VIII Fast Tract Court, Hyderabad and R.C.No.350/2000 on the file of II A.R.C. Hyderabad on 5-3.2003. It was submitted that the said D.D. for Rs.2,00,000/- was presented before Vijaya Bank on 3-9-2003 and the same was sent to opposite party bank for collection but the opposite party bank returned the D.D. with an endorsement “stale cheque”. It is the case of the complainant that the opposite party did not honor the D.D. as it was presented on the last day of its validity and came for collection on the next day by which date it became stale. The complainant submitted that as per Ex.A14 certificate, issued by Vijaya Bank, the D.D. for Rs.2,00,000/- was presented for collection on 3-9-2003 itself at 1.30 p.m. and since 3-9-2003 happened to be the last day, the opposite party ought to have taken immediate steps for collection of the amount under the D.D. The complainant also got issued a legal notice 18-12-2003 and submitted that the opposite party ought not to have rejected the D.D. without clearing for which opposite party gave a reply. Hence the complainant approached the District Forum for a direction to the opposite party to pay the amount under the D.D. together with interest, Rs.50,000/- towards compensation and Rs.5,000/- towards costs.

    The opposite party filed its counter and admitted that the D.D. dated 4-3-2003 was presented for collection in Vijaya Bank on 3-9-2003 and the said D.D. came for collection to it on 4-9-2003 by which date the D.D. became stale and could not be honoured. It further submitted that the complainant instead of getting the D.D revalidated by the purchase rof the instrument got issued legal notice for which they issued a suitable reply dated 9-1-2004 and inspite of this the complainant issued notice dated 18-10-2004. It further submitted that the said D.D. was presented for collection to Vijaya Bank on 3-9-2003 and the same has been sent by the said bank for collection at 1.30 p.m. and the D.D. came to the opposite party on the next day i.e. 4-9-2003 by which date it became stale and submitted that there was no deficiency in service on its part and prayed to dismiss the complaint.

    In support of her case, the complainant got filed the evidence of her general power of attorney and relied upon documents marked as Exs.A1 to A15. The opposite party though did not file a separate affidavit by way of evidence nevertheless relied upon the counter which appeared to have been filed by way of an affidavit.

    On a consideration of the evidence adduced by either side, the District Forum found fault with the opposite party, drawee bank for having returned the D.D. dubbing it as a stale cheque and in conformity thereof granted the relief to the complainant.

    Aggrieved by the said order, the opposite party preferred this appeal insisting that the District Forum was carried away by Ex.A14 certificate issued by the complainant’s bank without properly appreciating what it conveyed and failed to address the issue whether the cheque in question was presented to the opposite party who happened to be the drawee bank for realization via the clearing house in time.

    Heard both sides.

    The points that arises for consideration are:

    1. As a matter of fact, which is the date on which the D.D./cheque reached the payee appellant bank?

    2. For the purposes of determining the validity of presentment within the period of six months reception of the cheque at which bank is decisive or critical?

    3. Whether the order of the District Forum calls for any interference?

    In this case the deficiency in service that is attributed to the opposite party was put on the plank that the opposite party had no business to dishonour the cheque characterizing it as stale though the complainant admittedly presented the cheque to her own bank for crediting to her account in the said bank namely, Vijaya Bank. There is absolutely no doubt that she deposited the D.D. in question with Vijaya Bank on 3-9-2003 obviously the last date with which the period of six months validity of the instrument in question dated 4-3-2003 would run out. It is the case of the complainant, the moment she presented her D.D. to the bank, such presentment would be valid for all purposes and the drawee bank cannot have any ground to say that it was not received by it within time though obviously the said instrument was supposed to be routed through the clearing bank etc., According to the complainant the date of presentment was therefore 3-9-2003 but on the other hand, the drawee bank which was fastened with the duty of encashing it to the benefit of the payee if the same was presented within six months as super-scribed on the instrument itself marked as Ex.A1, contended that it received the instrument in question only on 4-9-2003 by which date the validity period of the D.D. in question ended one day before.

    This contention of the opposite party/appellant is disputed by the complainant on two grounds. The first ground is that as a matter of fact, it was sent to the opposite party bank on 3-3-2003 itself and therefore it was well within time. For this purpose, the respondent/complainant relied solely upon Ex.A14, the text of which reads as follows:



    CERTIFICATE

    This is to certify that Sri L.K.Panesh Babu and Kum.L.K.Neena Rani, whose S.B.A/c.No. is 12251 have deposited a D.D. with its No.336677 for Rs.2,00,000 (Rupees two lakhs only) in our Bank on 03-9-2003, with us. The same has been sent for collection on 03-9-2003 at 1.30 p.m.

    As rightly pointed out, there is absolutely no indication in the above text that it was sent for collection to the opposite party as such. It only mentioned that the same had been sent for collection on 3-9-2003 that too at 1.30 p.m. Therefore, it is impossible to muster support from Ex.A14 to hold that the same was presented to the opposite party on that very day itself. On the other hand, it is very much a well known fact that sending for collection cannot be directly to the drawee bank as such as it has to be necessarily routed through a clearing house. When such is the case, it is beyond anybody’s comprehension how Ex.A14 could be construed as having furnished proof of the cheque having reached the opposite party on 3-9-2003 itself. Such kind of inference is absurd as there is yet another agency, namely the clearing house, in between Vijaya Bank and the appellant bank. The appellant emphatically stated in the counter that it received the cheque on 4-9-2003, Ex.A13 is a document though tendered by the complainant that was actually authored by the opposite party. The said document is dated 4-9-2003 and it was clearly noted therein that the instrument in question was a stale cheque and got to be revalidated. The complainant failed to prove by resorting to proper procedure of summoning to establish that the cheque reached the opposite party on 3-9-2003 itself. On the other hand it relied upon Ex.A14 only which definitely did not bear any material to link up its sending for clearance was to the opposite party bank. Moreover, even according to Ex.A14, it was sent at 1.30 p.m. The complainant ought to have placed before the District Forum as to what would be the steps that an instrument meant for clearance would pass through and whether it was really possible for the instrument to reach the opposite party on that day itself. When the flow of the events facilitating such transmission is obviously interdicted by the necessity of the instrument being routed through yet another agency, namely the clearing house, tThe District Forum erroneously relied upon Ex.A14 to draw far reaching inferences not warranted from its text. Such kind of conjectures cannot take the place of concrete proof. It is the complainant that has to fully prove her case as the matter was taken to a position of cliff hanging in as much as the complainant herself had opted to present the cheque on the last day that too to her own banker leaving further more process before the proceeds of the said instrument could be actually realized. The learned counsel for the appellant relied on a decision reported in AIR 2001 SC 1161 in SHRI ISHAR ALLOYS STEELS LTD., v. JAYASWALS NECO LTD., makes it abundantly clear that presentation means presentation to the drawee bank. Here in this case the complainant miserably failed to prove that the cheque was presented to the drawee bank in contradistinction to his own bank before the dead line or expiration of six months’ validity period. Thus we are of the opinion that the decision of the District Forum cannot be upheld.

    Accordingly the appeal is allowed setting aside the order of the District Forum and thereby dismissing the complaint before it but without costs in the circumstances of the case.

  15. #15
    adv.singh is offline Senior Member
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    Default Canara Bank

    CC.No.70/2009

    Dated of this 23rd day of November 2009

    Present:

    Sri.K.M.Thammaiah President

    Sri.D.Shivamahadevaiah Member

    Smt.Girija Lady Member

    Between:



    Arunkumar s/o. late Ramarao,

    Aged about 60 years,

    R/at ‘Huligemma-Sadana’ Complainant

    7th cross, G.Karnad Road,

    Saraswathipuram, Tumkur

    (By Sri.D.P.Kiran Kumar, Advocate)

    AND

    1. Canara Bank,

    Ashoka Nagar Branch,

    Opposite Government polytechnic,

    BH Road, Tumkur

    Represented by its Manager Opposite parties

    2. National Insurance Co. Ltd,

    Corporation bank buildings,

    Behind Sri Krishna Talkies,

    MG Road, Tumkur,

    Represented by its Manager

    (OP No.1 - by Sri.Jagadeeshappa, Advocate)

    (OP No.2 – by Sri.M.S.Chandrashekharaiah)

    ORDER

    This is a complaint filed Under Section 12 of the Consumer Protection Act, 1986 (hereinafter called as Act for short)
    2. Through this complaint, the complainant prays for an award and order against the Opposite Parties (hereinafter called as the OPs for short) to hold OPs either jointly or severally liable for the payment of damages of 50% of the sum assured in policy number 603903/11/03/33100001478 dated 23-10-2003 of 2nd OP company, being Rs.3,00,000/- with interest of 12% per annum from 17-2-2006 till realisation and to direct the payment on the loan account of the complainant with the 1st OP.

    3. The facts given rise to institute the complaint may be summarized as thus:

    It is his grievance that, the complainant alongwith his brother B.R.Manjunatha had purchased a site property at Tumkur under registered sale deed dated 6-9-2002. Both of them with an intention of building up a house on it had taken licence and got the valid plan approved from the competent authorities. As there was shortage of funds for the construction purpose, both the co-owners approached the 1st OP for the grant of mortgage loan and was sanctioned at Rs.5,00,000/-by the 1st OP on 18-10-2003. It is further contended that, at the time of sanction of loan, the 1st OP informed the owners that, they could obtain loan protection insurance from the reputed insurance company so as to have protection for their loan amount in the event of an accidental damage to the property mortgaged or its owner meeting any accidental death and convinced that the insurance policy would be beneficial to the bank as well as the parties. It was further informed that, the premium charges for obtaining the insurance policy would be debited to the loan account of the borrowers.

    4. It is further contended that, the 1st OP orally informed the complainant that, they have paid the premium for obtaining the insurance and they would inform the complainant whenever the policy is ready for delivering to the insurance holders. The offer application for the obtaining insurance policy was filled up and forwarded by the 1st OP without the knowledge of the borrowers. The complainant requested the 1st OP for copy of the insurance policy but was assured a copy as soon as they receive the same. On 22-7-2004 the complainant has written a letter to the 1st OP to seeking the copy of insurance policy as to know the contents.

    5. It is further contended that, one of the borrowers B.R.Manjunatha met with a road accident on 4-9-2005 and due to injuries he died on 23-9-2005. Thereafter, the complainant being a co-borrower informed the 1st OP about the death of the principal borrower through registered post and requested the 1st OP to get realized the insurance death benefits of the borrower and credit the same to the loan account. The 1st OP orally assured that, they would process with the insurance company for disbursement of death benefits of borrower. Since, the complainant reposed trust with his bankers and also for want of policy details, he was left with no other option but to wait.

    6. It is further contended that, thereafter the 1st OP assured the complainant that, the accidental death benefits of the deceased borrower would be remitted soon after the same was received and instructed that, the complainant should continue the payment of EMI’s without default to keep the amount of loan update. Accordingly, he was paying the installments regularly.

    7. It is further contended that, as the 1st OP did not do anything about the death benefits of the insurance policy, despite the complainant’s repeated personal reminders and visits. On 21-1-2008 the complainant gave a demanding representation to the 1st OP seeking copy of the insurance policy so as to look into the terms and make a claim representation directly to the insurance company. After dodging sufficiently, the 1st OP gave a copy of the insurance policy they had obtained from the 2nd OP after collecting the requisite expenses for the same.

    8. It is further contended that, the policy disclosed that, the 1st OP had obtained insurance coverage only for the mortgaged property and had failed to seek coverage for the owners of the property as they had assured at the time of obtaining the insurance policy. It is further submitted that, the insurance companies have many such policies which not only covers the property but also personal risk coverage to the land lords, which are usually and normally obtained by the bankers in usual course of their business. The premium payable for any such policy is much lesser than, what is paid presently to the 2nd OP by the 1st OP. If at all comprehensive policy for building damage coverage and life insurance was availed, the deceased borrower would have got 50% of the sum insured as his death benefits.

    9. It is further contended that, the 2nd OP is an insurance company who issued a policy No.603903/11/03/3100001498 to the 1st OP after collecting a sum of Rs.2,268/- from the 1st OP. It is valid period from 23-10-2003 to 22-10-2013 with a sum assurance of Rs.6,00,000/-. They also have an implied obligation of offering policy with utmost benefits to the customers especially when they have approached indirectly through banking institutions like 1st OP. Being the ultimate beneficiary of the policy, the complainant is consumer under the 2nd OP also.

    10. It is further contended that, when the 1st OP took the responsibility of obtaining loan protector insurance, it had the implied obligation of making a reasonable enquiry about the most beneficial returns. In the case of the complainant, the 1st OP has committed deficiency in service by not covering the death benefits in the insurance policy so obtained on behalf of the borrowers. The negligence of the 1st OP has resulted in great financial loss to the complainant and the deceased borrower. The 1st OP ought to have been vigilant in obtaining the policy under Loan protector scheme. The present loss to the complainant is to be made good by the 1st OP and is also deficient at not furnishing copy of the insurance to the complainant at the earliest point, who would have had the options of getting a better policy obtained or got the present updated.

    11. It is further contended that, the 1st OP had negligently obtained the above policy without adequate application of mind. Despite the receipt of the demand notice dated 19-12-2008, the 1st OP has neither replied nor complied with the demand of the complainant. The complainant is an aged man and at this age the 1st OP had made him shuttle between their office and his place several times under assurance that the policy benefits would be rendered to the loan account and made the complainant live in dark without giving a copy of the policy. Thus the complainant is put to great hardship.

    12. It is further contended that, the death of borrower B.R.Manjunatha was reported to the 1st OP on 17-2-2006 and the benefits ought to have been settled on that day. The complainant has paid the monthly installments regularly till December 2008. Since the notice demand is not responded the installments are not paid since then. Thus, insurance settlement is sought from 17-2-2006 with interest of 12% till date of settlement. Hence this complaint.

    13. The OPs who have been notified of the complaint put in their appearance through counsel and resisted same by filing their objections.

    14. The gist of the 1st OP versions is as follows:

    In the versions filed by this OP, it is alleged that, the complaint is not maintainable either in law or on facts and the same is liable to be dismissed in limine. There is no deficiency of service on the part of this OP.



    15. This OP while admitting the plea of the complainant about availment of loan alongwith his brother by mortgaging the property, the insurance coverage policy obtained by them on the property and also the death of one of the borrowers, have denied other material allegations has false and untenable. Interalia this OP has pleaded that, under clause 16 of housing loan agreement executed by the complainant and deceased Manjunatha it was agreed;

    “The borrower shall adequately insure the schedule property for the full market value against risk of fire, war, riots, Civil commotion, strike accident, risk and also such other purpose as may be prescribed by the law for the time being in force and as required by the bank and keep the policy always current by duly and punctually paying ht premia from time to time and to assign the benefits in insurance policy thereof to the bank. The bank shall be entitled for all the benefits of al such polices.

    The borrower hereby agrees and undertakes to do everything necessary to transfer and effectively vest in bank the benefits of all such policies. The borrower further agree to indemnify the bank against loss by reason of damage to or destruction or loss to the schedule property from any cause whatsoever for reason of claim by third party in respect of the same.

    The bank is at liberty and is not bound to effect such insurance at the risk, responsibility and expenses of the borrower with any insurance company only to the extent of the value of schedule property as estimated by the bank and that in the event of insuring the schedule property, the bank shall not be considered or deemed to be responsible for liable for non-admission or rejection of the claim wholly or in part whether the claim is made by the bank or by borrower. It is expressly undertaken by borrower that he shall himself/ of his own accord take all steps like initiation of filing claims/furnishing necessary information to the bank/insurance company without being informed of details of loss/damage for any reason whatsoever. In the event of rejection of claim either wholly or in part on account of loss/damage to the security, the borrower shall be liable to repay to the bank the entire outstanding liability without requiring the bank to proceed in the first instance against the insurance company.

    In the event of non-settlement of claim, the bank may at its absolute discretion take action against insurance company without being under any obligation to do so or require the borrower himself to take action, in which case the borrower shall not be entitled to question the decision of the bank. If the bank does not lodge any claim under the policy within the time limit prescribed under such policy, the bank shall not be liable to the borrower for not filing any claim or suit for recovery of the insured amount against the insurance company or any other reason”.



    16. Thus, it contended that, the complainant and the deceased had insured their only the property to an extent of value of the mortgaged property and not to the lives of owners of the property. As such, this complaint, on this ground, is liable to be dismissed in limine.



    17. It is further submitted that, the complainant is not entitled for any relief as claimed in the complaint and the relief claimed is only imaginary and assumptive. It is against the principles of natural justice. Accordingly he prays for dismissal of the complaint with heavy costs.



    18. In the objections filed by the 2nd OP, it is alleged that, the complaint is not maintainable either in law or on facts the same is liable to be dismissed in limine. This OP while emphatically denying other complaint averments as false and untenable, interalia pleaded that, though the brother of the complainant had died on 23-9-2005, he kept quite for more than four years. The complainant knowing fully well that the policy obtained from the OP has not covered the risk of death benefits, still filed this frivolous complaint to cause unnecessary loss and to make an unlawful gain.



    19. It is further submitted that, it is the duty of the insured to obtain what type of policy and what he exactly required. It is further submitted that, this OP issued standard fire and perils policy only for material damage in favour of the complainant and his brother B.R.Manjunatha. Tt covers for a period of 10 years from 23-10-2003 to 22-10-2013. The policy issued by this OP covering the risk only for property against fire risk for a period of 10 years and does not cover the risk of personal accident benefits of the borrowers and co-borrowers. The said policy covers only the property against the fire. There is no question of deficiency of service on part of this OP and the complainant is not entitled for payment of death benefits from this OP. Accordingly, he prays for dismissal of the complaint with costs.



    20. In support of the cases of the parties, the complainant and OPs have filed their affidavit. The documents produced by the complainant and OPs came to be marked as Ex.P-1 to 11 and Ex.R-1 to 3. We have heard the learned counsels appearing for the parties. We have also examined the materials available on record.



    21. The questions that arise for our considerations are:

    1) Is there any deficiency in service on the part of the OPs?

    2) Is the complainant entitled to the relief as prays for?



    22. Our findings on the above questions are here under.

    Point No.1: Negative

    Point No.2: As per the order



    REASONS



    23. At the very threshold, we must point out that, with the insurance policy so taken from the 2nd OP by the borrowers through the 1st OP clearly demonstrated that, the insurance policy was taken to insure the schedule property for the full market value against the risk of fire, war, riots, civil commotion, strikes, accident and risk. Clause 16 of the insurance policy at Ex-R-1 clearly established this fact. The schedule of property given in Ex-R-1 reads as thus:

    Particulars/Extent


    Nature of property


    Location and boundaries


    Approximate value

    House site measuring 30’ X 40’


    Site with house under construction


    Site No.C-15, Shanthinagar,


    300000/-



    24. Therefore, it is clear that, the house site and the house under construction in site measuring 30 feet X 40 feet in site No.C-15 and khata No.8543/226 was insured to an extent of Rs.3,00,000/-. Absolutely, there is no proof or material to conclude that, the life risk of the borrowers was also covered under the said insurance policy. Therefore, it can not be said that, there is a deficiency in service on the part of the insurance company in not settling the demand of the complainant. Likewise, when there is no proof to hold that, the complainant and his brother Manjunatha had insisted to include their life risk in the policy, and the 1st OP had intentionally and deliberately avoided that beneficiary clause to the borrowers, we can not arbitrarily come to a conclusion that, the 1st OP has committed a deficiency in service. When the complainant and his deceased brother were signatory to the housing loan agreement at Ex.R-1, they should have placed acceptable and cogent evidence to show that, they had an inclination to cover their lives insured in the insurance policy and in furtherance such inclination, they did demand and persist the OP to include the clause in the insurance policy. Had there been such inclination, nothing prevented from the complainant and his brother informing the insurance company (2nd OP) to include such clause the insurance policy or for taking appropriate steps in that regard. When nothing has done in that regard, the oral assertion of the complainant to effect that, he had insisted for inclusion for such clause, which is not accepted by the other side, can not take the place of proof. Therefore, for want of necessary evidence, we hold that, the complaint is devoid of merits and it is liable to be rejected

    25. Being that opinion, we proceed to pass the following:

+ Submit Your Complaint
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