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Thread: Managing Director, HP State Co-operative Bank,

  1. #1
    Sidhant's Avatar
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    Default Managing Director, HP State Co-operative Bank,

    H.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION, SHIMLA.



    Appeal No. 159/2008.

    Date of Decision 03.07.2009.



    In the matter of:



    1. Managing Director, HP State Co-operative Bank,

    The Mall, Shimla-1 presently through its General

    Power of Attorney, Sh. G.R. Singh, Sr. Law Officer,

    HP State Co-operative Bank, The Mall Shimla.,



    2. Branch Manager, HP State Co-operative Bank, Branch

    Office at Jhakri, Tehsil Rampur,District Shimla, HP.



    … … Appellants.



    Versus



    Sh. Mohan Lal S/o Sh. Lachmi Nand, R/o Vill. Sanarsa,

    PO Kartol, Tehsil Rampur, Distt. Shimla, HP.

    … … Respondent.



    Hon’ble Mr. Justice Arun Kumar Goel (Retd.), President.

    Hon’ble Mrs. Saroj Sharma, Member.

    Hon’ble Mr. Chander Shekher Sharma, Member.



    Whether approved for reporting? Yes.



    For the Appellant: Mr. Sanjay Ranta, Advocate vice

    Mr. G.S. Rathore, Advocate.



    For the Respondent. In person.





    O R D E R



    Justice Arun Kumar Goel (Retd.), President (Oral).



    We have heard learned counsel for the appellants, as well as the respondent who is present in person. Facts giving rise to this appeal are, that respondent as an educated unemployed person wanted to start his employment, therefore he filed an application for the purchase of a tractor in the office of Block Development Officer, (BDO) Rampur. This application was filed for the purpose of self employment under “Swaran Jayanti Gram Savrojgar Yojna.” This application was accepted by the BDO on 25.8.2007. Copy of this application is Annexure C-1, letter of the BDO addressed to the appellant No.2 is Annexure C-2. As per this document, loan in the sum of Rs. 3,06,463/- was recommended and subsidy on it is shown to be Rs. 5,000/-. A perusal of this shows that recommendation was made by the BDO after the matter had been discussed between the Pardhan Panchayat, BDO and respondent.

    2. It appears that the appellant No.2 with a view to sanction the loan and to secure its due repayment asked the respondent to provide security, therefore, respondent got his father’s land mortgaged vide Annexure C-3. Its copy is at page 10 of the complaint file. It was registered in the office of Sub Registrar, at Tehsil Rampur. Its execution between the parties is not disputed.

    3. Instead of releasing the loan after execution of Annexure C-3, vide Annexure C-5 Head Office of respondent No.2-bank wrote to the Sub Registrar as under:-

    “To

    The Sub Registrar,

    Tehsil Rampur Bsr.

    Shimla H.P.

    Sub: Cancellation of Mortgage Deed.

    D/Sir,

    We have received a loan case of Sh. Mohan Lal through BDO Rampur vide their letter No. 2087 Dt. 29.8.2001 of Rs. 311463/- for purchase of Tractor under the scheme of SGSY.

    In this connection, we would like to inform you that sanction power of the above loan is not in the competency of Branch Manager, Jhakri. Hence the proposal sent to our Distt. Office Kasumpti for sanction. The formalities of the loan proposal has already been completed by the party, but our Distt. Office has returned the case without sanction and raised the objection that the purchase of tractor through SGSY does not falls under this scheme. So that we are unable to advance the such loan to the concerned party. (Emphasis supplied)



    It is, therefore, requested to you kindly cancelled the mortgage deed in respect of BM, Jhakri and cancel the mortgage charge to the concerned party.

    We shall very thankful for the act of this kindness.

    Yours faithfully,

    Sd/-”



    4. A perusal of the above extracted letter shows that the case was returned without sanction with the objection that purchase of tractors through SGSY scheme does not fall under the scheme, so the bank was unable to advance such loan to the concerned party. In this letter it was requested to cancel the mortgage deed and to release the mortgage charge. This Annexure C-5 is dated 24.4.2002.

    5. Strangely enough on 18.7.2002 vide Annexure C-6 a diametrically stand was taken by the respondent, for ready reference this letter is also extracted hereinbelow:-

    “To

    The Sub Registrar,

    Teh. Rampur Bsr.

    Distt Shimla (HP)

    Reg. Cancellation of Mortgage deed.

    D/Sir,

    We have received a loan proposal from Sh. Mohan Lal S/o Sh. Lachhmi Nand Village Sanarsa PO Kartol, Teh Rampur Distt Shimla (HP) for purchase of tractor. But he is not interesting to avail the loan from our bank due to some technical formalities and he is not able to complete the bank formalities. Now he is going to avail the loan from HP Agri Rural Devp. Bank, Rampur. (Emphasis supplied)



    So, it is therefore requested to you kindly cancel the mortgage deed in favour of the HP State Coop Bank Ltd Jhakri and mortgage deed paper enclosed herewith.

    Thanking You.

    Your faithfully.

    Sd/-

    Manager.”



    6. A perusal of Annexure C-6 supra, shows that it was the respondent who was not interested to avail the loan from the bank due to some technical formalities, and he was not able to complete the bank formalities. It is further stated by the Head Office of appellant No.2, that the respondent is going to avail the loan from HP Agriculture and Rural Bank Development, Rampur.

    7. Contents of Annexures C-5 and C-6 are self contradictory and mutually destructive. Reason for making this observation is, that as per Annexure C-5 respondent was ineligible as the loan could not have been sanctioned under the particular scheme, whereas according to Annexure C-6, loan was not availed because of non fulfillment of formalities by the respondent. Both these communications show the apathy of the appellant-bank while dealing with public at large. We are of the view that before getting the mortgage deed executed and registered Annexure C-3, appellant should have first ensured regarding eligibility of the respondent for the grant of loan as prayed for by him as also at the same time should have ensured that all the codal formalities including deposit of margin money etc. were completed by the respondent, and it was only then that after having come to the conclusion that the respondent was eligible and has fulfilled all other formalities including deposit of margin money, that the mortgage deed Annexure C-3 should have been got executed and registered. Instead of doing so, the bank forced the respondent to get the mortgage deed of his father’s property executed and registered for securing repayment of the amount that was to be advanced while financing the tractor in question first. Matter did not rest here only, thereafter the appellants took, two diametrically opposite views as is evident from its letter Annexures C-5 and C-6, (supra). In these circumstances, the bank indulged into unfair trade practice, besides being deficient in service. And the respondent was put to undue expense of getting the mortgage deed executed.

    8. Appellants are further precluded from saying that the respondent was not eligible to get the loan under the scheme, in the face of Annexure C-2 which clearly shows that the case was sent to respondent No.2 by the BDO after discussion with the Panchayat Pardhan and the said appellant. Therefore, appellant No.2 cannot be allowed to feign ignorance about eligibility or otherwise of the respondent to get the loan under the particular scheme.

    9. That being the position, we find no infirmity in the order of the District Forum below. In these circumstances, submissions urged in support of this appeal by Mr. Ranta for setting aside the impugned order are without merit and hence rejected.

    10. In the face of Annexure C-5 and C-6 (supra), before filing the appeal bank should have examined the matter in its right perspective because we are of the view that at least litigation of this appeal could and in fact should have been avoided. That being the position this appeal deserves to be dismissed. Ordered accordingly.

    11. At this stage respondent submitted that he has incurred expense of coming to Shimla and will have to incur further expense to go back to his native place. For this appeal he has to spend two days at Shimla, as such he may be adequately compensated. This prayer appears to be just and reasonable, as such we direct that appellant will pay Rs. 1,000/- as cost to the respondent.

    12. No other point is urged.

    In view of the aforesaid discussion while upholding the order of the District Forum Shimla, in Consumer Complaint No. 414/2003, dated 8.4.2008 this appeal is hereby rejected with cost assessed at Rs. 1000/-.

    Appellant shall remit the amount of cost directly by means of bank draft to the respondent Mohan Lal.

    At the same time appellants are directed to execute and get the redemption of the land mortgaged vide Annexure C-3, registered with the concerned Sub Registrar at its cost and expense. Needful will be done by or before 31.8.2009 and Managing Director of the Bank shall file affidavit reporting compliance. And for this limited purpose the case is ordered to be listed on 2.9.2009.

    All interim orders passed from time to time in this appeal shall stand vacated forthwith.



    Learned counsel for the appellant has undertaken to collect copy of this order from the Court Secretary free of cost as per rules and office is directed to send the same in the like manner to Sh. Mohan Lal S/o Sh. Lachhmi Nand, R/o Vill. Sanarsa, PO Kartol, Tehsil Rampur, Distt. Shimla, HP.

    Shimla,

    July 3, 2009.

    ( Justice Arun Kumar Goel ) (Retd.)

    President



    (Saroj Sharma)

    Member.



    ( Chander Shekher Sharma )

    /Karan/ Member.

  2. #2
    adv.singh is offline Senior Member
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    Default

    Complaint Case No.256/2007

    Date of Institution 11-10-2007

    Date of Decision 31-12-2009





    Bhup Singh son of Sh. Kanhiya Lal resident of village Joli, Post Office Baggi, Tehsil Sadar, District Mandi, H.P.



    Complainant .

    V/S



    1. Managing Director , The H.P. State Co-operative Agriculture and Rural Development Bank Ltd Kasumpti Shimla 171009.

    2. Branch Manger, The H.P. State Co-operative Agriculture and Rural Development Bank Ltd Near Vishwakarme Temple, College Road, Mandi, H.P.

    3. Sales Officer- cum Assistant Registrar Co-operative Societies Mandi, District Mandi, H.P.





    …. Opposite parties





    For the complainant Sh. Noor Ahmad, Advocate

    For the opposite parties

    No.1 to 3 Sh. Lokesh Kapoor, Advocate



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



    ORDER.



    This order shall dispose of a complaint under Section 12 of the Consumer Protection Act, 1986( hereinafter referred to as the “Act”) instituted by the complainant against the opposite parties . The case of the complainant is that he had purchased a truck in the year 1997 to earn his livelihood by means of self employment . The complainant averred that he had raised loan for the purchase of the truck from the opposite party No.2 and got 10% margin money for the purchase of the truck from the opposite party No.4 in the month of July 1997 vide letter No. HMR-3-C-12( MID)9/97 and he was assured by the opposite party No.4 to give subsidy on the loan amount. After availing the loan facility, the complainant purchased the truck and continued to pay the loan instalments up to the year 2003 and in between the said truck met with an accident on 12-9-2001 and the driver died on the spot . The complainant suffered huge loss .The truck again met with an accident on

    31-12-2001 and he became irregular and could not deposit the instalments of the loan . The complainant alleged that he had had paid entire loan amount alongwith interest on 20-5-2005 to the opposite party No.2 which was entered in his pass book. That at the time of availing of loan the complainant also requested the opposite party No.2 for issuance of NOC regarding the clearance of loan amount as the NOC was required for entry in the revenue record but despite several requests the NOC was refused by the opposite party No.2 on the ground that amount of Rs.30,638/- was still due which was protested by him on the ground that Rs.50,282/- had been paid on 20-5-2003 in full and final settlement and the opposite party No.2 showed Nil amount in the account of the complainant as well as in the loan pass book but the opposite party refused to issue the No Objection certificate without paying the balance amount of Rs.30,638/- which amount was paid by him in two instalments but No Objection certificate was again refused and the opposite party No.2 demanded more amount which act on the part of the opposite party No.2 was illegal and unlawful and amounts to deficiency in service as well as unfair trade practice . The complainant further alleged that the opposite parties No.1 and 2 had added compound interest which was not at all agreed upon inter-se the complainant and the opposite party No.2. The complainant further alleged that he had made several representation to the opposite party No.1 and 2 for adjustment of money of opposite party No.4 and waiving the excess interest and compound interest added in the principal amount but the matter was not favourably considered and lastly the complainant received a letter dated 6-9-2004 from the opposite party No.2 whereby the request of the complainant for waiving of amount had been turned down . Now the opposite party No.2 had issued proclamation dated 31-5-2006 for auctioning the mortgaged land of the complainant publicly on 21-6-2006 at 11.00 AM and directed the opposite party No.3 to conduct the auction which is wrong as the opposite parties No.1 and 2 are not entitled to add exorbitant and interest and compound interest . With these allegations the complainant had sought direction to the opposite parties to adjust the amount which was given by the opposite parties No.1and 4 i.e. Rs.50,000/- alongwith interest in the loan amount of the complainant , that the opposite parties be directed to issue NOC of clearance of loan amount to him that the opposite party No.2 be directed to avail subsidy from opposite party No.4 and that the opposite party No.2 be directed not to charge the exorbitant and compoundable interest and to charge simple interest . Apart

    from this, costs of litigation in the sum of Rs.10,000/- has also been claimed.



    2. The opposite party No.1 to 3 had resisted the complaint and raised preliminary objections that the complaint is bad for non joinder and mis-joinder of the parties , that the complainant is not a consumer under the Act and that no cause of action has arisen to the complainant to file the present complaint. On merits , it has been admitted that the vehicle was purchased by the complainant but pleaded that the vehicle was purchased for earning profit as the complainant is an Ex-serviceman. It has further been admitted that a sum of Rs.50,000/- was received through cheque from the opposite party No.4 on account of the complainant and Rs.50,000/- has been duly reflected in the books in different heads as per copy of statement of Debit and credit of Rs.50,000/-. It has been contended that at the time of application for loan by the complainant , he was not able to pay the share amount ( refundable ) to the opposite party No.2 as every borrower is supposed to purchase share @ 5% which was calculated for the complainants account at Rs.25,000/- and out of which he has only paid a token amount of Rs.100/- to become a Member of the Bank, since the opposite parties No.1 and 2 are the officers of the Bank and as per the norms every borrower before raising loan should have been the Member of the Bank by making the payment of Rs.100/-. The opposite party No.2 while receiving a cheque of Rs.50,000/- from the opposite party No.4 and after collection of the cheque Rs.49835/- were received and out of which Rs.24,900/- credited on account of share capital as Rs.100/- were earlier paid by the complainant by way of registration . Rs.10,000/- were deducted against excess payment for body building of the vehicle as the complainant has paid only Rs.1,06,774/- whereas a cheque of Rs.1,20,000/- was paid by the opposite party No.2 ( Rs.1,06,774.00+ 3226.00 ) left out amount from the principle amount of loan i.e. Rs.5 Lakhs ) which comes to Rs.1,10,000,00+ 10,000.00 = Rs,1,20,000/- were certificated by the Bank and remaining amount out of Rs.49,835/- was deposited in the principal amount which was calculated as Rs.14935/-. It has further been contended that the calculation is very much clear as per Annexure O-1 . The opposite parties pleaded that the complainant is a chronic defaulter and after receiving the payments from the insurance company the vehicle became roadworthy and was plied by the complainant but the loan instalments were not paid and he was served with notices of recovery. It has been averred that the Bank is financed by ARDB and the said Bank is charging interest upon the financed amount hence the opposite parties No.1 and 2 as per the norms of the Bank is charging penal interest on the defaulted amount which is in accordance with law . It had been admitted that the proclamatuion of land was kept on 31-5-2006 by the opposite party No.3 which was in accordance with law . Rest of the allegations have been denied being wrong. The opposite parties No.1 to 3 had prayed for dismissal of the complaint .

    3. The complainant had filed rejoinder reiterating the contents of the complaint and denied those contrary to the complaint.

    4. Be it stated that on the application under order 1 rule 10 CPC filed on behalf of the complainant, the name of the opposite party No.4 was deleted from the array of the opposite parties vide order dated 12-11-2009.



    5. We have heard the ld. counsel for the parties and have also gone through the entire record. The case of the complainant is that he purchased a truck in the year 1997 by raising a loan from the opposite party No.2 and mortgaged his agricultural land for securing the repayment of the loan. Further case of the complainant is that he had got 10% margin money for the purchase of the truck from the opposite party No.4 but the opposite party No.2 has not adjusted the margin money . According to the complainant, he had repaid the entire loan amount alongwith interest but the opposite party No.2 refused to issue the no objection certificate to the complainant and demanded more amount .Conversely, the case of the opposite parties No.1 to 3 is that the complainant is a chronic defaulter and he had failed to repay the entire loan amount and, therefore ,he was served with notice of recovery. Further case of the opposite parties No.1 to 3 is that the Bank is charging interest upon the financed amount as per its norms in accordance with law and the process of proclamation for the auction of land is proper and in accordance with law and the amount has been calculated as per the norms. The complainant has failed to mention in the complaint as to what had happened to the auction proceedings of the mortgaged land initiated by the opposite parties No. 1 and 2 by issuing proclamation on 31-5-2006 for the auction of mortgaged land of the complainant. which according to the complainant was postponed to 15-7-2006.The complainant has made a prayer in the complaint that amount of Rs.50,000/- given by the opposite party No.4 be adjusted in the loan account of the complainant and the opposite party No.2 be directed to avail subsidy from the opposite party No.4. As per the reply filed by the opposite party No.4 it gave margin money of 10% to the extent of Rs.50,000/- .As per reply filed by the opposite parties No.1 to 3 the amount of Rs.50,000/- received from the opposite party No.4 has been duly reflected in the books of accounts. As per the statement of accounts filed by the opposite parties No.1 to 3 as Annexure A and B dated 9-12-2009 an amount of Rs.6,77,579/- was due from the complainant. However according to the complainant he has repaid the entire loan amount . But the complainant has failed to rebut the statement of accounts filed by the opposite party by leading satisfactory evidence on record .In our considered opinion , if the complainant is disputing the correctness of the calculations given by the opposite party in statement of accounts , then it was incumbent upon him to file his own statement of accounts prepared by some chartered accountant / expert. However no such statement of account has been placed on record by the complainant . In our opinion , at least the complainant should have placed on record original counter foils / deposit slips regarding the deposit of the various amounts by him from time to time with the opposite parties in order to prove that he had paid entire loan amount but no such original counter foils /deposit slips have been filed by the complainant on the basis of which it can be inferred that he





    had repaid the entire loan amount . He has only filed photostat copies of some of the deposit slips and pass book which are not admissible in evidence being the photocopies . In the absence of any satisfactory evidence on the part of the complainant with respect to the deposit of the entire loan amount , this Forum cannot come to the conclusion as to whether he had repaid the entire loan amount or not . Moreover these are the matters which can be decided only by competent court of civil jurisdiction by reconciling the accounts. The forum constituted under the Act is not a proper forum for reconciling the accounts and for deciding the amount due to any of the parties which is to be done only by competent court of civil jurisdiction .To take this view we are fortified by the order of Hon’ble Tamil Nadu State Consumer Disputes Redressal Commission , Madras in the case titled R. Sethuraman vs The Manager , Indian Overseas Bank and another III(1993)CPJ-1614 wherein it was held that the Forum constituted under the Consumer Protection Act is not the proper forum for taking accounts and deciding the amount due to any of the parties and which is to be done only by the regular Civil Court of competent jurisdiction.



    6. Similarly the Hon’ble National Consumer Disputes Redressal Commission in the case titled Bihar State









    Housing Board vs Chairman-cum-Managing Director and others I(1996)CPJ-228(NC) has held as under:-

    “…………………………………………………….

    …………………………………………………….

    The dispute in respect of the amount deposited can be settled only by reconciliation of accounts as well as by proof of such deposits by producing counter foils or deposit slips or other evidence. It will also be necessary to go into the Reserve Bank of India’s instructions from time to time laying down the rate of interest payable on such deposits or whether any Bank could deviate from the guidelines issued by the Reserve Bank of India. In our view, it is a fit case to leave the parties to their remedies by way of a civil suit or other remedies as the disputes relates to accounting between the parties.



    7 In an another case titled Vishal Roadways vs Economic Traders ( Gujarat ) Ltd ( 1998)NCJ( NC)-539 the Hon’ble National Consumer Disputes Redressal Commission had taken a similar view by holding that if the dispute between the parties relates to the settlement of the accounts and for balance due on the basis of the accounts , the same does not fall within the ambit of Section 2(1)( c) and (e) of the Act. The relevant extract of the aforesaid order is reproduced as under:-



    As observed by the District Forum, the relation between the complainant and the opponent was of a customer and businessman. In the dealings, the complainant had paid more than the required amount to the opposite party and the complainant was entitled to recover the said amount from them. The allegations made in the complaint did not spell out a case of hiring of services and suffering from deficiency. Rather it disclosed a case relating to the settlement of accounts and for the balance due on the basis of accounts. The complainant did not fall within the ambit of section 2(1)_(c) and (e) of the Consumer Protection Act,1986. Civil suit was the proper remedy to recover the amount paid in excess. The District Forum and the State Commission had no jurisdiction to entertain the complaint which was beyond the scope of Consumer Protection Act. We hold that the order of the District Forum as well as the State Commission suffer from legal infirmity and are unsustainable in law. In the result the revision petition is allowed, the orders passed by the State Commission and the District Forum are set aside resulting in dismissal of the complaint, However, we leave the parties to bear their own costs”





    8 In the present case also, as discussed earlier , the dispute between the parties relates to the settlement of the accounts and for balance due on the basis of the accounts which obviously do not fall within the ambit of section 2(1)( c) and (e) of the Act and the complaint under the Consumer Protection Act is not a proper remedy .The allegations made in the complaint do not spell out a case of hiring of service and suffering from deficiency .

    9. In view of what has been discussed hereinabove, the complaint fails and the same is hereby dismissed with no order as to costs. However, the complainant is at liberty to exhaust his remedy before the competent court of jurisdiction in accordance with law and the dismissal of the present complaint shall not in any way affect his right in any manner as we have not expressed any opinion on the merits of the case.

    10 Copy of this order be supplied to the parties free of cost as per Rules.

    11 File, after due completion be consigned to the Record Room.

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