State Consumer Disputes Redressal Commission

West Bengal

BHABANI BHAVAN (GROUND FLOOR)

31, BELVEDERE ROAD, ALIPORE

KOLKATA – 700 027


S.C. CASE NO-FA/08/54





DATE OF FILING : 13.02.2008 DATE OF FINAL ORDER:7.04.09



APPELLANTS/COMPLAINANTS :

1. The Chief Manager

State Bank of India Barrackpore Branch,

PO- Barrackpore, Dist- North 24 Parganas.



2. The Chairman,

State Bank of India,

State Bank Bhavan,

Madami Cama Road,

Back Bay Reclamation, Mumbai- 400021.





RESPONDENTS/O.P.S : :



1. Sri Satadal Das

S/o Sri Nitya Ranjan Das of

390/1, Mannapara, Monirampore,

PO-Barrackpore, Dist – North 24 Parganas.



2. Sri Nitya Ranjan Das ,

S/o Late Debendra Nath Das, of

390/1, Mannapara, Monirampore,

PO- Barrackpore, Dist- North 24 Parganas.





BEFORE : HONBLE JUSTICE :

MEMBER : Shri. A.K. Ray.

MEMBER : Shri. P.K. Chattopadhyay.



FOR THE PETITIONER / APPELLANT : Shri Gobinda Chandra Bandhyapadhyay ( Advocat)

FOR THE RESPONDENT / O.P.S. : Shri S.K. Das, Shri S. Mondal ( Advocates)








Shri A.K. Ray., Member,





The Dist Forum North 24 Parganas in its order dated 14.1.08 in case no 135 of 2005 allowed the complaint on contest against the OPs. OP No –2 was directed to release the National Savings Certificate of Rs. 50,000/- or equivalent value on maturity + interest @ 12 % p.a from the date of maturity of the said NSC to the date of release. The OPs were further directed to release the cash certificate of Rs. 75,000/- to the Complainant along with interest as admissible on such deposit from the date of accrual to the date of release of the cash certificate. The OPs were further directed to return the title deed of the dwelling house in the name of the Complainant’s mother unconditionally if the same was still lying in their custody. The OPs were also to refund to the Complainant a sum of Rs. 22,699.17 being the balance in his loan account as on 6.1.05 along with a sum of Rs. 20,000/- as compensation and cost of Rs. 2,000/-.



Being aggrieved by this order the Appellants have preferred the instant appeal. The case of the Complainant/ Respondent no 1 is that he took a loan from Appellant no 1 to purchase a new Chassis of LPT 1613/42 for self employment and body of the Truck was built complying with all the formalities of Appellant no 1. Father of the Complainant ( Respondent no 2) was the guarantor against the said loan and the title deed of the dwelling house in the name of Complainant’s mother was deposited with Appellant no-1 as equitable mortgage against security of the loan amount . The loan amount was Rs. 4,90,000/- which was sanctioned for purchase of the vehicle. The loan was to be paid within a period of 60 months with monthly instalments of Rs. 8,170/-starting from 3 months after the date of disbursement. Interest to be accrued was to be paid monthly in addition to above installments. There were other terms and conditions also. The Truck bearing no WB23-8524 was purchased in the month of July, 1999 against the loan of Rs. 4,90,000/-. The Complainant invested a sum of Rs. 1,69,000/- as margin money.



Since the purchase of the vehicle the Complainant/Respondent no-1 regularly paid monthly instalments to Appellant no-1 up to 17.01.02 as the Truck was in service. The said Truck was found missing from 31.01.02 and as a result no further installments could be paid by the Respondent / Complainant as the vehicle was not being used . All the steps to trace out the said missing vehicle proved futile. A claim of Rs. 6,50,000/- was lodged with the insurance. On the date of missing of the truck of sum of Rs. 3,71,000/- was outstanding as per statement of Appellant no 1/ OP No 2. The Complainant / Respondent claimed to have paid Rs. 2,73,000/- till 17.01.02. The Insurance Company ( New India Assurance Company) issued a cheque of Rs. 4,50,000/- in favour of Appellant no 1 on 28.12.04 as full and final settlement of the claim of the Complainant in respect of the missing Truck. The Complainant paid installments amounting to Rs. 2,73,000/- and the Insurance Company paid Rs. 4,50,000/- to the Bank and therefore a total amount of Rs. 7,23,000/- against the sanctioned loan amount of Rs. 4,90,000/-was paid to Appellant no 1/OP-2. Thus the Respondent No 1 had paid the entire amount and no further claim was due. The Bank however, by a letter dated 17.3.05 demanded Rs. 99,590/- as outstanding by way of notional interest. According to the Complainant the said claim of notional interest was baseless and illegal. After receipt of the letter dated 17.03.05 the Complainant made several representations before the Appellant –1 bank , but in vain. By another letter dated 11.05.05 Appellant no 1 Bank claimed Rs. 97,800/- in place of Rs. 99,590/- and intimated that the bank had adjusted the said amount from NSC and TDR of Rs. 1,02,353/- along with the title deed. The aforesaid documents lying in the custody of the Bank were not to be adjusted against the claimed amount of Rs. 97,800/- . The NSC and the term deposit had already been matured . Bank was also requested by OP No 3 ( father) by a letter dated 25.05.05 to release the aforesaid securities including the title deed. The said letter was not paid any heed by the Bank . An Advocate’s letter was also sent by the Complainant for release of the certificate and the deed, but the bank did not take any steps. Hence, the complaint before the Forum below seeking certain relief’s. The Complainant also filed an affidavit in support of his complaint supported by various documents.



Appellant No –1 contested the case by filing W.V denying all the allegations of the Complainant. They however, admitted receipt of Rs. 4,50,000/- from the Insurance Company which was credited in the account of the Complainant in terms of the agreement sanctioning in the loan. The Complainant was to pay the entire outstanding dues including interest till realization. Notional interest was rightly claimed by the Bank. The Bank adjusted the matured amount of NSC of Rs. 97,800/- against the dues of notional interest and requested the Complainant to take back the cash certificate and the title deed. But they took no action. OP/ Appellant No 1 also submitted account of their claim which stood at Rs. 1,03,933.87/- and they claimed to have waived a sum of Rs. 6,133.87/- to adjust the outstanding dues against the matured value of NSC. There was therefore no ill intention on the part of the OP/ Appellant –1.



In their brief of written argument the Appellant no –1 further stated that the Respondent had paid his monthly installments amounting to Rs. 2,73,000/- up to 17.01.02. Since 31.01.02, the subject Truck was found missing and no further payment of installments was made thereafter by the Respondent. The Appellant bank claimed from the Respondent Rs. 9,23,439.81/- ( 4,90,000/- + interest from 12.05.99 to 30.6.03 @ 14 % i.e Rs. 3,32,050/- and further interest from 01.07.03 to 31.3.05 = Rs. 101389.81/-) The Forum, the Appellant submitted, failed to take into account the notional interest which the bank was empowered to charge from the Respondent –borrower as per IRAC policy. When the loan becomes NPA ( None performing Assets) , the accrual interest is not shown in the statement of account: the interest is to be calculated manually and kept in a separate account called protest bill account and at the time of liquidation of the loan the interest is added to the principal amount due . In the instant case the loan was not liquidated completely, so as per banking norms the Appellant bank could retain the title deed and other documents under its custody. The Appellant further submitted that it appropriated the proceeds of Rs. 97,800/- on account of encashment of NSC, waiving an amount of Rs. 6,133.87/- towards notional interest.

In his brief of written argument the Respondent stated inter alia that he, Satadal Das , Respondent no 1 was the Complainant and his father Nitya Ranjan Das was the proforma OP No 3 in the consumer case. He has not yet filed any execution case before the Forum below as the bank has come up in appeal. The OP bank charged and demanded from the Complainant a heavy amount as notional interest on the outstanding dues. As per Oxford Dictionary “Notional” means speculative, not based on experiment or demonstration , existing in thought and imaginary, so the Complainant should not be charged with any amount as notional interest . The Forum below rightly rejected the said demand of the OP. The Appellant’s story of not showing such interest in the bank’s statement and keeping the same in a shadow account as per guidelines of Reserve Bank of India was disputed and denied. The Appellant bank failed to produce any rule , regulation or circular of the RBI either to the Forum below or before this Commission. No documentary proof was also submitted in the case by the Bank. So, the Ld. Forum should not be blamed for its adverse finding against the bank.



Admittedly, the Complainant paid installments to the OP Bank till 17.1.02 and the amount of Rs. 2,73,000/- was paid. The Bank also received Rs. 4,50,000/- from the Complainant’s Insurance Company against the sanctioned loan of Rs. 4,90,000/-.It could not be understood as to why the Appellant bank did not adjust and close the loan account of the Complainant in December ,2004 and instead of doing so why the account was kept open and dragged till May, 2005. The Bank did not explain their stand in this respect. According to the Complainant this act and conduct of the bank was unjust and unfair. It was also deficiency in service on their part. An order passed by two members of a Forum without the juncture of the president is lawful and valid (Volume-iii (1996) CPJ 12 SC in Gulzarilal Agarwal vs Account Officer)



The Forum below in its impugned judgement observed interalia that the OP in terms of instruction of the higher authorities appropriated the matured value of Rs. 97,800/- of NSC against their claim of Rs. 99,590/- being the outstanding dues and notional interest. On 06.01.05 after crediting the amount of Rs. 4,50,000/-received from the Insurance Company, the Complainant had a balance of Rs. 22,699.17 in his own account . But the OP Bank curiously without closing the loan account and refunding the sum of Rs. 22,699.17/- to the Complainant or even without communicating the Complainant the status of his account on date carried on with the account till 09.03.05 without any reasonable ground, to show that the OP had outstanding dues of Rs. 2544.06/-. Thus the assessment on outstanding dues on the part of OP No 2 bank ( Appellant –1) as on 09.03.05 was without any reasonable ground and hence, that was not accepted by the Forum below. The Forum further observed that the actual amount due to the credit of the Complainant on the date of credit of the Insurance amount i.e 6.1.05 should be Rs. 22,699.97 and on that date there has no outstanding dues against the Complainant. The OP Bank claimed a sum of Rs. 99590/- as Notional Interest @ 14 % p.a from 1.7.03 to 17.2.05. The word Notional means hypothetical or imaginary. There was no reflection in the bank’s statement on 22.09.05 about the notional interest as claimed by the OP bank in its written version dated 5.10.05 . It proved that the claim of the OP bank was imaginary, hypothetical and was not actual as per the bank statement. Relationship between the bank and its customer is based on mutual trust and transactions by the bank are supposed to be a reflection of the above trust . Hence, the notional interest of Rs. 99,590/- as claimed by the OP bank was not calculated on reasonable grounds and therefor the same was rejected by the Forum. In the circumstances stated above the Forum felt that there was distinct deficiency of service on the part of the OP in claiming wrongly calculated outstanding as well as a notional interest without any reasonable basis. The complaint therefore succeeded on contest against OPs .



We have heard the parties to this case at length and have perused the order in question of the Forum below along with other written submissions of the parties to this case. In the light of what has been stated above in the foregoing paras there is hardly any opportunities for us to interfere with the impugned order of the Forum below. The appeal therefore fails to succeed .



It is accordingly ordered that the appeal be dismissed on contest without cost. The impugned order of the Forum below be affirmed as it suffers from no infirmity or irregularity. The order of the Forum below shall be complied with by the Appellant Bank within 45 days from the date of communication of this order failing which interest @ 10 % shall accrue on the decretal amount.







Member Member