IN THE CONSUMER DISPUTES REDRESSAL FORUM, ALAPPUZHA
Thursday the 28th day of November, 2019.
Filed on 17-03-2016
Present
- Sri.E.M. Muhammed Ibrahim,B.A,LLM (President)
- Smt. Sholy P.R, B.A.L,LLB (Member)
- Smt.C.K.Lekhamma, B.A, LLB (Member)
In
CC/No.84/2016
between
Complainant:- Opposite parties:-
1. Smt.Meenakshiyamma 1. Authorized officer/ Chief
W/o Vikraman Nair Manager (Rural) SBI, Regional
Manoj Mandiram Business Office, Beach Road,
Kodamthuruth Panchayath Alappuzha.
Kodamthuruth Village
Kuthiathodu P.O 2. The Branch Manager
Cherthala Taluk SBI, South Kuthiathodu Branch Kuthiathodu, Cherthala.
2. K.Radhakrishnan Nair (Adv.C Parameswaran)
S/o Krishnan Nair
Padinjarepoikayil, Thuravoor P.O
Thuravoor panchayath
Ward-4, Thuravoor Villege
Cherthala Taluk
3. The Proprietor
Gokulam Traders
K.Radhakrishnan Nair
S/o Krishnan Nair
Padinjarepoikayil, Thuravoor P.O
Thuravoor panchayath
Ward-4, Thuravoor Villege
Cherthala Taluk
(Adv.E.D.Zacharias)
O R D E R
SRI.E.M. MUHAMMED IBRAHIM (PRESIDENT-IN-CHARGE)
This case is based on a consumer complaint filed under section 12 of the Consumer Protection Act, 1986.
2. The averments in the complaint in short, are as follows:-
The second complainant is the proprietor of M/s Gokulam Traders and he has been conducting the supply of food items that he has been conducting the business for earning his lively hood as self-employment that he availed a loan from the second opposite party bank who sanctioned loan of Rs.5,00,000/-. The first complainant who is the mother-in-law of the second complainant stood as surety for the loan obtained after pledging the property with the bank. Due to the set back in the business the second complainant could not repay the loan instalments to the second opposite party bank hence the bank issued notice dated 19.12.2014 demanding the loan amount with interest and other charges. Subsequently the first opposite party has issued possession notice dated 29.12.2015 as per Rule 8(1) of securitization and reconstruction of financial assets and enforcement of security interest Act, in respect of the property belongs to the first complainant pledged in the bank. The first opposite party has also issued another notice dated 6/10/2015 intimating one Padmakumar (the authorized officer of the bank) that they intends to take all necessary steps for exercising rights under section 13(4) of SRFAESI Act. The opposite parties have been demanding Rs.3,89,199/- and accordingly the second complainant had remitted Rs.3,65,000/- on 16/12/2015 and Rs.24,000/- on 30.12.2015 (3,65,000 + 24,000= 3,89,000) But by neglecting the payments remitted by the second complainant, the opposite parties have published property possession notice as per rule 8(1) of SRFAESI Act in Malayala Manorama daily dated 04.01.2016 that too even after the closure of the loan amount. The opposite parties have published the possession notice with property details and name & addresses of the complainants in the Malayala Manorama daily having world-wide circulation. They published the notice with malafide object to defame the reputation of the complainants. In fact the opposite parties have no manner of right to publish such a notice in the daily. Several persons contacted the complainants after reading the notice in the daily and it caused mental agony and disgrace to the complainants. At the time of publishing the notice no such debt is there in existence. The acts of the opposite parties are perse illegal, ill motivated, biased and not in good faith.
3. The above loan account was transferred by the opposite parties as a non performing account in January 2015. The opposite parties have realized exorbitant interest from the complainant. About 1 lakh rupees was realised by the opposite parties towards interest. The agreed rate of interest was 8.5%. If the transaction was considered as non performing one, the opposite parties have no right to levy interest from January 2015. Therefore the opposite parties are entitled to get back the excess amount of Rs.1,00,000/- received by the opposite parties towards interest. Apart from this, the opposite parties have received Rs.20152 from the second complainant towards the cost of publication of notice in Malayala Manorama daily. In fact the opposite parties have no manner of right to grab such amount from the complainants. All the acts of the opposite parties have caused mental agony, frustration, inconvenience, difficulties, defamation etc. and therefore the complainant's are entitled to get compensation of Rs.2,00,000/-. The second complainant has directly demanded to get back the excess amount received towards interest by the opposite parties and also demanded to get back the amount received towards the cost of publication of notice in Malayala Manorama daily. In fact the opposite parties have no right to receive the amount but at the same time the second complainant have remitted the amount due to the threat of the opposite parties and its officials. The complaints have issued lawyer's notice to the opposite parties on 27-01-2016 and the opposite parties have issued reply setting forth untrue facts. There is grave dereliction of service on the part of the opposite parties. Hence the complaint.
4. The opposite parties resisted the complaint by filing a joint version raising the following contentions:-
The complaint is not maintainable either in law or on facts. The complaint is hit by Sec.34 &35 of the SARFAESI Act 2002 hence not maintainable. The complainants are not consumers of opposite parties. The second complainant has been conducting business in supply of food and its allied products. The alleged transaction is one for commercial purpose with the intention to main process and availed service of the opposite party bank for his commercial activity hence the complainants are not entitled to approach the Consumer Forum as they are not consumers as defined as Sec.2 (1) (d) of the Consumer Protection Act. There is no negligence or deficiency in service on the part of the opposite parties as alleged. The complainants have no cause of action against the opposite parties. The complainant by suppressing material facts filed the present complaint, that they have availed a loan of Rs.5,00,000/- from the 2nd opposite party bank. But committed default in repayment of the loan and thereby the loan account had been classified as a non performing asset. The opposite party had initiated action under the SARFAESI Act and notice under 13(2) of the SARFAESI Act was issued to the complainants on 19-12-2014 demanding them to liquidate the dues. The complainants have not complied with the demand and hence the opposite party have taken steps for taking possession of the secured assets. The entire amount due to the opposite party was paid by the complaint only on 04.03.2016. The action initiated by the Authorised Officer under the SARFAESI Act will be terminated only on payment of the entire amount due to the secured creditor bank. The payment effected by the defaulter complainants by way of instalments during the currency of the securitization Act will not fetter the right of the secured creditor to initiate action under the SARFAESI Act. Therefore the complainant is not entitled to assail the proceedings of the authorised officer culminating into the paper publication as contemplated under the Act. Hence there is no illegality or impropriety in effecting the paper publication and the allegations contrary to it as averred in the complaint are false untenable and unsustainable in law. The complainants have remitted the balance amount due to the 2nd opposite party after the paper publication and hence the publication of the notice as per the Rule 8(1) of SARFAESI Act is valid and is in order. There is no malafides in effecting the paper publication. The authorised officer under the SARFAESI Act is entitled in law to initiate action till the entire pai due to the bank is paid. The authorised officer has every right to publish the notice and the allegation contrary to it as averred in the complaint is false and hence denied. The allegation that several persons contacted the complaint after reading the notice in the daily and it caused mental agony and disgrace to the complainant etc. are false and hence denied. The allegation that at the time of publishing the notice no such debt is there in existence etc. is false and hence denied. The debt was alive at the time of publication of notice. The account was marked as non performing asset as per the directions of the Reserve Bank of India. 2nd opposite party recovered interest as per the existing rate only and no excess or exorbitant interest was charged. The allegations contrary to this is false and hence denied. The rate of interest is fixed by the Reserve Bank of India/ individual banks and the interest charged in the instant case is correct and valid. The non-performing asset account also attracts interest, charges etc. and the statement contrary to this by the complainants are baseless and hence denied. No excess amount was recovered from the complainant. As the debt due to the secured creditor remained unpaid the authorised officer has every right to proceed under the Act and accordingly the authorised officer has published the possession notice in News paper. The expense incurred in connection with such publication should be recovered from the complainant. The authorised officer has every right to proceed against the secured asset under the SARFAESI Act, which turned as the non-performing asset to recover the dues including interest, charges etc. The opposite parties have not caused any mental agony, frustration, inconvenience or defamation to the complainants and hence the complainants are not eligible for any compensation or refund of the cost of publication of notice in the daily. The averment that the opposite parties threatened the second complainant to remit the paper publication expense is baseless and untenable and hence denied. The opposite parties initiated action under SARFAESI Act in-order to recover the account turned Non Performing Asset and that there is no deficiency in service on the part of opposite parties as alleged. The opposite parties further pray to dismiss the complaint with costs.
5. In the light of the above pleadings the points that arise for consideration are:-
1. Whether the complainant is a consumer as defined under Sec.2(1)(d) of the Consumer Protection Act 1986?
2. Whether there is any deficiency in service or unfair trade practice on the part of the opposite party bank as alleged in the complaint?
3. Whether the opposite parties have realised excess interest to the tune of Rs.1,00,000/- as alleged?
4. Whether the complainant is entitled to get back Rs.20,152/- being the cost of publication of notice in Malayala Manorama daily with interest as claimed?
5. Whether the complainant is entitled to get compensation as claimed in the complaint?
6. Reliefs and costs.
6. Evidence on the side of the complaint consists of the oral evidence of PW1 and Ext.A1 to A3 documents. Evidence on the side of the opposite party consists of the oral evidence of RW1 and Ext.B1 series and B2 to B5 documents.
7. Though the case has been posted for filing argument note and hearing right from 26-10-2017 both sides have note advanced any arguments till 22-11-18 and on that day both parties filed notes of arguments. Though the case has been posted for advancing oral arguments, the learned counsel for the complainant has not turned up and argued on the merit of the case which is a statutory requirement. However on 06.09.2019 the learned counsel for the opposite parties appeared and argued on the merit of the case.
Point No.1
The specific case of the complainant in his complaint is that the 2nd complainant is the proprietor of M/s Gokulam Traders and he has been engaged in the supply of food items and he has availed loan of Rs.5,00,000/- from the 2nd opposite party bank for the purpose of the business. The further case of the complainant is that the 1st complainant is the mother in law of the 2nd complainant who is the surety for the loan availed from the first opposite party and she has also mortgaged the property with the bank. It is further alleged in the complaint that the 2nd complainant has been conducting the business for self employment for earning her lively hood. 2nd complainant has been examined as PW1 who has reiterated the averments in the complaint. Though the PW1 was cross examined by the learned counsel for the opposite party nothing material has been brought out to disbelieve the above version of the complainant in para 2 of the complaint as well as para 2 of the proof affidavit. It is stated that the 2nd complainant has been conducting the food supply business as a self employment for earning his lively hood. The above aspect is not seen challenged during cross examination of PW1 by the learned counsel for the opposite party. It is further to be pointed out that RW1 who is none other than the manager of SBI, Kuthiyathodu Branch (2nd O.P) would admit that and PW1 who is the proprietor of Gokulam Traders engaged in supplying food items as a self employment establishment. It is true that the proprietoryship run by the complainant for earning is lively hood is having labour registration and also deputed labours and annual turnover of the firm is between is 20-35 lacks and the firm is also paying income tax. Having labour registration or having a substantial turn over or income tax paying is not the criteria whether the business is a commercial one or not. What is to be considered is whether the 2nd complainant has been conducting the business as self employment in the business or not the pleadings and evidence entered by PW1 and the admission of DW1 pointed out above unerringly points towards the fact that the 2nd complainant is engaged in self employment business to earn his lively hood and not as a commercial purpose as contented by the opposite party. In the light of the pleadings and evidence we find no merit in the contention of the opposite parties that the 2nd complainant is not a consumer as defined under the Consumer Protection Act. In view of the explanation attached to the definition of consumer under Sec.2 (1) (d) it is crystal clear that even if the complainant has been doing any business the said business would not come under the commercial purpose as it is exclusively for the purpose of earning the lively hood by way of self employment. In view of the reasons stated above we hold that the 2nd complainant is a consumer coming under the definition of 2 (d) of the Consumer Protection Act. The point answered accordingly.
Point No.2
It is an admitted fact that the 2nd complainant has availed a loan of Rs.5,00,000/- from the 2nd opposite party bank and complainant's have committed defaults in repayment of the loan and therefore the loan account has been classified as non-performing account. It is also an undisputed fact that the 2nd opposite party bank has issued notice demanding to clear of the dues as early on 19/12/2014 and after waiting about one and odd year the bank has initiated proceedings under the SARFAESI Act and issued notice on 16.10.2015 under Sec.13(2) of the said Act the complainants demanding to clear of the dues by paying Rs.3,89,199/- which is the balance due as on that date along with future interest and costs. Accordingly the 2nd complainant remitted Rs.3,65,000/- on 16.12.2015 and also paid Rs.24,000 on 31-12-2015 and thereby they paid Rs.3,89,000/- But according to the complainants by neglecting the above payments already remitted by the complainant towards the dues the opposite parties issued and published notice under Sec.13 (4) of the SARFAESI Act in Malayala Manorama daily dated 04-01-2016 along with property details, name and address of the complainant. According to the complainant the opposite parties have published notice in the daily with malafied intention to tarnish the repulation of the 2nd complainant and they have no right to publish a notice in a daily newspaper after remitting the dues. However according to the complainants by knowing the facts of they are defaulters, several persons contacted them which caused mental agony and disgrace to 2nd complainant. According to the complainant at the time of publishing the notice no such debt was in existence.
The opposite parties resisted the above allegations with tooth and nail. According to the opposite parties the complainants have defaulted the payment of loan amount due and in spite of getting notice under Sec.13 (2) of the SARFAESI Act. Even after getting the said notice the complainants had not paid the amount due to the opposite bank. Hence the opposite parties taken steps for taking possession of the secured assets which is in accordance with law and also in terms of the agreement and SARFAESI Act. It is further contented that the action once taken against the defaulter by the authorized officer under the SARFAESI Act will be terminated only when the entire amount due to the secured credited bank is paid. Admittedly the notice under Sec.13 (2) of the SARFAESI Act was issued to the complainants demanding them to liquidate the dues as on 16.10.2015 with future interest and charges till the date of payment. But the complainants have not complied with the directions in the notice for about one and odd year. Admittedly the 2nd complainant remitted Rs.3,65,000/- only after about one year of getting notice under Sec.13(2) of the SARFAESI Act and subsequently on 30/12/2015 Rs.24,000/- was again paid. It is clear from the available materials even after one year they complaints have not paid the entire amount as demanded under 13 (2) notice. It is worthwhile to quote the admission of PW1 during cross examination regarding the aspect … Notice  AS¨pXoÀ¡p¶Xnte¡p ]dªncn¡p¶ Imemh[n t\m«okv ssI¸änb XobXn apX 60 Znhk¯n\pÅnemWv. ssI¸änb date F¶mWv (Q) HmÀ¡p¶nà (A) Notice ssI¸änb XobXn apX 60 Znhk¯n\pÅn Sn t\m«okn {]Xn]m[n¡p¶ kwJybpw ]enibpw HSp¡ntbm 3,65,000/-þ cq] AS¨p _m¡n XpI Hcmgv¨bv¡pÅn AS¨psImÅmsa¶v amt\PcpsS ASp¯p\n¶pw sanction \pw taSn¨p...... _m¡n XpI F{Xbmbncp¶p. 31,000,/þ F¶mWv HmÀ½. AS¨ tUäv IrXyambn HmÀ¡p¶nÃ. January 10 \pÅn AS¨v document XncnsI hm§n. The above admission of PW1 would clearly indicate that the entire amount due to the secured creditor was paid after publishing notice in the Malayala Manorama daily dated 04.01.2016. It is clear from the available materials that paper publication was effected on 4/1/2016 on which date the amount demanded in 13(2) notice was not fully paid according the 2nd opposite party bank the complainants have cleared the entire dues only on 04/03/2016 which is disputed by the complainants. However there is nothing on record to indicate that the opposite party bank has waived the remaining balance by receiving Rs.3,89,000/- and closed the loan account so as to withdraw the Securitisation proceedings initiated by the authorised officer. The complainants have also not seen made any attempt to intimate the authorised officer who has initiated proceedings under the SARFAESI Act stating that they have paid the entire amount due under the notice its interest and charges and praying to stop the proceedings under the said Act. In the circumstances the authorized officer under the SARFAESI Act is entitled under Sub sec.2 to 4 of Sec.13 of the Act to continue the proceedings till the last pai due to the secured creditor is fully paid. Therefore the act of issuing notice and making paper publication etc. by the authorized officer even after the payment of substantial amount by the complainant cannot be blamed nor any deficiency in service or unfair trade practice on the part of the opposite party bank in doing so can be inferred. The point answered accordingly.
Point No.3 to 5
For avoiding repetition of discussion of materials these 3 points are considered together. According to the complainants the opposite parties had realised an excess amount Rs.1,00,000/- and the complainants are entitled get back the said amount. However the opposite party has denied the same but the complainant have not proved that the bank has realised any such excess amount than the amount authorised under the agreement and SARFAESI Act and also under the guidelines of the RBI. The other allegations in the complaint is that the 1st opposite party has recovered heavy interest and other charges. It is clear from the available materials that the account of the complainant was converted as non-performing asset as per the direction of the RBI and non-performing asset also accrue interest, charges etc. It is also clear from the available materials that the 2nd opposite party recovered interest as per the existing rate fixed by RBI and no excess or exorbitant interest has been charged from the complainants. According to the learned counsel for the opposite parties as the debt to the secured credited bank or any portion of the same remained unpaid the authorized officer under the SARFAESI Act is expected to publish statutory notice in any newspaper including Malayala Manorama and the opposite party bank is entitled to realise the expenses incurred in that behalf also. If the authorised officer or the O.P. Bank has started proceedings under the Securitisation Act duly authorised by law and as agreed in the loan agreement the O.Ps cannot be blamed even if any mental agony, frustration or inconvenience or disgrace is caused to the defaulter and the same cannot be mitigated by paying any compensation nor entitled to get refund of the charges incurred on account of publication statutory notice. In the circumstances the complainant is not entitled to get any of the claims sought for in the complaint especially when the complainants have filed to establish that any excess amount has been received from the complainants
Yet another allegation of the complainant is that the opposite parties has threatened the second complainant for non-payment of expenses for publication of notice in the news paper. But there is no reliable and convincing evidence to prove that aspect except the interest testimony of PW1. On perusal of the entire pleadings and evidence it is clear that the cause of action for the complainant is the dispute based on the action initiated by the opposite party bank under the SARFAESI Act. But the said act is a complete code by itself wherein remedies are also provided. By virtue of Sec.34 of the said Act there is a bar in entertaining a complaint by any civil count or other authority. As per Sec.35 of the said Act the provisions of SARFAESI Act will over ride all other laws. Hence there is total Bar in entertaining the complaint. It is further to be pointed out that execution discharge satisfaction based on the action under the SARFAESI Act is a matter within the relem of that Act itself. Hence the action of the bank in taking possession of the secured property publishing notice and effecting paper publication realising charges for the same etc. under the Securitization Act cannot be called in question before the Consumer Protection Act by virtue of Sec.34 and Sec.35 of the said act as argued on behalf of the O.Ps.
The further allegation of the complainants is that at the time of publishing notice the amount due after deducting the amount realized from the complainant to the O.P. bank is not as mentioned in the notice and the bank is not entitle to get the amount stated in the notice published. It is true that RW1, the manager of the 2ndO.P. Branch has admitted the same. It is clear from the oral evidence of RW1 that the opposite parties have issued possession notice on 29-12-2015 and notice under Sec.13 (2) issued on 06.10.2015 by claiming Rs.3,89,199/- but after 2 months of issuing notice that is on 06.12.2015. The 2nd complainant has paid Rs.3,65,000/- and on 30.12.2015, they paid Rs.24,000/- also. It is also brought out in evidence through RW1 that on 4.01.2016 paper publication was effected by claiming the entire amount. Hence according to the complainant the publication of notice in the news paper claiming the entire dues which was already paid is illegal and with malafide intention to tarmish the image of the complainants. According to the PW1 if the entire amount stated under the statutory notice is not paid the secured creditor is entitled to proceed against the secured assets under the securitisation Act. Even according to the complainants the entire amount stated in the notice has not been paid and the last instalment of Rs.24,000/- has been paid just 5 days before effecting paper publication. RW1 has also admitted that effect. Even according to PW1 he had cleared the entire debt on 10/1/2016 which is after publishing notice in the Malayala Manorama daily. In order to publish a notice in a leading newspaper like Malayala Manorama the matter to be published has to be prepared well in advance and to be transmitted along with require fee to the publishing agency. There is little chance of communicating the part payments by way of instalments effected 4 or 5 days prior to the publication and also to state the remaining amount due and also to direct the authorised officer to recall the paper publication especially when the entire amount is not cleared. In the circumstances even if substantial portion of the debt was paid the same may not reflect in paper publication as the authorised officer is not entitled to recall further proceedings until and unless the entire claim raised under the notice issued under Securitisation Act it is interest and other charges is fully paid. As the entire amount due to the secured creditor was not cleared the proceedings under the Securitisation Act continued and hence one can't infor any deficiency in service or any unfair trade practice or malafides on the part of the opposite party bank.
On evaluating the entire materials available on record we come to the conclusion that the complaint is not maintainable either in law or on facts, as the complainants was a cronic defaulters as on the date of starting proceedings under the SARFAESI Act. Admittedly an amount of Rs.31,000/- was due as on the date of effecting paper publication. Hence the O.P bank has not exceed in their right stipulated under Sec.13 (2) to 4 of the above Act and also the direction of the RBI in this regard. We find no merit in the complaint and the same is only to be dismissed. Points answered accordingly.
In the result the complaint stands dismissed.
No costs.
Dictated to the Confidential Assistant, transcribed by her corrected by me and pronounced in open Forum on this the 28th day of November, 2019.
Sd/-Sri.E.M. Muhammed Ibrahim (President) :
Sd/-Smt. Sholy P.R (Member) :
Sd/-Smt.C.K.Lekhamma (Member) :
Appendix:-
Evidence of the complainant:-
PW1 - Radhakrishnan Nair (Witness)
Ext.A1 - True copy of lawyer’s notice
Ext.A2 - Copy of reply notice
Ext.A3 - Notice published in Malayala Manorama daily
Evidence of the opposite parties:-
RW1 - Babu Raj K.R (Witness)
Ext.B1Series - Letter from SBI, Regional business office, beach road,
Alappuzha dtd 06/10/2015 and other 4 pages.
Ext.B2 - Trading, profit & loss account for the year ended 31st March
2010
Ext.B3 - Trading, profit & loss account for the year ended 31st March
2011
Ext.B4 - Trading, profit & loss account for the year ended 31st March
2012
Ext.B5 - Projected, Trading, Profit & loss account for the year ended
31st March 2013
// True Copy //
To
Complainant/Oppo. party/S.F.
By Order
Senior Superintendent
Typed by:- Sa/-
Compared by:-
