ORDER

BY SRI.H.R.SRINIVAS, PRESIDENT.

1.     This is the Complaint filed by the Complainants under Section 35 of Consumer Protection Act 2019, against the Opposite Parties (herein referred in short as OPs) alleging the deficiency in service in not returning the original documents deposited with OPs towards mortgaging the property by deposit of title deeds in respect of the loan obtained by the borrower as a surety and for refund of Rs.30,00,000/- along with interest at 18% per annum and future interest, penal interest as compensation for deficiency in service by OP and for loss  and damages for causing hardship, misery, torture anxiety by OPs and for other reliefs as the Commission deems fit.

2.     The brief facts of the complaint are that; the complainants stood as guarantor to one Shankar Reddy who was running a business by name Eshwar Plastic at Jalahalli for the loan obtained by him to the extent of Rs.30 lakhs on 24.08.2013 and executed the guarantee agreement on 21.09.2013.  All the complainants executed a registered mortgage deed in respect of their property bearing No.5A, Old No.5, PID No.2-140-5A situated at 4^th A Cross, Bahubali Nagar, Jalahalli Branch.  They also registered the property under a mortgage deed in favour of OP on 10.10.2011. The said Eshwar Plastics owned by Shankar Reddy who borrowed the amount became defaulter and OPs filed recovery suit in OA No.2122/2014 for recovery of Rs.83,70,049/- before the Debt Recovery Tribunal.  In the said OA, OP had claimed a sum of Rs.31,61,718/- from the complainants as the balance towards the loan obtained by Shankar Reddy. Complainants are not at all liable and responsible for three other loans obtained by the said Shankar Reddy.  OPs also sought to recover the loan under SARFAESI Act for Rs.80,38.683/- in respect of the all the loans contracted by Shankar Reddy. Even the property of the complainant was taken possession under the order in Crl. Misc. Petition on 13.05.2019 in respect of all the four loans whereas complainants are the guarantors for the loan of Rs.30,00,000/- borrowed by the said Shankar Reddy.

3.     Possession taken by the OPs is by misrepresenting the facts before the magistrate courts.  OP also lodged complaint against these complainants under Section 406, 420, 403 and 423 IPC for wrongful possession of the machineries in respect of the said four loans.  After obtaining possession under Section 14 of the SARFAESI Act, OPs also filed CAVEAT Petitions before the City Civil Court, High Court and DRT courts.  Complainants approached OP and briefed them and made known to them that they are only the guarantor for the loan obtained to the extent of Rs.30 lakhs and not the other loans.  ON 25.05.2019 legal notice was also issued to OPs to give details of the liabilities of their complainants and inspite of it OPs did not provide the details sought.  It is also informed by them that they have paid the loan amount for which they stood as guarantor and possession taken by OP of the mortgage property is illegal and urged OPs to pay damage of Rs.25,00,000/- and also for return of the documents deposited with OPs.

4.     They filed Special Application No.302/2019 before the DRT which directed the OPs to collect the loan amount in respect of only one loan with update interest and upon such payment of the said amount by the complainants, OPs to redeliver the possession of the property and also the documents.  The same was brought to the notice of OPs.  The bank issued a statement to pay a sum of Rs.23,71,999/- towards the clearing of the loan for which they had to borrow Rs.24,3,726/ from SVT Realty Developers and to pay the same to the OPs as per the order passed by the DRT.  Afterwards, OP redelivered the possession of the property on 21.09.2019 but did not handover the NOC certificate and original title deeds, stating that complainants are still due the amounts towards the other three loans. Complainants filed application on 11.09.2019 seeking direction from the Hon’ble Court for issuance NOC and the original title deeds in respect of the mortgage properties for which OPs filed the objection regarding release of the title deeds claiming that the complainants are due the other three loan accounts. 

5.     Upon hearing the matter, OP bank filed a memo discharging the complainants in the matter. In view of the memo filed by the bank, complainants were discharged and the complaints were dismissed and OPs were to return the original documents or title deeds. Immediately the complainant requested the bank to handover the original documents as also NOC as ordered by DRT.  Inspite of it, original title deeds have not been returned and handed over back.  Till today, the documents are with OPs and NOC not issued which has caused mental agony, financial loss and mental trauma to the complainants. Hence they had to issue a legal notice to OPs and also they are not able to clear the Rs.20,00,000/- borrowed by them in order to clear the loan amount. Hence they demanded return of Rs.30,00,000/- as damages by OPs and prayed the forum to allow the complaint.

6.     Upon the service of notice, OPs-1 to 4 appeared before the commission and filed written version contending that complainants are not consumers as defined under Section 2(7) of the Consumer Protection Act. They are only guarantors cum mortgage for the money borrowed by the borrower. No services have been given to them and no services have been sought for by the complainants by paying the requisite charges.  Complainants have not at all made out any unfair trade practice, negligence or fraud against them in order to maintain this complaint. Further when the matter has been decided by the Debt Recovery Tribunal non-compliance of the order cannot be ordered by the consumer commission. They have to approach the DRT for grant of any relief. This complaint is manifestly frivolous and filed by suppressing the materials facts and without truth. There is no cause of action for the complaint to be filed.  Since the complainants are not consumers, the complaint is to be dismissed. 

7.     It is further contended that once Shankar Reddy proprietor of Eshwar Plastics obtained 4 loans from it and in respect of  the said loans, the complainants executed registered memorandum of deposit of title deeds and mortgaged the property for a sum of Rs.52,00,000/- obtained as loans under the 4 loan accounts. The original borrower along with the surety /guarantor has to repay the amount. The original borrower failed and neglected to regularize the loan by paying the installments. Hence they invoked the provisions of SARFAESI Act against the borrower and guarantor and obtained possession of the property under the orders of the legal authorities. The same was questioned in SA No.302 /2019. 

8.     The liability of the borrower in the application bearing No.133709041000086 was only Rs.30,00,000/- for which the complainant stood as guarantors.  The matter OA No.2122/2014 is still pending before the DRT.  Upon the order passed by the DRT the possession of the secured property was redelivered to the complainants. Unless the order is clear by the DRT to release the documents, they are not in a possession to hand over the documents deposited by the complainants.  The grievance stated by the complainants before this commission has no nexus with the term of deficiency of service and unfair trade practice. By denying all the allegations made in the complaint, prayed the commission to dismiss the complaint.

9.     In order to prove the case, complainants has filed their affidavit evidence and produced documents. Arguments Heard. The following points arise for our consideration:-

1) Whether the complainants are consumer as defined under the Consumer Protection Act 2019?

2) Whether the complainants are entitled to any of the reliefs prayed for in the complaint?

10.   Our answers to the above points are:-

POINT NO.1:            IN THE NEGATIVE

POINT NO.2:            Do not arise for our consideration

                                For the following.

REASONS

11.   POINT No.1:-

Perused the complaint, version, affidavit evidence and the documents produced by respective parties.  It is not in dispute that one Shankar Reddy running the business of Eshwar Plastics borrowed the loans from OPs and the complainants by mortgaging the property mentioned above by depositing of the title deeds of the said property and by registering the mortgage deeds became the guarantors for the said loan. It is not in dispute that series of litigations have taken place between the partis which is evident from the documents produced.  It is also not in dispute that the DRT has ordered to redeliver the possession of the property which OP had taken under the orders of the court by invoking the provisions of SARFAESI Act.

12.   We have perused the said order, wherein there is no specific directions from DRT to return the documents so deposited in order to create the mortgage. It is also the specific case of the OP that unless there is a specific order for return of the documents deposited, they are not in a position to return the documents unless and until the remaining debts are cleared. It is the specific contention of OPs that the complainants are not customers of the bank and they are all not consumers.  Section 2(7) of the Consumer Protection Act 2019 and 1986 envisages and defines as to who is a consumer:-

(7) "consumer" means any person who—

(i) buys any goods for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any user of such goods other than the person who buys such goods for consideration paid or promised or partly paid or partly promised, or under any system of deferred payment, when such use is made with the approval of such person, but does not include a person who obtains such goods for resale or for any commercial purpose; or

(ii) hires or avails of any service for a consideration which has been paid or promised or partly paid and partly promised, or under any system of deferred payment and includes any beneficiary of such service other than the person who hires or avails of the services for consideration paid or promised, or partly paid and partly promised, or under any system of deferred payment, when such services are availed of with the approval of the first mentioned person, but does not include a person who avails of such service for any commercial purpose.

13.   As specifically averred by the complainants themselves, they are not the borrowers and whereas they are only the guarantors who have secured the loan borrowed by one Shankar Reddy. When such being the case, there is no relationship of service provider on behalf of OPs and consumer on behalf of the complainants. The only remedy available to the complainants are to approach the DRT for an order directing the OPs to return the original documents which they had deposited at the time when Shankar Reddy borrowed the money. Since the matter is pending before the DRT, according to OP the complainants can very well get an order in the said litigation. Hence we hold that the complainant are not consumer and C.P. Act is not applicable to the complainants and hence we answer the above point in the negative and in the result complainants are not entitle for any of the reliefs claimed. Hence the complaint is liable to be dismissed and we answer POINT NO.1 IN THE NEGATIVE. In view of the above reasons consider the other points and discussing the evidence in that respect would be a futile exercise and hence we are of the opinion that the same do not survive for our consideration.

14.   Knowing fully well that repossession has been ordered by the DRT upon the application filed by the complainants they could have very well sought the direction from DRT itself to the OPs to deliver the documents also in view of clearing the debt for which complainants stood as guarantors. Inspite of it, complainants have filed this complaint knowing fully well that they are not the consumers and OPs are not the service providers and that there is no relationship between them as consumers and service providers which is just an attempt to harass the OPs. Hence we are of the view and since the OPs were made to defend the complaint they had to engage the services of their advocate and defended the case by paying him, his legal fee besides have to incur expenses in attending the hearing before this Commission. Hence we are of the opinion that if a sum of Rs.25,000/- is ordered to be paid by the complainants to OPs to meet the above expenses would be just, proper and reasonable. Hence we pass the following;

ORDER

1. Complaint is hereby dismissed with cost. Complainants to pay a sum of Rs.25,000/- to OPs towards litigation and other expenses within 30 days from the date of receipt of this order.
2. Send a copy of this order to both parties free of cost.

Note:You are hereby directed to take back the extra copies of the Complaints/version, documents and records filed by you within one month from the date of receipt of this order failing which the same will be weeded out/destroyed.

(Dictated to the Stenographer over the computer, typed by him, corrected and then pronounced by us in the Open Forum on this 06^TH DAY OF AUGUST 2022)

MEMBER                 MEMBER                PRESIDENT

ANNEXURES

1. Witness examined on behalf of the Complainant/s by way of affidavit:

Copies of Documents produced on behalf of Complainant/s:

Ex P1: Copies of the sanctioned letter dt:21.09.2013, guarantee agreement dt:21.09.2013 and registered mortgage deed dt:10.10.2011

Ex P2: Copy of the Recovery Petition in OS No.2122/2014 filed before DRT Court.

Ex P3: Copy of the demand notice dt:03.07.2014, Possession notice dt: 15.09.2014, paper publication of possession notice section 14 petition and order passed by the Magistrate court and seizure notice dt:04.05.2019.

Ex P4: Copy of the police complaint dt:09.08.2014.

Ex P5: Copy of the Caveat Petition filed before High Court, DRT Court and City Civil Court at Bangalore.

Ex P6: Copy of the letter dt: 21.05.2019, legal notice dt:25.05.2019,Postal receipt and acknowledgement.

Ex P7: Copy of the SA No.302/2019, statement of objection by the bank, Wrtten arguments and final order dt:17.07.2019.

Ex P8: Copy of the letter dt:22.07.2019 loan statement, letter dt.04.09.2019 and DD dated 16.09.2019.

Ex P9: Copy of the IA in OA no.2122/2014, objection to IA, order dt:03.02.2021 and letter dt: 16.02.2021.

Ex P10. Copy of the legal notice dt:16.03.2021 issued by Ramegowda to the banks.

Ex P11: Copy of the postal receipts dt:17.03.2021 and acknowledgement

Ex P12: Copy of the letter dt:17.06.2021 issued by OP bank of the complainant.

2. Witness examined on behalf of the Opposite party/s by way of affidavit:

RW-1: - Nil-

Copies of Documents produced on behalf of Opposite Party/s

Ex R1: -nil-

MEMBER                 MEMBER                PRESIDENT

RAK*