DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, PALAKKAD
Dated this the 7th day of August, 2024
Present : Sri. Vinay Menon V., President
: Smt. Vidya A., Member
: Sri. Krishnankutty N.K., Member Date of Filing: 26/07/2022
CC/133/2022
Suresh Babu K.,
S/o. Kochunarayana Menon,
12/731, Krishna Sarayu Nagar,
Chandranagar Post, Marutharoad,
Palakkad – 678 007. - Complainant
(By Adv. V. Shanmuganandan)
Vs
The Manager,
Punjab National Bank,
Chandranagar Branch,
7/808, Ram Arcade,
Chandranagar, Palakkad – 678 007. - Opposite party
(By Adv. P.M. Ramesan)
O R D E R
By Sri. Vinay Menon V., President
- Complainant is aggrieved by the denial of financial assistance by the O.P. bank after having availed legal opinion from the panel lawyer of the O.P. Complainant was forced to effect payment of legal charges and other expenses. The complainant had already started maintenance work of his residence building. Non-grant of financials assistance has caused mental pain and financial losses to the complainant. Complainant seeks Rs.5 lakhs as compensation and for return of documents, and for expenses incurred for legal opinion.
- Opposite party submitted that the loan facility was not granted since it transpired that the complainant was having two previous loan accounts with the OP bank which had slipped into NPA category and that he had to regularize the said accounts for availing another loan of any nature. The complainant was not handed over any loan application. The bank had not sought for any legal opinion. Hence the OP sought for dismissal of the complaint.
- The following issues were framed for consideration:
- Whether the complaint is maintainable under CP Act?
- Whether there is any deficiency in service or unfair trade practice on the part of the OP in denying loan to the complainant?
- Whether the complainant is entitled to any of the reliefs sought for?
- Any other reliefs?
4. (i) Documentary evidence of complainant comprised of proof affidavit and Exhibits
A1 & A2.
(a) Marking of both documents were objected to on the ground that they are photocopies. Marking of Ext.A2 is specifically objected to on the ground its description varies in proof affidavit and that A2 is an entirely different document from what the description in proof affidavit states
(b) Objection by the counsel for opposite party that the said documents were photocopies are rejected since this Commission is not bound by Indian Evidence Act or BSA. Further, counsel for opposite party has no case that these documents are forged or fabricated.
(c) The 2nd objection aimed specifically at Ext.A2 is that the description of the document in the proof affidavit varies. O.P. has no case that this document is not in the stationary of the Bank, or that the endorsement and seal seen at the bottom of page 2 is not made by the officials of O.P. Bank and the seal is not of the Bank.
(d) Per proof affidavit, Ext.A2 is a receipt evidencing acceptance of documents submitted by the complainant before OP bank. On a detailed perusal of the language of Ext. A2, we find that Ext.A2 is a receipt addressed to the Senior Manager, Punjab National Bank. Ext. A2 runs to two pages.
(e) The first document under the head ‘LIST OF TITLE DEEDS’ forming part of 12 documents, title deeds and revenue records, is a sale deed dated 10/09/2007 executed in favour of Sri. Suresh Babu. Documents 6,7 & 8 are documents relating to possession and payment of tax issued to Sri. Suresh Babu K. These 4 documents contain the name of the complainant. At the bottom of the LIST OF DOCUMENTS, it is hand-written that documents are received on 29/6/2022. Below that statement is another statement “The above documents handed over to party as per his request”, with initials and seal of the OP bank.
(f) On going through the contents of Ext. A2, we find that this is a receipt issued by the complainant to the bank. We do not find any discrepancies with regard to description in proof affidavit and the nature of document. Objection of the O.P. to marking Ext. A2 is rejected. Ext. A2 is accepted on record.
(ii) OP marked Exts. B1 & B2.
Issue No.1
5. Initially, the complaint was filed with the name of one Santhosh Kumar, Manager, Punjab National Bank as the opposite party. The opposite party had also filed an application IA 98/2023 seeking hearing on the issue of maintainability of this complaint as against Sri. Santhosh Kumar in his personal capacity. IA 98/2023 was allowed and the name of the Manager was struck off. Therefore, this question has already been answered.
Issue No.2
6. Grievance of the complainant as pleaded is that the OP bank had received documents from him and that these documents were sent to the panel counsel for the bank, where the same was vetted and LSR issued. In order to substantiate his case, complainant had filed Ext.A1 and A2. Ext.A1 is an LSR. Ext. A2 is a receipt of documents.
7. Opposite party pleaded that they had not taken any steps to grant a loan for the complainant since two of his pending loans were classified as NPAs. They also claim that the Bank had not issued application form for loan to the complainant. Complainant had received the legal opinion himself for his own purposes and the bank is not a party to it.
8. We do admit that a concluded contract has not arisen between complainant and OP bank. It is the discretion of the bank / its manager, based on documents produced before it, to take a decision as to render financial assistance or not. As can be ascertained by the pleadings of the complainant himself, a concluded contract has not been arrived at. Therefore, the OP bank is not at fault for not granting the financial assistance based on the two earlier NPA accounts in the name of the complainant.
9. But there is one aspect that is to be highlighted. Complainant was already a customer of the opposite party bank and hence a consumer. He was having two accounts which were in default. O.P. bank had knowledge of the complainant’s status as a defaulter. O.P.s have no case that they were not aware of the status of the complainant as a defaulter. In fact, their case is that the complainant was ineligible to get the loan based on the track record of the complainant. Consequently, the Bank had not even issued the complainant with a loan application.
10. But a conjoint reading assaying of the exhibits marked on the part of the complainant illustrates a new spin to the narrative.
11. Ext.A1 is a Legal Scrutiny Report dated 25/09/2021 addressed to the Manager, Punjab National Bank, Chandranagar Branch issued by the counsel for opposite party bank. Subject of this report is the scrutiny of title deeds pertaining to Sri. Suresh Babu, S/o. Kochu Krishna Menon. Ext. A1 is kept as an opinion issued to O.P. in the file of the panel lawyer’s file as can be seen in page 4 of Ext. A1. Folder as maintained is numbered as ‘Opinion/PNB – New – 12541 (1C). The 12 documents that are the subject matter of Ext. A1 report is one and the same as those referred in Ext.A2 receipt. Ext. A1 has 11 pages with varying entries which are distributed as follows:
1. Description of documents/discussion - Pages 1 to 4
2. Annexure - IV , “SPECIAL REPORT ON TITLE” - Pages 4 to 7
3. Annexure – V “CERTIFICATE” - Pages 7 to 9
4. Annexure V-B “SEARCH REPORT” - Pages 9 to 11
In Annexure - IV , “SPECIAL REPORT ON TITLE” in page 4 of Ext. A1, in question 1, complainant is referred to as ‘Borrower’. In page 6, in answer to question 13, complainant is referred to as the applicant.
In Annexure – V “CERTIFICATE” in page 7 of Ext. A1, certification is addressed to ‘The Manager, Punjab National Bank, Chandranagar Branch’.
1st line of certification is “As requested, I have conducted the legal investigation of the title and made a search of records in the registration office and other offices as required in the matter”.
Continuing in page 9, at the bottom part of the certificate, the panel lawyer has stated as below:
“I have returned the original of title deeds and other documents shown to me to the Branch official, Chandranagar Branch against receipt.” Thus it is clear that it was not the complainant who had handed over the documents to the counsel for the Bank, but an official of the Bank.
In Annexure V-B “SEARCH REPORT” forming part of Ext.A1 also, name of the addressee is shown as ‘Punjab National Bank, Chandranagar Branch’.
A reading of the above contents shows that the said document has the trappings of an opinion addressed for the Bank and not one issued for the personal use of the complainant.
12. The Opposite party has no objection whatsoever with regard to the nature and contents of Ext.A1, except that this is a photocopy. This objection was already over-ruled. They also have no case that the panel lawyer had made a mistake in the entries by addressing the same to the Manager of the O.P. Bank.
13. Therefore, we can safely conclude that Ext. A1 is what it seems to be – a legal scrutiny report issued by the panel lawyer of O.P. Bank to the O.P. after verifying the documents belonging to the property presented before him.
14. Ext.A2 is a receipt containing list of title deeds. It contains 12 documents. At the bottom of the second page the complainant has affixed his signature after having endorsed receipt of the documents on 29/6/2022. Beneath the endorsement by the complainant the authorized office of OP bank has made a subscript as below:
“The above documents handed over to party as per his request”.
Seal of the bank is seen affixed after this endorsement. OP has no objection whatsoever that this is not issued by OP bank. His sole objection was already discussed and overruled. Hence, we find the contents of Ext.A2 conveys what is written therein.
15. From a conjoint reading of Ext.A1 and A2 we can reasonably and safely come to the following conclusions.
1. 12 sets of documents were handed over to O.P. bank by the complainant in 2021.
2. As per request of the bank, panel lawyer for O.P. bank has issued a detailed legal scrutiny report dated 25.09.2021 addressed to the Manager, PNB, Chandranagar branch.
3. After refusal of financial assistance, complainant sought for return of the documents and they were handed over to the complainant by O.P. against Ext. A2.
16. Based on the above discussions and conclusions, we are of the opinion that the OP cannot wriggle out of their responsibility of getting the complainant to go for receiving the legal opinion and other difficulties. Nothing prevented the O.P. from intimating the complainant regarding his ineligibility at the first instance when he applied for loan.
17. We hold that there is deficiency in service on the part of the OP bank in making the complainant pay fees to the counsel for LSR when they were already having information regarding the financial status of the complainant which prevented granting of any further financial assistance.
Issue No.3
18. Complainant has sought for Rs. 5 lakhs as compensation and for the amounts expended for legal opinion and for the documents submitted for availing housing loan.
19. As can be seen from Ext.A2 the complainant has already received the documents that he had handed over to the OP bank. Hence this relief need not be granted.
20. In the facts and circumstances of the case, we are of the opinion that a compensation of Rs.5 lakhs is exorbitant. We grant a compensation of Rs.50,000/- (Rupees Fifty thousand only) on the above mentioned account. Complainant is also entitled cost of these proceedings is also entitled to the amounts expended for availing legal opinion.
21. There is another illegality in the conduct of the O.P. bank. They had lied before this Commission in such a manner as to going to the extent of denying any transaction with the complainant. We can understand the O.P. coming up with admissions of transactions, documents, and eventually fighting its way through the proceedings, with full disclosure of facts. But herein, as can be seen from the discussions above, the Bank has forwarded the documents for scrutiny based on an application filed by the complainant, but totally denied any involvement in a transaction that occurred in their daily business. Not only is this conduct an affront to the process of law, but also playing fraud on a customer to bar him from taking recourse to remedy available under law.
22. For this illegality perpetrated on the complainant, the O.P. is liable to pay punitive compensation of Rs. 2,50,000/- (Rupees Two lakhs fifty thousand only) to the complainant.
Issue No.4
23. Based on the discussions above we allow the complaint with the following directions:
1. OP bank is directed to pay the complainant the fees that he had to pay for availing legal scrutiny report. Complainant is entitled to interest of @10% on the said amount from 25/9/2021 till the date of payment.
2. Complainant is entitled to a compensation of Rs.50,000/-
3. Complainant is entitled to punitive compensation of Rs. 2,50,000/-
4. Complainant is entitled to a cost of Rs.25,000/-.
5. OP shall comply with the aforesaid directives within 45 days of receipt of this Order failing which they shall pay Rs.1000/- per month or part thereof as solatium from the date of this Order till the date of full and final compliance of this Order.
Pronounced in open court on this the 7th day of August, 2024.
Sd/-
Vinay Menon V
President
Sd/-
Vidya.A
Member
Sd/-
Krishnankutty N.K.
Member
APPENDIX
Exhibits marked on the side of the complainant
Ext.A1 - Copy of L.S.R. dated 25/9/2021
Ext.A2 – Copy of receipt of documents dated 29/6/2022
Exhibits marked on the side of the opposite party:
Ext.B1 – Copy of print out of customer account ledger report pertaining to
A/c No.4260009900000172
Ext.B2 – Copy of print out of customer account ledger report pertaining to
A/c No. 426000NC000008492
Court Exhibit: Nil
Third party documents: Nil
Witness examined on the side of the complainant: Nil
Witness examined on the side of the opposite party: Nil
Court Witness: Nil
NB : Parties are directed to take back all extra set of documents submitted in the proceedings in accordance with Regulation 20(5) of the Consumer Protection (Consumer Commission Procedure) Regulations, 2020 failing which they will be weeded out.
