State Consumer Disputes Redressal Commission
M/S. R. K. Mining Private Limited vs The State Bank Of India on 19 January, 2015
A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION: AT HYDERABAD C.C. NO. 66 OF 2013 Between: 1.M/s. R. K. Mining Private Limited, Rep. by its Managing Director, Sri. B. Ravi Kalyan Reddy, S/o. Dr. B. V. Krishna Reddy Age 34 years: Occ: Business, Office at H. No. 1-2-49/15, Nizampet Road, Kukatpally, Hyderabad Complainant And The State Bank of India represented by its Branch Manager, D. D.No. 22/168, Gandhi Road, PRODDUTUR-516360 Kaddapah District. Andhra Pradesh. Opposite Party Counsel for the Complainant : M/s. V. Srikantha Rao Counsel for the Opposite party : Mr. Vamaraju Srikrishnudu Coram : Sri S.BHUJANGA RAO, Honble Member And Sri R.LAKSHMINARASIMHA RAO, Honble Member
MONDAY, THE NINETINTH DAY OF JANUARY TWO THOUSAND FIFTEEN Oral Order (as per Sri R.Lakshminarasimha Rao, Honble Member) ***
1. The complaint is filed under Section 17 (i) (a) of the Consumer Protection Act seeking direction to the opposite party to return the original documents, to grant an amount of Rs. 90,00, 000/- towards compensation and damages.
2. The averments of the complaint are that the complainant-company is engaged in business of prospecting, exploring, operating, excavation and mining productions in India and the directors of the complainant-company are the partners of M/s R.K. Marketing Services and the promoters of M/s R.K.INFRA and Engineering (India) Pvt Ltd and on application of the complainant-company for its business necessity, the opposite partybank sanctioned loan on 23.03.2009 under cash credit account bearing number 30731626126 to the tune of 9 crores. The complainant-company hypothecated its current assets worth of Rs.15 crores and immovable property worth of Rs.4.25 lakh besides fixed deposit of Rs.13 lakh under TD CS No. 0604486 dated 13.03.2009. The complainant-company deposited its original PAN card, Original Incorporation certificate of the company, Sale Deeds for 4.25 AC of land of Sulthanpur village and Payment of TD CS. No. 0604486, dt 13.03.2009 (FD) for Rs. 13 lakhs with interest thereon, with the opposite party-bank on its assurance that the documents would be returned after closure of the loan account.
3. The complainant-company repaid the entire loan amount on 01.10.2011 and requested the opposite party-bank on 01.10.2011 to close the loan account. The opposite party-bank through its letter dated 10.10.2011 confirmed the closure of loan account and enclosed thereto, demand draft dated 08.10.2011 for balance amount of Rs.7,20,139/-. Contrary to the terms of the credit sanction letter, the opposite party-bank had not returned the documents to the complainant.
The opposite party-bank upgraded the status of the complainant with CIBIL after it had closed the loan account on 01.10.2011 and confirmed closure of loan account on 10.11.2011 on account of which the complainant-company was disqualified for getting cash credit facility resulting loss of nine tenders amounting to the tune of Rs.90 lakhs to the complainant-company. The complainant-company got issued notice dated 31.01.2013 through its advocate demanding the opposite party-bank to return the documents and pay damages to the tune of Rs.90 lakh and the opposite party-bank gave reply on 14.02.2013 with false averments. Hence, the complaint.
4. The opposite party has resisted the claim on the premise that the complainant is not consumer. The opposite party has contended that it sanctioned an amount of Rs.9 crores to the complainant and the complainant offered property admeasuring Ac.4-25 in Survey No. 443/AA/2 to , IDA Bollaram, Sulthanpur village, Patancheru Mandal , Medak district as security belonging to M/s RK Marketing Services whose four partners created mortgage by depositing title deeds with the opposite party. The complainant repaid some loan amount and the opposite party adjusted the remaining loan amount from out of the amount covered under deposit receipt which was deposited by the complainant in addition to the collateral security. The opposite party closed the loan account on 01.10.2011 and intimated the same to the complainant on 10.10.2011 as also the opposite party had sent the balance amount from the fixed deposit, Rs.7,20,139/- and informed the representative of the complainant company that competent person can take back the original documents. The mortgagers had not visited the opposite party bank to take back the original documents.
5. There is no practice for the branch of a bank or financial institution to report to CIBIL about the status of a loan account holder. CIBIL will extract the loan particulars from the central data base of banks and other financial institutions at corporate central level and it will update the status and the opposite party through its regional business office, Kadapa informed the CIBIL on 23.07.2012 with regard to closure of loan account of the complainant-company. The opposite party issued reply on 14.02.2013 to the notice of the complainant informing the complainant that the opposite party has been always ready to return the documents to the complainant if the mortgagers personally attend the bank. The complainant instead of approaching the opposite party bank filed the complaint with false allegations. The mortgager is not made party to the proceedings. Several complicated questions are involved in the case and the same can be decided by a civil court. There is no negligence on the part of the opposite party. Hence, the opposite party has prayed for dismissal of the complaint.
6. The Managing Director, of the complainant-company has filed his affidavit and the documents, ExA1 to A16. On behalf of the opposite party, its Branch Manager, filed his affidavit and the document, ExB1, Memorandum for Recording Creation of Mortgage by Deposit of title Deeds.
7. The learned counsel for the complainant and the opposite party have filed written submissions.
8. The point for consideration are:
i) Whether the complainant is entitled to the relief sought for?
ii) To what relief?
9. POINT: The facts beyond any dispute are sanction of loan to the tune of Rs.9 Crores by the opposite party-bank to the complainant-company on 23.03.2009, creation of equitable mortgage by deposit of title deeds by M/s RK Marketing Services, repayment of the loan amount by the complainant including the amount adjusted by the opposite party from out of the amount covered under fixed deposit receipt bearing no.0604486 and payment of balance amount of Rs.7,20,391/- after appropriating the amount , to the complainant . The complainant claimed that it sustained loss on account of non-return of the documents by the opposite party whereas the opposite party has contended that it has always been ready from the day of closure of the loan account of the complainant and it is the complainant which instead of receiving the documents by making the mortgagers appear and sign before the opposite party, filed the complaint.
10. Jurisdiction of a court or tribunal is its competence to decide a lis brought before it. Jurisdiction is the power and authority conferred by law upon a court, judge or Tribunal to decide the dispute and make Judgement authorized by law. There are in general three jurisdictional elements which would render the Judgement void and a mere nullity. Such an order would be open to attack or impeachment in collateral proceedings including execution proceedings. Original Jurisdiction of a court or tribunal is the extent and scope of its authority to hear and decide a case original jurisdiction refers to the inherent authority of a court to hear a case and deliver judgment. This type of jurisdiction of a court or tribunal again is of three kinds, 1.Territorial Jurisdiction.2. Pecuniary Jurisdiction ,and 3. Jurisdiction as to subject matter.
11. The Territorial Jurisdiction of a court is the authority of a court over certain territory or geographical area. Sections 16 to 18 of CPC deal with the jurisdiction of the courts in respect of the suits relating to immovable properties and section 19 of CPC provides for the jurisdiction of the court for institution of suits in relation to the movable property while section 20 of CPC decides the jurisdiction of the court in relation to the place where the defendant resides. Section 11(2) (a) of the C.P.Act confers jurisdiction on the Consumer Fora providing for institution of complaint within whose jurisdiction the opposite party or each of the opposite parties (at the time of institution of the complaint) reside, carries on business or has a branch office or personally works for gain or cause of action wholly or in part arises.
12. A complaint in respect of immovable property is to be filed in the Consumer Forum within the local limits whose jurisdiction the property is situate and if the property is situate within the jurisdiction of different Fora the complaint can be filed in any Consumer Forum within the local limits of whose jurisdiction any portion of property is situate. In case of dispute with respect to movable property, Where a wrong has been caused to a person, or any damage has been caused to a movable property, then the complaint may be instituted either, -
In the place, where wrong or damage has been caused, or- In the place, where opposite party (the person who caused the loss) resides. Where there is a dispute in regard to, agreement or any other kind of consumer dispute, then the complaint may be instituted either,- In a place, where the opposite party or any of the opposite parties resides, or carries on business, or- In a place, where the cause of action , wholly or in part ,arises. Section 9 of CPAct provides for institution of complaint in the Consumer Forum of inferior grade where the value of goods or the subject matter does not exceed the pecuniary limits of its jurisdiction. Impediment is the limitation on geographical and pecuniary factors imposed on it in exercising the power conferred on it by the statute.
13. The complaint is filed seeking for return of the documents and payment of compensation and damages to the tune of Rs. 90,00,000/- and during the pendency of the complaint , the documents are received by the partners of mortgagerfirm. The complainant company has not raised any objection at the time of the opposite party handing over the documents to the partners of M/s. RK Marketing Services. The amount sought for, towards compensation and damages is ancillary relief and not an independent relief. which in the circumstances does not exceed Rs. 20 lakhs. The pecuniary jurisdiction of this commission commence with the relief exceeding Rs. 20,00,000/- and as much the District Forum is proper Forum to aducate the matter.
14. For the foregoing reasons, this Commission is of considered view that the complaint has to be filed before the District Forum and not before this Commission. Therefore, leaving all other issues such as the maintainability of complaint, etc to be decided by the District Forum, we are inclined to hold that the complaint is liable to be returned to be presented before District Forum having jurisdiction.
15. In the result, the complaint is directed to be returned to be presented in District Forum. The Registry is directed to return the complaint under proper acknowledgement to the complainant. There shall be no separate order as to costs.
MEMBER MEMBER Dt: 19.01.15 APPENDIX OF EVIDENCE WITNESSES EXAMINED Affidavit of the Managing Director of M/s. R. K. Mining Private Limited filed Affidavit of the Branch Manager of State Bank of India filed For the complainants:
Ex.A1 Cash Credit sanctioned vide account by the opposite party to the complainant, dt 26.03.2009 Ex.A2 Intimation of closure of CC account No. 30731626126 of the opposite party issued to the complainant, dt 10.10.11 Ex.A3 Credit report (Report order No. W-2076577) in which the complainant was declared as defaulter., dt 25.02.13 Ex.A4 Legal notice issued by the counsel for the complainant, dt 31.03.13 Ex.A5 Acknowledgement card of legal notice, dt 04.02.13 Ex.A6 Reply legal notice sent by opposite party to the advocate of the complainant, dt 14.02.13 Ex.A7 Certified true copy of extract from the minutes of the meeting of the board of directors of M/s. R. K. Mining Pvt Ltd, dt 31.12.12 Ex.A8 Tender notice No. 111 dt 25-10-11 of Bharat Coking Coal India Ltd, Dhanbad. Ref: No. BCCL/GM/(CMC)/F-HEMM-OS/2011/1043, dt 25.10.11 Ex.A9 Tender Notice No. 39/2011-12, Dt 24-2-2012 of Western Coal Fields Ltd, Nagpur under Ref No. WCL/GM(CMC)/EW/TPT/PENCH/1889, dt 24.02.12 Ex.A10 Tender Notice No. 112, Dt 30.04.12 of Bharat Coking Coal India Ltd, Dhanbad. Ref:
BCCL/GM(CMC)/F-HEMM/OS/2012/411, dt 30.04.12 Ex.A11 Tender Notice No. 113, Dt 01.06.12 of Bharat Coking Coal India Ltd, Dhanbad. Ref: BCCL/GM(CMC)/F-HEMM/OS/2012/523, dt 01.06.12 Ex.A12 Tender Notice No. BCCL/(CMC)/F-NIT/CV/2012/645, dt 25.06.12 of Bharat Coking Coal India Ltd, Dhanbad Ex.A13 Tender Notice No. 114 BCCL/CGM(CMC)/F-HEMM-OS/2012/687, 09.07.12 of Bharat Coking Coal India Ltd, Dhanbad Ex.A14 Tender Notice No. 116 BCCL/CGM(CMC)/F-HEMM-OS/2012/832, 10.08.12 of Bharat Coking Coal India Ltd, Dhanbad Ex.A15 Tender Notice No. 117 BCCL/CGM(CMC)/F-HEMM-OS/2012/1126, 06.11.12 of Bharat Coking Coal India Ltd, Dhanbad Ex.A16 Tender Notice No. 119 BCCL/CGM(CMC)/F-HEMM-OS/2012/1172, 14.11.12 of Bharat Coking Coal India Ltd, Dhanbad For the Opposite party:-
Ex.B1 Memorandum for Recording Creation of Mortgage by Deposit of title deeds.
MEMBER MEMBER Dt: 19.01.15