National Consumer Disputes Redressal
Central Bank Of India vs M/S. Rajan Handloom Stores on 28 January, 2016
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 1891 OF 2008 (Against the Order dated 14/12/2007 in Appeal No. 720/2005 of the State Commission Bihar) 1. CENTRAL BANK OF INDIA CENTRAL OFFICE AT CHANDER MUKHI NARIMAN POINT MUMBAI - 400 021 ...........Petitioner(s) Versus 1. M/S. RAJAN HANDLOOM STORES S/O LATE HAZI ABDUL AZIZ RESIDENT OF UTTAR TOLA , POST OFFICE, & POLICE ST BIHAR ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.B. GUPTA, PRESIDING MEMBER HON'BLE MR. PREM NARAIN, MEMBER For the Petitioner : Ms. Rachna Gupta, Advocate For the Respondent : Mr. Shildeo Banerjee, Advocate Dated : 28 Jan 2016 ORDER PER MR. PREM NARAIN, MEMBER
1. Being aggrieved by the order dated 14-12-2007 of the Bihar State Consumer Disputes Redressal Commission (for short, the State Commission), this revision petition has been filed by Central Bank of India, the petitioner herein.
2. The brief facts are that the complainant is the proprietor of M/s. Rajan Handloom Stores, Bhagalpur which was provided cash credit facility limit upto Rs.3,00,000/- in the year 1998 by appellant bank and this facility was enhanced to Rs.7,00,000/- in 1999. The complainant utilized the facility as per banking norms and used to submit monthly stock statements and also used to deposit daily sale proceeds to the loan account. Due to prolonged illness and also due to change in Government Policy and restrictions imposed on exports of Bhagalpuri cloth products, etc., the business of complainant as well as other weavers in general was adversely affected but the complainant any how went on managing business. The Branch Manager Satya Narain Prasad-OP No.4 in complaint issued a letter showing the date of issue 03-07-2000, delivered to complainant on 25-07-2000 raising certain allegations regarding the submission of stock statements and deposits in the loan account and alleging poor transaction in the loan account. He also raised questions on stock statements submitted. The complainant sent his reply to bank but Branch Manager, Mr. Prasad stopped the operation of the loan account without giving any prior notice. Without any notice and consent of the complainant, the Bank in arbitrary manner adjusted the accrued amount of immatured monthly recurring deposit of complainant. This arbitrary closure of loan account caused loss and damage to the business of complainant and all attempts of complainant including pleader's notice failed to restore his loan account. Hence, a consumer complainant was filed by the complainant.
3. The Bhagalpur District Consumer Disputes Redressal Forum (for short, the District Forum) vide its order dated 29-09-2005 ordered as follows ( as per English translation available):
"Therefore, it is directed to defendant to start account of plaintiff within 30th day. Defendant No.4 Sri Satya Naryan Prasad also directed that plaintiff's account fee, with interest total amount deposit within 45 days because his carelessness and willingness plaintiff's business fully ruined. It is also directed to defendant to pay loss of business amount Rs.3,00,000/- (Rs. Three lacs) and Rs.30,000/- (Rs.Thirty Thousand) for compensation to plaintiff with 10% interest within 45 days which be followed equally all three defendants"
4. Aggrieved with the above order of the District Forum, the petitioner filed an appeal with the State Commission, which was dismissed vide its order dated 14-12-2007.
5. Hence, this revision petition.
6. We heard the learned counsel for both the parties and perused the records carefully.
7. The learned counsel for the petitioner stated that the account linked to cash credit limit was never stopped by the petitioner, however, withdrawing power under this account is linked to the stock position with the account holder. In this case the complainant himself has admitted that due to certain adverse circumstances prevailing in the handloom sector and due to his illness, his business was running at a low pace. As his stock position kept on declining, his withdrawing power also went on diminishing. His cash credit limit was originally Rs.3,00,000/- in the year 1993 which was increased to Rs.7,00,000/- by the bank in the year 1999. The stock position maintained by the account holder was less than the required one for many months and, therefore, he was unable to withdraw sufficient amount from this account. For this condition, the complainant was himself responsible and the bank had nothing to do with the prevailing precarious condition in the market for the sector in question. In fact, the audit was conducted by the bank for the account and the business position of the complainant, and it was found that the stock position was below even Rs.2,00,000/- in certain months.
8. The learned counsel also argued that the District Forum has arbitrarily awarded Rs.3,00,000/- as compensation for loss of business to the complainant without giving any reason or calculation for the same. The only reason seems to be that the complainant has asked for this amount in his complaint without giving any calculations for this amount. The State Commission has also not considered this point and has dismissed the appeal filed by the petitioner.
9. The learned counsel for the respondent argued that the bank branch had stopped the operation of the account on 22-08-2000. In fact, a letter was allegedly sent on 03-07-2000 which reached the respondent on 25-07-2000 wherein certain deficiencies in account were communicated to the account holder. Based on the audit of the account, the branch manager also sent a letter dated 31-07-2000 and letter dated 22-08-2000. In both these letters the bank manager had advised to remove the deficiencies and improve the operation of the account so that it does not become sticky. It is surprising that on the one hand the branch manager wrote a letter on 22-08-2000 and the same day he stopped the operation of the account without awaiting the decision of the superior office where the matter was referred to.
10. The learned counsel also mentioned the circumstances under which this happened. He mentioned that the branch manager had illegally demanded certain sum of money and Bhagalpuri cloth from the complainant which he refused to oblige and, therefore, the branch manager was adamant in teaching the complainant a lesson. The account had never become sticky and the complainant was regularly depositing the sale proceeds to the account. The learned counsel also pointed out that the bank had illegally adjusted the amount from an RD Account of the complainant in the loan account without any knowledge of the complainant. Definitely, the bank was not authorized to do so. So far as the compensation of Rs.3,00,000/- is concerned, after the stoppage of the operation of the account the respondent/complainant's cheques were bounced which had adverse impact on the business and reputation of the complainant. The loss was much more but only Rs.3,00,000/- were claimed initially in the complaint and the same has been awarded by the District Forum.
11. We have carefully considered the arguments advanced by both the parties and gone through the records. The assertion of the petitioner bank that the operation of the loan account was not stopped by the branch, does not hold good as the complainant was not able to transact with the loan account after 22-08-2000 and that his deposits in the RD account were adjusted in the loan account. The petitioner bank in their revision petition have also admitted that the operation of the cash credit account was stopped with effect from 22-08-2000. The petitioner bank have themselves averred in their revision petition that "Being compelled by the facts and circumstances of the case the appellant was left with no option but to stop the operation of the loan account since 22-08-2000". This may be another fact that due to diminishing stock position of the account holder, he was entitled to withdraw only small amounts. It is surprising that the branch manager wrote a letter dated 22-08-2000 to the complainant informing the shortcomings and asking for improvement, he stopped the operation of the loan account on the same day without informing the complainant. The bank also adjusted the amount deposited in the RD account of the complainant without his consent or knowledge. Thus, there is no doubt that there was deficiency in service on the part of the petitioner bank. However, there is some merit in the arguments of the petitioner that the compensation of Rs.3,00,000/- for loss of business is arbitrary and no reasons or calculations have been given by the District Forum or the State Commission in their orders. Even the complainant has not given any breakup or calculations for this amount in his complaint. The District Forum has already ordered opening of the operation of the account of the complainant and, therefore, the main grievance of the complainant stands redressed. There is no doubt that for the deficiency of the petitioner, the complainant is also entitled to get a reasonable compensation. The compensation of Rs.3,00,000/- in respect of loss of business seems to be on higher side because the loss of business has mainly been due to illness of the complainant as well as due to general precarious conditions prevailing in the handloom sector at that time, for which the petitioner bank is not directly responsible. In the facts and circumstances of the case, we are of the view that the compensation of Rs.1,20,000/- would be reasonable and justified instead of Rs.3,00,000/- as awarded by the District Forum and confirmed by the State Commission.
12. Accordingly, orders of both the fora below are sustained in the revision petition with modification that the petitioner bank is liable to pay Rs.1,20,000/-(Rupees one lakh twenty thousand only) as loss of business to the complainant instead of Rs.3,00,000/- as ordered by the District Forum and upheld by the State Commission. The other components of the orders of the fora below shall remain unchanged.
13. Thus, the revision petition filed by the petitioner is disposed of in terms of the above order. No order as to cost for this revision petition.
......................J V.B. GUPTA PRESIDING MEMBER ...................... PREM NARAIN MEMBER