State Consumer Disputes Redressal Commission
S.Karunamurthy, Chennai . vs The Managing Director, Indian Overseas ... on 26 October, 2023
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IN THE CIRCUIT BENCH OF THE TAMILNADU STATE CONSUMER
DISPUTES REDRESSAL COMMISSION, MADURAI.
Present
Date of appeal filed: 24.09.2018
THIRU. S.KARUPPIAH, PRESIDING JUDICIAL MEMBER
F.A.No.36/2019
THURSDAY, THE 26th DAY OF OCTOBER 2023.
S.Karunamurthy,
S/o V.Sarkarai,
Plot No.49, Varalakshmi Nagar,
Maduravoyal,
Chennai - 600 095. Appellant/Complainant
-Vs-
1. The Managing Director,
Indian Overseas Bank,
No.763, Anna Salai,
Chennai.
2. The Assistant General Manager,
Indian Overseas Bank,
No.763, Anna Salai,
Chennai.
3. The Senior Manager,
Indian Overseas Bank,
Ramanathapuram. Respondents/Opposite Parties
Counsel for Appellant/Complainant : M/s SR.Mouna Swaminathan, Advocate.
Counsel for Respondents-1to3/Opp.Parties-1to3 : Mr.R.Pandivel, Advocate.
Aggrieved by the dismissal order passed by the District Consumer Disputes
Redressal Commission, Ramanathapuram made in C.C.No.13/2011, dated
22.06.2018 the complainant preferred this appeal. This appeal coming before me for
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final hearing on 29.08.2023 and upon perusing the material records, this
Commission made the following:
ORDER
THIRU.S.KARUPPIAH, PRESIDING JUDICIAL MEMBER.
1. The Facts:
The complainant one Karunamoorthy deposited a sum of Rs.75,000/- in Fixed deposit on 14.08.1997 and he again deposited a sum of Rs.25,000/- on 13.03.1998 with the third opposite party/Indian Overseas Bank, Ramanathapuram. The first and second opposite parties are the Higher Officials. At the time of deposit one S.Murugaiah has applied for a bank loan to purchase a Mahindra Tractor. The third opposite party/bank obtained necessary security of title deeds as well as other documents and offered the loan to the above said Murugaiah. The, Then Manager asked the complainant to sign a guarantee for the above said loan and in the guarantee deed the F.D.R Rs.75,000/- was also mentioned. When questioned, the bank Manager informed the complainant that it is only a routine formality since the tractor was hypothecated and other title deeds were obtained as security, the complainant need not worry about his deposit amount. Then the complainant on 14.08.2003 sent a letter to the bank for the renewal of fixed deposit The opposite party/bank informed the complainant that the loan borrowed by said Murugaiah become default for which they are going to appropriate the deposit receipts. The complainant made several communications and requested information through Right to Information Act, which last long for three years and finally the complainant came to understand that for the loan of Murugaiah, the third opposite party/bank without 3 proceed against the tractor or the security offered by the borrower, appropriated the F.D.R.amount of Rs.25,000/- in the on 22.03.2004 and appropriated the F.D.R. of Rs.75,000/- on 31.08.2004. The bank failed to appropriate both deposits on the same day thereby caused severe monitory loss to the complainant. Similarly the bank failed to return the balance amount of Rs.16716/- immediately but sent the Demand Draft only on 31.03.2005 without any further interest. These are all amounted to deficiency in service. Hence the complaint is filed to direct the opposite parties to refund the deposits amount of Rs.75,000/- and Rs.25,000/- along with interest and Rs.5,00,000/- towards compensation for mental agony.
2. The third opposite party filed their written version stating the one Murugaiah borrowed a Mahindra Tractor loan. For which the complainant agreed to stand as a guarantor and he executed an acknowledgement deed thereby giving right to the bank to appropriate his deposit amount to the above said tractor loan. The above said Murugaiah committed default in the loan and after sending notice to the complainant the F.D.R amount has been adjusted towards tractor loan. Further the above said Murugaiah claiming his documents filed a suit before the District Munsif Court, Ramanathapuram in which the bank submitted that the tractor loan was adjusted from the guarantor's deposits amount and hence the guarantor / the complainant herein alone has a right and charge over the above title deeds deposited with the opposite party/bank. From this stand it can be evidenced that the bank acted bonafidely in favour of the complainant and they requested the District Commission to dismiss the complaint.
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3. The District Commission received both sides proof affidavit, documents marked as Exhibits-A1 to A40 and Exhibits-B1 to B17, finally dismissed the complaint.
4. Aggrieved with the above dismissal order, this appeal has been preferred by the complainant on the following:
Grounds: That, the District Commission failed to note the documents filed as Exhibits-A1 to A40 clearly proved the case of the complainant. The District Commission wrongly placed reliance upon the civil suit filed by the above said borrower Murugaiah and dismissed the complaint. The District Commission failed to see that the complainant on misrepresentation executed guarantee deed and in the guarantee deed only one F.D.R for Rs.75,000/- alone mentioned and the bank did not have any right to appropriate another F.D.R amount of Rs.25,000/-. Hence they prayed to allow the appeal.
5. In this case only appellant side written arguments filed and oral arguments also heard.
6. The learned counsel for the appellant would submit that the bank admitted the complainant had deposited Rs.75,000/- and Rs.25,000/- with them. Eventhough the bank sanctioned a loan of Rs.2,00,000/- to one Murugaiah after receiving sufficient security, hypothecation of tractor etc., The opposite party/bank failed to proceed against the borrower instead without prior intimation fixed deposit of Rs.25,000/- was initially appropriated and after five months another F.D.R was appropriated. These are all illegal acts without any authority and failure of the opposite party/bank in not appropriating both F.D.R. immediately after the loan 5 become overdue is a clear deficiency on their part. Hence they requested this Commission to allow the complaint.
7. Now the point for consideration is:
Whether the opposite parties/bank has committed any deficiency in service?
8. Discussion on the point: It is an admitted fact that the complainant made two deposits for a sum of Rs.75,000/- and Rs.25,000/- with the third opposite party/bank. Similarly it is also an admitted fact that the complainant stood as a guarantor for one Murugaiah to avail loan of Rs.2,00,000/-. In Ex.B2 letter dated 13.03.1998, and Ex.B3 proved the complainant stood as a guarantor for the above said loan and he authorized the bank to appropriate deposit amount towards outstanding. Of course in Ex.B3, F.D.R.No.170/97 for Rs.75,000/ alone mentioned. In Ex.B3 another F.D.R. was not mentioned. The complainant further contended that out of misrepresentation he stood as a guarantor and he never intended to offer security of his F.D.R. Receipts. Furthermore in a letter sent to the bank dated 01.09.2003 he has stated that he did not stood as a guarantor not signed any guarantee letter and nor offered his F.D.R. Receipts. But in Ex.B14 written statement filed in O.S.No.7/2011 the complainant admitted that he stood as a guarantor for the above said Murugaiah.
9. So the complainant took different stand at different time. However, before the Consumer Forum he cannot dispute the correctness of his documents produced as signed by the complainant. If the complainant alleges fraud or misrepresentation in obtaining signature, then the consumer complaint itself is not maintainable. 6
10. One important aspect which was not raised by the opposite parties as well as not discussed by the District Commission is the point of limitation. The complainant was informed the intention of the opposite party/bank by its letter dated 26.08.2003 that they are going to appropriate the F.D.R receipts. This letter is marked as Ex.A8 by the complainant himself. Again another letter dated 30.08.2003 stating the similar facts was also sent and the letter is marked as Ex.A9. Both the letters clearly explained that the opposite party/bank is going to appropriate F.D.R. deposits. By its subsequent communication, particularly by the letter dated 01.09.2003 the complainant came to understand about the appropriation.
11. The complaint was filed only in the year 2011. When the amount has been appropriation in the year 2004 itself. While the complainant spent lot of time in getting information through Right to Information Act, filed the complaint finally in the year 2011 before the District Commission. The cause of action with regard to appropriation came to the knowledge of the complainant in the year 2003 itself and the Demand Drat was sent as per Ex.A19 in the year 2005 itself. The complaint was lodged after six years which is clearly time barred and on this score alone the complaint is liable to be dismissed.
12. Apart from that the bank has got every right to appropriate deposits amount for any loan as a Principal borrower or as a guarantor. This is called bankers lien Section 171 of the Indian Contract Act, which reads thus:
"Bankers, factors, wharfingers, attorneys of a High Court and policy- brokers may, in the absence of a contract to the contrary, retain, as a security for a general balance of 7 account, any goods bailed to them; but no other persons have a right to retain, as a security for such balance, goods bailed to them, unless there is an express contract to that effect".
10. It is not out of place to refer the Judgement of the Hon'ble Madras High Court in S.Bhavani .Vs. The Branch Manager on 17 October, 20 W.P.No.21629 of 2016.
"""12. As noticed above, Section 171 of the Act states that the bankers like the appellant Bank, in the absence of a contract to the contrary, retain as security for a general balance account, any goods bailed to them. Therefore, what is required to be seen in the instant case is whether there is any contract to the contrary, which prevents the bank from exercising their general lien and as to whether any goods have been bailed to them. It cannot be disputed that the property in question was not bailed to the appellant Bank by the deceased borrower at any point of time. Further, it is an undisputed fact that the property in question was offered by (late) N.P.S.Mahendran to cover his liability in respect of the loans, which he had borrowed in the accounts of M/s.Sanjay Bala Tea Plantation and M/s.Aarthi Bala Tea Plantation and his self 8 acquired properties were mortgaged to secure this specific loan transactions. No document has been placed before us to show that the borrower had given any authorization to the Bank to hold the documents of the mortgaged property, given to secure the loan transaction for M/s.Sanjay Bala Tea Plantation and M/s.Aarthi Bala Tea Plantation, for the purpose of any other loan availed in any other branch by M/s.Somerset Tea Plantation in which (late) N.P.S.Mahendran, stood as a guarantor. Thus, the issue boils down to the question as to whether there is any contract to the contrary, which prevents the appellant Bank from exercising its general lien under Section 171 of the Act.
In Chitty on Contracts, 29th Edition (2004)? Volume-II, Page 496 on Bankers' Lien, it is stated as follows:
..The most frequent example of circumstances inconsistent with the general lien is in the case of a deposit expressed to cover an advance for a specified purpose. However, once the original purpose has been fulfilled by repayment of the specified advance, if a 9 customer knowingly permits the banker to retain the security, a general lien may ultimately be implied and its protection then claimed in respect of other advances?
14. In the instant case, the borrower, (late) N.P.S.Mahendran, has admittedly deposited the title deeds of the property to secure a loan transaction availed in respect of two Plantation Companies. This fact has not disputed by the appellant Bank. Therefore, we have no hesitation to hold that this contract / mortgage, had been created by the deceased borrower for a specific purpose and for a specific loan and the contract was self contained and the terms and conditions were binding upon both the borrower as well as the bank. In other words, the deposit of title deeds by which the mortgage was created by the deceased borrower was for a specific purpose to cover an advance for a specific loan. When such is the situation, the borrower having deposited the documents in order to secure a specific transaction, the bank cannot contend that they could hold the documents for a balance due in a different loan account where the said N.P.S. Mahendran is not a borrower. Further, the language of Section 171 of 10 the Act, is explicit to the fact that the bankers are entitled to retain as a security for a 'general balance account'.
Admittedly, it is not the case of the appellant Bank that the amount, which is now said to be due on account of the borrowings of M/s.Somerset Tea Plantation, is a general balance account of the deceased borrower N.P.S.Mahendran.
15. In the case of Syndicate Bank .Vs. Vijaya Kumar, referred supra and relied on by the learned senior counsel for the appellant Bank, it is to be noted that the borrower therein issued a letter in favour of the bank stating that the bank is at liberty to adjust from the Fixed Deposit receipts without any reference to the loan and he agreed that the Fixed Deposit receipts shall remain in the bank so long as any amount on any account is due to the bank from them either singly or jointly or with others. Thus, the Hon'ble Supreme Court, rendered a finding that the bank is entitled to general lien over the Fixed Deposit receipts given by the borrower therein."""
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13. So the opposite parties/bank has got every right even if the F.D.R. was not mentioned in the Ex.B4. So the above appropriation cannot be described as deficiency in service as such the District Commission rightly come to the conclusion that there is no deficiency in service committed by the opposite parties/bank. Considering the delay in preferring the consumer complaint, and the opposite parties/bank did not commit any deficiency in service, the finding of the District Commission is hereby confirmed and the appeal is liable to be dismissed without cost and answered the point accordingly.
14. In the result,
1. The appeal is dismissed.
2. The order passed by the Learned District Commission, Ramanathapuram, made in C.C.No.13/2011, dated 22.06.2018 is hereby confirmed.
3. There shall be no order as to costs in this appeal. Dictated to the Steno-typist transcribed and typed by her corrected and pronounced by me on this the 26th day of October 2023.
Sd/-xxxxxxx S.KARUPPIAH, PRESIDING JUDICIAL MEMBER.12
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