State Consumer Disputes Redressal Commission
Citibank, N.A. vs Sneh Lata Kumar on 4 July, 2024
FA/879/2014 D.O.D.: 04.07.2024
CITIBANK N.A. VS. SNEH LATA KUMAR
IN THE DELHI STATE CONSUMER DISPUTES REDRESSAL
COMMISSION
Date of Institution: 04.09.2014
Date of Hearing: 06.02.2024
Date of Decision: 04.07.2024
FIRST APPEAL NO-879/2014
IN THE MATTER OF
AXIS BANK LIMITED
REGISTERED OFFICE AT TRISHUL, 3RD FLOOR,
OPP. SAMARTHESHWAR TEMPLE, LAW GARDEN,
ELLISBRIDGE, AHMEDABAD, GUJARAT-380006
ALSO AT:
BRANCH OFFICE AT AXIS HOUSE,
TOWER-2, 2ND FLOOR, JAYPEE GREENS WISH TOWN,
SECTOR-128, NOIDA-201304
(PREVIOUSLY KNOWN AS CITIBANK, N.A.
124, JEEVAN BHARTI BUILDING,
CONNAUGHT CIRCUS,
NEW DELHI-110001)
...APPELLANT
(Through: Ms. Shreya Bhardwaj, Advocate,
Mob.9650456546 &
Email:[email protected])
VERSUS
MRS. SNEH LATA KUMAR,
W/O MR. SANJEEV KUMAR,
A-59/1, SAURABH VIHAR,
BADARPUR, NEW DELHI-110044.
....RESPONDENT
DISMISSED PAGE 1 OF 9
FA/879/2014 D.O.D.: 04.07.2024
CITIBANK N.A. VS. SNEH LATA KUMAR
(Through: Mr. Sanjay Sharma, Advocate,
Mob. 9811900172 &
Email:[email protected])
CORAM:
HON'BLE JUSTICE SANGITA DHINGRA SEHGAL (PRESIDENT)
HON'BLE MS. PINKI, MEMBER (JUDICIAL)
Present: Ms. Shreya Bhardwaj, counsel for the Appellant.
Mr. Sanjay Sharma, counsel for the Respondent.
PER : HON'BLE PINKI, MEMBER (JUDICIAL)
JUDGMENT
1. The facts of the case as per the District Commission record are as under:
"The deficiency alleged by the complainant on the part of OP bank, is in respect of issuing a notice U/S. 138 of Negotiable Instruments Act, to complainant, for dishonour of a cheque, which was collected as a security for loan of Rs.4 lakhs sanctioned to complainant but actually not disbursed, despite complainant continuing paying 3 EMIs to bank. The facts shown are that complainant had earlier taken a loan payable in 29EMIs and he regularly paid the same, when OP bank offered him another loan of Rs.4 lakhs in view of his Good record of payment of earlier loan, subject to for closing of existing loan. The complainant agreed and a fresh loan of Rs.4 lakhs, payable in 36 EMIs of Rs.14,950/- was sanctioned. It is alleged that after deducting outstanding of Rs.55,000/- of earlier loan, a DD of Rs.3,45,000/- was to be delivered to complainant in November, 2007. It is alleged that OP started deducting through ECS the EMI of Rs.14,950/-. The complainant stopped EMI further informing OP bank to send the draft. It is alleged that OP instead sent an executive with cheque/ DD of Rs.29,000/- towards deducted EMI with apology. The DISMISSED PAGE 2 OF 9 FA/879/2014 D.O.D.: 04.07.2024 CITIBANK N.A. VS. SNEH LATA KUMAR complainant decided to continue the loan and paid out other EMI of Rs.14,950/- in the hope of DD. However, in May 2008 the respondent slapped a notice U/S 138, Negotiable Instruments Act, for dishonor of cheque of Rs.45,000/- which OP wanted to get encashed without disbursing loan by issuing DD. Therefore, this complaint.
2. The District Commission after taking into consideration the material available on record passed the judgment dated 08.07.2014, whereby it held as follows:
"We have considered the rival case and find that facts mentioned by complainant speak for themselves. The OP has failed to explain, why the security cheque was presented when complainant was regularly paying EMI, though OP had not yet disbursed loan. The issuing of notice U/S 138 Negotiable Instruments Act, without looking into all aspects shows gross negligence and deficiency in service by OP. Holding it guilty of deficiency, we direct OP to return amount of 3 installment equal to Rs.44,850/- with interest of 9% per annum from date of sanction of loan, and OP should return all security cheques given by complainant and issue NOC to complainant. We award a compensation of Rs.50,000/- for the deficiency and Rs.10,000/- as litigation expenses to the complainant."
3. Aggrieved by the aforesaid order of the District Commission, the Appellant/Opposite Party has preferred the present appeal, inter- alia, contending that the District Commission has erred in passing the impugned order in complaint filed by the respondent/complainant as the respondent had not made payment of the entire dues towards the Second Loan account i.e. ,1,85,853/-; the District Commission arbitrarily directed the appellant to issue NOC to the respondent when it was not prayed by the respondent DISMISSED PAGE 3 OF 9 FA/879/2014 D.O.D.: 04.07.2024 CITIBANK N.A. VS. SNEH LATA KUMAR before the District Commission and failed to appreciate that without depositing the dues amount which was outstanding against the Second Loan, appellant cannot issue NOC to the respondent. Pressing the aforesaid contention, the Appellant prayed for the setting aside of the impugned order dated 08.07.2014 in Complaint Case No.738/2008.
4. Vide order dated 19.05.2016, Respondent did not wish to file reply to the appeal.
5. Vide order dated 30.10.2023, Citibank N.A. was deleted from the array of parties as the Axis Bank Limited was substituted in place of Citibank N.A.
6. Written arguments have been filed on behalf of the appellant.
However, despite various reminders, respondent has failed to file their written submissions.
7. We have carefully perused the material on record and the District Commission record.
8. The main question for consideration before us is whether the District Commission erred in allowing the complaint filed by the Respondent/ Complainant before it.
9. In the present case, on 16.09.2005, the respondent/complainant took a personal loan from the respondent vide account No. LAU- C10-3135876 i.e. First Loan for an amount of Rs.1,70,000/- repayable in 48 EMIs of Rs.4,862/- each. On 27.07.2006, the Respondent took a top-up loan vide loan account No.LTU-TAX- 3456735 i.e. Second Loan for an amount of Rs.2,50,000/- repayable in 48 EMIs of Rs.6,958/- each. After adjusting the outstanding amount of Rs.1,40,460.17 against the First Loan, the amount of Rs.1,09,539.83 was disbursed to the respondent as the same was DISMISSED PAGE 4 OF 9 FA/879/2014 D.O.D.: 04.07.2024 CITIBANK N.A. VS. SNEH LATA KUMAR top up loan. Upon completing 15 EMIs out of total 48 EMIs of the Second Loan, on 12.11.2007 respondent further took a third loan vide account no. LC4-INR-3943168 for an amount of Rs.5,00,000/- which repayable in 48 EMIs of Rs.14,950/- each. After adjustment of the amount due on the Second Loan i.e. 1,85,853.06, an amount of Rs.3,08,385.32 was disbursed to the Respondent by way of a demand draft. Eight post dated cheques were entrusted with the appellant as security for the third loan. The Demand draft of Rs.3,08,385.32 was accepted by the respondent's husband on behalf of the respondent but the same was not utilized by the respondent and returned the same to the appellant on 26.03.2008. By that time, two EMIs of Rs.14,950/- towards repayment of third loan were already debited from the respondent account. Before the amount of Rs.29,900/- which were deducted by the respondent could be handed over to the respondent, it was required to reopen the appellant's Second Loan account and continued the same as there was an outstanding of Rs.1,85,853.06. The appellant could not have closed the Third Loan account without reopening the Second Loan account and as a result the Appellant continued to present ECS wherein out of the 33 ECS presented 30 were bounced. Thereafter, since the respondent neither agreed to reopen the second loan account and repay the dues towards the second loan, nor did appellant clear the ECS given towards the third loan. Appellant was constrained to present the cheque bearing No.578601 dated 01.01.2008 for an amount of Rs.45,000/- towards part discharge of her liability which was dishonoured on 12.04.2008 due to insufficient funds. Appellant sent a legal notice to the respondent under Section 138 of the Negotiable Instruments Act, 1881 calling DISMISSED PAGE 5 OF 9 FA/879/2014 D.O.D.: 04.07.2024 CITIBANK N.A. VS. SNEH LATA KUMAR upon the respondent to pay a sum of Rs.45,000/- towards the dishonoured cheque. Respondent replied to the legal notice vide letter dated 31.05.2008.
10. A perusal of record shows that admittedly respondent had taken a first loan of Rs.1,70,000/- from the appellant. To prove the same, copy of Loan agreement dated 16.09.2005 has been filed by the appellant alongwith the appeal as Annexure A-1 at page No.21 to
29). After payment of 11 EMIs of first Loan, on 27.07.2006 respondent took a second loan as top up loan for an amount of Rs.2,50,000/- from the appellant. Copy of Loan Agreement dated 27.07.2006 has also been placed on record by the appellant alongwith the appeal as Annexure A-3 at page No.32 to 45). After adjusting the outstanding amount towards first loan of Rs.1,40,460.17, sum of Rs.1,09,539.83 was disbursed to the respondent. After repayment of 15 EMIs of second loan, on 12.11.2007, respondent took another loan for sum of Rs.5,00,000/- from the respondent which was to be payable in 48 EMIs of Rs.14,950/- each. Copy of Loan Agreement dated 12.11.2007 has also been placed on record by the appellant alongwith the appeal as Annexure A-4 at page No.48 to 58). After adjusting the outstanding amount against second loan of Rs.1,85,853.06, sum of Rs.3,08,852.32 was to be disbursed to the respondent by way of a demand draft. It was submitted by the counsel of the appellant that the same demand draft which was accepted by the respondent's husband on her behalf did not utilize and returned to the appellant on 26.03.2008. However, the appellant has failed to file any document in support of its contention that the said demand draft was accepted by anyone on behalf of the respondent from them.
DISMISSED PAGE 6 OF 9
FA/879/2014 D.O.D.: 04.07.2024
CITIBANK N.A. VS. SNEH LATA KUMAR
11. By that time, appellant had already debited two EMIs from the respondent's account towards repayment of third loan. After adjusting loan amount of Rs.3,08,852.32 was not disbursed to the respondent by the appellant, the said EMIs in total of Rs.29,900/- was to be given by the appellant to the respondent. Since, the respondent was not willing to reopen the second loan account, the appellant could not be handed over the said amount to the respondent.
12. It is a case of the appellant that as to how the appellant was to pay the amount of Rs.14,950/- each deducted against three EMI's of third loan to the respondent, the respondent had not made payment of the entire dues towards the second loan account and was not ready to reopen the second loan account. Till the dues against the Second loan were unpaid, the appellant cannot issue NOC to the respondent.
13. It is clear from the record that the respondent has failed to file any document in order to prove the contention that the third loan amount through demand draft was accepted by the appellant or anyone on her behalf or given to the appellant by any other mode.
14. Further, the appellant has submitted that the NOC which was directed by the District Commission, cannot be issued without paying the dues amount against second loan. It is correct if the third loan amount was not disbursed by the appellant, it is not possible to issue NOC without paying the dues outstanding against Second Loan.
15. It is admitted by the respondent in his rejoinder filed before the District Commission that the complainant/ respondent never intended to evade any liability and still ready to repay the actual DISMISSED PAGE 7 OF 9 FA/879/2014 D.O.D.: 04.07.2024 CITIBANK N.A. VS. SNEH LATA KUMAR outstanding amount subject to due compensation from the appellant. Appellant had debited the EMIs from the respondent account without disbursing the loan amount to the respondent and issuing of notice under Section 138 of Negotiable Instruments Act, which shows the gross negligence and deficiency in service of the appellant.
16. It is rightly observed by the District Commission that OP had failed to explain, why the security cheque was presented when complainant / respondent was regularly paying EMI, though OP had not yet disbursed loan, issuing notice U/S 138 Negotiable Instruments Act, without looking into all aspects shows gross negligence and deficiency in service by the appellant. District Commission directed to pay the three EMI's equal to Rs.44,850/- with interest @ 9% per annum from the date of sanction of loan and further awarded a compensation of Rs.50,000/- for deficiency.
17. We are of the considered view that the District Commission has rightly observed that the appellant company was deficient in service.
18. We make it clear and clarify the impugned order of the District Commission and direct the appellant to return all three EMI's of Rs.14,950/- each with interest @ 9% per annum from the date of sanction of loan, which were debited from the account of the respondent towards repayment of third loan. After returning all three EMI's alongwith interest to the respondent as well as compensation awarded by the District Commission, Respondent will pay the dues outstanding towards second loan account. Thereafter, appellant will issue NOC to the respondent.
19. Consequently, we uphold the order dated 08.07.2014 passed by the District Consumer Disputes Redressal Commission (New Delhi), M DISMISSED PAGE 8 OF 9 FA/879/2014 D.O.D.: 04.07.2024 CITIBANK N.A. VS. SNEH LATA KUMAR Block, 1st Floor, Vikas Bhawan, I.P. Estate, New Delhi-110002. Resultantly, the present appeal stands dismissed with no order as to costs.
20. Application(s) pending, if any, stands disposed of in terms of the aforesaid judgment.
21. A copy of this judgment be provided to all the parties free of cost as mandated by the Consumer Protection Act, 1986. The judgment be uploaded forthwith on the website of the Commission for the perusal of the parties.
22. File be consigned to record room along with a copy of this Judgment. Record of the District Commission, if any, be returned forthwith alongwith copy of this judgment.
(JUSTICE SANGITA DHINGRA SEHGAL) PRESIDENT (PINKI) MEMBER (JUDICIAL) Pronounced on 04.07.2024 DISMISSED PAGE 9 OF 9