State Consumer Disputes Redressal Commission
The Akola Janata ... vs Harichand Rupchand Badera on 15 February, 2010
MAHARASHTRA STATE CONSUMER DISPUTE REDRESSAL COMMISSION, MAHARASHTRA STATE CONSUMER DISPUTE REDRESSAL COMMISSION, MUMBAI, CIRCUIT BENCH AT AURANGABAD . Date of filing : 09.10.2003 Date of Order : 15.02.2010 FIRST APPEAL NO. 1558 OF 2003 IN COMPLAINT CASE NO. 107 OF 2001 DISTRICT CONSUMER FORUM: PARBHANI & HINGOLI The Akola Janata Commercial Co-operative Bank Ltd., Akola Through its General Manager, Prafulla S/o. Gopikisan Rathi, having its head Office at Akola and Branch Office at Sardar Patel Road, Parbhani, Tq. & Dist. Parbhani. Appellant VERSUS Harichand Rupchand Badera R/o. Parbhani, Tq. & Dist. Parbhani. Respondent Coram : 1) Mr. S.G. Deshmukh, Honble Presiding Judicial Member
2) Mrs. Uma S.Bora, Hon`ble Member.
Present: Adv. Shri. K. D. Agrawal, for appellant.
Adv. Shri. R. K. Bhakde, for respondent.
:: ORAL ORDER ::
Per Mrs. Uma S. Bora, Honble Member
1. The Akola Janata Commercial Co-operative Bank, Akola through its General Manager, challenges in this appeal the judgment and order passed by District Forum, Parbhani & Hingoli in complaint case No. 107/2001 decided on 18.08.2003.
2. The facts giving rise to this appeal are as under:-
Harichand Rupchand Badera resident of Parbhani is businessman and Proprietor of Firm M/s. Vijay Trading Company. Appellant being a Bank sanctioned the cash credit facility to the petitioner to the tune of Rs. 15,00,000/- as a working capital. The complainant was working as dealer of Parle products and agency of the same. In the month of February, 2001 the complainant was sanctioned loan facility of Rs. 15,00,000/- and accordingly he issued demand draft of Rs. 4,04,000/- in the name of Parle Products from the loan amount. Thereafter he came to know that accounts of the complainant towards Parle products are not settled. Thereafter during the regular course of the petitioners business petitioner issued one cheque of Rs. 2,60,000/- in the name of Shetki Bhandar, Kalamnuri. Though he was having credit facility of Rs. 15,00,000/- his cheque was dis-honoured and returned unpaid on the count that complainants account is out of order. Complainant immediately approached to opponent and inquired about the facts. It was informed to him that his account was closed on account of less stock appeared in his shop and his cash credit facility was cancelled. As the cheque was returned unpaid his reputation in the market was lower down and he suffered huge loss. He approached to District Forum by demanding the compensation.
3. Appellant appeared before the Forum and denied the claim. It is contended that, as per terms and conditions of the cash credit facility complainant was to maintain the stock in his shop but on the inspection by the Bank it was found that, complainant was not having sufficient stock. It was found that the Firm was having stock worth of Rs. 5,00,000/- only while the outstanding amount of the account of the Firm at the relevant time was of Rs. 15,00,000/- or more. Therefore notice was issued to the complainant and informed him to maintain the stock to avail the cash credit facility. Though notice was served and directions were given, there was no change in the position of the stock and business operation of account therefore Bank has o alternative but to dishonour the cheque issued by the complainant.
4. After hearing both the parties District Forum held that, Bank has committed deficiency in service while conducting the operation of the cash credit facility and damaged the reputation of the complainant. Therefore, District Forum directed appellant to pay Rs. 10,000/- for mental agony.
5. Being aggrieved by the said judgment and order Bank came in appeal.
6. Notices of final hearing were issued to both the parties. Adv. Shri. K. D. Agrawal, appeared for appellant and Shri. R. K. Bhakde, appeared for respondent. It is submitted by Adv. Agrawal, that respondent proprietor of the firm M/s. Vijay Trading Company was sanctioned the cash credit limit since the year 1999 to the tune of Rs. 15,00,000/-. The respondent was working as dealer of Parle Products and having agency of the same. The cash credit facility was sanctioned against the stock of Parle product and financial assistance was also given to do the business of Parle products. But, as there was a dispute of agency between the respondent and Parle Company his agency was terminated in the year 2001. On the inspection of the godown by the officer of the Bank it was found that, there was stock of worth of Rs.5,00,000/- only when the cash credit facility was to the tune of Rs.15,00,000/-. It also revealed that, there was outstanding amount in the account of firm to the tune of Rs. 11,70,000/-, therefore notice was issued to the respondent on 12th March, 2001. Even after notice complainant did not change the position of stock. Cash credit facility was given to run the business of Parle Products but the cheque in question was issued in favour of Shetki Bhandar therefore said cheque was dishonoured as it was against the terms and conditions of the sanctioned limit. Complainant was in default of paying the loan amount therefore legal action was also taken against him. The appellant did not commit any deficiency in service as complainant was already in default of payment of loan and he committed breach of condition of cash credit facility.
7. Adv.
Bhakade for respondent supported the judgment and order of District Forum. He submitted that the dishonouring of the cheque of reputed firm by the bank caused the damage to the firm. The Bank did not inform to the respondent before closing his account, no prior notice was given before closing account, and respondent suffered loss and mental agony. District Forum rightly granted compensation for mental agony.
8. We heard both the counsels and perused the records. It is mentioned by appellant that, the complainant/respondent committed breach of terms and conditions of cash credit facility. Complainant was to maintain sufficient stock to avail the cash credit facility. But it is found at the time of inspection that he was not maintaining the proper stock. He was not maintaining the account properly. It is well settled position that parties to the contract are to act as per terms and conditions, the cheque given by respondent to the Shetki Bhandar was dishonoured on the ground that account was not in order it was the duty of the respondent to maintain the account. Notices were issued by the Bank to the respondent before closing his account dated 23rd May,2000, 1st Feb.2001 and 12th March,2001, even then respondent did not take care to maintain his account. We are relying on the National Commissions judgment in the Branch Manager, State Bank of India V/s. Sundarlal Kela, reported in II (1995) CPJ 5 (NC) in which It is held by National Commission, Complainant alleges that though he was granted a cash credit facility of Rs. 12,500/- but he was allowed to avail said facility upto five lacs for 17 yearsBank contended that financial position of the complainant was dubious hence the facility was stopped. Whether there is a deficiency in service ? (NO). As per settled position of law when the financial position of the borrower is doubtful the Bank is justified not allowing the borrower to avail the cash credit limit. When the borrower has committed default and committed breach of terms and conditions of the cash credit agreement Bank is justified in closing the account. We do not find any deficiency in service committed by the Bank. Hence, the order.
*ORDER*
1. Appeal is allowed. The judgment and order passed by the Forum is hereby quashed and set aside.
2. Complaint stands dismissed.
3. Copy of the order be furnished to the parties.
Mrs.Uma S. Bora S. G. Deshmukh Member Presiding Judicial Member Kalyankar