State Consumer Disputes Redressal Commission
Sushil Gulati vs Oriental Bank Of Commerce on 17 March, 2008
IN THE STATE COMMISSION : DELHI IN THE STATE COMMISSION : DELHI (Constituted under Section 9 clause (b) of the Consumer Protection Act, 1986 ) Date of Decision: 17-03-2008 Complaint Case No.C-68/1998 Sushil Gulati, -Complainant Prop. M/s Tekline Communications, Through 6, Jain Mandir Complex, Mr.Vipin Nandwani, N.D.S.E. Part II, Advocate. New Delhi-110049. Versus Oriental Bank of Commerce -Opposite Party No.1 P-34, NDSE, Part II, Through New Delhi-110049. Mr. S.K. Chaudhary, Advocate. CORAM: Mr. Justice J.D.Kapoor President Ms Rumnita Mittal Member
1. Whether reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
JUSTICE J.D. KAPOOR, PRESIDENT (ORAL) On account of alleged deficiency in service on the part of OP Bank the complainant firm has claimed compensation of damages to the tune of Rs.8,47,325.00/-.
2. Case of the complainant, in brief, is that he was having dealings with the Punjab Co-operative Bank Ltd. The said bank has been overtaken by the Oriental Bank of Commerce in the year 1995 the complainant was advanced a cash credit (Pledge) limit of Rs.3,00,000.00 by the erstwhile Punjab Co-operative Bank Ltd against pledge of batteries with a margin of 25% i.e. goods worth Rs.3,75,000/- were pledged against an advance of Rs.3,00,000.00. Blank documents were got signed from the complainant and his wife who stood surety for the same goods are under lock and key of the OP. the complainant has been operating the account regularly till Sept.1996 when a moratorium was placed for a period of seven months from 30.09.1996 to 01.04.1997 by Reserve Bank of India on the said bank due to irregularities committed by the said bank and complainant was not allowed to operate the account. The
3. OP allowed the operation of the account for the first time on 30.05.1997 when two pieces of batteries were delivered against payment. When the complainant went to take delivery of two pieces from the godown. The complainant found that the batteries were lying in bad shape they were in damaged condition, their packing and boxes have been broken and there were scratches on the batteries and it showed that the godwon has been pilferaged by the officials of Bank and on random counting shortage in total number of batteries was noticed and the complainant inspected the pledge goods. From the inspection it transpired that out of batteries of 7AH, 43 batteries were short. The batteries which were found in the godwon were in such a bad condition that they are not salable in the market. The complainant again operated the account on 30.08.1997 and took delivery of 16 pieces of batteries against payment. It was found that the batteries have technically perished due to non-charging the OP was duty bound to keep the goods in good shape and return the same to the complainant in good shape against payment. The OP has failed to perform its part as pawner and goods have technically perished due to non- charging and mishandling. The OP has not allowed the complainant to operate the account from 30.09.1996 to 29.05.1997. Secondly the OP has misappropriated part of the pledge goods and remaining goods have been made un salable. The complainant has suffered heavy losses as an amount of about Rs.3.50,000.00 has remained blocked.
4. OP Bank denied any deficiency on its part and raised the following pleas:-
(i) That the complainant was availing certain credit facilities from the OP bank against the pledge of batteries besides the personal guarantee of his wife.
(ii) That the operation in the account were irregular and against the banking discipline.
The OP Bank had been calling upon the complainant to regularize his account and liquidate his liability which the complainant has failed to do.
(iii) That as on 30.11.98 the borrowers are liable to pay Rs.2,78,862.86 as the Principal amount and Rs.1,60,899/- as recorded interest @ 18.5%pa with quarterly rests recorded up to 30.11.1998. The complainant himself being at fault cannot be permitted to take advantage of his own wrongs to escape/delay his liability to the OP bank.
(iv) That the erstwhile management of PCBL has filed a writ petition before the High Court at Chandigarh challenging the said merger. Therefore, the present complaint against OBC is premature as the final outcome of the merger pending adjudication is not known.
(v) That the batteries lying in the store were totally handled by the complainant as and when any batteries were to be removed or placed there.
5. Apart from this OP has also taken the plea that civil suit is pending between the parties in respect of the aforesaid dispute and therefore the instant complaint is not maintainable.
6. So far as last objection is concerned the Supreme Court has taken a view that remedy under section 3 of the Consumer Protection Act, 1986 is an additional remedy and not in derogation of any other law for the time being in force or any other proceedings pending in any other forum. In this regard reference of the following judgments of the Supreme Court is necessary:-
(i) Secretary, Thirumurugan Coo-operative Agricultural Credit Society Vs. M. Lalitha (Dead) through LRS and Ors. Civil Appeal No. 92 of 1998 decided on 11-12-2003.
Reported in S.C. & N.C. Consumer cases (1996-2005).
10. In Section 3 of the Act in clear and unambiguous terms it is stated that the provisions of 1986 Act shall be in addition to an not in derogation of the provisions of any other law for the time being in force.
From the statement of objects and reasons and the scheme of 1986 Act, it is apparent that the main objective of the Act is to provide better protection of the interest of the consumer and for that purpose to provide better redressal, mechanism through which cheaper, easier, expeditious and effective redressal is made available to consumers. To serve purpose of the Act, various quasi judicial forums are set up at the district, State and National level with wide range of powers vested in them. These quasi judicial forums, observing the principle of a specific nature and to award, whenever appropriate compensation to the consumers and to impose penalties for non-compliance of their orders.
(ii) Fair Air Engineers Pvt. Ltd. and Anr. Vs. N.K. Modi, 1996 (6) SCC 385.
It would, therefore be clear that the legislature intended to provide a remedy in addition to the consequent arbitration which could be enforced under the Arbitration Act or the civil action in a suit under the provisions of the Code of Civil Procedure.
In view of the object of the Act and by operation of section 3 thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matter in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that the Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on the peculiar facts and circumstances of a particular case, come to the conclusion that the appropriate forum for adjudication of the disputes would be otherwise those given in the Act.
(iii) Smt. Kalawati and others Vs. M/s United Vaish Co-operative Thrift and Credit Society Ltd.
R.P. No. 823 to 826 of 2001, SC & NC Consumer Law Cases (1886-2005) 275, wherein the National Commission observed that
4. Section 3 is worded in widest terms and leaves no one in doubt that the provisions of CPA shall be in addition and not in derogation of any other law for the time being in force. Thus even if any other Act provides for any remedy to litigant for redressal by that remedy a litigant can go to Dist. Forum if he is a consumer under CPA. That remedy exists in any other law which creates the right is no bar to District Forum assuming jurisdiction.
7. As is apparent from the defence of the OP, the complainant had been irregular in liquidating his liability in as much as that on 30-11-1998 they were liable to pay Rs. 2,78,862.86 as the principal amount and Rs. 1,60,899/- as recorded interest @ 18.5% with quarters recorded upto 30-11-1998. Since the complainant was at fault it cannot be permitted to take advantage of his own wrongs to escape or delay his liability to the Bank.
8. There is no dispute that the loan was advanced against pledging of batteries of the value of Rs. 3,75,000/- whereas cash credit (pledge) limit was for Rs. 3,00,000/-. Once the bank advances overdraft facility or loan by pledging goods it is incumbent upon the bank to first enquire the quality, nature and capability of the goods being pledged and the bank is liable to keep those goods in such condition that may fetch the same value or depreciated value as to the actual value and allow such goods to deteriorate or render in such condition then the bank is always liable to compensate the consumer or the borrower. It is well settled law and as envisaged in Lallan Prasad Vs. Rahmat Ali AIR 1967 Supreme Court 1322 (V 54 C 275) the Supreme Court has observed as under:-
The right to sue on the debt assumes that he is in a position to redeliver the goods on payment of the debt and, therefore, it has put himself in a position where he is not able to redeliver the goods he cannot obtain a decree.
Where the value of the pledged property is less than the debt and in a suit for recovery of debt by the pledge, the pledge denies the pledge or is otherwise not in a position to return the pledged goods he has to give credit for the value of the goods and would be entitled then to recover only the balance.
9. However, there is no evidence on record to show as to the actual damage to the batteries or depreciated value of the batteries which were alleged to have been damaged or were not kept in good condition. Even if it is accepted as contended by the OP that complainant did not declare the value of the pledged goods still the fact remains that OP had given credit limit upto Rs. 3 lacs and, therefore, inference is that at least the pledged goods would have been Rs. 3 lacs, if not 3,75,000/- or so.
10. Since civil suit is already pending between the parties as to the assessment of the actual cost of the goods pledged as well as the liability of the complainant qua the OP, we for the purpose of compensating the complainant for the deficiency in service on the part of OP in not maintaining the batteries in the same condition as these were pledged and, therefore, became of no use to the complainant and thereby complainant incurred not only loss as to the value of the batteries but also loss by way of interest against credit limit, we deem that lump sum compensation of Rs. 50,000/- shall meet the ends of justice. This compensation we are awarding as to the limited deficiency of not keeping the batteries in the same condition and also by way of interest and also because of real dispute between the parties being as to the liability of the complainant and the OP being subject to the civil suit.
11. Aforesaid payment shall be made within one month from the date of receipt of this order.
12. Complaint is disposed of in aforesaid terms.
13. A copy of the order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to Record Room.
14. Announced on 17th March, 2008.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member jj