National Consumer Disputes Redressal
Dcc, Bank vs Madhavrao (Dead) Through Lrs. on 23 November, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI REVISION PETITION NO. 3168 OF 2009 (Against the Order dated 15/04/2009 in Appeal No. 1017/2009 of the State Commission Karnataka) 1. DCC, BANK The Manager Director. Central Co. Opretive Bank Ltd. Bidar ...........Petitioner(s) Versus 1. MADHAVRAO (DEAD) THROUGH LRS. Through LRs. Mrs. Meena, W/o. Madhavrao All are Resident of Bidar Karnataka 2. MRS. MEENA, W/O. LATE MADHAVRAO House No. 8-9-270/19-A, Guru Nanak Colony, Post: Bidar, Taluk & District : Bidar Bidar - 585401 Karnataka 3. MRS. HEMA, D/O. LATE MADHAVRAO House No. 8-9-270/19-A, Guru Nanak Colony, Post: Bidar, Taluk & District : Bidar Bidar - 585401 Karnataka 4. RANUKA, D/O. LATE MADHAVRAO House No. 8-9-270/19-A, Guru Nanak Colony, Post: Bidar, Taluk & District : Bidar Bidar - 585401 Karnataka 5. MAHESH, S/O. LATE MADHAVRAO House No. 8-9-270/19-A, Guru Nanak Colony, Post: Bidar, Taluk & District : Bidar Bidar - 585401 Karnataka ...........Respondent(s)
BEFORE: HON'BLE MR. JUSTICE V.B. GUPTA, PRESIDING MEMBER HON'BLE MR. PREM NARAIN, MEMBER For the Petitioner : Mr. Mallikarajun S. Mylar, Advocate For the Respondent :
Dated : 23 Nov 2015 ORDER
1. This revision petition has been filed by the Managing Director District Central Co-operative Bank Ltd. against the order dated 15.04.2009 of the Karnataka State Consumer Disputes Redressal Commission, (in short 'the State Commission'), wherein the appeal filed by the petitioner has been dismissed against the order dated 25.02.2009 of the District Consumer Disputes Redressal Forum, Bidar.
2. In short, the case is that the Company, Aishwarya Papers Pvt. Ltd. took a loan of Rs.50 lacs from the petitioner-bank and certain properties/deeds were put as security to the loan, which included a sale deed in the name of the respondent also. Then the Company again passed a resolution in its meeting dated 9.9.1999 to take additional loan of Rs.10 lac from the petitioner-bank to liquidate the working capital loan taken from the Syndicate Bank. Later, the earlier loan of Rs.50 lac was repaid by the Company to the petitioner and this fact is not disputed. Legal notice dated 12.3.2008 was sent to the petitioner-bank by the respondent that the petitioner-bank has not returned the original tittle deeds deposited i.e. Sale Deed bearing document no.4948/93-94. The petitioner-bank replied to the legal notice stating that the respondent/complainant has suppressed the fact that M/s. Aishwarya Papers Pvt. Ltd. which was earlier availing credit facilities from Syndicate Bank, was sanctioned a loan of Rs.10 lacs as bridge loan on their request and therefore, these papers were required in connection with that loan. The petitioner did not return the documents relating to security and therefore, the respondent filed a consumer complaint before the District Forum.
3. The District Forum vide its order dated 25.2.2009 allowed the complaint and passed the following order:-
"1. The petition dated 17-04-2008 is allowed.
2. The respondent is directed to return original sale deed bearing No.4948/1993-94 dated 22-2-1994 within a period of one month.
3. The respondent has to pay damages of Rs.5,000-00 to the complainant. One month time is granted to pay this amount failing which respondent has to pay interest @ 6%."
4. The petitioner then filed an appeal before the State Commission, which was dismissed vide its order dated 15.4.2009. The present revision petition has been filed against this order of the State Commission.
5. We have heard the learned counsel for the petitioner and perused the documents carefully. Learned counsel for the petitioner argued that the additional loan of Rs.10 lacs was extension of the earlier loan of Rs.50 lacs and therefore, the security documents were continued to be kept with the bank till the additional loan of Rs.10 lac was repaid by the Aishwarya Papers Pvt. Ltd./Complainant as this was a bridge loan and this was sanctioned with the understanding that the same security will continue as security for this additional loan as well. If the petitioner-bank had returned the documents relating to the security submitted for earlier loan of Rs.50 lacs, it would not have had any security to fall back upon, if the loan of Rs.10 lacs was not repaid. Therefore, petitioner-bank is fully justified in withholding the documents relating to the security submitted in connection with the earlier loan of Rs.50 lacs. The fora below have not properly understood the process of sanctioning of the loan. This additional loan of Rs.10 lacs was sanctioned on the clear understanding that the same security will continue to be hypothecated against this loan as well, otherwise, the petitioner-bank would not have sanctioned this additional loan of Rs.10 lacs. The learned counsel also stated that consumer complaint was filed after only two weeks after giving the legal notice, whereas, Karnataka Co-operative Societies Act prescribed 60 days as the period after the legal notice for any further legal action. Thus, the consumer complaint was pre-mature.
6. We have perused carefully correspondence that is available in the file in connection with sanction of additional loan of Rs.10 lacs. First of all, there is no dispute in respect of the loan of Rs.50 lacs and its repayment. In the normal course, papers relating to the security in respect of Rs.50 lacs loan should have been returned to the loanee. The petitioner-bank withheld these documents because the additional sanctioned loan of Rs.10 lacs was not repaid. From the extract of the Board meeting held on 9.9.1999. The following was resolved:-
"Further it is resolved that the existing co-lateral security offered against the c.c. loan availed from Syndicate Bank shall be transferred to D.C.C. Bank through "Syndicate Bank to D.C.C. Bank to cover the aforesaid liability."
7. Further, the Managing Director Aishwarya Paper PVT. Ltd. vide his letter dated 17.9.1999 addressed to the General Manager of the DCC Bank Ltd. inter alia informed as following:-
"Further your kindselves is requested to sanction the additional loan of Rs.10 lacs and close the Syndicate Bank loan account and get transferred the collateral security Bank to Bank which is offered to the Syndicate Bank Bidar."
8. In a letter dated 22.9.1999, the petitioner-bank has written to the Manager, Syndicate bank on the sub: "M/s. Aishwarya paper Pvt. Ltd., Bidar-Reg" as follows:
"With reference to the above cited subject, we are sending pay order No.002116 dt.22-9-99 for Rs.9,10,318/- (Nine lakhs ten thousand three hundred eighteen only) in favour of you towards liability of M/s. Aishwarya paper Pvt. Ltd., Bidar.
Therefore, you are requested to kindly transfer the documents of M/s. Aishwarya Papers Pvt. Ltd., Bidar duly discharged your claim on the property to us."
9. From the above correspondence, it is very clear that the security for the additional loan of Rs.10 lacs was the security kept with the Syndicate Bank, which was to be transferred to the petitioner-bank. Neither the loanee, nor the petitioner-bank have indicated that the security already submitted in connection with loan of Rs.50 lacs will continue for additional loan of Rs.10 lacs. In the light of clear evidence of separate security for additional loan of Rs.10 lacs, we do not find any force in the assertion made by the petitioner-bank that additional loan of Rs.10 lacs to the respondent by the petitioner-bank was sanctioned on the trust and oral request to keep the above said title deed which was already in the bank's custody. The averments made by the learned counsel for the petitioner in respect of filing of the consumer complaint just after 15 days of giving legal notice have no relevance even if, the Karnataka Society Act, mentions 60 days for taking legal action after the legal notice because the remedy under the Consumer Protection Act 1986 is in addition to any other remedy available. There is no proof filed by the petitioner that the security submitted in connection with loan of Rs.50 lacs was also required for the additional loan of Rs.10 lacs. The petitioner-bank have themselves stated that the continuation of security was on the oral understanding between the parties. This cannot be accepted when there is proper evidence otherwise.
10. Based on the above discussion, we do not find any illegality, material irregularity or jurisdictional error in the impugned order dated 15.04.2009 passed by the State Commission. Accordingly, we see no merit in the revision petition filed by the petitioner-bank, and the same is dismissed in limine.
......................J V.B. GUPTA PRESIDING MEMBER ...................... PREM NARAIN MEMBER