State Consumer Disputes Redressal Commission
Indusind Bank Ltd. & Anr. vs Mehar Singh on 18 May, 2023
1st ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.40 of 2021
Date of institution : 04.03.2021
Reserved on : 10.05.2023
Date of decision : 18.05.2023
IndusInd Bank Ltd. The Mall, Kapurthala through its Chief Manager.
.....Appellant/Opposite Party
Versus
Mehar Singh son of Joginder Singh r/o village Mehmadwal, PO
Khiranwali District Kapurthala.
.....Respondent/Complainant
First Appeal under the Consumer Protection
Act, 2019 against the order dated 01.02.2021
passed by the District Consumer Disputes
Redressal Commission, Kapurthala.
Quorum:-
Mr. H.P.S. Mahal, Presiding Judicial Member
Mrs. Kiran Sibal, Member Argued by:-
For the appellant : Sh. Parminder Singh, Advocate For respondent : Sh. Angad Parmar, Advocate for Sh. V.K. Thakur, Advocate KIRAN SIBAL, MEMBER The instant appeal has been filed by the appellant/opposite party against the impugned order dated 01.02.2021 passed by District Consumer Disputes Redressal Commission, Kapurthala (in short, "the District Commission"), whereby the complaint filed by complainant against opposite party (in short 'OP'), under the Consumer Protection Act, was allowed and the following relief has been granted:
"11. As a result of above discussion, the complaint is allowed with order that the OP Bank shall issue the No Objection Certificate in respect of the car hypothecation in question in FA No.40 of 2021 2 respect of which the complainant has already repaid the entire loan. However, there shall be no order as to costs."
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission.
3. Brief facts for the disposal of the appeal are that the complainant had obtained a vehicle loan for the sum of Rs.2,87,726/- from the OP, for his vehicle i.e. 'Hyundai I20" car. The said loan was repaid by the complainant by way of 24 equated monthly installments of Rs.14,500/- each. The last EMI was paid on 07.06.2018. However, inspite of having paid the entire loan amount, the OP Bank has not issued 'No Objection Certificate' to the complainant, which is required to get removed the hypothecation entry on the registration certificate of the vehicle. The complainant requested the OP to issue 'No Objection Certificate' but it failed to issue the same. The complainant also served legal notice dated 29.08.2019 upon the OP but all in vain. Alleging deficiency in service on the part of the OP, the complainant filed consumer complaint before the District Commission and sought directions against the OP to issue "No Objection Certificate" qua the vehicle in question and to pay Rs.20,000/- as compensation and Rs.11,000/- as litigation expenses.
4. The complaint was contested by the OP by filing written reply. In reply to complaint, OP raised certain preliminary objections, inter alia; that the complaint was just an abuse on the process of law and the complainant was stopped from filing the present complaint by his own acts and conduct as he had not come to the Commission with FA No.40 of 2021 3 clean hands and was guilty of suppressing the material facts. On merits, the OP stated that the complainant was a co-borrower/guarantor in another loan account having account No.PJJ00595D in the name of M/s SBS Bus Service and had executed the loan agreement in favour of the OP-Bank. The liability of the borrower and co-borrower/guarantor is co- extensive and is of joint and several in nature. As per clause 20 of the loan agreement duly executed by the borrower, the OP bank has all rights to set off and lien on all assets of the complainant being a co- borrower/guarantor. An amount of Rs.7,26,348.62 is still due in the said loan account bearing No.PJJ00595D. The OP further stated that as per clause 23 of the agreement, there is an arbitration clause and in case of dispute arising between the parties, the matter is to be referred to the arbitrator. After denying the other averments made in the complaint, the OP prayed for dismissal of the complaint.
5. The parties led their evidence in support of their respective contentions and the District Commission after going through the record and hearing learned counsel for the parties, accepted the complaint of the complainant, vide impugned order. Aggrieved with the same the present appeal has been filed by the appellant/OP.
6. We have heard learned counsel for the parties and have gone through the written argument submitted by parties and also perused the record of the case.
7. The learned counsel for the appellant/OP vehemently contended that the District Commission has failed to appreciate the admitted fact that respondent/complainant had purchased two vehicles FA No.40 of 2021 4 by availing two loans from appellant/OP and has concealed this material fact before the District Commission. The parties have entered into loan agreement in both the loan availed by the respondent/complainant and both the parties cannot go beyond the terms and conditions agreed between them. As per clause 20 of the said loan agreement duly executed by the borrower and co- borrower/guarantor, the bank has all rights to set off and lien on all assets of the respondent/complainant. The District Commission has completely ignored and has not even appreciated the terms and conditions of the loan agreement. Alleging no deficiency in service on the part of the appellant/OP- Bank, the learned counsel prayed for acceptance of the appeal by setting aside the impugned order.
8. On the other hand, the learned counsel for the respondent/complainant has contended that the District Commission has rightly held in the impugned order that the appellant/OP Bank shall issue the No Objection Certificate in respect of the car hypothecation in question as the entire loan amount has already been paid by the respondent/complainant and further that the right of the appellant/OP would not be jeopardized by issuing the NOC. The learned counsel further argued on the similar lines as stated in the complaint and prayed for dismissal of the present appeal.
9. We have given thoughtful consideration to the contentions raised by learned counsel for the parties.
10. The admitted facts of the case are that the respondent/complainant had obtained a vehicle loan for the sum of FA No.40 of 2021 5 Rs.2,87,726/- from the OP, for his vehicle i.e. 'Hyundai i20' car, vide loan agreement dated 01.07.2016, Ex. OP/2. The said loan amount was to be repaid by the respondent/complainant by way of 24 equated monthly installments of Rs.14,500/- each and he paid the entire loan amount to the appellant/OP. The respondent/complainant alleged that despite payment of entire loan amount the appellant/OP Bank has not issued 'No Objection Certificate' to the complainant, which is required to get removed the hypothecation entry on the registration certificate of the vehicle. On the other hand, the appellant/OP pleaded that the respondent/complainant was a co-borrower/guarantor in another loan account No.PJJ00595D, vide loan agreement dated 13.04.2016 Ex.OP/1, in the name of M/s SBS Bus Service and an amount of Rs.7,26,348.62 is still outstanding against the said loan, therefore the appellant/OP has all rights to set off and lien on all assets of the complainant being a co-borrower/guarantor. Alleging deficiency in service on the part of the appellant/OP the respondent/complaint filed consumer complaint before the District Commission, which was allowed by it vide impugned order as above. Aggrieved by the same, the appellant/OP bank has filed the present appeal.
11. The appellant/OP has preferred the present appeal mainly on the ground that the District Commission has failed to appreciate the admitted fact that the respondent/complainant has availed two loans from appellant/OP and had concealed this material fact before the District Commission to take undue advantage of Consumer Protection Act. To determine this point we have perused the entire documentary evidence, pleadings and objections on record. There is no dispute qua FA No.40 of 2021 6 the fact that the respondent/complainant had obtained a vehicle loan for the sum of Rs.2,87,726/- from the appellant/OP-Bank for his vehicle i.e. 'Hyundai i20' car, vide loan agreement dated 01.07.2016, Ex. OP/2. It has not been denied by the appellant/OP that the said loan amount has been paid by the respondent/complainant. However, OP has not issued "No Objection Certificate" to the complainant qua the said loan account on the ground that respondent/complainant was a co- borrower/guarantor in another loan account No.PJJ00595D, vide loan agreement, Ex. OP/1, in the name of M/s SBS Bus Service and an amount of Rs.7,26,348.62 is still outstanding against the said loan. A perusal of the loan agreement, Ex. OP/1, shows that the appellant/OP- bank being a lender, SBS Bus Service being Borrower and respondent/complainant being Co-borrower were entered into the said agreement dated 13.04.2016 and as per clause 20 of the terms and conditions of the said agreement under the heading "Set off and lien"
the appellant/OP-Bank being a lender has a lien over all the assets of the borrower(s)/Co-borrower(s) in its control and a right to set off against any money due to it from the borrower(s)/co-borrower(s) for recovery of its dues hereunder. The relevant part of the clause 20 is reproduced as under:-
"20.0 SET-OFF AND LIEN 20.1 Notwithstanding anything contained in this Agreement, the Lender shall have a lien over all the assets of the Borrower(s)/Co-borrower(s) in the Lender's control and a right to set off against any monies due to the Lender from the Borrower/Co-borrower(s) and to combine all accounts of the Borrower(s)/Co-borrower(s) for recovery of the Lender's dues hereunder.
20.2 It is hereby agreed and understood by the Borrower that in the event the Borrower(s) defaults in payment of the FA No.40 of 2021 7 installments/Charges/fees without prejudice to the right of termination, the Lender shall have the right to set-off all monies, securities, deposits, other assets and properties of the Borrower's/Co-borrower that is held by the Lender as secured asset, against the amount in respect of which the default has been committed under this Agreement or any other agreement.
The learned counsel for the appellant/OP placed reliance on the judgment of Hon'ble Supreme Court in the case of Syndicate Bank Vs. Vijaya Kumar reported as (1992)2 SCC 330, wherein it has been held, " ....by mercantile system the Bank has a general lien over all forms of securities or negotiable instruments deposited by or on behalf of the customer in the ordinary course of banking business and that the general lien is a valuable right of the banker judicially recognized and in the absence of an agreement to the contrary, a Banker has a general lien over such securities or bills received from a customer in the ordinary course of banking business and has a right to use the proceeds in respect of any balance that may be due from the customer by way of reduction of customer's debit balance". In view of the law laid down by the Hon'ble Supreme Court, the bank has a general lien over all securities deposited by the customer, in the absence of any agreement contrary thereto. The respondent/complainant had duly signed and accepted the terms and conditions of the loan agreement, Ex.OP/1. As per statement of accounts of the said loan account No.PJJ00595D as on 27.02.2021, placed on record by the appellant/OP in additional evidence, annexure A-3, some amount is still overdue towards the said loan account, which is recoverable from the respondent/complainant. It is pertinent to mention here, at this stage, that these facts regarding availing of FA No.40 of 2021 8 another loan, vide loan agreement dated 13.04.2016, Ex. OP/1, our view is that it was imperative for the respondent/complainant to bring the same to the notice of the District Commission as it has evidentiary value and concealment of the same would certainly prejudice the observation of the District Commission. Moreover, further concealment of the fact by the respondent/complainant that an arbitration award, Annexure A-7, has already been passed, against him for recovery of the outstanding amount of loan, on 12.05.2017 i.e. prior to the filing of complaint before the District Commission on 24.09.2019, also draws adverse inference against the respondent/complainant. Therefore, respondent/complainant cannot raise the said demand of obtaining No Objection Certificate from the appellant/OP without clearing the outstanding amount of another vehicle loan. Accordingly, we find force in the contention raised by the appellant/OP and therefore the impugned order passed by the District Commission is liable to be set aside.
12. Sequel to our above discussion, we allow the appeal of the appellant/OP and the impugned order of the District Commission is hereby set aside.
13. The appeal could not be decided within the stipulated period due to heavy pendency of Court cases.
(H.P.S.MAHAL) PRESIDING JUDICIAL MEMBER (KIRAN SIBAL) MEMBER May 18th, 2023.
(Dv)