State Consumer Disputes Redressal Commission
Shri. Rajendra Fallari, vs Corporation Bank, on 19 March, 2014
BEFORE THE GOA STATE CONSUMER DISPUTES REDRESSAL COMMISSION PANAJI GOA FA No. 08/2014 Shri. Rajendra Fallari, Son of Madhukar Fallari, Aged, 49 years, R/OP 204, Guru Ashish Building, Gandhi Market Road, Margao Goa. Appellant v/s (1) Corporation Bank, A Body Corporate Constituted under Banking Companies (Acquisition and Transfer of Undertaking) Act 1980, Having its branch at Vidhya Nagar, Gogol Margao Goa And Represented by Its Branch Manager (2) Jaiwant Narhari Gaitonde Son of Narhari Gaitonde Aged 91 years, Resident of H. No. 78-C, Ghatamorod, Aquem Baix, Margao Goa. Respondents Appellant/Complainant is represented by Adv. Shri. A. Nachinolkar. Respondent No. 1/OP No. 1 is represented by Adv. Shri. K. P. Prabhudessai. Respondent No. 2/OP No. 2 is represented by Adv. Shri. V.V. Alvenkar. Coram: Shri. Justice N.A. Britto, President Shri. Jagdish Prabhudesai, Member Dated: 19/03/2014 ORDER
[Per Shri Justice N.A. Britto, President] Consumer complaint filed by the complainant on 29/04/11 has been dismissed by the Lr. District Forum, South Goa, by order dated 06/12/13, on two counts:
One. Because of a pending Civil Suit bearing RCS No. 316/11/F filed on 17/11/11 by OP No. 2.
Two. Because the loan taken by the complainant from the OP Bank was for commercial purposes.
2. Some more facts are required to be stated to dispose off this appeal and for that the parties hereto are being referred to in the names as they appear in the cause title in the said complaint.
3. The complainant had taken a term loan from OP Bank to run his business in the name of M/s Cannon Ball in the sum of Rs. 16 lacs on or about 14/05/04 and the complainant had created an equitable mortgage in favour of the Bank in respect of plot No. 3 of survey No. 43/0 of Village Aquem Baixo with the house situated thereon, and, as on 29/02/08 the complainant was due and payable to the OP Bank, a sum of Rs. 11,14,268/-.
4. Thereafter, the complainant, the OP Bank and OP No. 2, Shri. Gaitonde, a Builder, entered into a tripartite agreement on or about 29/02/08. By virtue of this tripartite agreement the complainant and OP No. 2, the Builder agreed and undertook to repay to OP Bank the sum of Rs. 11,14,268/- with interest at 12.25% with monthly rests till the entire term loan was repaid. The tripartite agreement also stipulated that the complainant and OP No. 2, the Builder, would sign a different deed or agreement with regard to construction, licences, permissions and usage of the said plot, etc. It was also stipulated that the complainant and OP No. 2, Shri. Gaitonde upon receiving the money in the form of full payment or initial deposit from various persons towards the booking of the flats or shops, the same would be paid to the OP Bank by keeping some amount towards the expenses and towards the costs of overheads and upon the payment of the said amount of Rs. 11,14,268/- together with interest, the OP Bank would issue a No due certificate. The construction of the proposed building was to start before the end of March, 2008.
It was stipulated that the tripartite agreement was signed in order to protect the interest of OP Bank, and, it was further stipulated that:
That if the owners (complainant) or the builder Cum-Developer (OP No. 2) jointly or individually fails to remit the banks dues as agreed above this particular agreement stands cancelled automatically without any further notice by the bank to owner or the builder cum developer. On such event the consent given by the Bank to develop the property as aforesaid stands withdrawn/cancelled. And that the Bank shall have all its right under the Law as if no such agreement has been entered between the parties and the bank is free to recover its dues by invoking the provisions of Law including sale of the mortgaged property.
5. It appears that no agreement came about between the complainant and OP No. 2, the builder, and OP No. 2, Shri. Gaitonde by letter dated 1/12/08 informed the OP Bank that OP No. 2 had deposited a sum of Rs. 6.85 lacs into the loan account of the complainant and since the complainant had not come forward to sign the agreement or any document to start the project, OP No. 2, Shri. Gaitonde, was compelled to discontinue future payments being made into the term loan account of the complainant.
The OP Bank was requested to auction the property at the earliest to realize the outstanding amount and after settling the term loan amount, surplus be paid to OP No. 2, Shri. Gaitonde, to the extent of Rs. 6.85 lacs deposited by OP No. 2 into the term loan account of the complainant and Rs. 2.92 lacs towards expenditure incurred for planning, demolition of the main house, etc.
6. The OP Bank, thereafter, on or about 1/12/09 sold the said plot mortgaged by the complainant and after adjusting the Bank loan of the Complainant the OP Bank deposited a sum of Rs. 27,78,815/- into a sundry account.
7. The OP No. 2 by letter dated 18/11/10 sent through advocate called upon the OP Bank to refund to the complainant the sum of Rs. 6 lacs plus 2.92 lacs, failing which civil and criminal proceedings would be filed to recover the said amounts.
8. The complainant, by letter dated 20/12/10, called upon OP Bank to transfer an amount of Rs. 26 lacs, (out of the said sum of Rs. 27,78,815/-) as per statement dated 20/12/10, in his joint account at the Corporation Bank, Verna. This was followed by advocates letter dated 28/12/10 by which the complainant informed the OP Bank that OP No. 2, the Builder, by his letter dated 1/12/08 had cancelled the tripartite agreement and once the agreement was cancelled the party cannot turn round and say that there existed an agreement and as such OP Bank cannot withhold the payment due to the complainant and in case OP Bank failed to release the amount, the complainant would not hesitate to take action against the OP Bank including a claim for damages for unnecessarily causing mental tension, etc.
9. OP No. 2, Shri. Gaitonde by advocates letter dated 5/2/11 written to the advocate of the OP Bank informed that OP No. 2, Shri. Gaitonde, had deposited a sum of Rs. 6 lacs during the period from 30/6/07 and 29/12/07 and had incurred an expenditure of Rs. 2.92 lacs and the advocate was requested to advise the OP Bank to pay the said amounts with interest at the rate of 12.25%.
10. By letter dated 7/2/11 written on behalf of OP Bank to the complainants advocate, the complainant was informed that as per the tripartite agreement the loan was to be paid by the complainant or by OP No. 2 either individually or jointly.
The complainant was informed that the sale proceeds after adjusting the loan amount were deposited in a sundry deposit and the OP Bank was ever ready to refund the said amount to the complainant but in view of the counter claim made by OP No. 2 Shri. Gaitonde, the OP Bank had decided to retain an amount of Rs. 10,06,852/- and the balance amount would be transferred to the complainants account as per complainants standing instructions. The complainants advocate was requested to advise the complainant to settle the claim of OP No. 2 Shri. Gaitonde amicably or by intervention of the Court so as to enable the OP Bank either to deposit the said amount in the Court or to release the same directly to the complainant and/or OP No. 2 Shri. Gaitonde.
11. Admittedly, the dispute between the complainant and the OP Bank was in relation to the sum of Rs. 27,78,815/- which was kept as sundry deposit after adjusting the amount due by the complainant in the loan account, of the loan taken by him or rather the amount of Rs. 10,06,852/- withheld by OP Bank in view of the claim made by OP No. 2 Shri. Gaitonde, in the sum of Rs. 6 lacs plus 2.92 lacs with interest at the rate of 12%, and, therefore the Lr. District Forum was not at all right in concluding that the complainant was not a consumer, as the complainant had taken the loan for a commercial purpose. After the sale of the complainants property, the sale proceeds were adjusted towards the loan account, and as rightly pointed out on behalf of the complainant, the commercial loan account was closed, and the dispute was only regarding the amount of Rs. 10,06,852/- out of Rs. 27,78,815/-, wrongly withheld by OP Bank, which was otherwise due and payable to the complainant being the excess amount realized by sale of complainants property.
12. Admittedly, also, in the written version filed by the OP Bank, the OP Bank had taken the plea that OP No. 2 Shri. Gaitonde was proper and necessary party and in his absence the complaint was bad for non joinder of proper and necessary party. As already noted, OP No. 2 Shri. Gaitonde had filed the said civil suit on or about 17/11/11, much after the filing of consumer complaint by the complainant on 29/04/11, and, much later on or about 11/06/13 OP No. 2 Shri. Gaitonde had filed the application for being impleaded in the complaint. The OP Bank, had readily given their no objection for impleadment of OP No. 2 Shri. Gaitonde. By then, the evidence in the complaint was completed and the complaint was fixed for final arguments on various dates from 6/9/12. The complainant had strongly objected to the said application dated 11/06/13 of OP No. 2 by reply dated 4/7/13. By order dated 16/08/13 the application for impleadment dated 11/06/13 was allowed, observing that by allowing the same no prejudice would be caused to the OP Bank as well as to the complainant.
13. Shri. Nachinolkar, the Lr. advocate on behalf of the complainant, fairly concedes that the complainant did not challenge the said order passed on 16/08/13 but submits that the complainant is entitled in law to challenge the same in an appeal filed against the final order. Lr. advocate submits that OP No. 2 Shri. Gaitonde could not have been added as the OP when he was neither a consumer nor any deficiency in service was alleged by the complainant as against him.
14. In our view, the complainant is right in contending that OP No. 2 Shri. Gaitonde, added pursuant to his application dated 11/06/13 and orders passed thereon on 16/8/13, could not have been added as OP, more so because the complainant was opposed to his addition and his presence was not at necessary as no relief was sought against him nor he was a proper party. As stated by the Apex Court in Mumbai International Airport Pvt., Ltd., (2013 3 CPR 647), if a person is not found to be a proper or necessary party, the court has no jurisdiction to implead him against the wishes of the plaintiff. The Apex Court has also explained as to who are necessary and proper parties. A necessary party is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the Court and if a necessary party is not impleaded, the suit itself is liable to be dismissed. A proper party is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in disputes in the suit, though he need not be a person in favour of or against whom the decree is to be made.
15. Admittedly, the complaint was filed by the complainant against OP Bank for deficiency in service of retaining an amount of Rs. 10,06,852/-out of Rs. 27,78,815/- which was due and payable to the complainant, after the complainants loan was settled. OP No. 2 Shri. Gaitonde was neither a trader as defined in clause (q) or a service provider as defined in Clause (o) of Section 2 of the C.P. Act, 1986. A complaint is maintainable before a Forum only by a complainant, as defined under Clause (b) of Section 2 and against a trader or service provider and the complaint relates to any of the matters specified in clause (c) of Section 2 for obtaining any relief provided under the Act, and, as such the Lr. District Forum was not right in allowing OP No. 2, Shri. Gaitonde, to be joined as a party to the complaint. If OP No. 2 was entitled to any amount paid by him, on behalf of the complainant in his loan account, under the tripartite agreement that claim could have been decided only by the civil court. In the circumstances, the order pronounced on 16/8/13 is liable to be set aside and consequently the application dated 11/6/13 is liable and is hereby dismissed.
16. The Lr. District Forum has not at all taken into consideration the date when the consumer complaint was filed or for that matter when OP No. 2 had filed the said Civil Suit. We have already taken note of the date of filing of the consumer complaint i.e. on 29/4/11, as could be seen from the very complaint itself, though some other date was wrongly mentioned on behalf of the complainant. On behalf of OP No. 2 Shri. Gaitonde, reliance was placed on a decision reported on 1991 (1) CPJ 626 in the case of K. Sivasankaran Nair.
We have not been able to lay our hands on the said decision. However, from what we see from the short note (at pg. 305), in that case, it is the complainant who had himself filed a civil suit in a local sub- court for the recovery of the amount which was the subject matter of the complaint and for that reason it was held that the Commission was right in declining to entertain the complaint.
In other words, the complainant was before two different Fora for the same cause of action. That is not the case herein. Here, the causes of action for the complainant to file the consumer complaint and for OP No. 2 Shri. Gaitonde to file the civil suit were distinct and different. OP No. 2 Shri. Gaitonde was a stranger to the dispute raised by the complainant in relation to the service provider, namely, the OP Bank. Moreover, the Lr. District Forum had already taken cognizance of the consumer complaint filed by the complainant on 29/4/11 by admitting the same on 5/5/11. The jurisdiction of the Lr. District Forum, could not have been ousted by OP No. 2, by subsequently filing a civil suit against the complainant and the OP Bank on 17/11/11. In fact, the complainant ought to have obtained a stay of the said civil suit in view of the consumer complaint earlier filed by him, in case the complainant was entitled in law to do so. The civil suit filed by OP No. 2 Shri. Gaitonde is bound to take its own course, and, the main issue in the said civil suit is whether OP No. 2 Shri. Gaitonde would be entitled to recover from the complainant the said sums of Rs. 6 lacs and 2.92 lacs with interest of 12% from the complainant paid by him under an agreement which he himself had cancelled by letter dated 1/12/08. It is rightly pointed out on behalf of the complainant, that OP No. 2 Shri. Gaitonde, has not sought any interim reliefs in the said civil suit so as to prevent the OP Bank from disbursing the amount of Rs. 10,06,852/- wrongly retained by OP Bank.
17. On merits of the case, Shri. Prabhudessai, the Lr. advocate of the OP Bank would submit that the OP Bank had retained the said amount because of the claim made by OP No. 2 and as such there is no deficiency in service on the part of the OP Bank. Shri. Prabhudessai would then submit that the Bank was about to file an interpleader suit, but by that time the civil suit came to be filed by OP No. 2. Shri. Alvenkar, the Lr.
advocate on behalf of OP No. 2 Shri. Gaitonde would submit that OP No. 2 had a lien on the said amount retained by OP Bank because of the tripartite agreement. To that, Shri. Nachinolkar, lr. advocate of the complainant would submit that the tripartite agreement nowhere provided that there would be such a lien. Lr. advocate would further submit that OP No. 2 could have specifically enforced the tripartite agreement in case he so desired.
18. We are unable to accept the submissions made by Lr. Adv. Shri. Prabhudessai as well as Lr. Adv. Shri. Alvenkar on behalf of the OPs. The submission of Lr.
Adv. Shri. Alvenkar is entirely misconceived.
OP No. 2 Shri. Gaitonde could only have a claim for Rs. 6 lacs plus Rs. 2.92 lacs against the complainant.
Nothing more. A lien is a charge on property which a person has for the payment of debt for which the property may be sold in discharge of the lien. We fail to understand, if the claim made by OP No. 2 was of Rs. 6 lacs plus 2.92 lacs with interest at the rate of 12% as to why OP Bank retained an amount of Rs. 10,06,852/- which was due and payable to the complainant out of Rs. 27,78,815/- kept in sundry deposit which was otherwise due and payable to the complainant after adjusting the loan amount of the complainant. In our view, the OP Bank was not at all right in retaining the said amount which was due and payable to the complainant out of the sale proceeds of his property sold by the OP Bank. In case any claim was made by OP No. 2 Shri. Gaitonde to OP Bank, it was the duty of the OP Bank to have told to OP No. 2, Shri. Gaitonde, to get his claim decided by a competent court of law. In our view, OP Bank was not at all justified in retaining the said sum of Rs. 10,06,852/- which was otherwise due and payable to the complainant only because of the claim made by OP No. 2. In retaining the said amount, the OP Bank has shown undue favour to OP No. 2 Shri. Gaitonde and thereby shown deficiency in service to the complainant. It is to be noted that it is at the behest of OP No. 2 Shri. Gaitonde, that the tripartite agreement was cancelled and OP No. 2 Bank had proceeded to realize its dues from the sale of the property mortgaged by the complainant to OP Bank and therefore whatever surplus was there, after adjusting the loan, the OP Bank was liable to pay to the complainant. In our view, the OP Bank was not at all justified in retaining the said amount of Rs. 10,06,852/- only because the claim was made by OP No. 2 Shri. Gaitonde for a sum of Rs. 6 lacs plus 2.92 lacs with interest at 12%.
19. As a result of the above discussion, the appeal deserves to succeed. The impugned final order is hereby set aside. Consequently, the complaint is allowed in terms of prayer (a) and OP Bank is hereby directed to release the sum of Rs. 10,06,852/- with pending and future interest at the rate of 9% from 20/12/10, until payment. The complainant is also held entitled for a sum of Rs. 50,000/- to be paid to the complainant in terms of prayers (b) and (c) by way of compensation for harassment, mental stress, frustration, etc. arising from deficiency of service on the part of OP Bank. Complainant is also held entitled for costs of Rs. 5000/- in terms of prayer (d).
The said costs shall be paid jointly and severally by both the OPs. The costs of this appeal are quantified at Rs. 10,000/- also to be paid jointly and severally by both the OPs. The amounts herein ordered to be paid shall be paid within 30 days failing which they shall also carry interest at the rate of 9% until they are paid.
[Shri. Jagdish Prabhudesai] [Shri Justice N.A. Britto] MEMBER PRESIDENT