State Consumer Disputes Redressal Commission
Shri. M. Arumugam, Lcd, Van Vikas, ... vs The Asst. Genl. Manager, Sbi Main ... on 31 January, 2014
State Consumer Disputes Redressal Commission
Andaman & Nicobar Islands
Port Blair
Present: Justice Arunabha Basu, President.
Smti Biji Thomas, Member.
Appeal No. 01 of 2013
Shri. M. Arumugam, LCD, Van Vikas, Haddo, Port Blair, S.Andaman
-vs-
The Asst. Genl. Manager, SBI Main Branch, Port Blair. & 7 Others
JUDGMENT
Dated: 31.01.2014 The appeal is directed against the Judgment and Order dated 13.11.2013 passed by District Forum in connection with CD Case No.18 of 2011, whereby and whereunder the Forum has dismissed the complaint filed by the appellant herein.
The appellant filed complaint against the Respondents where the officers of the State Bank of India, Main Branch at Port Blair have been impleaded. The short case of the appellant rests upon different transactions entered between the appellant and bank. On perusal of the complaint it appears that main grievance of the complainant is about a transaction in his ATM with the Main Branch at Port Blair in respect of sum of Rs.2000/-. It is the case of the complainant that the said amount was not withdrawn but the bank illegally deducted the amount from his Saving Pass Book. The second grievance of the complainant is about over charging of interest of Rs.13,844/- in connection with personal loan for Rs.1,09,000/-. The remaining cause of action was rightly not considered by District Forum as those transactions took place in the year 2005, 2007 and as the complaint was instituted on 19.08.2011 the same is hopelessly barred by limitation. We are not highlighting those facts as the complainant during the appeal did not press for those points mentioned in the complaint. The complainant annexed a letter addressed to one Shri. S. Ganesh of Reserve Bank of India and certain documents alongwith the complaint.
On perusal of the Judgment passed by District Forum we find that the Forum mainly decided the issue on technical grounds. It is recorded by District Forum, "We have already mentioned that the petition of complaint suffers from various deficiencies and as such it is not maintainable in the present form". The Forum is also of the view that the evidence of the complainant is a piece of material supporting and substancing his pleading in the petitioner of complaint.
In our view the Forum while deciding the complaint rigidly followed the rule of pleadings as provided under order VI Civil Procedure Court. We find that so far the present case is concerned the appellant who is not a law knowing person conducted his own case and works as a Lower Division Clerk and as such it cannot be expected that he will be knowing the art of pleadings. It is the duty of the Forum to minutely go through the contents of the complaint rather than the form in which complaint is written. It may be pointed out that application of Civil Procedure Court is limited and very restricted. No doubt the proceeding before the Forum is a judicial proceeding but the judicial authority under the Consumer Protection Act is a creature of a statute. Application of CPC is mentioned under Section 13 of the Consumer Protection Act and Sub-Section 4 to Sub-Section 7 of Section 13 deal with the application of CPC. Order 6 CPC has no application and as such in our view the Forum took a rigid approach and followed provisions of the CPC more strictly and stringently then what is permissible under the statute. Section 12 of the Consumer Protection Act deals with the "Manner in which the complaint shall be made" and in the aforementioned section no form is mentioned. The question of the application of the CPC will be discussed in detail by us during the course of this judgment as the respondent bank has filed an application under order 41 rule 27 CPC praying to submit additional evidence and by our order dated 18.10.2013 we directed that the appeal and application shall be heard together. After going through the judgment passed by the District Forum and the contention by the rival parties we propose to frame the following points for consideration:-
1. Whether the application under order 41 Rule 27 of CPC filed by the respondents to adduce additional evidence is at all maintainable at law as well as in the facts of the case ?
2. Whether the appellant is entitled to recover a sum of Rs.2000/- from the respondent bank as the ATM operation was unsuccessful ?
3. Whether in connection with the personal loan of Rs.1,09,000/- the interest charged against the appellant was not in conformity with the agreement entered between the parties ?
Decisions with reasons
1. The respondents have filed an application under order 41Rule of 27 CPC praying inter-alia to file documents which may be treated as additional evidence.
The question now arises is whether such application is at all maintainable under the Provisions of the Act or Rules framed there under. The application of CPC is to a limited extent as permissible under law. Section 13 of the Act deals with the procedure on admission of complaint. Sub-Section 4, 5, 6 and 7 of Section 13 deals with application of CPC. It may be pointed out under Sub-Section 5 of Section 13 it is provided that the proceeding is deemed to be judicial proceeding and the Forum shall be deemed to be a Civil Court. This does not necessarily mean that code of Civil Procedure in its entirity will be applicable. The Ld. Advocate for the respondent failed to produce any authority that all the Provisions in CPC is applicable. In our view Commission is a creature of the Acts and shall exercise powers permissible under the Act.
In this connection we may fruitfully refer to the decision of Hon'ble Supreme Court in Rajeev Hitandra Pathak and Others -Vs- Achyut Kashinath Karekar and another reported in 2013 (1) CCC 514 (NS). Three Judges Bench of Supreme Court considered the applicability of CPC with regard to the question whether the District Consumer Forum and the State Commissions have the power to set aside their ex-parte orders or whether they have power to review or recall their own orders. The Hon'ble Court considered various earlier decisions of Supreme Court both in favour or against the proposition and decided as follows:-
"On careful analysis of the provisions of the Act, it is abundantly clear that the tribunals are creatures of the Statute and derive their power from the express provisions of the Statute. The District Forums and the State Commissions have not been given any power to set aside ex-parte orders and power of review and the powers which have not been expressly given by the Statute cannot be exercised".
In view of the decision of the Supreme Court as referred to above it is absolutely clear that save and except the Provisions of CPC as incorporated in the Code, no other provisions can be applicable. Clause 26 of Consumer Protection Regulation 2005 has also provided that provisions of the Court of Civil procedure 1908 may be applied which have been referred to in the Act or in the Rules made thereunder.
We are not unmindful of the fact that under Clause-III to Sub-Section (4) of Section 13 it is provided about "reception of evidence". Even though order 41 Rule 27 has not been specifically mentioned we may consider that reception of evidence would mean reception of additional evidence. Order 41 Rule 27 CPC runs as follows:-
"27. Production of additional evidence in Appellate Court- (1) The parties to an appeal shall not be entitled to produce additional evidence, whether oral or documentary, in the Appellate Court. But if-
(a) the court from whose decree the appeal is preferred has refused to admit evidence which ought to have been admitted, or [(aa) the party seeking to produce additional evidence, establishes that notwithstanding the exercise of due diligence, such evidence was not within his knowledge or could not, after the exercise of due diligence, be produced by him at the time when the decree appealed against was passed, or],
(b) the Appellate Court requires any document to be produced or any witness to be examined to enable it to pronounce judgment, or for any other substantial cause, the Appellate Court may allow such evidence or document to be produced, or witness to be examined. (2) Wherever, additional evidence is allowed to be produced by an Appellate Court, the court shall record the reason for its admission."
Order 41Rule 27 CPC prescribes for production of additional evidence before the appellant court. The evidence may be permitted to be given only on such contingency as provided under the aforementioned Rule. It is evident from the record that original complaint was filed on 19.08.2011, while the respondent in their capacity as opposite party entered appearance on 16.11.2011. During the course of proceeding before the Forum the respondent which is a reputed bank filed written objection, produced evidence both oral and documentary. It may be mentioned here the respondent filed a document dated 08.04.2011 whereby complainant was informed that the ATM transaction was shown to be successful. The said document was marked as Exhibit-A before the Forum. The respondent also produced a copy of the agreement entered between the parties with regard to the loan transaction amounting to Rs.1,09,000/- and the said document was marked as Exhibit-B. So it cannot be a case where the evidence was refused to be admitted by the Forum. The documents which are sought to be produced consists of banking circular, a copy of arrangement letter, some log entries and a document under the heading ATM Error Code. In the application, respondents very casually stated in Para 2 of their application that the documents were not traceable inspite of vigorous and diligent search by the respondent. We are unable to accept that the documents were not available as the documents dated 13.06.2009 is issued by the Chief General Manager, State Bank of India and sent to all circles. This document mentions about the rate of interest that is required to be charged in connection with various loans. In the said document it is mentioned that rate of interest is applicable w.e.f 29.06.2009. It is not the case of the bank that from 2009 till the agreement with the appellant they had no other banking transactions. It cannot be so. The State Bank of India at Port Blair was granting personal loans to many persons on the basis of the circular as mentioned above and the contention that the documents were misplaced and could not be traced out is in our view is not only incorrect but to some extent false. An organization like State Bank of India cannot be that casual and callous. In addition to what has been stated above we do not find that the documents now produced will at all change the complexion of the case and we are of the view that on the basis of the documents already produced the matter can be decided by us. In these circumstances we are not inclined to allow the application filed order 41 Rule 27 CPC and reject the same.
Point No.1 is thus answered accordingly.
2. In his complaint the appellant has stated that Rs.2000/- should be refunded as the amount was not received by him from the ATM in the Main Branch of State Bank of India at Port Blair. The bank (the respondent) has simply brushed aside the objection of the appellant on the ground as mentioned in Exhibit-A in which by their communication dated 08.04.2011 the respondent has stated that, "with reference to your complaint dated 18.03.2011 we have to state that the ATM JP Log is showing the transaction as "Successful" and accordingly the refunded amount was reversed on a subsequent date". We decided to examine the matter more closely as it was admitted by the Bank by its communication marked as Exhibit-A that initially the amount was refunded. The appellant produced the original pass book and on examination we find the following entries which are referred below:-
CHEQUE BALANCE
DATE PARTICULARS DEBIT CREDIT
NO
ATM 3983 SBI 66383.22Cr
06/11/10 2000.00
PORT BLAIR
REVERSE ATM 68383.22Cr
06/11/10 2000.00
WDL
DELETE 0.00
20/11/10
HOLD=2000
31765.22Cr.
09.03.11 2000.00
Surprisingly in the entry dated 09.03.2011 the
respondent bank once again deducted the amount of Rs.2000/- and entered the same under the head debit. In spite of our repeated queries the respondent bank failed to enlighten us as to how in connection with ATM transaction the bank took such a long time to ascertain that the transaction was successful. It is common knowledge that ATM transaction is machine operated and as such the correctness of any transaction is recorded within a minute. If that be so then after refunding the amount initially to the account of the appellant the bank cannot now claim that the operation was successful. In our view the subsequent entry dated 09.03.2011 long after of ATM operation dated 06.11.2010 is nothing but an afterthought. A reputed concern like State Bank of India while dealing with a customer (Consumer) must do so in an open and in transparent manner. So far as the amount of Rs.2000/- in connection with ATM operation is concerned we are of the view that there is a serious deficiency in service on the part of the State Bank of India and as such we answer the point in favour of the appellant and decide that the appellant is entitled to refund of Rs.2000/- and the entries dated 09.03.2011 is illegal and in our view is recorded by the employees of the Bank illegally to defraud and deny the appellant a legitimate amount of Rs.2000/- which is required to be recorded under the head credit and the amount should be entered in his total balance in the Pass Book. It is, needless to say that the entire document (Pass Book) is maintained by the Bank and the consumer has no control over the entries.
Point No.2 is thus answered accordingly.
3. On scrutiny of the record, including the judgment delivered by District Forum and the evidence both oral and documentary it appears that with regard to the loan amount of Rs.1,09,000/-sanctioned in favour of the complainant, both the District Forum and the respondent drew attention to the letter dated 26.07.2011 addressed to one Shri S.Ganesh of Reserve Bank of India by the complainant. The identity of Shri Ganesh remains unestablished as he is neither a party to the proceeding or examined as witness by any of the parties. What appears material is that the respondent as well as the District Forum relied on the recital of the complainant in the letter addressed to Shri Ganesh which runs as follows, "Once again I had obtained personal loan bearing my loan A/c No.00000030907075600 for an amount of Rs. 1,09,000/- during September 2009. This loan recovery was going on very smoothly". While doing so the District Forum failed to notice the recital in later part of the aforementioned letter which runs as follows:-
"During my 3rd loan for Rs.10,9000/- at Port Blair, the bank official intimated me the interest rate was 12.75% per annum but they charges interest @ 16.75% to 17.50% per annum. So, I am paying huge amount of interest as my personal loan the bank has harassing every now and then to me". On behalf of the respondent Shri.S.Johny, Assistant Manager of the Bank was examined and at para 14 of the Evidence in Chief he has denied the rate of interest has 12.75% but he has not stated what was the rate of interest charged by the bank and agreed between the parties. In this connection we like to point out that entire transaction between the consumer and the bank was initiated on the prayer by the complainant for sanctioning of personal loan and the decision solely rests on the bank about sanctioning of loan as well as the rate of interest to be charged. In case of dispute burden lies on the Bank (Respondent) to establish what was the rate of interest agreed between the parties. The best evidence will be the agreement that was entered between the parties.
Ld. Advocate for the respondent drew our attention to the Banking Regulation Act, 1949 and submitted the rate of interest charged by the bank cannot be interfered by the Court. He drew our attention to the Section 21 A of Banking Regulation Act and the said Section is reproduced below:-
"21-A.Rates of interest charged by banking companies not to be subject to scrutiny by Courts- Notwithstanding anything contained in the Usurious Loans Act, 1918 (10 of 1918), or any other law relating to indebtedness in force in any State, a transaction between a banking company and its debtor shall not be re-opened by any Court on the ground that the rate of interest charged by the banking company in respect of such transaction is excessive".
In view of legal position we are not proposing to alter the rate of interest charged by the bank but certainly we will enter into the question to ascertain the rate of interest agreed between the parties. Fixation of interest rests on the discretion of the bank but such discretion is not and cannot be arbitrary. Rate of interest is fixed by the Authority and all Banks and their branches are to follow the same strictly. This being the position burden entirely lies on the respondents to prove the same by producing cogent and reliable evidence. We are required to decide the issue on the basis of evidence produced by respondents and cannot base our finding on surmise and conjectures.
We have already pointed out that the best evidence is the written agreement entered between the parties and the terms and conditions as reflected in the agreement will supersede all other contention in the matter. A copy of the agreement has been produced by the respondent bank and marked as Exhibit-B in this case. For the purpose of present discussion we shall reproduce the following Clause as recorded in the agreement and produced by the bank. To be deleted Interest on the amount of the loan will be where Floating applied at the rate of------per cent per Rate of Interest is annum with monthly rests, calculated on applicable. the highest monthly balance.
To be deleted Interest on the amount of loan will be where Fixed Rate applied at the rate of 4.25 per cent of Interest is above PLR/State Bank Advance Rate applicable. hereinafter referred to as PLR/SBAR, rising and falling therewith, at monthly rests calculated on the daily balance of the loan amount. Provided that the Bank shall at any time and from, time to time be entitled to change the rate of interest depending on changes on PLR/SBAR, and such revised rate of interest shall always be construed as agreed to be paid by the borrower(s) and hereby secured.
Borrowers shall be deemed to have notice of change in the rate of interest whenever the changes PLR/SBAR are displayed /notified at/by the branch/published in newspaper/made through entry of interest charged in the passbook/statement of accounts sent to the borrower(s) After going through the recital as highlighted above we are shocked to find that necessary deletion as mandated in the agreement is not recorded by the bank. An amount of 4.25% has been recorded as the rate of interest in the column where fixed rate of interest is not applicable. It is nobody's case that 4.25% was the rate of interest agreed between the parties so it is evident that the respondent has hopelessly failed to discharge the burden in their evidence both oral and documentary about the rate of interest fixed by the bank. While fixing the rate of interest a particular branch of the State Bank of India cannot act arbitrarily. It has to fix the rate of interest as decided by the authority. The judicial authority dealing with a case under Consumer Protection Act cannot take judicial notice about the rate of interest applicable in a particular case. In each case it is duty of the bank to establish by producing proper document in order to establish the rate of interest as prevalent at that time and the prevalent rate of interest must be reflected in the agreement.
Unfortunately the banking authorities of Port Blair particularly the Chief Manager of Port Blair Branch who prepared the agreement has acted in a very casual and negligent manner. According to complainant the rate of interest was 12.75% per annum. The respondent bank has only denied the recital as mentioned in the complaint and annexures to the complaint without even recording what was the rate of interest fixed by the Bank in their written objection and in the oral evidence. The document we already mentioned contains only an amount of 4.25% from the evidence produced by the bank. We find that there is no evidence even in the agreement about the rate of interest. It is really shocking that a reputed concern like State Bank of India and it's Chief Manager at Port Blair Branch while preparing the agreement entered between the complainant and the bank failed to mention the rate of interest while sanctioning the loan of Rs. 1,09,000/-. We are shocked to notice that in the written objection filed by the Bank only denial is recorded. There is no mention about the rate of interest chargeable in the transaction. In the written objection Respondents never recorded their own case. Mere denial in the written objection without ever mentioning the rate of interest chargeable is a serious flow which remains unexplained, even in the evidence of Sole Witness of the Bank who is opposite No.3, there is no mention about the rate of interest applicable in the case. His evidence is merely a replica of written objection. It is surprising that Respondent never highlighted, mentioned or proved their case and in the absence of any proof we have no other option but to negative the contention of Respondents.
In the absence of any evidence produced by the bank we have no other option but to accept the case of the complainant that rate of interest was 12.75% per annum.
The language of the Section 21 A does not permit the bank to prepare an agreement mentioning the rate of interest which is not even permitted by the authority of the bank. The Port Blair Branch in particular the Chief Manager acted in a very careless manner and in our view the Chief Manager who was posted at Port Blair at the relevant time in connection with the Express Credit Agreement entered into between the parties should be prosecuted by initiating departmental proceeding against him. We propose to send a copy of judgment along with a copy of agreement produced by the bank and marked as Exhibit-B to Chairman State Bank of India so that necessary action in the matter may be initiated.
Appellant has prayed that a sum of Rs.13,844/- was charged as excess interest in the absence of contrary evidence proposed by the bank. We have no other option but to allow this same. Further, the amount of Rs. 981/- which was taken as processing charge cannot be refunded to the appellant as the bank is entitled to impose processing charge in connection with the transaction.
Point No.3 is answered accordingly.
The appellant is a Lower Division Clerk and it is evident that he contested the case on his own several technical pleas about non- joinder of parties as raised by the respondent has been rightly refused by the District Forum and we affirm the same. In this connection the judgment of the Hon'ble Supreme Court in Savita Gard (Smti)-Vs- Director National Heart institute is relevant. The Supreme court in connection with the case of the medical negligent the similar pleas was raised held, "Once a patient is admitted in a hospital it is the responsibility of the hospital to provide the best service and if it does not then the hospital cannot take shelter under the technical ground that the Surgeon concerned or the Nursing staff as the case may be, was not impleaded and therefore the claim should be rejected on the basis of non-joinder of necessary parties.
1. In view of the our discussion we allow the appeal in part and pass the following direction that appellant is entitled to refund of Rs.2000/- and the said amount must be credited in the Pass Book account of the appellant.
2. The appellant is entitled to an amount of Rs.13,844/- and the said amount must be given to the appellant by issuing an account payee cheque by the respondent the appellant is further entitled a sum of Rs.5000/- as compensation, which shall be paid by the respondent in favour of the appellant by issuing Account Payee Cheque in his favour. The respondent must pay the amount in favour of the appellant within 30 days from the date of the order failing which an amount of 12% interest shall be payable on the amounts, so allowed in favour of the appellant from the date of filing the complaint till recovery of the same. The judgment and order passed by the District forum is set aside and appeal stands allowed to the extend as mentioned above.
We have already recorded that a copy of judgment passed by us along with a copy of agreement filed by the respondent and marked as Exhibit-B "Chairman, State Bank of India be forwarded so that necessary departmental action may be initiated against the defaulting bank employees. The amount awarded by us may be insignificant to a concern like State Bank of India but the manner in which the loan application was processed, the manner in which the agreement is prepared and the case was defended by the bank should in our opinion be brought to the notice of the highest authority so that necessary corrective measures may be initiated. Office is directed to send a copy of our judgment along with a copy of agreement to the Chairman, State Bank of India immediately. Copies of the judgment passed by us be supplied to the appellant and the respondent free of cost. A copy of judgment along with LCR be returned to District Forum.
Smti Biji Thomas Justice Arunabha Basu
Member President