State Consumer Disputes Redressal Commission
Jai Kishan Sharma vs Pnb on 26 March, 2015
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH
First Appeal No. 706 of 2012
Date of institution: 30.5.2012
Date of Decision: 26.3.2015
Jai Kishan Sharma son of Shri Suresh Kumar Sharma, Student ID No.
15679888 of La Trobe University, Melbourne, Australia, at present and
Local C/o Shri S.K. Sharma, House No. 115 (909/3-old) Tagore Nagar,
Ludhiana, through Power of Attorney Shri S.K. Sharma.
Appellant/Complainant
Versus
1. Punjab National Bank, Overlock Road, Ludhiana through its Chief
Manager.
2. Punjab National Bank, Overseas Branch, Ludhiana through its Chief
Manager.
OPs/Opposite Parties
First Appeal against the order dated 18.4.2012
passed by the District Consumer Disputes
Redressal Forum, Ludhiana.
Quorum:-
Shri Gurcharan Singh Saran, Presiding Judicial Member
Shri Jasbir Singh Gill, Member
Shri Harcharan Singh Guram, Member
Present:-
For the appellant : Sh. S.K. Sharma, GPA of the appellant
For the OPs: Sh. H.S. Bhatia, Advocate for
Sh. R.S. Bhatia, Advocate
2
FIRST APPEAL NO. 706 OF 2012
Gurcharan Singh Saran, Presiding Judicial Member
ORDER
The appellant/complainant(hereinafter referred as "the complainant") has filed the present appeal against the order dated 18.4.2012 passed by the District Consumer Disputes Redressal Forum, Ludhiana (hereinafter referred as the District Forum) in consumer complaint No.102 dated 15.2.2011 vide which the complaint filed by the complainant was disposed off with the findings that there was one time settlement effected between the guarantor and Ops to withdraw all the claims pending before various authorities, then no cause of action was left with the complainant to file this complaint and that the complainant was relegated to seek his remedy before the appropriate Court of Law.
2. The complaint was filed by the complainant through his attorney Sh. S.K. Sharma, his father under the Consumer Protection Act, 1986 (in short 'the Act') against the OPs/opposite parties(hereinafter referred as the OPs) stating that he was studying in Melbourne (Australia). Accordingly, he had authorised his father S.K. Sharma through his general attorney to file this complaint. The complainant was interested to pursue his higher studies i.e. Master of Accounting and Financial Management, therefore, he approached the OPs under their education loan scheme to grant education loan of Rs. 15.00 lacs for higher studies in Australia. The said loan was sanctioned to the complainant alongwith co-borrower S.K. Sharma, father and the individual guarantee of Smt. Karma Rekha grand- 3 FIRST APPEAL NO. 706 OF 2012 mother of the complainant. The loan was to be reimbursed in the instalments and the loan documents were executed by the complainant in favour of the OPs on 19.12.2007. According to the loan agreement, the complainant was required to repay the loan together with interest in equal monthly instalments i.e. 84 EMIs or 7 years after the commencement of repayment i.e. one year after the course period or 6 months after getting the job whichever was earlier. It was further agreed that extension of the repayment period was the absolute discretion of the Ops. As per the agreement, the loan was to be utilized by the borrower for the purpose of pursuing studies i.e. payment of fee payable to the College, school, hostel, examination, library, laboratory fee, purchase of books, equipment, instruments, uniforms, caution deposit, building fund, refundable deposit, supported by institution bills, receipts, travel expenses, passage money for studies abroad, purchase of computers-essential for completion of the course, any other expenses required to complete the course like study tours, project work, thesis etc.. The education course of the complainant was completed on 14.12.2010 and result notification was received on internet directly from the University and degree was supposed to be provided to the complainant in the month of March, 2011 and only after that the complainant can apply for the job, therefore, he had not taken any job. The repayment of the education loan was to commence from 14.12.2011 but the OPs illegally, arbitrarily and against all kinds of justice and equity declared the account of the complainant as Non Performing Assets (NPA) on 5.5.2010 with balance of Rs. 18,05,461/- fully knowing that 4 FIRST APPEAL NO. 706 OF 2012 repayment schedule was not yet started. As per the RBI Guidelines, NPA can be declared, if the loan instalment or interest was not paid upto 180 days. Therefore, the act of the Ops /OPs to declare his account as NPA was totally illegal, arbitrary and against the instructions of the RBI. No sufficient opportunity was given to the complainant of being heard before passing of the order.
3. It was also alleged in the complaint that loan was to be paid in instalments by the OPs on the completion of every semester exam. However, the OPs committed several irregularities and illegalities in the disbursement of the loan in instalments as per terms and conditions of the loan, which amounts to intentional deficiency in services on their part. The complainant was in India in the month of February, 2009 and requested the OPs to send his tuition fee to Latrobe University with an application for sending Australian Dollar 9155. However, the loan was intentionally sent to wrong bank i.e. Common Wealth Bank of Australia, Sydney instead of Melbourne without Latrobe University Swift and BSB Code number of student ID and the payment was returned by the foreign bank by deducting Australian Dollar 69. The payment was again re-transmitted by the OPs bank having its IBB Branch, Ludhiana on 2.3.2009 to the correct address for Swift Code Number but with short amount of Australian Dollar 69. Consequently, the Latrobe University had stopped his course of internet and issued the notice to the complainant. The OPs also delayed the payment of living expenses intentionally for more than two years, just by demanding House Rental Receipt etc., which demand was illegal, arbitrary as no rent note or receipt were issued in 5 FIRST APPEAL NO. 706 OF 2012 Australia. The complainant being international student had to suffer very badly without his living expenses. Due to this the landlord forced the complainant to leave the rented house. The complainant was not having any money in Australia for food and living expenses whereas the officials of the Ops were joking asking the father of the complainant that complainant can earn the money by doing a part time job. The complainant had gone to Australia for higher studies on education Visa or not to do part time job. Then the complainant had requested his father to send Australian Dollar 1500 for the purchase of Laptop, food and living expenses and house rent. The father of the complainant requested the OPs in the month of April, 2008 to remit the same for the purpose of Laptop for Australian Dollar 780, house rent Australian Dollar 440 and food and living expenses Australian Dollar 280 but there was intentional delay for more than two months by Sh. V.K. Jeti, Branch Manager, and Shri Balbir Singh, Loan Officer, who was demanding unnecessarily for the original ink signed copy of quotation/purchase receipt of the Laptop purchased in Australia in the name of complainant whereas the same was submitted by International e-mail by scanning the bill copy. Then the details were submitted vide letter dated 10.5.2008 in original but even then the amount of Australian Dollar 1500 was released on 3.6.2008. On 10.3.2009, the complainant was in India. He deposited margin money of Rs. 24,317/- in his education loan and a sum of Rs. 1,02,964/- was forwarded by the Ops alongwith application form for issuance of foreign D/D of Westpac Banking Corporation. It was also informed to the OPs that the complainant was to get his flight No. 6 FIRST APPEAL NO. 706 OF 2012 QF3954 vide ticket No. F-0813304247282. However, the officials of the Ops refused to issue the DD as there was holiday in Delhi Head Office due to which the complainant had to miss his flight on 11.3.2009 and for the next flight booking, he had to pay Rs. 3,000/- etc. and had to bear cancellation charges. The Latrobe University vide his letter dated 30.9.2009 had informed the complainant that in the year 2009 enrollment of the complainant was discontinued as the complainant had failed to pay fee of the second semester enrolment by the specified dates as a result of that he was declared to be no longer student of the said University. It was further intimated by the University that in case the complainant wanted to revive enrolment for 2009 then the complainant must report to Latrobe International office reception to collect the invoice to pay the outstanding fee plus Dollar 110 revival of enrolment. After providing the evidence of payment, the complainant can be referred to the faculty for revival of enrolment approval. Therefore, the complainant had to face the said humiliation and additional burden of Dollar 110 on account of deficiency in services or negligence on the part of the OPs. On account of late submission of education fee, there was difference in exchange rate i.e. Rs. 27/- per Australian Dollar Rs. 43.50/- per Australian Dollar i.e. more than 60% appreciation, therefore, the complainant could not complete his education out of the education loan plus margin money and there was short fall of Australian Dollar 6100, therefore, he called upon his father to send the said amount. The father of the complainant arranged Australian Dollar 6100 from Indian Overseas Bank, Ludhiana and remitted the same to the complainant for 7 FIRST APPEAL NO. 706 OF 2012 payment to Latrobe University. That litigation was going between M/s Guide International Export Wing with the Ops and one application under Order 39 Rule 2-A of CPC was filed against the OPs for committing disobedience of injunction order dated 4.4.1997 extended till 6.2.1998 due to threat. The OPs had intentionally harassed the complainant and declared his loan account in the category of NPA illegally and arbitrarily, which amounts to deficiency in services and unfair trade practices on the part of the OPs. Hence, the complaint to set-aside the NPA order dated 5.5.2010 passed by the OPs and they be directed to pay Rs. 19,80,000/- by way of compensation.
4. The complaint was contested by the OPs, who filed written reply taking preliminary objections that the complaint was not maintainable as the complainant was not a consumer qua the OPs as the grievance of the complainant involved interpretation of provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002(in short SARFASI Act, 2002). Section 34 read with Section 35 and Section 17 of the Sarfasi Act clearly reveal that any person feeling aggrieved with the action of the Bank can invoke the provisions of the said Act by filing an appeal before the Debt Recovery Tribunal (in short DRT). With regard to declaring the education loan of the complainant as NPA, it was submitted that M/s Guide International (Export Wing) and Guide International were the family partnership concerns, who availed various credit facilities from the OPs Bank with Branch Office Overlock Road, Ludhiana. Education loan of Rs. 15 lacs was also availed by the complainant alongwith his father S.K. Sharma and S.K. 8 FIRST APPEAL NO. 706 OF 2012 Sharma is the Managing Partner for running the business of the firms. All the three loan accounts were secured by way of common collateral mortgage of the property owned by Smt. Karam Rekha, mother of S.K. Sharma. The loan of M/s Guide International (EW) was classified as 'NPA' on 31.12.2009 and similarly, term loan of M/s Guide International and the Education Loan in the name of Jai Kishan Sharma and S.K. Sharma were declared as 'NPA' on 5.5.2010 because of common collateral security credited in all the three loan accounts. No doubt that education loan was repayable in 84 monthly instalments starting from February, 2011, in order to keep Education Loan out of NPA category, the co-borrowers were requested vide letter dated 17.4.2010 affording them an opportunity to substitute the collateral security in the education loan account and despite affording a reasonable opportunity the substituted security in the education loan was not provided and accordingly, the education loan account was also declared NPA on 5.5.2010. A recovery suit for recovery of Rs. 38.34 lacs was filed on 15.12.2010 before DRT, Chandigarh, which included education loan also.
5. On merits, it was submitted that the power of attorney placed on the record does not authorise the attorney to file the complaint. The equitable mortgage was created by Smt. Karam Rekha as guarantor. The cost of the course was Rs. 22.61 lacs but loan sanctioned was Rs. 15 lacs and the other amount was to be arranged by the OPs at their disposal. Disbursement of the loan on various dates was admitted. There was no intentional delay for sending the expenses for fee, rent and other charges to the 9 FIRST APPEAL NO. 706 OF 2012 complainant, however, in case there was any delay, it was bonafide, unintentional, error on the part of the remitting office of the OPs Bank. In case the OPs had demanded for original ink sign copy of quotation/purchase receipt of the Laptop, there was nothing wrong in it. It was also denied that on 11.3.2009 the payment was intentionally withheld as a result of which the complainant had to cancel his flight and had to pay Rs. 3,000/- more alongwith cancellation charges. It was also denied that the complainant had suffered loss of Australian Dollar 1 lac equivalent to Rs. 43.50 lacs, the figures were manipulated one. The entire amount of sanction limit of Rs. 15 lacs stand already disbursed by 10.3.2009. The difference of exchange rate of fluctuation, if any, is always to be borne by the borrower. The filing of application under Order 39 Rule 2-A CPC was admitted. However, it was denied that the OPs had committed any intentional disobedience of the injunction order. Ultimately, it was submitted that the complaint was without merit and it be dismissed.
6. The parties were allowed by the learned District Forum to lead their evidence.
7. In support of his allegations, the complainant had tendered into evidence affidavit of S.K. Sharma Ex. CW-P/A, copy of GPA Ex. C-1, emails Exs. C-2 & 3, confirmation of payment Ex. C-4 & 5, statement of A/c Ex. C-6, letter Ex. C-7, email Ex. C-8, agreement copy Ex. C-9, guarantee letter Ex. C-10, tax invoice Ex. C-11, statement of accounts Exs. C-12 & 13, message copy Ex. C-14, account ledger inquiry Ex. C-15, order of CJ(JD, Ldh Ex. C-16, amended plaint copy Ex. C-17, order Ex. C-18, rules of SARFASI Act 10 FIRST APPEAL NO. 706 OF 2012 Ex. C-19, letter of RBI Ex. C-20, letter of PNB Ex. C-21, letters Exs. C-22 to 32, information under RTI Ex. C-33 & 34, affidavit of S. K. Sharma Ex. CW-2/A, letter of PNB Ex. C-35, letter of Guide International Ex. C-36, news cuttings Exs. C-37 to 40, misc. documents Exs. C-41 to 43. On the other hand, the opposite party had tendered into evidence affidavit of Major Singh Ex. RW-1/A, letter of PNB Ex. R-1, copy of OA Ex. R-2, letter Exs. R-3 & 4, application Ex. R-5 & 6, affidavit of V.S. Bhandari Ex. RW-2/A, affidavit of Major Singh Ex. RW-3/A, Dak receipt register Exs. R-7 to 10, letter of S.K. Sharma Ex. R-11, education loan scheme Ex. R-12.
8. After going through the allegations in the complaint, written reply filed by the OPs, evidence and documents brought on the record, the complaint was disposed off in the terms referred above.
9. In the appeal, it has been argued by the appellant/complainant S.K. Sharma in person that the order so passed by the learned District Forum is incorrect. Basically the complaint has been disposed off by the District Forum on the ground that the matter between the parties was pending before the DRT in which one time settlement was entered into between both the parties and amount was paid in that settlement in which it was agreed to withdraw all the litigations, therefore, the complaint cannot be proceed. However, it was referred by the complainant that in the litigation before the DRT to which a reference has been made by the District Forum, it is Original Application Ex. R-2 "PNB Vs. M/s Guide International (Export Wing) etc." through its partners Mukesh Kumar 11 FIRST APPEAL NO. 706 OF 2012 Sharma, Suresh Kumar Sharma, Rajneesh Kumar Sharma and their guarantors Smt. Karam Rekha and others entered into compromise with the OPs. So far as the compromise is concerned, it is Ex. R-3, which has been signed by Karam Rekha, Mukesh Kumar Sharma one of the partners and Mukesh Kumar Sharma and Mamta Sharma Partners. Under the Sarfasi Act, the borrower has been defined as under:-
"(f) "Borrower" means any person who has been granted financial assistance by any Bank or financial institution or who has given any guarantee or created any mortgage or pledge as security for the financial assistance granted by any Bank or financial institution and includes a person who becomes borrower of a securitisation company or reconstruction company consequent upon acquisition by it of any rights or interest of any Bank or financial institution in relation to such financial assistance".
10. Its definition includes the borrower as well as the guarantor. Therefore, it is immaterial whether the complainant was party to that or not. So far as those loans are concerned, no doubt that any one partner or the guarantor can enter into compromise. Under that compromise Ex. R-3, it was undertaken that they do not want to indulge in litigation and as such, give an offer for one time settlement so as to adjust the accounts of the Bank. "We offer to pay a sum of Rs. 33 lacs towards full and final settlement of all the accounts" and that they should withdraw all claims/counter- claims/criminal case filed, if any, in any Court of Law against Bank or 12 FIRST APPEAL NO. 706 OF 2012 its officials. This settlement was entered into between the parties on 28.7.2011 whereas this consumer complaint was pending since 15.2.2011. Therefore, at the time of settlement on 28.7.2011, this complaint was pending before the District Forum, Ludhiana and there is no reference to this complaint in the said compromise. Moreover, this complaint was filed by Mr. Jai Krishan Sharma through his father S.K. Sharma. Neither Jai Krishan Sharma and S.K. Sharma are party to this compromise. Therefore, other partners/guarantors cannot enter into compromise for the complaint filed by Mr. Jai Krishan Sharma against the Bank. Therefore, if any, compromise with regard to the payment of loan has been settled between the partners and the guarantors that does not take away the right of the complainant to continue with this complaint on account of several deficiencies in their service and unfair trade practices on the part of the OPs. Therefore, the learned District Forum was wrong to dispose of this complaint on the basis of compromise entered into between the parties before the DRT with regard to the loans granted to M/s Guide International (Export Wing) and Guide International and the education loan.
11. Further education loan was granted to the complainant and his father S.K. Sharma in which Karam Rekha was a guarantor. No doubt that in case guarantor is also include a person, in the definition of borrower, in that event the guarantor may settle the account but the guarantor cannot settle the claim in a consumer complaint filed by the complainant for deficiencies on the part of OPs. The first deficiency pointed out by the complainant is that he was granted education loan of Rs. 15 lacs on 19.12.2007. It was to be 13 FIRST APPEAL NO. 706 OF 2012 repaid by equal monthly instalments i.e. 84 EMIs or 7 years after the commencement of repayment i.e. one year after the course period or six months after getting the job. He was completed his course on 14.12.2010, therefore, one year was to commence on 14.12.2011 and that he did not get any job, therefore, no repayment was admissible to the OPs Bank before 14.12.2011. Therefore, it was wrong on the part of the OPs Bank to declare this loan 'NPA' as on 5.5.2010. Whereas according to the re-instructions any loan can be declared NPA in case the principal or interest is not paid for a period of 180 days. When the repayment of the loan was yet to commence then it is unknown how the Ops declared his account as NPA. The Ops have taken the plea in their written reply that vide letter dated 17.4.2010 they had requested the complainant to file a fresh collateral security. The letter dated 17.4.2010 has been produced on the record by the OPs as Ex. R-1. The plea of the complainant in the complaint that he did not receive this letter. It has not been explained by the Ops how this letter was sent to the complainant. No postal receipt or any receipt of any courier has been placed on the record how this letter was delivered to the complainant. Moreover, once they have satisfied about the security at the time of granting the loan then no reason has been stated why the fresh security has been demanded, otherwise the value of the property given as a collateral security was sufficient to satisfy this loan and loans advanced to M/s Guide International (Export Wing) and Guide International. There were some other allegations with regard to delay in disbursing the loan amount at various stages to the complainant as enumerated in 14 FIRST APPEAL NO. 706 OF 2012 the complaint. When entire evidence has come on the record then it was not appropriate for the District Forum to ask the complainant to seek his remedy before the appropriate Court of Law. The Presiding Officers of the District Forum are mostly retired District Judges having sufficient experience at their back and they are in a position to decide these type of cases. The Hon'ble National Commission in "Shiv Kumar Agarwal versus Arun Tandon and another", 2007(2) CLT 287 held in this regard. In that case - plea that case involves complicated questions of act and law and will need expert evidence, which is not possible in the summary proceedings adopted by the Consumer Fora repelled - Consumer Forum which is headed by Senior Judicial Officers, are capable of dealing with even complex questions. When both the parties have completed their evidence then it is not proper to relegate the matter to the Civil Court and the District Forum should have decided the matter. In view of that it was not appropriate on the part of the District Forum to relegate the parties to appropriate Court instead of deciding the complaint.
12. A plea has also been taken by the Ops that the jurisdiction of the Court is barred in view of pendency of SARFASI proceedings before the DRT under SARFASI. Since the matter has not been decided by the District Forum on merits, therefore, they are at liberty to take this plea when the matter will be decided by the District Forum on merits.
13. In case we analyse the entire facts, it was not appropriate on the part of the District Forum to dispose of the complaint merely because of the fact that there was a compromise in the cases 15 FIRST APPEAL NO. 706 OF 2012 pending before the DRT between the parties. However, the complainant was not a party to that compromise, therefore, that compromise was not binding upon the complainant. Moreover, this complaint pertains to the deficiency and unfair trade practice on the part of the OPs to declare his education loan as NPA before time and intentional delay regarding disbursing of the loan amount at various stages and not regarding repayment of the loan amount. In view of the judgments referred above, it was not appropriate for the District Forum to relegate the parties to appropriate Court. Better would have been; in case the District Forum would have decided the complaint on the basis of entire evidence so available with them whether any case of deficiency or unfair trade practice is made out against the Ops. Therefore, the order so passed by the learned District Form is not legally sustainable and liable to be set-aside.
14. In view of the above, we accept the appeal. The impugned order is set-aside. The District Forum is directed to decide the complaint on merits considering the pleadings and evidence on the record by the parties preferably within a period of three months after the receipt of order from this Commission.
15. The parties through their counsel are directed to appear before the learned District Forum, Ludhiana on 27.4.2015. Copy of the order alongwith record of the District Forum, Ludhiana be sent back forthwith.
16. The arguments in this appeal were heard on 18.3.2015 and the order was reserved. Now the order be communicated to the parties as per rules.
16FIRST APPEAL NO. 706 OF 2012
17. The appeal could not be decided within the statutory period due to heavy pendency of Court cases.
(Gurcharan Singh Saran) Presiding Judicial Member (Jasbir Singh Gill) Member March 26, 2015. (Harcharan Singh Guram) as Member