State Consumer Disputes Redressal Commission
Branch Manager vs Nandkeshwar Gond on 30 January, 2013
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION
PANDRI, RAIPUR (C.G.)
Appeal No.FA/12/48
Instituted on : 02.02.2012
Branch Manager,
State Bank of India, Surajpur Branch, Surajpur,
Dist. SURGUJA (C.G.) .... Appellant
Vs.
Nandkeshwar Gond, S/o Shri Ronha Gond,
R/o : Rajapur, Teh. Surajpur,
Dist. SURGUJA (C.G.) ..... Respondent.
Appeal No.FA/12/49
Instituted on : 02.02.2012
Nandkeshwar Gond, S/o Shri Ronha Gond,
R/o : Rajapur, Thana - Jaynagar, Teh. Surajpur,
Dist. SURGUJA (C.G.) ... Appellant.
Vs.
Branch Manager,
State Bank of India, Branch Surajpur,
Dist. SURGUJA (C.G.) ... Respondent.
PRESENT: ‐
HON'BLE JUSTICE SHRI S.C. VYAS, PRESIDENT
HON'BLE SHRI V.K. PATIL, MEMBER COUNSEL FOR THE PARTIES IN BOTH APPEALS : ‐ Shri R.K. Bhawnani, for the complainant, Shri Nandkeshwar Gond. Shri N.K. Shrivastava, for O.P., Branch Manager, State Bank of India.
ORDER Dated: 30/01/2013 PER: ‐ HON'BLE SHRI V.K.PATIL, MEMBER This order will govern disposal of appeal nos. FA/12/48 and FA/12/49, preferred by the appellants herein, who were respectively // {PAGE } // OP and complainant, in the complaint case no. 114/2011 filed before the District Consumer Disputes Redressal Forum, Surguja, Ambikapur (hereinafter called "District Forum" for short), whereby complaint of the complainant was partly allowed by order dated 05.01.2012, directing OP Bank to return the tractor & trolley to the complainant along with compensation of Rs.5,000/‐ towards mental and physical harassment and also to pay cost of litigation Rs.1,000/‐. OP was also directed that since the tractor & trolley were kept in its possession for long time without getting order from a competent court, so it should bear further installments and interest as per document D 1(6). It was also directed that OP would adjust Rs.4,000/‐ in the account of the complainant, being the amount of compensation as awarded in para 10(2) & 10(3) of the order. Having been aggrieved by the impugned order, complainant in his appeal has prayed for enhancement of the awarded amount while OP has prayed for setting aside the impugned order. In this order, the parties will be referred hereinafter as per their nomenclature as prevailed before the District Forum. Original of this order be retained in the file of appeal no.FA/12/48 and its copy be placed in another file appeal no.FA/12/49.
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2. Briefly stated facts of the case, necessary for disposal of the appeals are that the complainant is holder of account nos. A.T.C.01572065797 and K.C.C.0169006597 with the OP Bank and through these accounts he had deposited Rs.35,000/‐ towards purchase of tractor & trolley and also got amount financed by OP Bank in the year 2004. OP Bank repossessed the tractor & trolley in February 2007 and kept it for auction with Talat Agency, Kharasia Naka Ambikapur. As per averment of the complainant, when he sought information from OP on 19.03.2007 about the tractor & trolley, he was informed that the tractor had not been sold in auction, and the same could be returned to him if outstanding dues Rs.1,30,000/‐ were deposited, so in response he deposited Rs.50,000/‐ on 19.03.2007, Rs.30,000/‐ on 28.03.2007 and Rs.50,000/‐ on 11.04.2007. so in all Rs.1,30,000/‐ was deposited, but despite that tractor & trolley were not returned. A notice was sent by OP to him on 19.01.2011 demanding loan amount Rs.3,03,899/‐ with interest within a week time else his land would be sold and amount of loan dues recovered. Complainant averred that OP had repossessed the tractor four years back and did not auction it, so he suffered financial loss of Rs.1,00,000/‐ each year total Rs.4,00,000/‐ as such the act of OP amounted to deficiency in service/unfair trade practice. A notice through advocate dated 19.04.2011 was sent to OP Bank by him.
// {PAGE } // Complainant prayed before the District Forum seeking direction to OP for returning his tractor & trolley along with compensation of Rs.4,00,000/‐ and also Rs.1,00,000/‐ towards mental agony.
3. OP bank in its reply, while denying other averments of the complainant, averred that the complainant was financed by it in the year 2004 for purchase of tractor & trolley and a hypothecation agreement was executed by him for the purpose. Complainant defaulted in repayment of loan installments thereby failed to repay the loan dues so notices were sent to him in writing and he was intimated verbally also but finding no response, the tractor & trolley were repossessed and kept with an authorized agency for auction. As per averment of OP when complainant contacted it in the year 2007 he was informed that the tractor was not auctioned and if he could deposit Rs.2,00,000/‐ then the tractor & trolley would be returned to him but he could deposit Rs.1,30,000/‐ only. A notice was also sent to the complainant on 19.01.2011 demanding him Rs.3,03,899/‐ with interest within a week time failing which the amount would be recovered by sale of his land. OP also averred that the condition of tractor and trolley was so poor that nobody was willing to buy it in auction. OP also averred that the complainant had defaulted in repayment of loan // {PAGE } // in terms of agreement so he was responsible for his own conduct as such it had not committed any deficiency in service / unfair trade practice by repossessing the vehicle. OP prayed for dismissal of the complainant.
4. Learned District Forum having perused the documents produced before it and heard arguments of parties allowed the complaint in part with the direction to return tractor & trolley to the complainant along with compensation as per the impugned order.
5. We have perused the documents on record and heard arguments advanced by the parties.
6. The only question for consideration is whether OP bank committed deficiency in service/unfair trade practice by repossessing the tractor & trolley in an unlawful manner as alleged by the complainant and if so then how far liable for compensation ?
7. Undisputedly the complainant was financed by OP bank for purchase of tractor & trolley in the year 2004 and OP bank had repossessed the tractor & trolley on 2007.
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8. We find that as per document no.A/5 produced by the complainant Tractor loan of Rs.3,00,000/‐ was sanctioned by OP bank to the complainant on 22.04.2004. A Hypothecation Agreement was executed by the complainant on 22.05.2004 (document no.D‐1) whereby cash credit limit was agreed for Rs.25,000/‐ and term loan of Rs.3,00,000/‐as per its clause no.3. The agreement so executed was as security towards repayment of loan dues, in case of demand made by the OP bank upto Rs.3,25,000/‐. As per clause no.4 of the agreement, the interest chargeable was @ Rs.10.25% p.a. or what might be prescribed by the bank. As per clause 1 (iii) and 4th schedule of the agreement tractor, trolley with other agriculture equipments and also agriculture land of the complainant/borrower stood hypothecated to the OP bank by way of first charge as security for the loan and as per details mentioned in 2nd schedule. As per clause 6 & clause no.10 of the agreement, in the event of default due to non payment of one or two installments, OP Bank was given right to repossess the security so created i.e. tractor, trolley, to sell it and recover loan dues. Moreover for that purpose, OP bank had also been given authority by the complainant to act as his agent. In the aforementioned 2nd schedule of the agreement, details like Registration no., Engine no., chassis no. etc // {PAGE } // of the tractor have not been mentioned so it remains a question whether OP bank could recover the questioned tractor & trolley which have not been specifically mentioned as security in the agreement. As per Vth schedule of the agreement, loan amount Rs.3,00,000/‐ was repayable in yearly installment of Rs.33,000/‐ on 31st May each with last installment of Rs.36,000/‐ during period 31.05.2005 to 31.05.2013 along with interest @ Rs.10.25% p.a.. As per Loan Account statement issued by the bank (document no.A/6) prior to the month in which questioned tractor & trolley were repossessed as on 11.12.2006, the debit balance of loan was Rs.3,87,504/‐ when Rs.80,000/‐ and Rs.46,748/‐ and Rs.300/‐ were credited upto the year 2006 in his account. In fact during 3 years period 2004 to 2006 yearly loan installments @ Rs.33,000/‐ along with interest @ Rs.10.25% p.a. were only repayable then how debit balance had grown to the tune of Rs.3,87,504/‐ as at 11.12.2006, is not clear. Aforesaid 3 paged Account statement (document no.A/6 at page s.no.40 to 43) does not reveal a clear position about outstanding loan dues. From the documents on record, there is no evidence if any additional charges due to defaults were more recoverable by OP bank.
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9. In the agreement there is no mention as to what would be the rate of additional charges/penal charges in case of default in repayment of loan. As per clause no.6 of the agreement, OP bank could take possession of the security so created forthwith i.e. tractor & trolley or land and would sell it. As per notice sent by OP bank to the complainant on 19.01.2011 (document No.A/5), he was demanded Rs.3,03,899/‐ but there were no details as to how such amount was arrived at. More over in the said notice, he was intimated that his land would be auctioned and there was no whisper about the tractor & trolley. Other than aforesaid notice, there is no evidence to show that the complainant was intimated about outstanding loan dues or about repossession of the tractor. Undoubtedly, OP Bank is always free to recover its dues from the complainant borrower, but in case of default in repayment of loan dues, proper intimation giving details of outstanding dues, rate of additional interest charges payable and intimation about repossession of tractor etc., are essentially required in natural justice. OP bank thus committed deficiency in service to that extent and not only that it did not take effective and expeditious steps for disposal of the matter even during the course of so many years' period after repossession of the tractor in 2/2007.
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10. Now question remains what should be the just and proper compensation for deficiency in service committed by OP Bank.
11. The complainant was financed Rs.3,00,000/‐ in the year 2004 on which interest was payable @ 10.25% p.a. and there is no evidence to show as to what was the rate of additional charges agreed for delay / default in repayment of loan installments, so, in such situation, without indulging in hyper technicality of the matter and to meet justice both the ends, we feel just and proper that OP Bank may recover the financed amount Rs.3,00,000/‐ with interest @ 10.25% p.a. for the period from may 2004 till the period of repossession of the tractor i.e. February 2007 after deducting the outstanding loan dues.
12. As per agreement, loan installments @ Rs.33,000/‐ per year for 3 years from May 2004 to May 2006 prior to the repossession of the tractor in February 2007 worked out Rs.99,000/‐ which were repayable with interest @ 10.25%, whereas the complainant had deposited Rs.80,000/‐, Rs.46,748/‐, Rs.300/‐ totaling Rs.1,27,048/‐ as per statement of account (document A / 6), which broadly appears to be adequate to cover up loan and interest till Feb.2006. In such situation after deducting Rs.99,000/‐ from the amount of total loan Rs.3,00,000/‐ the // {PAGE } // balance remains Rs.2,01,000/‐ and admittedly OP Bank had demanded Rs.2,00,000/‐ from the complainant in March 2007, but since it had repossessed the tractor in February 2007 so its demanding interest thereafter was not justified. Complainant had already deposited Rs.1,30,000/‐ after repossession of the tractor, so only balance amount Rs.70,000/‐ is required to be recovered. Due to unlawful repossession of the tractor by OP Bank, the tractor remained out of use and might have deteriorated substantially due to non‐maintenance, so also OP Bank cannot charge interest any more.
13. The complainant, in his appeal has prayed for enhancement of the awarded amount, but since he had defaulted in repayment of loan by way of irregular installments in terms of agreement and due to repossession of the tractor by OP bank in an unlawful manner, he has also been allowed relief in interest on loan by learned District Forum, so enhancement of the awarded amount any more would not be just & proper.
14. During the course of hearing, counsel for OP bank submitted verbally that the Bank had repossessed the tractor only and not any trolley, as has been erroneously referred in the complaint and all the // {PAGE } // papers related to the case, so accordingly order has been passed by learned District Forum to return both tractor & trolley.
15. We find that nowhere in the case, the fact of repossession of only tractor done by the Bank was brought to the notice of learned District Forum and on the contrary in the written version in para 3&4 it has been admitted that tractor & trolley both have been repossessed. The Bank has not produced the repossession note to establish whether only tractor was repossessed or both tractor & trolley. Under the situation nothing can be held contrary to the findings of learned District Forum in respect of the questioned tractor or trolley. Parties may settle said dispute by mutual understanding amicably.
16. In the facts of the case and foregoing discussion, the appeal of complainant is dismissed and appeal of OP Bank is allowed in part as under:
(i) Para 19 (4) of the impugned order is modified and it is directed that OP Bank will return the tractor and trolley to the complainant within a period of one month after collecting Rs.70,000/‐ ( Rs. Seventy Thousand, only) from him.
(ii) As per para no.19 (5) of the impugned order total Rs.6,000/‐ will be adjustable in the account of the complainant in lieu of Rs.4,000/‐.
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(iii) Remaining part of the order will remain unaltered.
(iv) No order as to cost of these appeals.
(Justice S.C.Vyas) (V.K. Patil)
President Member
/01/2013 /01/2013