State Consumer Disputes Redressal Commission
The Manager, Canara Bank, Nilgiris And ... vs Udhagai Thoguthi Consumer Protection ... on 17 September, 2009
BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI Present Hon'ble Thiru Justice M. THANIKACHALAM PRESIDENT THIRU Pon. GUNASEKARAN B.A.,B.L., MEMBER - I F.A.NO.443/2005 (Against order in O.PNo.19/2003 on the file of the DCDRF, Ooty) DATED THIS THE 17th DAY OF SEPTEMBER 2009 1.
The Manager Canara Bank Ootacamund Branch Nilgiris
2. The Regional Manager Canara Bank No.166, T.V.S.Road R.S.Puram, Coimbatore-2
3. The General Manager Canara Bank M/s.T.C.A.Shrinivasan 112, J.C.Road, P.B.no.6648 Counsels for Bangalore 2 Appellants / Opposite parties Vs.
1. The General Secretary Udhagai Thoguthi Consumer Protection Sangam 80, Kamaraj Bhavan Ooty, The Nilgiris
2. A.K.Abdul Rahim D.No.42, Haji Mahal Upper Bazaar M/s.N.Ilangovan Udhagamandalam Counsel for 2nd Respondent The Nilgiris Respondents/ Complainants M. THANIKACHALAM J.
1. The opposite parties before the lower forum are the appellants herein.
2. The respondents herein as complainants accused the appellants as if they have committed deficiency in service, thereby caused loss to the 2nd complainant and therefore the same has to be redressed. According to the complainants, the 2nd complainant deposited a sum of Rs.11000/- under Kamathenu Deposit Scheme for 10 years, which would yield maturity value of Rs.34,181/-, that the 2nd complainant had borrowed a business loan of Rs.30000/- on 10.4.2001, and that towards the said loan he had paid Rs.18600/- commencing from 10.4.2001 to 23.9.2002, that despite the above fact, for the alleged arrears, the appellants / opposite parties preclosed the Fixed Deposit and appropriated the proceeds towards the loan illegally, which amounts to not only deficiency in service but also illegal and against the terms of contract and because of the above conduct of the bank, he suffered the maturity value as well as business loss, which should be compensated.
3. The appellant questioning the correctness of the averments in the complaint would contend in the written version, that the complainant has failed to pay the business loan committing default and there was balance in principal and interest which comes to Rs.18310/-, that during the grant of loan the 2nd complainant handed over the deposit receipt for due repayment of the said loan, that in view of the default committed by the borrower, the Fixed Deposit was pre-matured and the proceed was credited towards the loan amount, in which act there is neither deficiency in service nor any illegal act as complained and thereby they prayed for the dismissal of the complaint.
4. The District Consumer Disputes Redressal Forum, Ooty, taking the case on file, adopting the procedure conducted an enquiry. In support of the petitioners claim, ten documents were exhibited supported by an affidavit, which are sought to be repudiated by producing five documents, supported by affidavit also. The lower forum analyzing the above maters came to the conclusion that the bank has negligently and hurriedly pre-closed the deposit without taking care of the welfare of the customer, which should be labeled as deficiency in service and that because of this deficiency in service the 2nd complainant not only suffered loss in the deposit which would have earned interest, but also in business. Thus taking the view, the lower forum directed the opposite parties, to return a sum of Rs.34181/- due on 28.1.2009, further directing to reschedule the business loan amount of Rs.30000/-, further ordering to pay compensation of Rs.25000/- plus cost.
5. Aggrieved by the above said directions, the sufferers viz. the opposite parties challenged the said order dt.15.7.2005 before us. Heard the learned counsels appearing for both sides, perused the documents relied on by them and also scanned the written submissions made by both parties.
6. It is an admitted fact, that on 17.1.99 the 2nd complainant had deposited a sum of Rs.11000/- for ten years under Kamathenu Deposit Scheme in the bank and its maturity value was Rs.34181/- as on 17.1.2009. It is also an admitted fact that the 2nd complainant approaching the bank obtained a loan of Rs.30000/- for his business on 10.4.2001, probably agreeing to repay the loan @ Rs.1000/- per month. It is also conceded by the appellant that for 15 months or so the 2nd complainant has paid leaving the balance of principal amount, in addition to interest. As seen from Ex.B5 certified copy of the account extract, the 2nd complainant though paid periodically Rs.1000/-, failed to pay the instalment or otherwise as agreed from July 2002.
After demand for two months, he has made further payments and it appears thereafter he has not paid the amount.
According to the learned counsel for the appellant, the non-payment of the business loan, for the long period is categorized as bad debt and therefore the bank was compelled to take appropriate steps, to recover the amount, in which we cannot find any fault.
7. It is the specific case of the bank that at the time of the grant of loan, the 2nd complainant had deposited the Fixed Deposit Receipt as security and this fact should be accepted, in view of the admitted position that Fixed Deposit Receipt was with the bank. Admittedly, we can say so the 2nd complainant having agreed to repay the business loan, failed to do so and therefore the bank is entitled to appropriate the deposit amount even preclosing the security given to them as rightly submitted by the learned counsel for the appellant, invoking Sec.171 of Indian Contract Act. Thus the bank has pre-closed the deposit and credited the amount of Rs.16,347/- on 26.7.2003, leaving some balance also. In pre-closing the Fixed Deposits, when the borrower has committed default, we are unable to find any defect in the action taken by the bank, which cannot be termed as illegal or deficiency in service warranting the interference by the consumer forum. If the borrower had paid the amount regularly as agreed and despite that fact, to close the loan early, if the bank had adopted this kind of procedure, then it should be described as deficiency in service and not otherwise. In our considered opinion, the lower forum, unfortunately has not considered the above position and erred also, which should be rectified.
8. The learned counsel for the respondent/2nd complainant would submit that while borrowing the loan under Ex.B2, stocks were hypothecated to the bank and if at all, the bank ought to have proceeded for the defaulted instalments, only against the stock and not against the deposit amount. When two securities are made available at the disposal of the bank, the option is left to the bank, to choose, which is convenient to them and in this way, it seems the bank instead of proceeding against the stock, which is a cumbersome procedure, adopted easy method and considering the business transaction it cannot be termed as illegal.
9. The learned counsel for the appellant, further relying upon clause 9 of Ex.B2, urged before us that the bank ought to have rescheduled the loan since the 2nd complainant was unable to discharge the loan, due to genuine reasons. Except the submissions made before us, in support of the same we are unable to find any substantive materials for accepting this submission. It is also not mandatory, that the bank should reschedule the loan, as erroneously directed by the District Forum, in the operative portion of the order, which is not even the prayer, in the complaint.
10. The date of maturity of the admitted Fixed Deposit Receipt is 17.1.2009. The case was filed in the year 2003. The order was made on 15.7.2005. From the above dates, it is clear that on the date of filing of the claim or on the date of pronouncing the order, the Fixed Deposit Receipt which was pre-closed, was not matured and therefore it will not have the value of Rs.34181/-. This being the position it is not known how the lower forum has directed the bank to refund this amount within three months from the date of order, which order was passed on 15.7.2005. The lower forum not even taking this into account as if on the date of judgement itself, the 2nd complainant is entitled to this value, granted an award which should be upset.
11. A fabulous sum of Rs.25000/- was granted as compensation thereby favoring a person who has committed default in payment of the business loan, which is unwarranted. When the bank has not committed any deficiency in service whereas when the bank has acted according to the rules and regulations and appropriated the proceeds of Fixed Deposit, pre-closing the same, when the borrower has committed default, this cannot be termed as negligent act or hurried act, that too when the borrower had committed default for one year or so. This being the position we are unable to concur with the lower forum, as if the appellants have committed deficiency in service. When there is no deficiency in service, question of refunding the amount which was credited towards the loan amount, or granting compensation or cost does not arise for consideration. For the foregoing reasons we are of the considered and firm opinion that the lower forum has committed error in not analyzing the case properly whereas taking some sympathetic view extraneously, has come to the conclusion awarding the amount, which is not in accordance with law, hence required to be set aside.
11. In the result, the appeal is allowed setting aside the order of the lower forum dt.15.7.2005 and dismissing the O.P.No.19/2003 on the file of District Consumer Disputes Redressal Forum, Uthagamandalam. In the facts and circumstances of the case making no order as to cost throughout.
PON GUNASEKARAN M. THANIKACHALAM MEMBER-I PRESIDENT INDEX : YES / NO Rsh/d/mtj/bank