State Consumer Disputes Redressal Commission
Prof.Ravinder Singh, Son Of S.Wazir ... vs The General Manager, State Bank Of ... on 26 October, 2009
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB,
S.C.O. NO.3009-10, SECTOR 22-D, CHANDIGARH.
...
First Appeal No.1397 of 2008
Date of Institution : 04.12.2008
Date of decision : 26.10.2009
Prof.Ravinder Singh, son of S.Wazir Singh, resident of 4-A, Ranbir Club,
Sangrur, Tehsil and District Sangrur.
...Appellant
Versus
1. The General Manager, State Bank of Patiala, Head Office, The Mall,
Patiala.
2. The Regional Manager -I, State Bank of Patiala, Zonal Office, Leela
Bhawan, Patiala.
3. The Authorised Officer/ Chief Manager (Adv.), State Bank of Patiala,
Region-I, Sai Market, Branch Patiala.
4. The Branch Manager, State Bank of Patiala, Aurobindo Bhawan, Near
Main Bus Stand, Patiala.
5. The Manager, M/s Yencon Joint Ventue Pvt. Ltd. SCO No.2413,
Second Floor, Sector 22-C, Chandigarh.
...Respondents
First Appeal against the order dated 3.11.2008
of the District Consumer Disputes Redressal
Forum, Sangrur.
Before:-
Hon'ble Mr.Justice S.N.Aggarwal, President.
Lt.Col.Darshan Singh (Retd.), Member.
Sh.Piare Lal Garg, Member.
Present:-
For the appellant : Prof.Ravinder Singh in person.
For the respondent : Sh.Harpreet Singh, Advocate.
JUSTICE S.N. AGGARWAL, PRESIDENT
The respondents advertised / published a public notice in Hindustan Times for the sale of different properties. The auction was to be held on 12.8.2005 at Sai Market Branch of State Bank of Patiala, Patiala. As per the terms and conditions of auction, 5% of the reserved price of property was to be deposited by the bidder before the bid was made and he was to deposit 25% (minus the amount already deposited) of auction amount within period of 24 hours after his bid was accepted.
First Appeal No.1397 of 2008 2
2. It was further pleaded that lured by the said advertisement, the appellant reached the place of auction and offer the bid on 18.12.2005 after depositing an amount of Rs.67,100/- being 5% of the reserved price of Rs.13.42 lacs for property showed at Sr.No.4 in the public notice. The appellant was the only bidder. His bid was accepted. He went to the respondent bank on 13.8.2005 for depositing a sum of Rs.2,68,400/- to complete 25% of the auction price, but the officials of the respondent bank put off the matter on one pretext or the other and did not accept the deposit. The appellant gave telegram to the respondent bank on 15.8.2005 for not permitting to deposit the remaining amount out of 25% but the said telegram was not replied by the respondents.
3. It was further pleaded that on 18.5.2007 the respondents returned the amount of Rs.67,100/- to the appellant which was deposited by him on 12.8.2005. By this conduct of the respondents, the appellant has suffered financial loss, mental agony and physical harassment and loss of reputation. Alleging deficiency in service on the part of respondents, the appellant filed complaint against them in the learned District Consumer Disputes Redressal Forum, Chandigarh (in short "learned District Forum"). Compensation, interest and costs was prayed.
4. The respondents filed reply. It was not denied that the respondents had published advertisement in Hindustan Times for holding auction of certain property. It was not disputed that auction was to take place on 12.8.2005 at Sai Market Branch of State Bank of Patiala at Patiala. It was also not disputed that 5% of reserved price was to be deposited before offering the bid and 25% of auction price including the earnest money was to be completed within 24 hours. It was also not disputed that the appellant had deposited a sum of Rs.67,100/- being 5% of the reserved price with the respondents on 12.8.2005.
5. It was pleaded by the respondents that the said property was owned by M/s Navneet and Company, who had obtained cash credit limit of Rs.3 lacs First Appeal No.1397 of 2008 3 from the respondents and in lieu of that loan, Navneet Kumar Singla Proprietor of M/s Navneet and Company had mortgaged his residential house No.1939/1 situated at Mohalla Shamsher Singh Tarwaini Chowk, Patiala (this very property for which bid was made by the appellant) and he had deposited the original sale deed dated 20.5.1998 with the bank. He had also created equitable charge of mortgage on that property in favour of bank. Lateron the borrower M/s Navneet and Company had defaulted in returning the loan amount. Accordingly the proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 were initiated by the respondents against the defaulter.
6. It was further pleaded that Navneet Kumar Singla and his brother Ajay Kumar Singla connived with each other to harm the respondent bank and in order to save the auction under the aforesaid act, Navneet Kumar Singla got filed a false suit against him from Ajay Kumar Singla against the respondents for permanent injunction restraining the bank from interfering in any manner and from taking possession of house NO.1939/1 mortgaged by Navneet Kumar Singla. However, no relief was granted in favour of Ajay Kumar Singla. He had filed an appeal in the Court of District Judge, Patiala. He had not been granted any relief there also. After Navneet Kumar Singla Proprietor of the Company failed to achieve his illegal mission and failed to get any order in his favour, he deposited the entire outstanding amount with the bank on 17.5.2007.
7. It was further pleaded that after initiation of civil suit, the respondents were constrained to discontinue the proceedings against the said property till the decision of the civil suit. Immediately after the defaulter deposited the money on 17.5.2007, the respondents refunded the earnest money of Rs.67,100/- to the bidder namely the appellant on 18.5.2007.
8. It was further pleaded that as per the terms and conditions of the auction of 12.8.2005, which was duly signed by the appellant, EMD of two highest bidder was to be retained till the confirmation of sale and no interest First Appeal No.1397 of 2008 4 was payable. Similarly para 5 of the terms and conditions provided that sale would be subject to confirmation of the sale by the authorised officer and that sale could be cancelled by the authorised officer by any reason or without any reason. Para 4 of the public notice also provided that authorised officer / Chief Manager reserved the right to withdraw any property or portion thereof at any stage before confirmation of sale. It was denied that if there was any deficiency on the part of respondents. Hence dismissal of the complaint was prayed.
9. The appellant filed his affidavit Ex.CW1/A. He also proved documents Ex.CW1/B to Ex.CW1/Y.
10. On the other hand, the respondents proved documents Ex.R1 to Ex.R18. They also filed affidavit of Sh.R.K.Goyal as Ex.R19.
11. After considering the pleadings of parties and affidavits/documents produced by them on file, the learned District Forum dismissed the complaint vide impugned order dated 3.11.2008.
12. Hence the appeal.
13. Submission of appellant was that he was misled to make the bid. His bid was accepted and with great difficulty, he arranged the money, but the respondents refused to accept the same. Earnest money was refunded to him after a period of 2 years. Hence he was entitled to compensation. It is prayed that appeal be accepted and impugned order dated 3.11.2008 be set aside and he be awarded compensation, interest and costs.
14. On the other hand, submissions of learned counsel for respondents was that there is no merit in the appeal and same be dismissed.
15. Record has been perused and submissions have been considered.
16. Public auction notice has been proved by the appellant himself asEx.CW1/B and it has also been proved by the respondents as Ex.R1. It was specifically mentioned in the auction notice that the authorised officer / Chief Manager reserved the right to withdraw any property or portion thereof at any stage before confirmation of sale.
First Appeal No.1397 of 2008 5
17. The respondents have also proved a copy of plaint of civil suit filed by Ajay Kumar Singla against the respondents for permanent injunction as Ex.R5, which clearly revealed that civil suit was pending against this property. The Civil suit was filed on 24.6.2005. Since legal proceedings were pending in the Civil Court, therefore, the respondent bank was justified in not finalising the auction proceedings. If they had done so, the appellants would have been more in difficulty because he would have invested more money in the property and the property would have been got released by the judgment debtor by depositing the money. Now only an amount of Rs.67,100/- has been invested by the appellant and if the respondents had accepted the amount of Rs.2,68,400/- more on 13.8.2005, the appellant would have incurred the great liability to refund the money to his creditors. Therefore, the step of respondent in not accepting the amount of Rs.2,68,400/- on 13.8.2005 was justified.
18. Since the judicial proceeding are pending relating to the property put to auction, therefore, the respondents were not justified in issuing the public notice for putting the property in dispute to public auction. It is not the case of the respondents if they had not received the notice in the civil suit prior to the holding of public auction. If they issued public notice, they could have withdrawn the public auction by pleading that civil litigation was pending and they had received the notice and therefore, they were not conducting the auction. Rather the respondents conducted the auction and accepted the bid of the appellant by which not only the appellant was induced to deposit the earnest money of Rs.67,100/-, but he was also induced to arrange the remaining amount of Rs.2,68,400/-. Certainly therefore, the respondents had committed the deficiency in service.
19. If the respondents returned the earnest money of the appellant only after the borrower of respondent bank deposited the loan amount with them on 17.5.2007, it means therefore that amount deposited by the appellant was First Appeal No.1397 of 2008 6 kept as a pawn by the respondent bank in order to await the deposit of money by Navneet Kumar Proprietor of M/s Navneet and Company.
20. The amount was deposited by the appellant on 12.8.2005. It was refunded to him on 18.5.2007. Therefore, the appellant is certainly entitled to interest on this amount.
21. Accordingly, this appeal is partly accepted. The respondents are held liable to pay interest at the rate of 6% p.a. on Rs.67,100/- from the period from 12.8.2005 to 18.5.2007. The appellant is also awarded costs to the tune of Rs.10,000/-. This amount be paid by the respondents to the appellant within a period of 2 months after the receipt of a copy of this order, failing which they would be liable to pay interest @ 9% per annum with effect from today.
22. The arguments were heard in this case on 20.10.2009 and the order was reserved. Now, the order be communicated to the parties.
23. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(Justice S.N.Aggarwal) President (Lt.Col.Darshan Singh [Retd.]) Member (Piare Lal Garg) Member October 26, 2009.
Davinder