State Consumer Disputes Redressal Commission
Rahul Engineering & Machinery Company vs State Bank Of India on 5 May, 2014
C-98-2006
BEFORE THE HON'BLE STATE CONSUMER DISPUTES
REDRESSAL
COMMISSION, MAHARASHTRA,
MUMBAI
Complaint Case No. CC/06/98
MR. P.G.S. RAO,
Rahul Engineering
& Machinery Company,
Shop No.32, Hilton Towers,
Sher-E-Punjab
Society,
Mahakali Caves Road, Andheri East,
Mumbai 400 093.
...........Complainant(s)
Versus
1. State Bank of India,
Through the Chairman
& Managing Director,
Formerly known as
State Bank of Saurashtra,
Corporate Office of
State Bank of India,
Situated at Madame
Cama Raod,
Nariman Point, Mumbai
400 021.
2. State Bank of India,
Through Branch
Manager Andheri Branch,
Hotel Samraj
Building, Chakala
Road,
Andheri (E), Mumai
400 093
............Opp.Party(s)
BEFORE:
HON'BLE MR. P.B.
Joshi, PRESIDING MEMBER
HON'ABLE MR. Narendra
Kawde MEMBER
PRESENT:
Mr.Anand Patwardhan, Advocate for the
Complainant.
Ms.Usha
Srivastava, Advocate for the Opponents.
ORDER
Per Honble Mr.P.B. Joshi Presiding Judicial Member:
1. Complainant has made a fixed deposit of `50 lac for one year with the Opponent Bank. Thereafter it was renewed for three years. The Opponents have granted loan to third party on the Complainants fixed deposit of `50,00,000/- without his knowledge. As per the Complainant, the Opponents have created a fraud by endorsing on the fixed deposit receipt Under Banks Lien without approval of the Complainant. Thus, the Opponents are guilty of unfair trade practice u/sec 2(r) of the Consumer Protection Act, 1986 (hereinafter referred to as the Act for the sake of brevity) by giving loan to third party on the fixed Deposit of the Complainant without his knowledge and approval. The matter went to Banking Ombudsman on 03.06.2005. Banking Ombudsman ordered that the adjudication of the complaint might be only in a different Forum and hence, Complainant filed complaint in this Commission and prayed that his fixed deposit amount be refunded to him along with interest @11.50% per annum from June, 2005 till realization. Complainant prayed for `2,00,000/- as compensation for mental agony and harassment and costs of `15,000/-.
2. Opponents have filed written version and have not disputed about the fixed deposit of `50 lac by Complainant with the Opponent Bank and loan of `38.30 lac was given to Manasi Construction Company (hereinafter referred to as MCC for the sake of brevity) against the fixed deposit of Complainant, however denied all other contentions. It was further argued that the complaint involves complicated issues requiring detailed scrutiny of the elaborate evidence, oral or documentary or that of expert. It is, therefore, that the Commission does not have jurisdiction to entertain the complaint.
3. It was contended by the Opponents that the loan was granted with full knowledge of the Complainant. TDR No.210827 dated 24th April, 2014 had a Banks lien for loan of `38.30 lac availed by MCC in April, 1999. The TDR was issued to State Bank of Saurashtra (SBS in short) a/c Rahul Engineering and Machine Company (REMC in short).
The Complainant had renewed TDR on 24th April, 2002 for full amount of `50 lac and had also affixed his signature on the revenue stamp on the said TDR. It was further contended by the Opponent that the Complainant had handed over cheques of MCC drawn in favour of REMC and he knew that the cheques would be cleared only if the Bank granted overdraft to MCC. It is under those circumstances the Complainant and MCC requested the Bank to raise an overdraft in the account of MCC so as to facilitate the payment of both the cheques issued by MCC aggregating to `38.30 lac. The Bank agreed to create an overdraft on the condition that the proceeds would be kept under Banks lien and the Complainant offered `11.70 lac as an additional deposit and agreed to keep the entire deposit of `50 lac under Banks lien. The Opponent prayed for dismissal of the complaint.
4. Initially the complaint was filed against the Managing Director, State Bank of Saurashtra, New Administrative Building, Neelam Baug, Chowk, Bhavnagar 364001 and Branch Manager, State Bank of Saurashtra, Hotel Samraj Building, Chakala Road, Andheri (East) Mumbai 400
099. Then by way of amendment Opponents are replaced by State Bank of India through the Chairman & Managing Director, formerly known as State Bank of Saurashtra, Corproate Office of State Bank of India situated at Madame Cama Road, Nariman Point, Mumbai 400 021 and State Bank of India, through BranchManager Andheri Branch, Hotel Samraj Building, Chakala Road, Andheri (E), Mumbai 400 093.
5. Thereafter both the parties have filed affidavits in evidence and documents and finally heard arguments advanced by the Advocates of both the parties.
Considering the submissions made before us and considering the record, following points arise for our determination and our findings thereon are as under:
Sr.No. Points Findings
(i) Whether this Commission has jurisdiction to entertain the complaint?
:
Yes.
(ii) Whether the Opponents have granted a loan to third party against the F.D.R. of `50 lac of the Complainant without his consent?
:
Yes.
(iii) Whether the Complainant is entitled for Fixed Deposit amount of `50 lac along with interest since June, 2005 as claimed?
:
Yes.
(iv) What order?
:
As per final order REASONS:
Point No.(i):
Opponents have contended that the complaint involves complicated issue requiring scrutiny of elaborate justification, oral documentary as well as expert and hence, the consumer Commission does not have jurisdiction to entertain the complaint under Section 2(i)(c) of the Act. Said contention of the Opponent cannot be accepted for the reason that the provisions of the Act shall be in addition to and not in derogation of the any other law for the time being in force. This Commission can decide the complicated questions of law which are relevent for deciding the complaint under the Act. Only because some facts are disputed and some law points are raised by Opponents that will not deprive the jurisdiction of this Commission to decide the complaint.
In the present matter it is admitted that fixed deposit of `50 lac was issued by the Opponent in favour of the Complainant as said amount was kept by the Complainant with the Opponent as fixed deposit. The contention of the Complainant is that the Opponents have refused to give this amount of said fixed deposit by saying that the loan was given against the said fixed deposit to the third party. The contention of the Complainant is that he has not given any consent for giving loan to third party against the said fixed deposit. In view of this fact the complaint is well within the jurisdiction of this Commission and this Commission can very well decide the complaint. Hence, we answer point No.(i) in the affirmative.
Point No.(ii):
It is the contention of the Complainant that an amount of `50 lac was kept by Complainant with the Opponents on 24.04.1999. It was contended that the said Fixed Deposit was for 36 months and rate of interest was 11.50% per annum. As per the complainant on 09.04.2001, a letter was sent by Opponent to Complainant informing that the Opponent had granted loan of `38.30 lac to MCC in April, 1999 against the fixed deposit of `50 lac of Complainant. The Complainant on the next day by letter dated 10.04.2001 informed the Opponents that he was shocked to receive a letter of Opponents of granting loan to third party against the fixed deposit receipt of the Complainant. By the said letter the Complainant informed the Opponent that Complainant neither requested nor given any undertaking to Bank for granting loan against the fixed deposit receipt of the Complainant. It was mentioned in the said letter that since the amount being large the Complainant kept amount in Fixed Deposit in the Bank for security and safety reason and that was informed by the Complainant to the Opponents by letter dated 10.08.1999 and 27.12.1999. Ld.Advocate for the Complainant submitted that the Opponents have no authority to grant loan to third party against the fixed deposit of the Complainant without his consent. It was submitted that the Officers of the Opponents have mentioned on the said fixed deposit receipt unauthorizedly as Under Banks Lien.
Ld.Advocate has submitted that there was no consent or authorization from the Complainant to create a lien on the said fixed deposit and to grant loan against that fixed deposit to third party.
The Ld.Advocate of the Opponents argued that as the fixed deposit receipt was under lien of the Bank and that is why it was in the custody of the Bank and it was in the name of State Bank of Saurashtra, account of REMC. The Ld.Advocate for the Complainant has submitted that said fixed deposit i.e. fixed deposit receipt was kept with the Bank only for safety being amount was large and that was informed by the Complainant to Bank in the month of August, 1999 and as no reply was given by the bank of the said letter, another letter dated 27.12.1999 was sent by the Complainant to the Opponent mentioning therein that he kept his fixed deposit receipt in the Bank for safety and security reason. Even that letter was not replied by the Opponent Bank. The copies of those two letters were filed by the Complainant.
From those two letters dated 10.08.1999 and 27.12.1999 it is clear that the Complainant had kept said fixed deposit receipt in the Bank for safety. As per the Complainant there was no reply received to those letters from the Opponents. Ld.Advocate for the Complainant has argued that recitals in those letters support the contention of the Complainant that he kept Fixed Deposit receipt with the Opponents for safety reason. It was submitted that conduct of Opponent of not replying those letters fortifies the Complainant that the said fixed deposit receipt was kept in the Bank for safety reason. We find some substance in the said argument for the reason that in August, 1999 complainant by letter addressed to the Opponent makes it clear that the said fixed deposit receipt of `50 lac was kept with the Opponent for safety reason. As the said letter was not replied by the Opponent another letter dated 27.12.1999 was sent by the Complainant to the Opponent mentioning the same facts in it. As the Opponent has not replied those letters and not denied the recitals in the letters the said conduct of the Opponent supported the contention of the Complainant.
Point (iii):
Ld.Advocate for the Opponent has submitted that it was mentioned in the said Fixed Deposit Receipt that Received from State Bank of Saurashtra A/c Rahul Engineering and Machinery Company, who has submitted that it is only because the loan was advanced against the Fixed Deposits and there was lien of the Bank on the said fixed deposits the name of the Bank on the said Fixed Deposit receipt along with Complainant was mentioned.
Ld.Advocate for the Complainant has submitted that the Fixed Deposit receipt was kept with the Bank for safety purpose.
However, the Officer of the bank unauthorisedly written on it as under Banks lien and unauthorisedly written the name State Bank of Saurashtra. The Ld.Counsel for the Complainant has submitted that as per Opponent the loan of `38.30 lakhs was given to Manasvi Construction Company in April, 1999 against the fixed deposit. The Advocate for Complainant submitted that for granting loan against the fixed deposit the F.D.R. must be in existence before granting loan. However, in present matter Fixed Deposit was created afterwards whereas loan to Manasvi Construction Company by way of overdraft was given earlier. It was submitted that Complainant has deposited cheques of `35,00,000/-, `3,30,000/- dated 03.09.1999 although those were issued by Manasvi Construction Company in favour of the Complainant. As per Opponent for clearing those cheques overdraft facility was granted in favour of said Manasvi Construction Company and that overdraft facility by way of loan of `38.30 lac was granted to Manasvi Construction Co. by the Opponents. Ld.Advocate for the Complainant submitted that after granting of overdraft facility by way of loan of `38.30 lac to Manasvi Construction Company the cheques issued by Manasvi Construction Company in favour of the Complainant were cleared. Those cheques were deposited by the Complainant with the Opponent. Then one cheque of `6.20 lac was given by Complainant to Opponent. One Fixed Deposit of `5.50 lac was prematurely encashed and amount was deposited by the Complainant with the Opponent Bank.
Thus total amount of `50,00,000/-
was deposited by the Complainant with the opponent for creating Fixed Deposit Receipt of `50,00,000/-. Ld.Advocate for the Complainant submitted that, thus, it is clear that two cheques of `35lac and `3,30,000/- issued by Manasvi Construction Company in favour of the Complainant were encashed only after overdraft by way of loan of `38.30 lac was granted to Manasvi Construction Company by the Opponent. Thereafter, the Complainant by giving one cheque of `6,20,000/- and by premature encashment of fixed deposit of `5,50,000/- amount of `50 lac was deposited with the Opponent for creating fixed deposit of `50 lac. Hence, there was no question of granting overdraft facility by way of loan of `38.30 lac to Manasvi Construction Co. against the fixed deposit of `50 lac of the Complainant. As the fixed deposit was not in existence when the loan was granted by the Opponent to Manasvi Construction Co., we find much substance in the arguments of the Complainant as it is clear that loan was granted earlier and fixed deposit was created afterwards.
Ld.Advocate for the Complainant submitted that only by writing on fixed deposit receipt as under Banks Lien without referring for what it was under lien also make position clear that officials of the Opponent Bank have only mentioned under Banks Lien afterwards. It was submitted that there is no consent of the Complainant for creating loan on his fixed deposit and granting any loan as against fixed deposit.
No document is filed on record by the Opponent to show that the Complainant has given any consent for creating lien on his fixed deposit and granting loan against the said fixed deposit.
It is material to note that Complainant by his letters dated 10.08.1999 and 27.12.1999 made it clear that said fixed deposit receipt was kept with the Opponent Bank for safety reason. Those letters were not replied by the Opponent Bank, that also supports the contention of the Complainant as discussed by us above. Thus, we find that the Opponents granted loan to third party showing as against the fixed deposit of `50 lac without the consent of the Complainant. Hence, we answer Point No.(i) in the affirmative.
Point No.(iv):
In view of the answer of point No.(i) the Complainant is entitled for fixed deposit amount of `50 lac with interest thereon since July, 2005.
Complainant has stated that he received interest on the said fixed deposit till June, 2005. In renewed F.D.R. interest is mentioned @8% per annum.
Hence, Complainant is entitled for said rate of interest. Therefore, we answer point No.(ii) accordingly and pass the following order:
ORDER
(i) Complaint is partly allowed.
(ii) The Opponent is directed to pay to the Complainant an amount of `50,00,000/-
along with interest @8% per annum since June, 2005 till realization.
(iii) The Opponent is directed to pay an amount of `15,000/- to the Complainant towards costs of litigation.+ Pronounced on 5th May, 2014.
[HON'ABLE MR. P.B. Joshi] Presiding Judicial Member [HON'ABLE MR. Narendra Kawde] Member ep