State Consumer Disputes Redressal Commission
K. Minakshi Sundaram Kolathur Post ... vs Bank Of India Chennai on 10 February, 2011
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.J.Jayaram, M.A., M.L., JUDICIAL MEMBER
Thiru.S.Sambandam, B.Sc., MEMBER II F.A.164/2010 [Against order in C.C.69/2008 on the file of the DCDRF, Chennai (North) DATED THIS THE 10th DAY OF FEBRUARY 2011 K. Minakshi Sundaram, | Appellant / Complainant 5/2, K.K. Nagar, First Street, | Kolathur Post, | Chennai 600 099. | Vs. The General Manager, | Respondent / OP Bank of India, | 17, Errabalu Chetty Street, | Chennai 600 001. | The appellant / complainant filed a complaint before the District Forum against the opposite party praying for the direction to the opposite party to pay compensatory damages amounting to Rs.5 lakhs and return the shares sold on 25.6.2002 and 11.08.2006. The District Forum dismissed the complaint, against the said order, this appeal is preferred praying to set aside the order of the District Forum dt.28.01.2010 in C.C.69/2008.
This appeal coming before us for hearing finally on 02.02.2011, upon hearing the arguments of appellant counsel and perused the documents, as well as the order of the District Forum, this commission made the following order:
For the Appellant / Complainant : Party in Person.
Counsel for the Respondent /OP : Mr.B. Karthikeyan, Advocate.
M. THANIKACHALAM J, PRESIDENT
1. The unsuccessful complainant is the appellant.
2. The complainant/appellant, who was the customer of the opposite party bank, having OD Account No.687, pleding the shares owned by him, in various Companies, availed financial assistance to the extent of Rs.3 lakhs, for which, the shares were given as valuable security. The loan covered by the OD Account was discharged, periodically by sale of the shares deposited with the opposite party and further, the proper accounting will disclose that the OD Account should be treated as closed.
3. The complainant, by obtaining information, came to know that the Bank could have sold the shares either on 25.6.2002 or on 11.08.2006, not following the proper procedure. When the shares were pledged, that can be negotiated by dematerializing the shares, but despite repeated requests, the opposite party has not followed the formalities, for dematerializing the shares and if the shares were negotiable, the OD limit could not have exceeded, at any time. Therefore, the bank has to bear responsibility for the delay from 19.05.2000 and the consequential liability.
The complainants instructions for sale of shares on 25.6.2002, were only at the instance and compulsion of the opposite party, not volunteer as required under law. The account stands closed of its own accord by operation of law and the pledged shares should have been released automatically. In this view, the sale of 580 shares of Colgate on 11.08.2006 is improper. The opposite party, without furnishing the vital document, informing the true position, has caused mental agony, loss and damage to the complainant, which should be construed, as deficiency in service.
Hence, the case is filed to direct the opposite party to pay compensatory damage of Rs.5 lakhs and to return the shares sold on 25.6.2002 and 11.08.2006.
4. The opposite party bank in a way admitting that the complainant was an account holder, availed OD loan facilities, pledging the shares, questioned and resisted the claim of the complainant on the grounds that the case is clearly barred by limitation, that the law of limitation pleaded by the complainant may a bar initiate the legal proceedings, but that will not extinguish the right of the creditor if that could be enforced under law, otherwise, that only at the request of the complainant without protest, shares were sold on 25.6.2002 and therefore, the complainant is estopped from questioning the transaction and that for the alleged imaginary mental agony, they are not liable to pay any damage, much less not liable to return the shares also.
5. The District Forum, considering the rival contentions of the parties, felt that there was no sustainable elements in the claim of the complainant, that the bank had exercised their right of lien correctly, which cannot be challenged and that the complaint does not contain necessary required particulars, to attract the consumer dispute. In this view, further concluding, that the complainant failed to establish the negligent act, and deficiency in service, dismissed the complaint, on 28.01.2010, which is challenged on various grounds by the complainant, in this appeal.
6. The appeal was filed by the senior citizen, in person. He has filed Written Argument on 22.06.2010 and subsequently he has filed Memo also dated 01.12.2010 received by this Office on 13.12.2010, informing his oral argument may be dispensed with accepting the Written Argument, wherein also, the averments in the complaint are reiterated, stating how the rights commenced under the document dated 19.5.1994 and how that document came to be void on 19.5.97 and describing the subsequent act of the opposite party, as if against law. Perused the Written Submission of the complainant filed before this Commission as well as the District Forum and as well rejoinder. Heard the submission of the learned counsel for the respondent and perused their Written Submission also.
7. As submitted by the respondent/opposite party and as recorded by the District Forum, it is not known, for what purpose, on what basis, a claim came to be filed, since even according to the complainant, the original document came to an end on 19.05.97. If that argument is to be accepted, assuming that the opposite party had committed any negligent act or deficiency in service, then the complainant should have approached the Consumer Forum, within two years from the date of cause of action.
Admittedly, for the reasons, which we are going to advert infra also, the complaint was not filed within two years from the above said date, whereas, it was filed only on 07.11.2007, and therefore, it should be concluded, that the claim is barred by limitation.
Unfortunately, the District Forum despite the fact, the opposite party has raised this defence substantially has not considered and gave a finding, though the complaint is dismissed otherwise, that part can be accepted by this Commission.
8. The prayer in the complaint reads to pass orders holding the opposite party liable under the Act and directing the opposite party to pay compensatory damages amounting to Rs.5 lakhs and return the shares sold on 25.6.2002 and 11.8.2006 and grant such other reliefs. The cause of action for the complaint is dated 17.8.2007 and 01.09.2007, including the date of notice namely 27.09.2007. Though it appears, from the above said dates, the complaint is in time, as mandated under Section 24(A) of the Consumer Protection Act, it is not so.
The case could be seen, not only from the prayer, but also from other averments. As indicated above, the prayer is for the return of the shares, sold on 25.06.2002 and 11.08.2006. As far as shares sold on 25.06.2002 is concerned, the case is clearly out of time, though the claim for the return of shares sold on 11.08.2006 may be within the time, under the Consumer Protection Act, subject to other defence, raised on behalf of the opposite party. Even as per the pleadings, major shares were sold on 25.6.2002. It appears, the shares were sold, informing the complainant also, though he might have pretended that he had no idea. The complainant, instead of questioning the action of the opposite party, if he felt, they were negligent, amounting to deficiency, being the consumer, within two years, he ought to have come to the District Forum. But, unfortunately, for the reasons best known to him, he approached the Central Information Commission and obtained certain particulars, which will not renew the cause of action or extent the period of limitation, as ruled by the Supreme Court, which we will advert infra.
9. The other plea, as if, the opposite partys claim was barred by limitation and therefore, they have no right to sale the shares, is also baseless and improper understanding of law. No law prohibits or bars the Bank from exercising the general lien, as available under the Contract Act, even in respect of barred debt. The question, whether a claim is barred or not, will come, when the creditor sues for the recovery of the amount. But, that does not mean the liability is extinguished.
In case, where the liability is not extinguished, under the Limitation Act, a creditor, if not otherwise barred, entitled to proceed to adjust the amount of the debtor, if it is available with them as security under the general lien available for a Bank. Under Limitation Act, as seen from Section 27, even that may not be applicable to the present case, only in respect of possession extinguishment of right is contemplated, probably barring the suit under Article 64 or 65 of the Limitation Act. Otherwise, under the law of limitation, we do not find any specific Section, extinguishing other right, though there is a bar to file a suit for the recovery. Having this in mind, now we have to see the case of the complainant.
10. Admittedly, the complainant had availed OD facilities, for which, he had given the shares, owned by him in various Companies or pledged the same as security. In view of the fact, for the non-payment of the OD, some of the shares were sold on 25.6.2002 and some of the shares were sold on 11.08.2006, not very much in dispute.
The selling of the above said shares is faulted by the complainant, as if, the opposite party had committed negligent act, in selling after the general period of limitation is over. As seen from the agreement dated 19.5.94, loan was availed, rights of the parties defined. According to the complainant, the agreement came to an end, after three years and thereafter it is void, thereby, the complainant wants to evade the liability, forgetting the other rights available to the Bank, including the general lien. As indicated by us supra, though a suit for recovery is barred under Limitation Act, the liability of the complainant is not extinguished, and there is no limitation also to exercise the general lien by the Bank. In the complaint, not date of loan is mentioned, from which date, he committed default is not mentioned, how the opposite party had committed negligent act is not mentioned, and in the absence of the required particulars, the senior citizen having obtained some information, then simply using words, the opposite party had committed negligent and deficiency in service, which is not sufficient to fasten any liability upon the opposite party since they have exercised their rights legally within the frame of law.
11. The complainant had seen one side of the coin, failed or closed his eye, to see the other side of the coin, where the rights are available to the Bank not extinguished at all. Therefore, the submission in the Written Version, that the default and negligent of the bank, as alleged in not maintaining the account records or not renewing the transaction periodically will not give any relief, to the complainant and under the guise, there was no effective contract or loan agreement, when the loan itself was admitted, not discharged, and the complainant is not entitled to escape.
So the submissions made in the Written Argument received by this Commission on 22.6.2010 are legally unsustainable, that too, in view of the fact that the consumer complaint is barred by limitation.
12. The learned counsel for the respondent/opposite party, in order to counteract the submission on behalf of the appellant, that the time barred debt cannot be enforced, exercising lien, brought to our notice three rulings of the Apex Court, reported in AIR 1992 SC 1815, 1998 (7) SCC 123 and 1999 (2) SCC 355. In all the cases, this kind of plea raised by the complainant was considered elaborately and negatived, considering the scope not only Section 3 of the Limitation Act, but also Section 27 of the Limitation Act.
In the first ruling, the Apex Court has held S.3 of the Limitation Act only bars the remedy but does not destroy the right which the remedy relates to. The right to the debt continues to exist notwithstanding the remedy is barred by the limitation. Therefore, when the principal debtor did not repay the bank loan, the bank as creditor can adjust it at maturity of the Fixed Deposit Receipts deposited by the guarantor with the bank as security, though the debt became barred by limitation at the time of maturity of the said Fixed Deposit Receipts. It is not obligatory to file a suit to recover the debt.
Such adjustment would not amount to offences punishable under Ss.109, 114 and 409 of the Penal Code.
13. In the second citation, it is held Rules of limitation are not meant to destroy the rights of the parties.
They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time.
14. In third case, the Apex Court has ruled once again considering the Section 3 of the Limitation Act, expiry of period of limitation, does not mean, extinguishing the debt, but only renders the same enforceable in a Court of Law and the relevant portion reads The principle that expiry of the period of limitation prescribed under the Limitation Act could not extinguish the debt, but it would only prevent the creditor from enforcing the debt, has been well settled. Applying that principle, it is clear that mere entry in the books of accounts of the debtor made unilaterally without any act on the part of the creditor, will not enable the debtor to say that the liability has come to an end. Apart from that, that will not by itself confer any benefit on the debtor as contemplated by the Section. Though the Limitation Act is not made applicable to the Consumer Protection Act since main defence of the complainant was, the debt or the contract was barred by time, and therefore, the opposite party cannot exercise the general lien and to repudiate the same alone, we have pointed out the Supreme Court rulings as placed before us.
15. In the case of a consumer dispute, we are concerned mainly, in this kind of case, the service availed or hired for consideration followed by negligent act and the consequential act of deficiency, in service, empowering the consumer to claim compensation. In this case, the complainant has not at all made, but a case of any negligent act, on the part of the opposite party. Originally, legal transactions commenced, voluntarily the complainant pledged his shares as security, borrowed loan. No case has been made out by the complainant, as if, he paid the entire loan and therefore, the opposite party had no right to sell the shares. Though the delay in demating the share certificates is alleged for that also, we do not have any iota of evidence. As already indicated, the transaction took place in 1994, first sale of shares took place on 25.6.2002 and the second sale of shares took place on 11.08.2006. Since the complainant has miserably failed to prove the discharge of the debt, under the general lien available to the Bankers, they have sold shares legitimately though the claim may be barred for filing the suit, not extinguished the liability of the complainant. The District Forum, though not considered all these things elaborately, has rightly come to the conclusion, in giving a finding that there was no negligent act or deficiency in service on the part of the opposite party, which finding is acceptable to us. Hence, the appeal is devoid of merit, liable to be dismissed with cost.
16. In the result, the appeal is dismissed with cost of Rs.1,000/-, confirming the order passed by the District Consumer Disputes Redressal Forum, Chennai [North], in O.P.69/2008, dated 28.01.2010.
S. SAMBANDAM J. JAYARAM M.THANIKACHALAM MEMBER II JUDICIAL MEMBER PRESIDENT INDEX : YES / NO Ns/mtj/Bank