BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANGALORE
Dated this the 30th of April 2011
PRESENT
SMT. ASHA SHETTY : PRESIDENT
SMT.LAVANYA M. RAI : MEMBER
SRI. ARUN KUMAR K. : MEMBER
COMPLAINT NO.25/2010
(Admitted on 23.01.2010)
Mr.Oswald Veigas,
So. Late Inthru Veigas,
Aged about 60 years,
RA. Inthru Veigas Compound,
Hoige Bazaar,
Mangalore. …….. COMPLAINANT
(Advocate for the Complainant: Sri.K.S. Nambiar).
VERSUS
1. Bank of Baroda,
Mangalore Branch,
Milagres Centre,
Hampankatta, Mangalore.
(Advocate for the Opposite Party No.1: Sri.P.Chidananda Rao).
2. M/s.Ozma Shipping Company,
Inthru Veigas Compound,
Hoige Bazaar, Mangalore,
A Registered Partnership Firm
Represented by its Managing Partner –
Mr.Harold D’Souza.
(Advocate for Opposite Party No.2: Sri.Rajesh K.G).
3. Sri.V.T. Shetty,
S/o. Thyampanna Shetty,
Residing at No.25, 3rd Main,
Jayalaxmipuram, Mysore. ……. OPPOSITE PARTIES
(Advocate for the Opposite Party No.3: Sri.K.Premanath).
***************
ORDER DELIVERED BY PRESIDENT SMT. ASHA SHETTY:
1. This complaint is filed under Section 12 of the Consumer Protection Act alleging deficiency in service against the Opposite Parties claiming certain reliefs.
The brief facts of the case are as under:
The Complainant submitted that, Opposite Party No.2 is a registered partnership firm carrying on shipping business, obtained a loan of Rs.8,00,000/- from the Opposite Party No.1. The Complainant had stood as a guarantor for the said loan. It is stated that, in the year 1986 the ship owned by the Opposite Party No.2 met with an accident in the open sea drowned near Kavarathi Island. The Opposite Party No.2 filed a consumer complaint against the Oriental Insurance Company and the said complaint was allowed by the lower District Forum as well as before the Hon’ble National Commission and subsequently the matter was gone upto Hon’ble Supreme Court of India vide civil appeal No.6289/2001. The Hon’ble Supreme Court dismissed the appeal and directed the Insurance Company to pay Rs.48,82,617/-. It is stated that, as the amounts due to the bank were not paid, a suit came to be filed by the bank i.e., Opposite Party No.1 for recovery of amount with interest against the above said firm i.e., Opposite Party No.2 as well as its partners and guarantors before the Civil Court. The suit was allowed on 24.7.1998 quantifying the amounts due to it as Rs.51,37,000/-. But in the year 2001 Opposite Party No.1 offered to pay a sum of Rs.23,36,000/- towards the full and final settlement of their dues with the Opposite Party No.2. The Opposite Party No.2 accepted the said offer. In pursuance of the offer for settlement, the Complainant paid a sum of Rs.4,34,629/-. Opposite Party No.1 has acknowledged the said amount from the Complainant. In the meanwhile, the Insurance Company appealed before the Hon’ble Supreme Court of India as against the lower court order as stated supra, the Hon’ble Supreme Court dismissed the appeal and directed the Insurance Company to pay Rs.48,82,617/-. The Opposite Party No.1 after adjusting a sum of Rs.24,41,309/- from the aforesaid amount of Rs.48,82,617/- to the loan account of Opposite Party No.2. The remaining balance is with the Opposite Party No.1. It is stated that, the entire settlement amount was recovered from the Opposite Party No.2, the Complainant sought for refund of the excess amount of Rs.4,34,629/- from the Opposite Party No.1 but the Opposite Party No.1 kept on dragging the matter and stated that, Opposite Party No.1 has not returned the amount of Rs.4,34,629/- paid by the Complainant in the above said loan amount. Finally, the Complainant issued a legal notice dated 15.10.2009 to the Opposite Party No.1. Despite of that, the Opposite Party No.1 not paid the amount and hence the above complaint filed under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction from this Forum to the Opposite Party No.1 to refund the amount of Rs.4,34,629/- along with interest at the rate of 18% p.a. from the date of receipt of the amount i.e., 17.02.2001 till the date of repayment and also claimed Rs.50,000/- as compensation and cost of the proceedings.
2. Version notice served to the Opposite Parties by RPAD. Opposite Parties appeared through their counsel filed separate version.
Opposite Party No.1 i.e., Bank of Baroda stated that, one M/s.Ozma Shipping Company being a partnership firm having six partners had availed certain loan from the Opposite Party No.1 in the year 1982 on the security of the cargo vessel owned by them. It is stated that, the Complainant as well as other two persons were stood as guarantor to the above said loan but the amount due to the bank were not paid, a suit came to be filed for recovery of Rs.16,97,811.57 with interest against the said firm and subsequently the same has been transferred to DRT and the said suit was allowed on 24.07.1998 quantifying the amounts due to it as Rs.51,37,000/- plus interest from 25.07.1998. It is stated that, during the trial of the aforesaid recovery suit the hypothecated vessel along with cargo sank on 23.04.1988 which was insured with Oriental Insurance Company Limited for Rs.21,50,000/-. Thereafter, the above said borrower firm made a claim before the Insurance Company and subsequently the matter was gone up to Hon’ble Supreme Court of India vide Civil Appeal No.6289/2001. While admitting the said appeal, the Hon’ble Supreme Court directed the Insurance Company to deposit the amount with the Opposite Party No.1 and also directed the Opposite Party No.1 to adjust the 50% amount so deposited against the dues of the Ozma Shipping Company firm and directed to invest the remaining amount in F.D in the name of the borrower firm for one year, renewable for similar terms until further orders. In view of the above said order, the Insurance Company deposited Rs.48,82,617/- with the Opposite Party No.1 at its Mangalore main branch on 23.10.2001 and by virtue of the said direction, the Opposite Party No.1 has adjusted 50% i.e., Rs.24,41,309/- towards the dues of the borrowers firm.
It is further stated that, before the aforesaid deposit by the Insurance Company, the matter was settled by the borrower firm and Opposite Party No.1 under one time settlement scheme for Rs.23,46,000/- subject to payment of the same within 12 months from the date of settlement which was accepted by the firm and its partners and in view of the said settlement, the Complainant Mr.Oswald Veigas being the guarantor, on behalf of the firm paid a total sum of Rs.2,35,000/- on different dates to the current account of the borrower firm and Rs.2,00,000/- paid by one Mr.Dinesh Pai, a good friend of one of the partner Sri.V.T Shetty. As such a total sum of Rs.4,34,629/- was remitted to the current account of the borrower’s firm towards its dues. By virtue of the aforesaid payment and by virtue of adjustment of the order of the Hon’ble Supreme Court after adjusting the loan amount the bank is liable to refund a sum of Rs.29,71,247/- with up-to-date interest to the borrower firm M/s.Ozma Shipping Company for which Opposite Party No.1 is ready if all the partners come before the bank and contended that there is no deficiency whatsoever and prayed for dismissal of the complaint.
Opposite Party No.2 is a registered firm represented by its Managing Partner stated that, Opposite Party No.1 had given an offer for settlement in the year 2001 to settle the loan account for a sum of Rs.23,36,000/-. The said offer was accepted by the Opposite Party No.2. The Complainant as guarantor has paid a sum of Rs.4,34,629/- to the Opposite Party No.1 towards the settlement amount. Thereafter, the entire due amount was paid to the Opposite Party No.1 as per the interim order passed by the Hon’ble Supreme Court dated 24.09.2001. The Opposite Party No.1 has also issued a loan clearance certificate. It is stated that, in fact a sum of Rs.24,41,309/- was received by the Opposite Party No.1 as per the order of the Hon’ble Supreme Court and Opposite Party No.1 is liable to refund the above said amount along with excess amount of Rs.1,05,309/-. It is stated that, Opposite Party No.2 has no objection for refund of the amount of Rs.4,34,629/- and prayed for dismissal of the complaint.
Opposite Party No.3 who is one of the partner of the Opposite Party No.2 stated that, the amount deposited to the bank is the asset of the firm, it is payable to the firm only. The Complainant is not the partner of the firm. He is not entitled to withdraw the amount belonging to the firm. Opposite Party No.3 has issued notice to the Opposite Party No.1 bank not to pay the amount to the Complainant and stated that, the account of the Opposite Party No.2 firm are not settled and hence the Complainant is not entitled to receive any amount in this matter and stated that, the complaint filed by the Complainant is not maintainable and prayed for dismissal of the complaint.
3. In view of the above said facts, the points now that arise for our consideration in this case are as under:
- Whether the Complainant proves that the Opposite Parties committed deficiency in service?
- If so, whether the Complainant is entitled for the reliefs claimed?
- What order?
4. In support of the complaint, Mr.Oswald Veigas (CW1) filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on him. Ex C1 to C9 were marked for the Complainant as listed in the annexure. One Sri.Lokya Naik (RW1), Principal Officer / Sr.Branch Manager / GPA Holder of Opposite Party No.1, one Mr.Herald D’Souza (RW2), Managing Partner of Opposite Party No.2 and one Mr.V.T. Shetty (RW3), Opposite Party No.3 filed counter affidavit and answered the interrogatories served on them. One Mr.Dinesh Pai (RW4), witness of the Opposite Party No.3 filed affidavit and answered the interrogatories served on him. Ex R1 to R16 were marked for the Opposite Parties as listed in the annexure. Complainant as well as Opposite Party No.1 and 3 filed notes of arguments.
We have considered the notes/oral arguments submitted by the learned counsels and also considered the materials that was placed before this Forum and answer the points are as follows:
Point No.(i): Negative.
Point No.(ii) & (iii): As per the final order.
Reasons
5. Point No. (i) to (iii):
On scrutiny of the oral as well as documentary evidence placed on record by the parties as well as after hearing the arguments submitted by the learned counsels, the facts which are not disputed is that, the Complainant stood as a guarantor to the Opposite Party No.2 i.e., M/s. Ozma Shipping Company, a partnership firm and Opposite Party No.1 financed a loan to the Opposite Party No.2 in this case.
However, it could be seen on record that, the Complainant came up with a complaint stating that, he stood as a guarantor to the Opposite Party No.2 i.e., M/s. Ozma Shipping Company a partnership firm before the Opposite Party No.1 bank. The 2nd Opposite Party i.e., M/s. Ozma Shipping Company had obtained a loan from the 1st Opposite Party, while availing the loan the firm mortgaged their cargo vessel and also the landed property belonging to one Smt.N.J. Pinto and the Complainant as well as other two persons namely Mr.K.K. Prabhakaran and Smt.N.J.Pinto. Further it is sent that, as the amounts due to the bank were not paid, a suit vide O.S. No.192/1987 came to be filed by the bank for recovery of Rs.16,97,811.57 with interest against the above said firm as well as its partners and guarantors before the Civil Court. The above suit was subsequently transferred to Debts Recovery Tribunal at Bangalore and the suit was allowed on 24.07.1998. During the pendency of the aforesaid recovery suit, the hypothecated vessel along with cargo sunk on 23.04.1988 which was insured with M/s.Oriental Insurance Company for Rs.21,50,000/-. The above said firm made a claim before the Insurance Company and thereafter the matter was went upto the Hon’ble Supreme Court of India. Initially, the consumer complaint filed by the firm was allowed and the Insurance Company took the matter upto the Hon’ble Supreme Court of India vide Civil Appeal No.6289/2001 and while admitting the said appeal, the Hon’ble Supreme Court directed the Insurance Company to deposit the amount ordered by the Lower Courts and also directed the Opposite Party No.1 to adjust the 50% of the amount so deposited against the dues of the Ozma Shipping Company firm and also directed to invest the remaining amount in Fixed Deposit in the name of the borrower firm for one year, renewable for similar terms until further orders (i.e., as per Ex C3, C4 and C5). In view of the said order, the Insurance Company deposited a sum of Rs.48,82,617/- with the Opposite Party No.1 at its Mangalore main branch on 23.10.2001 and the Opposite Party No.1 has adjusted 50% of the amount i.e., Rs.24,41,309/- towards the dues of the borrower firm i.e., Opposite Party No.2. It is further seen that, before the aforesaid deposit by the Insurance Company the matter was settled by the borrower firm and Opposite Party No.1 under one time settlement scheme for Rs.23,46,000/- subject to payment of the same within 12 months from the date of settlement, which was accepted by the firm i.e., Opposite Party No.2 and its partners. It is further seen that, in view of the above said settlement the Complainant Mr. Oswald Veigas being the guarantor paid a total sum of Rs.2,35,000/- on different dates i.e., Rs.90,000/- on 14.01.2001, Rs.70,000/- on 17.03.2001 and Rs.75,000/- on 23.03.2001 to the current account of the borrower firm i.e., Opposite Party No.1. And it is further seen from the record that, one Mr.Dinesh Pai paid a sum of Rs.2,00,000/- on 25.07.2001 to the account of M/s. Ozma Shipping Company and as such a total sum of Rs.4,34,629/- was remitted to the current account of the borrower firm towards its dues. From the aforesaid undisputed facts it is very clear that, the entire amount has been paid by the Complainant as well as one Mr.Dinesh Pai to the current account of the M/s. Ozma Shipping Company i.e., Opposite Party No.2 firm. In other words, whatever the amount remitted by the Complainant as well as Mr.Dinesh Pai to the loan account of the Opposite Party No.2. The Complainant is not a partner of the firm. Once the amount remitted to the current account of the firm or to the loan account, in case of excess amount lying in the said account cannot be paid to the Complainant who is a guarantor in this case. Because the Opposite Party No.3 who is one of the partner of the above said firm raised an objection stating that the account of the Opposite Party No.2 firm are not settled. When that being the case, the Opposite Party No.1 i.e., Bank of Baroda cannot issue or pay the aforesaid amount to the Complainant or any other individual other than the firm and its all partners. In the instant case, the Opposite Party No.1 bank has taken right and lawful decision. Because after adjustment of the loan amount the remaining balance whatsoever lying with the bank shall be refunded to the lawful owners / partners not to the Complainant. No doubt, the Complainant stood as a guarantor to the loan account of the Opposite Party No.2 firm. If at all any payment made by the Complainant shall be claimed with the partners of the firm and not before the Opposite Party No.1 bank.
In view of the above discussion, we hold that there is no deficiency whatsoever on the part of the Opposite Party No.1 bank. The subject matter involved in this case is with regard to the account of the firm. Hence the complaint has no merits, deserves to be dismissed. No order as to costs.
6. In the result, we pass the following:
ORDER
The complaint is dismissed. No order as to costs.
The copy of this order as per the statutory requirements be forwarded to the parties free of charge or sent to the parties under postal certificate and thereafter the file shall be consigned to the record room.
(Page No.1 to 13 dictated to the Stenographer typed by her, revised and pronounced in the open court on this the 30th day of April 2011.)
PRESIDENT MEMBER MEMBER
NNEXURE
Witnesses examined on behalf of the Complainant:
CW1 – Mr.Oswald Veigas – Complainant.
Documents produced on behalf of the Complainant:
Ex C1 – 29.10.2011: Letter issued by the Opposite Party No.1 to the Opposite Party No.2.
Ex C2 – 15.07.2003: Letter issued by the Opposite Party No.1 to the Complainant.
Ex C3 – 24.09.2001: Order passed by the Hon’ble Supreme Court of India in Civil Appeal No.6289/2001.
Ex C4 – 19.11.2001: Order passed by the Hon’ble Supreme Court of India in Civil Appeal No.6289/2001.
Ex C5 - : Copy of the judgment passed in civil appeal No.6289/2001 passed by the Hon’ble Supreme Court of India.
Ex C6 – 15.10.2009: Letter issued by the Complainant to the Opposite Party No.1.
Ex C7 – 21.10.2009: Loan clearance certificate issued by the Opposite Party No.1.
Ex C8 – 18.07.2005: Certified copy of the Decree passed by the I Additional Civil Judge (Jr Dn), Mangalore in OS No.647/2002.
Ex C9 - : Deposit Receipts (4 in numbers).
Witnesses examined on behalf of the Opposite Parties:
RW1 – Sri.Lokya Naik, Principal Officer/ Sr.Branch Manager/
GPA Holder of Opposite Party No.1.
RW2 – Mr.Herald D’Souza, Managing Partner of Opposite
Party No.2.
RW3 – V.T. Shetty, Opposite Party No.3.
RW4 – Mr.Dinesh Pai, witness of the Opposite Party No.3.
Documents produced on behalf of the Opposite Parties:
Ex R1 – : Attested copy of the counter part of paying in slip of current account of Opposite Party No.2 for having paid a sum of Rs.2,35,000/-.
Ex R2 – 25.07.2001: Copy of the cheque for Rs.2,00,000/- drawn on Vijaya Bank with certificate of Vijaya Bank.
Ex R3 – 15.10.2001: Letter by the Complainant to Opposite Party No.1.
Ex R4 – 28.08.2009: Notice by Sri.V.T.Shetty to Opposite Party No.1 through his advocate.
Ex R5 – 22.10.2009: Notice by Sri.V.T.Shetty to Opposite Party No.1 through his advocate.
Ex R6 – 20.01.2010: Notice by Sri.V.T.Shetty to Opposite Party No.1 through his advocate along with death certificate of Sri.B.Prabhakar.
Ex R7 – 09.11.2009: Notice by Sri.B.Dinesh Pai to Opposite Party No.1.
Ex R8 – 05.01.2010: Letter issued by Opposite Party No.1 to the Complainant.
Ex R9 – 09.06.1981: Copy of the Partnership Deed.
Ex R10 – 06.10.2009: Copy of the Lawyer’s notice sent by Opposite Party No.3.
Ex R11 - : Reply sent by Mrs.Henrita Veigas, W/o. the Complainant.
Ex R12 - : Reply sent by Sri.B.Prabhakar.
Ex R13 - : Reply sent by Sri.Bharath Mendon.
Ex R14 – : Reply sent by Sri.Herald D’Souza.
Ex R15 -18.07.2005: Copy of the judgment in O.S. No.647/2002.
Ex R16 – 28.08.2009: Notice issued by Opposite Party No.3 to Opposite Party No.1.
Dated:30.04.2011 PRESIDENT
