Haryana

StateCommission

A/518/2016

INDUSIND BANK LTD. - Complainant(s)

Versus

AMRIK SINGH - Opp.Party(s)

ASHWANI TALWAR

25 Jan 2017

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No  :     518 of 2016

Date of Institution:     06.06.2016

Date of Decision :     25.01.2017

 

1.      IndusInd Bank Limited, Jagadhri Road near Telephone Exchange, Jagadhri, District Yamuna Nagar through its Branch Manager.  

2.      IndusInd Bank Limited, Door No.69, Ishwar Dham Street, Old Mahabalipuram Road, Mathamiz Nagar, Karapakam, Chennai (Head Office) through its Chairman/Managing Director.

 

                                      Appellants-Opposite Parties

Versus

 

Amrik singh s/o Sh. Didar Singh, Resident of Village & Post Office Nihal Garg, Tehsil Ponta Sahib, District Sirmaur, Himachal Pradesh.

 

                                      Respondent-complainant

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Shri B.M. Bedi, Judicial Member.

                             Shri Diwan Singh Chauhan, Member                                                                                                                                         

Argued by:          Shri A.S. Khara, Advocate for appellants.

                             Shri Ashwani Sharma, Advocate for respondent.

 

                                                   O R D E R

 

B.M. BEDI, JUDICIAL MEMBER

 

          This Opposite Parties’ appeal is directed against the order dated April 21^st, 2016 passed by District Consumer Disputes Redressal Forum, Yamuna Nagar (for short ‘the District Forum’) in complaint No.333 of 2014.

2.                Amrik Singh-complainant (respondent herein) filed complaint under Section 12 of the Consumer Protection Act, 1986 averring that he owned truck bearing registration No.HP-17-B-8586. It was got financed with IndusInd Bank Limited-Opposite Parties/appellants in 2012 vide account No.HYD00123D. He repaid the entire loan amount along with interest to the opposite parties and the Opposite Parties issued Closure Certificate dated 21^st July, 2014 in this respect.   However despite repeated oral requests and email dated 1^st August, 2014, the opposite parties did not issue ‘No Dues Certificate’ alongwith Form No.35 and six blank cheques obtained from him.

3.                The Opposite Parties-appellants, in their written version stated that blank cheques, as alleged by the complainant were never obtained from him. However, it was admitted that No Dues Certificate could not be issued because the complainant was a co-borrower in other loan account No.HDY00026E and HDY00015E. Towards account No.HDY00026E a huge amount was due and payable by the complainant and the main borrower, which was not repaid. The opposite parties filed a petition under Section 9 of the Arbitration Act at Rohini Court, Delhi. Arbitration proceedings were initiated and an award was passed against the borrower and complainant. However, as per the guidelines of Reserve Bank of India, if any one contract of a person comes in the category of NPA (Non Performing Asset), then all of his contracts would be treated as NPA despite regular payment in his other contracts. It was prayed that the complaint be dismissed.

4.                After evaluating the pleadings and evidence of the parties, the District Forum allowed complaint and directed the opposite parties-appellants to issue ‘No Dues Certificate’ alongwith Form No.35 to the complainant and to pay Rs.5,000/- as compensation for mental agony, harassment and litigation expenses.

5.                Counsel for the parties have been heard. File perused.

6.                Indisputably, the opposite parties-appellants did not issue ‘No Dues Certificate’ alongwith Form No.35 despite the fact that the complainant had repaid the entire loan amount of particular loan account. It is also not in dispute that the complainant being co-borrower in other loan accounts was defaulter of the opposite parties. For ready reference paragraph No.5 of the written version of opposite parties reads as under:-

“5.     That in reply to para No.5 of the complaint it is submitted that the answering respondent never obtained any blank cheques from the complainant, however no dues certificate could not be issued because the complainant is co-borrower in another loan accounts No.HDY00026E and No.HDY00015E. It is relevant to mention here that in loan account No.HDY00026E a huge amount is due and payable by present complainant and main borrower but despite regular follow up in writing and personally visit by the executive of the bank not paid by complainant and the main borrower, therefore respondent bank has filed a petition u/s-9 of Arbi Act at Rohini Court, Delhi and arbitration proceedings were initiated and an awards has passed against main borrower and present complaint regarding the loan agreement No.HDY00026E. However as per the guidelines of Reserve Bank of India as stated above if any one contract of a person comes in the category of NPA (Non Performing Asset then all of his contracts would be treated as Non Performing Assets (NPA) despite regular payment in his other contracts. Therefore as per the aforesaid guidelines of Reserve Bank of India, NOC pertains to the loan account No.HDY00123D cannot be issued unless the aforesaid other loan accounts got regularized or get settled.”

7.                The matter being referred to the arbitrator, the arbitrator passed award against the complainant as co-borrower as well as main borrower. Copy of the award (Exhibit R-4) has been produced on the record, where the complainant was one of the respondents and award also stands against the complainant-Amrik Singh.

8.                Clause 2.12 of the agreement (Exhibit R-1) which was executed between the complainant and the bank, reads as under:-

“The liability of the co-borrower is joint and several and is coexistent with that of the borrower. The liability of the co-borrower(s) to repay the loan amount together with interest etc and to observe the terms and conditions of the Agreement/and any other Agreement/s, document/s that may have been or may be executed by the Borrower with the Lander in respect of this Loan or any other Loan or Loans, is joint and several and consequently the Lender shall have a sole discretion to proceed against both or either of them to recover the Loan and other charges payable by the Borrower to the Lender shall have a sole discretion to proceed against both or either of them to recover the Loan and other charges payable by the Borrower to the Lender.”

9.                Section 171 of the Contract Act, is reproduced as under:

“171. General lien of bankers, factors, wharfingers, attorneys, and policy-brokers.—Bankers, factors, wharfingers, attorneys of a High Court and policy-brokers may, in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to them; but no other persons have a right to retain, as a security for such balance, goods bailed to them, unless there is an express contract to that effect.”

10.              It is well established that the liability of the guarantor is equal to and co-extensive with the borrower. The guarantor can not avoid his liability. In this case, the agreement (Exhibit R-1) executed between the complainant and the bank has made the position completely clear. The District Forum has failed to appreciate the facts and the legal position involved in this case. So, the impugned order cannot be allowed to sustain.

11.              In view of the above, the appeal is accepted, the impugned order is set aside and the complaint is dismissed.

12.              The statutory amount of Rs.25,000/- deposited at the time of filing the appeal be refunded to the appellants against proper receipt and identification in accordance with rules, after the expiry of period of appeal/revision, if any.

 

Announced 25.01.2017

Diwan Singh Chauhan Member

B.M. Bedi Judicial Member

Nawab Singh President

CL