HYDERABAD.

F.A  1553/2007  against C.C. 35/2007,  Dist. Forum, Nalgonda.   

Between:

Narendruni  Sudha Rani

W/o. Lingamurthy

Age: 30 years, Household

R/o.  Suryapet Town

Nalgonda Dist.                                            ***                         Appellant/

                                                                                                Complainant.

                                                                   And

M/s. Andhra Bank

Suryapet Branch

Rep. by its Branch Manager                       ***                         Respondent/Op.

Counsel for the Appellant:                          M/s. K. Narasimha Chari.

Counsel for the Resp:                                 M/s. K. Sridhar Rao.

CORAM:

HON’BLE SRI JUSTICE D. APPA RAO, PRESIDENT

&

                                    SRI R.L.NARASIMHA RAO, MEMBER

WEDNESDAY, THIS THE SIXTEENTH DAY  OF DECEMBER TWO THOUSAND NINE

Oral Order: (Per Hon’ble Justice D. Appa Rao, President)

                                                          *****

1)                 Appellant is unsuccessful complainant.    

2)                The case of the complainant in brief is that   complainant’s husband was appointed as  gold appraiser  with the respondent bank in the year 2001, and at his request she gave security by way of  fixed deposit receipts (FDRs)  for an amount of Rs. 1,50,000/- under Exs. A1 to A3 certificates.   The bank has issued a notice on 30.8.2006  alleging that the gold appraised by her husband was proved spurious pertaining to gold account of one Gangula Ravi, and therefore directed her to pay the amount.  Immediately her husband questioned  as to why  at the time of testing  of  the gold  he was not informed  and  afraid  that he would be implicated, gave a reply  on  19.10.2006 demanding  disclosure of  entire particulars  and also demanded the amount covered under the FDRs  deposited by his wife with interest.    The bank on the next day i.e., on  20.10.2006  enclosed pay order  for Rs.  19,457/-  after deducting an amount of Rs. 1,42,322/-  belonging to her illegally and arbitrarily without issuing any notice to her.   The pay order was returned  with a direction to  pay the amount.  The contents of rejoinder notice issued by the bank is false.   The bank could not have appropriated the amount which amounts to deficiency in service and therefore the bank be directed to pay  Rs. 1,50,000/- with interest  @  12% p.a., together with compensation of Rs. 50,000/- and costs.

3)                The bank resisted the case.   It alleged that the complainant’s husband was appointed as gold appraiser.  He furnished  personal cash security with the bank.   Her husband  had deposited the security in his personal capacity.   The complainant was not a party to the transaction between her husband and the bank.   The complainant’s husband himself  personally visited the bank  and admitted his fault.   The complaint was filed in order to harass them.   There was neither negligence nor deficiency in service on its part, and therefore prayed for dismissal of the complaint with costs.

4)                The complainant in proof of her case filed her affidavit evidence and got Exs. A1 to  A9 marked, while the bank filed the affidavit evidence of its Senior Manager and got Ex. B1 marked.

5)                The Dist. Forum after considering the evidence placed on record  dismissed the complaint holding that  the complainant cannot be termed as consumer nor the dispute  a consumer dispute. 

6)                Aggrieved by the said order, the complainant preferred this appeal contending that the Dist. Forum did not appreciate either the facts or law in correct perspective.   The complainant was entitled to the amount covered under the FDRs  and appropriation by the bank unilaterally  was bad under law,  a deficiency in service, and therefore prayed that the amount covered under the FDRs be directed to be paid with interest. 

7)                The point that arises for consideration is whether the order of the Dist. Forum is  vitiated by mis-appreciation of  fact  or law and liable to be  set-aside?

8)                It is not in dispute that the complainant had deposited  Rs. 50,000/- each  on  19.5.2001 evidenced under  Exs. A2 & A3 bonds  the maturity date being 19.5.2004 wherein she was entitled to Rs. 67,240/-  on each of the bond.   She also deposited an amount of Rs. 50,000/- on 10.5.2006 evidenced under Ex. A1, the  maturity date being 10.5.2007,  wherein she was entitled to Rs. 53,330/-.  It is also not in dispute that the complainant’s husband  Narendruni Linga Murthy  was a gold appraiser of the bank.   The very respondent bank admitted both in the counter  as well as in the affidavit evidence  that he was appointed in the year 2001. It  categorically mentioned that  “ he furnished personal cash security with the bank as per the terms of the agreement.”   It denied that  FDRS were deposited towards security.   Though it is not clear, however in the counter it was alleged that  “ The opposite party submits that the complainant’s husband  deposited the  security deposit  in his personal capacity and not as  third party security, hence the complainant  is not a party to the agreement  with regard to the appointment of gold appraiser to the bank.”.  Nothing was pleaded as to why the amounts covered under Exs. A1 to A3 FDRs  could not be paid on or  after the maturity date.    By letter  Dt. 30.8.2006 under Ex. A4  the bank issued  notice to the complainant’s husband stating that the gold which he appraised pertaining to one “ Gangula Ravi  was proved to be spurious and therefore directed him to repay the loan outstanding amount with interest as on date within 15 days  otherwise  we have to adjust  your deposits  (which have been kept as security for the loan account)  to the above  loan  account to  the extent  of  principal  and  interest  as  on  date.”    

It looks as though he has also borrowed some amounts.  When the complainant’s husband gave reply under Ex. A5  Dt. 19.10.2006 questioning the  said notice, denied that the gold was spurious.  However, he demanded return of the amount covered under the FDRs and that he paid the entire loan amounts.  He was forced to discharge the amount under gold loan with a threat that the amount would be adjusted towards  FDRs of  his wife.

9)                Contrary to the entire pleadings  the bank by letter  Ex. A6 Dt. 20.10.2006  informed the complainant’s husband that the bank has closed the  FDRs   of the complainant  under Exs. A1 to A3 and adjusted towards the amount payable due to wrong appraisal of gold by him  by deducting Rs. 1,42,322/-.  It is mentioned  “ we herewith send a pay order No. 856 193  Dt. 20.10.2006  for Rs. 19,457/-   favouring  N. Sudha Rani, being the remaining amount of her  deposits  after adjusting the said gold loan account.    For this her husband gave notice under  Ex. A7  Dt  26.10.2006  by  returning the pay order. 

10)              It is curious to learn that the bank gave rejoinder under  Ex. A9 Dt.  27.10.2006  stating that the complainant’s husband  “after knowing all the details and in turn your client also consented to adjust the deposits which were kept as security.”  It did not mention anything as to when the security was given.    It maintained that “my client also sent pay order for Rs. 19,457/-  left over amount with such letter in favour wife of your client as she created lien towards the guarantee of your appreciation.”

11)              A perusal of the entire evidence placed on record discloses that the complainant’s husband was appointed as gold appraiser  in the year 2001.   The complainant asserted that  Exs. A2 & A3 as well as Ex. A1  were kept as security deposit  on the request of her husband.    Curiously  the bank while denying that these  FDRs were kept as security  on behalf of her husband alleged that  he furnished  personal cash security  with the bank  as per the terms of the agreement.  It looks as though  the bank  did  not admit  these FDRs were kept as  security.    Contrarily, a perusal of the  FDRs show that  they were kept as security.    The bank alleges that the gold items which were appraised by him were  found to be spurious  pertaining to gold loan account of one  Gangula Ravi  and deducted Rs. 1,42,322/- and sent balance of Rs. 19,457/- by way of pay order  to the complainant’s husband evidenced under  Ex. A6.    The loan account of   Gangula Ravi  was not filed.   The application for loan was filed which does not mention as to exact amount  that  Gangula Ravi had to pay.      

12)              Be that as it may, the bank had failed to prove that the gold appraised by the complainant’s  husband was spurious and that the bank  had sustained loss to a tune of Rs. 1,42,322/-.   If really the bank intends to  appropriate the amount covered under the FDRs  Exs. A1 to A3  on the ground that her husband had appraised the spurious gold ornaments as genuine one  and therefore sustained loss, it could have issued notice to the complainant mentioning the above facts.    It is not as though the complainant’s husband  admitted the said fact.    He contested  the claim of the bank.  Taking advantage of  FDRs with it, the bank had unilaterally appropriated   the amount and sent a pay order for remaining amount.   If really the bank had sustained loss due to the acts of  her husband it could have taken legal proceedings and then appropriate  the amount. 

13)              Even otherwise  it could have issued notice to the complainant mentioning that it was recovering the amount  from her FDRs  which was given as security.   The bank  at no where admitted that these  FDRs were kept as security for her husband’s  job  as gold appraiser. Its contention was that the complainant’s husband  had furnished  personal cash security   in his personal capacity and not FDRs.  The bank has all through stated that they issued notice to her husband.   At no time the complainant was given any notice.   Ex-facie the FDR stand  in the name of the complainant.   If really they intend to appropriate the amount, notice ought to have been given to her and not to her husband.    Unilateral appropriation of amount is bad under law.   The bank did not file the terms and conditions of  appointment  of her husband and proved that  they were entitled to security amount in case any loss was  occasioned  by the conduct of the  appraiser.    The bank ought to have recovered the amount by taking appropriate action.   It cannot do it   unilaterally and without even giving notice,  and in the process deny the amount covered under the FDRs.     The bank ought to have filed the entire record  pertaining to the gold loan account of Gangula Ravi and furnished the record showing  that due to wrong  appraisal it has sustained the loss.    It cannot assume that it was spurious and then recover the amount..  It is not known who certified that it is spurious.  If the banks are entitled to appropriate the amount without recourse to law it would end in  chaos.   The entire conduct  of the bank  smacks  suspicious.  Non-payment of amount covered under the FDRs  after maturity period would undoubtedly amounts to deficiency in service.   The complainant is a consumer  in the sense that the banking services are included in the definition of ‘ Service’ u/s 2(1)(o) of the Consumer Protection Act. 

14)              In the result  the appeal is allowed in part, consequently the complaint is allowed in part.   The respondent bank is directed to refund Rs. 1,50,000/- together with interest  @ 6.5% p.a.,  as mentioned in the FDRs from the date of maturity till the date of realization together with costs of Rs. 5,000/-.  Time for compliance four weeks.

1)       _______________________________

PRESIDENT                 

2)      ________________________________

 MEMBER          

                             Dt.  16. 12. 2009.

*pnr

“UP LOAD – O.K.”