Date of Filing: 26/08/2011

        Date of Order:24/10/2011

BEFORE THE I ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL FORUM SESHADRIPURAM BANGALORE -  20

Dated:  24^th DAY OF OCTOBER 2011

PRESENT

SRI.H.V.RAMACHANDRA RAO,B.SC.,B.L., PRESIDENT

SRI.KESHAV RAO PATIL, B.COM., M.A., LL.B., PGDPR, MEMBER

SMT.NIVEDITHA .J, B.SC.,LLB., MEMBER

COMPLAINT NO.1603 OF 2011

Shri. K. Padmanabhan,

One of the guarantors,

Rep. the borrowers viz.,

Sri. Arun Padmanabhan, Mrs. Usha P.S,

Mr. P.P. Selvam, Mr. Poongkodi, Mrs. Kavitha Arun.

R/at: 77/15-1, 7^th Main,

Hanuma Hills Layout,

Ramanjaneya Nagar,

Bangalore-560 061.

(Rep. by In person)                                                         ….  Complainants.

V/s

(1) The Assistant General Manager,

Bank of Baroda, Bangalore Main Branch,

No.2, Prithvi Building, K.G. Road,

BANGALORE-560 009.

(2) The Deputy General Manager,

Bank of Baroda, Regional Office (Karnataka)

3^rd Floor, HJS Chambers, No.26, Richmond Road,

BANGALORE-560 025.

(Rep. by Sri.Y.V.Parthasarathy, Advocate)                          …. Opposite Parties.

BY SRI. H.V.RAMACHANDRA RAO, PRESIDENT

-: ORDER:-

The brief antecedents that lead to the filing of the complainant U/s 12 of the Consumer Protection Act seeking direction to the Opposite Parties to give credit to the amount of Rs.50,000/- and release the property papers which are distinctly different separate and independent no lien on each other and to pay damages, are necessary:-

The erstwhile Bank Of Baroda Housing Finance Limited sanctioned five independent housing loans aggregating Rs.37.50 lakhs during 2002 to Sri. P. Arun, Smt. P.Usha Selvan, Sri. P.Panneer Selvam, Smt. R. Poongkodi and Smt. Kavita Arun the kith and kin of complainant and the complainant was the guarantor for all the loans.  Because of certain factors the borrowers could not repay the EMIs.  Though it has to be paid up to 2017 the recovery has been made over and taken over by the opposite party.  Though the borrowers wanted to regularize the EMI the opposite party wanted the borrowers to go for one time settlement.  Hence a proposal for 15 lakhs for OTS of all the five loans was given on 12.09.2009 as per the letter dated: 26.08.2009 and paid by cheque a sum of Rs.50,000/- towards part of the compromise amount.  Later it was enhanced to Rs.18 lakhs in the course of renegotiation held at the Bank on 22.12.2010.  It was subject to adjustment of the part of the payment made already.  The complainant in all paid Rs.17.50 lakhs and requested the opposite party to adjust Rs.50,000/- paid on 12.09.2009 towards the 18 lakhs though it was agreed it was not taken in to account and the opposite party has not released the documents.  This is deficiency in service.  Though the complainant made several correspondences with the opposite party in this regard nothing has happened.  Hence the complaint.

2.       In brief the version of the opposite party are:-

          Mr. P. Arun is the son of the complainant; his wife is Smt. Kavitha Arun, Mr. Paneer Selvam is the son of the complainant and Smt. Usha Selvam is the wife of the said Paneer Selvam and Smt. Poonkodi R is the daughter of the complainant all were granted housing loans for purchase of flats in the year 2002 and the complainant was the guarantor for all the said loans.  The complainant appears to have mortgaged the property which was offered as security by the borrowers.  Suppressing the earlier mortgage the borrowers created the mortgage of the property to which the complainant is a party as a guarantor.  These things are suppressed by the complainant.  Subsequently the accounts were transferred from the subsidiary company B.O.B. Housing Finance Limited to the opposite party.  The said five loan accounts became substandard in the year 2003 itself.  There was a move for O.T.S. in the year 2009.  The opposite party by its order dated: 18.01.2011 finally agreed to receive total sum of Rs.18.00 lakhs to be paid between 18.01.2011 and March-2011.  At that time the amount due was Rs.34,69,698/-.  At the initial stage of the proposal for settlement Rs.50,000/- was paid in September-2009 towards the then dues in the said five loan accounts.  The letter dated: 18.01.2011 clearly stated that the Bank is willing to accept Rs.18.00 lakhs towards O.T.S.  Hence the question of adjusting Rs.50,000/- in this 18 lakhs does not arise.  The opposite parties have clearly replied all the letters of the complainant.  The complainant has not come to this Forum with clean hands.  The documents were not deposited by the complainant.  All the allegations to the contrary are denied.

3.       To substantiate their respective cases, the complainant has filed one rejoinder and stated that it may be read as his affidavit.  The opposite party No.2 has filed the Memo stating that his version may be read as his affidavit.  The arguments were heard.

4.       The points that arise for our consideration are:-

:- POINTS:-

1. Whether Rs.50,000/- paid on 12.09.2009 has to be treated as part of the settlement dated: 18.01.2011?
2. What Order?

5.       Our findings are:-

Point (A) & (B):        As per the final Order

                             for the following:- 

-:REASONS:-

Point A & B:-

6.       Reading the pleadings in conjunction with the documents on record, it is an admitted fact that the Bank of Baroda Housing Finance Limited had sanctioned to the son of the complainant Sri. P. Arun the housing loan of Rs.8,00,000/-; has sanctioned to Smt. Kavitha Arun the wife of the said P. Arun that is the daughter-in-law of the complainant a sum of Rs.5,00,000/-; has sanctioned to Mr. Paneer Selvam the son of the complainant a sum of Rs.8.5 lakhs to his wife Smt. Usha Selvam a sum of Rs.9.00 lakhs and to Smt. Poonkodi.R, the daughter of the complainant a sum of Rs.7.00 lakhs the housing loan, to purchase certain flats in the year 2002 the complainant became the guarantor for all the said loans.  It is further an admitted fact that the said loan became NPA i.e., Non-Productive Account in the year 2003 itself.  These transactions were made by the complainant and his children and daughter-in-law.  In this regard on 23.05.2009 the complainant for himself and on behalf of the borrowers wrote to the opposite party, since the opposite party had taken over the said loans.  The relevant portion of the letter reads thus:-

“We assured you in person that we would abide by the one-time settlement on receipt of your communication specifying the exact amount due by us and also undertook to remit 10% of the mutually agreeable OTS amount in all the above five accounts within a fortnight and the balance as per the time schedule to the granted under the scheme.

In the light of above facts, we request you to kindly finalise the individual statement of accounts quantifying the exact liability in each account and oblige us with an opportunity for arriving at a settlement on the issue.  We are not for making any illegal gain or defraud on the public money as alleged to by Sri Ratnaiah.  He pleads that he does not have access to complete accounts.  This is something shocking to hear from an official of the bank.”

That means to say the complainant was offering one time settlement requesting the opposite party to specify the exact amount due and he has undertaken to pay 10% of the mutually agreeable OTS amount within fortnight and the balance as per the time schedule that has to be granted under the scheme and sought details of the amount due.

7.       To this the opposite party on 26.08.2009 has replied.  The relevant portion of the reply reads thus:-

“The accounts have become NPA on various dates and interest is not applied to the accounts presently.  The present balance outstanding and other details are given below:-

We enclose the statement of accounts for the entire period of the loan.  It may be noted that, there have been no credits in the account for the past 8 months.

In order to have a fruitful discussions/sanctions on the OTS offered by you, you should come out with tangible and reasonable proposal as to the amount that can be paid by you and the mode of payment i.e. you should pay a part of the compromise amount to start with and give a schedule by which you can fulfill the commitment assured by you.  In such a case, we will be able to process your request for OTS.

In the light of the above, we once again request you to call on us along with the other borrowers and give us a tangible proposal so that we may arrive at a mutually acceptable amount.”

That is to say the opposite party has given the details of the amount due as on 26.08.2009 and stated the total amount due is Rs.29,12,459/- as on 31.12.2008 and 30.06.2008 and to have a discussion since the complainant had come out with the proposal they wanted the complainant to come out with a proposal how he going to pay and as a part of the compromise he had to pay certain amount.  The details stated does not amounts to compromise nor OTS took place on that day.

8.       To this the complainant on 12.09.2009 has written to the opposite party.  The relevant portion of the letter reads thus:-

“We enclose hereto a cheque for Rs.50,000/- towards the initial payment of our OTS offer indicated at Rs.15 lakhs as above.  We hope that our request would be considered sympathetically and conceded to by the bank.  The proceeds of the said cheque may please be credited to all the five accounts, with a sum of Rs.10,000/- each.  On receipt of the bank’s acceptance and confirmation of our offer towards the OTS, we shall arrange for a remittance of 15 per cent of the agreed amount within two weeks.  The balance amount will be paid over a span of eight months or even earlier.  Please note that even this repayment is to be outsourced from the private financiers.”

That means the complainant has offered Rs.15 lakhs as a total amount, they are going to pay it as one time settlement, offered, and paid Rs.50,000/- which has to be credited to all the five loan accounts at Rs.10,000/- each and only on confirmation of the offer they will arrange to remit 15% of the agreed amount and the balance in eight months.  This has not been acted upon nor agreed to.  It was only at the stage of an offer.  They have clearly stated that they have to obtain finance from the finance centers and arrange to pay the money that means the complainant and the borrowers were in difficulties and they are defaulters.  Here no settlement took place.  There is no confirmation of this offer made by the complainant.  If it were to be accepted by the opposite parties there would have been some letter and complainant would have paid the entire amount within eight months from 12.09.2009, but that has not been paid.

9.       No transaction was completed.  If this amount of Rs.50,000/- was accepted as part of one side settlement the complainant would have paid 15% within 12.05.2010 and he would have paid in all 15.00 lakhs within two weeks from 12.09.2009.  There is no averments made by the complainant that he had paid 15% of the amount within two weeks from 12.09.2009 and paid 14.5 lakhs within eight months from 12.09.2009.  That means it was only a proposal and it was not accepted and the transaction was not completed one.

10.     Further it is an admitted fact that on 22.12.2010 the complainant made further request for OTS and offered afreash the relevant portion of the said letter reads thus:-

“I, the undersigned, by name K Padmanabhan, being the parent and parent-in-law of the above borrowers and in the capacity of one of the guarantors, give hereunder my commitment in pursuance to my earlier letter dated: 12.09.2009 on the subject wherein there was an offer of Rs.15 lacs in full and final settlement of all the above accounts against which an hiked offer of Rs.18 lacs to be cleared on or before 31^st March 2011 by making an initial payment of 25% on approval within 10 days.”

“On payment of the committed amount, the papers may be handed over to the undersigned for which individual letters from the borrowers will be submitted to the Bank for your records.”

That means the complainant has stated that the offer of OTS is for 18 lakhs it has to be completed within 31.03.2011 and making an initial payment of 25% within 10 days and on payment of the committed amount the papers has to be handedover that’s all.  Nowhere he has stated that this offer is subject to Rs.50,000/- that has been paid by him on 12.09.2009.  He could have stated that this offer is subject to the payment of Rs.50,000/- made on 12.09.2009 that is the present offer is only 17.50 lakhs.  There is no such offer made by the complainant.  There was no such indication is there.  To this offer of 22.12.2010 of OTS the opposite party on 18.01.2011 has written to the complainant.  The relevant portion reads thus:-

You would repay 25% of the compromise amount i.e. Rs.4.5 lacs within 10 days of the date of this letter.

The remaining amount i.e. Rs.13.50 lacs will be paid by March-2011.

Please note that in case of non-compliance of any/all of the terms and conditions, this sanction will be treated as invalid and accordingly you will not be entitled for any concession whatsoever and Bank will be entitled to recover the entire dues along with interest uptodate and other charges without any prejudice to Bank’s right to initiate suitable recovery measures including legal actions in the matter at your cost, risk and responsibility.

That means the opposite party has agreed to accept Rs.18 lakhs the OTS provided the complainant pays 25% of the amount that is 4.5 lakhs within 10 days from 18.01.2011 and pays the balance of 3.5 lakhs within March-2011 failing which the concession given is deemed to have been cancelled.  That means even in this letter the opposite party not agreed or accepted or stated that Rs.50,000/- paid on 12.09.2009 is adjustable in the 18.00 lakhs.  They wanted 4.50 lakhs to be paid within 10 days and 13.50 lakhs to be paid within March-2011.  That means Rs.50,000/- paid does not come in to picture at all in this OTS that has been offered and accepted by the parties.

11.     However on 21.01.2011 the complainant had enclosed two cheques for 3.82 lakhs and 2.26 lakhs to the opposite party and in the covering letter he has stated that:-

“The proceeds of the said cheques be taken to the credit of respective Loan Accounts of Sri.P.Arun and Smt. Kavita Arun in full and final settlement of their dues as quantified by the bank.”

That means he wanted these two amounts have to be given credit to his son and daughter-in-law that’s all.  Even in this letter he has not stated that Rs.50,000/- paid on 12.09.2009 has to be adjusted to any of the loan account.  That means 18.00 lakhs OTS is for 18.00 lakhs as on that day.  It will not be a continuation of the OTS of 12.09.2009 wherein an offer was made and 50,000 was paid which was adjusted to all the loans.  Hence the complainant cannot seek further reduction in the matter from the opposite party.

12.     In this regard the opposite party on 29.01.2011 has written to the complainant requesting him to pay the amount as agreed on 18.01.2011.  The relevant portion of the letter reads thus:-

“Incidentally, please be advised that as per your letter of request dated: 22.12.2010, the Bank has considered your request favorably towards settlement of Bank’s dues of five loan accounts under reference for compromise offer of Rs.18 lakhs jointly on the terms and conditions stated in our letter BOB:BANGAL:NPA:COMP:58/680 dated 18.01.2011 duly accepted by you”

“It is needless to mention here that non compliance of any/all of the terms and conditions will result into this sanction becoming invalid and accordingly the concessions offered in the compromise will stand cancelled.  Accordingly, the Bank will be entitled to recover the entire dues along with interest up to date and other charges in respect of all the five accounts without any prejudice to Bank’s rights to initiate suitable recovery measures including legal action in the matter at your cost, risk and responsibility.”

That means the opposite party has sought 18 lakhs as OTS which the complainant has accepted and they wanted that amount to be paid by March-2011 failing which the concession given will seize.  Up to this date the complainant never disputed about 18 lakhs nor wanted Rs.50,000/- to be adjusted to this 18 lakhs.  But all of a sudden on paying certain amount on 10.03.2011 for the first time the complainant has written to the opposite party stating that Rs.50,000/- has to be adjusted in this 18 lakhs. 

13.     In this regard on 25.03.2011 the opposite party has written to the complainant asking him to pay Rs.18.00 lakhs and stated Rs.50,000/- cannot be adjusted.  The relevant portion of the letter dated: 25.03.2011 reads thus:-

“While submitting the request for compromise vide your letter dated: 22.12.2010, it was made amply clear to you that your request for compromise offer for Rs.18 lakhs is not at all inclusive of Rs.50,000/- deposited by you on 3.10.2009.  Afterwards, on all the occasions and through various correspondences, it has been very clearly communicated to you that Rs.50,000 deposited by you on 3.10.2009 is completely exclusive of Rs.18 lakhs compromise sanctioned by the Bank vide letter No:BOB:BANGAL:NPA:COMP:58/680 DATED 18.1.2011.”

“We wish to inform you that you have failed to pay the amount as per terms of sanction duly communicated to you through our various correspondences.  Accordingly the bank could have easily cancelled the compromise and initiate suitable recovery measures for recovery of its entire dues without any relief and concession.  However, taking a lenient view in the matter, the Bank has allowed you some more time to repay the 25% of the compromise amount as a special case.  You unnecessary and unwarranted correspondences in the matter clearly indicate that the good gesture shown by the Bank is not appreciated by you at all which is a very sorry state of affairs.  We request you to please appreciate the Bank’s goodness shown to you in the right spirit.”

“As per our records, you have so far paid Rs.10.50 lacs only and not Rs.11 lacs as stated in your letter under reference.”

“Under the circumstances referred above, we request you to please pay the remaining amount for Rs.7.50 lacs on or before 31^st March 2011 failing which please note that the compromise will automatically stand cancelled as per the terms of sanction without any further reference in the matter and accordingly Bank will initiate suitably recovery measures including legal steps for recovery of its full dues along with applicable interest and other charges uptodate without any concessions and relief.”

The opposite party had made it very clear that Rs.50,000/- paid on 03.10.2009 is not a part of settlement of 18.01.2011 that cannot be adjusted towards the loan due and they wanted the full amount of Rs.18 lakhs.

14.     Even on 26.03.2011 the opposite party has written to the complainant, thus:-

“At the cost of repetition, we wish to inform you that the sanctioned compromise is valid up to 31.03.2011 only and as per terms and conditions of sanction.  You are required to pay the remaining amount of Rs.3.00 lakhs on or before 31.03.2011.”

“We, therefore request you to pay the full compromise amount latest by 31.03.2011 failing which it is needless to mention that without any further reference in the matter the compromise will stand cancelled and Bank will initiate suitable recovery measures including Legal action to recover entire dues along with applicable interest and other charges up to date without any relief and concession.”

“Lastly, we request you not to raise the illogical and unrealistic issue unnecessarily again and again which has already been clarified/replied on several times through our various correspondence.”

Here also the opposite party had clearly stated that they are not interested in giving further concession and they wanted Rs.18 lakhs in full and if it is not paid the concession stands cancelled.

15.     Further on 30.03.2011 the opposite party has written to the complainant, thus:-

“We would like to inform you that the compromise amount of Rs.18.00 lacs was agreed after taking in to account all the credits to the 5 loan accounts till the date of compromise including the amount of Rs.0.50 lacs which you had deposited on 12.09.2009.”

“Under the above compromise, so far you have deposited Rs.17.50 lacs in the 5 accounts.  We advise you to kindly pay the balance amount of Rs.0.50 lacs in accordance with the compromise proposal sanctioned and advised to you.”

That means the opposite party admits payment of Rs.17.50 lakhs and demanded the complainant to pay further sum of Rs.50,000/- failing which the concession stances cancelled.  Even then the complainant did not pay this amount within 31.03.2011.  He could have paid the amount obtain the documents back, but that he has not done.  It is further seen the complainant raised a dispute in this regard before Banking Ombudsmen wherein on 26.05.2011 itself the opposite party has written to the Ombudsmen stating that this Rs.50,000/- is not the part of the compromise of 18.01.2011.  The relevant portion reads thus:-

“As the offer of settlement offered by the borrowers earlier was not accepted, the compromise proposal was renegotiated and sanctioned on 18.1.2011.  Hence Rs.50,000/- paid by him earlier cannot be treated as payment towards this compromise.”

Even after disposal of the complaint before the Ombudsmen the opposite party on 21.05.2011 and 31.05.2011 has written to the complainant asking him to pay Rs.50,000/- even that has not been complied with by the demand.  The banking Ombudsmen on 03.06.2011 has rejected the claim of the complainant.  The relevant portion reads thus:-

“Please refer to your complaint dated April 17, 2011 against the captioned bank.  In this connection we observe from the comments furnished by the bank, that your claim for adjusting the disputed amount of Rs.50,000/- which was remitted in October 2009 as part of the earlier OTS proposal cannot be considered as an adjustment towards the present offer.  Since the decision of the bank is based on its commercial judgment, the Office of the Banking Ombudsman cannot intervene in the matter.  We enclose copies of the letters ROKARN/31/RECY/2167 dated May 16, 2011 and RO:KARN:REC:31/2262 dated May 31, 2011, received from the bank, the contents of which are self explanatory.”

“In view of the above, we advise that we are unable to proceed further under clause 13 (a) of the Banking Ombudsman Scheme, 2006.”

That means the 12.09.2009 payment is not part of the settlement of 18.01.2011 both are independent transactions.

16.     Even after this the opposite party has written a letter to the complainant on 19.07.2011, even then the complainant has not paid the amount, but went on making correspondences and filed this complaint.  These are all the documents of the complainant himself and not of anybody.  That means the transactions of 12.09.2011 is independent which has not culminated in to an agreement, it was no acted upon nor completed it was only in the embriyo stage.

17.       The OTS that was agreed on 18.01.2011 is the separate and distinct OTS.  According to which the complainant has to pay Rs.18 lakhs, but he paid only Rs.17.5 lakhs hence the documents cannot be returned to him unless the balance amount is paid.  In this case the borrowers had taken certain loan; as on 18.01.2011 these borrowers were due Rs.34,69,698/- out of which they have been given a concession of Rs.16,69,698/- and it was agreed that the complainant and the borrowers have to pay Rs.18,00,000/-.  Now by this complaint the complainant wants further concession of Rs.50,000/- which was not accepted by the opposite party.  Hence the complainant or borrowers cannot insist that 50,000/- paid on 12.09.2009 has to be adjusted in the compromise of 18.01.2011.

18.     In any event as on 12.09.2009 the amount due was Rs.29,12,459/-, as on 18.01.2011 the amount due was Rs.34,69,698/-, adjusting Rs.50,000/- towards loan account.  That means the opposite party has taken in to account Rs.50,000/- also and has given concession of Rs.16,69,698/-.  Anyway it is seen that there was recession the complainant and the borrowers could not obtain possession of the property, they have to take private finance and have to pay.  The opposite party on considering this has offered such huge amount as concession.  The complainant and the borrowers had obtained private finance.  Hence if another Rs.25,000/- is reduced from Rs.50,000/- and if we direct the complainant to pay Rs.25,000/- within a particular period and on receipt of which the opposite parties if directed to release the documents and issue NOC we think that will meet the ends of justice.  Hence we hold the above points accordingly and proceed to pass the following:-

ORDER

1.        The complaint is Allowed-in-part.

2.        The complainant is directed to pay Rs.25,000/- to the opposite party within 15 days from the date of this order.  On payment of the said amount within the said period then the opposite party shall close all the five loan accounts and issue N.O.C. and return the documents of title of the property to the concerned within 30 days from the date of this order.

3.        The parties are directed to bear their own costs.

4.        The parties are directed to comply the above order as ordered in Serial Nos. 2 & 3 and submit the compliance report to this Forum with necessary documents within 45 days from the date of this order.

5.       Return the extra sets filed by the parties to the concerned as under Regulation 20(3) of the Consumer’s Protection Regulation 2005.

6.       Send a copy of this order to both the parties free of costs, immediately.

(Dictated to the Stenographer, transcribed and typed by him, corrected and then pronounced by us in the Open Forum on this the 24^th  Day of October 2011)

MEMBER                                               MEMBER                                         PRESIDENT