For the Complainant - Mr. DebnathSaha, Advocate
For the OPs - Mr. Vivekananda Das, Advocate
FINAL ORDER/JUDGEMENT
SHRI SWAPAN KUMAR MAHANTY, PRESIDENT
This is an application u/s.12 of the C.P. Act, 1986.
The case of the complainant, in short; is that he purchased aself-contained flat measuring about 484 square feet super built up area after obtained house building loan of Rs. 8,00,000/- from OP-1/Bank of Baroda, Kidderpore Branch, Kolkata on executing loan agreement against equitable mortgage of the flat. In terms of the loan agreement, complainant is liable to repay the loanamount in 240 monthly installments at the rate of Rs. 8,394/-. Complainant liquidated the entire loan amount without any default. In spite ofliquidation of house building loan, the OP-1 did not issue “No Dues Certificate”and return the Deed of Conveyance of the flat which was deposited as equitablemortgage to the OP-1. Finding no other alternative, complainant issued legal notice dated 20.09.2018 requesting the OP-1 to return the original loan related documents, registered Deed of Conveyance and No Dues Certificate. The OP-1 has closed the loan account but did not return the documents, Deed of Conveyance and No Dues Certificate. The OPs have committed deficiency in service.
OPs have contested the case by filing Written Version and also denied all the material allegations of the complainant. The positive case of the OPs is that the complainant failed and neglected to comply the terms & conditions of the sanction letter dated 14.07.2017 and also committed defaults in paying EMIs of house building loan for which the LoanAccount No. 06830600000348 classified as non-performing assets as per guidelines of RBI. Complainant also availed Term Loan of Rs. 18,80,000/- from their, SadanandaRoad Branch for purchasing a truck against same customer I.D. Complainant was irregular to liquidate Term Loan& House Building Loan. Thus, all the facilitates granted by the OP-1 to the complainant have treated as NPA/NPI. In the above perspective factual aspect, the OPs can not be held responsible for any deficiency in service or unfair trade practice. Accordingly, the OPs have prayed for dismissal of the complaint.
In the light of the above pleadings, the following points necessarily came up for determination.
1) Whether the complainant borrowed Rs. 8,00,000/- as House Building Loan from the OP-1?
2) Whether the complainant liquidated the entire loan amount to the OP-1?
3) Whether the OP-1justified not to issue NOC and return the loan agreement and Deed of Conveyance of the flat to the Complainant?
4)Whether the OPs have been deficient in rendering service to the complainant?
5) Whether the complainant is entitled to get relief or reliefs as prayed for?
Decision with Reasons
Point Nos. 1 to5:-
All the points are taken up together for the sake of convenience and brevity in discussion.
Complainant has tendered evidence through affidavit. On the contrary, OPs did not tender evidence in support of their case in spite of opportunities given to them. Both parties have also filed their Brief Notes of Arguments.
We have also gone through the complaint petition coupled with its Written Version thereto including the evidence of the complainant and documents relied by him.
It remains undisputed that complainant approached the OP-1 Bank for House Building Loan of Rs. 8,00,000/- for purchasing a flat at 8, Michel MadhusudanSarani, Kolkata-700023 and on verification of documents the OP-1 sanctioned Rs. 8,00,000/- to the complainant against sanction letter dated 14.07.2017 subject to terms and conditions fully contained therein. As per terms and conditions,complainant is liable to pay floating interest at the rate of 11.25 percentper annum and repay the loan amount in 240 monthly installments at the rate of Rs. 8,394/-. It is also true that the complainant availed the loan amount and deposited title deed of the flat to the OP-1 as security for the loan. There is no dispute that the complainant had committed defaults in payment of EMIs and interest of loan violating the terms & conditions of the sanction letter dated 14.07.2017 for which the said loan account classified as Non-Performing Assets on 30.06.2018 as per guidelines of Reserve Bank of India.
There is also no dispute that the OP-1 issued notice dated08.08.2018U/s 13 (2) of SARFAESI Act dated 08.08.2018 to the complainant for recovery of outstanding housebuilding loan. Ultimately, the complainant liquidated the entire loan amountincluding and the OP-1 acknowledged the same by issuing statement of accounts. Despite of liquidation of house building loan the OP-1 Bank did not issue NOC and return the original title deed of the mortgage flat including registeredAgreement for Sale and registered deed of declaration to the complainant.
The Ld. Advocate for the OPs submitted that the complainant also availed Term Loan from its Sadananda Road Branch and he was also irregular to clear the EMIs. House Building Loan and Term Loan were sanctioned against complainant’s Identical Customer Identification Number. He further submitted that clause 4.2.7 of RBI circular No. 2015-16/101 under the heading Assets Classification to be borrower-wise not facility-wise defined (i) “it is difficult to envisage a situation when only one facility to a borrower/ one investment in any of the securities issued by the borrower becomes credit/ investment and not others. Therefore, all the facilities granted by a Bank to a borrower and investment in all the securities issued by the borrower will have to be treated as NPA/NPI and not the particular facility/investment or part theirof which has become irregular”. Ld. Advocate for the OPs stated that the complainant availed two loans from the same bank but from its different branches against same customer identification number and both the loan accounts related with each other as per RBI circular being No. RBI/2015-16/101.Therefore, the allegation of alleged deficiency cannot be substantiated.
On the contrary, the Ld. Advocate for the complainant stated that the RBI circular pointed out by the OPs is just to mislead and misguide the Forum. The cited guidelines is classifying assets as NPA by the banks and nothing relating to lien of security to the loan or general lien of documents. According to him, it is the obligation of OP-1 to returnsecurity kept with them in regards to the loanand non-issuance of NOC upon full liquidation of loan from the Bank but not whether the account being NPA/NPI. The Ld. Advocate for the complainant further stated that Clause No. 4.2.5 under the heading of upgradation of loan accounts classified as NPAs defined “If arrears of interest and principal are paid by the borrower in the case of loan accounts classified as NPAs, the accounts should no longer be treat performing and may be classified as standard accounts. With regard to upgradation of a restructured/ rescheduled amount which is classified as NPA in paragraphs 12.2 and 15.2 in the Part-B of this circular will be applicable.” Therefore, the OP-1 is bound to return the original title deed including other related documents of the house building loan.
In a decision of Hon’ble Madras High Court, Madurai Bench (M.Shanthi Vs. Bank of Baroda) decided on 09.08.2017 passed in WP (MD) No.12613 of 2016 the Hon’ble Madras High Court has been pleased to direct the respondent to return the documents in respect of property belonging to petitioner situated atNamakkal, given as security as respect of transaction covered by sanctioning letter dated 14.04.2017 upon payment of Rs. 14,65,604/- towards the entire dues without claiming to exercise any general lien.
In the instant case, the complainant has already liquidated the entire house building loanincluding interest to the OP-1. Therefore, the OP-1 Bank has no right of general lien against the mortgaged property of the complainant for the outstanding dues of term loan. The loan transaction referred inthe letter dated 14.07.2007 is an independent loan transaction and the property of the complainant was not secured in respect of term loan. The act of the OPs threatening to exercise general lien is in violation of the legal principles reiterated in several judgments of the Hon’ble Supreme Court. No law for time being inforce, permits the OP-1 Bank to retain the title deed alleging dues in respect for any othertransactionU/s 171 of the IndianContract Act. The OP-1 has already received the balance amount of house building loan including interest and to issue a No Dues Certificate in respect of the loan and return all the documents deposited by the complainant. The mortgage was created for a specific loan transaction. Upon repayment of said loan under no stretch of imagination, the bank would claim general lien and retain the documents.Title deed deposited as security is not a form of security in respect of which section 171 of the Contract Act can be applied.
Having regard to the facts and circumstances of the case coupled with unchallenged testimony of that thecomplainant including the documents on record, we are of the view of thatcomplainant is entitled toget relief against the OPs. There is deficiency in service and unfair trade practice on the part of the OP-1. Thus, all the points under determination answered in the affirmative.
Inthe result, the case succeeds in part.
Hence,
Ordered
That the complaint case be and the same is allowed on contest against the OPs with litigation cost of Rs. 5,000/- (Rupees Five thousand) only.
OP-1 is directed to issue No Dues Certificateagainst loan Account Number 06830600000348 and also to return the original registeredAgreement for Sale, registeredDeed of Declaration and registeredDeed of Conveyance to the complainant within 45 days from the date of this order.
OP-1 is further directed to pay Rs. 25,000/- (Rupees Twenty Five thousand) only to the complainant as compensation for mental agony, pain and harassment. The litigation cost and the compensation amount is to be paid within the specified periodof 45 days in default complainant to put the order in execution. .
