By Sri. M.S. Sasidharan, Member:
The complainant’s case is that the complainant introduced one C.K.Prabakaran to the respondent Bank on 22.6.1996 and the bank extended an overdraft facility to him upto a tune of Rs.1,00,000/- against security of immovable property to the extent of 12½ cents of land in Kainoor village owned by Smt. Vilasini the wife of said Prabhakaran. The complainant had no intention to be a guarantor/surety for the said OD facility given to the said Prabhakaran. The respondent bank was holding for sale custody of some term deposits receipts of the complainant. As suggested by the manager of the bank the complainant subscribed his signature in some bank forms. The said Prabhakaran expired on 7.6.01. The respondent bank informed the complainant by letter dt. 22.2.03 that the OD had been given on his security that the amount due under OD account as of date was 1,36,135.50 and that the same would be liquidated against his term deposit The complainant immediately replied denying his liability. The respondent issued another letter on 26.11.03 mentioning the amount due as 1,45,799.30. The complainant again replied to it. Later the respondent informed the complainant through their letter dt. 2.1.04 that the amount due under OD, had been adjusted against the term deposit of the complainant. But the amount so adjusted was not mentioned in the letter. The complainant had not pledged any term deposit receipt with the bank or he had not given any pledge letter on 23.6.1999. When the borrower committed default the bank should have take effective action to realize the debt from the defaulter or his heirs after his death or from the mortgaged property. The complainant has come to know that the respondents have fraudulently omitted to record the mortgaged by the deposit of title deed and has forged a document with the signed blank forms obtained from the complainant to the effect that the complainant had pledged his term deposit as security to the said OD. The non-realisation of the amount due to the bank by taking prompt action was due to the latches on the part of the respondent officials. The complainant could not be held responsible for that and the bank cannot appropriate the amount due from the complainant’s term deposit, kept at the bank for safe keeping. The act of the respondents in unilaterally liquidating the complainant’s fixed deposit amounts to unfair trade practice and deficiency of service on their part. The complainant is entitled to get Rs.2,19,889/- from the respondents being the amount due as per his term deposit receipt No.3531/2002. So the complainant issued a lawyer notice on 19.3.01. Though the respondents replied there was no remedy. Hence the complaint filed.
2. The averments in the version filed by the respondents are that late Prabhakaran. C.K. alias Thankappan.C.K. had applied for an overdraft facility to be utilized for his retail trade in rice to the bank. The said facility was sanctioned on 23.6.1999 upto a limit of Rs.1,00,000/- against the complainants fixed deposit of KDR 172/99 of Rs.1,18,944/- as prime security. The complainant had executed a third party letter of pledge of valuable securities on 23.6.1999 in favour of the respondent bank whereby he had agreed to that the bank can hold the said deposit receipt as security with full right for enforcement or appropriation without prejudice to the bank’s remedies against the borrower and right over any other securities which may now or at any time hereafter be held by the bank from time to time in respect of any advances made to the borrower or guarantee executed on his behalf. It is true that when Prabhakaran applied for over draft he was introduced by the complainant. In addition to the above bank obtained the title deed pertaining to 12½ cents of property owned by Prabhakaran’s wife named Vilasini. But there was no mortgage of the property in favour of the bank. The respondent obtained a letter of undertaking from the said Vilasini on 23.6.1999 whereby she had undertaken that the property would be mortgaged to the bank as and when required by the bank. Therefore the averments in the complaint that there was mortgage of the property and the over draft facility was extended not on the strength of the fixed deposit are factually incorrect. The complainant’s contention that he had signed certain blank forms as required by the bank which were subsequently utilized as bank documents to the convenience of the bank are absolutely incorrect. The complainant being a highly qualified and fully conversant with all the rules of procedure of the bank cannot be believed to have signed blank forms. There was no negligence on the part of the respondents in taking the undertaking letter from Vilasini. Since the complainant had pledged his fixed deposit of Rs.1,18,944/- as prime security to the over draft facility there was no necessity to create mortgage of the immovable property to the bank. Even though in an abundant caution the bank took an undertaking letter from Vilasini it was taken only for the purpose of compelling her to mortgage the property at the time when the fixed deposit amount would become insufficient towards the liability of late Prabhakaran. The respondents had never acted any fraud or committed any negligence in this matter. The borrower late Prabhakaran utterly failed to reduce his over draft limit already sanctioned to him. The respondent bank had issued notice on 22.3.01 to him demanding immediate payment of the amount due from him. The said Prabhakaran expired on 7.6.01 leaving the amount due to the bank. The respondents as usual informed the fact as to the liability of late Prabhakaran to his wife Vilasini on 3.9.01. Thereafter Smt. Vilasini executed acknowledging the debt due to the bank by her husband Prabhakaran. Though she had acknowledged the debt, there was no attempt on the part of Smt. Vilasini to repay the loan amount to the bank. The complainant was fully aware of the fact that Prabhakaran expired on 7.6.2001 and he was liable to pay the amount to the bank. Then he requested Bank to proceed first against Vilasini and only in case if no amount is paid by her his F.D. could be proceed against inspite of the oral as well as written requests made by the bank there was no positive response and sincere attempt shown on the part of Vilasini in this respect. Hence the respondents were constrained to issue a notice to the complainant on 26.11.03 stating the aforesaid facts and the respondents intension to adjust the fixed amount towards the liability of late Prabhakaran. The complainant sent a reply on 18.12.03 requesting to accept the respondent’s intention to adjust his F.D. towards the outstanding amount payable by Prabhakaran. In the circumstances the respondents had no other alternative but to adjust the F.D. amount towards the liability of Late Prabhakaran. The respondent adjusted the F.D. amount towards the dues of Prabhakaran on 2.1.04. On that day the total amount available in the fixed deposit was Rs.1,92,418/- and the exact dues payable by Prabhakaran was 1,48,698.30. After adjusting the said dues and other charges against the F.D. the balance available in the F.D. was Rs.43,672.70. Since there was no reply from the complainant on the request to intimate the further course of action with respect to the balance amount, it was transferred to F.D. to accrue admissible interest. The respondents had not unauthorisedly or unilaterally appropriated the F.D. amount towards the liability as alleged by the complainant. The respondents have the right to adopt or resort to any other source or method which would be more feasible and efficacious for the realization of the dues from the parties concerned.
3. The points for consideration are:
(1) Is thecomplainant entitled to get the amount claimed?
(2) Is there any deficiency in service committed by the respondents
in this case?
(3) If so reliefs and costs.
4. The evidence consists of Exts. P1 to P16, Ext. R1 to R6 and the oral testimonies of PW1 and RW1.
5. Point No.1: The complainant’s case in brief is that he introduced one Prabhakaran alias Thankappan to the respondent bank to avail a bank account. The respondent bank sanctioned an overdraft upto the limit of Rs.1,00,000/- to the said Prabhakaran against the security of immovable property of 12½ cents in Kainoor village owned by Prabhakaran’s wife Vilasini. Vilasini mortgaged her title deed to the respondent bank. The respondent bank was holding some term deposit receipts of the complainant for safe custody. As suggested by the manager of the respondent bank he has signed some blank forms. The said Prabhakaran died on 7.6.01. The respondent bank informed the complainant that the OD had been given on his security and the amount due under OD account would be liquidated against his term deposit. Even though the complainant did not agree to it and requested to proceed against mortgaged title deed of Smt. Vilasini. The respondents adjusted the amount due under OD against the complainant’s term deposit. The complainant claims that he had not pledged any term deposit receipt with the bank and had not given any pledge letter. So he is entitled to get the amount as per the term deposit. The respondents denied this and stated that the OD was sanctioned to Sri. Prabhakaran on 23.6.1999 against the complainant fixed deposit as prime security. The complainant had executed a third party letter of pledge valuable securities on 23.6.1999. Since the complainant had pledged his fixed deposit as prime security to the over draft there was no necessity to create mortgage of the immovable property to the bank. Even then an undertaking letter was obtained from Vilasini. Prabhakaran died on 7.6.01 leaving the amount due to the bank. Even though Smt. Vilasini had acknowledged the debt there was no attempt to repay the amount. So the respondent had no alternative but to adjust the term deposit against the dues.
6. The first point is to be decided in this case is whether the overdraft was sanctioned against the term deposit receipt as prime security or against the mortgage of the title deed of 12½ cents in Kainoor village owned by Smt. Vilasini deceased Prabhakaran’s wife as alleged by the complainant. Ext. R1 is the third party letter of pledge of valuable securities. It is seen that the term deposit receipt KDR 172/99 was pledged and the complainant has signed on it. But the complainant has stated every where that he has not pledged any of his fixed deposit receipts. He has stated that he had put his signature on blank forms and the complainant alleged that the respondent has forged a document using signed blank forms which had been obtained from the complainant. It may be noted that the date in Ext. R1 is 23.6.1999 which is seen different from other writings. Ext. R7 is the application form for sanctioning over draft submitted by Prabhakaran. The fixed deposit receipt No.KDR 172/99 in the name of the complainant is written as security to the overdraft. But the date in Ext. R7 is 21.6.99 whereas the date in Ext. R1 is 23.6.99. As per Ext. R1 the complainant has pledged his deposit in favour of the OD on 23.6.99 where as it is stated in Ext. R7 which is written two days earlier that the fixed deposit receipt is the security. It shows some discrepancy. More over the PW1 has deposed while cross examination that
“Ext. R1 (In Malayalam words) fill up .”
The complainant has stated that the overt draft was sanctioned against the security of immovable property of 12½ cents of land owned by Smt. Vilasini the deceased Prabhakaran’s wife. Ext. P3 is the letter of undertakizng given by the said Vilasini. Ext. P6 the copy of the letter addressed to Smt. Vilasini by the advocate of the respondent bank dt. 22.3.02 reveals that Smt. Vilasini had deposited title deeds of her properties for the security of the over draft sanctioned to Sri. Prabhakaran and had also created an equitable mortgage in favour of the respondent bank. It was also stated in Ext. P6 letter that the respondent bank will be constrained to proceed against Smt. Vilasini legally for realization of the amount due to the bank. Ext. P5 also reveals that Smt. Vilasini had acknowledged the debt on 7.9.01. While cross examining the RW1 has stated that “Ext. P3
(In Malayalam words) Original title deeds bank deposit . Original documents loan (In Malayalam words)
Bank deposit mortgage by deposit of title deeds . He has also deposed that “Ext. P1, P4, P6
(In Malayalam words) Fixed deposit receipt loan prime security . He has admitted further that “ hand writing Ext. R7 .” It is the usual practice of financial institutions to execute a bond by the principal borrower and the sureties in order to make the sureties jointly liable to repay the loan. In this case no such bond is seen executed. From the above discussion it is concluded that the disputed over draft was sanctioned against the title deed of 12½ cents owned by Smt. Vilasini the wife of deceased Prabhakaran. That is why after the death of said Prabhakaran legal notice was issued to Smt. Vilasini who acknowledged the debt and was agreed to pay Rs.60,000/- at first. Later the respondent bank created a document using the signed blank forms obtained from the complainant to make the deposit receipt as the prime security towards the over draft facility to the deceased Prabhakaran.
7. Point No.2: In the aforesaid paragraph it is said that usually a ‘bond’ should be executed by the loanee and his sureties to make the sureties liable to repay the loan amount and also to proceed against them when the loanee failed to settle the loan account. Here in this case no such bond is seen executed either with the complainant or with Smt. Vilasini the wife of deceased Prabhakaran.
8. The over draft was sanctioned on 23.6.1999 and Sri. Prabhakaran died on 7.6.01 without repaying any amount towards the over draft. As Ext. P6 letter reveals that the legal notice was issued to Smt. Vilasini calling upon her to pay the entire amount together with interest within seven days or the respondent bank will be constrained to proceed against her to realise the amount. Ext. P6 letter was issued on 22.3.02. No copy of Ext. P6 letter is seen sent to the complainant. On receiving the legal notice, Smt. Vilasini has given the Ext. P2 letter wherein she had agreed to pay Rs.60,000/- before 30.6.02 and if she failed to pay the amount she had consented to proceed against her property. However Ext. P8 letter reveals that the complainant was informed about the pendency in the over draft and the bank’s intention to adjust his deposit towards the liability was only on 22.4.03. So the complainant was informed about the pendency in the draft after long period of two years after the death of Sri. Prabhakaran. Even though the wife of deceased Prabhakaran agreed to proceed against her property if she failed to pay Rs.60,000/- before 30.6.02. No action is seen taken to realise the amount or to proceed against her property. These all shows the grave deficiency n service committed by the respondents for which they have to pay for.
9. In the result the complaint is allowed and the respondent is directed to pay the complainant Rs.1,48,698/- (Rupees one lakh forty eight thousand six hundred and ninety eight only) the amount adjusted towards the dues with interest at the rate of 12% per annum from 2.1.04 till realization and also to pay Rs.1000/- (Rupees one thousand only) as costs within two months from the date of receipt of copy of this order.
Dictated to the Confidential Assistant, transcribed by her, corrected by me and pronounced in the open Forum this the 8th day of March 2012.
