Punjab

Faridkot

CC/19/278

Piyush Goyal - Complainant(s)

Versus

Canara Bank - Opp.Party(s)

Deep Chand Goyal

07 Jul 2022

ORDER

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, FARIDKOT

 

Complaint No. :          278 of 2019

Date of Institution :      22.11.2019

Date of Decision :         07.07.2022

 

Piyush Goyal aged about 40 years, son of Ajay Kumar Goyal sole proprietor of Ajay Impex, C-67, Focal Point, Kotkapura, Tehsil Kotkapura, District Faridkot.

.....complainant

Versus

 

1. Chief Manager, Canara bank, Faridkot Road, Kotkapura, Tehsil Kotkapura, District Faridkot.
2. General Manager, Canara Bank, having its Circle Office at Plot No.1, Sector-34/A, Chandigarh.

......OPs

 

Complaint under Section 12 of the

Consumer Protection Act, 1986.

(Now u/s 35 of C. P. Act)

 

Quorum:     Smt Param Pal Kaur, Member.

                     Smt Vishav Kant Garg, Member.

Present:       Sh Deep Chand Goyal, Ld Counsel for Complainant,

 Sh Dildeep Singh, Ld Counsel for OPs.

ORDER

(Param Pal Kaur, Member)

 

c.c. no.-278 of 2019

                   Complainant has filed the present complaint under Section 12 of the Consumer Protection Act, 1986 against OPs seeking directions to OPs to refund the amount of Rs.8,26,000/- illegally deducted from his account with interest and for further directing OPs to pay Rs.5,00,000/-on account of loss of his business, Rs. 5 lacs as compensation for harassment and mental agony suffered by him besides Rs.55,000/-as litigation expenses to complainant.

2                         Briefly stated, the case of the complainant is that complainant is having account with OP-1 bank and has availed CC limit at 9.45 % rate of interest. Wife of complainant started her own new factory Metalac Industries and OP-1 requested complainant to insist his wife for availing term loan as well as CC limit from their bank. After consultation, wife of complainant agreed to avail term loan and cc limit of her industry and at that time, she asked about rate of interest to be charged from her, on which OP-1 cleared that same rate of interest would be charged as being charged from the industry of complainant Ajay Impex. After that, his wife agreed to avail both loans from OP and complainant stood guarantor for factory of his wife. Loan process started and requisite documents were handed over to OP-1. Loan was sanctioned by OP-2 and OP-1 called his

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wife in bank and told her that loan has been sanctioned at the rate of 11.20 % interest instead of rate of interest of 9.45%. On hearing this, wife of complainant refused to avail loan and requested to return her file as other banks float term loan and cc limit at much less interest rate. On 30.03.2019, complainant was shocked to receive a message from OP bank regarding deduction of Rs.8,26,000/-from his account. 31.03.2019 was Sunday and on very next day, complainant approached OP-1 and enquired about deduction of Rs.8,26,000/-in respect of which, he was told by OP-1 that this amount is deducted from his account on account of processing charges of loan file of his wife. It is totally illegal and Ops have wrongly deducted huge amount of Rs.8,26,000/-from the account of guarantor. Moreover, no loan amount was ever availed by his wife and thus, action of OP-1 in deducting this amount amounts to deficiency in service. Complainant also approached OP-2 but that also failed to redress his grievance. All this amounts to deficiency in service and trade mal practice. Complainant has suffered huge harassment and mental tension due to this act of OPs. He has prayed for compensation and litigation expenses besides the main relief. Hence, the complaint.

 

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3                                      Ld Counsel for complainant was heard with regard to admission of the complaint and vide order dated 27.11.2019, complaint was admitted and notice was ordered to be issued to the opposite party.

4                                 OPs filed written statement taking objections that complainant has not come to the Forum with clean hands and present complaint is not maintainable. There is no deficiency in service on the part of OP and therefore, it is liable to be dismissed. It is averred that complainant has concealed the material facts and no cause of action arises against answering OPs. On merits, they have denied all the allegations of complainant being wrong and incorrect and reiterated that there is no deficiency in service on their part. Further averred that complainant has adopted clever methodology as transactions in statement of account Ex C-3show that complainant has concealed material fact in the name of m/s Metallic Industries while using the loan amount, on the other hand trying to escape from his legal liability. Proprietor of M/s Metallic Industries had voluntarily applied loan from OP-1 bank as per prevailing terms and conditions, but complainant adopted clever methodology to twist the actual facts of controversy. It is averred that it takes great efforts of bank at various levels including number of skilled work force to

c.c. no.-278 of 2019

properly appraise the loan application of amount of Rs.7 crore of terms land and 4.25 crores cc limit and there is condition of bank to charge processing fee of 1%  of loan amount in addition to GST 18% which amounts to amount deducted. M/s Metallic Industries was not maintaining adequate balance in firm account and thus it becomes liability of guarantor to pay the dues and the same were deducted from the account of guarantor under Right to Set Off. There is no deficiency in service or unfair trade practice on their part. All other allegations and the allegation with regard to relief sought too were refuted with a prayer to dismiss the complaint with costs.

5                                                          Parties wanted to lead evidence to prove their respective pleadings and proper opportunity was given to them. The complainant tendered in evidence his affidavit Ex.C-1 and documents Ex C-2 to C-13 and then, closed his evidence.

6                                  In order to rebut the evidence of the complainant, Counsel for OP tendered in evidence affidavit of Satwant Singh, Manager, Canara Bank, Kotkapura as Ex. OP-1 and then, closed the evidence.

 

 

c.c. no.-278 of 2019

7                                       Ld Counsel for complainant argued that complainant is having account with OP-1 bank and has also availed CC limit at 9.45 % rate of interest. Wife of complainant started her own new factory and on request of OP-1, complainant convinced his wife for availing term loan as well as CC limit from their bank. She agreed to avail term loan and cc limit of her industry and at that time, OP-1 cleared that same rate of interest would be charged as being charged from the industry of complainant Ajay Impex. Complainant stood guarantor for factory of his wife. Loan process started, requisite documents were handed over to OP-1 and they completed all formalities. After sanctioning the loan, OP-1 called his wife in bank and told her that loan has been sanctioned at the rate of 11.20 % interest instead of rate of interest of 9.45%. On hearing this, she refused to avail loan and asked to return her file as other banks float term loan and cc limit at much less interest rate. grievance of the complainant is that on 30.03.2019, OP-1 deducted Rs.8,26,000/- from his account on account of processing charges of loan file of his wife. It is totally illegal and they have wrongly deducted huge amount of Rs.8,26,000/-from the account of guarantor when, no loan amount was ever availed by his wife. Despite repeated requests and even after issuance of legal notice by complainant, Ops have not done

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anything needful, which amounts to deficiency in service. Prayer for accepting the complaint is made.

8                                                     To controvert the allegations of complainant, ld counsel for OP argued that there is no deficiency in service on the part of answering OPs. It is argued that there is no deficiency in service on the part of OPs as complainant has adopted clever methodology to conceal the material fact in the name of m/s Metalac Industries while using the loan amount and has tried to escape from his legal liability. Proprietor of M/s Metallic Industries had voluntarily applied loan from OP-1 bank as per prevailing terms and conditions, but complainant adopted clever methodology to twist the actual facts of controversy. It is averred that it takes great efforts of bank at various levels including number of skilled work force to properly appraise the loan application of amount of Rs.7 crore of terms loan and 4.25 crores cc limit and there is condition of bank to charge processing fee of 1%  of loan amount in addition to GST 18% which amounts to amount deducted. M/s Metalac Industry was not having adequate balance in firm account and thus it becomes liability of guarantor to pay the dues and the same were deducted from the account of

 

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guarantor under Right to Set Off. There is no deficiency in service and prayed for dismissal of complaint with cost.

9                                     We have heard learned counsel for parties and have very carefully perused the affidavits & documents placed on the file by complainant as well as opposite parties.

10                                        The case of complainant is that wife of complainant availed term loan as well as CC limit from OPs bank and at the initial stage of applying for loan, OP-1 cleared that rate of interest would be 9.45 % but after sanction of loan she was told that loan has been sanctioned at the rate of 11.20 % interest instead of 9.45%. She immediately refused to avail loan and sought her file back as other banks float term loan and cc limit at much less interest rate. Grievance of the complainant is that on 30.03.2019, OP-1 deducted Rs.8,26,000/- from his account on account of processing charges of loan file of his wife, which is totally illegal and unlawful. Repeated requests and even issuance of legal notice, bore no fruit and due to this act of OPs, complainant has suffered huge harassment and mental agony. On the other hand, stand taken by OPs is that wife of complainant did not maintain sufficient balance in her

 

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account therefore, charges on account of processing fee for loan and cc limit were debited from the account of complainant, who stood as a guarantor for his wife and there is no deficiency in service on their part and all they have done is as per rules under Right to Set Off.

  11                                               Careful perusal of Ex C-2 copy of statement of account of complainant clearly reveals the fact that amount of Rs.8,26,000/- is deducted from the account of Ajay Impex on 30.04.2019. Through document ExC-9 it is clear that rate of interest being charged from complainant is 9.45%. Ex C-4 to Ex C-6 that are copies of legal notice alongwith receipts, also reveal the grievance of complainant. Act of OPs in deducting huge amount of Rs.8,26,000/-from the account of guarantor amounts to deficiency in service on the part of OPs and inaction on their part in not making refund of same despite repeated requests and issuance of legal notice to OPs, has caused huge harassment and mental agony to complainant. It is admitted by OPs that amount of interest being charged from complainant is 9.45% and OPs sanctioned loan to his wife at the rate of interest of 11.20% to which she flatly refused and did not avail the same. Moreover, it is admitted by OPs that wife of complainant has not

 

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availed any loan amount and deduction of huge amount of Rs.8,26,000/-on the ground of processing fee charges from the account of complainant, who stood as guarantor, is inappropriate.

12                                     It is also observed that had OPs adopted proper procedure of recovering file processing charges directly from wife of complainant, there would have been no complaint. OPs were required to adopt proper procedure for recovering the processing fee for her term loan and cc limit that has not been availed by her.

13                                          Supreme Court of India also held in several judgments that guarantor of a loan is liable if the debtor fails to clear it, the Supreme Court has ruled, while maintaining that financial institutions too cannot act like property dealers in recovering debits. According to the Black’s Law Dictionary 7^th Edition Page 711, a guarantor is defined as “one who gives security for a debt’

                                                  A guarantor’s liability does not begin until the principal debtor is in default. Furthermore, a guarantor is a term used to

 

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describe an individual who promises to pay a borrower’s debt in the event that the borrower defaults on his loan obligation by pledging his assets as collateral against the loan. Meaning thereby, liability of guarantor, begins when a debtor fails to make repayment of loan availed, but in present case, loan amount has not been availed by wife of complainant and deduction of huge amount of Rs.8,26,000/-from the account of guarantor by OPs, amounts to gross negligence or trade mal practice on their part and thus, OPs are liable for deficiency in service.

14                                                                Therefore, in the light of above discussion and case law produced by complainant counsel, we are of considered opinion that complainant has placed on record cogent and sufficient evidence to prove his pleadings and all documents produced on record by him are authentic and are beyond any doubt. Complainant has succeeded in proving his case. Hence, complaint in hand is hereby allowed with directions to OPs to refund the amount of Rs.8,26,000/- deducted from the account of complainant alongwith interest at the rate of 8% per anum from the date of deduction till final realization. Compliance of this order be made within 45 days of receipt of the

c.c. no.-278 of 2019

copy of the order, failing which complainant shall be entitled to proceed under Section 71 and 72 of the Consumer Protection Act. Copy of the order be supplied to parties free of costs as per law. File be consigned to record room.

Announced in Commission :

Dated: 07.07.2022

 

(Vishav Kant Garg)        (Param Pal Kaur)

  Member                             Member.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

c.c. no.-278 of 2019

Piyush Goyal    Vs      Canara Bank

 

Present:       Sh Deep Chand Goyal, Ld Counsel for Complainant,

 Sh Dildeep Singh, Ld Counsel for OPs.

                       Arguments heard. Vide our separate detailed order of even date, complaint in hand is hereby allowed. Copy of the order be supplied to parties free of costs as per law. File be consigned to record room.

Announced in Commission :

Dated: 07.07.2022

 

(Vishav Kant Garg)        (Param Pal Kaur)

  Member                             Member.