Date of filing: 20-1-2017 Date of order : 04-9-2017
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM ::
KADAPA Y.S.R DISTRICT
PRESENT SRI V.C. GUNNAIAH, B.Com., M.L., PRESIDENT
SMT. K. SIREESHA, B.L., LADY MEMBER
Monday, 4th day of September 2017
CONSUMER COMPLAINT No. 06 / 2017
Smt. K. Khader Bi, D/o K. Hussain Saheb,
aged 48 years, Occ: House wife, R/o H.No. 5/334,
Brahmin Street, Near Raghavendra Swamy Temple,
Kadapa. ………… Complainant.
Vs.
1. City union Bank Limited, Rep. by its
Branch Manager, # 3/120-121, Christain Lane,
Kadapa – 516001.
2. M/s New Rayalaseema Educational Society, Rep. by its
Secretary, C/o Geethanjali College of Nursing,
Opp. Durga Petrol Bunk, Manapuram, Kadapa. ….. Opposite parties.
This complaint coming for final hearing on 23-8-2017 in the presence of Sri S. Moulali, Advocate for Complainant and Sri P. Goutam Kumar, Advocate for O.P.1 and O.P.2 forfeited on 2-5-2017 and upon perusing the material papers on record, the Forum made the following:-
O R D E R
(Per V.C. Gunnaiah, President),
1. The complainant filed this complaint under section 12 of Consumer Protection Act 1986 (for short herein after called as C.P. Act) praying this forum to direct the Opposite parties to return original title deeds to the Complainant which were deposited by her at the time of availing house loan since the said housing loan was fully repaid, to pay Rs. 50,000/- towards compensation, to pay Rs. 50,000/- towards mental agony and Rs. 10,000/- towards costs of the complaint.
2. The averments of the complaint in brevity which are necessary to decide this complaint are as follows:-
The Complainant had availed housing loan facility of Rs. 8,00,000/- on 24-1-2009 vide loan No. 140012000558329 from O.P.1 and subsequently, the Complainant reapid the entire outstanding amount of the housing loan account and O.P.1 had also executed a certificate on 24-9-2014 in favour of Complainant stating that the housing loan account was closed on 24-9-2014. After repaying the loan amount the Complainant approached O.P.1 and requested to release original property documents which were deposited at the time of availing loan, but refused to return the original documents stating that O.P.2 had availed a term loan from O.P.1 and there is outstanding amount which has to be cleared by O.P.2 and until and unless O.P.2 clears the entire outstanding in the term loan facility, original documents cannot be released, though the housing loan was closed. The claim of O.P.1 is illegal having issued a certificate dt. 24-9-2014, stating that the housing loan account was closed.
3. It is further averred that the Complainant had received a letter dt. 20-10-2014 from O.P.1 bank stating that the Complainant stood as guarantor of the loan account of O.P.2 and as a guarantor the Complainant is jointly, severally and personally liable to repay entire loan amount and liability of the guarantor is coextensive with that of the principal debtor. The O.P.1 ignored the fact that the Complainant never mortgaged her property in favour of the O.P.1 for the purpose of availing term loan facility by O.P.2. The Complainant issued reply letters on 20-10-2014, 15-11-2014 and 23-3-2015 stating that she was member erstwhile board of O.P.2 and the said board was dissolved and new members were elected as office bearers of O.P.2. The same has ratified by the Registrar of Societies and the O.P.2 has sufficient funds, therefore, she is entitled for return of her documents. The new board members of O.P.2 had entered into an agreement to repay the loan amount to O.P.1 and the old members are not liable. Hence, the Complainant or other erstwhile members are no way concerned with the alleged debts of O.P.2 payable to O.P.1. it is unjust on the part of the O.P.1 in retaining the documents. Thus the same is deficiency in service on the part of O.P.1 and the acts of O.P.1 caused tremendous mental agony to the Complainant. Hence, the complaint for the above reliefs.
4. O.P.2 not filed any written version and not participated in the proceedings.
5. O.P.1 filed counter / written version denying the allegations of the Complainant made in the complaint regarding deficiency in service as alleged and retaining the property documents illegally. But admitted the Complainant availed housing loan and subsequently repaying entire outstanding amount and issuance of certificate to that effect dt. 24-9-2014 by O.P.1.
6. It is further averred that the complaint is not maintainable as the same is hopelessly barred by limitation under section 24 (a) of C.P. Act as the complaint has been filed two years from 20-10-2014 on which date the bank denied request of the Complainant for return of the title deeds deposited by her.
7. It is also further averred the Complainant is a guarantor for the loan borrowed by the Rayalaseema Educational Society i.e. O.P.2. The said society borrowed huge loan and intentionally avoid repayment. The society is established by the family members of the Complainant and Complainant is one of the director of the society. The Complainant being a guarantor and contacted debt on behalf of the society and executed a guarantee agreement under individual capacity and liability is co-extensive with that of principal debtor, further the surety is favoured debtor. Hence, the Complainant has liability to discharge debt on behalf of O.P.2 society. Hence, withholding of documents by the bank of O.P.1 does not amount to deficiency in service. In fact it is a valid attempt for recovery loan. The Complainant is hand in glove with the other office bearers of the society and filed the present complaint as a counter blast of recovery case filed against the said society and the Complaint before Debt Recovery Tribunal, Hyderabad. The O.P. bank enjoins the power of general lien according to the contract act. Therefore, the exercise of power of the banker to recover the amount from said society cannot be found fault and cannot be found a deficiency in service. The bank is at liberty to retain the title deeds of the Complainant till the loan granted to said society is discharged. As the Complainant stood guarantor in personal capacity along with the other members of the society, who also stood as guarantors under individual capacity O.P.1 filed O.A. 232/2011 before Debt Recovery Tribunal, A.P. Hyderabad wherein it mentioned in the application that this Complainant along with other defendants stood as guarantors in their individual capacity and executed guarantee agreement separately. The said O.A No. 232/2011 is decreed on 13-10-2014. There is no cause of action, no mental agony was caused to the Complainant and Complainant is not entitled for any reliefs and complaint is liable to be dismissed with exemplary costs.
8. On the basis of the above pleadings the following points are settled for determination.
- Whether there is deficiency in service on the part of Opposite parties as pleaded by the Complainant?
- Whether the complaint is barred by limitation as pleaded by O.P1?
- Whether the complainant is entitled for the reliefs, if so to what extent?
- To what relief?
9. No oral evidence has been adduced by the parties, but on behalf of Complainant, her affidavit is filed and got marked Exs. A1 to A16 in support of her case. On behalf of O.P.1 his affidavit is filed and got marked Exs. B1 to B4 and closed evidence. After closing evidence both parties filed written arguments.
10. Heard arguments on both sides and perused the pleadings, affidavit and the documentary evidence placed on record by them and their written arguments filed.
11. Point No. I Learned counsel for Complainant contended that the Complainant availed housing loan by depositing her title deeds of property and discharged the entire loan amount and the same was accepted by Opposite parties and issued letter of Ex. A1 on 24-9-2014 but refused to return the original title deeds and retaining the title deeds by O.P.1, even after discharging the debt amount to deficiency in service and Complainant has nothing to do for O.P.2 debts and no personal liability to her. Therefore, the Complainant is entitled for her return of her original property title deeds from Opposite parties.
12. Per contra learned counsel for O.P.1 vehemently contended that through the Complainant discharged housing loan but she was one of the director for O.P.2 society and she executed guarantee agreement to discharge the debt of O.P.2 and stood as guarantor for the term loan of O.P.2 society and the same is proved by filing Ex. B4 and Debt Recovery Tribunal, A.P. Hyderabad also passed order against the Complainant and others for recovery of debt of society of O.P.2. There is huge debt of Rs. 60,00,000/- due by O.P.2 for which the Complainant and others are guarantors. Therefore, the title deeds are retained as per guarantee agreement till recovery of debt guaranteed by her. Therefore, no deficiency in service on the part of Opposite parties and complaint is not maintainable and complaint is liable to be dismissed.
13. In this case there is no dispute that the Complainant availed loan of Rs. 8,00,000/- from O.P.1 on 24-1-2009 vide loan No. 140012000558329 and the said loan was discharged by the Complainant and loan was closed by 24-9-2014 and a certificate was issued to that effect on 24-9-2014 by O.P.1 under Ex. A1. It is further agreed between the parties that O.P.1 refused to return original title deeds of the Complainant on the pretext that she is in the capacity of director of O.P.2 society executed a guarantee agreement and stood as guarantor to the term loan of O.P.2.
14. Now, it is the contention of Complainant that she resigned from board members and she has no connection with the society and society has properties and source to pay the term loan. Therefore, she is not personally liable and her documents cannot be retained. To show that the Complainant and other board members resigned from the society the Complainant filed Exs. A8 to A12 and she also filed Ex. A13 to show that the new management paid to certain amounts to the loan account to O.P.1. it is the case of O.P.1 that to avoid loan of society of O.P.2 they created some documents and saying that the old management is not liable to pay debts of the society though they executed guarantee agreement Ex. B4.
15. O.P.1 filed Ex. B4 copy of guarantee agreement. A perusal of above agreement clearly and categorically goes to show that the Complainant executed guarantee agreement for the debt of O.P.2 on 17-4-2008 for an amount of Rs. 60,00,000/- and further shows as guarantor for the discharge of the debts. Simply the Complainant resigned from the management board the same does not absolve her from the liability to pay the debt of the O.P.2 as guarantor as per Ex. B4 dt. 17-4-2008 as it is continuing guarantee. The liability of guarantor is co-extensive with that of principal debtor. The same has also been observed by the debit recovery tribunal, Hyderabad in O.A. No. 232/2011, dt. 11th September 2014. Though the said order was exparte order and it was set aside on 31-1-2017, but still O.A. No. 232/2011 is said to be still pending before Debt Recovery Tribunal, Hyderabad. Therefore, we have no hesitation to hold that there is no deficiency on the part of O.P.1 in retaining the title deeds of Complainant deposited by her as she stood guarantor for the debt of O.P.2 society.
16. Though the Complainant relied on judgement in W.P.No. 416/2013 on Nagpur Bench, State Bank of India Vs. Jayanthi Laws (MAD) – 2011-2-245 High Court of Madras, decided on February 23, 2011, Revision Petition No. 255/2011, dt. 10-1-2006 of NCDRC Thukaram Anantha Shet, Shri R.V. Vs. The Manager Karnataka Bank Ltd., for the proposition that the bank has no lien and Complainant is entitled for return of documents.
17. We have carefully gone through the above judgments cited by the counsel for the Complainant, but they are no way applicable to the facts and circumstances of the present case on hand as the Complainant herein has executed a guarantee agreement in favour of O.P.1 as guarantor for debt availed by O.P.2 society and her liability is co-extensive with that of the principal debtor.
18. After going through the entire material placed on record and considering the same we hold there is no deficiency in service on the part of the O.P as pleaded by the Complainant. Accordingly, point No. 1is answered against the Complainant.
19. Point Nos. II Learned counsel for O.P.1 contended that the demand of Complainant for return of title deeds was rejected in writing by letter dt. 20-10-2014 and the same was served to the Complainant. The Complainant ought to have filed complaint within two years from 20-10-2014 i.e. on or before 20-10-2016. But, filed this complaint on 20-1-2017. Therefore, the complaint is clearly barred by limitation under section 24 (a) of C.P. Act. Hence, complaint is liable to be dismissed in limini.
20. Per contra learned counsel for Complainant contended the Complainant issued a letter on 23-3-2015. So from that date the complaint is filed within two years. Hence, the complaint is within limitation.
21. We do not see any merit in the contention of learned counsel for Complainant. The loan was discharged by the Complainant and closed by 24-9-2014. She demanded for return of title deeds and the same was refused by O.P.1 by letter dt. 20-10-2014. Subsequently, the Complainant addressed letters 22-10-2014 and 15-11-2014. There was no reply from Opposite parties. so the Complainant should have filed a complaint on or before 20-10-2016 i.e. within two years from 20-10-2014 the date of refusing title deeds by O.P.1, but filed this complaint on 20-01-2017 stating that she addressed another letter on 20-3-2015 to O.P.1. But the letter dt. 23-3-2015 said to have issued by the Complainant cannot be countenanced for reckoning limitation period, as already under Ex. B2 on 20-10-2014 O.P.1 issued reply notice refusing to return the title deed. Therefore, we have no hesitation to hold the complaint is barred by limitation and complaint is not maintainable under section 24 (a) of C.P. Act 1986. Accordingly, point No. II is answered against the Complainant.
22. Point Nos. III In view of our findings in Points I & II above we hold the complaint is not maintainable and complainant is not entitled for any reliefs and complaint is liable to be dismissed. Accordingly, point No. III is answered.
23. Point No. IV. In the result, the complaint is dismissed, but in the circumstances without costs.
Dictated to the Stenographer, transcribed by him, corrected and pronounced by us in the open forum, this the 4th day of September 2017
MEMBER PRESIDENT
APPENDIX OF EVIDENCE
Witnesses examined.
For Complainant: NIL For Opposite party : NIL
Exhibits marked for Complainant : -
Ex: A1 Letter DT. 24-9-2014 to the complainant by the City Union Bank of Ltd.,
Kadapa.
Ex: A2 Counter foil for an amount of Rs.4,72,560/- Dt. 24-9-2014.
Ex: A3 Statement of A/c furnished by 1st opposite party Dt. 24-92014.
Ex: A4 Letter addressed by O.P. no.1, Dt. 2010-2014.
Ex: A5 Reply letter addressed by complainant dt. 22-10-2014.
Ex: A6 Reply letter addressed by the complainant Dt. 15-11-2014.
Ex: A7 Reminder letter addressed by complainant to the 1st opposite party,
dt. 23-3-2015.
Ex: A8 Resignation letter dated 10-9-2009 submitted by the old members of the O.P.no.2 society.
Ex: A9 Resolution dated 10-9-2009 passed by the newly elected governing body of the O.P. no.2 society.
Ex: A10 Certificate of Registration, Dt.. 17-5-2014.
Ex: A11 Paper publication of Demand Notice Dt. 21-9-2011 issued by O.P. no.1
Ex: A12 Agreement dt. 11-9-2009 executed by and between and old management and new management of the O.P. no.2 society.,
Ex: A13 Statement dated 5-9-2009 showing the payments made by the new
management of the O.P. no.2 in the loan account with the o.p.no.1.
Ex: A14 List of new members of governing body of O.P. no.2 dated 28-10-2011
submitted before the Registrar of Societies, Kadapa.
Ex: A15 Legal notice Dt. 2-1-2015 addressed to O.P. no.1.
Ex: A16 P/c of D.R.T. Hyderabad O.A.No. 232/2011 set aside order filed by the
Complainant
Exhibits marked on behalf of the Opposite party No.1: -
Ex:B1 Original undated letter issued by the applicant to the 1st opposite party.
Ex:B2 Office copy of Reply notice Dt. 20-10-2014 issued to the applicant.
Ex:B3 Copy of recovery certificate in O.A. No.232/2011, Dt. 13-10-2014 passed by Debt Recovery Tribunal at Hyderabad.
Ex: B4 P/c of guarantee agreement copy filed by the O.P.1.
MEMBER PRESIDENT
Copy to :-
- Sri S. Moulali, Advocate for Complainant
- Sri P. Goutham Kumar, Advocate for O.P.1
- M/s New Rayalaseema Educational Society, Rep. by its
Secretary, C/o Geethanjali College of Nursing,
Opp. Durga Petrol Bunk, Manapuram, Kadapa
B.V.P
