DATE OF FILING : 20.10.2016

IN THE CONSUMER DISPUTES  REDRESSAL FORUM, IDUKKI

Dated this the 22nd day of  February,  2019

Present :

SRI. S. GOPAKUMAR PRESIDENT

SMT. ASAMOL. P    MEMBER

CC NO.291/2016

Between

Complainant       :      Sunny Philipose,

   Vadakkedath House,

   Kurichithanam P.O.,

   Kottayam. 

    (By Advs: Joby John & Fenil Jose)

And

Opposite Parties                                          :   1.  The General Manager,

       District Co-operative Bank, Idukki,

       Idukki Colony P.O.,

       Idukki. 

  2. The Branch Manager,

      District Co-operative Bank, Idukki,

       Muttom, 

       Idukki.

      (Both by Advs:  Lissy M.M. 

& Binumol Joseph)

 

O R D E R

 

SRI. S. GOPAKUMAR, PRESIDENT

 

Case of the complainant is that :

 

The complainant was the secretary of a service co-operative bank.  He availed a cash credit loan of Rs.15 lakhs and a gold loan of Rs.70000/- from the opposite party society on 29.5.2015.  The cash credit loan was in default.  As per the rules, the cash credit loan has to be charged at 13.5.% interest and the gold loan has to be given at the rate of 11% per annum.  While so, the 1st opposite party has issued a notice to the complainant demanding for the  loan dues of Rs.15,79,335/-.  On receipt of the notice, the complainant remitted Rs.1,10,441/- and Rs.6,20,000/- on 24.6.2016.  Along with this he remitted Rs.52,000/- on 3.2.2016 towards the gold loan account.  The  gold loan account was closed by paying the whole amount 

(cont....2)

-  2  -

with interest.  for all these loans, the opposite party has charged exorbitant interest and also, the opposite party bank denied the request of the complainant,  to consider his defaulted loan under Aswas Scheme 2016, thereby  the opposite party bank denied the chance to waive the interest more than Rs.70000/- in the above said defaulted loan.  The   complainant further averred that the opposite party did not granted any interest relaxation to the complainant, in spite of repeated petition under the Aswas Scheme.  The opposite party is still demanding Rs.64,000/- as additional interest from the complainant     to close the loan.  The demand  for additional interest and enhancement of the interest over and above the prescribed rate by the NABARD and RBI is gross deficiency in service on the part of the opposite party.  Against this, complainant approached this Forum for getting the relief such as to direct the opposite party to recalculate the interest rate of the loan as per the RBI norms and direct the opposite party to pay Rs.50000/- as compensation and Rs.10000/- as litigation cost.

                    

Upon notice, opposite parties 1 and 2 entered appearance and filed detailed reply version denying the alleged deficiency in service.  Opposite parties further contended that, this Forum is having no jurisdiction to entertain this complaint as per the dictum given in judgement in Appeal No.644/2010 dated 29.11.2011 of the Hon'ble State Consumer Disputes Redressal Commission and the Hon'ble High Court of Kerala in its order in K.T. Manoharan Vs. Thalakulathur House Construction Pvt. Ltd and others (WP(C) No.4895/2005(G).  In this judgement, the Hon'ble State Commission and the Hon'ble High Court of Kerala upheld their view that the Arbitrator / Co-operative Arbitration Court as the case may be, have the jurisdiction to entertain disputes which is  touching  the business of a co-operative society.  No other court / authority has any right to entertain the disputes which comes under section 69 of the Kerala Co-operative Society Act.

 

The opposite parties further contended that, the complainant had availed ordinary loan cash credit from the opposite party upon furnishing his landed properties as surety.  The agreed rate of interest is 16% and the rate of penal interest in case of default is 2%.  since the complainant made default in making payment in the loan account, the opposite party was 

   (cont....3)

-  3  -

constrained to initiate proceedings under SARFAESI Act by issuing notice under section 13(2).  Thereafter the complainant has made remittance of Rs.10000/- on 2.7.2015, Rs.50000/- on 3.2.2016, Rs.10,11,445/- on 31.3.2016 and Rs.62000/- on 24.6.2016, towards cash credit account.  As on 3.1.2016, the outstanding loan dues in cash credit account is pending Rs.57611/-.  The gold loans were issued to the complainant imposed 13.5% and 12% interest as agreed.  Hence no deficiency in service happened on the part of the opposite parties.  During the course of trial, opposite parties filed a petition challenging the maintainability of the complaint by relying the decisions discussed above under section 69 of Co-operative 

                            

Societies Act.  In this petition, the complainant filed a detailed objection stating that the above said decision of the State Commission was overruled by the Hon'ble High Court of Kerala in Enathu Service Co-operative Bank Vs. Consumer Disputes Redressal Forum, Kollam.  In this judgement, the Hon'ble Court found that “going by clause (e) of section 2, 'Consumer Dispute' means a dispute where the person against whom a complaint has been made, denies or disputes the allegations contained in the complaint and the definition of 'Person' in clause (m) section 2 includes, in sub clause (iii), a Co-operative society.  This by itself is abundant statutory material to hold that co-operative society is a person that could be subjected to an action before CDRF and leaving the parties to agitate all their grievances on merits before the CDRF.  The only objection of the writ petitioner society is on the basis of section 69 of KCS Act and not on any other provisions of that Act or any provision of the Consumer Protection Act, the question raised has to be answered only as above.  We have heard the petition in detail and found the question of maintainability in favour of the complainant, because the Act itself says that the provisions of this Act shall be in addition to and not in derogation of the provisions of any other law for the time being in force.

 

The evidence adduced by the complainant by way of proof affidavit and documents.  Complainant was examined as PW1 and exhibits P1 to P11 marked.  Ext.P1 is the copy of loan sanction order.  Ext.P2 is the copy of loan agreement.  Ext.P3 is the copy of demand notice.  Ext.P4 is the statement of account.  Ext.P5 is the circular No.53/2015 dated 17.12.2015 

      (cont....4)

-  4  -

of Co-operative Registrar.  Ext.P6 is the message copy.  Ext.P7 is the circular No.23/2014 dated 30.5.2014 of the Co-operative Registrar.  Ext.P8 is the reply given by the Co-operative Registrar to the complainant.  Ext.P9 is the copy of complaint lodged by the complainant before the Banking Ombudsman.  Ext.P10 is the copy of complaint lodged before the Regional Manager, NABARD.  Ext.P11 is the reply from Reserve Bank of India dated 15.7.2016.

 

From the defence side, loan application, loan agreement, copy of cash receipts and copy of petition submitted by the complainant against the opposite party in various agencies including banking ombudsman and RBI produced.  Opposite party produced the replies and version submitted by them before the NABARD, Co-operative Registrar, RBI and banking ombudsman.  No oral evidence adduced.

 

Heard both sides.  

 

The points that arose for consideration are (1) whether the complaint is maintainable or not ?  (2) whether there is any deficiency in service from the part of opposite parties ?  (3) compensation and cost ?

 

The POINT :-  We have heard the counsel for both sides and had gone through the documents.  Regarding the 1st issue, we already decided the matter in favour of the complainant and it is discussed above.  Then regarding other issues, we considered the evidence on record.  It is evident from Ext.P3 notice dated 13.10.2015, issued by the opposite parties demanding the payment of loan along with defaulted interest.  It is seen that complainant committed default in repayment of principal amount as well as interest accrued and the notice is under section 13(2) of the SARFAESI Act.  As per records, it is admitted that, after receiving this notice, complainant remitted an amount of Rs.11,33,445/- in total from 2.7.2015 to 24.6.2016.  Between this period, complainant submitted so many requests to the opposite party to include his loan in Ashwas 2016 scheme, which was meant for person who have availed loan from the opposite party bank and committed default in its repayment.  But this request was denied by the opposite parties on the ground that this loan amount did not come within the purview of the criteria of Ashwas one time 

   (cont....5)

-  5  -

settlement scheme because it is meant for loan upto 10 lakhs.  To counter this contention of the opposite party, the learned counsel of the complainant, by sticking on Ext.P5 circular (No.53/2015 dated 17.12.2015 issued by the Registrar of Co-operative Society) pointed out that, as per the scheme, the Registrar of Co-operative Society directed all the subordinate societies to conduct co-operative adalath from January 1 to February 29, 2016, for all loans which was categorised as Non-performing Asset, upto 10 lakhs.  In this scheme, the Registrar, Co-operative Societies also directed all the societies of the State to conduct One Time Settlement scheme from January 1 to March 31, 2016 for all loans above 10 lakhs rupees. (page 5 of the Ext.P5).  Here the version of the opposite party is that, complainant's loan was not irregular till 29.5.2016, because the loan termination period is one year from the date of disbursement.  At the same time, the opposite party issued demand notice to the complainant on 13.10.2015.  It means that the loan account of the complainant is categorised as NPA from 13.10.2015 onwards.  This shows that the complainant committed default in his loan from its beginning period onwards and this loan is eligible to include in One Time Settlement Scheme of Ashwas 2016, as per Ext.P5 circular.  But the opposite party bank wilfully denied it through which the complainant has lost his chance for interest subvention of the benefit of Ashwas scheme.  This may be done by the opposite party bank with a malafide intention that the loan is covered by sufficient landed security and they can realise as much amount from the complainant.  Eventhough the complainant challenged the act of the opposite party in various agencies, all his attempts were ended in futile.

   

On perusing the evidences on record and the points of argument, the Forum found that, the act of the opposite party in denying the legal right of the complainant for including his loan in One Time Settlement Scheme of Ashwas 2016, amounts to gross deficiency in service.

 

At the same time, Forum found that as per Exts.P1 and P2, the loan sanction order and loan agreement, complainant agreed for the rate of interest and on perusing the relevant documents of gold loan, it is seen that the opposite party bank charged the admitted rate of interest.  But the complainant is entitled for a subvention in penal interest.  That chance is curtailed by the opposite party by denying his written request for including the loan in OTS of Ashwas 2016 scheme.       (cont....6)

-  6  -

On the basis of the above discussion, Forum allowed the complaint in part. In this case, complainant had not specifically stated how much amount is realised by the opposite party, by way of penal interest.  Hence the Forum is not in a position to fix an amount as penal interest.  Hence opposite party is directed to re-calculate the interest rate which is realised from the complainant over and above the agreed rate of interest and directed to refund the excess amount collected as such.  For deficiency in service in not including the loan of the complainant in OTS scheme, opposite party is directed to pay Rs.10000/- as compensation and Rs.2000/- as litigation cost to the complainant, within 30 days from the date of receipt of a copy of this order, failing which the amount shall carry 12% interest per annum from the date of default, till its realisation.

 

Pronounced in the Open Forum on this the 22nd day of February, 2019

         Sd/-

     SRI. S. GOPAKUMAR, PRESIDENT

Sd/-

SMT. ASAMOL. P, MEMBER

 

APPENDIX

Depositions :

On the side of the Complainant :

PW1               -    Sunny Philipose.

On the side of the Opposite Party :

Nil.

Exhibits :

On the side of the Complainant :

Ext.P1     -  copy of loan sanction order.  

Ext.P2     -  copy of loan agreement.  

Ext.P3     -  copy of demand notice.  

Ext.P4     -  statement of account.  

Ext.P5     -  circular No.53/2015 dated 17.12.2015 of Co-operative Registrar.  

Ext.P6     -  message copy.  

Ext.P7     -  circular No.23/2014 dated 30.5.2014 of the Co-operative Registrar.  

Ext.P8     -  reply given by the Co-operative Registrar to the complainant.  

Ext.P9     -  copy of complaint lodged by the complainant before 

the Banking Ombudsman.  

Ext.P10   - copy of complaint lodged before the Regional Manager, NABARD.  

Ext.P11   -  reply from Reserve Bank of India dated 15.7.2016.

On the side of the Opposite Party :

Nil. Forwarded by Order,

 

SENIOR SUPERINTENDENT