Orissa

Jajapur

CC/44/2014

Madan Mohan Mallik - Complainant(s)

Versus

General Manager - Opp.Party(s)

Niranjan Parida

29 Mar 2016

ORDER

IN THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, JAJPUR.

                                                                      Present:  1.Shri Biraja Prasad Kar, President,

                                                                                      2.Sri Pitabas Mohanty, Member,

                                                                                      3.Miss Smita Ray, Lady Member.                        

        Dated the 29th day of March,2016.

                                        C.C.Case No.44 of 2014

Madan Mohan Mallik,  S/O Bholanath Mallik

Vill . Brajanagar,P.O.  Rudhia,

P.S.Panikoili, Dist. Jajpur.                                                                   …… ……....Complainant .                                                        .                                     (Versus)

General Manager / Branch Manager / Chief Manager,

 State Bank of India, At/P.O/Dist. Jajpur.  

                                                                              ……………..Opp.Party.                                                                                                                                                                                                                                                                                                                                          

For the Complainant:                         Sri N. Parida,  Sri C. Jena, Advocates.

For the Opp.Parties:                          Sri P.K. DasPattnaik, Advocate.                                                                                   

                                                                                                 Date of order:   29. 03. 2016.

MISS  SMITA  RAY , LADY MEMBER .

                        The complainant  has filed this dispute alleging deficiency in service on the part of the O.P.

                        The facts relevant for this present dispute shortly as per complain petition are that the complainant availed a tractor loan from the O.P. Due to non payment of some installments the O.P bank illegally seized and sold the tractor in the year 2012. Thereafter the O.P. also without giving any notice to the complainant illegally withdraw Rs.75,000/- from his S.B account towards the liquidation of the loan. The complainant apprehends that the O.P. may withdraw money from the complainant’s  S.B Account . The O.P also has issued demand notice against the tractor loan .The complainant also mentioned  in the complaint petition that due to some mechanical defects in the tractor and it became idle . As a result the complainant was unable to pay the installments in time. The complainant also alleges that he has received subsidy amount of Rs.1,56,905/- but on 27.07.2008 the O.P has deducted the same amount for recovery of loan without giving any prior notice to the complainant.

                        That on 07.04.14 the complainant has sent a pleader notice by R.P with A.D to the O.P regarding his difficulties and one time settlement but the O.P has not replied till to date. On the other hand the O.P illegally demanded a sum of Rs. 4,63,276/- . Accordingly finding no other way the complainant filed this present C.C.Case with the prayer to direct the O.P to pay Rs.1,81,405/- towards compensation.

            After notice the O.P. filed the written version stating  therein that in the year-2005 Madan Malik on the guarantee of Bholanath Malik has made an application for Tractor loan to carry on his agricultural operation. He introduced Bholanath Malik as his guarantor for the said loan. On considering his requirements the O.P Bank on 26.05.05 sanctioned an Agricultural Term loan for an amount of Rs.3,95,000/-  in favour of the complainant . It was mutually agreed that the loan amount would be repaid on 18 Half year installment of Rs.22,000/- each plus interest accrued there on and the schedule of repayment started for 30.11.05.  Accordingly, on 26.05.05 the borrower and guarantor by way of security for the loan advance / to be advance executed different security documents  in favour of the plaintiff Bank.

                        After execution of different security documents, money was advanced to the complainant for purchase of tractor, trolley etc to carry on his agricultural operation. Though the borrower has purchased the tractor, trolley and its accessories, but could not  repay the installments of the plaintiff Bank in due and regular course as a result of which the loan outstanding has been increased. Besides demand notices the officer of the O.P. Bank personally, requested the complainant for repayment of the loan  but same  was not fruitful. Hence the loan A/C became a substandard A/C and has been classified as NPA / A/C . In the above circumstances the O.P Bank by exercising its resources repossessed the hypothecated tractor and sent it to its stockyard for its safe upkeepment. That on several times field functionaries of O.P. Bank requested the complainant to release his vehicle but it was not fruitful. Hence the O.P Bank issued notice in favour of the complainant calling upon him to repay the over due amount and release his vehicle on or before its public auction but  the complainant/ borrower did not release the tractor . Hence the vehicle was put to public auction and the amount available  has been credited in his loan A/C. After adjustment of all debts and credit the balance outstanding in the loan A/C is Rs.6,298.77= 00. As per Hypothecation Agreement (AGRAB-1) executed by the complainant in favour of O.P Bank on 26.05.2008 the complainant by way of security for the loan advance  executed  hypothecation agreement (AGR-AB-1) to and in favour of O.P. Bank . By executing  it, the borrower abide by different terms and conditions of the O.P. Bank stated their in and also hypothecated his tractor trolley etc to  and in favour of O.P Bank . This hypothecation  agreement will continue unless until the complainant borrower liquidate the entire loan outstanding dues of O.P. Bank.      As per hypothecation Agreement (AGRAB-1) the Bank/ O.P is the real owner and the complainant is its mere agent and he is enjoying benefit under the scheme as per agreement he is entitled to returned back the money which has been advanced to him by way of loan for purchase of a tractor. If the borrower fails to return the amount, then the real owner i.e Bank may proceed as per agreement made in the hypothecation agreement (g) “ In the event of any default the banks shall have the right-(c) to take possession of this security so created forth with and take any other action as it may deem fit, to recover its dues and enforcement of its securities.

                        Under the hypothecation agreement (FIRST SCHEDULE) Clause-3(I) “ without notice to the borrowers and at the borrowers ricks and expanses enter any place /where security may be kept / store and inspect, value, insure, dispose of and / or take possession thereof (ii) without prejudice to the foregoing on default of the borrower (s) in payment of any money hereby secured or on the non-performance of any obligation on the part of the borrower (s) or on the occurrence of any circumstances in the opinion of the bank endangering the security, the Bank shall take possession or recover and / or sell by public auction or private contract of otherwise deal with the security and appropriate the proceeds to the outstanding loans.

            As per clause-10 of hypothecation agreement right of reposition- in the event of default, the bank will have a right to take over possession of the securities charged and sell them and recover its dues. The borrower hereby authorizes the bank to act as their attorney / agent for all intents and purposes for effectual implementation of the aforesaid action. Hence the banks action for repossession and sale of the hypothecated vehicle of the complainant in view of this agreement as stated above is justified and legal, as the complainant has defaulted in payment of banks outstanding in due and regular course.

            Secondly, the complainant alleged that a sum of Rs.75,000/- has been deducted from his S.B A/C without any prior information. As per hypothecation agreement clause-7 (LIEN-). The Bank shall have the right of lien and set off against any of the balances in the account of the borrower(s) /guarantor(s) in accordance with the provisions of this agreement and the law the borrower will not create any charge over any property whether secured or unsecured except with the permission of the bank. The borrower shall not bank with any other Bank. The borrower shall not create  any lien on the properties / goods hypothecated to the Bank.

                       Hence, the set off of Rs.75,000/- in the SB A/C of the complainant by the O.P. is justified for recovering  of its due outstanding amount.

            As per case of the complainant his tractor , has been seized on 16.03.12 without any prior notice. In the mean while the more than two year has been passed  under the C.P. Act the period of limitation is of two years , from the date of cause of action. Hence the matter is not acceptable as  same is barred by law of limitation under C.P. Act. At the address last known to the bank will be treated as sufficient service for all intent and purpose.

            In the above circumstances the  dispute filed by the complainant is not maintainable and liable to be dismissed on cost.

            On the date of hearing  we heard the learned advocates from both the sides and after perusal of the record along with the documents in detailed to frame the following issues :-

1. Whether the petitioner is a consumer who is entitled to maintain the dispute in this For a ?
2. Whether this Fora gets jurisdiction to adjudicate the present dispute as per limitation point ?
3. Whether there is deficiency in service on the part of the O.Ps.  so far as seizure and sold the alleged vehicle is concerned if so
4. Whether the petitioner is entitled for the relief as prayed for in the complain petition

It is the initial stage we make it clear that we are going through the circumstances in the present dispute as per observations of Hon’ble Supreme Court reported in 2001(2)CPR-108-S.C

Answer to issue no.1

                        It is undisputed facts that the complainant has availed the agricultural  loan of Rs.3,95,000/- from the O.P . As against such loan the complainant is paying interest which is consideration and  in the  expression of service  . As such the complainant is a consumer as per observation of Hon’ble Supreme Court reported in 1995(2) SCC-150-SC ( Consumer Unit & Trust Society Vrs.Chairman and M.D Bank of Baroda, 11(2000) CPJ-11S.C (Vimal Chandra Grover Vrs. Bank of India) .

Answer to issue no.2 :-

                        The stand taken by the O.P. vide para-2 of the written version that present dispute is barred by limitation as provided under C.P . Act. It is our considered views that the cause of action arises i.e. on dt.20.02.2014 when the O.P. deducted a sum of Rs.75,000/- from the savings Bank accounts of the petitioner bearing A/C No.11309102707. Soon after the petitioner filed the present dispute against the O.P i.e on dt. 15.05.14. So there is no point of limitation arises.

Answer  to issue no.3 and 4  

                        There are vital issues where  we have to verify whether there is any deficiency in service on the part of the O.P. and if so whether the petitioner is entitled for the relief as prayed in his complaint petition .

1. It is alleged by the petitioner that on 20.02.2014 the O.P.  unauthorizedly and illegally has deducted a sum of Rs.75,000/- from the S/B account of the petitioner .

                        As against such grievances of the petitioner the O.P  has  taken the stand that since the petitioner was a chronic defaulter and did not repay the loan . The O.P was entitled to adjust  the amount towards the loan amount by deducting the amount from the S/B account of the petitioner .           

 On the above allegation and counter allegations we are of the opinion that the bank is entitled to exercise its right of lien .

2. Further  it is alleged by the petitioner that without giving repossession and pre sale notice the O.P after repossessing  the vehicle has sold the alleged vehicle.

                         As against such grievance of the petitioner, the O.P has taken the stand that the O.P issued notice for auction sale and affix the said  notice in front of  the houses of the petitioner and give opportunity to release the alleged vehicle on or before the public auction , but the borrower did not turned off. Hence, the vehicle was put to public auction. On the other hand the petitioner filed an affidavit dt.02.12.15 categorically denied the plea of the O.P. Owing to such situation the O.P. has not produced  any documents like postal receipts in support of pre-sale notice  instead of several opportunity.

                        The next aspect comes for consideration whether the mode of seizure and sale of the alleged vehicle is tenable in the eye of law.

                        In this contest after perusal of the observation of Hon’ble Supreme Court reported in 2006-CTJ-209 (SC)( M.D Orix Auto Vrs. Josvinder Singh)  we are inclined to hold that though the O.P. is empowered as per term and condition of the agreement to seize and sale the financed  vehicle in case of default of monthly installments of the loan but such seizure and sale must be as per law in view of the observation of Hon’ble Supreme Court reported in 2007(36) OCRCSC (Manager ICICI Bank Ltd Vrs. Pravash Kour & Others) 2016(1)CLT-310-N.C(Kotak Mahindra Bank Ltd Vrs.M.D.Sarif Ansori)  wherein it is held that:

                        “ vehicle repossessed and sold by financer without notice illegal “.

                        In this contest we make it clear no where the hypothecation agreement of the alleged vehicle empowers  the O.P to take such action violating the guide line of Hon’ble Supreme Court ,Hon’ble national Commission and Hon’ble State Commission Delhi reported in 2012(2)-CLT-72-SC, 2007(3)CPR-191, 2005-CTJ-522 respectively (Citi Crop Maruti Finance Ltd Vrs.Vijaya Laxmi) wherein it is held that:

                        “ Seizuring of the vehicle must be through court.”

Similarly we are also inclined  to verify whether the selling of the above vehicle bonafide one. In this contest it is alleged by the petitioner that without giving an opportunity to the petitioner the O.P. has  sold the vehicle at their sweet will. In such situation we do not found any documents regarding the date of auction of the said vehicle which violates the  guide line of appellant Forums reported in 2010(1) CPR-118-H.P,2004(3) CPR-154-Odisha, wherein it is held that:

‘Auction  sale must be bonafide one and date of auction of vehicle must be intimated to hirer / loanee .      

                        In view of the above observation from our side it is cristal clear that the O.P. has committed patent deficiency in service as well as unfair trade practice by selling the above   vehicle without following the proper procedure of law for which the law is conclusively in the complainant’s favour and consequently the dispute must  succeed and hereby allowed.

 

O R D E R

                     In the net result  the dispute is allowed against the O.P. and directed to pay Rs.20,000/- as compensation to the petitioner within one month after receipt of this order . No cost.

          This order is pronounced in the open Forum on this the 29th day of March ,2016. under my hand and seal of the Forum.