The titled complainant No.1 MSME firm has filed the present complaint through its Sole Proprietor the titled complainant2 against the titled opposite party No.1 Bank Branch Batala (duly enjoining its other senior-offices and dealing officers the OP2 to the OP7) at their alleged refusal to return back the property-documents upon total-liquidation of the credit facility, for securing of which these property papers were deposited with the OP Bank on an unauthorized pretext that an amount of Rs.13,75,991/- were due for recovery as 'foreclosure-charges' kept on-hold in the loan account.
2. The back-drop of the dispute, in brief, has been that the OP Bank on 19.05.2021 had advanced an aggregate credit-facility of Rs.5,50,82,400/- to the complainant firm, stockists cum traders in Pig Iron, against Pledge of Fixed Assets (Plant and Machinery) and Equitable Mortgage of Immovable Property, the title deeds, of which, were statutorily deposited with the OP Bank for creation of Equitable Mortgage. The working capital limits of Rs.5Crore were to be reviewed and renewed every year whereas the term loan of Rs.50,82,400/- was to be repaid vide the equated installments. It was also agreed upon by the OP Bank that foreclosure charges shall not be payable as the complainant firm fell under the MSME category and the requisite closure intimation, if required, shall be given 30 days, in advance. However, during the very first year of operations the complainant firm was offered better credit-terms by one of the rival competitor ICICI Bank and accepting the same the MSME Firm served the loan-closure Notice upon the OP Bank in the 3rd week of May' 2022 as requisite, in order to avoid levying of foreclosure-charges upon shifting of accounts to ICICI Bank.
3. Further, the ICICI Bank on 27.05.2022 sanctioned better 'credit-facilities' to the complainant firm to take-over/transfer its loan-accounts along with the security-cover held with the OP Bank by paying-off/liquidating the outstanding in the firm's loan A/cs; And, for the purpose, the ICICI Bank Branch issued the requisite Bankers' Cheque/Draft favoring the OP Bank for the amount covering the outstanding loans with the OP Bank, to the debit of the complainant firm's freshly opened account. However, the OP1 Bank Branch refused to accept the above 'draft' pleading absence of authority etc and similar pleas were put forth by the OP2 Loan Dept., the OP4 BBG Head & the OP6/OP7 officers upon approach with the result that the related Draft had to be canceled twice to avoid/save simultaneous charging of interest by the two banks. Finally, the OP5 Cluster Head was contacted who agreed to accept the 'repayment' and 'return' of the securities.
4. As agreed upon by the OP5 Cluster Head, the OP Bank through its OP1 Branch had accepted/received the repayment vide the ICICI bank-draft but refused to release/deliver back the securities demanding deposit/liquidation of the freshly debited penal- interests and other arbitrary costs/charges along with Rs.13,75,991/- kept on-hold as fore-closure charges merely to harass/humiliate the complainant at his shifting of loan accounts against the unfair-whims of the OP Bank Officers.
5. The complainant having failed in his efforts to persuade the OP Bank to issue the requisite 'No-Dues' and release the 'Securities' has filed the present complaint seeking directives to the OP Bank through its OP officers to i) Release the original documents of title to the mortgaged property; ii) Reverse the excessive/penal interest/unauthorized costs and charges, non-charging of the fore-closure charges Rs.13,75,991/- kept on hold and release the credit amounts held with them; iii) Pay Rs.40 Lac as compensation and costs etc; iv) Allow any other relief(s) that the commission may deem fit in the interest of justice and fair play.
6. Lastly, the complainant to see successful prosecution of his present complaint has filed his affidavit (Ex.CW1/A), in support, along with the herein listed documents as: Ex.C1–Copy of Sanction Letter dated 19.05.2021; Ex.C2–Copy of OP Bank 19.05.2021 confirmation as to non-charging of Foreclosure Charges subject to advance intimation by 30 days; Ex.C3–Copy of ICICI Bank Take-over Letter 31.05.2022 to the OP Bank; Ex.C4–Copy of ICICI Bank Take-over Amounts 03.06.2022 to the OP Bank; Ex.C5–Copy of Complainant's mail to HDFC Bank to release securities; Ex.C6–Copy of A/c Statement with the OP Bank; Ex.C7–Copy of A/c Statement with ICICI Bank; Ex.C8–Copy of Aadhar Card of the Complainant2; Rejoinder & Written Arguments & CA 's Certificate Rs.49,273/- excess interest.
7. The OP1 Bank Branch along with its enjoined offices/officers upon summoning, appeared through their common counsel who filed the joint written statement comprising of the preliminary as well as other objections (on merits) as:
8. The present complaint is comprised of complicated issues/questions of facts as well as of law requiring oral and documentary evidence subject to cross-examination by the opposite counsels that is not feasible under the summary procedure prescribed under the herein applicable statute and thus the case be relegated to the civil court(s). On merits, the OP Bank in reply to the Paragraph 5 of the complaint has put forth its prime defense by way of the complainant executed agreement and acknowledged acceptance of the terms of Sanction that both provide for levying of the 'fore-closure charges' as well as penal interest; And, the complainant is also liable to pay fore-closure charges as he did not intimate of accounts-closure, in advance, by 30 days. And, the complainant, in terms of clause 10 of the terms of Sanction, had not applied vide submission of financial papers 60 days prior to expiry of the continuing facility and has thus attracted an additional interest @ 2% PA. The OP Bank vide its written statement has admitted and/or denied all other immaterial/non-substantial facts/issues being incorrect or for lack of knowledge etc and has finally sought dismissal of the present complaint with costs. In support of its prosecution of defense the OP Bank has filed the affidavit of Sahil Mahajan Cluster Manager deposing the contents of the written reply/statement and authenticity of the herein listed documents: i) copy of statement of the loan-accounts; ii) copy of the MFA- Master Facility Agreement; iii) copy of the Sanction dated 19.05.2021 and iv) copy of OP Bank Letter dated 19.05.2021.
9. Somehow, the learned counsel has not filed the written arguments in spite of having availed 3 nos. of adjournments and has finally requested for adjudication on the strength of his written reply and oral-arguments taken, together.
10. We have examined the available documents/evidence on records of the present proceedings so as to statutorily interpret the meaning n purpose of each document along with scope of adverse inference on account of some documents ignored to be produced/not produced by the contesting litigants against the back-drop of the arguments as put forth by the learned counsels for their respective sides.
11. We have scrutinized the present complaint to examine the extant issues liable/probable to arise/prompt during the related proceedings and find these quite normal and fit for usual resolve through the herein prescribed summary procedure and thus we over-rule the OP Bank's preliminary lone objection and continue with furtherance. We observe that the OP Bank's objection fails that the complainant had not intimated them of loan-closure, in advance, by 30 days; in light of the fact that he had not filed his financial papers for renewal of facility prior to 60 days of its expiry on 18.05.2022 and thus the OP Bank had the requisite Closure Notice, in advance. And, as the herein complainant never applied for renewal of credit-facility he cannot be charged penal interest for non-submission of his financial-papers. Further, it is observed that the OP Bank Sanction as well as the Loan Agreement do have clauses of fore-closure charges, in general, but these shall fade out in the light of categorical understanding reduced to writing that fore-closure charges shall not be levied. Moreover, when the RBI (Reserve Bank of India) the Governing Bank in its capacity as Supervisory Bank to all Scheduled Banks has waived-off the fore-closure charges to Units falling under MSME Category and the complainant firm as MSME unit has been duly admitted by the OP Bank. And, the excessive cum penal interest/charges etc also warrant reversal, in the least.
12. In the light of the all above, we are of the considered opinion that the herein OP Bank can neither escape not wriggle out of its liability for the acts cum omissions of its offices/officers who have humiliated/harassed the complainant unnecessarily causing him and his associates mental agony and financial-loss during the course of the OP Bank's banking business. We also observe that the complainant(s) have suffered much harassment, humiliation and mental agony at the hands of the OP1 Bank Branch as well as its associate Credit Dispensing Team who have all acted in a totally unauthorized manner. The OP Bank has failed to plead/ quote as to under what 'law' they have been performing all these acts/omissions.
13. We find the OP Bank has exhibited an employ of unfair trade practices in its functioning cum unscrupulous exploitation of the consumer/complainant and that do prove 'deficiency in service' in full display, on their part. Thus, we partly allow this complaint and ORDER the OP Bank to immediately: I) Release/Return/Deliver back all the title-deeds, in original, to the complainant; II) Reverse all the penal/excessive interest, costs and charges etc. and release all the credit amounts qua the related extant instructions of the respective account-holders; III) Set-aside fore-closure charges Rs.13,75,991/- levied but not debited (kept on hold); IV) Pay Rs.50,000/- to the complainant (s) as compensation for having caused them harassment, mental agony and financial-loss besides Rs.10,000/- as cost of litigation within 45 days of receipt of certified copy of these orders otherwise the awarded amount at (IV) shall attract interest @ 9% PA from the date of orders till paid, in full.
14. The complaint could not be decided within the stipulated period due to heavy pendency of Court Cases, vacancies in the office and due to pandemic of Covid-19.
15. Copy of the order be communicated to the parties free of charges. After compliance, file be consigned to record.
(Naveen Puri)
President.
ANNOUNCED: (R.S.Sukhija)
OCT. 27, 2022. Member.
YP.
