Tamil Nadu

Ariyalur

CC/01/2018

S.Ranganathan, - Complainant(s)

Versus

Indian Overseas Bank, - Opp.Party(s)

S.Vijayaraghavan. M.com., LLB.,

14 Mar 2023

ORDER

Complaint taken on file: 04.01.2018

    Order delivered on: 14.03.2023

BEFORE THE HON’BLE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, ARIYALUR

PRESENT: Dr.V.Ramaraj M.L, Ph.D: President

Mr.N.Balu B.A, B.L: Member – I

Mrs.V.Lavanya B.A, B.L: Member – II

Consumer Complaint No. 1/2018

Monday, the fourteenth day of March, 2023

 

Renganathan S/o. Surttai, Puthupalayam Village, Ariyalur Taluk, Ariyalur District.                                                  (died during pendency)

Impleaded Legal Heirs:

1. Maruthayee, W/o. Suruttai
2. Anjuham, W/o. Renganathan

Both residing at Puthupalayam Village, Ariyalur Taluk, Ariyalur District          

                                                                                                          …               Complainants

          -Vs-

 

Branch Manager, Indian Overseas Bank, Middle Agraharam, Ariyalur -  621 704.

                                                       

                                                         …          Opposite Parties

 

Counsel for the Complainant: M/s. S. Vijayaragavan

Counsel for the opposite Party: M/s. A.A .Rajendra Prasad

The complainant has filed this complaint praying to direct the opposite parties to return his 55.7 grams of jewels, Rs.3,00,000/- towards compensation for his loss and mental agony and Rs.5,000/- as cost of this litigation.

ORDER

Pronounced by Mr.N.Balu: Member-I

Adopted by Dr.V.Ramaraj: President

 Mrs.V.Lavanya: Member-II

 

 The facts of the complaint in brief:

 

1.           The complainant pledged his 55.7 grams of jewels with the opposite party on 16.04.2014 under loan No: AGL:1181/2014 and obtained an agricultural loan of Rs.80,000/-. The complainant was paying the interest for this loan. The opposite party sent a notice to the complainant on 03.11.2016 stating that the complainant has not paid any interest for the above loan and that unless he pays the interest within 10 days, the jewels would be auctioned. Then the complainant approached the opposite party and enquired about the notice. The opposite party advised the complainant to pay the principal amount with pending interest to get his jewels back. The complainant agreed to settle all the pending dues within 10 days to get his jewels back.

 

2.           At this juncture, the Central Government demonetised 500 and 1000 Rupee notes on 08.11.2016 due to which the money rotation among the public was affected to a larger extent. The Central Government through Reserve Bank of India advised all the banks in the nation to grant 2 months of grace period to all those persons who have borrowed loans from the banks across the country. The opposite party did not grant sufficient time to the complainant as per the above notification of the Central Government but auctioned the jewels of the complainant.

 

3.           The opposite party sent a notice to the complainant on 03.11.2016 stating that his jewels were auctioned but the notice did not contain any signature or seal of the bank. It did not contain the loan number and the pending interest details. The bank did not send prior notice about the date of auction and did not inform about the sale proceeds. The opposite party did not even give newspaper publication about the auction. The truth is that the complainant’s jewels were not auctioned. The complainant has remitted Rs.18,200/- on 27.01.2016 and Rs.9,000/- on 30.01.2016 towards the interest of the above loan.

 

4.           The complainant is illiterate. Regarding agricultural loans, the banks should collect an interest of 4% per annum which are to be closed within a period of 1 month to 12 months. If the banks want to receive interest after 12 months of the date of loan, it is the duty of the bank to renew the loan. But the opposite party has deposited Rs.25,965/- in complainant’s account on 17.12.2016 that is 10 days after the alleged date of auction. As per law, the entire sale proceeds should have been credited in the account of the complainant and then only the jewel loan amount and pending interest amount should have been adjusted. But the opposite party has taken the entire amount.

 

5.           The complainant used the loan amount for doing agriculture in his lands and paid the interest amount out of the income derived from agriculture. The opposite party bank has done the same thing to many other farmers also. The complainant had pledged his jewels with the opposite party with a bonafide intention. The opposite party has received interest from the complainant but cheated him. The act of the opposite party amounts to deficiency in service. Therefore, the complainant prays to direct the opposite party to return his 55.7 grams of jewels, to pay Rs.3,00,000/- towards compensation for loss and mental agony and Rs.5,000/- towards the cost of this litigation.

 

 The facts of Written version of the opposite parties in brief:

 

6.           The complaint is totally a lie. The points of the complainant in his complaint that he was paying interest to his jewel loan, that the opposite party has mistakenly sent notice and that his jewels were auctioned without giving sufficient time are absolute lies. The points stated by the complainant in the complaint that the Central Government demonetised the 500 and 1000 rupee notes on 08.11.2016, that the general public were severely affected because of that demonetisation and that in order to give relief to the public, the banks gave 2 months of grace time to its customers to pay the loan dues are also denied as false by the opposite party.

 

7.           There is no motive or enmity for the opposite party with the complainant because the opposite party is a Central Government bank. The demand notice (Ex. A-2) dated 03.11.2016 might be without any signature or seal of the bank. but prior to that the opposite party has sent notice to the complainant on 18.12.2015. The opposite party is waiting to submit the computerised statement of account showing the complainant’s interest payment details at the time of trial. Both educated people and illiterate people are equal to the Central Government. The complainant’s legal knowledge criticising the time duration for payment of bank loans and methods of interest payment shows that he is not an illiterate but a prudent man with expertise legal knowledge.

 

8.           The opposite party has sent public auction notice to the complainant and 100 other persons through Dhinamalar. It is incorrect to state the banks should credit the entire sale proceeds in the account of the defaulter and then adjust the same against the pending dues. It is also incorrect to state that the bank credited Rs.25,965/- in the account of the complainant on 17.02.2016 and then debited the entire amount without giving any notice to the complainant. it is also incorrect to state that this complaint is not barred by limitation. It is incorrect to state that the opposite party has pre-planned everything and cheated many of its customers in the same way. It is also incorrect to state that the opposite party did not do proper service to the complainant.

 

9.           There is no enmity between the complainant and the opposite party but the complainant is with the opinion that the bank should convey the day to day status of his loan status and interest payment details. The opposite party did not understand the fact that the complainant should pay his dues in the bank and settle his loan. If the complainant does not settle the agricultural jewel loan (AJL) within a period of 1 year, the computer will automatically add compounding interest and convert the loan from AJL status to other loan status.

 

10.           The complainant should strictly prove that the opposite party is controlled by computers, that they are not cheating anyone and that there is no deficiency in their service. The complainant has filed this complaint with the intention that the services of the opposite party should not be availed by other persons. The complaint is not bonafide one. Therefore, the opposite party prays that the complaint should be dismissed with cost.

 

11.            The complainant has filed his proof affidavit on 14.06.2018 and has marked Ex. A-1 to A-8. The opposite party has examined Mr. G.Baskar as their side witness and has not submitted any document. The original complainant Renganathan died on 18.12.2020 while this complaint was pending. His legal heirs namely Maruthayee and Anjuham have been impleaded as complainants by order in C.M.P No.8/2022 on 12.01.2023. Therefore, the legal heirs Maruthayee and Anjuham are the complainants as per the records.

 

 

            Points to be considered:

 

1. Whether the opposite parties have committed any deficiency in their service?

 

2. If yes, whether any compensation should be awarded against the opposite parties?

 

3. Whether cost should be awarded?

 

Point No: 1

 

12.           The complainant has obtained an agricultural jewel loan from the opposite party on 16.04.2014 pledging his 55.7 grams of gold jewels. Since the complainant failed to repay the loan properly with interest, the opposite party bank has auctioned complainant’s jewels on 07.12.2016. We have to find out whether all formalities were followed by the opposite party before and after the auction as per law, whether the opposite party has proved that the jewels were properly auctioned and whether the sale proceeds of the auction were properly credited in the account of the complainant and properly adjusted with the pending dues.

      

13.            The opposite party has stated in their written version and proof affidavit that there is no motive or enmity for the opposite party with the complainant because the opposite party is a Central Government bank. The opposite party has admitted in written version and in proof affidavit that the demand notice (Ex. A-2) dated 03.11.2016 might be without any signature or seal of the bank, but prior to that the opposite party has sent notice to the complainant on 18.12.2015. But the opposite has failed to submit any documentary proof in support of the alleged notice sent on 18.12.2015. The demand notice (Ex. A-2) is admittedly without any signature and seal of the bank. More interestingly it has been sent by ordinary post. The opposite party does not even have any proof to show that they sent this notice (Ex. A-2) or any other notice to the complainant at any point of time. The opposite party has not filed any document in support of their case.

 

14.            The opposite party has stated in their written version that they are waiting to submit the computerised statement of account showing the complainant’s interest payment details at the time of trial. But they did not any such statement of account with their proof affidavit. In fact, there is no mention about the point of payment of interest by the complainant. the opposite party claim that both educated people and illiterate people are equal to the Central Government. They further state in written statement and in proof affidavit that the complainant’s legal knowledge criticising the time duration for payment of bank loans and methods of interest payment shows that he is not an illiterate but a prudent man with expertise legal knowledge. These statements show their high-handed attitude and superior mentality towards their customers especially poor farmers.

 

15.            The opposite party has stated that the complainant is with the opinion that the bank should convey the day to day status of his loan account and interest payment details and that if the complainant does not settle the agricultural jewel loan (AJL) within a period of 1 year, the computer will automatically add compounding interest and convert the loan from AJL status to other loan status. But the opposite party has not submitted any statement of account. Ex. A-8, the statement of accounts shows that they have credited Rs.25,965/- on 17.12.2016 in the name of “Auction Reversed”.

 

16.            According to the version and proof affidavit of the opposite party, they have auctioned the jewels on 07.12.2016 but have not credited the sale proceeds in complainant’s account but have credited Rs.25,965/- only in the name “Auction Reversed”. They have not clarified about this to the complainant at all. The complainant has raised this point in his complaint but still the opposite party has not clarified this point in their written version or in proof affidavit. The opposite party has not mentioned anything about the auction. The opposite party simply says that the jewels were auctioned on 07.12.2016. The opposite party has stated that they sent notice to the complainant and 100 other persons through Dhinamalar. Here, they have not produced any such documentary evidence before this commission to prove that they issued Public Auction Notice in local Newspaper. The opposite party has stated that they sent a demand notice to the complainant on 18.12.2015 but has not submitted any documentary evidence to prove the same.

 

17.            The claim of the opposite party that if an agricultural jewel loan is not fully settled within a period of 1 year, its status will be automatically modified by the computer as the central government banks are operated by computer. But            the opposite party has admitted that the complainant has paid an interest amount of Rs.9,000/- on 30.01.2016. The opposite party has not produced any document to prove that they intimated the complainant either before 30.01.2016 or before that date about the pending interest, the only available notice is Ex. A-2 dated 03.11.2016. The complainant has stated that after getting the notice, he approached the opposite party bank and requested them to grant 10 days’ time to settle the loan to which they agreed.

 

18.            The complainant states that the Central Government demonetised the 500 and 1000 rupee notes on 08.11.2016, just few days after he received the Ex. A-2 demand notice. The complainant has submitted 2 circulars downloaded from R.B.I website issued by the Reserve Bank of India, one dated 21.11.2016 asking all the entities regulated by the R.B.I to provide an additional time of 60 days to for all term loans up to 1 crore in value whether personal, secured or otherwise including agricultural loans. The other circular dated 28.12.2016 has extended the time by another 30 days. Even in the case that the complainant did not approach the opposite party after the Ex. A-2 notice sent on 03.11.2016, the notice itself provides 10 days’ time to the complainant to pay his loan. The R.B.I circulars provide 90 days of grace period to all term loans including agricultural loans. Hence, as per the R.B.I circulars, the complainant gets time until 31.01.2017 to settle his loan. But the opposite party has auctioned the jewels on 07.12.2016 and has not submitted any proof in support of the auction.

 

19.            The complainant claims that since Ex. A-2 notice does not contain either signature or seal of the bank, it is not a valid demand notice. The opposite party has given reply that as the bank is operated by computer, the signature or seal is not required. But Ex. A-2 is not a computer-generated document because it is a printed in-land letter wherein the name, loan number and amount has been written in pen. it has not been sent by registered post but by ordinary post. It remains without signature or seal of the bank. The bank earns from its customers and hence the banks should treat its customers with due respect. Such demand notice should be sent by registered post with due signature and seal of the bank. Since the jewels of the complainant have already been auctioned, the opposite party cannot be directed to return the jewels.

 

20.           Even though Ex. A-2 was not sent properly, the complainant has received it and has acted upon it. Hence, the validity of Ex. A-2 need not be discussed further as it has been accepted by the complainant. But we have to see whether the opposite party has obeyed the circulars of the R.B.I. The stand of the opposite party is that they auctioned the jewels on 07.12.2016 whereas the R.B.I has given 90 days additional time to the complainant’s loan as discussed in paragraph 18 that is till 31.01.2017. But the auction of the opposite party on 07.12.2016 is a clear violation of the R.B.I circulars. Not submitting any proof of the auction is another deficiency on the side of the opposite party. Merely crediting Rs.25,965/- in complainant’s account on 17.12.2016 raises suspicion on the acts of the opposite party. The opposite party is silent about the auction amount and further they have not filed any statement to show the interest details payable by the complainant are other deficiencies on the part of the opposite party. Therefore, this commission concludes that the opposite party bank has committed deficiency in its service.

 

Point No: 2

 

21.          On the side of the complainant, he has failed to pay the interest from 16.05.2014 to 30.01.2016 for a period of about one and half years. At the same time, the bank has not sent any demand notice to the complainant. At the same time, when the complainant willingly came forward to pay the pending interest with the intention of safeguarding his jewels, the opposite party bank has silently received an interest amount of Rs.9.000/- from the complainant on 30.01.2016. It should be noticed here that the bank has not given any warning intimation to the complainant that his agricultural jewel loan has crossed the statutory period of one year and that his jewels are facing the threat of auction.

 

22.            Hence, this commission concludes that even though the complainant has committed default in paying the interest, the bank should not have auctioned the jewels. The opposite party being a nationalised bank should keep the welfare of the farmers as its first and foremost goal. But here, the opposite party has behaved in an arbitrary and high-handed manner. The public Sector banks should operate in a transparent way. Here, the opposite party has not stated the details of auction, the sale proceeds have not been credited in complainant’s account. The only thing available is that the amount of Rs.25,965/- credited in complainant’s account in the name of “Auction Reversed”. When there is no explanation by the bank about this term “Auction Reversed”, this commission concludes that the bank has committed serious mistakes and thereby has committed deficiency in its service and is liable to pay compensation to the complainant. Therefore this commission believes that the complainant has suffered mental agony and hardship because of the auctioning of his jewels by the opposite party. Regarding the quantum of compensation, this commission feels that Rs.2,00,000/- shall be a reasonable amount.

 

Point No:3

 

         This commission feels that the opposite party should be asked to pay a cost of Rs.10,000/-to the complainant.

 

As a result, this commission passes the following ORDER:

 

(1). The opposite party is directed to pay a compensation of Rs.2,00,000/- as compensation to the complainant within 30 days from the date of receipt of this order.

 

(2).   The opposite party is directed to pay a cost Rs.10,000/- to the complainant.

 

  This Order was dictated by me to the steno, today the fourteenth day of March, 2023, was taken notes in short-hand and then typed in computer and corrected and was pronounced by us in the open commission today.

  

 

 

             Member -I                                      Member – II                                    President

 

 

Witnesses examined by the complainant: S. Renganathan (the complainant)

Witness examined by the opposite party: G.Baskar

Documents marked by the Complainant:

S.No	Date	Description of Document	Remarks
A-1	16.04.2014	Agricultural Jewel Loan card issued by the opposite party	Original
A-2	03.11.2016	Demand notice sent by the opposite party	Original
A-3	27.12.2016	Legal notice sent by the complainant to O.P and R.B.I with original postal receipts	Office copy
A-4	-	Ack. Cards	Original
A-5	04.01.2017	Reply notice sent by the opposite party	Original
A-6	19.01.2017	Acknowledgement sent by R.B.I Ombudsman for complainant’s complaint	Original
A-7	30.01.2016	Challan issued by the opposite party in proof of complainant’s interest payment	Original
A-8	10.09.2018	Ack. card issued by the 4th opposite party	Original

 

No document was submitted by the opposite party

 

Member - I                                         Member – II                                             President