Date of Filing:25.11.2009<br /> Date of Order: 13.08.2010<br /> <br /> 2<br /> <br /> BEFORE THE II ADDITIONAL DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, SESHADRIPURAM BANGALORE-20<br /> <br /> Dated: 13TH DAY OF AUGUST 2010<br /> <br /> PRESENT<br /> <br /> <br /> <br /> Sri S.S. NAGARALE, B.A, LL.B. (SPL.), President.<br /> Smt. D. LEELAVATHI, M.A.LL.B, Member.<br /> Sri BALAKRISHNA. V. MASALI, B.A, LL.B. (SPL.), Member.<br /> COMPLAINT NO: 2766 OF 2009<br /> <br /> Krishna Bhagya Jala Nigam Ltd.<br /> A Government of Karnataka Undertaking<br /> Registered Office at PWD Office Annexe<br /> Left Wing, First Floor, K.R. Circle<br /> Bangalore 560 001<br /> Rep. by its Managing Director Complainant<br /> V/S<br /> 1. Life Insurance Corporation of India<br /> Investment Department<br /> Central Office, 6th Floor<br /> “Yogakshema”, Jeevan Bheema Marg<br /> Mumbai 400 021<br /> Rep. by its Executive Director (Investment)<br /> <br /> 2. Corporation Bank<br /> N. T. Road Branch<br /> 15/3, Nrupathunga Road<br /> K.R. Circle, Bangalore 560 001<br /> Rep. by its Assistant General Manager Opposite Parties<br /> <br /> ORDER<br /> By the President Sri S.S. Nagarale<br /> <br /> This is a complaint filed under Section 12 of the Consumer Protection Act.<br /> The facts of the case are that complainant had availed loan from first opposite party wherein complainant was required to open “No lien designated Escrow account” for the repayment of loan and interest. Escrow account was opened with second opposite party. Complainant has been deposited the monies in the Escrow account to transfer the same to first opposite party on 31.07.2006. The second installment was due for repayment along with interest. Complainant written letter on 24.07.2006 to second opposite party informing them that interest along with installment was due on 31.07.2006 and complainant would be funding the Escrow Account. Complainant again wrote letter on 29.07.2006 to opposite party No. 2 enclosing a cheque for Rs. 14,86,25,000/- issued in favour of opposite party No. 2 being the amount for interest and installment and requested the opposite party No. 2 that amount be telegraphically transferred to opposite party No. 1 before 31.07.2006. Opposite party No. 2 remitted Rs. 9,00,00,000/- and another sum of Rs. 3,50,00,000/- to first opposite party account on 31.07.2006 but the differential amount of Rs. 2,36,25,000/- was remitted only on 13.12.2006. Complainant received letter from opposite party No. 1 where in it has been stated that cumulative interest has been charged on Rs. 2,36,25,000/- amounting to Rs. 12,66,300/- calculated at the rate of 14.60% p.a. for the delay of 134 days. Opposite party No. 2 deliberately tried to shield for the deficiency of service. On 11.06.2008 the complainant had remitted Rs. 10,92,834/- being interest on Rs. 2,36,25,000/- for delayed transfer of amount and at interest rate of 12.60% to the LIC of India under protest without prejudice. Opposite party No. 2 is liable to refund the interest amount for the delayed transfer of funds to opposite party No. 1. There is no suitable response from the opposite parties. The complainant caused legal notice on 25.03.2009. Opposite party No. 2 replied to the notice wherein they have stated that complainant is one of their valued clients and after taking up the matter with their appropriate authorities they would revert in due course. Till date there is no further response from opposite party No. 2. The complainant has prayed for refund of Rs. 10,92,834/- paid to opposite party No. 1 as interest and the complainant has also prayed Rs. 3,74,234/- interest on the above amount from 13.12.2006 to 31.08.2009. The complainant has also prayed for compensation from the opposite parties.<br /> 2. The opposite party No. 1 LIC of India has filed defence version admitting that the complainant has paid penal interest. The opposite party No. 1 admitted that it has sent letter demanding Rs. 12,66,300/- interest from the complainant. Opposite party No. 1 has very much in order in calling for penal interest for the period wherever the installment payment is delayed, regardless of the fact that whether lapse on the part of complainant or banker - opposite party No. 2. Fixing of responsibility for the delayed transfer of due amounts to the first opposite party and consequent incidence of penalties the issue is between complainant and second opposite party. The opposite party No. 1 has prayed to dismiss the complaint against LIC of India. <br /> 3. Opposite party No.2 filed separate defence version. The opposite party No. 2 submitted that complainant has been depositing the moneys in the Escrow Account with instructions to Second opposite party to transfer the same to first opposite party account. Complainant wrote letter on 29.07.2006 to second opposite party enclosing cheque for Rs. 14,86,25,000/- issued in favour of opposite party No. 2 being amount due for interest and repayment of loan installment and requested the opposite party No. 2 to telegraphically transfer the amount on or before 31.07.2006. There was discrepancy in the letter dated 24.07.2006 and 29.07.2006 issued by the complainant, wherein in the first letter complainant have mentioned that Rs. 12,50,00,000/- is due to first opposite party No. 1 on 31.07.2006 and complainant is going to provide funds in the account on 28.07.2006. Opposite party No. 2 remitted the funds to first opposite party as per the complainant’s letter. As per the Escrow agreement complainant has to fund the Escrow account atleast 7 days before due date of remittance. The complainant is not a ‘Consumer’ under the definition of Consumer Protection Act. Therefore, the opposite party No. 2 prayed to dismiss the complaint. <br /> 4. The respective parties have filed affidavit evidence. The complainant has produced 12 documents.<br /> 5. Arguments are heard.<br /> 6. The points for consideration are:<br /> 1. Whether the complainant has proved deficiency of service on the part of opposite party No. 2?<br /> 2. Whether the complainant is entitled for the relief? If so what is the amount?<br /> 7. It is admitted case of the parties that complainant had availed loan from opposite party No. 1. Escrow account was opened with opposite party No. 2. Complainant has deposited the moneys in the Escrow account with instruction to the opposite party No. 2 to transfer same to the first opposite party. On 31.07.2006 installment of loan along with interest was due. The complainant had written letter dated 24.07.2006 to opposite party No. 2. The letter is as follows:<br /> “The Chief Manager,<br /> Corporation Bank<br /> NT Road Branch<br /> Bangalore 560001<br /> <br /> Dear Sir,<br /> Sub : Funding to “No Lief Designated Escro A/c – KBJNL A/c No. 01/01166<br /> The Interest on term loan availed from M/s. LIC of India, Mumbai is falling due for payment along with 2nd installment of principal loan of Rs. 12.50 crores on 31.07.2006. The Nigam is funding the Escrow Account NO. 01/001166 on 28.07.2006 for onward transmission to Corporation Bank A/c No. 10521 Nariman Point, Mumbai on or before 31.07.2006.<br /> <br /> Thanking You,<br /> Yours faithfully,<br /> For Krishna Bhagya Jala Nigam Limited<br /> Sd/-<br /> (Charles Sujaya Kumar)<br /> Asst. General Manager – Finance”<br /> <br /> 8. The complainant had written another letter on 29.07.2006 to opposite party No. 2. This letter reads as follows:<br /> “The Chief Manager<br /> Corporation Bank<br /> N.T. Road Branch<br /> Bangalore 560 001<br /> <br /> Dear Sir,<br /> Sub: Telegraphic transfer of funds<br /> Ref: Our Ltr. No. KBJNL:AGM:LICINTPMT:06-07/F dt. 24.07.2006<br /> <br /> Please find herewith enclosed a cheque bearing No. 95499 dt. 28.07.2006 for Rs. 14,86,25,000.00 (Rupees fourteen crores eighty six lakhs twenty five thousand only) issue in favour of your bank, in connection with payment of interest and repayment of loan installment to LIC of India, Mumbai. In this regard it is requested to credit the proceeds to our Escrow Account NO. 01/001166 and transfer the same telegraphically to LIC of India, Mumbai account as mentioned below:<br /> <br /> CORPORATION BANK<br /> NARIMAN POINT BRANCH<br /> MUMBAI ACCOUNT NO 10521<br /> <br /> Please transfer the above on or before 31.07.2006 to the said account and confirm the transfer.<br /> <br /> Thanking you,<br /> <br /> Yours faithfully,<br /> For Krishna Bhagya Jala Nigam Limited<br /> Sd/-<br /> (Charles Sujaya Kumar)<br /> Asst. General Manager – Finance”<br /> <br /> 9. The complainant has produced letter of opposite party No. 2 dated 15.12.2006. The said letter is as under:<br /> “The Asst. General Manager – Finance<br /> Krishna Bhagya Jala Nigam Limited<br /> PWD Office Annexe, 3rd Floor<br /> K.R. Circle, Bangalore<br /> <br /> Dear Sir,<br /> Sub : Telegraphic Transfer of funds<br /> Ref : Your Letter KBJNL/AGM/LICINTPMT/ 06-07 F/C-/671 DT. 13/14.12.2006<br /> Adverting to above we wish to inform you that we have remitted to Corporation Bank, Nariman Point, Mumbai A/c 10521 held in the name of LIC of India, Mumbai as detailed below.<br /> <br /> Rs. 9,00,00,000/- and Rs. 3,50,00,000/- on 31.07.2006. The difference amount of Rs. 2,36,25,000/- on 13.12.2006.<br /> <br /> This is for your kind information.<br /> <br /> Yours faithfully,<br /> For Corporation Bank<br /> <br /> Sd/-<br /> Chief Manager”<br /> <br /> 10. So admitted case of the opposite party No. 2 as per the above letter that an amount of Rs. 12,50,00,000/- was remitted to opposite party No. 1 on 31.07.2006 the due date of payment of installment and interest. As per the letter of complainant dated 29.07.2006 the opposite party No. 2 had received Rs. 14,86,25,000/- amount by way of cheque from the complainant for remitting amount to the LIC of India before 31.07.2006. Even though the full amount of installment and interest was received by the opposite party No. 2, unfortunately, the opposite party No. 2 had remitted Rs. 12,50,00,000/- only to the LIC of India on 31.07.2006. The balance amount of Rs. 2,36,25,000/- was lying with the opposite party No. 2 bank only up to 31.12.2006. Admittedly, the opposite party No. 2 had remitted or sent Rs. 2,36,25,000/- to the LIC of India on 13.12.2006. The LIC of India asked the complainant for payment of penal interest for delayed payment of 134 days. The LIC charged interest on 2,36,25,000/- amount to Rs. 12,66,300/- calculated at the rate of 14.60% p.a. and asked the complainant to remit that cumulative interest and the complainant paid / remitted Rs. 10,92,834/- the cumulative interest on 11.12.2006 to the LIC of India for the delayed transfer of amount of Rs. 2,36,25,000/-. Now the complainant has claimed that amount from the opposite party No. 2 because for no fault of complainant the penal interest had been remitted to the LIC. The opposite party No. 2 Corporation Bank had received Rs. 14,86,25,000/- from the complainant through cheque dated 29.07.2006. In spite of remitting or paying the entire amount to the LIC of India on 31.07.2006 the opposite party No. 2 bank had committed deficiency in service in sending Rs. 12,50,00,000/- amount to the LIC of India and the opposite party No. 2 had made delay in remitting Rs. 2,36,25,000/-. Totally 134 days delay was caused. For all these days the amount was with opposite party No. 2 bank. The LIC of India was right in asking cumulative interest for delayed payment. After several correspondences the complainant ultimately paid the cumulative interest to LIC of India. Opposite party No. 2 has no valid and justifiable grounds in not remitting the entire amount of Rs. 14,86,25,000/- to the LIC of India, even though that amount had been received from the opposite party No. 2 from the complainant through cheque. There were absolutely no reasons as to how an amount of Rs. 2,36,25,000/- are withheld or kept by the opposite party No. 2 without remitting the amount to LIC of India. Therefore, opposite party No. 2 had definitely committed deficiency in service. Opposite party No. 2 has taken a very feasible defence that there is some discrepancy in the letters dated 24.07.2006 and 29.07.2006 issued by the complainant. Therefore, due to the discrepancy opposite party No. 2 was not able to remit or send the entire installment and interest amount to opposite party No. 1. By reading letter of complainant dated 24.07.2006 and 29.07.2006 sent to the opposite party No. 2 we find no discrepancy at all. Both letters are very clear. There was no reason to make confusion in these two letters. When the amount of Rs. 14,86,25,000/- was sent through cheque with a letter for payment of interest and loan installment to LIC of India opposite party No. 2 should have remitted and sent the entire amount to LIC of India. The opposite party No. 2 has written letter on 12.04.2008 that they have taken up the matter with appropriate authorities and shall revert to you in due course. The opposite party No. 2 being a bank had enjoyed and kept the amount of Rs. 2,36,25,000/- with them and naturally the responsibility is on them to reimburse the loss caused to complainant. The learned advocate for the opposite party No. 2 argued that the complaint is not maintainable because this complaint is for recovery of money and he relied upon the decision of Hon’ble Karnataka High Court reported in AIR 2010 Karnataka 12 between K. Venkatappa Vs Sundaresh B.M. I have gone through this judgement in detail. The facts of the judgement was that the complainant therein had lent Rs. 9,00,000/- to the opposite party and the opposite party had promised to repay the said amount within six months with interest at 16% p.a. However, the opposite party did not repay the amount as promised. The person who lent the amount had filed a complaint before district consumer forum. In that contest it was held that the complainant should have approached the civil court and the complaint before Consumer Forum is not maintainable. But in this case it is not the case of recovery of monies lent to the opposite parties. The facts of the present case are entirely different. The case here in pertains to deficiency of service in not remitting the amount to the LIC of India as per the terms and conditions of Escrow account. Therefore, the above ruling will not help the opposite party No. 2 in any way. The learned counsel for the opposite party No. 2 has again relied upon decision of Supreme Court reported in 2005 (7) Supreme Court Cases 576. I have gone through the judgement in detail. Again said judgement with all respect is not applicable to the facts of the present case. Observation made in that judgement cannot be made applicable. The present complaint is a simple complaint claiming the amount paid by the complainant to the opposite party No. 1 on account of deficiency of service rendered by opposite party No. 2. Therefore, the only point to be considered in this case is whether the opposite party No. 2 has committed deficiency in service in not remitting the amount to LIC of India in time. As discussed above and in view of the documents and own admission of opposite party No. 2 it is very clear that opposite party No. 2 had made 134 days delay in remitting Rs. 2,36,25,000/- to LIC of India. Therefore, naturally as a matter of business principle the opposite party No. 2 shall have to reimburse the amount of cumulative interest paid by the complainant to LIC of India. The complainant has paid Rs. 10,92,834/- to LIC of India as penal interest for 134 days and this amount shall have to be paid by opposite party No. 2 to the complainant. The complainant has prayed Rs. 3,74,234/- interest from 13.12.2006 to 31.08.2009 on Rs. 10,92,834/-. It has not made clear in the pleading or in the body of complaint as to how the complainant has claimed Rs. 3,74,234/-. The complainant has not given any reasons or explanation that he is entitled to get Rs. 3,74,234/- amount from the opposite parties. Whether this amount is payable by opposite party No. 1 or 2 nothing is made clear. This claim is vague, uncertain and unclear. Therefore, we refuse to allow the claim put up by the complainant for payment of Rs. 3,74,234/-. On the facts and circumstances of the case and on the pleadings of parties and documents it is very clear that opposite party No. 1 LIC of India has not committed any deficiency of service. Therefore, there is no question of passing orders against opposite party No. 1. Opposite party No. 2 bank is wholly responsible for the deficiency of service rendered by it. Therefore, opposite party No. 2 shall have to be directed to reimburse Rs. 10,92,834/- to the complainant. In the result I proceed to pass the following:<br /> ORDER<br /> 11. The complaint is allowed. The opposite party No. 2 Corporation Bank is directed to pay Rs. 10,92,834/- to the complainant within 60 days from the date of this order. In the event of non-compliance of the order within 60 days the above amount carries interest at 9% p.a. from the date of order till payment / realisation.<br /> 12. The complainant is also entitled for Rs. 2,000/- as costs of the present proceedings from the opposite party No. 2.<br /> 13. Send the copy of this Order to both the parties free of costs immediately. <br /> 14. Pronounced in the Open Forum on this 13TH DAY OF AUGUST 2010. <br /> Order accordingly,<br /> <br /> PRESIDENT<br /> We concur the above findings.<br /> <br /> MEMBER MEMBER<br />