Tamil Nadu

StateCommission

FA/359/2014

STATE BANK OF INDIA, THE BRANCH MANAGER - Complainant(s)

Versus

M. ELANGOVAN - Opp.Party(s)

P.D. AUDIKESAVALU

16 Nov 2022

ORDER

IN THE TAMIL NADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

 

Present:Hon’ble Thiru. Justice R.SUBBIAH ... PRESIDENT

             Thiru.R VENKATESAPERUMAL       … MEMBER

 

F.A. No.359 of 2014

(Against the Order, dated 04.06.2014, in C.C. No.58 of 2013, on the file of  the DCDRF, Erode)

 

                                  Orders pronounced on: 16.11.2022

 

The Branch Manager,

State Bank of India,

No.735, Mettur Main Road,

Bhavani 638 301,

Erode District, Tamil Nadu           ... Appellant/Opp. Party

 

vs.

 

M.Elangovan,

S/o.Mahalingam,

87, Vellapalayam Post,

Shakti Nagar, Andiyur Taluk,

Erode District.                      ... Respondent/Complainant

 

             For Appellant           :  M/s.K.Kumaran

             For Respondent       :  M/s.C.Munusamy

This First Appeal came up for final hearing on 18.10.2022 and, after hearing the arguments of the counsels for the parties and perusing the materials on record and having stood over for consideration till this day, this Commission passes the following:-

O R D E R

R.Subbiah, J. – President.

             The appellant herein challenges the impugned order, dated 04.06.2014, passed by the DCDRF, Erode, in C.C. No.58 of 2013, whereby, the said Forum has allowed the complaint filed by the respondent herein and directed the OP/appellant herein to return the property documents as mentioned therein to the complainant and also, to pay to him a sum of Rs.30,000/- as compensation for the mental agony, besides Rs.3,000/- as litigation expenses.

 

             2. For the sake of convenience, the parties are referred to in this order as per their nomenclature before the District Forum.

 

             3. In brief, the case of the complainant is that, on 18.07.2006, he had obtained a loan of Rs.1 lakh from the OP/Bank by mortgaging his house property and the original title deed & other documents pertaining to the said property were deposited with the Bank as security; that, as on 10.08.2013, the statement furnished by the Bank indicated the total outstanding payable as Rs.1,63,000/-, which the complainant had paid on the same date and thereupon, he requested to return the original documents that were deposited with the Bank, which insisted him to pay another sum of Rs.92.21 as pending balance and the said amount was also paid on 19.08.2013; that, despite re-paying the entire loan amount along with the interest as demanded, the Bank, instead of returning the documents, was harassing the complainant by not returning the papers, whereupon, the complainant filed the complaint before the District Forum, seeking to direct the Bank to return all the documents retained by them and for payment of Rs.2 lakh as compensation for the mental agony caused to him due to the alleged service deficiency on the part of the Bank.

 

             4. The crux of the version filed by the OP/Bank runs to the effect that, as on 31.08.2013, a sum of Rs.34,295.20 was payable by the debtor and along with the said sum, Rs.10,135/- was also to be paid on account of the services rendered by the loan recovery Agent; that, as such, the complainant is bound to pay Rs.44,430.20 with interest from 01.09.2013; that, without paying the said sum, the complainant is not entitled to get back the documents; that, after the payment made by the complainant on 19.08.2013, he sought information from their Regional Office about the outstanding due and, on 27.09.2013, he was furnished with the details about the Account; and that the complainant has not approached the Forum with clean hands and hence, the complaint is liable to be dismissed.

            

             5. To substantiate the claim and counter-claim, both sides filed their respective proof affidavits and, on the side of the complainant, 2 documents were filed as Exs.A1 and A2 and no document was marked by the OP/Bank.  The District Forum, after consideration, passed the impugned order, allowing the complaint against the Bank as aforementioned and, aggrieved thereby, the Bank has come up with the present Appeal.

 

             6. Learned counsel for the OP-Bank, by stating that they did not debit the quarterly interest for the term loan granted to the complainant in view of the directives of the RBI pertaining to Income Recognition and Asset Classifications of loan account, submits that, if an account is running irregular for more than six months, it has to be classified as a Non Performing Asset, but, that does not relieve the complainant from their liability to pay interest and accordingly, the Bank is entitled to recover the interest due from the complainant at the contractual rate.  He argues that the Bank is legally entitled to engage securitization agents for enforcing its interest over the secured assets of the borrowers without intervention of any court under the provisions of the SARFAESI Act as well as Enforcement of Security Interest Act, 2002. Further, the Notification, dated 01.04.2022, of the RBI issued by way of a Master Circular in DOR.STR.REC.4/21.04.048/2022-23, under clause 3.2 thereof with the caption 'Reversal of Income' provides that if any advance, including bills purchased and discounted, becomes NPA, the entire interest accrued and credited to income account in the past period should be reversed if the same is not realised.  According to him, thus, the interest was reversed for the purpose of adjustment till the complainant makes the entire payment as per the demand, in line with the Statement of accounts.  Now, the reversed amount that has been brought back is claimed by the Bank and there is  nothing illegal or wrong in such claim or demand.  The District Forum has miserably failed to appreciate all such relevant aspects surrounding the transaction and it irrationally hurried to allow the complaint; as such, the impugned order is liable to be interfered with, he pleaded.

 

             7. Per contra, learned counsel for the complainant states that the loan amount borrowed on 18.07.2006 was Rs.1 lakh and, as on 10.08.2013, the outstanding was Rs.1,63,000/- which was paid on the very same date and thereafter, when return of the documents was sought for, the complainant was asked to pay the only remaining balance of Rs.92.21 which was also paid on 19.08.2013.  Thus, having re-paid the entire loan amount along with the interest as demanded, without any basis, the Bank makes new demands one after the other stating to be unrealized interest and charges payable to the collection agents, which is nothing but a clear instance of unfair trade practice that cannot be viewed so slightly.  Inasmuch as the District Forum rightly found that the Bank has committed service deficiency and ultimately granted the relief by assigning valid reasons, there is no scope at all for interference with such well-considered order, he emphasized.

 

             8.  Having considered the rival submissions based on the materials available on record, we are of the view that the case of the Bank does not deserve acceptance for the following reasons.

             First of all, the Bank has not produced any single document either in respect of the transaction in question or regarding their demand towards the alleged 'unrealized interest'.  On the contrary, the documents marked on the side of the complainant shows under Ex.A1-Demand Notice, dated 17.03.2012, that the OP-Bank had mentioned Rs.1,47,048/- therein as the total due, as on 06.03.2012.  According to the complainant, as per the other document/Loan Account Statement filed  under Ex.A2, dated 30.08.2013, the loan amount was brought down to zero, since the entire outstanding of Rs.1,63,092.20 was re-paid.  Obviously, the Bank has not disputed the said two documents.   That being so, for their demand of Rs.34,295.20 as the 'unrealized interest' and another sum of Rs.10,135/-, towards payment to the Debt Recovery Agent,  the Bank did not file any document before the District Forum.  When the Loan Account Statement reveals the outstanding as Rs.1,63,000/- and the complainant has paid the same, we do not find any justification in demanding another sum of Rs.44,430.20 under the aforesaid two heads, stating that the said amount was adjusted/reversed.  If that was so, the complainant should have been duly intimated of the same through proper notice and, all of a sudden, he cannot be taken to surprise with extraneous demands. Had there been any outstanding still pending towards 'unrealized interest', why the Bank did not choose to reflect the same in the Loan Account Statement under Ex.A2 still remains a big question.  That being so, the present reference or reliance upon the circular of the RBI that has been issued in the year 2022 with a clause regarding reversal of income would in no way help the Bank that too to keep alive a loan account that was closed by the borrower on full re-payment about a decade back.  The conduct of the Bank that completely lacks transparency in a simple loan transaction only reflects the unfair trade practice which can never be endorsed or encouraged.  The District Forum appreciated the facts in a correct perspective and arrived at a just conclusion by issuing the impugned direction and we do not find any valid reason or ground to interfere therewith.

 

             9. In the result, the Appeal is dismissed by confirming the impugned order, dated 04.06.2014, passed by the DCDRF, Erode, in C.C. No.58 of 2013. 

 

             Sd/-                                                               Sd/-

R VENKATESAPERUMAL                             R.SUBBIAH, J.

      MEMBER                                                      PRESIDENT.