IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, KOTTAYAM

Dated this the 23^rd day of May, 2022

Present:  Sri. Manulal V.S. President

Smt.  Bindhu R,  Member

Sri. K.M. Anto, Member

C C No. 119/2020 (filed on 24/08/2020)

Petitioners                                         : (1)   Reji George,

                                                                   W/o. George Pulparayil House,

                                                                   Manjoor Village, Vaikom Taluk,

                                                                   Manjoor P.O.  Kottayam – 686603

                                                             (2)  Jeffin George,

                                                                   S/o. George Pulparayil House,

                                                                            -do-

                                                                   (Adv. Jose Joseph K.)

                                                                             Vs.                            

Opposite Party                                 :         Manjoor Service Co-operative

                                                                   Bank Ltd.  No. K-73

                                                                   Rep. by Secretary,

                                                                   Manjoor Village, Vaikom Taluk.

                                                                   Manjoor P.O.  Kottayam – 686603.

                                                          O  R  D  E  R

Smt.  Bindhu R,  Member

The complainants availed mortgage loans from the opposite party bank on mutual guarantee by mortgaging their properties. The 1^st complainant availed Rs.6,00,000/- and the 2^nd complainant availed Rs.12,00,000/-.The said loans were closed on 14.11.2019 and 22.11.2019 respectively. The complainants submitted an application to the opposite party on 23.11.2019 to return the documents entrusted with them for the purpose of loan and to execute release deed. But in spite of repeated requests, the opposite party has neither returned the documents nor executed a release deed. The complainants filed application before the HonourableChief Minister of Kerala and the Joint Registrar of Cooperative societies Kottayam with a prayer to direct the opposite party to return the documents entrusted for the purpose of the loan. Joint Registrar referred the matter to the Assistant registrar, Vaikom for enquiry and necessary action. After enquiry the Assistant Registrar directed the opposite party to return the documents and to report the compliance within 7 days. The opposite party has not complied the order so far in derogation of the order of the Assistant Registrar.

The act of the opposite party in not returning the documents entrusted for the purpose of the loan and not executing the release deed after closing the loan is arbitrary, high handed, unjust and illegal.

The opposite party on receipt of notice appeared before the Commission and filed their version.

The contention of the opposite party is that the opposite party has already filed W.P.(C) No.15817/2020 challenging the  order passed by the Asst. Registrar dated 27.05.2020 whereby through an administrative order, the said authority directed to return  title deeds. The writ petition was admitted and the matter is pending before the Hon’ble High Court. The complainant approached this Commission suppressing these facts though the complainant has filed counter affidavit in the writ petition. The 1^stcomplainant  Reji George  and her son ,the 2^nd complainant Jeffin George and another son Jerin George constitute a common family. They are having properties. They have availed loan facilities from the Kuruppantharakavala branch. The 1^st loan was taken by Smt. Reji George on 31.10.2005 for Rs.2 Lakhs which was enhanced later to 3 Lakhs and a Gehan was registered. On 23.11.2012 the said loan was enhanced to Rs.20 Lakhs. The security given to this loan is sought to be released. In between in 2009 a loan was availed in the name of George Joseph the husband of Reji George to the tune of Rs. 3 lakhs.  This was enhanced to Rs.10Lakhs.Again enhanced to 15 lakhs and lastly enhanced to 24 Lakhs on 23.03.2016.For the loan in the name of George Joseph, separate security was offered as the value of the given property was not sufficient.  

Another loan was availed in the name of Jeffin George, the son, for 20 lakhs on 27.6.2016.     This was reduced to 12 Lakhs on 16.06.2017. The security of this loan was the property of Reji George. Again in 2012, Smt.Reji George approached the opposite party for another loan of Rs, 20 Lakhs. For this loan the property offered was the property of Mathew M.John, who is none other than her brother. This loan also was renewed. Again the complainants approached for another loan, and availed Rs.10 Lakhs in the name of Jerin George. The security given to this loan was of George Joseph, husband of the 1^st complainant. This loan was enhanced to Rs.24 Lakhs. Due to a family arrangement the name of Jerin George was deleted and the name of George joseph alone was retained. By this time 3 properties were available with the bank as security. Out of these properties only the property of Mathew M. John can be treated as a third party collateral. After 2005, when the valuable property title deed was deposited,the title deed was not handed over by the opposite party as this was to form the principal security for all the loans. There was a specific understanding on that issue also. The 1^st complainant, against the above express trust and confidence, closed the loan transaction taken in the name of the 2^nd complainant. Thereafter she closed the loan in her own name. The outstanding due on 30.09.2020 was Rs.24 Lakhs being the principal amount and altogether Rs.40,67,534/-. 

On 26.02.2020 the 1^st complainant submitted a complaint to the Hon’ble Chief Minister of Kerala. The same was communicated to the bank by Asst. Registrar, Cooperative societies, Vaikom with a forwarding communication dated 13.3.2020. An explanation to this was given by the bank in the form of a report dated 5.5.2020. The complaint was properly explained in the report submitted by the bank. Without hearing the bank and without giving an opportunity to explain their stand, the Assistant Registrar, Vaikom passed an order on 27.5.2020 for handing over the title deeds within 7 days. The 1^stcomplainant alone was heard and the opposite party was not given an opportunity to be heard. This order was challenged before the Hon’ble High court in Writ petition. The only option available to the complainant was to approach the court of Registrar through arbitration proceedings as contemplated under section 69 of Kerala Cooperative societies Act. Hence the complaint is not maintainable under consumer protection Act. There is no deficiency of service and hence the complaint is liable to be dismissed.     

The 2^nd complainant deposed as PW1 and Exhibit A1 to A6 got were marked from the part of the complainant. The opposite party also filed proof affidavit along with exhibits B1 to B9.

On a detailed perusal of the evidence and pleadings, we consider to frame the following points.

1. Whether there is a well established case of deficiency in service from the part of the opposite party?
2. Whether the complainant is entitled for any compensation?

Point No 1 and 2

The complainant’s case is that the 1^st and 2^nd complainantsavailed loans from the opposite party bank. 1^st  loan for the 1^st complainant and the 2^nd for the 2^nd complainant. The brother of the 1^st complainant mortgaged his property of 9 Ares 50 Sq.m. in sy. No.896/1 Re.sy.no. 299/7  of Kuravilangad Village of Sale deed no 907/2007 for the loan in the name of the 1^st complainant.

The 1^st complainant mortgaged her property of 30 Ares 02 sq.m in Re.Sy.no 101/1(old sy.No.198/2)of  Manjoor village which she obtained vide sale deed no 3161/94 for the loan in the name of the 2^nd complainant.

As per the complainants the above said two loans were closed but the opposite party is not ready to return the title deeds of the mortgaged properties.

Whereas the opposite party contended in its version that the complainants have several loans which were enhanced several times. The husband of the complainant also had taken a loan which was finally enhanced to Rs.24,00,000/- For this loan as the property of the 1^st complainant’s husband was undervalued, the property of the 1^st complainant also was mortgaged and as that loan is pending the document of the 1^st complainant cannot be returned.

The complainants admittedly took loans from the opposite party after executing mortgage by way of submission of title deeds. For The deed submitted for the loan in the name of the 1^st complainant was sale deed no 907/07 of her brother Mathew M. John and that for the loan in the name of the 2^nd complainant was sale deed no 3161 /94 of the 1^st complainant. According to the complainant these two loans were closed in 2019 and the opposite party issued A1 series receipts and A2 series receipts.The opposite party has not challenged these two documents and the closure of the above two loans.

Accordingly the complainants applied for the return of the documents vide Exhibit A3 series. But the opposite party put forward new objections that the said properties were mortgaged with the opposite party for the loan taken by George Joseph, the husband of the 1^st complainant and the father of the 2^nd complainant. So there is a lien over the property of the 1^st complainant and hence they could not release the property and return the title deed.

The 1^st complainant approached the Joint Registrar, Cooperative Department  against this vide exhibit A4 . The Joint Registrar, through Assistant registrar, Vaikom directed the opposite party to reply properly to the complainants and close the file after conducting proper enquiry urgently. But even after that the opposite party was not ready to return the documents and the complainants approached the Honorabale Chief Minister and accordingly the Assist. Registrar ordered to return the documents within 7 days and report back. Exhibit A6 is the order of the Assistant registrar, Vaikom. This order was also ignored by the opposite party and they were not ready to give the documents back. Thereafter the complainants approached this Commission for the redressal of their grievances.

The opposite party has produced certain loan applications and the Gehans issued by the borrowers. According to the opposite party the 1^st and 2^nd complainants, the husband and son of the 1^st complainant took several loans which were being enhanced several times.

We have perused the documents Exhibits B1 to B9 .Exhibit B1 is the loan application of the 1^st complainant for Rs.7,01,500/- to which B6 Gehan (no.2119/12) was executed for the property under the sale deed no 907/2007. Exhibit B2 is the loan application executed by the 2^nd complainant on 6.2.18 for the amount of 12 Lakhs against B8 Gehan no 937/16 for the property under the sale deed no 3161/94. Exhibit B3 loan application of the 2^nd complainant also is against Exhibit B8 Gehan no.937/16.Exhibit B4 is a loan application of George Joseph for Rs.24 Lakhs in which no property is shown pledged. Exhibit B5 is a gehan executed by George Joseph for an amount of Rs. 24 lakhs mortgaging the property under the Partition deed no 147 of 2005. Ext. B7 is a loan sanction letter to the 1^st and 2^nd complainant for Rs.20Lakhs.B9 is a gehan executed for the property under saledeed no 907/07 which is of Mathew John.

Out of these, Exhibit B4 is the loan application given by George Joseph in which no property is shown as pledged. The property described in B5 said Gahan is the property of George Joseph, the title deed of which is the partition deed no 147 of 2005 of Kaduthuruthy SRO whereas the documents offered to be mortgaged by the complainants are in Sale deed no 907/2007 and Sale deed no 3161/94.

We have given a thoughtful evaluation of the evidence on record but it is found that the opposite party has failed to produce any document in support of their claim that the property of the 1st complainant and her brother were mortgaged for the loan taken by George Joseph and there exists a charge over the said properties even after closing both the loans of the complainants. The opposite party has no case and no evidence as to show that whether  the complainant’s property has been mortgaged for any other loan or any charge over them.  The contention of the opposite party that as the property of George Joseph was under valued and so the property of the 1^st complainant also was taken as security for his loan also is not sustainable as the opposite party has not produced any valuation certificate or any other documents to substantiate this. No statement of accounts is produced by the opposite party in support of their contentions.

On the other hand the documents itself prove that there is no other liability over the properties under the said title deeds.

So we find that both point no 1 and 2 are against the opposite party and the non return of the documents on false claims is a severe deficiency on the part of the opposite party. Moreover all the documents produced by the opposite party show that the staff of the opposite party bank handled the loans in very inappropriate manner. The loan applications are not properly filled and all the documents produced are incomplete. Thus we infer that a financial institution like the opposite party is thus handling the money in the public exchequer very carelessly. The contention of the opposite party that the property of the complainant also is mortgaged for the loan of George Joseph as his property was undervalued is raised only for argument sake. Any loss caused to the opposite party bank due to this irresponsibility ought to have been collected from its staff or directors for their mismanagement.

Thus we find gross negligence on the part of the opposite party and deficiency in service on their part in unlawfully retaining the title deeds of the complainants. Thus we are inclined to allow the complaint.

The complainants closed the two loans only to sell a portion of her property and close the entire loan amounts. In this the complainants had to take loans for higher interest rates from private parties and due to the non return of the documents they had to suffer more financial loss. The opposite party is liable to compensate for the mental agony and financial loss of the complainants also.

Thus we allow the complaint and

1. The opposite party is directed to return the original of Sale deed no 907/2007 and Sale deed no.3161/94 within 30 days of receipt of this order failing which pay Rs.1,00,000/- to the complainant with 9%  interest from the date of Order till realisation.
2. Pay Rs.1,00,000/-to the complainant by way of compensation for mental agony within 30 days of this order failing which the compensation amount also will carry 9% interest till realisation.

Pronounced in the Open Commission on this the 23^rd day of May, 2022

Smt.  Bindhu R,  Member               Sd/-

Sri. Manulal V.S. President             Sd/-

Sri. K.M. Anto, Member                 Sd/-

Appendix

Witness from the side of complainant

Pw1 – Jeffin George

Exhibits marked from the side of complainant.

A1 series - Receipt dtd.14-11-19 issued by opposite party (2 nos.)

A2(a) - Receipt dtd.18-02-19 issued by opposite party

A3 – Copy of application dtd.23-11-19 by 1^st complainant to opposite party

A3 (a) - Copy of application dtd.23-11-19 by 1^st complainant to opposite party

A4 – Complaint dtd.26-02-2020 submitted by 1^st complainant to Co-operative

         Societies, Joint Registrar (J)

A5 – Copy of notice dtd.05-05-20 from Office of the Joint Registrar of Co-

operative Societies, Kottayam.

A6 –Copy of notice dtd.27-05-20 from Assistant Registrar of Co-operative 

          Societies, Vaikom to 1^stcomplainant

Exhibits marked from the side of opposite party

B1- Copy of loan application dtd.31-03-18

B2 – Copy of loan application dtd.06-02-18 by 2^nd complainant

B3 -  – Copy of loan application dtd.16-06-17 by 2^nd complainant

B4– Copy of loan application dtd.14-03-16 by George Joseph

B5 – Copy of Gahan No.G482/2016

B6- Copy of Gahan No.G2119/2012

B7 – Copy of loan application by 2^nd complainant

B8- Copy of Gahan No.G937/2016

B9- Copy of Gahan No.G448/2011

                                                                                      By Order

                                                                      Assistant Registrar