Tamil Nadu

South Chennai

CC/21/2016

M/s.Karunakaran - Complainant(s)

Versus

M/s.Central Bank of India - Opp.Party(s)

Sai Barath

11 Jul 2022

ORDER

Date of Complaint Filed : 18.01.2016

Date of Reservation      : 27.06.2022

Date of Order               : 11.07.2022

 

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION,

CHENNAI (SOUTH), CHENNAI-3.

 

PRESENT:    TMT. B. JIJAA, M.L.,                                                 : PRESIDENT

                       THIRU. T.R. SIVAKUMHAR, B.A., B.L.,                 :  MEMBER  I 

                        THIRU. S. NANDAGOPALAN., B.Sc., MBA.,        : MEMBER II

 

CONSUMER COMPLAINT No.21/2016

MONDAY, THE 11^th DAY OF JULY 2022

Mr.E. Karunakaran,

Son of L. Ezhumalai,

Residing at No. 57 & 58/112,

Choolai High Road,

Choolai,

Chennai - 600 112.                                                                                                                                                        ... Complainant                       

 

..Vs..

Central Bank of India,

Represented by

The Manager,

Triplicane Branch,

Triplicane High Road,

Chennai - 600 005.                                                                                                                                                   ...  Opposite Party

 

******

Counsel for the Complainant          :M/s. Sai, Bharath and Ilan

Counsel for the Opposite Party       : M/s. A. Sermaraj

 

        On perusal of records and after having heard the oral arguments of the Counsel for Complainant  and Counsel for the Opposite Party, we delivered the following:

ORDER

Pronounced by the Member-I,Thiru.T.R.Sivakumhar, B.A., B.L.,

1.      The Complainant has filed this complaint as against the Opposite Party under section 12 of the Consumer Protection Act, 1986 and prays to direct the Opposite Party to issue No Due Certificate and discharge the re-assignment made and to return the LIC policy pledged with Opposite Party bank along with liquidated damages for a sum of Rs.3,00,000/- and direct the Opposite Party to pay the cost of the Complainant.

2.     The averments of Complaint in brief are as follows:-

        The Complainant  had obtained loan from Opposite Party bank vide Loan account Nos. 3000515655 and 1037302037 by pledging and re-assigning his LIC Policy No. 713447014 in favor of Opposite Party bank and as the loan amount could not be repaid, the opposite bank filed a case before the Lok Adalat, Chennal and the Lok Adalat by its award in Case No. 209418 dated 23.11.2013 and Case No. 209426 dated 23.11.2013 passed on the following terms agreed by the both parties after amicable settlement between them. he Complainant states that with regards to the total outstanding as per the claim of the Opposite Party bank Rs. 1,82,138/- under Loan Account No. 3000515655 is settled for a sum of Rs.33,000/- by Lok Adalat case No. 209418 dated 23.11.2013 and the payments also made by four instalments a. Rs. 11,000/- on 27.01.2014; b. Rs.11,000/- on 15.02.2014; c Rs. 7,000/- on 18.03.2014 & d. Rs. 4,000/- on 05.04.2014 totalling to Rs.33,000/-. In respect of other loan outstanding as per the claim of the Opposite Party bank Rs. 2,01,341/- under Loan Account No. 1037302037 and amount settled at Rs. 1,00,000/- by Lok Adalat case No. 209426 dated 23.11.2013. The payments made by three instalments, a. Rs.32,000/- paid on 27.01.2014; b.Rs.32,000/- paid on 15.02.2014; c. Rs.36,000/- paid on 18.03.2014 totalling to Rs.1,00,000/-. The Complainant further states that consequent to payment of entire settlement amount as per the orders of the Lok Adalat, he had been approaching the Opposite Party bank in person on several occasion, since march, 2014, seeking (1) to issue No Due Certificate (II) to discharge the re-assignment made & (ii) to return the LIC policy pledged with the Opposite Party bank, but the Opposite Party bank did not take any step so far to comply with the request of the Complainant. The Complainant further states that through his counsel he had sent a legal notice dated 08.09.2015 giving an opportunity to the Opposite Party bank to comply with his request within 15 days from the date of receipt of the above said notice. For which the opposite bank gave usual one line reply dated 19.09.2015, availing two weeks time. But of no avail even after 4 weeks. LIC policy being Money Back Scheme without the Policy document he couldn't claim the Term bonus amount from the policy. He is struggling with financial crisis. Due to the same he was compelled to borrow money at a higher interest for meeting out the expenditures. He is a laborer in a company is made to live in difficult circumstances as he has to pay interest on the amounts borrowed from outside from the meager salary that he is getting. Due to this he is subjected to mental agony and hardship. for more than 50 times he had reminded the Opposite Party bank in person about his above said request. For which he had availed leave with loss of pay. Which in turn to be compensated. Due to this he is subjected to mental agony and undue-hardship. The Complainant further states that for causing serious inconvenience, mental agony and undue-hardship as a result of gross negligence and deficiency in service on Opposite Party bank part.

3.  Written Version filed by the Opposite Party is as follows:-

        The above complaint is not maintainable in law since this Opposite Party did not commit any deficiency while serving to the Complainant and hence this Complainant is liable to be dismissed in limine. The Complainant borrowed two loans from the Opposite Party and subsequently became the defaulter. Therefore, the Opposite Party initiated recovery proceedings before the Lok Adalat by filing cases in Case Nos: 209418 and 209426. In these two cases a compromise Awards were passed by the Lok Adalat Court on 23.11.2013. The liability of the Complainant in his loan account No.1037302037 was Rs.2,01,341/-. The Opposite Party agrees to settle the claim before the Lok Adalath Court in the Lok Adalath Case No.209425 on the condition that the Complainant shall pay a sum of Rs.1,00,000/- in the following manner viz:

a. Rs.33,000/- to be paid on or before 15.01.2014.

b. Rs.33,000/- to be paid on or before 15.02.2014.

c. Rs.34,000/- to be paid on or before 15.03.2014.

In the similar manner, the liability of the complaint in his loan account No.3000515655 was Rs.1,82,138/- and the Opposite Party agrees to settle the claim before the Lok Adalath Court in the Lok Adalath Case No. 209418 on the condit on that the Complainant shall pay a sum of Rs.33,000/- in the following manner viz:

a. Rs. 11,000/- to be paid on or before 15.01.2014.

b. Rs. 11,000/- to be paid on or before 15.02.2014.

c. Rs.11,000/- to be paid on or before 01.03.2014.

As stated above, the compromise  Award were passed in the aforesaid two Lok Adalath cases on 23.11.2013.  The Complainant did not pay the amount as per the Award passed by the Lok Adalath Court. Therefore, as per the terms of Lok Adalath Award, in case any default in the terms of the order the Opposite Party is entitled to proceed against the borrower as if no compromise is arrived or settled between the parties. Since the Complainant failed to pay the amount as per the terms of the Award passed by the Lok Adalath Court, the compromise Award fails and hence Opposite Party is entitle to recover entire due amount from the Complainant. As on 21.06.2014 a sum of Rs.1,15,097/- is due in the Loan Account  No.1037372037 and a sum of Rs. 61,000/- is due in the  Loan Account No.3000515685 and the Complainant is liable to pay these amount together with subsequent interest. Therefore, the contention of the Complainant that he has settled entire loan mounts to the Opposite Party is untenable. The Complainant is also a Guarantor for the credit facility sanctioned by the Opposite Party's Periamet Branch (now called as Ayanavaram Branch) to one Mr.S.Arumugam, Proprietor of M/s. Ragavendra Enterprises. The borrower Mr.S.Arumugam commit ed default and hence the loan account became NPA. Since the Complainant is a guarantor for the loan a 'vanced to Mr.S.Arumugam, the Complainant along wit. Mr.S.Arumugam jointly and severally liable to pay th due amount. As on 30.11.2016 a sum of Rs.53,321/- is due in the loan account of Mr.S.Arumugam and the Complainant is liable to pay this amount. The Complainant is liable to pay the aforesaid amounts. The Opposite Party being the banker has legal right to exercise their lien for recovering the due amount. As such, the Opposite Party has lien over the LIC Policy No.713447014 of the Complainant. Therefore, the Opposite Party did not issue discharge receipt with regard to the re-assignment made in favour of. them in respect of the LIC Policy No.713447014 contrary to the aforesaid facts, the Opposite Party denies all the averments/allegations made in the Complainant. The Complainant originally assigned his LIC Policy No.713447014 in favour of Life Insurance Corporation of India as a security for the loan availed by him from the LIC. This LIC Policy has been re-assigned in favour of the Opposite Party. But as per the Opposite Party original LIC Policy records No.713447014 is not available and hence the Complainant the shall strictly prove his contention that he has pledged the original LIC Policy No.713447014 with the Opposite Party Bank. In case, if the Complainant pledged the original LIC Policy No.713447014 with the Opposite Party, as stated by him, the bank would have surrendered the policy, claimed the surrendered value from the LIC and given credit the policy amount in the loan accounts of the Complainant. The Opposite Party would not initiate legal proceedings before the Lok Adalath for recovering their due amount. The Complainant demanded to return the original LIC Policy after paying the amount as stated above. But the original LIC Policy No.713447014 is not available in the records of the Opposite Party. Therefore, the Opposite Party made thorough search in their records. The Opposite Party also enquired with the LIC officials regarding the whereabouts of the Policy. Therefore, the Opposite Party unable to give suitable replies for the no ices issued by the Complainant through his advocates. one of the relief sought by the Complainant is that to issue No due certificate is untenable because the Complainant did not. repay entire loan amount. The Complainant has paid only Rs.1,00,000/- and Rs.33,000/- as against the total claim amount of Rs.2,01,341/- and Rs.1,82,138/-,  respectively. Further, the Complainant did not pay the amount as per the terms of the Award passed by the Lok Adalath court. Therefore, the claim of the Complainant to issue No Due certificate is unsustainable. The Complainant is not entitle to claim any liquidated damages since the Opposite Party did not commit any mistake in discharging their duty as a Banker. Hence the complaint is to be dismissed.

4.      The Complainant submitted his Proof Affidavit and Written Arguments. On the side of the Complainant, documents Ex.A-1 to Ex.A-9  were marked. The Opposite Party submitted his Proof Affidavit and Written Arguments. On the side of the Opposite Party, documents Ex.B-1 to Ex.B-5  were marked

5.Points for consideration:-

1.     Whether the Opposite Party had committed deficiency of service to the Complainant?

2.     Whether the Complainant is entitled for the reliefs claimed in the Complaint and for any other relief/s?

Point No.1

It is not in dispute that the Complainant had availed two Loans bearing account Nos. 3000515655 and 1037302037 from the Opposite Party by pledging and re-assigning his LIC Policy bearing No.713447014 with the Opposite Party. It is also not in dispute that the Loan amounts could not be repaid by the Complainant, the Opposite Party had initiated a case against the Complainant before Lok Adalat and awards were passed on 23.11.2013 by the Lok Adalat in Case Nos.209418 and 209426, on the terms agreed between the Opposite Party bank and the Complainant after amicable settlement arrived between them.

It is in dispute that the Opposite Party Bank had received entire amounts as per the Awards and claimed that the Complainant had not made the Payments as per schedule of the above said Awards, further the Complainant had stood as a guarantor in another Loan account which remains unpaid and hence the Opposite Party Bank had created Lien on the said LIC Policy of the Complainant and refused to return the said LIC Policy pledged by the Complainant, which resulted in filing of the above complaint.

The Contention of the Complainant is that he had paid the award amounts to the Opposite Party Bank and the same was received by the Opposite Party, and after paying entire amounts as per the Awards passed by the Lok Adalat, which was marked as Ex.A-1, the Complainant had been approaching the Opposite Bank in person since 2014 for issuance of No Due Certificate, to discharge and return the LIC Policy pledged and re-assigned, and had also given a written request vide Letter dated 14.06.2014, which was marked as Ex.A-2, but the Opposite Party had not taken any steps to comply with his request, which constrained him to cause a Legal Notice dated 08.09.2015 to be issued to the Opposite Party Bank as found in Ex. A-6, wherein the Opposite Party Bank was called upon to comply with the request of the Complainant within 15 days, on receipt of Ex.A-6 the Opposite Party Bank had sent a reply notice dated 19.09.2015, which was marked as Ex.A-7, wherein the Opposite Party Bank had stated that they were in process of verifying the records available at Branch and requested for two more weeks for responding the Legal Notice (Ex.A-6). As there was no response even after 4 weeks from the Opposite Party Bank and in spite of his constant follow ups and remainders made in person on several occasions availing leave on loss of pay, to the Complainant, the Opposite Party had failed to comply with his above requests of issuing No Due Certificate, to discharge and return the LIC Policy pledged and re-assigned, in spite of the entire amount received by the Opposite Party, as per the said Awards.

The Non returning of his LIC Policy which was Money Back Policy, only on surrender of the Original Policy Document he could claim Term Bonus amount for the Policy, which made to borrow money at a higher interest to meet out his expenditures and being a laborer in a company with a meagre salary found it difficult to pay the interest on the amounts borrowed. As a result of gross negligence and deficiency of service on the part of the Opposite Party Bank he suffered serious inconvenience, mental agony and undue hardship.

The contention of the Opposite Party Bank is that the Complainant had not paid the award amounts in time as stipulated and further the Complainant had stood as a guarantor for another loan account obtained by one S.Arumugam, Prop. M/s. Ragavendra Enterprises, from opposite Parties Periamet Branch  which is not discharged till date and hence the LIC Policy pledged by the Complainant as marked in Ex.A-9, unless and until the loan account where the Complainant stood as guarantor, is discharged, as lien of the said policy is created towards the discharge of the said loan obtained by one S.Arumugam. Further contended that the LIC Policy of the Complainant was originally assigned for loan obtained from LIC and the same was reassigned to the Opposite Party, hence the original policy is not available with them and if at all the original LIC policy was with them they would have surrendered the same and realized the due amount instead of initiating recovery proceedings before the LOK Adalat. Further contended that as the Complainant had not paid the entire amount, claiming no due certificate is untenable and as they have not committed any mistake the Complainant is not entitled for any liquidated damages.

On considering the facts and circumstances of the case, the contention of the Opposite Party Bank with regard to non-issuance of “No Due Certificate”(inspite of receipt of the entire amount agreed before the LOK Adalat and as per the awards marked as Ex.A-1 passed in LOK Adalat) by claiming the entire loan amounts due were not paid, hence the no due certificate claimed by the Complainant is untenable, is not sustainable, the Judgement reported in (2007) 11 SCC 369 passed by the Hon’ble Supreme Court, in State Bank of India Vs. Vijay Kumar, relied by the Complainant, equally apply to the instant case. Further the contention of the Opposite Party Bank with regard to return of original LIC policy on discharge of re-assignment of the said policy, on receipt of legal notice dated 08.09.2015 (Ex.A-6), the Opposite Party Bank had sent a reply through mail dated 19.09.2015 which was marked as Ex.A-7, wherein the Opposite Party Bank had sought two weeks time for reply as they were in process of verifying the records available at Branch, but had failed to provide the details of the original LIC Policy within requested time and in contra, in written version filed by the Opposite Party it is conteded that initially the original LIC policy was assigned as a security for the loan obtained from LIC and only thereafter re-assigned to them, and further on thorough search the original LIC policy is not in their records, is not sustainable, as it is clear that when inspite of the agreed award amounts received by the Opposite Party Bank had failed to issued No Due Certificate, the Opposite Party Bank in clear refusal to discharge the re-assignment and to return the original LIC policy to the Complainant, further it is also clear when the Opposite Party Bank had contended that the reason for non-returning of the said LIC policy is that the said policy is created as lien towards the loan account of one S.Arumugam, Proprietor, M/s. Ragavendra Enterprises, where the Complainant stood as a guarantor and the said loan account remains unpaid till date, without the original LIC policy the Opposite Party Bank would not have created such lien, though the said lien would not bind the Complainant, when the original LIC policy was more particularly reassigned towards his loan a/c, which was discharged as per the awards of the LOK Adalat.

On the discussions made above, this Commission holds that the non-issuance of ‘No Due Certificate’ and non returning of original LIC policy after discharging the re-assignment, to the Complainant clearly amounts to deficiency of service on the part of the Opposite Party Bank. Hence, we are of the considered view that the Opposite Party had committed deficiency of service.

Point No.2:-

        As discussed and decided in Point No.1 against the Opposite Party, the Opposite Party is liable to issue No Due Certificate and discharge the re-assignment made in respect of LIC Policy No.713447014 and thereafter to return the  Original LIC Policy pledged by the Complainant, in case of Original LIC Policy is not available with the Opposite Party Bank as an alternate to follow the procedure for misplaced / lost documents by lodging a complaint and by obtaining “Non traceable Certificate” for the misplaced / lost Original LIC Policy No.713447014 of the Complainant and  to effect paper publication of the Original LIC Policy No.713447014 of the Complainant, and also to intimate the Life Insurance Corporation about the misplaced / lost Original LIC Policy No.713447014 of the Complainant, at their end, at the cost of the Opposite Party and to hand over the said documents, to the Complainant, failing above compliance, the Opposite Party shall monetarily compensate a sum of Rs.1,00,000/- to the Complainant and to pay a sum of Rs.1,00,000/-  for the mental agony and inconvenience caused to the Complainant and also to pay a sum  of Rs.5000/- towards costs

In the result, the complaint is allowed in part. The Opposite Party is directed to issue No Due Certificate and discharge the re-assignment made in respect of LIC Policy No.713447014 and thereafter to return the  Original LIC Policy pledged by the Complainant, in case of Original LIC Policy is not available with the Opposite Party Bank as an alternate to follow the procedure for  misplaced / lost documents by lodging a complaint and by obtaining “Non traceable Certificate” for the misplaced / lost Original LIC Policy No.713447014 of the Complainant and to effect paper publication of the Original LIC Policy No.713447014 of the Complainant, and also to intimate the Life Insurance Corporation about the misplaced / lost Original LIC Policy No.713447014 of the Complainant, at their end, at the cost of the Opposite Party and to hand over the said documents, to the Complainant, failing above compliance, the Opposite Party shall monetarily compensate a sum of Rs.1,00,000/-(Rupees One Lakh Only) to the Complainant and to pay a sum of Rs.1,00,000/- (Rupees one Lakh Only) for the mental agony and inconvenience caused to the Complainant and also to pay a sum  of Rs.5000/- (Rupees Five Thousand Only) towards costs, to the Complainant, within 8 weeks from the date of the order. If the above amounts are not paid within the stipulated time, the Complainant is entitled to recover the above amounts together with interest at 6% p.a from the date of realization.

In the result this complaint is allowed.

Dictated to Steno-Typist, transcribed and typed by her, corrected and pronounced by us in the Open Commission, on 11th of July 2022.  

 

 

S. NANDAGOPALAN                                                            T.R. SIVAKUMHAR                                                           B.JIJAA

         MEMBER II                                                                          MEMBER I                                                               PRESIDENT

 

List of documents filed on the side of the Complainant:-

 

Ex.A1	23.11.2013	Lok adalat Award in caseNo.209418 & 209426 and payment challans
Ex.A2	14.06.2014	Request Letter given by the Complainant
Ex.A3	28.07.2015	Complaint given to Grievance cell, RBI
Ex.A4	06.08.2015	Acknowledgement letter for receipt of complaint from Banking Ombudsman
Ex.A5	21.08.2015	Reply from Banking Ombudsman
Ex.A6	08.09.2015	1st Legal notice with AD card issued by the Complainant
Ex.A7	9.09.2015	Reply mail sent by the Opposite Party Bank
Ex.A8	29.10.2015	2nd Legal notice with AD card issued by the Complainant
Ex.A9	-	Photo copy of the LIC POlicy

 

List of documents filed on the side of the Opposite Party:-

 

Ex.B1	-	Statement of Account in Loan Account No.1037372037.
Ex.B2	-	Statement of Account in Loan Account No.300515655
Ex.B3	03.11.2005	Guarantee Agreement executed by the Complainant
Ex.B4	03.11.2005	Consent Letter executed by the Complainant in the term Loan Agreement executed by S.Arumugam
Ex.B5	-	Statement of account pertaining to loan account No.1818838083 of S.Arumugam

 

 

 

 

S. NANDAGOPALAN                                                             T.R. SIVAKUMHAR                                                                B.JIJAA

         MEMBER II                                                                            MEMBER I                                                                   PRESIDENT