SMT. RAVI SUSHA: PRESIDENT

Complainant filed this complaint U/s35 of Consumer Protection Act 2019 seeking to get an order directing opposite party to refund Rs.1,25,000/- with compensation and cost of the proceedings of the case.

Brief facts of the case are that the complainant’s Late husband V Surendran was an employee of erstwhile South Malabar Gramin Bank.  Before joining in this bank he was in army.  Complainant’s husband retired from the service on 31/03/2011.  Pension scheme came into force on 01/04/2018 in Kerala Gramin Bank.  In the year of 2020 the complainant’s husband late Surendran V has taken Rs. 3,00,000/- and complainant was a co-borrower and executed a pro-note in favour of OP on 09/03/2020 loan was availed to meet medical expenses of late husband.  The pension amount is credited in the SB account of the husband of the complainant and A/c No. is 40249100104592.  Complainant’s husband was drawing approximately Rs.15,304/- as pension.  Complainant is a consumer having SB A/c 40249100104592 and loan transaction with OP No.2. It is submitted that from the month of March 2021 onwards the OP has started deducting the family pension from SB A/C 406971010332574 of the complainant and the same is adjusted to the loan account.  OP bank deducted the amount without any intimation or without her consent.   The unauthorized deduction of family pension has caused great inconvenience /mental agony and life span of the complainant is reduced.    The complainant has not given any under taking letter to the bank towards repayment of the loan.  The family pension amount is not at par with salary or wages.  The deduction is made by the OP No.2 as per the instruction made by the OP No.1.  The complainant has to spend huge amount for medical treatment.  From 02/03/2021 to 06/10/2022 the OP has deducted a sum of Rs.1,32,000/-. This amount being as an unauthorized deduction the OP has to repay a sum of Rs. 1,32,000/- with 12 interest from the date of deduction.  Apart from the OPs are not bound to deduct any amount in future from the family pension of the complainant.  The bank will get lie on unpaid amount only after loan is defaulted and notice of the same is to complainant.  So it is totally illegal.    Till 06/10/2022 the OP has deducted the family pension amount and adjusted in the loan account.  The wrongful act of the OP amounts to deficiency of service.  Hence the complaint.

After receiving notice, OPs filed written version stating that the diseased husband of the complainant Sri. Surendran was an employee of the OP who retired from service.  The complainant’s husband late Surendran V has taken Rs. 3,00,000/- from pension loan scheme to retired employees of the OP bank on 09/03/2020.  He had given under taking letter to the bank towards repayment of the loan for the purpose of meeting the medical expenses and other personal requirements.  The complainant herein it’s the co-obligant of the loan and had executed a demand promissory note along with the pensioner Surendran in favour of the bank.  It is true that the pension amount of the deceased husband Surendran is being credited in the SB Account regularly.    The mode of payment of the above loan is to deduct the monthly installment from the pension account.  Moreover, the complainant being the person who had executed a demand promissory note along with her deceased husband is bound to repay the loan amount.  It is submitted that these OPs has got an undertaking by the husband of the complainant to deduct the loan installment form eh pension account.  When there is an express undertaking by the pensioner to deduct the loan installment from the pension account the same is applicable to his wife and family members including the complainant as they being co-borrower and legal heir.  Apart from the above obligation the complainant has got a pious obligation to discharge the liability of her deceased husband.  It is well within the knowledge of the complainant that her husband had executed an undertaking to deduct the loan installment from the pension account.  As per the scheme of the loan, the mode of repayment is by deduction from the pension amount.  It is not correct to say that the OP is transferring different amount adjusting the loan amount.  These OPs are discharging their duty in accordance with law and procedure following the directions of the bank.  There is no deficiency of service on the part of these OPs.  It is submitted that the deduction made by this OPs are proper and as per the scheme implemented by the bank.  As per the scheme of the pension along the monthly EMI is automatically deducted from the pension account and is being credited to the pension loan account.  As per the undertaking given by the deceased husband of the complainant the bank is at liberty to deduct the amount from the pension account.  It is submitted that the complainant never raised any complaint before these OPs.  It is submitted that to as long as a substantial amount on the above loan account is due from the complainant and therefore the OPs has a general lien or a right to make deduction from the amount of the pension account.  The banker’s lien is legally recognized and as such a lien cannot be interfered with unless the liability is fully discharge.  In this case the co-borrower of the loan failed to discharge their liability even after the repeated demands made to her to repay the loan amount towards the OP bank.  Hence the complainant is not entitled to any relief claimed in the complaint and prayed for the dismissal of complaint.

            At the evidence time complainant has submitted documents marked as Ext.A1 to A4.   On the side of OP, documents B1 to B5 were marked.  After that the learned counsel of complainant filed written argument note with judgment of Hon’ble High court of Kerala.   Learned counsel of OP also filed argument note.

            Complainant’s case is that OP had deducted a sum of Rs.1,25,000/- from the SB account of the complainant kept in the OP bank unauthorizedly from her family pension.  OP bank deducted the amount without any intimation to her and without her consent.  Further she had not given any authorization to deduct the family pension amount towards the loan amount.

            On the other hand OPs contended that since the husband of the complainant late Surendran V has given Ext.A2 under taking letter permitted to deduct Rs.6,448/-  from his pension every month and to credit the said amount in the loan account, OP bank has got every right to recover the amount from family pension for deducting to the loan amount.

            Here there is no dispute that the complainant’s husband late Surendran V has taken Rs. 3,00,000/- from pension loan scheme to retired employees of the OP bank.  It is also not disputed that he had given Ext.A2 under taking letter to the bank towards repayment of the loan.  Further it is fact that OP bank has deducted a sum of Rs.1,25,000/-  from the SB Account of the complainant from family pension of the complainant without giving any written intimation to complainant or after getting consent from the complainant.  It is also a fact that complainant is the co-borrower of the loan in question. Further OP has imposed general lien over the family pension amount. 

            Here the question to be considered is whether OP bank has right to deduct the repayment amount from family pension benefit deposited in the fixed deposit impose general lien on the family pension amount without adequate intimation to the family pensioner?

            The learned counsel of complainant submitted judgment of Division Branch of Hon’le High court of Kerala Presided over by Justice K Surendran Mohan, 2018(4) KLT 876 syndicate Bank V Sheela Julian in which the Hon’ble High court held that pensionery benefit and gratuity received in cash and converted  into fixed deposits, cannot be attached.  Further held that the bank appropriated the amount which was credited in the account of the account holder as the pensionery benefits, which is not segregated.  Further, held that though the bank has a  general lien as provided under section 171 of the contract Act, it was not proper to appropriate the amount by the bank without adequate intimation to the  account holder, especially when the terminal, benefits are not segregated. 

            Here also the complainant has not entrusted or permitted / consented to adjust any amount due to the bank towards loan availed by her husband from her personal account.  Without giving any intimation/information, the OP bank exercised its lien and a substantial amount from family pension benefit deposited in the SB account of the complainant was adjusted towards the outstanding loan.  The Hon’ble High Court, held in the above case that as there is no segregation of the terminal benefits whether it is gratuity, provident fund or amount payable on insurance policy etc. bank has no right to make repayment of the loan availed by the husband of the complainant from the family pension benefit deposited in the SB account of the complainant.  In the above said case the Hon’ble court directed the appellate bank to re-credit the amount.

            In the present case also OP bank credited the amount of Rs.1,25,000/- from SB account of the complainant towards the repayment of loan account taken by the deceased husband of the complainant.  As per the view taken by the Hon’ble High court in the above case are stated, the OP bank has no right to impose lien over the family pension amount of the complainant as well as no right to credit amount from her SB account towards  loan repayment without any written consent of the complainant.

            Hence there is deficiency in service and unfair trade practice on the part of the OP bank.  So the complainant is entitled to get relief.  OP bank can take other legal proceedings to recover the loan dues from the legal heirs of the deceased loanee.

            In the result complaint is allowed in part.  Opposite party bank shall refund Rs.1,25,000/- to the complainant .  Opposite partybank is also directed not to make any deductions/ transfer any amount from the family pension amount as and when credited in the SB account 40697101032574, kept on OP bank.  Opposite partybank is further directed to pay Rs.10,000/- as compensation for mental agony suffered by the complainant and Rs.5,000/- towards litigation expenses of the complaint.  Opposite party shall comply the order of repayment of the amount compensation and cost as stated above to the complainant within one month from the date of receipt of this order.  Failing which Rs.1,25,000+Rs.10,000 carries interest @ 9% per annum from the date of order till realization.  Complainant is at liberty to execute the order as per provision in Consumer Protection Act.

Exts.

A1- Photocopy of Pronote executed by Late V Surendran

A2- Letter undertaking given by the Late V Surendran

A3- Passbook account No. 0697101032574 operated by complainant (original)

A4- Ledger extract (true copy)

B1-Terms and conditions of pension loan scheme

B2-Application for pension loan

B3- Details of co-obligant/Guarantor

B4- Copy of pro note

B5-Delivery letter on demand of promissory note

      Sd/                                                                                Sd/                                                         Sd/

PRESIDENT                                                                 MEMBER                                              MEMBER

Ravi Susha                                                               Molykutty Mathew                                     Sajeesh K.P

(mnp)

/Forward by order/

Assistant Registrar