CONSUMER DISPUTES REDRESSAL FORUM, KOTTAYAM
Present
Sri. Santhosh Kesavanath P. President
Smt. Bindhu M. Thomas, Member
Sri. K.N. Radhakrishnan, Member
CC No. 238/2010
Monday, the 26th day of March, 2012
Petitioner : P.J. George,
Poovathumkal House,
Elackadu P.O
Vayala, Kottayam.
(By Adv. P.V Joseph)
Vs.
Opposite party : Vayala Service Co-Op. Bank
Ltd. No. 2175.
Vayala P.O., Kottayam
reptd. by its Secretary.
(By Adv. T.M Xavierkutty)
O R D E R
Sri. Santhosh Kesavanath P., President
Case of the petitioner filed on 23..9..2010 is as follows.
Petitioner is a consumer of the opposite party bank. Petitioner availed service off opposite party by joining as a subscriber of a chitty conducted by opposite party’s bank Elakkad branch for Rs. 50,000/-. Petitioner paid 29 installments and prized the chitty in the auction held on 9..7..2010. Petitioner had furnished two solvent sureties for release of prized chitty amount. Opposite party bank refused to disburse the chitty amount to the petitioner. Chitty amount is with held by the opposite party bank, at the behest of secretary, who ordered to with hold the prized chitty amount. According to the opposite party reason for with holding chitty amount is that petitioner had not closed the existing 2 agriculture loans. According to the petitioner loans were taken after executing valid mortgage deed for petitioners 12 cents landed property in favour of the banks. According to the petitioner act of the
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opposite party in with helding the amount amounts to deficiency in service. So, he prays for an order directing the opposite party to release the prized chitty amount with 12% interest from 9..7..2010 till payment. Petitioner claims Rs. 10,000/- as compensation and cost of the proceedings.
Opposite party entered appearance and filed version contenting that petition is not maintainable. Petitioner has not approached the fora with clean hands and has suppressed the material facts. Opposite party has not directed
the petitioner to furnish any sureties for release of the amount because the opposite party has not decided to pay the prized amount instead decided to credit the prized amount to the outstanding loan account of petitioner. The allegation that the bank at the behest of the secretary, who ordered to with hold the prized chitty amount, from being disbursed is denied . The bank represented by its secretary followed general procedure and custom to the effect that when the subscriber prized chitty is a defaulter to any other loan transaction either as borrower or as guarantor the prized amount will be with held to remit the same to the account of the defaulted transactions. Petitioner has liability under 2 loan transaction for Rs. 25,000/- and Rs. 35,000/-. The statement with regard to execution of mortgaged deed as security for the loan is not disputed. Even if the bank is a secured creditor bank is having a general lien and claim over any other amounts. Unless there is an express contract or circumstances that shows a contract in consistent with lien. In the present transactions there was no such contract and bank has exercised its legal right. The chitty transactions are modified and called as group deposit and credit scheme. In the terms and conditions under that
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scheme signed by the petitioner on 11..1..2008 in page 3 clause (3) it was specifically stated that if any amount is due to the bank from a member or the sureties under this scheme the said amount can be realised by the bank under this scheme. Fully understanding the direction petitioner executed a chitty Udampady, signed by 2 sureties, before the bank. Lawyers notice issued by the petitioner is accepted by the bank and bank sent detailed reply. Petitioner executed a mortgage deed in favour of the opposite party bank on 31..8..99 for Rs. 25,000/- and another for Rs. 35,000/- on 16..1..2003 for which a collateral security of 30 cents is given to the bank. The alleged loan transactions were renewed from July 2005 but said loan is not so far closed by the petitioner. Bank filed suit for realization of those amounts with interest and cost before the arbitrator and awards were passed. Execution petition were filed and as such from those loan transactions Rs. 1,04,618/- is due. Meanwhile for the amounts due to Maharashtra Apex company Ltd, under an arbitration award No. AP 264/00, company filed EP 9 of 2006 before the District Court, Kottayam in which petitioner was 4th respondent. Company attached aforesaid mortgaged property and was brought to sale in which bank has no notice. The sale was conducted for Rs. 31,000/- and a 3rd party bid in auction. Sale was confirmed and sale amount was withdrawn by decree holder company un opposed by the petitioner. Petitioner filed a petition to set aside the sale. Later petitioner filed an affidavit stating that they will not proceed further. According to the opposite party petitioner and decree holder in the said case colluded each other ignoring right of the bank over the aforesaid secured property, thus cheated
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the bank. The bank is accountable to the public. So, the amount of the prized chitty is with held. According to the opposite party there is no deficiency in service they pray for dismissal of petition with their costs.
Points for determinations are:
i) Whether there is any deficiency in service on the part of the
opposite party.
ii) Relief and costs?
Evidence in this case consists of affidavit filed by both parties and Ext. A1 to A4. document on the side of petitioner and Ext. B1 to B15 documents and deposition of DW1 on the side of the opposite party.
Point No. 1
According to petitioner refusal to release the prized chitty amount of the petitioner, subscriber, is an act of deficiency committed by the opposite party foreman. According to the opposite party bank has a lien over prized chitty amount because the petitioner is a defaulter of the earlier mortgaged transactions. The defaulted amount due to the bank was Rs. 1,04,618/- as on 23..9..2010. The mortgaged deeds produced were marked as Ext. B1 and B2. Petitioner states that since opposite party bank is a secured creditor as far as the agricultural loan and other loan concerned opposite party cannot claim general lien as contained in section 171 and 174 of Indian Contract Act. Because this is available only in respect of a security for a general balance of account. Since a separate and independent security was given by the petitioner opposite party being a secured creditor is not entitled to detain chitty amount due to the petitioner.
Counsel for the opposite party submitted that subsequent to the mortgage as per Ext. B1 and B2, petitioner was a guarantor to a loan transaction with M/s. Maharashtra Apex Corporation Ltd., for which arbitration proceedings No. 264 of
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2000 was initiated which came for execution at District Court, Ernakulam. as E.P No. 55/02 and the same was as to dismissed for default. Subsequently EP 12/05 was filed later said EP was transferred to Kottayam District Court in the said execution proceedings the decree holder in E.P No. 9/06 (re-numbered by District Court, Kottayam) kept the property of 30 cents as stated in Ext. B1 and B2, for sale. Admittedly the said property was mortgaged to the opposite party bank in connection with existing loan. Subsequently opposite party filed a petition to set aside the sale but however, the sale of property was become absolute. By confirmation of that sale the petitioner ceased to existing charge of the property.
Petitioner alleges deficiency in service on the part of the opposite party “deficiency” in defined in Consumer Protection Act Section 2 (g) as any fault, imperfection shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise any relation to the services.
So, in order to prove deficiency in service petitioner shall prove that opposite party performed not in a manner which is required to be maintained by or under any law. Ext. A3 is the stipulations terms and conditions of the GDS. Admittedly the petitioner signed in Ext. A3. As stipulation No. 22 in Ext. A3 petitioner agreed that bank can proceed against the subscriber on the amount for realization of any other amount due to the bank from the subscriber / sureties . In Ext. B1 and B2 also as first clause it is mentioned that bank can realize the arrears if any from the consumer relating to any other amounts due to the bank.
Counsel for the petitioner referred several rulings ie. 2009 IV CPJ 83 NC, 2008 I CPJ 283 and 2009 CPJ said dicta are not applicable to the fact of this particular case. In our view as per section 171 to 174 of contract act bank has a lien available for a general balance of account. In our view we cannot attribute any
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deficiency in service for the act of creditor from appropriating or adjusting the amounts of the debtor which comes to his hand. So, point No. 1 is found accordingly.
Point No. 2
In view of the finding i point No. 1 . Petition is dismissed. Considering the facts and circumstances of the case no cost and compensation is ordered.
Dictated by me transcribed by the Confidential Assistant corrected by me and
pronounced in the Open Forum on this the 26th day of March, 2012.
Sri. Santhosh Kesavanath P. President Sd/-
Smt. Bindhu M. Thomas, Member Sd/-
Sri. K.N Radhakrishnan, Member Sd/-
APPENDIX
Documents for the Petitioner:
Ext. A1: Copy of JDCS pass book
Ext. A2: Lawyers notice Dated: 2..9..2010
Ext. A3: Postal receipt
Ext. A4: Postal AD card
Documents for the Opposite party
Ext. B1: True copy of Mortgage deed executed by the petitioner in favour of the
bank Dtd: 31..8..99.
Ext. B2: Copy of mortgage deed Dtd: 16..1..2003
Ext. B3: Agreement of GDCS Dtd: 11..1..2008
Ext. B4: Certified copy of EP 9/06
Ext. B5: Certified copy of final order in EP 9/06
Ext. B6: Certified copy of sale certificate in EP 9/06 of AP-264/00
Ext. B7: Certified copy of Cheque application for Rs. 31,000/-
Ext. B8: Certified copy of petition to set aside sale
Ext. B9: Certified copy of affidavit filed by decree holder in EP 9/06
Ext. B10: Copy of ledger regarding loan 18220
Ext. B11: Copy of ledger regarding loan No. 17901
Ext. B12: Certified copy of memo in EP 9/06
Ext. B13: Copy of reply notice
Ext. B14: Copy of ledger regarding loan transaction of account No. 17901.
Ext. B15: Certified copy of ledger regarding loan transaction account No. 18220.
By Order,
Senior Superintendent
