7.10.08<br /> Sri.K.Gopalan, President<br /> <br /> This is a complaint filed under section12 of the Consumer Protection Act for an order directing the opposite party to return the document and to pay compensation of Rs.50, 000/- to the complainants together with the cost of these proceedings. <br /> The case of the complainants in brief is as follows:<br /> The 1st complainant Rohini is a manufacturer and distributor of washing cream and allied articles. She had availed an Over draft facility for Rs.1, 00,000/- from the opposite party-Bank and for that facility; the 2nd complainant was the surety. He deposited the title deed with the opposite party as security. Due to the indifferent and indecent attitude of the Senior Manager of opposite party the 1st complainant closed the loan account on 14.11.2005 by paying the whole amount. After closing the loan 2nd complainant approached the opposite party bank to return the document. He was asked to approach after one week. When he approached after one week bank was not ready to return back the document and he was sent back by saying some lame excuses. Complainant submitted that there was in dire necessity of the document to avail loan by mortgaging the property for business purpose of the 1st complainant. So they approached the opposite party again and again and appraised the situation. But instead of returning the document opposite party told them that 1st complainant had availed another loan under PMRY scheme and the said loan is not discharged the opposite party has the right to retain the document and the said document cannot be returned to him unless and until the PMRY loan in favour of complainant No.1 is discharged in total. Further the Senior Manager has told that if an amount of Rs.2000/- is paid to him he will give back the document. So the complainant issued lawyer notice on 29.6.06. Opposite party issued reply notice stating that the 1st complainant availed a loan for Rs.,80,000/- under PMRY Scheme from his bank on 2.12.2002 and while availing the overdraft facility on 2.11.2004 the second complainant had agreed to stand surety for both the loans and mortgaged his property by deposit of title deeds. It was also stated that the 2nd complainant had executed necessary documents including guarantee agreement, debit balance confirmation and extension of mortgage covering both the loans and so the existing loan in the name of Rohini Nambiar is a charge over the property even though the working capital loan was discharged, and so the title deed cannot be returned etc. The 2nd complainant had never deposited his title deed for executing a mortgage covering the loan availed under PMRY scheme except standing as a surety. It is submitted that as per PMRY Scheme such condition cannot be imposed and there was no necessity for the 2nd complainant give an additional surety for loan availed under the PMRY scheme. The 1st complainant because of the indifferent and indecent attitude decided to close both the loan account with the opposite party and for that purpose she closed the Over Draft facility first, thinking that after availing some other loan from some other financial institutions by mortgaging the title deed of the 2nd complainant, she can close the loan availed under the PMRY Scheme subsequently. Since the document is returned, the 1st complainant is not in a position to avail another loan and close the loan availed from the opposite party under PMRY Scheme. Thus she is deprived of availing necessary funds as working capital also. The complainants submitted that due to the deficiency in service on the part of the opposite party they have suffered much in addition to the huge financial burden. The estimated monetary loss sustained to them to the tune of Rs.50, 000/-. This is in addition to the loss sustained to the 1st complainant by way of payment of interest to the opposite party at a huge rate of 11.25%. Opposite party is liable to compensate the loss.<br /> After receiving the notice from the Forum, opposite party filed version denying the allegations and averments of the complainant. The contentions of opposite party in brief are as follows: the complaint is not maintainable. The 1st complainant was given a loan of Rs.80, 000/- on 8.12.03 under PMRY scheme for her detergent business. The dealing in account was satisfactory and when she demanded further loan Rs.1, 00,000/- as working capital to expand her business the bank agreed on condition that the security must be furnished for the whole loan. The complainant agreed and the 2nd complainant, husband of the 1st complainant was ready to stand as guarantor for both the loans and mortgage his property/. Therefore the working capital Rs.1, 00,000/- was granted in addition to earlier loan. On availing the additional loan, the 2nd complainant stood as guarantor to the loans and mortgaged his 2 cents of property by depositing of title deed. He had executed necessary documents including guarantee agreement, debit balance confirmation and extension of mortgage covering both the loans. Therefore the existing loan in the name of 1st complainant is charge over the property even though the working capital loan was charged. The title deed of 2nd complainant cannot be returned to him unless and until the loan in favour of 1st complainant is discharged in total. The complainants allegation that the 2nd complainant stood surety for the loan of<br /> Rs.1, 00,000/- only and that the 1st complainant was constrained to close the loan due to the opposite party’s indifferent and indecent attitude is false and baseless. The allegation that the opposite party told the complainant that if an amount of Rs.2000/- is paid, the document will be returned is false and baseless. . The document is being retained as per rules to protect the interest of the bank and its depositors. The intention of the complainant is to avoid the payment of existing loan. The same will become unsecured if the document is released. There is no deficiency on the part of opposite party. The complainant is not entitled for any compensation.<br /> On the above pleadings the following issues have taken for consideration.<br /> 1. Whether the complaint is maintainable?<br /> 2. Whether there is any deficiency on the part of opposite party?<br /> 3. Whether the complainant is entitled for compensation as prayed?<br /> 4. Relief and cost.<br /> The evidence in this case consists of the oral testimony of PW1, DW1 and documentary evidences as Ext.A1 to A4 and B1 to B9.<br /> Issue No.1<br /> It has raised from the outset by opposite party that the complaint is not maintainable under section 3 of Consumer Protection Act. The act shall be in addition to and not in derogation of the provisions of any other law for the time being in force. The remedy provided under the Act is in additions to the provisions of any other law for the time being in force. The provisions of this Act gives the consumer an additional remedy besides those that may be available under other existing law as reported in 1994(I) CPR 130. Hence we are of the opinion that the Forum had ample power to entertain the complaint. Issue No.1 is found in favour of complainant.<br /> Issue No.2<br /> Admittedly 1st complainant, Rohini manufacturer and distributor of washing cream and allied articles, availed a loan of Rs.80, 000/- from opposite party under PMRY scheme on 2.12.03 as recommended by the Industries Department. She had availed another separate loan of Rs.1, 00,000/- on 2.11.04 as working capital loan from opposite party which is not under PMRY Scheme. Complainants averment that no security was necessary for PMRY loan and infact no security was furnished had not been denied by the opposite party. Complainant stated that security was furnished for the second loan alone whereas, case of the opposite party is that additional loan of Rs.1,00,000/- was granted in continuation of the PMRY loan and agreeing up on furnishing security for both the loans and the 2nd complainant agreeing to mortgage his property as security for both the loans. The loan for Rs.80, 000/- under PMRY scheme availed on 2.12.03. The question of security as far as this loan is concerned arises on or before availing the loan. The separate loan for Rs.1, 00,000/- availed on 2.11.04. It is difficult to understand why security is asked to furnish for the loan which was taken one year before on 2.12.03. Loan availing one year before and security furnishing one year after seems to be quite contradictory to the truth. 2nd complainant has specific case that there is no need of security for loan under PMRY scheme. That was neither denied nor explained by the opposite party. Ext.A2 notice sent by the opposite party states that as the 2nd complainant were ready to stand as guarantor for both the loans and mortgage his property the working capital of Rs.1, 00,000/- was granted by opposite party on 21.10.04 in addition to the earlier loan. The opposite party’s statement that loan for Rs.1, 00,000/- was granted on 21.10.04 on condition to give security for a loan which availed 13 months was before create doubts. In Ext.B1 letter of Guarantee it can be seen that it is due payment and discharge two day after demand of all present and future advances liabilities, bills and promissory notes whether made, incurred or discounted before or after the date here off is guaranteed. The payment of past liabilities of previous loans was not guaranteed in Ext.B1 letter of guarantee. The clause 1 limits the liability to a written amount on particular day of evasion of document and not any amount automatically accrued from any past liability. .B1 did not state that the letter of guarantee is in respect of a liability in continuation of the PMRY loan of Rs.80, 000/-. Ext.B2 also speaks that deposit of title deeds will continue to be security to the loan of specified amount and not specifying the PMRY loan. PMRY loan is granted by industries department. That scheme is sponsored by the central govt. Thus it is clear that loan under PMRY scheme can be given only by the sanction of the industrial Department. The 2nd loan, if addition loan under PMRY scheme, sanction of the industrial department is essential one. But the second loan is no way connected with industrial department. DW1 in his cross examination deposed thus: PMRY loan Industries Department recommendation <br /> <br /> He has also deposed”<br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> <br /> Thus it makes clear that these loans, 1st and 2nd loans are separate loans creating separate independent liabilities.Ext.B1 shows that the amount of Rs, 73,276 added separately. In the usual course loan amount will not be written piece piece. In the cross examination DW1 deposed that the amount was written separately because the loan was taken in two occasions. If so the amount written in words is not seen written separately. If the rule is to write separately it should be written separately in words also. More over, it is not understandable how does the security becomes one and the same for loans taken on two occasions. So what is deposed by DW1 with respect to explanation of writing amount separately seems to be not correct. Opposite party does not show any such rules to establish this contention true. In Ext.B2 also two amounts separately ie.1,00,000/-+73,267/- seen written. What prevents writing amount altogether or why compelled to write separately is not brought out. If there are any such rules insisting to do so that should be brought before the Forum so as to convince the genuine reason. Thus Ext.B1 and B2 are highly suspicious. Ext.B3 is dated 21.10.2004 and Ext.B4 dt.29.6.06. Both these documents are affixed with Adhesive stamps. It has stated in Ext.B3 and B4 separately that “Each borrower and guarantor should sign across a separate revenue stamp”. This is a mandatory direction. DW1 failed to give satisfactory explanation for using adhesive stamp instead of revenue stamp. If the Senior Manager has any authority to use such stamp opposite party is bound to produce relevant evidence and mere statement is not at all sufficient. It has also necessary to taken into account that Revenue Stamps will be changed in every two years. Hence the opposite party is bound to give convincing explanation for not using the revenue stamp. The value of Adhesive stamp is more than that of revenue stamp. The allegation of the complainant that the adhesive stamp is issued because, at the time of preparing the document the previously designed revenue stamp was not available, cannot be rejected without reasonable explanation. It was also not explained why such a document Ext.B2 is obtained on 21.10.2004. <br /> Ext.B5 issued to complainant on 21.10.04. Ext.B1 and B2 are also executed on the same day. It is not clear how does the mortgage of 2 cents of land created on 20.10.04 continue as security for 13 months earlier loan which was taken by the sanction of Industrial Department under PMRY scheme. PMRY loan of Rs.80, 000/- was sanctioned to 1st complainant on 8.12.2003. If any security is needed for that loan it might have created on 8.12.2003 itself, together with that loan agreement. It is quite evidence that there was no security for the loan under PMRY scheme. Whether opposite party is entitled, thereafter, to impose new terms and conditions binding upon the complainants to offer security for the loan already availed. If so, where from and by which order or rule opposite party is entitled to impose such condition? Opposite party has stated in his chief that “PMRY scheme additional security<br /> <br /> <br /> <br /> <br /> <br /> <br /> Ext.B8”. This statements itself speaks that Ext.B8 is not applicable to the loan of <br /> Rs.80, 000/- availed by the complainant under PMRY scheme. Secondly the loan taken for Rs.1, 00,000/- after 13 months as working capital is not a loan under PMRY scheme. It is not a loan sanctioned by the Industrial department. It is a loan sanction by the bank on security. PMRY loan is sanctioned by Industrial Department without security. It was true that government of India, Ministry of Industry felt that certain parameter of the PMRY scheme needed modification. Para 2 of Ext.B8 shows the modifications thus “Government therefore has decided to modify some of these parameters of the scheme. The upper age limit has been relaxed, beyond 35 years by 10 years for SCs/STs and women and the educational qualifications for eligibility under the scheme has been relaxed from metric to VIIIth passed. Similarly the upper limit of project cost has been increased from 1 lakh to Rs.2 lakhs.” This office memorandum only shows that the PMRY scheme further widened its scope without making any sort of additional liabilities. The perusal of the entire document will reveal that the government has given more relaxation, whereas, opposite party herein wanted to impose new liabilities and burdens which shows the way in which the implementing agencies spoils the spirit of great schemes that intended to uplift the country from the backwardness. Ext.B8 does not permit the opposite party to extent security to the loan availed under PMRY scheme. Second loan taken by the complainant as a separate loan. If the title deed is deposited by the complainant a guarantor, the guarantor is entitled to get back the title deed when the amount of that loan is paid. Admittedly the complainant herein cleared the second loan for Rs.1, 00,000/- by paying the entire amount. Hence we are of the opinion that denial of returning the title deed by extending it as security for the previously availed loan under PMRY scheme which does not require security is an unjustifiable and an unfair trade practice that amounts to deficiency in service. The opposite party is liable to return the document. Thus issue No.2 is found in favour of the complainant. <br /> Issue Nos.3 & 4<br /> The 1st complainant paid the entire amount of loan which she has taken 2nd time from the opposite party-Bank. The complainants alleged that the then manager has behaved indecently towards the first complainant and they were constrained to close the loan on 14.11.2005 by repaying the whole amount. On closing the loan 2nd complainant approached the opposite party for the return of the document deposited in the bank.2nd Complainant stated that he had approached the opposite party several time for his title deed but the opposite party was not prepared to return the document. The opposite party justified in keeping the title deed on the ground that the additional loan of Rs.1, 00,000/- was treated as continuation of the 1st loan of Rs.80, 000/- already granted under PMRY scheme and liable to return only after clearing the first loan also. It is already found that the retaining of document is unjustifiable, unfair trade practice and liable to return the document. Now there arose the question what is the actual loss suffered by the complainants? As he has submitted complainant is not able to approach other financial agencies for new loans without the title deed. Even if it is true the loss is as that of differences in the rate of interest only. It is true that there is deficiency in service on the part of opposite party and that have in ordinary course created mental pain and loss. Hence we are of opinion that an order directing the opposite party to return the document to 2nd complainant together with compensation of Rs.5000/- with Rs.500/- as cost of these proceedings will meet the ends of justice. So issues 3 and 4 found in favour of the complainants.<br /> In the result, the complaint is allowed directing the opposite party to return the document and to pay Rs5000/- (Rupees Five thousand only) as compensation with Rs.500/- (Rupees five hundred only) as cost of this proceedings to the 2nd complainant within one month from the date of receipt of this order, failing which the complainants are allowed to execute the order against the opposite parties under the provisions of the consumer protection Act.<br /> <br /> Sd/- Sd/- Sd/-<br /> President Member Member<br /> <br /> APPENDIX<br /> Exhibits for the complainant<br /> A1. Copy of the Lawyer notice dt.29.6.06 sent to OP<br /> A2.Copy of the reply notice dt.1.7.06<br /> A3.Notice dt.1.7.06 sent by OP<br /> A5.Reply notice dt.20.7.06<br /> Exhibits for the opposite parties<br /> B1, Letter of guarantee dt.21.10.04<br /> B2.Undertaking dt.21.10.04<br /> B3.Debit balance confirmationdt.21.10.04<br /> B4.Debit balance confirmation dt.29.6.06<br /> B5.Letter dt.21.10.04 sent to complainant<br /> B6. Copy of the complaint submitted by complainant before Women’s commission<br /> B7.Statement submitted by OP before Women’s commission<br /> B8.Coipy of the office memorandum dt.22.1.99 of OP<br /> B9. Copy of the Statement of account maintained by OP for the account of complainant<br /> <br /> Witness examined for the complainant<br /> PW1.N.K.Shaj<br /> Witness examined for the opposite party<br /> DW1.P.Vinodan <br /> <br /> /forwarded by order/<br /> <br /> Senior Superintendent<br /> <br /> Consumer Disputes Redressed Forum, Kannur <br /> <br /> <br /> <br /> Dispatched on<br /> Through Post/Hand <br />