KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAD, THIRUVANANTHAPURAM APPEAL 44/2006 JUDGMENT DATED :29.5.09 Appeal filed against the order passed by CDRF, Thiruvananthapuram in OP.471/03 PRESENT SMT.VALSALA SARANGADHARAN : MEMBER SRI.S.CHANDRAMOHAN NAIR : MEMBER Kerala Financial Corporation : APPELLANT Represented by its Chief Manager, Branch Office, Vellayambalam, Thiruvananthapuram (By Authorised representation) Vs. Soman Nair, : RESPONDENT Durga Nivas, Thathiyoor, Marayamuttom.P.O., Perumkadavila village. (By.Adv.Sri.R.Krishnappan Nair) JUDGMENT SRI.S.CHANDRAMOHAN NAIR : MEMBER By the order dated 7.10.05 in OP.471/03, the CDRF, Thiruvananhtapuram has cancelled the proceeding of the opposite party to recover any amount from the complainant and his property along with further directions to pay Rs.10,000/- as compensation and Rs.1000/- as cost to be paid to the complainant. It is aggrieved by the said directions that the present appeal is filed by the opposite party calling for the interference of this Commission as to the sustainability of the order passed by the Forum below. 2. The case of the complainant bereft of unnecessary details is that he has applied for a loan from the opposite party for the running of his establishment named Swan rubber Works and the opposite party Corporation has granted him Rs.2,40,000/- in the year 1977. It is further stated by the complainant that though he made all efforts to run the establishment in a proper way, the unit became sick and the Industries Department of Kerala Government declared the unit as a sick unit and though he sought the help of the opposite party for financial assistance for reviving the unit, the opposite party did not extend any help. It is his further case that in 1989, without notice to the complainant, the opposite party conducted the auction sale of the factory equipments and other accessories attached to it which was valued for more than 20 lakhs. As his prayers for settling the account with the opposite party became futile, he filed the complaint before the Forum praying for directions to the opposite party to pay him Rs.5 lakhs as compensation for the deficiency in service along with cost. 3. Resisting the complaint, the opposite party filed version contending that the complaint was not maintainable and that the complainant was a defaulter in repayment of the loan and it was after several notices that the opposite party initiated revenue recovery action against the complainant. The opposite party further submitted that when the movable properties were sold in auction only an amount of Rs.25000/- was received and it was for the balance amount that they were trying to collect from the complainant. It is also their case that 2 OPs were filed against the opposite parties before the Hon’ble High Court and both OPs were disposed of in favour of the Corporation and the complaint was filed without disclosing those facts and that it was not true that the property valued more than 20 lakhs. Contending that there was no deficiency in service the opposite party prayed for the dismissal of the complaint with cost. The evidence consisted of the oral testimony of the complainant as PW1 and a witness as PW2. The opposite party examined the Assistant Manager, Legal as DW1. On the side of the opposite party Exts. D1 to D7 were marked. It was on an appreciation of the documents and other facts and circumstances of the case that the impugned order was .passed by the Forum below allowing the complaint to a great extent. We heard the representative of the appellant/opposite party and the counsel for the respondent/complainant. The representative who is the Legal Officer of the appellant vehemently argued before us that the Forum has gone wrong in directing the opposite party to cancel the proceedings initiated by the Corporation for recovery of the balance amount from the complainant/respondent. The imposition of compensation of Rs.10000/- and cost of Rs.1000/- are also challenged by him. It is his very case that as per article 112 of the limitation Act 1963, the Corporation is entitled for the period of 30 years for initiating proceedings for the recovery of the amount from the defaulter. He has also argued before us that though the complainant has taken a loan of Rs.2,40,000/- only an amount Rs.25000/- was recovered in auction and the balance amount as on 31.7.05 is Rs.54,62,793/- and the complainant is liable to pay interest on the above said amount from the above said date till the date of payment. He has given much emphasis on the point that when revenue recovery proceedings are initiated, it is for the revenue recovery authorities to collect the amount and remit to the Corporation. He has argued that Ext.D6 was not properly appreciated by the Forum below and canvassed for the position that there was no deficiency in service on the part of the opposite parties and the Forum ought to have dismissed the complaint in toto. On the other hand the learned counsel for the respondent/complainant supported the findings and conclusions of the Forum below and argued that the present appeal is only to harass the respondent/complainant for the misfortune of having taken a loan of Rs.2,40,000/- from the Corporation and was to suffer the loss of nearly 20 lakhs, as at the time of auction the unit valued more than 20 lakhs. He has also canvassed for the position that the appellant/opposite party was negligent in taking timely action for the recovery of money and invited our attention to the fact that the opposite party/appellant had taken more than 10 years to initiate recovery proceedings to collect the balance amount from the complainant. He has vehemently attacked Ext.D7 wherein the opposite party has calculated the dues to be Rs.54,62,793. Contending that there is no irregularity or illegality in the order, the learned counsel prayed for dismissal of the appeal. On hearing the parties and on a perusal of the documents we find that it is the admitted case of both the parties that the complainant is given a loan of Rs.2,40,000/- as in back in 1977. The appellant would argue that the complainant had to repay the amount in 13 half yearly installments beginning from 10.11.79 and ending on 10.11.1985 and also that the complainant was a chronic defaulter in repayments. He has submitted before us that the Corporation issued revenue recovery requisition to the District Collector on 2.6.1984 and on 11.4.91 an amount of Rs.25000/- was collected in public auction. It is also the case of the appellant that by way of Ext.D7 the balance amount has gone upto Rs.54,62,793/-. On a perusal of the records we find that Ext.D3 is the revenue recovery requisition sent to the District Collector. It is also noted that as per Ext.D4 the amount is 2,89,223 and paise 46. Ext.D6 is dated 30.4.91on which the appellant has placed much reliance. It is noted that the Technical Officer of the opposite party has valued the attached articles for an amount of Rs.1,00,700/-. But the Deputy Tahasildar has reported that only Rs.25000/- could be obtained in public auction. The respondent/complainant has stated that it was without sufficient notice to him that the articles were sold in auction and that there was deficiency in service on the part of the opposite party in doing so. He has also argued that after 30.4.91, the opposite party has not initiated any action for recovering any money from the respondent/complainant. It is also noted that it is after the lapse of 14 years and that too after filing the complaint before the Forum that the opposite party has filed the statement showing that the complainant is liable to pay Rs.54,62,793/- as per Ext.D7. The appellant would argue that they are empowered to take action for the realisation of the amount anytime within 30 years as article 112 of the Limitation Act gives them the power to do so. Here, in the instant case it is to be noted that if at all such power is there for the opposite party, it is exercised as back on 2.6.84 and till 11.4.91 they were not bothered about the recovery of the money. The appellant would take a contention that after RR proceedings are requested to be initiated against the complainant through the District Collector, they have no role in the collection of the amount. It is also to be found that the Deputy Tahasildar vide his letter dated 30.4.91 has informed the District Manager, Kerala Financial Corporation, Sastamangalam, Trivandrum that only an amount of Rs.25000/- could be obtained. It is interesting to observe that after the said date no action has been taken by the opposite party for realising any amount from the complainant/respondent. It is definitely deficiency in service in not taking timely action against the defaulters in time. It is not enough to say that they have enough time before them for taking any action. It is not justifiable to allow the appellant/opposite party to take any such time as they desire or wish for collecting the arrears from the defaulters. As per clause 23(a) of the Agreement produced by the opposite party as Ext.D2, the opposite party is entitled to enforce its security upon the happening of any installment of the principal remaining unpaid for a period of 6 months after due date for payment there of has expired. The appellant’s main case is default in payment by the respondent/complainant/loanee and it is interesting to note that it was even without sending a notice that the opposite party has initiated revenue recovery proceedings in 1984(Ext.D3) for realization of the entire amount of Rs.2,40,000/-. It is also to be found that the 1st installment was due on 10.11.79 and by 1984 so many installment became due and the opposite party was keeping silent even when they were having the powers under clause 23(a). It is to be presumed that the opposite party was closing their eyes and infact they were allowing the complainant not to pay the dues on time. The complainant has a case that his unit became sick and the opposite party did nothing to save the unit. However there is no documentary evidence to support the claim of the complainant that his unit was sick. The appellant argued before us that since the amount of Rs.25,000/- collected by the revenue authorities was not sufficient, revenue recovery proceedings were continued against the respondent and it was consequent to the stay obtained by the co-obligant that the proceedings were stopped. But it is also submitted that the Hon’ble High Court had disposed of the OPs in favour of the appellant. However apart from the statements in the version and submissions before us, no document is produced by the appellant to support such a case. Again as per Ext.D5 dtd.2.6.84 the amount due is only 2,89,223.46 and as per Ext.D6, it can be found that the Technical Officer has valued the attached articles at 1,00,700. We find that the auction for selling the properties worth Rs.1,00,700/- for a sum of Rs.25000/- is not justifiable and we find some unholy circumstances in the said auction especially in the light of the fact that the opposite party failed to produce the documents as directed by the Forum below. Even though the documents were said to be with the revenue authorities, the opposite party could have obtained the same and produced before the Forum to substantiate their contentions. In the aforesaid circumstances we find that the Forum below has rightly observed that the unnecessary delay caused in the recovery of the amount has defeated the very intention of the legislature with regard to revenue recovery proceedings. In the instant case if timely action was initiated, the complainant/respondent would not have been put to the hardship of facing the direction to pay Rs.54,62,793/- as on 31.7.2005 in the place of Rs.2,40,000/-. However it is to be found that the appellant has not produced any document to substantiate the case that the appellant is entitled and empowered to collect the amount anytime in 30 years as per article 112 of the Limitation Act. It is also found that after 30.4.91 on which date the Deputy Tahasildar has initiated the opposite party that only an amount of Rs.25,000/- could be realized, no action is seen taken by the appellant for realizing any amount from the complainant and in such a situation it is our impeccable conclusion that the appellant has committed great deficiency of service and the Forum below has rightly allowed the complaint after proper appreciation of the entire facts and circumstances of the case and in the said circumstances, we see no grounds to interfere with the order passed by the Forum below. In the result the appeal is dismissed and the order dated 7.10.05 in OP.471/03 of CDRF Thiruvananthapuram is confirmed. Relying on the ratio in Lucknow Development Authority’s are (Lucknow Development Authority vs.M.K.Gupta III 1993 CPJ 7 Supreme Court-1994 I SCC 243) we make it clear that if the opposite party has suffered any loss due to the inaction on the part of its officials at the appropriate time as per the provision in the agreement, the opposite party is free to realise the same from the officials if they choose to do so. In the nature and circumstances of the present appeal, the parties are directed to suffer their respective costs. SRI.S.CHANDRAMOHAN NAIR : MEMBER SMT.VALSALA SARANGADHARAN : MEMBER
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