DISTRICT CONSUMER DISPUTES REDRESSAL FORUM PALAKKAD

Dated this the  31^st  day of  January 2013

Present : Smt.Seena H, President

            : Smt. Preetha.G. Nair, Member

            : Smt. Bhanumathi.A.K, Member           Date of filing:   20/10/2011

(C.C.No.178/2011)

1.A.Farook

   S/o.Abdul Razak,

  15/589, Sanjay Nagar,

   Kunnathurmedu, Palakkad – 13                      -       

(By Adv.K.P.Nouphal)

2.Iqbal,

   S/o.abdul Razak,

  15/589, Sanjay Nagar,

   Kunnathurmedu,Palakkad – 13              -         

(By Adv.K.P.Nouphal)

3.Mrs.Hathoon,

   W/o.Farook, 1/313,

   Rose Land,

  Thannissery Post,

  Palakkad.                                          -        Complainants

  (By Adv.K.P.Nouphal)

                                                          V/s

1.Senior Branch Manager

   Syndicate Bank, 

   Melamury, Palakkad.                          

  (By Adv.M.Sugadha Kumar)          

2.The Manager,

    Syndicate Bank,

    Head Office, Post Box No.1,

    Manipal – 576 104

    Udupi District, Karnataka                            -        Opposite parties

  (By Adv.M.Sugadha Kumar)          

O R D E R

By Smt.SEENA.H, PRESIDENT

Complaint in nutshell is as follows:

Complainants No.1 & 2 availed an over draft facility from opposite party No.1 Bank for which complainant No.3 stood as a guarantor by  mortgaging the original deed of No.2108/2004, Sub Registrar Office, Koduvayur alongwith  other documents. Complainants approached the 1^st opposite party for clearing the outstanding dues in the month of June 2011. Evenafter  several demands also opposite party No.1 was reluctant to close the account and give back the original title deeds. On 11/08/2011 it was informed  by  the bank that the title deeds were misplaced and it will be traced out within a week. There after there  was no response from 1^st opposite party. Complainants caused a lawyer notice dated 26/08/11 demanding closing of the loan and return of original  title deeds. Reply notice was sent admitting loss/misplace of the same from the custody of Bank. It was also stated that they are ready to replace the documents by certified copies. According to the complainants certified copies will never serve  the purpose of the original. Further if the lost documents  are misused, complainant will be put into hardship. The misplacement / loss of valuable documents and non return of the same is a clear deficiency in service  on the part of the opposite parties.  The property covered by the document fetch more than Rupees 50 lakhs and it will fetch only half of the value in the absence of original documents. Hence the complainant prays for an order directing the opposite parties to pay Rs.20,00,000/- as compensation and return their original title deeds or on  their failure bear the expenses of a certified copy with proper indemnity bond and cost of the proceedings.

Opposite parties filed version contending the following:

That complainants  1 & 2  have availed over draft facility for an amount of Rs.3 lakh for which complainant No.3  stood as guarantor by mortgaging his original title deed is an admitted fact. Further contented that the complaint is not maintainable before the Forum. In view of the pendency of the loan complainants has no right to approach the Forum for release of Security. Opposite parties have replied to the complaint that the original deed is found to be misplaced / lost and efforts are made to trace out the same. Also assured in case of loss to make available a certified copy at the cost of opposite parties. Further denied the say of the complainant that the property fetch      Rs.50 lakhs.  There is no deficiency in service on the part of opposite parties and opposite parties are ready to handover a certified copy of the original title deed.

The evidence adduced by the parties consists of the chief affidavit of the parties, Ext.A1 to Ext.A4,  Ext.B1 to B7. Opposite party was cross examined as   DW1. Complainant No.1 cross examined as PW1, witnesses on the part of complainant examined as PW2 & PW3.

During the pendency of the proceedings application was filed for return of title deeds. The same was allowed on  condition of deposit  of the balance dues as on date of application before the Forum. Accordingly  complainants deposited Rs.3,16,883/- before the Forum. Documents not returned by opposite parties.

Issues that arise for consideration :

1.    Whether the complaint is maintainable before Forum ?

2.    Whether there is any deficiency in service on the part of opposite parties ?

3.    If so, what is the relief and cost complainant is entitled to ?

Issue No.1

Opposite parties has contended that they have only a debtor creditor relationship with complainants No. 1 & No.2 &  complainant No.3 being the guarantor there is no privity of contract. Hence complaint is  not maintainable before the Forum. We do not find any substance in the said argument. Since  the definition of service under section 2(1)(o)  specifically includes banking service and deficiency in the said sector definitely will come under the purview of Consumer Protection Act. Moreover complainant No.3 being the guarantor is under obligation to discharge the liability of complainants No.1 & 2 on default. Bank has every right to proceed against the guarantor. Hence the contention of opposite parties that there is no privity of contract with complainant No.3   is of no substance. Issue No.1 found in favour of the complainant.

Issue No.2 & 3

Availing of over draft facility by complainant No.1 &  2 and deposit of title deeds by the guarantor complainant No.3 is an admitted fact. Though not specifically   stated, loss of original title deeds from the custody of the bank seems to be an admitted fact.Ext.A2 reply notice clearly states that the original deed No.2108/2004 of Koduvayur Sub Registrar Office is found to be misplaced / lost and efforts are made to trace out the same. We find that the same has not been traced out. Complainant No.3 has entrusted the documents in the safe custody of the bank.  The loss of the same from the custody of the bank is clear negligence and deficiency in service on their part.

Next question is with regard to the compensation aspect. It is true that the certified copies will never  be a substitute for the original document. Certainly complainant will  suffer hardship inorder to convince the intended   purchases in case of sale of the property. Being a Bank, opposite party is well aware of the difficulty of a customer approaching the bank for availing loan with a certified copy. In order to obtain an original documents, complainant has the only option to transfer it to somebody and retransfer the same in the complainant’s name which will incur a considerable amount as per Govt.norms. Opposite parties have furnished Ext.B1, gazette publication showing the fair value of the land. Property  is of extent 6 ½  cent is borne out by evidence. PW2 deposed that it includes a house of 1650 Sq.feet. Photograph of the same produced. Even though while cross examination PW2 stated that he has not gone through any of the documents of the party, no contradictory  evidence to show that there is no house in the plot.

Considering all these aspects, we quantify  an amount of Rs.1 lakh (Rupees One lakh only) as compensation payable to complainant No.3. In the result, complaint partly allowed and we order the following.

1. Opposite parties are directed to hand over certified copy of the documents to complainant No.3 with proper endorsement showing loss of original title deeds.
2. Pay complainant No.3 an amount of Rs.1,00,000/- (Rupees One lakh only) as compensation

3.    Pay Rs.1,000/- (Rupees One thousand only) as cost of the proceedings.

4.    Opposite parties are at liberty to release the amount deposited by the complainant, deducting the ordered amount.

Order shall be complied within one month from the date of receipt of order, failing which the complainant is entitled for 9% interest per annum for the whole amount from the date of order, till realization.

Pronounced in the open court on this the  31^st  day of January 2013

   Sd/-

Seena H

President

    Sd/-

Preetha G Nair

Member

    Sd/-

Bhanumathi.A.K.

Member

Exhibits marked on the side of the complainant

Ext.A1 series – Lawyer notice dated 26/8/11 issued by complainant to opposite

                     parties  alongwith postal receipt and acknowledgment card

Ext.A2 –  Reply  notice dated 13/9/11 by opposite party

Ext.A3 series  – Photos

Ext.A4 – Notice issued to M/s.New Roja Stores, Vadakkanthara dated 17/3/12

             by the SBI, Vadakkanthara branch

Exhibits marked on the side of the Opposite party

Ext.B1 – True copy of Gazette dated 6/3/2010

Ext.B2 – Certified copy of title deed No.2018/04 of SRO Koduvayur

Ext.B3 – Proforma of Title Investigation Report in Annexure B of SBI

Ext.B4 - Letter sent by 3^rd complainant to Hon’be Governor, RBI New Delhi.

Ext.B5 - Copy of letter dated 27/7/12 sent by Palghat Chamber of Commerce to

            The GM, Syndicate Bank, Manipal.

Ext.B6 - Copy of letter dated 27/7/12 sent by Palghat Chamber of Commerce

             to the Banking Ombudsman, Thiruvananthapuram.

Ext.B7 – True copy of Statement of accounts from 1/4/06 to 12/3/12 issued by

             opposite party

Witness examined on the side of the complainant

PW1 – Farook.A

PW2 – Kaja Hussain

PW3 – Narayanan.K

Witness examined on the side of the opposite party

DW1 – M.Prabhakaran

Cost

Rs.1,000/- allowed as cost of the proceedings