BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION: HYDERABAD.

F.A.No.524/2013 against C.C.No.05/2013, District Forum-I, Chittoor.

Between:

The Chief Manager, State Bank of

India, Main Branch, Prakasam High Road,

Chittoor.                                                            ..Appellant/OP

                        AND

K.Munirathnam s/o.K.Narasimhulu

Aged 58 years, Occ:

Retd.Employee, R/at D.No.15-1215,

Vinayakapuram, Chittoor                                      Respondent/

                                                                        Complainant

Counsel for the  Appellant : M/s.VamarajuSrikrishnudu

Counsel for the Respondent:(M/s I.V.Siddhivardhana)

F.A.No.835/2013 against C.C.No.05/2013, District Forum-I, Chittoor.

Between:

K.Munirathnam s/o.K.Narasimhulu

Aged 58 years,

Occ:Retd.Employee, R/at D.No.15-1215,

Vinayakapuram, Chittoor.                                     ..Appellant/

                                                                        Complainant

The Chief General Manager, State Bank of

India, Main Branch, Prakasam High Road,

Chittoor.                                                            Respondent/

                                                                        Opp.party                 

Counsel for the  Appellant : M/s I.V.Siddivardhana

Counsel for the Respondent: M/s.VamarajuSrikrishnudu

QUORUM: HON’BLE SRI JUSTICE GOPALA KRISHNA TAMADA, PRESIDENT.

AND

SRI R.LAKSHMI NARASHIMHA RAO, HON’BLE MEMBER.

THURSDAY, THE SEVENTEENTH DAY OF APRIL,

TWO THOUSAND FOURTEEN

Order (As per Sri R.LakshmiNarasimha Rao, Hon’ble Member).

***

1.     The complainant filed the appeal F.A.No.835 of 2013 and the opposite party has filed appeal in F.A.No. 524 of 2013.  Both appeals are directed against the same order passed by the District Forum. The parties are referred to, as they are referred in the complaint.

2.    The brief facts of the complaint are that the complainant’s wife on 20.01.2005 availed  house loan of Rs.5,74,000/- to be repaid with interest at 8% p.a. and she executed registered mortgage deed mortgaging her plot. The complainant stood as guarantor to the house loan availed by his wife. The repayment of loan was commencing after completion of construction of 18 months and after disbursement whichever is earlier. As the sanctioned loan was insufficient, the opposite party again sanctioned a loan of Rs.1,50,000/- in addition to the loan of Rs.5,74,000/-  and in total a loan amount of Rs.7,24,000/- was repayable in 120 equal instalments.  The complainant without committing any default was regularly paying the E.M.I. amount towards discharge of loan.

3.     The complainant on 12.11.2010, obtained personal loan of Rs.7,00,000/- from the opposite party bank towards marriage expenses of his daughter. The loan amount is repayable within 60 months @ Rs.16,000/- per month in equal monthly instalments and the same are to be deducted from his salary. It is the case of the complainant that without his knowledge and consent, the bank has transferred Rs.1,50,000/- from the personal loan account to the housing loan account of his wife and therefore he had obtained loan from third parties apart from the personal loan to perform his daughter’s marriage and the outstanding debt payable to his creditors is Rs.15,00,000/.

4.     The complainant retired from his service on 30.06.2012 and his retiral benefits of Rs.16,63,084/- paid by his department have been deposited in his S.B. account on 05.10.2012 with the opposite party bank. Out of the amount, on 06.10.2012, the opposite party bank has transferred an amount of Rs.5,63,063/- to his personal loan account from the S.B. account of complainant without knowledge and consent of the complainant and closed the  personal loan account. On 06.10.2012,  the opposite party bank seized Rs.6,00,000/- in the complainant’s S.B. account. On account of seizure of Rs.6,00,000/- and deduction of Rs.1,50,000/-, the complainant could not discharge the debts borrowed from the third parties and also he sustained a loss of interest at 20% p.a. on Rs.6,00,000/-.  The opposite party bank has been deducting Rs.10,000/- per month from the complainant’s pension amount towards house loan though the complainant is having facility to discharge the loans in equal monthly instalments and still has time to repay instalments and also he will be getting pension of Rs.35,000/- per month.

5.     On 20.12.2012, the complainant has got issued notice to the opposite party bank calling upon the opposite party to redeposit the amount of Rs.13,13,063/- with interest at 24% p.a. into his S.B. account within a week of the receipt of the notice.  The opposite party having received the notice has not complied with the demand of the complainant. Alleging that transferring of Rs.1,50,000/- from personal loan account to house loan and transferring of Rs.5,63,063/- from S.B. account of complainant to his personal loan account  and seizure of Rs.6,00,000/- without his consent and knowledge amounts to deficiency in service on the part of opposite party, the complainant filed the complaint. 

6.     The complainant sought for direction to the opposite party to redeposit the amount of Rs.1,50,000/- transferred to the house loan account from the personal loan account of the complainant andRs.5,63,063/- transferred to the personal loan account on 06.10.2012 from the retirement benefits deposited in complainant’s S.B. account in opposite party bank and Rs.6,00,000/- seized on 06.10.2012 by the opposite party bank from the complainant’s S.B. account and total a sum of Rs.13,13,063/- with interest at 24% p.a. from the date of transfer till the date of redeposit into the complainant’s S.B. account and to pay a sum of Rs.6,00,000/- as damages towards mental agony and to pay costs of the complaint.

7.     The opposite party filed written version and admitted the house loan availed by the complainant’s wife for Rs.5,74,000/- by executing registered mortgage deed and also admitted the personal loan for Rs.7,00,000/- availed by the complainant to perform the marriage of his daughter. The opposite party further admitted that the retirement benefits of Rs.16,63,084/- was deposited in the complainant’s S.B. account in opposite party’s bank and the opposite party transferred a sum of Rs.5,63,063/- to his personal loan account on 06.10.2012 and closed the personal account and denied that the transfer of the amount is without his consent and knowledge of the complainant.

8.     On 07.02.2008, the complainant availed education loan of Rs.3,00,000/- to meet the educational expenses of his daughter on personal loan of Rs.7,00,000/- the complainant repaid the entire loan of Rs.3,50,000/- availed on 10.09.2008. As on today the outstanding loans are the housing loan account of Rs.4,76,281.47 Ps. + interest and educational loan account of Rs.2,76,622/- + interest. The complainant as a guardian of the student was to pay the education loan amount repayable in 36 monthly instalments after commencement of repayment schedule  from June, 2012 at Rs.12,929/- per month. As per the agreed terms, the guardian/ student shall pay the interest during moratorium period as per letter of authorization dt: 07.02.2008 issued by the complainant.

9.     The complainant or his daughter has not informed anything about the completion of the course or about securing of employment. The B.Tech.course of the student is completed by May, 2011 and in view of the clear violation of the agreed terms and conditions of educational loan, the entire outstanding loan of education shall become payable at once. The terms and conditions of personal loan agreement dt: 09.11.2010 i.e. in case of default in payment of any one of the loan amounts by the complainant either as a borrower/ co-obligant or guarantor, the bank has got every right to exercise its Right of General Lien and appropriate the monies of the complainant to the loan out standings.

10.    The complainant availed several personal loan accounts and he is a chronic defaulter in paying the monthly instalments. The complainant and his employer submitted irrevocable letter of authority to the opposite party bank clearly stating that in case of retirement, the employer of the complainant is authorized to deduct and pay to the outstanding loan account together with interest and costs and any money payable by the borrower as may be due to the bank from out of the terminal benefits like Provident Fund, Gratuity etc.

11.    The complainant and his wife are chronic defaulters in paying the house loan and educational loan. The holding of Rs.6,00,000/- in the complainant’s S.B. account is towards repayment of the above two loan accounts is valid and the opposite party bank has every right to exercise the right of General Lien for the repayment of the above said loan amounts. The opposite party is not liable to pay the damages to the complainant for mental agony. There is no deficiency in service on the part of opposite party bank and the complainant is not entitled to any of the reliefs as prayed for and the complaint for redeposit of Rs.1,50,000/- is barred by limitation.  Civil court alone has got jurisdiction to decide the subject matter of the case.  Hence the opposite party prayed for dismissal of the complaint.

12.    The complainant in support of his case filed his affidavit and relied on Exs.A1 to A7  and on behalf of the opposite party, its Manager, G. Sreenivas, filed his affidavit,  and marked Exs.B1 to B16.

13.    The District Forum allowed the complaint on the premise that the appellant-bank without any cause did transfer the amount of Rs.6,00,000/- and it had retained the amount for a period of  7 months and the District Forum observed that the respondent had to pay interest on his housing loan amount and educational loan amount and directed the opposite party bank to pay a sum of Rs.50,000/- (Rupees fifty thousand only) to the complainant towards deficiency in service and to pay Rs.1,000/- (Rupees one thousand only) towards costs of the complaint within one month from the date of receipt of this order.

14.    Feeling aggrieved by the said order, the opposite party bank preferred F.A.No.524/2013 and also filed written arguments.  The complainant preferred F.A.No.835/2013.  The opposite party contended interalia that the District Forum despite holding the opposite party has right of general lien proceeded to award a sum of Rs.50,000/- towards deficiency in service on the part of the appellant-bank. Further, the opposite party contended that the complainant  suppressed the fact that he availed loan under six loan accounts from the opposite party-bank.  The complainant contended that the District Forum failed to consider that principle of promissory estoppels would be clearly applicable in the present case and the respondent having already given a period of 10 years for repayment of loan is now stopped from claiming the amount at any time before completion of the original loan period and even if there is default, the same cannot be pressed into issue now at such a belated stage and prayed to redeposit the transferred amounts and seized amounts.

15.            The point for consideration is whether the appellant rendered deficient service in retaining the amount of Rs.6,00,000/-?

16.            The facts which do not require any discussion in view of their admitted position are that the complainant’s wife availed housing loan to an extent of Rs.7,24,000/- from the opposite party-bank and the complainant stood as guarantor for repayment of the loan amount. The complainant’s wife mortgaged her immovable property to the appellant-bank for the purpose of loan. The complainant availed personal loan of Rs.7,00,000/- on 12.11.2010 from the opposite party –bank and it was agreed that the loan installments @Rs.16,000/- were to be adjusted every month from the salary of the complainant over a period of 60 months.

17.            On the same day,  the loan was sanctioned , i.e. 12.11.2010,  the opposite party transferred a sum of Rs.1,50,000/-  from out of the loan amount of Rs.7,00,000/-to the housing loan account of the complainant’s wife. The complainant retired from service on 30.06.2012.  His retiring   benefits to the extent of Rs.16,63,084/- in the form of cheque was deposited with the saving bank account maintained with the appellant-bank and from out of the said amount,  the opposite party adjusted an amount of Rs.5,63,063/- towards the amount due pertaining to the personal loan account of the complainant on 06.10.2012 and an amount of Rs.6,00,000/- to the housing loan account of the complainant’s wife.

18.            The complainant questioned propriety of deducting the amount of Rs.5,63,063/- and Rs.6,00,000/- from out of his retiring benefits and adjustment of the amount to the outstanding dues of his personal loan account and his wife’s housing loan account without there being any consent obtained from his for the said purpose.

19.            The complainant availed loan under six loan accounts from the opposite party-bank. A perusal of the statements of account would show that the complainant is chronic defaulter and the terms of housing loan agreement and the personal loan agreement as well provide for liability of the complainant to pay the entire outstanding loan in case the complainant or his wife committed default in paying the installments as per the terms and conditions stipulated therein.

20.            The amount sought to be adjusted to the outstanding loan amounts under personal loan account of the complainant and housing loan account of his wife is the complainant’s retirement benefits.  The complainant deposited the cheque for Rs.16,63,084/- drawn on SBI with his saving bank account. The learned counsel for the opposite party  contended that opposite party can exercise its power of general lien and transfer the amount deposited with the saving bank account of the complainant to the other loan accounts of the complainant and his wife.

21.            In this connection the role of the bank is virtually that of an agent of the salary disbursing officer and it is therefore functionally different from the banks performing the usual banking activities. The appropriation of amounts lying with it as deposited retiring benefits cannot bypass the provisions of Section 60 CPC which itself regulates even the judicial process from entirely attaching the salary. It is naïve therefore for the bank to contend that its general lien extends even to such amounts which it had come to hold as either agent of the disbursing officer or as trustee of the account holder. 

22.            Even otherwise, the appellant kept on withholding the amount of Rs.6,00,000/- from the amount deposited as retiring benefits of the complainant, for a period of 7 months without taking steps for  transferring the amount to adjust towards the outstanding due pertaining to the housing loan account and personal loan account. The complainant suffered loss of interest on the amount and the interest accrued on the loan amounts under the housing loan account and personal loan account.

23.            The inaction on the part of the opposite party for such considerable period led to loss of interest on the amount withheld and there is no explanation forthcoming in this regard from the opposite party-bank which leads us to the conclusion that there is deficiency in service on the part of the opposite party-bank.

24.            Coming to the contention of the learned counsel for the complainant that the amount of Rs.6 lakhs so deducted and subsequently transferred to the housing loan account of the complainant’s wife and the personal loan of the complainant, we, in the aforementioned paras held that the opposite party  had transferred the amount in violation of the provisions of Section 60 CPC.  However, the complainant or his wife had not paid the outstanding due in respect of the aforementioned loan accounts.  It is not the case of the complainant or his wife that they had not been irregular in making payment of the loan instalments or that there was no amount due from them towards both the loan accounts.  As such, we do not subscribe to the version of the learned counsel for the complainant that the amount so deducted and transferred towards adjustment of the personal loan account and housing loan account of the complainant and his wife. We do not find any infirmity in the findings recorded by the District Forum and hold the appeals devoid of any merits.

25.            In the result, both the appeals are dismissed confirming the order of the District Forum. There shall be no separate order as to costs. Time for compliance four weeks.

                                                                        Sd/-PRESIDENT.

                                                                        Sd/MEMBER.

JM                                                                     Dt.17-4-2014.