DATE OF FILING: 02.02.2015
DATE OF DISPOSAL: 13.06.2017
Dr. N.Tuna Sahu, Presiding Member:
The complainant has filed this consumer dispute under Section 12 of the Consumer Protection Act 1986, alleging deficiency in banking service against the Opposite Party ( in short the O.P.) and for redressal of his grievance before this Forum.
2. The brief fact of the case of the complainant is that he being the guarantor of M/s Gayatri Traders bearing cash credit Account No.10859361568 closed his loan account on 6.2.2014 on payment of all outstanding amounts including simple and compound interests as per the rules and regulations of O.P. Bank. It is also stated in the complaint that on the very date his son got closer certificate from the concerned branch and submitted the same in the office of O.P. bank and asked for getting release of his security documents. It is further mentioned that the son of the complainant had pledged the documents of land and six LIC policy bonds before the loan branch as securities of the loan and on production of loan closure certificate he demanded before O.P. Bank to release the security documents. The dealing officer of O.P. Bank told to the son of the complainant to come on tomorrow to collect the security documents. Accordingly, the son of the complainant on the very next day went to the office of the O.P. and when asked for the security documents, the concerned officer told him that all land documents are with them but he was unable to trace out the LIC bonds. He again told him to ask another officer but he also failed to trace out the same. The son of the complainant again went to the loan branch and met with the Chief Manager and explained every detail thereof and on verification it was found that all documents were dispatched to the branch of O.P. Bank. The very next day the son of the complainant met with the officials of O.P. branch and asked for the security documents but that also did not serve any purpose and all went in vain. On 25.02.2014 the son of the complainant in writing complained the matter to the AGM of the O.P. Bank and also discussed the matter with him with the assurance to take necessary action to do the needful but did not give any reply in writing. It is also stated in the complaint that he explained the need of security document to the O.P. and also informed that he is planning to borrow an amount of Rs.8,00,000/- from other sources to meet the need of working capital for his business and requested to release the security documents but the O.P. did not give any heed to his grievances. The son of the complainant on several times went to the office of the O.P. and in the office of LIC for collecting the LIC bonds but failed to get anything. On receipt of some important information from LIC office on 14.03.2014, the son of the complainant finally went to meet the DGM of O.P. Bank on 27.04.2014 but failed to meet him and as per the advice of the personal secretary to DGM of O.P. Bank, the son of the complainant filed a complaint in writing to the DGM of O.P. Bank and he was informed to resolve his problem within 15 days. When the matter was not resolved by the O.P. even after written complaint, the complainant was forced to redress his grievance before the Banking Ombudsman at Bhubaneswar. However, the Banking Ombudsman also did not take any action against the O.P. Bank and rejected the complaint of the complainant as per the report of the O.P. Bank. The O.P. Bank when did not give any heed to the grievances of the complainant, he has filed this consumer complaint aggrieved by the actions of O. P. Bank with the prayer to direct the O.P. Bank:
(A) To pay interest on matured amount of Rs.80,850/- pertaining to policy No.580343572 which was matured on 19.02.2010 for the period 19.02.2010 to 14.03.2014 for non-collection of maturity amount and to pay interest @ 14.5% + 2%=16.5% instead of 6.5% amounts to Rs.73,779/- instead of Rs.24,179/- and to compensate the loss of Rs.49,600/- towards interest.
(B) To pay more compensation for delay in returning LIC bonds as per the SBI compensation policy instead of Rs.5000/- only towards the same.
(C ) To pay the complainant the cost of opportunity amounting to Rs.60,588/- towards loss of business from 6.2.2014 to 19.6.2014 as prayed in the complaint.
(D) To pay the amounts of money back policy bearing No.570006649 which were received in shape of cheque amounting to Rs.12,500/- each i.e. first one is from 28.05.2006 and second one is from 28.05.2009 along with up-to-date interest and to compensate loss of Rs.44,583/- with respect to first cheque received with effect from 5th May 2006 and compensate the loss of Rs.29,475/- with respect to second cheque from 28.5.2009 to till date including principal amounts as per the SBI compensation policy respectively.
( E ) To pay compensation of Rs.45,000/- towards mental agony for non-receipt of policy bonds in time and for harassment to run the office of O.P. time and again and Rs.10,000/- towards other expenses in the interest of justice.
3. On notice, the O.P. bank appeared in this Forum through learned counsel for O.P. Sri B. K. Mohanty, Advocate, Berhampur, on 8.2.2015 and filed his version of the case on 6.7.2016 and written argument on 6.10.2016. In the written version/argument it is stated that the averments made in the complaint petition are not all true and correct and the complainant is put to strict proof of such of those allegations which are not specifically admitted herein. It is also stated that the averments made in Para 1 & 2 are self explanatory and based on records and the complainant is put to strict proof of same. Similarly, it is also stated that the averments made in Para 3, 4, 5, 7, 8, 9 and 10 are not all true, correct and denied in toto by the O.P. and the complainant is put to strict proof of the same. It is humbly submitted that M/s Gayatri Traders, Sapuapalli was having a loan account with this O.P. bank. On request of the borrower, the bank closed the loan account and returned the security documents along with mortgaged land documents to the complainant. However, at that time the LIC policies which were assigned in favour of O.P. State Bank of India could not be located/ traced and the matter was taken up by this O.P. with the LIC authorities and duplicate policies were issued in favour of the policy holder at the earliest possible time. The delays in arranging duplicate policies were due to non availability of requisites form with LIC authorities. Subsequently the O.P. bank has been adequately compensated by paying Rs.24,179/- as interest on Rs.80,500/-, the maturity value of one LIC policy for the period 19.02.2010 i.e. the date of maturity to 12.03.2014 i.e. on the date of actual payment. It is also contended that the O.P. Bank has paid Rs.5,000/- vide banker’s cheque dated 26.6.2014 as compensation for the delay in LIC’s policies. Thus, the O.P. Bank has adequately compensated the complainant and they are not liable to pay anything more. It is further contended that this complainant earlier vide its complaint No.1131/2013-14 had approached the Banking Ombudsman for settlement of similar grievances as made in this petition. The O.P. intimated the steps taken by them for settlement of the grievance of the complainant and the quantum of compensation paid by it and after going through all documents filed by both parties, the Banking Ombudsman was pleased to reject the claim of the complainant on the ground of no deficiency in service. Hence, the complainant should file an appeal before the Deputy Governor of RBI as per Banking Ombudsman Scheme 2006 framed under Banking Regulation Act, 1949 and not before this Forum. Thus the present consumer case is barred by the doctrine of Res-judicata and not maintainable before this Hon’ble Forum. The learned counsel for the O.P. also stated that the claim made by the complainant is speculative and contradictory in nature and this O.P. is always ready and willing to settle the genuine grievances of its customers. It is further contended that the case involves complex question of facts evidence and law and it involves the interpretation of the contracts and other complex questions relating to the rights and liabilities of the banker and borrower. Hence, the Hon’ble Forum has no jurisdiction to admit this case and to try the same and the matter can be properly adjudicated in the Civil Court. Due to the above facts, this complaint does not come within the scope and ambit of Consumer Forum and there is no deficiency in service on part of the O.P. so, not liable to pay anything for mental agony, harassment and litigation charges. This complaint is also barred by limitation and the same is not properly valued. The complaint is not maintainable due to non-joinder and mis-joinder of party. It is, therefore, prayed by the O.P. bank that the Hon’ble Forum may graciously be pleased to take the above fact and circumstance into consideration and dismiss the complaint with exemplary cost in the interest of justice.
4. On the date of hearing of the consumer dispute we heard the arguments from the complainant as well as from learned counsel for O.P. Bank. We have also perused the complaint of the complainant, written arguments filed by both parties and verified the documents filed by the complainant marked as Annexure –1 to 20 placed on the case record. We have also considered the submissions made by both parties and perused the pleadings.
On perusal of the case record, it reveals that the present complainant is a guarantor of the M/s Gayatri Traders bearing cash credit account No.10859361568. The cash credit account of aforesaid M/s Gayatri Traders was closed on 06.02.2014 on payment of all dues as per banking rules as is evident from the letter of O.P. bank bearing No.BR/58/88 dated 06.02.2014. It is also seen from case record that the complainant on 7th February requested the O.P. bank to return six mortgaged LIC bonds on submission of loan closure certificate but the O.P. bank informed the complainant that the LIC bonds are misplaced somewhere in the bank. He again on 25.02.2014 complained the O.P. Bank in writing to return all the six LIC policy bonds and requested for payment of interest on blocked money in LIC bonds and loss of opportunity cost due to misplacement of LIC bonds of rupees Ten Lakhs which was mortgaged towards security of the loan. In the said letter the guarantor of the cash credit loan i.e. the present complainant had mentioned about misplacement of LIC bonds. The complainant again on 05/04/2014 informed the O.P. bank that he had mortgaged six LIC bonds out of which one of the bonds bearing No.580343572 got matured on February 2010 and encashed on 14th March 2014. The O.P. Bank in his letter No.SMECCC/2590 dated 14/03/2014 also intimated to the complainant regarding payment of proceeds of LIC Policy bearing No.580343572 amounting to Rs.80,850/- vide Banker’s Cheque bearing No.659258 dated 14.03.2014. It was also mentioned in the complaint dated 05/04/2014 that out of five LIC policies, two policies were money back policies on which LIC in return issued two cheques of Rs.12,500/- each and two cheques of Rs.20,000/- which were received by the O.P. Bank. However, as alleged by the complainant he has not received two cheques of Rs.12,500/- each from LIC since the amount was not reflected in the statement of accounts of M/s Gayatri Traders and nor deposited as in the form of STDR. When the complainant did not get any satisfactory reply from the O.P. bank, he also redressed his grievances before Banking Ombudsman on 21.04.2014 by filing a complaint bearing No.201314003001131 as is evident from Annexure-5 placed on the case record. On careful perusal of the case record it is also found that the O.P. Bank in his letter No.SMECCC/531 dated 16.06.2014 intimated to the complainant that the O.P. Bank has decided to pay interest on the proceeds of the matured LIC Policy No.580343572 from the date of cheque issued by LIC for the payment to the date of actual payment to the complainant i.e. from 19/02/2010 to 12/02/2010 at the rate applicable for STDR at the relevant time. In the said letter it was also informed to the complainant that the O.P. bank has calculated the interest at the rate of 6.5% per annum with quarterly rest as Rs.24,179/- for the period and a cheque for Rs.24,179/- bearing No.747839 dated 14/06/2014 drawn in favour of the complainant was enclosed with the letter and was requested to acknowledge the same. In para-3 of the said letter, it was also requested to make arrangement for receipt of five original security land documents standing in the name of Sri Hari Krishna Sabat and 3 numbers of LIC policies bearing No.570633472, 570340910 and 570006649 respectively standing in the name of Sri Hari Krishna Sabat that were mortgaged against cash credit loan of M/s Gayatri Traders. In the said letter vide para-4 it was also informed to the complainant that the duplicate policy bond of LIC Policy No.580667387 was yet to receive from the LIC office and for that they have taken up the matter with LIC Brahampur Branch -1. Similarly, in an another letter bearing No.SMECCC/530 dated 14/06/2014, the O.P. Bank also intimated to the complainant to take delivery of original land documents and LIC Policy No.570853537 standing in the name of Smt. Shehalata Sabat. It further reveals from the case record that the O.P. Bank has paid a sum of Rs.5,000/- vide bankers cheque No.747847 dated 26.06.2014 towards opportunity cost for delayed release of securities as per banks compensation policy as is evident from O.P. bank letter No.SMECCC/582 dated 26/006/2014. In the said letter it was also admitted by the O.P. bank regarding non-payment of two cheques of Rs.12,500/- each for which it was intimated to the complainant that the matter was taken up with LIC, Berhampur Branch for early settlement of the issue and it was also admitted to make payment of delayed period interest as per the compensation policy of the bank. Accordingly, as appraised by the O.P. Bank and on perusal of the documents filed by O.P. bank, the Banking Ombudsman rejected the complaint of the complainant vide his letter No.BO (BHU) NO.347/15045/2014-15 dated 23.07.2104.
5. Similarly, on careful verification of the pleadings of the O.P. Bank and on perusal of written argument, we ascertained that it is an admitted fact that the present complainant is a guarantor of M/s Gayatri Traders who was having a loan account as discussed above with O.P. bank. It is submitted that as per the request of the borrower the bank closed the loan account and the land documents which was mortgaged with the bank were returned to the depositor. However, the LIC policies which were assigned in favour of this O.P. bank could not be located /traced at that time. It was informed that the matter was taken up by the O.P. bank with LIC authorities and duplicate policies are to be issued in favour of the policy holders at the earliest possible time. The delay in arranging the duplicate policies were due to non-availability of the requisite form with LIC authorities. Subsequently, the LIC has adequately compensated by paying a sum of Rs.24,179/ as interest on Rs.80,860/- i.e. the maturity value of one LIC policy for the period 19.02.2010 i.e. the date of maturity to 12.03.2014 i.e. the date of actual payment. Similarly, the O.P. bank has paid Rs.5,000/- vide banker’s cheque dated 26.06.2014 as compensation for the delay in LIC’s polices. Thus, the O.P bank has adequately compensated the complainant and they are not liable to pay anything more.
6. From the above discussion it is clear that the Forum is to decide on the following disputed issues of the complaint in this consumer dispute:
- Whether complainant is entitled for interest more than 6.5% P.A on the matured amount of Rs.80,850/- pertaining to policy No.580343572 for the period19.02.2010 to 14.03.2014 for non-collection of maturity amount which was matured on 19.02.2010?
- Whether the complainant is entitled for more compensation for delay in returning LIC bonds as per the SBI compensation policy instead of Rs.5,000/- as already paid by the O.P. Bank?
- Whether the complainant is entitled for cost of opportunity amounting to Rs.60,588/- towards loss of business from 06.02.2014 to 19.06.2014 as prayed in the complaint.
- Whether the complainant is entitled for the amount of two cheques of Rs.12,500/- each received from LIC under money back policy in LIC policy No.570006649 which was not credited to the account of the complainant and the up to date interest thereof?
7. With regard to first issue above, we would like to state that it is an admitted fact that the policy bearing No.580343572 of the complainant was matured on 19.02.2010 and the maturity amount under the said policy is Rs.80,850/-. As per the letter bearing No.SMECCC/531 dated 14/06/2014 where it was intimated to the complainant to pay interest on the proceeds of the LIC policy from the date of cheque issued by the LIC for the payment to the date of actual payment to the complainant i.e. from 19.02.2010 to 12.02.2014 at the rate applicable STDR at the relevant time. It is also an admitted fact that the complainant has received a sum of Rs.24,179/- through cheque No.747839 dated 14.06.2014 towards interest at the rate of 6.5% per annum for the aforesaid period but as contended by the complainant he is entitled for interest as applicable to the loan account plus extra 2% as per the banks compensation policy. In this case the O.P. Bank has already paid a sum of Rs. 24,179/- towards interest for the period 19.02.2010 to 14.06.2014 at the rate 6.5% per annum but we don’t feel that at the relevant point of time the rate of interest was 6.5% interest. So the O.P. Bank is liable to pay the interest as applicable to the loan account of the complainant at that relevant point of time. As per the compensation policy of SBI placed in the case record, the complainant is entitled for interest at the rate applicable for term deposit for the respective period of delay, where the delay is beyond 14 days and in case of extraordinary delay i.e. delays exceeding 90 days, interest will be paid at the rate of 2% above the corresponding term deposit rate. However, in this case the bank has collected interest from the complainant as per rate of interest as applicable to the loan account of the complainant. According to the foregoing discussion and as per the letter dated 14/06/2014 as discussed above, in our considered view, the complainant is entitled for the interest at the rate as applicable to the loan account along with extra 2% as per the banks compensation policy instead of interest @6.5% since the O.P. bank has collected interest from the complainant as per the rate of interest as applicable to the loan account of the complainant. Therefore, the O.P. Bank is liable to pay interest as per the rate of interest as applicable to loan account of the complainant on the amount of Rs.80,850/- for the period 19.02.2010 to 14.06.2014 plus extra 2% as per the bank compensation policy. Hence, the O.P. Bank is liable to pay interest to the complainant for the aforesaid period as applicable to loan account of the complainant at that point of time plus extra 2% for delayed collection instead of 6.5% as has already been paid after proper calculation and by making deductions of the amount of Rs.24,179/- as has already been paid to the complainant.
8. As far as the second point is concerned regarding claim of compensation for delay in returning security documents like original land documents and LIC bonds, we would like to say that on perusal of the case record we found that the complainant closed his loan account on 06.02.2014 and requested the O.P Bank to return the original land documents and LIC bonds on 25.02.2014 and on 05.4.2014 respectively. In response to his request, the O.P. Bank wrote a letter to the complainant regarding return of the original land documents and LIC policies on 14.06.2014 as is evident from Annexure-6 placed on the case record. In the said letter it was also mentioned about non-issuance of duplicate bond of LIC policy bearing No.580667387 which was not made available to the complainant at that point of time. From this discussion, it reveals that the O.P. Bank after elapse of about four months wrote a letter to return the original land documents and LIC policies and admitted for the aforesaid delay period and has also paid a sum of Rs.5,000/- towards compensation as per SBI compensation policy as contended by the O.P. Bank. However, as per the contention of the complainant, he is entitled for more compensation as per the compensation policy devised by the SBI placed on the case record as Annexure-13. On perusal of the SBI compensation policy vide lenders liability: commitments to borrowers clause, it states that in the event of loss of title deeds to mortgaged property at the hands of the Banks, the compensation will cover out of pocket expenses for obtaining duplicate documents plus a lump sum amount as decided by the Bank in the following manner:
i) The bank would pay the compensation for delay in return of securities/documents /title deeds to the mortgaged property beyond 15 days of repayment of all dues agreed to or contracted, subject to above conditions, @ Rs.100/- per day subject to maximum Rs.5000/- to the borrower.
In the instant case, the delay was more than 15 day since the complainant closed the account on 06.02.2014 and the O.P. Bank intimated him to take bank the original land documents and LIC policy bonds on 14/06/2014 which is beyond four months period of time. Accordingly, the complainant is entitled to compensation for delay @Rs.100/- per day subject to maximum of Rs.5,000/- as per the banking compensation policy. On perusal of the case record, as admitted by the complainant, he has already received Rs.5,000/- from O.P bank as compensation towards delay for return of original land documents and LIC policy bonds, consequently the complainant is no more entitled to any further compensation in this case. We are, therefore, unable to award any further compensation violating the banking compensation policy.
9. With regard to third point as made above, we would like to discuss that in this case the complainant has claimed a sum of Rs. 60,588/- towards cost of opportunity and loss of business from 06.02.2014 to 19.06.2014. In this context, it would be relevant to point out that as admitted by the O.P. bank in their letter No.SMECCC/582 dated 26/06/2014, it is clear that the O.P. Bank has already paid Rs.5,000/- to the complainant towards opportunity cost for delayed release of securities as per the bank compensation policy vide cheque No.747847 dated 26/06/2014 which is not in dispute. However, the claim made by the complainant of Rs.60,588/- towards cost of opportunity and loss of business appears to be speculative without justification. In our considered view, the complainant’s claim for Rs.60,588/- appears to be unjust enrichment and consumer Forum can’t award to compensate speculative loss of the complainant. In our view the award of consumer court is not a jack pot or a lottery. The contention of the complainant is quite surprising and mischievous which is not tenable under law. We are, therefore, not inclined to accept the claim of loss of the complainant and accordingly the claim of the complainant is rejected as not tenable under law.
10. With regard to fourth issue as framed above, we would like to discuss that as per the claim of the complainant he is entitled for the amount of two cheques of Rs.12,500/- each received from LIC under money back policy in LIC policy No.570006649 which were not credited to the loan account of the complainant as admitted by the O.P. Bank in letter No.SMECCC/582 dated 26/06/2014 where it was admitted regarding non-credit of two cheques of Rs.12,500/- each and the O.P. Bank had agreed to make payment of delayed period interest as per the compensation policy of the bank. In this context, on perusal of the case record we find that the bank admitted to have received the two cheques of Rs.12,500/- each but could not credit to the loan account of the complainant the reason best known to the O.P. Bank. Due to non-credit of two cheques of Rs.12,500/- each pertaining to LIC Policy No.570006649 by O.P. Bank, the complainant is entitled for principal amount of two cheques of Rs.12,500/- each along with interest as applicable. As per the banking compensation policy guidelines placed as Annexure-13 on the case record, in the event the proceeds of cheque under collection were to be credited to an overdraft/loan account of the customer, interest will be paid at the rate applicable to the loan account. For extra ordinary delay, interest will be paid at the rate of 2% above the rate applicable to the loan account. In the instant case, the O.P. Bank is negligent in collecting the aforesaid two cheques of Rs.12,500/- each for which the O.P. Bank is liable to pay interest on that amounts at the rate applicable to the loan account plus extra 2% above the rate applicable to the loan account since this is a case of exceptional delay in crediting the amount as admitted by the bank in the letter as discussed above. It is also a fact that the complainant has not received amounts of two cheques of Rs.12,500/- each till today and for that he is entitled to principal amount of Rs.25,000/- along with interest as applicable to the loan account and for exceptionally delay he is entitled for extra 2% above the rate applicable to the loan account. The complainant is entitled for the interest with effect from 28.05.2006 in case of first cheque No.0662247 dated 28.05.2006 for Rs.12,500/- which was renewed as a new cheque bearing No.657106 dated 27.8.2007 and was encashed on 25.10.2007. Similarly, the complainant is entitled for interest with effect from 28.05.2009 in case of second cheque No.0476992 dated 28.05.2009 which was renewed as a new cheque bearing No.600065 dated 13.11.2009 for Rs.12,500/- and that was encashed by the O.P. Bank on 16.12.2009 as is evident from Annexure-16 placed on the case record. It is also a fact that the complainant is yet to receive the amounts along with up to date interest as discussed above. In view of the above and as per the foregoing circumstance, the O.P. Bank is liable to pay the interest as per the banking compensation policy as discussed above.
11. That apart, the complainant has also claimed compensation of Rs.45,000/- for mental agony due to not getting the policy bonds in time and for running time and again to the office of the O.P. Bank for collecting the security documents and LIC policy bonds. Similarly, he has also claimed a sum of Rs.10,000/- towards other expenses. On this point, we have observed that it is not in dispute that the complainant has faced inconvenience due to the negligence of the O.P. Bank and even after repeated requests he could not receive his security documents up to 14/06/2014 though his loan account was closed on 06/02/2014. From this it is ascertained that there was delay of 4 months returning the securities even after the loan was closed by the complainant. Hence, there is no doubt or dispute that he was suffered from some inconvenience and for that the O.P. Bank has also compensated the complainant by making payment of Rs.5,000/- towards delayed released of securities as per bank’s compensation policy. So, we are not inclined to direct the O.P. bank to pay more compensation since the O.P. Bank has paid compensation as per bank’s compensation policy. However, the complainant is entitled for cost of litigation and as far as the cost of litigation is concerned we feel in the fact and circumstance of the case it would be just and proper to award Rs.2,000/- to meet the cost of litigation. In the light of the foregoing discussion and considering the fact and circumstances of the case, we partially allowed the case of the complainant against O.P. Bank.
12. Resultantly, the Forum passed the following orders against the O.P. Bank:
- The O.P. Bank is directed to pay interest to the complainant on the amount of Rs.80,850/- from 19/02/2010 to 14/06/2014 as per the rate of interest applicable to the loan account of the complainant at the relevant point of time with extra 2% above the corresponding rate of interest instead of interest @6.5% as paid by O.P. Bank and to make deduction of amount of interest of Rs.24,179/- as has already been paid by the O.P. Bank to the complainant.
- Similarly, the O.P. Bank is also directed to pay the amounts of two cheques of Rs.12,500/- each to the complainant with interest as applicable to the loan account plus extra 2% above the rate applicable to the loan account. The interests in case of first cheque to be calculated from 28/05/2006 till on the date of actual payment and in case of second cheque the interests to be calculated from 28/05/2009 till on the date of actual payment.
- Further, the O.P. Bank is also directed to pay a sum of Rs.2,000/- to the complainant towards cost of litigation during the same period.
The O.P. Bank is directed to carry out the above orders within two months from the date of receipt of this order failing which the complainant is at liberty to recover the same under Section 25/27 of the Consumer Protection Act, 1986. The case of the complainant is disposed of accordingly.
13. The order is pronounced on this day of 13th June 2017 under the signature and seal of this Forum. The office is directed to supply copy of order to the parties free of cost and a copy of same be sent to the server of
