JUSTICE V.K. JAIN, PRESIDING MEMBER (ORAL)

1.      A company named Azcon Cement Fabricators (P) Ltd., which was allotted an industrial plot by Uttar Pradesh Financial Corporation, approached the opposite party-State Bank of India for sanction of working capital, etc., and was sanctioned a loan of Rs.4,50,000/- comprising Rs.2,00,000/- against hypothecation of raw material and Rs.2,50,000/- against bill debit, under Cash Credit Stock Scheme. In order to avail the aforesaid credit facility, property No.3/4 K.M., Sandi Road, Hardoi, Uttar Pradesh was mortgaged with the bank. Later on the credit facility was enhanced to Rs.8,50,000/- comprising Rs.4,00,000/- against hypothecation of raw material and Rs.4,50,000/- against the bill debit. At that time, the opposite party-bank insisted upon additional collateral security from a third party, over and above the mortgage which had already been credit in its favour, in respect of property No.3/4, K.M., Sandi Road, Hardoi, Uttar Pradesh. Late Smt. Seeta Diljan, owner of property No.198-A, Bishop Rocky Street, Faizabad, Lucknow, Uttar Pradesh provided the additional collateral/security to the bank by depositing the title deed of the said property with the bank. It would be pertinent to note here that the complainant who is son of Smt. Seeta Diljan was the Managing Director of the borrower company Azcon Cement Fabricators (P) Ltd..

2.      The borrower defaulted in repayment of the loan taken from the bank and proceedings for recovery of debt were also instituted by the bank. Later, there was a one time settlement and in terms of the said settlement, the loan taken from the bank was fully repaid by 31-03-2010 and a No Dues Certificate was also issued by the bank. The title deed of the property, which his mother had deposited with the bank, however, was not returned to him, on the ground that the same had been lost.

3.      The complainant also applied to the bank for reverse mortgage of the said property, but his application was declined on the ground that he was the Managing Director of a company, which had defaulted in repayment of the loan and, therefore, had a poor credit history.

4. In the present complaint, the complainant who got the said property in a family settlement, is alleging deficiency on the part of the State Bank of India in rendering services and seeking the following reliefs:

“(a)    direct the OP to sanction the complainant a reverse mortgage loan for an amount of Rs.75,00,000;

(b)     direct the OP to pay compensation of Rs.25,00,000/- in the nature of punitive damages on account of mental agony, humiliation and harassment suffered by the complainant for the acts and/or omission of the opposite party;

(c)     direct the opposite party to pay damages totaling Rs.84,93,600/- to the complainant in terms of paragraph 26 hereinabove;

(d)     in the alternative, if the above order could not be passed for any valid reasons, direct the opposite party to execute an indemnity bond in favour of the complainant to indemnify the complainant for the loss/damage likely to be suffered in the event of sale of the said property;

(e)     direct the OP to pay damages totaling to Rs.25,00,000/- to the complainant in terms of paragraph 28 hereinabove;

(f)      direct the opposite party to pay a sum ofRs.26,93,750/- due to difference/increase in circle rates between 2010 to 2014 by the Government of Uttar Pradesh payable by the complainant for conversion of the “property” from lease hold to free hold or such other enhanced amount for conversion of lease hold rights to freehold;

(g)     direct the opposite party to execute an indemnity bond in favour of the complainant to indemnify the complainant for the loss/damage likely to be suffered which may be incurred, in the event the complainant is required to pay more on account of further increase of circle rate in future by the Lucknow Development Authority till the original title/sale deed of the property is returned to the complainant;

(h)     direct the OP to pay a sum of Rs.14,70,000/- as compensation for the rent paid by the complainant on account of non-availability of title deeds from 01-04-2010 till 30-04-2014 @ Rs.35,000/- per month;

(i)      direct the OP to issue an advertisement in two daily newspapers in Lucknow, that the original title deeds of the property situated at 198-A, Bishop Rocket Street, Faizabad, Lucknow have been misplaced due to the acts and/or omissions of the opposite party and the costs of such advertisement be borne by the opposite party;

(j)      direct the OP to issue a certificate that the original title deeds were deposited with the opposite party, however, the same was lost due to the acts and/or omissions of the opposite party;

(k)     award costs;

(l)      pass order for payment of interest @18% per annum on the aforesaid amount pendentelite and future norms.”                

5.      Section 2(1) (d) of the Consumer Protection Act, 1986, after its amendment with effect from 15-03-2003, to the extent it is relevant provides that consumer does not include a person who avails services for any commercial purpose.

6.      Admittedly, the credit facilities from the bank were availed by a company for the purpose of its business. The alleged deficiency in rendering the services took place after amendment with effect from                 15-09-2003. Therefore, it cannot be disputed that the said services were availed for a commercial purpose. Since the mother of the complainant provided collateral/additional security for the credit facilities availed by the aforesaid company, she also shall be deemed to have availed the services of the opposite party-bank for a commercial purpose. In any case, when a person mortgages his property as a collateral security with a bank by depositing of the titled deeds of the said property, for the purpose of enabling the bank to extend credit facilities, to a company, he does so for the commercial purposes of the borrower company and not for a personal purpose.

7.      When this proposition is put to the learned counsel for the complainant his only submission is that the case of the complainant is squarely covered under the explanation below clause (d) of Section 2(1) of the Act. The said explanation to the extent it is relevant provides that commercial purpose does not include services availed by a person exclusively for the purpose of earning his livelihood by means of self-employment. We fail to understand how a person, offering his immovable property as a collateral security, for the purpose of enabling a bank to extend credit facility to a company can claim that by doing so he was earning his livelihood by means of self-employment. The credit facilities were availed by the company and not by the mother of the complainant. She only facilitated the grant of the credit facility by offering his immovable property as a collateral security to the bank. Therefore, reliance upon the explanation, in our view, is wholly misplaced.

8.      The learned counsel for the complainant relies upon the decision of this Commission in Original Petition No.70 of 2002, C.L. Khanna Vs. Dena Bank, decided on 02-09-2005. However, if we go by the amended definition of the ‘consumer’ the said decision would not be relevant since the aforesaid petition came to be filed before amendment of the Act with effect from 15-03-2003. In fact, this Commission took the view that it would not be difficult to sell the property, without the gift deed of Okhla property, which the bank had lost, though it did award some compensation to the complainant. The learned counsel also relies upon the decision of this Commission in Abdul Hafeez Vs. State Bank of Hyderabad, II (2013) CPJ 285(NC). However, there is nothing in the aforesaid judgment to even indicate that the loan from the bank was taken by the complainant for a commercial purpose. On the other hand in the case before us the loan was taken by a company and admittedly the loan was for the purpose of the business of the said company. Therefore, the aforesaid judgment also is wholly inapplicable to the facts of the case before us.

9.      Moreover, we are of the considered view that adjudication of this complaint, would require voluminous oral and documentary evidence which cannot be conveniently undertaken in the proceedings of rather summary nature, before this Commission. Though we cannot accept the plea that a property cannot at all be sold without original title deeds, there can be no denial that the sale of an immovable property without original title deed, is not likely to realize its full market value, even if the bank certificates that the said deed was misplaced or lost, while in its custody. However, the loss on account of sale without title deed, cannot be ascertained and consequently the compensation payable to the complainant cannot be determined, unless evidence is produced inter alia to prove the market value of such a property if sold with title deed and its value if sold without title deed. The evidence, on such a contentious issue, by its very nature is likely to be voluminous and would also necessitate oral cross examination of the witnesses, which consumer fora normally do not allow.

10.    As regards refusal of the bank to sanction credit against reverse mortgage of the property, we find that the bank declined the request on account of poor credit history of the complainant, and not for want of the title deed lost by it. More importantly, the complainant cannot be said to be a consumer of the bank in respect of credit facility, which its bank did not sanction to him. Only in the event of such a facility being sanctioned to him, he could be said to be a consumer of the bank, as far as the said facility is concerned.

11.    In OIC Vs. Munimahesh Patel (2006) 7 SCC 655, the Hon’ble Supreme Court inter alia held that the proceedings before this Commission are essentially summary in nature and adjudication of issued which involve disputed factual questions should not be adjudicated. In Trai Foods Ltd. Vs. NIC & Ors. (2004) 13 SCC 656, the Apex Court inter alia observed as under:

          “6.     The only question to be decided is, when should this jurisdiction be exercised by the Commission. In our view, the Commission should address itself to the quantity of the claim, the nature of the claim, the nature of the evidence which would be required to be submitted both in respect of the claim and the damages suffered and the nature of the legal issues before deciding that the matter ought to be decided by the civil courts in the regular course. It is not disputed that the consumer forum has been set up to grant speedy remedy. The consumer forums have been given the responsibility of achieving this object. They were not meant to duplicate the civil courts, and subject the litigants to delays which have become endemic in the civil courts.

          7.      Although the reason given in the impugned order of the Commission for referring the present matter to the civil court is cryptic, we have been through the records filed before us and are satisfied that the Commission’s decision was correct. There is no doubt having regard to the nature of the claim, the large amount of damages claimed, and the extensive enquiry into the evidence which would be necessary in order to resolve the disputes between the parties that this is not a matter to be decided summarily at all.”

12.    For the reasons stated hereinabove, we are of the view that a consumer forum is not the appropriate forum to decide a case of this nature. The complaint is, therefore dismissed. However, the dismissal of the complaint shall not come in the way of the complainant availing such other remedy as may be available to him in law and if he chooses to approach a civil court, he can also claim the benefit of Section 14 of the Limitation Act, in respect of the period spent in prosecuting this complaint.