Complainant Sarabjit Kaur through the present complaint filed under Section 12 of the Consumer Protection Act, 1986 (for short, ‘the Act’) has sought issuance of necessary directions to the opposite parties to issue Clearance Certificates to her in all the three loan accounts standing in the name of her deceased husband Satnam Singh son of Charan Singh which have been adjusted by her. Opposite party be further directed to pay Rs.50,000/- as compensation alongwith litigation expenses on account of mental and physical harassment suffered by her from the hands of the opposite party, in the interest of justice.  

2.           The case of the complainant in brief is that her husband had obtained three types of loan from the opposite party Bank i.e. for purchase of Tractor, purchase of Trolley and Kisan Credit Card Limit known as KCC Limit. He died on 11.12.2009 without repaying the loan. The opposite party gave a proposal to her to repay the loan outstanding in the name of her husband by way of one time settlement. The opposite party offered to given concession of interest to her. It was stated that in Loan Account bearing No.30872062563, she gave the offer to pay a sum of Rs.4,38,834/- as one time settlement. In this offer, it was stated that she was to deposit 30% out of this sum at the time of accepting offer and remaining sum was to be paid by her within two months from the date of acceptance of offer. In the same manner in Loan Account No.30872011416, the opposite party asked her to deposit the same in the same manner i.e. 30% at the time of accepting of the offer made by the opposite party and remaining 70% within two months from the date of acceptance. Similarly in the third loan Account No.3087028135, she was directed to deposit a sum of Rs.2,41,061/- as one time settlement and the same was to be paid by her in the same manner as detailed above. She has further pleaded that on deposit of these amounts, the Bank shall issue Clearance Certificate to her. She accepted the offer made by the opposite party on 31.10.2014. A sum of 30% in all the accounts were deposited by her at the time of acceptance and the remaining 70% in all the Accounts was deposited by her within two months. Thus all the three loan accounts stood adjusted and nothing remain due against her. As per the terms and conditions of the one time settlement to repay the loan offer made by the opposite party which was accepted by her. The opposite party was duty bound to issue Clearance Certificate to her in all the three loan accounts but she has resiled to issue Clearance Certificate to her. She is poor lady and she has borrowed money from her relatives to adjust the loan accounts of her husband. The accounts were adjusted with the understanding that Clearance Certificate would be issued to her by the opposite party. Thereafter she has been calling upon the opposite party several times to give the Clearance Certificates, but she was being put off by the opposite party with one excuse or the other. The opposite party has finally refused vide letter dated 20.3.2015, refusing to issue Clearance Certificates to her on a flimsy ground alleging that her husband has stood guarantor in the loan of one Ajit Singh the alleged borrower. The refusal of the opposite party in refusing to issue Clearance Certificate amounts to deficiency in service on the part of the opposite party and violation of the terms and conditions under which the loans were repaid. She has suffered physically and mentally on account of the illegal act of the opposite party in not issuing the Clearance Certificate. Hence this complaint.

3.           Upon notice, the opposite party appeared and filed its written reply through the counsel taking the preliminary objection that the present complaint is not maintainable. On merits, it was submitted that one Palwinder Singh son of Ajit Singh i.e. nephew of Satnam Singh has taken loan of Rs.12,00,000/- on 13.7.2009 by impersonating Ajit Singh (Brother of Satnam Singh) and in that case Satnam Singh has identified said Palwinder Singh as Ajit Singh and helped said Palwinder Singh to take loan of Rs.12,00,000/- from the bank. Satnam Singh husband of the complainant, Palwinder Singh his nephew, Darshan Singh Lambardar have played fraud with the bank in connivance with other and moreover Satnam  Singh had also stood as Guarantor for the repayment of the loan taken by said Palwinder Singh by producing forged and fabricated document and impersonation. A criminal case U/S 420 has also been registered against them. The bank has also filed a recovery proceeding before The Debts Recovery Tribunal-II Chandigarh. Moreover the guarantor is equally liable for the repayment of the loan taken by the borrower as the liability of the borrower and the guarantor is joint and several. The bank has a right to recover the amount from the guarantor also. Lastly the complaint has been prayed to dismiss with costs.

4.       Complainant tendered into evidence her own affidavit Ex.C1, alongwith other documents Ex.C2 to Ex.C11 and closed the evidence.

5.       Sh.Subash Chander Manager of S.B.I tendered into evidence his own affidavit Ex.OP1, alongwith other document Ex.OP2 and closed the evidence.  

6.       We have carefully examined the available evidence and its supporting documents produced on the records so as to interpret their meaning and purpose and also the scope of the prospective adverse inference need to be drawn for that ignored to be produced by the OP Bank. We find that the complainant has repaid in totality the entire outstanding in all the loan accounts as availed of by her demised husband during his life time. However, the OP Bank has admittedly refused (vides Ex.C11) to vacate the Banks’ Lien/ charge over the Mortgaged Immovable Property of the deceased Borrower (duly represented by his widow complainant) pleading the exercise of its Right to Banks’ General Lien. It is further stated by the OP Bank that Satnam Singh (deceased borrower) had also executed personal ‘guarantee’ to another Loan A/c (of Ajit Singh) that still stands unpaid and presently his legal heirs have become jointly and severally liable to pay the dues of the Bank in the account of Ajit Singh, also. Whereas, the clumsy interpretation of Banker’ General Lien & Right to Set Off Balances speaks of the poor legal knowledge of the OP Bank Branch (on the subject matter) it has adversely but for sure has affected the complainants’ interest causing her much harassment. The OP Bank has failed to produce any evidence proving that the property in question was ever ‘mortgaged/charged’ to the Loan A/c of Ajit Singh but instead has clearly stated (Ex.C11) in its letter of 20.03.2015 that the deceased Satnam Singh gave his ‘personal guarantee’. The Bankers’ General Lien and Right to Set off Balances are applicable and exercisable in same/similarly titled

accounts and not otherwise and that too by duly following the prescribed procedure. Moreover, these rights cannot be (and shall not be) exercised by the Banker on securities especially handed over/executed in specific defined accounts. Upon the death of ‘guarantor’ his estate shall be liable to pay the surety amount (as on the date of death) but through the process of law (intervention and orders/decree of the Civil Court) and his ‘legal heirs’ shall be liable to the extent of only the share/property inherited from the deceased’s estate and by no stretch of imagination can be made to legally step into the shoes of deceased guarantor. The criminal prosecution/liability extinguishes with the death of the ‘offender/accused’ with however the awarded damages etc can be legally recovered from his estate but again as per the procedure established in law. It appears as if the OP Bank Branch has been taking its decisions in isolation totally bereft of ‘legal advice’ that would have been readily available from its own controlling office/legal advisor/empanelled advocate etc. Such acts and omissions do add up to amount to ‘unfair trade practice’ and ‘deficiency in service’ under the Act and thus lining the delinquent vulnerable to an adverse award.                

7.       In the light of the all above, while partly allowing the present complaint we hold the titled OP Bank as guilty of unfair trade practice/ deficiency in service and thus ORDER them to release all the securities held with it in the related Loan accounts (of the deceased Satnam Singh) in order to revoke the related mortgages in the complainant’s favor and also issue the related Clearance “No Dues Certificates’ besides to pay her Rs.10,000/- as cost and compensation within 30 days of the receipt of the copy of these orders otherwise the aggregate awarded amount shall attract interest @ 9% P.A. from the date of orders till actually paid.

8.       Copy of the order be communicated to the parties free of charges. After compliance, file be consigned to records.

                                                                                 (Naveen Puri)

                                                                                       President.                                                                                                     

ANNOUNCED:                                                   (Jagdeep Kaur)

October 14, 2015                                                                    Member.

*MK*