Date of filing:13.8.2013
Date of Disposal:5.3.2014
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II::
VIJAYAWADA, KRISHNA DISTRICT.
Present: SRI A. M. L. NARASIMHA RAO, B.SC., B. L., PRESIDENT
SMT N. TRIPURA SUNDARI, B. COM., B. L., MEMBER
SRI S.SREERAM, B.COM., B.A., B.L., MEMBER
WEDNESDAY, THE 5TH DAY OF MARCH, 2014.
C.C.No.144 OF 2013.
Between :
Padala Bhimeswara Rao, S/o Kameswara Rao, Hindu, 67 years, R/o Maruthi Towers, Flat No.1, II Floor, Near Chinavanthena, Patamata, Vijayawada – 10.
….. Complainant.
And
The Andhra Bank, Autonagar Branch, Autonagar, Vijayawada Rep., by its Branch Manager.
…..Opposite Party.
This complaint is coming before us for final hearing on 18.2.2014 in the presence of Sri K.V.Bhanu Murthy, Counsel for complainant and Sri Y.Ramakrishna, Counsel for opposite party and upon perusing the material available on record, this Forum delivers the following:
O R D E R
(Delivered by Hon’ble Member Smt N. Tripura Sundari)
This complaint is filed under Section 12 of the Consumer Protection Act, 1986.
1. The averments of the complaint are in brief:
The complainant stood as guarantor in regard to credit account in the nature of overdraft facility vide A/c No.071413100000052 for the amount due, there under borrowed by his son Padala Prasanna Kumar from the opposite party. In this connection he gave equitable mortgage by way of deposit his property documents to an extent of 333.3 sq.yards situated at Gunadala, Vijayawada and also the link document. The complainant availed advance sale consideration from one Pedapudi Prabhakar Rao and paid due amount to the opposite party a sum of Rs.2,50,931/- on 19.7.2013 to redeem the mortgaged property and asked the opposite party to return his title deed and link documents deposited by him with the opposite party for the above said mortgage. The opposite party informed that they would return the documents on the next day i.e., 20.7.2013 after informing the same to the zonal Office. The complainant went on the next day to the opposite party bank and was informed that unless with the consent of the principal borrower, the opposite party would not return the documents. Immediately the complainant got issued a registered notice to opposite party on 21.7.2013 demanding the opposite party to return the title deed and link documents and other necessary documents. The opposite party instead of returning the documents issued reply dated 3.8.2013 to the complainant and the principal borrower. The complainant received the said notice but the counsel to whom the notice was addressed, did not receive. The opposite party informed in the reply notice that on the next day of paying the due loan amount to the opposite party i.e., on 20.7.2013, the principal borrower withdrew the sums of Rs.2,59,648/- and Rs.2,48,138/- and that there was a freshly created deposit balance of Rs.4,05,411/-. The opposite party allowed the principal borrower to withdraw the funds even after the complainant has revoked the guarantee. The complainant is prepared to clear the further debit as stated by the opposite party in the reply notice dated 3.8.2013. The opposite party’s refusal to return the documents to the complainant being a mortgagor, even as the complainant is ready to pay the dues, its amounts to deficiency in service. Hence the complainant is constrained to file this complaint against the opposite party praying the Forum to direct the opposite party to return the documents i.e., sale deed and award compensation of Rs.10,000/- for mental agony and interest as the opposite party is liable from the date of refusal to return documents i.e., 3.8.2013 and interest as the complainant may be come liable to pay the purchaser under the agreement of sale dated 19.7.2013 @ 24% per annum over the advance sale consideration received by the complainant for the delay in execution of the sale deed and costs of the complainant and other reliefs.
2. The version of the opposite party is in brief:
The opposite party denied all the allegations of the complaint and submitted that M/s Paper Converters, represented by its Proprietor Padala Prasanna Kumar availed Open Cash Credit Facility to the extent a sum of Rs.5,00,000/- from the opposite party under loan A/c No.071413100000052. The complainant is the father of said Padala Prasanna Kumar and he stood as guarantor cum co-obligant for the above O.C.C. limits and he also created mortgage over his immovable property in favour of the opposite party by way of deposit of title deeds. The complainant is thus guarantor cum co-obligant cum mortgagor for the above limits. The above loan system prescribes a tripartite contractual obligations arranged between the bank, principal borrower and the guarantor cum co-obligant and each of the parties had conditional rights and unconditional duties to observe in the loaning system. One cannot act detriment to the interest of other party. The above OCC limits are a performing asset and the opposite party never cancelled or recalled the limits till date. The principal borrower concern is entitled to enjoy the limits so long as it remains as performing asset supported by security of immovable property and guarantee and co-obligationship by his father who is the complainant herein. The complainant can withdraw from his co-obligation guarantee on arrangement of payment of all dues to opposite party and can seek for redemption of mortgage with prior notice to bank and principal borrower. The complainant has no right to sell the mortgaged property without seeking prior permission from opposite party. The alleged agreement of sale dated 19.7.2013 does not admitted to be true and correct. The complainant arranged payments to the credit of above OCC limits on 19.7.2013 a sum of Rs.2,59,648/- and a sum of Rs.2,48,138/- were withdrawn on 20.7.2013 by M/s Vinayaka Traders by way of clearing cheques issued by principal borrower M/s Paper Converters. Therefore the said OCC limits shows debit balance of Rs.4,05,411/- as on 20.7.2013 by other branch of opposite party. The complainant gave no prior written notice to opposite party or principal borrower about his intention to withdraw from co-obligation or guarantee and his intention to get release of equitable mortgage or otherwise the above withdrawals could not have taken place. The opposite party cannot release the documents when there is debit balance of Rs.4,05,411/- as on 20.7.2013. No guarantor and co-obligant will be allowed to withdraw from his guaranteeship according to his whims and fancies once loans are advanced. There is no deficiency in service on the part of opposite party for the withdrawals from the above OCC limits by the principal borrower by way of cheques issued to third parties and in retaining equitable mortgage when there is debit balance in OCC limits till date. Hence the opposite party prayed to dismiss the complaint with costs.
3. On behalf of the complainant he filed his affidavit and got marked Ex.A.1 to Ex.A.5 and on behalf of the opposite party Sri Myneni Subramanyeswara Rao, Senior Branch Manager gave his affidavit and got marked Ex.B.1 and Ex.B.2.
4. Heard and perused.
5. Now the points that arise for consideration in this complaint are:
1. Whether there is any deficiency in service on the part of opposite party
towards the complainant in not returning the deposited title deeds of the
complainant even though he paid the due amount of the principal borrower?
2. If so is the complainant entitled for any relief?
3. To what relief the complainant is entitled?
POINTS 1 AND 2:-
6. On perusing the material on hand we, the Forum came to understand that one Padala Prasanna Kumar, Son of the complainant has overdraft facility with the opposite party upto Rs.5,00,000/- under loan A/c No.071413100000052. He entered into agreement with the opposite party under Ex.B.2 dated 9.2.2012 and his father, the complainant signed on the same as co-obligant to the principal borrower for the due repayment of all the liabilities under the agreement and to pay jointly and severally with the borrower amounts as and when due. It is an admitted fact that the complainant deposited his property documents with the opposite party as security for the said overdraft loan A/c of his son. The complainant says that he wanted to sell his property which was given as security to the bank and availed sale consideration by entering into an agreement with one Pedapudi Prabhakar Rao under Ex.A.4 dated 19.7.2013, and paid due amount of Rs.2,50,931/- on 19.7.2013 to the opposite party under Ex.A.1 and asked the opposite party to return his title deed. The opposite party refused to return the same as the above OCC limits are a performing asset and the opposite party never cancelled or recalled the limits so long as it remains as performing asset supporting by security of immovable property. Therefore the complainant gave a legal notice under Ex.A.2 dated 21.7.2013 demanding the opposite party to deliver his property documents otherwise he would proceed against the opposite party to the court of law. The opposite party gave reply legal notice dated 3.8.2013 under Ex.A.3 stating that prior to Ex.A.2 the opposite party has no information regarding the alleged conflicts between the father (complainant herein) and the son (the principal borrower). As per Ex.B.1 the complainant made payments to the credit of the above OCC limits on 19.7.2013 and the said sum was withdrawn by M/s Vinayaka Traders on 20.7.2013 by clearing cheques issued by the principal borrower. Therefore the said OCC limits shows debit balance of Rs.4,05,411/-. The father of the principal borrower (complainant herein) not cautioned the opposite party to suspend the operation of OCC limits from 19.7.2013 as he paid the amounts to redeem his mortgage. Therefore the withdrawals took place on 20.7.2013. The guarantor may withdraw his guarantorship with notice to principal borrower and opposite party and also redeem the mortgage on payment of amount due to the opposite party under the above OCC limits. The opposite party says that the opposite party cannot release the title deeds of the complainant since the above OCC limits in A/c No.071413100000052 are not cancelled as there is debit balance of Rs.4,05,411/-.
7. The complainant filed an I.A.207/13 praying the Forum to pass interim orders directing the opposite party not to allow any further withdrawals from the credit A/c of the principal borrower affecting the interest of the petitioner. He also informed the Forum to pay the due of the said OCC A/c of the principal borrower. The opposite party is present to the Forum on 5.11.2013 and was informed by the Forum to furnish the loan amount due under the said account. The opposite party furnish the loan amount details on 8.11.2013 stating that the outstanding balance amount of the OCC A/c is Rs.4,21,886/- as on 15.11.2013. The complainant approached the opposite party with a letter from his counsel Ex.A.5 dated 12.11.2013 stating that as per orders in I.A.207/13 the complainant approached the opposite party with funds to remit and redeem the mortgage and asked the opposite party to receive the said money and redeem the mortgage and deliver the title deeds and other link documents to the complainant immediately. The opposite party made an endorsement on Ex.A.5 stating that the copy of Ex.A.5 was received and after paying the loan in full, and after receiving the Judgement copy from Court the opposite party will immediately deliver the documents as per Judgement. The Forum gave an order in the above said I.A. directing the opposite party for not to create any further loan burden on the petitioner/complainant in respect of account No.071413100000052 and also directed to deliver the title deeds to the petitioner/complainant and redeem the mortgage as stated in the counter on payment of the amount of Rs.4,21,886/- on or before 15.11.2013 (as per letter of respondent bank) and on payment of further interest and charges if paid later.
8. We, agreed with the submissions of opposite party we do not find any documentary evidence prior to legal notice Ex.A.2 dated 21.7.2013 to show that the complainant gave written letter to opposite party that he had withdraw his guarantorship and paid the dues to the opposite party on behalf of the principal borrower and to return his mortgaged property documents. The Forum after giving the final Order in I.A.207/13 did not receive any information from the complainant whether he paid the dues to the opposite party and obtained his property documents. The opposite party has no obligation to return the mortgage property documents till it receives dues either from the principal borrower or from the complainant.
POINT No.3:-
9. In the result, the complaint is allowed in part and the opposite party is directed not to create any further loan burden on the complainant in respect of A/c No.071413100000052. The opposite party is further directed to deliver the title deeds to the complainant and redeem the mortgage on payment of the amount due under the said A/c of the principal borrower either by the complainant or by the principal borrower. No costs are awarded
Typewritten by Stenographer K.Sivaram Prasad, corrected by me and pronounced by us in the open Forum, this the 5th day of March, 2014.
PRESIDENT MEMBER MEMBER
APPENDIX OF EVIDENCE
WITNESSES EXAMINED
For the complainant: For the opposite parties:-
P.W.1 P.Bhimeswara Rao D.W.1 M.Subrahmanyeswara Rao,
Complainant Senior Branch Manager of the
(by affidavit) opposite party (by affidavit)
DOCUMENTS MARKED
On behalf of the Complainant:
Ex.A.1 19.07.2013 Acknowledgement for cash receipt.
Ex.A.2 21.07.2013 Office copy of legal notice.
Ex.A.3 03.08.2013 Reply notice from opposite party.
Ex.A.4 19.07.2013 Photocopy of sale agreement.
Ex.A.5 12.11.2013 Photocopy of letter from the complainant to the opposite
party.
For the opposite parties:-
Ex.B.1 19.08.2013 Statement of account.
Ex.B.2 09.02.2012 Notarized copy of Composite Agreement.
PRESIDENT
