O R D E R
Per Sri A. Hazarath Rao, President:-
The complainant filed this complaint u/s 12 of the Consumer Protection Act seeking a direction to the opposite parties to release the transfer amount of Rs.4,00,000/-; compensation of Rs.3,10,000/- (estimated profits) for loss of maize crop in 15.50 cents; Rs.50,000/- as compensation; Rs.25,000/- towards mental agony and Rs.25,000/- towards legal expenses.
2. The complaint averments in brief are hereunder:
The complainant owned Ac.10.12 of wet land. The complainant also used to cultivate an extent of Ac.3.00 and Ac.2.50 belonging to his brother and one M. Padmaja on lease. The principle source of income of the complainant is agriculture. The complainant availed gold loan, crop loan and two KCC loans from the 1st opposite party for raising crops in Khariff and Rabi seasons and has to pay in all Rs.3,95,034/-. The complainant also had an SB account with the 1st opposite party and the 2nd opposite party. The complainant harvested the crop, stored paddy grains in his house and was waiting for proper price to dispose. While availing loans, the complainant furnished substantial solvency of property and mortgaged them in favour of the 1st opposite party. The complainant is unable to discharge the outstanding loan amount of the 1st opposite party as unable to sell paddy for want of proper price. The complainant is having good intention to discharge loan whenever best price prevailed in the market. Under the above circumstances, the complainant sold his other properties and realized Rs.6,00,000/- and deposited it with the 2nd opposite party on 27-05-11 to meet the needs of 2nd crop i.e., maize in his lands. The then Branch Manager of the 2nd opposite party without consent and knowledge of the complainant secretly informed to the Manager of the 1st opposite party regarding pending loans. Both the opposite parties colluded and on 05-12-11 transferred the amounts from the 2nd opposite party to the 1st opposite party. The 1st opposite party on 12-12-11 adjusted the said amount (which was got transferred from the 2nd opposite party) to the loan accounts of the complainant. The 1st opposite party is having substantial guarantee by way of mortgage in its favour. The loan accounts are purely agricultural loans. The 1st opposite party has to follow the due process of law for recovery of loan amount in case of default. The 1st opposite party neither issued prior notice demanding loan nor treated the loans of the complainant as bad debts. The complainant is a respectable farmer. The complainant is not well versed with the banking rules and protocols being uneducated. The above transfer and adjustment of loan by the opposite parties in collusion amounted to deficiency of service. Due to the above acts of the opposite parties the complainant faced hardship and was unable to raise maize crop in Ac.15.50. The opposite parties failed to rectify their defects when the complainant brought to the notice of the opposite parties about their illegal transactions. The complainant estimated the loss of profits in Ac.15.50 for not raising the crop at Rs.3,10,000/-. The complaint therefore be allowed.
3. The 2nd opposite party filed memo adopting the version of the 1st opposite party and their contention in brief is hereunder:
The complainant is not a consumer and there is no consumer dispute to be tried. The complaint therefore is not maintainable. The complainant is having four loan accounts and one SB account with the 1st opposite party. The complainant is also having SB account with the 2nd opposite party also. The complainant availed
a) a crop loan of Rs.1,10,000/- on 12-06-07 vide A/c.No.11599259642 which has to be repaid on or before 31-05-08. The complainant did not repay the said loan as agreed to and a sum of Rs.1,81,219/- was due as on 12-12-11.
b) a Kisan Gold Card loan of Rs.2,75,000/- on 02-05-05 for land development vide account No.11599300851 which has to be repaid in five yearly installments of Rs.55,000/- plus interest. As the complainant committed default the said account has been treated as NPA. A sum of Rs.1,38,783/- was due as on 12-12-11. The said KGC loan was rescheduled during the year 2007 under account No.11599300862. A sum of Rs.58,923.72 ps was due after adding interest upto 30-11-08 and giving benefit of Rs.21,175.57ps under RBI OTS relief.
c) a crop loan of Rs.40,000/- on 10-07-03 from the 1st opposite party and the same was rescheduled on 19-07-04 vide A/c.No.11599300840. A sum of Rs.26,130.31 ps was due and outstanding with interest applied upto 30-11-08 and after giving benefit of Rs.20,000/- under RBI OTS relief.
d) a crop loan of Rs.1,10,000/- on 23-06-06 from the 1st opposite party and the same was rescheduled on 12-06-07 under account No.11599300873. A sum of Rs.1,03,219.39 ps was due and outstanding with interest applied upto 30-11-08 and after giving benefit of Rs.34,407/- under RBI OTS relief.
e) a business loan (cash credit limit) of Rs.2,50,000/- from the 1st opposite party for rice mill business carrying under the name and style of M/s Lakshmi Venkateswara Rice Mill, Chebrolu as a proprietor (vide A/c.No.11599253866). A sum of Rs.3,05,183.87 ps was due outstanding after applying interest upto 30-11-11.
4. The complainant failed to discharge the above referred outstanding dues inspite of demands by the 1st opposite party. The complainant himself informed the 1st opposite party about his credit balance of Rs.4,34,000/- in SB.A/c No.10719825105 with the 2nd opposite party. The complainant on 05-12-11 called on the 1st opposite party and gave withdrawal for Rs.4,34,000/- and requested to credit the said amount to the SB A/c.No.11599235439 with the 1st opposite party by way of credit slip duly signed by him. Accordingly the said amount has been credited to his SB account with the 1st opposite party. Later the complainant has withdrawn Rs.40,000/- on 05-12-11 and Rs.40,000/- on 06-12-11 through his ATM. As the complainant failed to discharge his loan amounts the 1st opposite party exercised lien in terms of agreements executed by the complainant and on 12-12-11 adjusted Rs.1,81,219/- to the loan account of the complainant bearing No.11599259642 and Rs.1,38,783/- towards KGC loan account No.11599300851. The 1st opposite party in all adjusted Rs.3,20,002/- from out of the available balance of Rs.4,01,294.24ps. Still a credit balance of Rs.81,292.24 ps was outstanding to the credit of complainant’s SB account. The 1st opposite party thus exercised lien as per loan agreement with the consent of the complainant. The complainant is a chronic defaulter in payment of loans. The opposite parties did not commit any deficiency of service. The complaint therefore be dismissed.
5. Exs.A-1 to A-13 on behalf of complainant and Exs.B-1 to B-29 on behalf of opposite parties were marked.
6. Now the points that arise for consideration are:
1. Whether the complainant is a consumer?
2. Whether there is any consumer dispute?
3. Whether the opposite parties committed deficiency of service?
4. Whether the complainant is entitled to compensation as claimed?
5. To what relief?
7. Admitted facts in this case are these:-
1. The complainant borrowed loans for agricultural purpose from the 1st opposite party during 19-07-04 – 12-06-07.
2.The complainant had an SB account with the 1st OP.
3.The complainant is also having SB account with the 2nd opposite party.
4. The complainant did not discharge the agricultural loans due to the 1st opposite party.
5. The complainant deposited Rs.6,00,000/- with the 2nd OP
on 27-05-11 (Ex.A-6).
6. The 2nd opposite party exercised lien by holding Rs.4,00,000/- from the account of the complainant.
7. The 2nd opposite party transferred Rs.4,34,000/- on 05-12-11
from the account of the complainant to the 1st opposite party.
8. The 1st opposite party credited Rs.4,34,000/- to the SB account of complainant bearing No.11599235439.
9. The 1st opposite party on 12-12-11 adjusted Rs.1,81,219/- to the loan account of the complainant bearing No.11599259642.
10. The 1st opposite party on 12-12-11 adjusted Rs.1,38,783/- to the loan account of the complainant bearing No.11599300851.
11. An amount of Rs.80,658.24ps was lying to the credit of the complainant bearing account No. 11599235439 (Ex.A-5).
8. POINTS 1&2:- Admittedlythe complainant is operating accounts with opposite parties and is their customer. Therefore the contention of the opposite parties that the complainant did not satisfy the requirements of consumer and absence of consumer dispute is devoid of merit. We therefore answer these points against the opposite parties.
9. POINTS 3 &4:- The complainant in his complaint and affidavit categorically mentioned that he was due in a sum of Rs.3,95,034.22ps to the 1st opposite party as unable to dispose off paddy for want of proper price in the market. It can therefore be inferred that the complainant is indebted to the 1st opposite party.
10. As seen from Ex.A-5 the complainant deposited Rs.6,00,000/- on 27-05-11 by selling shares. The deficiency of service coined by the complainant is that the opposite parties colluded together and got transferred the amount to the loanee bank without prior notice. The contention of the 1st opposite party is that the complainant is a chronic defaulter and in order to avoid payment deposited Rs.6,00,000/- with the 2nd opposite party and the bank has rightly exercised the lien with the consent of the complainant and transferred it to his account by way of withdrawal slips duly executed by the complainant and relied on Exs.B-27 and B-28. Ex.B-27 is savings bank withdrawal form while Ex.B-28 is cash/transfer form. Both Exs.B-27 and B-28 contained the signatures of complainant. The complaint and affidavit of the complaint was silent about Exs.B-27 and B-28.
11. In State Bank of Patiala vs. Narindrapaul Singh 2012 (2) CPR 115 (NC) it was held:
“It is a settled principle of law that the bank has ‘general lien’ over all forms of securities deposited by or on behalf of the customer in the ordinary course of banking business and that the general lien is a valuable right of the banker judicially recognized and in the absence of agreement to the contrary. A Banker has a general lien over such securities and has a right to sue the proceeds in respect of any balance that may be due from the customer by way of reduction of customer’s debit balance. The provisions of Section 171 of the Indian Contract Act, 1872 carves out an except to the said general rule in order to protect the interest of the bank by ensuring right to retain the documents so that other loan accounts of the bank are also cleared by borrowers or guarantors without forcing the bank to file suits. In the present case the petitioner was well within its right to exercise its right of General Lien over the LIC policy and the petitioner bank was entitled to set off/adjust the security of the LIC policy towards the outstanding amount in the complainant as they had a lien over the same.
The Fora below have erred in not appreciating that the LIC policy pledged in the overdraft account could be retained as a security for adjusting the outstanding amount, in the cash credit account as there was no contract to the contrary and the right of ‘General Lien’ could be exercised by the petitioner. The State Commission ignored the fact that in the present case security letter clearly stipulated that the LIC policy had been deposited in the petitioner’s bank as a security for all money, now owing or which shall be at any time hereafter be owing by the respondent/complainant in any manner whatsoever”.
12. In the above cited case the complainant was having two accounts with the same bank. But in this case the complainant is having accounts with different branches of same bank. The opposite parties relied on clause 7 in Ex.B-3 hypothecation agreement dated 02-05-05 which dealt with lien and it reads as follows:
"The Bank shall have the right of lien and set off against any of the balances in the account of the borrower(s)/guarantor(s) in accordance with the provisions of this agreement and the law the borrower will not create any charge over any property whether secured or unsecured except with the permission of the bank. The borrower shall not bank with any other Bank. The borrower shall not create any lien on the properties/goods hypothecated to the Bank”.
13. The opposite parties contended that bank does not mean a particular branch that too after introduction of core banking solution and brought to the notice of the Forum about the introduction of core banking solution and its benefits. The relevant portion in respect of core banking solution is extracted below for better appreciation:
“INTRODUCTION:
01.01 Background: State Bank of India has always recognized the importance of integrating information technology in all its operations. It started in 1960s with the computerization of individual branches culminating in computerization of all branches through universal computerization. Once again, SBI felt the need to upgrade its operations to incorporate the latest advances in Information Technology. This computerization of SBI, done under the Core Banking Solution, has had a major impact on all spheres of banking.
01.01.02 The single biggest achievement of implementing the Core Banking Solution is that each customer of SBI is truly the customer of the Bank and not just the customer of the Branch, where his/her account is maintained. He/she can go to an SBI branch anywhere in the country and perform a transaction. This is possible as the entire customer database is centrally located at the Central Data Centre (CDC) and can be accessed by any branch on CBS.
01.02. Key Features of the system
01.02.01: 24x7 Banking
As a result of implementing Core Banking solution, most of the facilities being offered by SBI, are available to customers 24 hours a day, 7 days a week. Customers can transact their business using multiple channels such as ATMs, internet Banking, Phone Banking and Mobile Banking. These transactions conducted through various delivery channels are updated in the CDC in real time.
01.02.02: ANYWHERE BANKING
Customers can avail of banking services across the bank and channel network irrespective of location where their account is maintained as SBI has achieved 100% networking of all its delivery channels. INB Kiosks that are set up at ATM centers by the bank can also be accessed 24x7 by customer”.
Taking a clue from the above decision and the meaning of ‘bank’ after technological advantage of Core Banking Solution the exercise of lien and holding the amount by the 2nd opposite party and later transferring it to the 1st opposite party (relating to complainant’s accounts) in our considered opinion did not amount to deficiency of service. Non discharge of loans by the complainant to the 1st opposite party made it to exercise the lien option. Under those circumstances, the complainant is not entitled to any compensation. We therefore answer these points against the complainant.
14. POINT No.5:- In view of findings on points 3 and 4, in the result the complaint is dismissed without costs.
Typed to my dictation by Junior Steno, corrected by me and pronounced in the open Forum, dated this the 29th day of June, 2012.
MEMBER MEMBER PRESIDENT
APPENDIX OF EVIDENCE
DOCUMENTS MARKED
For Complainant:
Ex.Nos. |
DATE |
DESCRIPTION OF DOCUMENTS |
A1 |
|
Copy of K.G.C. A/c. No.004236-SBI, Chebrolu |
A2 |
|
Copy of K.G.C. A/c. No.004237-SBI, Chebrolu |
A3 |
|
Copy of K.C.C. A/c. No.004238-SBI, Chebrolu |
A4 |
|
Copy of terms to be followed by the Kisan Card Holder |
A5 |
|
S.B. A/c. No. 11599235439 – SBI, Chebrolu |
A6 |
|
S.B. A/c. No. 10719825105 – SBI, Chebrolu |
A7 |
|
Xerox copy of pattadar pass book in patta No.1994 |
A8 |
|
Xerox copy of pattadar pass book in patta No.255 |
A9 |
|
Xerox copy of pattadar pass book in patta No.2812 |
A10 |
|
Xerox copy of pattadar pass book in patta No.253 |
A11 |
29-01-07 |
Xerox copy of title deed No.170/2007 |
A12 |
03-07-10 |
Xerox copy of title deed No.2941/2010 |
A13 |
03-07-10 |
Xerox copy of title deed No.2942/2010 |
For opposite parties :
Ex.Nos. |
DATE |
DESCRIPTION OF DOCUMENTS |
B1 |
12-06-07 |
Copy of application form for agriculture by the complainant for Rs.1,10,000/- |
B2 |
12-06-07 |
Copy of Arrangement letter executed by the complainant for crop loan |
B3 |
12-06-07 |
Copy of hypothecation agreement for Rs.1,10,000/- executed by the complainant in favour of 1st opposite party |
B4 |
02-05-05 |
Copy of application for agricultural credit short term loan for Rs.2,75,000/- |
B5 |
02-05-05 |
Copy of arrangement letter executed by the complainant for crop loan for Rs.2,75,000/- |
B6 |
02-05-05 |
Copy of hypothecation agreement for Rs.2,75,000/- executed by the complainant in favour of 1st opposite party |
B7 |
30-03-07 |
Copy of Rephasement of term loans |
B8 to 11 |
13-05-08 |
Copies of notices sent by the 1st opposite party to the complainant relating to different loan accounts numbers |
B12 |
15-12-09 |
Copy of notice sent by the 1st opposite party to the complainant relating to loan |
B13 |
27-04-10 |
Copy of legal notice of 1st opposite party |
B14 |
06-05-10 |
Copy of legal notice of 1st opposite party |
B15 |
06-05-10 |
Copy of legal notice of 1st opposite party |
B16 |
14-07-10 |
Copy of notice sent by the 1st opposite party |
B17 |
18-08-11 |
Copy of notice sent by the 1st opposite party |
B18 |
|
Statement of account relating to A/c No.11599259642 |
B19 |
|
Statement of account relating to A/c No.11599300851 |
B20 |
|
Statement of account relating to A/c No.11599300862 |
B21 |
|
Statement of account relating to A/c No.11599300873 |
B22 |
|
Statement of account relating to A/c No.11599300840 |
B23 |
|
Statement of account relating to A/c No.01670070837 |
B24 |
|
Statement of account relating to A/c No.11599253866 (Lakshmi Venkateswara Rice Mill) |
B25 |
|
Statement of account relating to A/c No.11599235439 |
B26 |
|
Statement of account relating to A/c No.10719825105 |
B27 |
05-12-11 |
Copy of withdrawal of Rs.4,34,000/- by the complainant |
B28 |
05-12-11 |
Copy of pay-in-slip for Rs.4,34,000/- by the complainant |
B29 |
|
Copy of adangal extract issued by Tahsildar, Chebrolu |
PRESIDENT
