Date of Filing      : 26.05.2022
                                                                                                                 Date of Disposal : 20.03.2023

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION
THIRUVALLUR

 BEFORE  TMT. Dr.S.M. LATHA MAHESWARI, M.A.,M.L, Ph.D (Law)                                 .…. PRESIDENT
                 THIRU.P.MURUGAN, M.Com, ICWA(Inter), B.L.,                                                 ......MEMBER-II

CC. No.148/2022
THIS MONDAY, THE 20th  DAY OF MARCH 2023

Mr.J.Somasundaram,
No.2769, New Ashirvad Avenue,
Dhanalakshmi Nagar,
Old Kanniamman Nagar,
Morai, Avadi,
Thiruvallur District 600 055.                                                                 ……Complainant. 
                                                                                 //Vs//
The Branch Manager,
Indian Bank,
Thervazhi Branch,
Gummidipoondi, Thiruvallur.                                                                …..opposite party.
 
Counsel for the complainant                                   :   M/s.B.Ramakrishnan, Advocate.
Counsel for the  opposite party                              :   Mr.S.Sugadav, Advocate
                        
This complaint is coming before us on various dates and finally on 28.02.2023 in the presence of M/s.B.Ramakrishnan counsel for the complainant and Mr.S.Sugadav counsel for the opposite party and upon perusing the documents and evidences this Commission delivered the following:
ORDER
PRONOUNCED BY TMT. Dr.S.M. LATHA MAHESWARI, PRESIDENT

This complaint has been filed by the complainant u/s 35 of the Consumer Protection Act, 2019 alleging deficiency in service against the opposite party in the matter of granting loan to the complainant insisting for guarantor and submitting security along with a prayer to direct the opposite party to pay a sum of Rs.5,00,000/- towards compensation for delay in closing the loan account and for returning the original documents of the guarantor after a lapse of one and half years along with cost of proceedings.
Summary of facts culminating into complaint:-
Being aggrieved and dissatisfied by the act of the opposite party in the matter of granting loan to the complainant and insisting for a guarantor and submitting original documents given for security the present complaint was filed.  It was the case of the complainant that he availed subsidized business loan from the opposite party Bank vide Loan Account No.641344767 for an amount of Rs.3,00,000/-on 25.02.2016. While at the time of granting loan, the Manager of the opposite party Bank had insisted for a guarantor and for production of original document of any immovable property as security for granting the subsidized loan. Due to his financial situation he convinced his uncle to lend his property document bearing No.11421/2012 dated 17.10.2012 registered at the office of Joint Sub Registrar, Avadi for security purpose for granting loan. The original document was handed over to the Manager namely Mr.Sundharam for obtaining the loan. The complainant cleared the subsidized loan on 06.11.2020 and he insisted for closure of loan account by clearing the entire loan amount but the Manager of the opposite party Bank did not heed to his demand and the loan account was not closed. The same was kept alive by making Rs.20/- as balance from the borrower.  The opposite party Bank Manager had informed to the complainant that the said process was formal one and further informed that no loan account would be closed at once for all and the same would take some time to close the loan account. As far as the complainant is concerned, there is no impediment or whatsoever for him in remitting a meagre amount of Rs.20/- to clear the loan account but the bank authorities are keeping the loan account alive without closing the same for the reasons best known to them.  The complainant approached the office of the opposite party Bank on several occasions for closing loan account and demanded to return the original documents belonging to the guarantor. But the authorities had avoided to answer and dragged the matter for several months without heeding to the demands of the complainant and the guarantor. The Manager of the opposite party had informed that the document given as security by the guarantor was lost and could not be traced. Hence the complainant had given a complaint to the Customer Service Cell, Indian Bank, Corporate Office by narrating all the facts on 13.09.2021. Further an  email was sent to Banking Ombudsman narrating all the facts. Thus aggrieved by the act of the opposite party the present complaint was filed to direct the opposite party to pay a sum of Rs.5,00,000/- towards compensation for not closing the loan account in time causing delay in returning the original document of the guarantor after lapse of one and half years.
The crux of the defence put forth by the opposite party:-
 The opposite party filed version disputing the complaint allegations contending ineralia that as for as loan was concerned it was a standalone procedure of the Bankers to obtain a guarantor for each and every loan. Since Unemployed Youth Employment Generation Program Loan was a Government sponsored Scheme, the Bankers would not ask for collateral property documents for loans upto Rs.10,00,000/-. The complainant applied for an Unemployed Youth Employment Generation Program Loan with the Chairman, UYEGP – Task Force Committee, District Industries Centre, Tiruvallur.  Initially the UYEGP – Task Force Committee has recommended Rs.5,00,000/- against the application of the complainant, sent a letter dated 13.11.2015 to the opposite party.  Later the UYEGP – Task Force Committee downsized the loan amount and sent a letter along with a demand draft of Rs.62,500/- towards the subsidy for loan of the complainant. The opposite party submitted that the UYEGP – Task Force Committee in its letter dated 13.01.2015 stated as follows;
“The Branch Manager of the receiving bank is requested to follow the procedures said in the G.O.1st cited Para No.22 of Annexure.
The Subsidy should be kept in Term Deposit Receipt for three years in the name of the beneficiary and the subsidy will be credited to the borrower’s loan account after three years from the date of 1st disbursement.”
After due process, the application of the complainant was approved on 12.02.2016 and the opposite party sanctioned the loan and the sanction letter was issued. It is pertinent to note that the opposite party never insisted for guarantor/security. Since the earlier loan amount of Rs.5,00,000/- was downsized to Rs.2,50,000/- by the UYEGP-Task Force Committee, the complainant and the guarantor in order to avoid rejection of the  UYEGP-Task Force Committee scheme and to avail the loan amount they jointly offered and handed over the document as security to the opposite party. It was submitted that the UYEGP-Task Force Committee has recommended to credit the subsidy amount after three years.  It means that there should not be any amount due from the borrower side and then only the subsidy amount will be appropriated towards the loan account and after that only the loan account would be closed.  After completing all the process then only the opposite party shall be in a position to clear the documents as well as the securities given and to return the same.  One Mr.T.Vijaya Raghavan had executed an agreement of guarantee on 12.02.2016 in which it was stated that “So long as any money remains owing under this guarantee, the Bank shall have a lien on all moneys standing to the credit of guarantor(s) and on any securities or goods in the hands of the bank belonging to the guarantor(s) under its control.” Since the amount was pending in the complainant‘s loan account the opposite party was not in position to release the given security.  Based on the request made by the complainant on 13.09.2021 the opposite party asked the complainant to close the loan in order to release the given security document.  The due amount was paid on 11.03.2022 towards the complainant’s loan account and then the opposite party called the complainant to collect the document and on 22.04.2022 the complainant came to the opposite party Bank gave an affidavit on behalf of him and on behalf of his nephew. The complainant sent a legal notice dated 06.04.2022 & 22.04.2020.  After receiving all the documents including the security document, gave an affidavit to the opposite party that the complainant and guarantor would not claim any amount and shall not initiate any legal action against the opposite party.  Thus they sought for the complaint to be dismissed.
On the side of complainant proof affidavit was filed and submitted documents marked as Ex.A1 to A6. On the side of opposite party proof affidavit was filed and submitted document marked as Ex.B1 to Ex.B12.
Points for consideration:
Whether the complaint allegations in the matter of granting loan to the complainant insisting for a guarantor and submission of security documents and in not returning the same by closing the loan account amounts to deficiency in service as alleged by the complainant?
If so to what reliefs the complainant is entitled?
Point No.1:-
The following documents were filed on the side of complainant in support of his contentions;
Copy of Release Deed executed in favour of the Guarantor vide document No.11421/2012 at SRO, Avadi dated 17.10.2012 was marked as Ex.A1;
Copy of Loan Statement of the complainant was filed as Ex.A2;
Copy of complaint lodged before the Chief Manager, Customer Service Cell, Indian Bank dated 13.09.2021 was marked as Ex.A3;
Copy of email sent by the complainant to Ombudsman, RBI Chennai dated 21.09.2021 was marked as Ex.A4;
Copy of the re-launch notice issued by the complainant to the Ombudsman was marked as Ex.A5;
Copy of the representation given by the complainant to the opposite party and other higher officers dated 07.04.2022 was marked as Ex.A6;
On the side of opposite party the following documents were submitted in proof of their defence;
UYEGP Scheme Application dated 22.04.2015 was marked as Ex.B1;
Loan Sanction Ticket dated 12.02.2016 was marked as Ex.B2;
Project Report given by J.Somasundaram was marked as Ex.B3;
Property details given by T.Vijayaraghavan was marked as Ex.B4;
Credit Report of J.Somasundaram was marked as Ex.B5;
Guarantor Form given by T.Vijayaraghavan was marked as Ex.B6;
Agreement of Guarantee given by T.Vijayaraghavan was marked as Ex.B7;
Proceedings of the General Manager, District Industries Centre, Thiruvallur dated 20.02.2017 was marked as Ex.B8;
Acknowledgment of debit cum security dated 21.12.2017 was marked as Ex.B9;
Letter of J.Somasundaram was marked as Ex.B10;
Affidavit of J.Somasundaram was marked as Ex.B11;
Statement of Accounts of the complainant issued by the opposite party Bank was marked as Ex.B12;
The crux of the oral arguments made by the learned counsel appearing for the complainant is that the complainant had obtained loan from opposite party for business purposes and that the loan was closed as early as on 06.11.2020.  However, the document submitted as security at the time of availing loan was returned only after one and half years.  Thus he sought for the complaint to be allowed for the alleged deficiency in service on the part of the opposite party and prayed for compensation for causing delay in returning the document.
 However, on the side of opposite party Bank it was argued that they never insisted for any security and also did not ask for any person to stand as guarantor for the loan availed by the complainant.  Further it was argued that at the time of receipt of original document the complainant had given an undertaking by way of affidavit that they will not initiate any legal proceedings. However, now had come up with the present complaint.  Hence it was argued that the complaint ought to be dismissed as they had not committed any deficiency in service.
We perused the entire pleadings and materials and we are of the opinion that the complaint has to be allowed for the following reasons;
There is no necessity for the complainant to submit the original document that too belonging to his nephew when not insisted by the Bank for sanctioning the Unemployed Youth Employment Generation Program loan.  In this context the version of the opposite party that they never insisted for production of any security document at the time of sanctioning of loan has been proved to be an utter false statement.
Also it is the specific version of the Bank that they did not insist for any guarantor for sanctioning the loan but the complainant on his own volition had made his nephew as guarantor for the loan. When the bank did not insist the complainant, the was no necessity to make his nephew to sign him as a guarantor, as no normal person would like to make his relative as guarantor for the loan when the Bank did not demand for.
When the Bank raised the defence that they did not insist for both deposit of security documents and for guarantor what necessitated the Bank to accept both. They ought to have rejected the same as unwarranted for the loan. Thus, no satisfactory reason given by Bank for accepting the guarantor and Security document.
  The undertaking letter given by the complainant relied upon by the opposite party that they will not insist any legal action as per Law is not at all maintainable as the same is clearly barred under the statute.
As per the Statement of Accounts it is seen that on 06.11.2020 there was only a balance of Rs.25.68/-.  When the complainant was able to repay the entire loan amount but he was not able to pay the said meagre amount seems unreasonable.  At this juncture the complaint allegations that the complainant was not allowed to close the loan account by the opposite party as on 06.11.2020 by retaining a balance of Rs.20/- purposefully and dragging the complainant and guarantor until 11.03.2022 has to be presumed as true and proved.
No valid defence was raised by the opposite party Bank for the delay in returning the document.  No proper explanation was given for the complaint allegations that the complainant was not permitted to close the loan account as early as on 06.11.2020 except the bald statement that the loan amount was not fully paid.
For the above mentioned reasons we hold that the opposite party had committed clear deficiency in service in insisting for a guarantor and submission of security doucments when not required and in not returning the original document submitted by the complainant in time.  This point is answered accordingly in favour of the complainant and as against the opposite party.
Point No.2:-
With respect to the relief to be granted we are of the view that for not returning the original document for more than one and half years for the complainant causing mental agony and hardship, complainant should be adequately compensated for which we fix an amount of Rs.50,000/- as compensation to be paid to the complainant by the opposite party along with cost of Rs.5,000/- to the complainant.
In the result, the complaint is partly allowed against the opposite party directing them
a) To pay a sum of Rs.50,000/- (Rupees fifty thousand only) towards compensation for the mental agony and hardship caused to the complainant.
b)  To pay a sum of Rs.5,000/- (Rupees five thousand only) towards litigation expenses to the complainant.
 Dictated by the President to the steno-typist, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this the 20th day of March 2023.

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 MEMBER-II                                                                                             PRESIDENT
List of document filed by the complainant:-

Ex.A1 17.10.2012 Copy of the Release Deed executed in favour of the Guarantor vide document No.11421/2012 at SRO, Avadi. Xerox
Ex.A2 18.08.2021 Copy of the Loan Statement of the complainant. Xerox
Ex.A3 13.09.2021 Copy of complaint lodged before the Chief Manager, Customer Service Cell, Indian Bank, Chennai 600 001. Xerox
Ex.A4 21.09.2021 Copy of email sent by the complainant to Ombudsman, RBI, Chennai. Xerox
Ex.A5 .............. Copy of re-launch notice issued by the complainant to the Ombudsman. Xerox
Ex.A6 07.04.2022 Copy of the representation given by the complainat to the opposite party and other higher officers with post receipts. Xerox

List of documents filed by the opposite party:-

Ex.B1 22.04.2015 UYEGP Scheme Application. Xerox
Ex.B2 12.02.2016 Loan Sanction Ticket. Xerox
Ex.B3 ............... Project Report given by J.Somasundaram. Xerox
Ex.B4 12.02.2016 Property details given by T.Vijayaraghavan. Xerox
Ex.B5 12.02.2016 Credit Report of J.Somasundaram. Xerox
Ex.B6 .............. Guarantor Form given by T.Vijayaraghavan. Xerox
Ex.B7 12.02.2016 Agreement of Guarantee given by T.Vijayaraghavan. Xerox
Ex.B8 20.02.2017 Proceedings of the GM, DIC, Tiruvallur. Xerox
Ex.B9 21.12.2017 Acknowledgement of Debt cum security. Xerox
Ex.B10 13.09.2021 Letter of J.Somasundaram. Xerox
Ex.B11 22.04.2022 Affidavit of J.Somasundaram. Xerox
Ex.B12 16.08.2022 Statement of Accounts. Xerox

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MEMBER-II                                                                                                         PRESIDENT