Karnataka

Chitradurga

CC/54/2019

M/s Mangala Traders, Represented by its Managing Director - Complainant(s)

Versus

The Branch Manager, Kotak Mahindra Bank Ltd.(3221 - Opp.Party(s)

Sri.P.S. Sathyanarayana Rao

20 Apr 2019

ORDER

COMPLAINT FILED ON:24/01/2019

DISPOSED      ON:20/04/2019

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHITRADURGA.

 

CC.NO:54/2019

 

DATED: 20^th APRIL 2019

PRESENT :-     SRI.T.N.SREENIVASAIAH :   PRESIDENT                                     B.A., LL.B.,

                        SMT. JYOTHI RADHESH JEMBAGI

BSc.,MBA., DHA.,                LADY MEMBER

 

……COMPLAINANT/S	M/s Mangala Traders, Represented by its Managing Director, Sri. C.B. Mahesh Chandra Babu, S/o Sri. B.T. Basavaraju, Age: 56 Years, R/o Sri Mangala, II Cross, Mahaveer Nagar, B.D. Road, Chitradurga.   (Rep by Sri.P.S. sathyanarayana Rao, Advocate)
V/S
…..OPPOSITE PARTIES	1. The Branch Manager, Kotak Mahindra Bank Ltd., (3221), Holalkere Road, P.B.No.13, Near Neelakanteshwara Temple, Chitradurga.   2. The Chief Manager, Kotak Mahindra Bank, Koppikar Road, Hubli.   (Rep by Sri.B.N. Lakshminarayana Rao, Advocate)

ORDER

SRI. T.N. SREENIVASAIAH:   PRESIDENT

The above complaint has been filed by the complainant u/Sec.12 of the C.P. Act, 1986 for the relief to direct the OPs return the original property documents, not to collect any foreclosure charges and to pay Rs.12,00,000/- towards damages for financial loss, mental agony, loss of time and energy, costs and  to grant such other reliefs.

2.      The brief facts of the case of the above complainant are that, he has availed OD facilities by pledging original property documents with the OPs and he is having A/c No.103044031281.  It is further submitted that, on 01.01.2019, the complainant has written a letter to OPs with a request to closure of OD facility in the above said account and return all the original documents which was submitted earlier.  It is further submitted that, on 18.01.2019, the OP instead of returning the original documents, has written a letter that, the complainant has to pay foreclosure charges of 1% + GST 18% to be applicable to the OD facility limit.  It is pertinent to mention here that, the OP has collected the renewal charges for the OD facility.  Even then the OP has informed the complainant to pay foreclosure charges and GST to release the property documents, it is highly illegal and not sustainable in law, which is a deficiency in service and dereliction of duties.  The complainant has cleared all the loan amount to the OP and according to the OP, the complainant has to pay more than Rs.1.18 lakhs to the Bank, it is highly exorbitant, global and illegal one and untenable in law.  Due to delay in returning the property documents, the complainant has incurred heavy financial loss in rendering the business and suffered mental agony and pain.  For all these lapses, the OP is held liable to pay the suitable compensation to the complainant.   The cause of action for this complaint arose at Chitradurga which is within the jurisdiction of this Forum and hence, prayed for allow the complaint.

   3.   On service of notice, OPs appeared through Sri. B.N. Lakshminarayana Rao, Advocate and filed version.   

According to the version filed by the OPs, it is agreed that the complainant is having OD facilities in the Bank and averments made in para 3 of the complaint is admitted in part and further the OPs have stated that the complainant has to pay foreclosure charges at 1% + GST 18% to be applicable for the OD facility limit not correct,  It was agreed by the complainant that in the event the borrower closed the working capital facility within 24 months of the first disbursal/utilization of said facility, the borrower shall pay to the Bank closure fee at 1% of the limit sanctioned.  The complainant by agreeing to the said terms has availed OD facility from the OPs.  Therefore, the OPs have written a letter to the complainant to pay foreclosure charges at 1% plus GST at 8%.  Further the averments that, the OPs have already collected renewal charges at the time of renewal of OD facility.  Even then the OPs have informed the complainant to pay foreclosure charges and GST to release the property documents and it is highly illegal one and not sustainable in law, it clearly shows the deficiency of service and dereliction of duties is false.  AS per the agreement between the complainant and OPs, the complainant has to pay 1% foreclosure charges and GST at 8%, the payment of renewal charges is quite different from foreclosure charges, the complainant has to pay foreclosure charges as per sanction letter, the complainant has cleared all the loan amount to the OP Bank, it is false to state that, it is not correct to say that, the complainant has to pay Rs.1,18,000/- to the OP, it is highly exorbitant, global and untenable in law and due to delay in return of the property documents, the complainant has incurred heavy financial loss in running the business and suffered from mental agony and the complainant has got defame in the business and not transacted properly and that for all these lapses, the OP Bank is held liable to pay suitable compensation is false.  It is submitted that, the complainant is bind by agreed terms of loan and he has to pay foreclosure charges with GST to the OP.  Therefore, there is no deficiency of service on the part of OPs and hence, prayed for dismissal of the complaint.

4.      Complainant himself has examined as PW-1 by filing affidavit evidence and the documents Ex.A-1 to A-5 were got marked and closed his side.   OP has examined one Sri K Sheshappa Setty Srinath as DW-1 and relied on Ex.B-1 to B-5 and closed their side.

 

5.      Arguments heard.

6.      Now the points that arise for our consideration for decision of above complaints are that;

(1)  Whether the complainant proves that the OPs have committed deficiency of service in demanding to pay the foreclosure at 1% and GST at 8% for returning the original property documents and entitled for the reliefs as prayed for in the above complaint?

              (2) What order?

         7.       Our findings on the above points are as follows:-

                    Point No.1:- Partly in Affirmative. 

                    Point No.2:- As per final order.

REASONS

8.      Point No.1:- There is no dispute between the complainant and OP that, the complainant is having OD facility with the OPs.  The complainant has cleared the entire loan amount and requested the OPs to return all the original property documents as collected at the time of sanctioning the OD facility.  But the OPs have denied and demanded 1% foreclosure charges and GST at 8% from the complainant.  The Advocate for complainant has addressed his arguments that, the OPs have already collected charges from the complainant at the time of sanctioning the OD facility.  At this stage, the OPs have no right to claim any foreclosure charges or GST Charges while returning the documents to the complainant.  But the Advocate for OPs addressed his argument that, the foreclosure charges and GST charges is different from the charges collected at the time of sanctioning the OD facility.  The documents produced by the complainant shows that, the Ex.A-3 the letter written to the OPs, the OPs have received the Ex.A-3 on 12.01.2019 and the OP No.1 has written a letter on 18.01.2019 demanding foreclosure charges from the complainant.  But according to the arguments addressed by the OPs, the foreclosure charges is different from charges collected at the time of sanctioning the OD facility.  But the Advocate for complainant states that, once the charges have been collected from the complainant, again the question of asking the foreclosure charges or GST from the complainant while returning the original documents does not arise.  The complainant has relied upon the Ex.A-5, the letter issued from the RBI, in the said letter it clearly stated that, a reference is invited to Part B of the First Bi-monthly monetary policy statement 2014-15 announced on April 1, 2014 proposing certain measures for consumer protection. It was indicated that in the interest of their consumers, banks should consider allowing their borrowers the possibility of prepaying floating rate term loans without any penalty.  Accordingly, it is advised that banks will not be permitted to charge foreclosure charges/pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect.  Further the letter of the RBI i.e.,14^th July 2014, as a measure of customer protection and also in order to bring in uniformity with regard to prepayment of various loans by borrowers of banks and NBFCs, it is advised that NBFCs shall not charge foreclosure charges/pre-payment penalties on all floating rate term loans sanctioned to individual borrowers, with immediate effect.  The complainant also relied upon an unreported decision in the case of Nitin Gupta Vs DCB Bank in the Court of SH. Arun Sukhija, the Additional District Judge, TIS Hazari Courts, Delhi in support of his case.  In any angle, it shows that, the OPs have committed deficiency of service while returning the original documents to the complainant.  Further non-returning of the original documents to the complainant well in time has caused great hardship and injury, therefore, the OPs have to pay the compensation to the complainant.

9.      We have gone through the entire documents filed by both the sides, it shows that both the parties have agreed that the complainant is having OD facility in the OP Bank and after clearing the entire loan amount, the OPs have failed to return the original documents to the complainant.  The main contention of the OPs is that, the complainant has to pay the foreclosure charges and GST charges.  But as per the Ex.A-5, it clearly shows that, the OPs are not entitled for any foreclosure charges or GST charges from the complainant.  Once the consumers have cleared the loan to the Bank authority, it is their bounden duty to return all the original documents.  In this case, the OPs have already collected the charges from the complainant while sanctioning the OD facility.  Therefore, the question of paying the foreclosure and GST charges to the OPs does not arise.  The OPs have committed deficiency in service and dereliction of duties while returning the original documents to the complainant.  Non returning of the documents to the complainant caused the complainant to suffer great loss and mental agony and loss of business which cannot be compensated by the OPs in any manner.  Therefore, the OPs have to return all the original documents to the complainant and also to pay the compensation.  Accordingly, this Point No.1 is held as partly affirmative to the complainant.          

            10.     Point No.2:- As discussed on the above point and for the reasons stated therein we pass the following:-

 

ORDER

The complaint filed by the complainant U/s 12 of CP Act 1986 is partly allowed.

It is ordered that the OPs are hereby directed to return all the original documents if any with them which were collected at the time of sanctioning the OD facility immediately. 

Further, the OPs are hereby directed not to collect any foreclosure or GST charges as per letter dated 18.01.2019.

Further it is ordered that, the OPs are hereby directed to pay a sum of Rs.1,00,000/- to the complainant towards financial loss, mental agony and loss of time and energy.

The office is hereby directed to issue a cheque for Rs.1,00,000/- in favour complainant which was deposited before this Forum.

It is further ordered that, the OPs are hereby directed to pay Rs.10,000/- towards mental agony and Rs.5,000/- towards costs of this proceedings. 

It is further ordered that, the OPs are hereby directed to comply the above order within 30 days from the date of this order.

 (This order is made with the consent of Member after the correction of the draft on 20/04/2019 and it is pronounced in the open Court after our signatures)         

 

                                     

MEMBER                                                   PRESIDENT

 

-:ANNEXURES:-

Witnesses examined on behalf of Complainant:

PW-1:  Complainant by way of affidavit evidence.

Witnesses examined on behalf of OPs:

DW-1:- Sri.K. Sheshappa Setty Srinath, by way of affidavit evidence.

Documents marked on behalf of Complainant:

01	Ex-A-1:-	Form D
02	Ex-A-2:-	Partnership deed dated 01.09.2018
03	Ex-A-3:-	Letter to OPs by the complainant
04	Ex-A-4:-	Letter dated 18.01.2019 to complainant
05	Ex-A-5:-	Letter dated 07.05.2014 by RBI

Documents marked on behalf of OPs:

01	Ex-B-1:-	Loan sanction letter dated 17.11.2017
02	Ex-B-2:-	Letter by the complainant dated 15.10.2018
03	Ex.B-3:-	Letter dated 09.11.2018 by the complainant
04	Ex-B-4:-	Letter by the complainant
05	Ex-B-5:-	Letter dated 18.01.2019 by the OPs to complainant

 

 

 

MEMBER                                                   PRESIDENT

Rhr**