Andhra Pradesh

East Godwari-II at Rajahmundry

CC/22/2015

Akula Shanmukha Rao - Complainant(s)

Versus

The Branch Manager, LIC Housing Finance Ltd, - Opp.Party(s)

D. Appa Rao

13 Oct 2015

ORDER

                                                                                                                                                                               Date of filing:   04.03.2015

                                                                                                                                                                               Date of Order: 13.10.2015

 

BEFORE THE DISTRICT CONSUMER FORUM-II, EAST GODAVARI

DISTRICT AT RAJAHMUNDRY

 

                                                      PRESENT:   Smt H.V. Ramana, B.Com., L.L.M.,   PRESIDENT(FAC)

                      Sri A. Madhusudana Rao, M.Com., B.L., MEMBER          

    

                           Tuesday, the 13^th day of October, 2015

 

C.C.No.22 /2015

Between:-

 

Akula Shanmukha Rao, S/o. Suryanarayana,

aged about 56 years, Cultivation, R/o. D.No.19-5-13,

Near Kambala Tank, Ramachandrarao peta,

Rajahmundry, E.G. Dist.                                                                                                                                    …        Complainant

 

                        And

 

1)  The Branch Manager, LIC Housing Finance Ltd.,

      D.No.7-30-20, Ground Floor, Jeevan Jyothi Buildings,

      Main Road, Rajahmundry.

 

2)   Durga Srinivas, S/o. Durga Venkata Ramana Rao,

      aged about 51 years, Business, D.No.74-9-10,

      Andhra Bank Upstairs, Prakash Nagar, Rajahmundry.                                                                                    …        Opposite parties

 

 

 

            This case coming on 01.10.2015 for final hearing before this Forum in the presence of Sri D. Appa Rao, Advocate for the complainant and Sri K. Badrinath, Advocate for the     1^st opposite party, and Sri P. Kondala Rao, Advocate for the 2^nd opposite party, and having stood over till this date for consideration, this Forum has pronounced the following:  

 

O R D E R

[Per Smt.H.V. Ramana, President(FAC)] 

This is a complaint filed by the complainant U/Sec.12 of Consumer Protection Act 1986 to direct the 1^st opposite party to return all the original title deeds of the plaint schedule property which were deposited with the 1^st opposite party at the time of granting loan to the complainant; to direct the opposite parties to pay the damages of Rs.2,00,000/- to the complainant due to mental agony and pain caused to the complainant in not returning the original title deeds even after discharge of the loan by the complainant and award costs of the complaint.

2.         The case of the complainant is that he purchased the schedule property from the 2^nd opposite party and the 2^nd opposite party alienated the same by suppression of the mortgage debt due to the 1^st opposite party.  Subsequently, the complainant approached the 1^st opposite party and requested him that he will pay the loan amount because the 2^nd opposite party did not disclose the same.  Since the 1^st opposite party gave notice for sale of the said property, the complainant discharged the loan.  Therefore, the complainant is the bona fide purchaser as he paid loan amount of Rs.7,00,000/- under one time settlement to the 1^st opposite party. After receipt of the amount, the 1^st opposite party failed to return the original title deeds to the complainant. Hence, the complainant got issued the notice dt.2.2.2015 and the same was received by the 1^st opposite party and gave reply with false and untenable allegations. Hence, the complaint.

3.         The 1^st opposite party filed its written version and denied all the allegations made by the complainant. It is submitted that the 2^nd opposite party obtained housing loan from the 1^st opposite party on 13.3.2003 by mortgaging his property covered under Regd. Sale deed dt.11.11.2005 and obtained a loan of Rs.3,75,000/- after executing necessary loan documents in favour of the 1^st opposite party. The 1^st opposite party submits that after obtained the housing loan, the 2^nd opposite party failed to adhere to the terms and conditions of the loan offer letter and committed default in payment of equal monthly installments inspite of repeated demands made by the 1^st opposite party.  The 2^nd opposite party clandestinely alienated the mortgage property in favour of the complainant on 11.12.2005 while the mortgage in favour of the 1^st opposite party was subsisting.  The 1^st opposite party initiated proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 herein after called as SARFAESI ACT and issued a demand notice under Section 13(2) of the said Act calling upon the 2^nd opposite party to repay the amount mentioned in said notice together with subsequent interest and costs.  The 2^nd opposite party after receiving the notice got filed O.S.No.734/2007 on the file of Ist Additional Junior Civil Judge, Rajahmundry dismissed the said suit on 18.2.2010.  The complainant approached the 1^st opposite party stating that he purchased the mortgage property from the 2^nd opposite party and requested the 1^st opposite party to deliver the original sale deed. The 1^st opposite party informed the complainant about the outstanding loan due and declined to release the title deed. The complainant then approached the Principal Senior Civil Judge, Rajahmundry in O.P.S.R.4943/2011 for redemption of mortgage by impleading the 1^st and 2^nd opposite parties as parties. The 2^nd oppsoiteparty herein did not contest the said proceedings. During the pendency of the same, the complainant herein approached  the 1^st opposite party and paid an amount of Rs.7,00,000/- towards full settlement of loan amount and agreed to obtain court orders for release of original title deeds in his favour through honourable court. Subsequently, the complainant did not prosecute the above matter and got filed this complaint before this Forum.  As stated supra, the complainant is not a borrower or customer of the 1^st opposite party. Hence, there is no deficiency of service on the part of the 1^st opposite party and the complaint is liable to be dismissed.     

4.         The 2^nd opposite party filed its written version and denied all the allegations made by the complainant.  The allegation that the 2^nd opposite party executed the sale deed in favour of the complainant and delivered possession of the schedule property on 11.11.2005 is not true and correct, but the ale deed was registered before the sub-registrar office.  In fact, this opposite party mortgaged the said property to L.I.C. Housing Finance, T. Nagar, Rajahmundry and borrowed the loan on 11.5.2013. The said loan discharged period up to 2018. Due to his financial problems, the 2^nd opposite party failed to pay the loan amount to LIC and requested the complainant to pay the same.  Recently to his knowledge, the complainant has paid Rs.7 lakhs to the 1^st opposite party.  The 2^nd opposite party submits that on his verification, he came to know that the balance loan amount due by him to the 1^st opposite party has been paid by the complainant as purchased of his property under sale deed dt.11.11.2015 in addition to the sale consideration paid under the sale deed dt.11.11.2005 and the recitals in the same deed are true and correct. The 2^nd opposite party further submits that he has submitted letters to the 1^st opposite party through him as purchaser of the schedule property and he made correspondence with the 1^st opposite party for discharge of loan and for delivery of title deeds on payment of the loan amount by him.  The 2^nd opposite party submits that his wife Durga Ramulamma @ Sode Ramulamma have filed case on the file of 7^th J.F.C.M., Rajahmundry against the complainant in Crime No.36/2012 and the said case is pending.  The complainant with an intention to grab his property, he made publication in Eenadu newspaper on 22.11.2013 for which his advocate gave the reply.  The 2^nd opposite party submits that I came to know the 1^st opposite party without giving notices to him, they closed the account on 31.3.2015.  The said act is an illegal and the Hon’ble Forum may be pleased to consider my counter contents.  The 2^nd opposite party submits that he is in the possession of the schedule property by payment of property tax, tap tax, current tax.  The 2^nd opposite party further submits that the complainant and the 1^st opposite party are responsible for the punishment due to they committed illegal act.  Hence, there is no deficiency of service on the part of the 2^nd opposite party and the complaint is liable to be dismissed.

5.         The proof affidavit filed by the complainant and Exs.A1 to A6 have been marked on behalf of the complainant. The proof affidavits filed by the 1st & 2^nd opposite parties and Exs.B1 to B6 have been marked on behalf of the opposite parties.

6.         Heard both sides.

7.         Points raised for consideration are:

 

1. Whether there is any deficiency in service on the part of the opposite parties?

            2. Whether the complainant is entitled for the reliefs asked for?

            3. To what relief?

 

            Admitted facts in this case are that the complainant purchased the schedule property from the 2^nd opposite party vide Ex.A1 and the 2^nd opposite party alienated the property by suppression of the mortgage debt with the1st opposite party to the complainant. The complainant approached the 1^st opposite party and settled the loan amount taken by the 2^nd opposite party and the same is informed by the 1^st opposite party to the 2^nd opposite party vide Ex.A2. After settlement of the loan amount, the complainant gave a legal notice to the 1^st opposite party to return the original documents pledged by the 2^nd opposite party vide Ex.A3 and the same is acknowledged by the 1^st opposite party vide Ex.A4. The 1^st opposite party gave a reply vide Ex.A5 = Ex.B4 The complainant wrote a letter to the 1^st opposite party vide Ex.A6.

            The 1^st opposite party submitted that the 2^nd opposite party mortgaged his property and obtained a loan of Rs.3,75,000/- after executing the necessary documents in favour of the 1^st opposite party. The 1^st opposite party sent a demand notice to the 2^nd opposite party vide Ex.B1. The 2^nd opposite party filed a case against the 1^st opposite party before the 1^st Addl. Junior Civil Judge’s court and the copy of the decree is herewith filed vide Ex.B2.  The complainant also filed a civil suit under Section 83 of T.P. Act before the Principal Senior Civil Judge court and the copy of the said petition is herewith filed vide Ex.B3.

            The 2^nd opposite party submitted that the complainant gave a paper publication vide Ex.B5 for which the 2^nd opposite party denied the facts of the publication and gave reply paper publication vide Ex.B6 stating that he never alienated his property to the complainant.        

         

8.  POINT Nos.1 & 2:  The main contention of the complainant is that even after settlement of the loan account, the opposite parties failed to return the original documents to the complainant even after several demands. The 1^st opposite party also admitted that the complainant paid the full amount and settled the loan account. After receipt of the total amount by the 1^st opposite party from the complainant, even then, he failed to return the original title deeds. The complainant also contended that he also gave an authorization letter taken from the 2^nd opposite party for return of documents and submitted to the 1^st opposite party.  Even then, the 1^st opposite party did not return the said original documents. The complainant further contended that the 1^st and 2^nd opposite parties colluded and failed to return the documents. The complainant got issued a legal notice on 2.2.2015 and the same is received by the 1^st opposite party and gave a false reply. This amounts to deficiency in service on the part of the 1^st opposite party and to discharge their obligation as per law in return of the documents mentioned in the schedule.

            The 1^st opposite party contended that the complainant is not a customer and there is no deficiency in service on their part. They further submitted that the 2^nd opposite party failed to repay the loan amount and committed default in payment of equal monthly installments inspite of repeated demands. The 2^nd opposite party clandestinely alienated the mortgage property in favour of the complainant on 11.12.2005 while the mortgage is in favour of this opposite party. This opposite party initiated the proceedings under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and got issued a demand notice under Section 13(2) of the said Act calling upon the 2^nd opposite party to repay the amount with interest and costs. They further contended that the complainant approached the 1^st opposite party and stated that he purchased the mortgaged property from the 2^nd opposite party and requested to deliver the original sale deed. The 1^st opposite party informed about the outstanding loan due from the 2^nd opposite party and declined to release the title deeds. The complainant approached the Hon’ble Principal Senior Civil Judge, Rajahmundry in O.P.S.R. 4943/2011 for redemption of mortgage by impleading the 1^st and 2^nd respondents as parties. The 2^nd respondent did not contest the proceedings. The complainant paid an amount of Rs.7,00,000/- towards full settlement of the loan amount and agreed to obtain court orders for release of original title deeds in his favour through honourable court, but the complainant did not prosecute the above matter and filed this complaint before this Forum. The 2^nd opposite party who alienated the mortgaged property in favour of the complainant during the pendency of the mortgage and the same is not informed to this opposite party and also failed to discharge the loan due to the 1^st opposite party even inspite of repeated demands. The 1^st opposite party contended that the complainant and the 2^nd opposite party colluded and this opposite party did not return the documents are not true and correct. The complainant sent a legal notice on 2.2.2015 and the 1^st opposite party gave a reply on 14.2.2015 with true and correct facts. This opposite party also informed to the complainant that they have no objection to return the documents on obtaining the court order and the same is agreed by the complainant while settling the loan account. But, the complainant has not filed the court order and there is no deficiency in service on the part of this opposite party.

            The 2^nd opposite party contended that he obtained loan from the 1^st opposite party on 11.5.2003 and the loan discharge period is up to 2018. He also admitted that due to his financial problems, he failed to pay the loan account to the L.I.C. and requested the complainant to pay the same. He further submitted that he came to know that the complainant paid Rs.7,00,000/- to the 1^st opposite party. This complainant is not a consumer under the purview of Consumer Protection Act.  Further, contended that the wife of the 2^nd opposite party a case against the complainant on the file of VII J.F.C.M., Rajahmundry under Crime No.36/2012 and the said case is pending. The complainant also made a publication in Eenadu paper on 22.11.2013 for which he gave a reply. He also contended that the 1^st opposite party without giving notices to me, they closed the account on 31.3.2015 and the said act is illegal. The 2^nd opposite party further submitted that he is in possession of the schedule property.

            After perusing the material on record and other documents, we observed that the 2^nd opposite party has taken the loan from the 1^st opposite party and failed to repay the loan amount.  As per Ex.A1, the complainant purchased the property on 11.11.2005, in the said record, the 2^nd opposite party informed that the said property is not alienated to anybody and mortgaging the property with the 1^st opposite party is concealed by the 2^nd opposite party. The 2^nd opposite party also filed a case vide Ex.B2 against the 1^st opposite party and the same is dismissed for default by the Principal Junior Civil Judge, Rajahmundry. The complainant also filed a  case  under  Ex.B3 against the opposite parties under Section 83 of T.P. Act. Thesaid matter was settled and the amount was paid by the complainant to the 1^st opposite party and the same is admitted by them vide Ex.A2. As per the material on hand we observed that the complainant has not filed the copy of the document ie. authorization letter given by the 2^nd opposite party to the 1^st opposite party. As per Ex. A2 we observed that the complainant paid the loan amount on 5^th January 2015 only.

            The complainant relied a decision in State Bank of India & another Vs. K. Ramalingeswara Rao: IV (2014) CPJ 22 (APSCDRC, Hyderabad), in which it was held that the housing loan - repayment made - original mortgaged document not returned – mental agony – deficiency in service – District Forum allowed the complaint – hence appeal – loss of document i.e. title deed would pose problems to respondent as to availing loan from banks other than appellant bank – prospective buyers may not come forward to pay actual value of property on account of associated risks as to source of title of title – entire market value of the property covered under lost document cannot be awarded as compensation and the compensation given by the lower forum is reduced from Rs.6 lakhs to Rs.3.5 lakhs.

            The above said case is not applicable to the case on hand.  In this case, the documents are still with the 1^st opposite party and they have not returned the documents to the complainant to get an order from the appropriate forum.    

            With the discussion held supra, we observed that there is no deficiency in service on the part of the 1^st opposite party as he has informed the complainant to produce the court order for releasing the original documents of the schedule property. We also observed that the 2^nd opposite party registered the sale deed vide Ex.A1 to the complainant without knowledge of the 1^st opposite party and also concealing the fact of the said mortgage to the complainant. In this case, as per our observation, the 2^nd opposite party mislead the complainant and the 1^st opposite party by not releasing the exact facts while registering the schedule property. Therefore, we opined that the 2^nd opposite party is liable to pay damages to the complainant. We also direct the 1^st opposite party to release the original documents to the complainant as the loan amount is already settled by him as per Ex.A2.                        

9.   POINT No.3:  In the result, the complaint is allowed in part, directing the 1^st opposite party to release the original documents of the schedule property and hand over them to the complainant. We further direct the 2^nd opposite party to pay Rs.20,000/- towards damages for misleading the complainant and also direct to pay Rs.2,000/- towards the costs of the complaint to the complainant. Time for compliance is two months from the date of this order.   

 

Typed to dictation, corrected and pronounced by us in open Forum, on this the       

13^th day of October, 2015.

    

                  Sd/-xx                                                                                         Sd/-xx

              MEMBER                                                                              PRESIDENT(FAC)

         

 

APPENDIX OF EVIDENCE

WITNESSES EXAMINED

 

FOR COMPLAINANT: None.                                                                            FOR OPPOSITE PARTIES: None.

 

DOCUMENTS MARKED

 

FOR COMPLAINANT:

 

Ex.A1    Copy of the sale deed dt.11.11.2005 executed by the 2^nd opposite party in favour of

  the complainant.

Ex.A2    Receipt dt.12.1.2015 given by the 1^st opposite party acknowledging the payment of

              the loan amount of Rs.7,00,000/- to the 1^st opposite party by the complainant.

Ex.A3    O/c of the notice dt.2.2.2015 along with postal receipt.

Ex.A4    Acknowledgement of the 1^st opposite party.

Ex.A5    Reply given by the 1^st opposite party dt.14.2.2015 through his counsel.

Ex.A6    Letter addressed by the complainant to the 1^st opposite party under OTS scheme

  dt.12.4.2014 along with receipt.

 

FOR 1^st OPPOSITE PARTY:-     

 

Ex.B1    Office copy of the notice dt.15.5.2007 issued by the 1^st opposite party to the 2^nd

  opposite party under Sec. 13(2) of the SARFACESI ACT.

Ex.B2    C.C. of decree in O.S.734/2007 on the file of Ist Addl. Junior Civil Judge,

  Rajahmundry.

Ex.B3    Office copy of Plaint in OPSR.4943/2011 filed by the complainant on the file of Prl.

  Senior Civil Judge, Rajahmundry.

Ex.B4    Office copy of reply notice dt.14.2.2015 issued by the 1^st opposite party to the

  complainant.

 

FOR 2^nd OPPOSITE PARTY:-    

 

Ex.B5    original copy of Eenadu daily publication given by the complainant counsel on

  22.11.2013.

Ex.B6    Original copy of the Eenadu daily publication given by his counsel on 24.11.2013.

 

                 Sd/-xx                                                                                               Sd/-xx

              MEMBER                                                                              PRESIDENT(FAC)