Smt. Syeda Shahnur Ali, President-in-Charge

In a short compass, case of the Complainants’, is that they took a loan of Rs. 2,63,000/- from the OP bank that was sanctioned vide letter dated 16-08-2012. The loan amount, together with interest, was payable in 60 installments and a vehicle was hypothecated with the OP bank for this purpose.  It is claimed that they were regularly paying EMIs as per terms and conditions. In any case, in the month of February, 2016, the OP came up with an offer to settle the loan account on payment of Rs. 40,000/-.  Accordingly, the Complainants deposited the requisite money with the OP on 26-02-2016 and in turn, the OP issued a “No due Certificate” on the very same day in favour of the Complainants’ confirming closure of the concerned loan account under LATRO scheme under special O.T.S. scheme.  It is alleged that subsequently, the OP, to the utter surprise of the Complainants’, sent a letter dated 18-03-2016 stating inter alia that it inadvertently entered into the settlement agreement with them and that the concerned loan account could not be compromised through settlement and asked them to repay Rs. 1,18,899.50 within a week. It is further alleged that the OP has refused to give any clearance in respect of the hypothecated vehicle and refused to handover the duplicate key of the said vehicle. Terming such action of the OP totally arbitrary and illegal, Complainants’ filed the instant case.

Per contra, case of the OP is that petitioners’ account is covered under CGTMSE guarantee.  As per the guideline of CGTMSE, the amount recovered from the borrower through compromise or any other recovery measures should be returned to CGTMSE for necessary appropriation of the recovered amount.  It is stated that due to irregular payment, the concerned account became NPA on 30-06-2014.  After constant follow ups, the Complainants’ visited the branch of the OP bank and settled the account on 26-02-2016 after paying a sum of Rs. 40,000/-.  It is further stated that inadvertently, the OP did not add the amount of CGTMSE claim received on 18-09-2015 and issued a No due Certificate on 26-02-2016 in favour of the petitioners.  As per guideline of the bank, branch cannot enter compromise settlement at the amount which is net off the claim amount received, if any, from the CGTMSE and the compromise has to be made  at the amount after adding up the claim amount, if any, received from CGTMSE.  It is claimed that they called the Complainants’ duo in the evening on the very same day and asked them to pay the residual amount to close the account, but they refused to do so.  Thereafter, the OP sent a letter to the petitioners on 18-03-2016 stating that the loan account could not be closed till a sum of Rs. 1,18,899.50+interest was paid.

The moot point to be considered is whether the Complainants’ are entitled to the relief sought for by them, or not.

Decision with reasons

The OP has vehemently disputed the maintainability of this case on the ground that commercial purpose does not come within the ambit of the Consumer Protection Act, 1986. Therefore, let us first decide whether the present case is maintainable in its present form and prayer before this Forum, or not.

It is clearly clarified u/s 2(1)(d) of the Act that “commercial purpose” not necessarily throws one out of the ambit of this case.  According to this Section, if one purchase goods or avails of services exclusively for the purpose of earning one’s livelihood by means of self-employment, one construes as a bona fide “consumer”.  The Hon’ble Apex Court in the matter of Laxmi Engineering Works vs. P.S.G. Industrial Institute, reported in (1995) 3 SCC 583, has clarified that, ‘in certain situations, purchase of goods for “commercial purpose” would not yet take the purchaser out of the definition of expression “consumer”.  If the commercial use is by the purchaser himself for the purpose of earning his livelihood by means of self-employment, such purchaser of goods is yet a “consumer”’.   

The Complainant, in the instant case, is the partners of a partnership firm, namely, “OMKAR ENTERPRISE”.  As per Section 2(1)(d)(m) of the Consumer Protection Act and in terms of Sec. 69 of the Partnership Act, 1932, and more so, keeping in mind the decision of Hon’ble Apex Court in the afore-mentioned case, we have no qualms holding that institution of a complaint by the partners of a firm in the name of the firm is not a disqualification on the term “person” defined u/s 2(1)(m) of the Act, irrespective of whether the firm is registered or not. We, thus, find no merit in the objection raised from the side of the OP in this regard. There is no infirmity in the present complaint case filed by the Complainants’.

Undisputedly, the Complainants’ took a loan amounting to Rs. 2,63,000/- from the OP on 16-08-2012. There is no quarrel as regards the fact that a compromise settlement was arrived at in between the parties whereof the loan account was squared off on payment of one time settlement money amounting to Rs. 40,000/- by the Complainants’ and a “No Due Certificate” was issued by the OP in favour of the Complainants’ on 26-02-2016.      

The dispute hovers around the claim for an amount of Rs.  1,18,899.50 plus accrued interest, raised by the OP subsequent to discharge of said settlement. 

Now, the question survives for our determination is whether a lender can renege on its commitment after entering into any settlement agreement terming it as an inadvertent mistake. 

OP has justified such demand on the ground that it inadvertently did not add the amount of CGTMSE claim received on 18-09-2015. It is further stated that as per guideline of the bank, branch cannot enter into compromise settlement at the amount which is net off the claim amount received, if any, from the CGTMSE and the compromise has to be made at the amount after adding up claim amount, if any, received from CGTMSE. 

It appears, the loan account turned NPA on 30-06-2014 and the CGTMSE claim was received on 18-09-2015; whereas, the settlement in between the parties was cemented on 26-02-2016. 

Undisputedly, said settlement was fructified following constant follow up of the matter with the Complainants by the OP. There is a huge gap of 1-½ year in between 30-06-2014 and 26-02-2016. It is not denied by the OP that it vigorously followed up the matter with the Complainants.  Thus, we find that the compromise offer was not made in haste, but the inevitable conclusion one can draw out of such admission is that it was the outcome of thoughtful consideration of the matter by the concerned officials of the bank.

  As we know, extending such leeway to a defaulter is not done by any individual official, but a collective decision is taken at different levels of management following intense deliberation/consultation of the matter by concerned officials/sections. No tangible evidence is advanced from the side of the OP that the concerned officials were not aware of the management policy in this regard. On a reference to the one page Transaction Inquiry sheet supplied on record by the OP pertaining to the account concerned, we find it contains only 10 transactions, including the CGTMSE claim received on 18-09-2015. Taking into consideration the remote possibility of each and every transaction pertaining to the concerned loan account not coming under watchful scrutiny of the concerned officials/departments, we find little or no reason to believe that the disputed CGTMSE claim escaped the attention of one and all.  Frankly speaking, a particular transaction escaping the attention of each and every official of the OP bank involved in determining the settlement sum sounds quite improbable to us.

We find it quite unusual that the OP, for the reasons best known to it, has shied away from placing on record relevant papers of the concerned settlement file to drive home its point. No doubt, the same would have given us crucial insight into the dispute.  Any person of reasonable prudence would find it hard to accept that the alleged error, that escaped the notice of concerned officials/sections for long 1½ year, was discovered as soon as the Complainant paid the settlement amount.  Rather, the manner in which the Complainants’ were called up at the branch by the officials of the OP in the evening on the date of settlement for a brain storming session to hard press them cough up rest of the outstanding amount is a clear pointer of the fact that the OP tried to act smart without any respect whatsoever towards propriety, ethical values or the law of the land.

Every one of us must be held accountable for our actions.  It might be true that to err is to be human.  But then we must look more closely at what that might mean, to be human.  The more significant question is, is anything we do truly inadvertent?  The more we explore human nature and behavior, the more inescapable is that we don’t “just” make mistakes.  Even the most “inadvertent” act does not occur in a vacuum.  When we look at any mistake, no matter how small or how accidental, we can see that avoiding those mistakes required only an equally “small” awareness of circumstances and thought.  “Inadvertent” mistakes, it seems, result almost inevitably from our placing ourselves in circumstances which make the mistake possible or when we fail to consider consequences and outcomes of our thoughts and behavior.

Truth to tell, we find no trace whatsoever of any bona fide mistake on the part of the OP.  People are careful, serious and thoughtful about things that matter to them. They tend to be less so to things that don’t matter much. There is no excuse for obvious carelessness and an explanation won’t help. It is up to the top echelon of management of the OP bank, if it so desires, to take the errant officials to task, as they did not factor in the impact of CGTMSE claim while fixing up the settlement amount. Once an amicable settlement is reached at in between the concerned parties, the same cannot be revoked unilaterally by any side citing such feeble and untenable excuses.   

The old saying goes; it is always wise to look before you leap.  The alibi, as advanced from the side of the OP, is not at all acceptable under the law and as such, we are inclined to hold that by revoking the earlier NoC, OP has done great injustice to the Complainants’. It must return the duplicate key of the hypothecated vehicle and facilitate seamless release of the same from all hypothecation related legal encumbrances. Taking into consideration the illegal manner in which the OP revoked its earlier NoC, we hold it liable to pay compensation and litigation cost to the Complainants as well.

Accordingly, this complaint case succeeds.

Hence,

ORDERED

that C. C. No. 37/2016 be and the same is allowed on contest against the OP.  OP is directed withdraw its demand letter dated 18-03-2016 under copy to the concerned RTA, issue fresh NoC to ensure deletion of hypothecation tag in respect of the concerned vehicle, return the duplicate key of the vehicle concerned to the Complainants’ and pay Rs. 20,000/-and Rs. 5,000/- as compensation and litigation cost, respectively, within 40 days hence failing which the Complainants’ would be at liberty to draw execution proceedings against the OP in accordance with law in which case, the OP shall be liable to pay fine @ Rs. 150/- per diem from this day till it ensures compliance of this order in toto.