DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: BHADRAK

Present 1. Shri Raghunath Kara, President

2. Shri Basanta Kumar Mallick, Member

3. Afsara Begum, Member

Dated the 16^th day of March, 2018

C.D. Case No. 33 of 2015

Sri Narayan Prasad Swain

S/O Late Muralidhar Swain

At-Jharadia

PO- Kalyani

P.S- Dhusuri

Dist-Bhadrak               ………………………Petitioner/Complainant

                                       Versus

Branch Manager

KalingaGramya Bank @ OdishaGramya Bank

Gobindapur Branch

At/Po- Gobindapur

Ps- Dhusuri

Dist- Bhadrak             ……………………Opposite Parties

For Complainant- Sri ArjunCharanBehera, Advocate and MuzahidAkhtarKhan, Advocate

For Opposite Party- Rabindra Prasad Ray, Advocate & Associate

Date of Hearing-11.10.2017

Date of Order- 16.03.2018

AFSARA BEGUM, MEMBER

This dispute arises out of a complaint filed by the complainant alleging deficiency of service and unfair trade practice.

The facts of the complaint are to the effect that the complainant is an unemployed person engaged in a small business to earn his lively hood and to maintain his family. In order to purchase a motor cycle for his own convenience, complainant requested OP to grant a loan for acquisition of a motor cycle. OP expressed his inability to grant/sanction loan for the purpose of motor cycle but agreed to sanction a business term loan of Rs 50,000/- which can be utilized for purchase of motor cycle. Complainant agreed to the proposal of OP and applied for a term loan of Rs 50,000/- in the printed from supplied by theBank. Further the OP asked the complainant to deposit a sum of Rs 30,000/- in SB account which would be taken as liquid security to secure the loan. Accordingly complainant offered a term deposit receipt of his father Muralidhar Swain bearing TD account No- 12610300001186 held in UCO Bank Asurali Branch under KuberYojana Deposit Scheme along with a deposit of Rs 30,000/- in his SB account No- 2627 to secure the loan. After obtaining security from the complainant, OP sanctioned a sum of Rs 50,000/- on 10.11.2010 and credited the amount to the SB account of the complainant on the same day so as to enable him to withdraw the amount from his account. After few days of availing the loan, complainant requested the OP to adjust the amount of Rs 30,000/- kept in his SB account to the credit of his loan account which was agreed by the OP and assured to do the needful shortly. Furthermore the complainant submitted that he was made convinced by the OP that the amount of Rs 30,000/- and the maturity value of Rs 10,000/- TD would be credited to the loan account and residue of the loan of Rs 10,000/- approximately would be paid by him. It is also stated by the complainant that no loan pass book was provided by the OP instantly on the date of disbursement of loan. The complainant was shocked and surprised when he received a notice from the Bhadrak Legal Authority to appear before the 2^ndNationalLokAdalatwas to be held on 06.12.2014 for settlement and payment of loan dues of Rs 88,023/- as on 31.10.2014. The complainant had been to the LokAdalat on the schedule date but due to stiff resistance of the advocates Bhadrak Bar Association on strike, complainant could not enter in to the Court premises and also failed to disclose the truth as to how the OP has deceived him. Returning from National LokAdalat, complainant rushed to O.Ps Branch and enquired as to how and why such a big amount is demanded and why the OP has not credited the amount of Rs 30,000/- deposited in his SB account and the maturity value of the T.D certificate of the father of the complainant which was pledged against the loan. The complainant also wanted to know as to how the term loan account was converted to cash credit account and also claimed statement of loan account. But the O.Ps did not provide the statement of loan account even after several and repeated persuasions. When the OP did not supply the loan account statement and other documents, the complainant served a notice through his advocate requesting settlement/resolution of the matter within 15 days but the OP did not prefer to respond the notice. Such action of OP amounts to deficiency of service and converting of term loan to cash credit without obtaining option and consent of the complainant attributes to unfair trade practice. When OP failed to provide required documents, did not care for the notice, the complainant, finding no other way, failed this dispute in the DCDRF for proper adjudication with prayer to issue direction to charge interest as applicable to term loan only and exempt interest on the principal amount after setting off the deposited amount pledged against the loan.

OP resisted the allegation in the complaint and contested the case and submitted written version in stating that all the allegations made in the complaint are false, frivolous, vexatious and concocted. In addition to above, OP has also stated that it has not caused any deficiency of service to the complainant as a customer of the Bank and therefore the dispute is not maintainable and liable to be dismissed. Further OP has also cited the decision of National Commission in case M/S Lufthansa German Air Lines Versus M/S Indian National Service Academy (2010 (2) CPR- 88) and Hon’ble Apex Court in the judgment reported in AIR 1999, SCW 4223 (4227) (1) S.C.C- 66 has held that deficiency in service is to be distinguished from tortuous acts of respondent. In theafore mentioned case, the National Commission has held that deficiency in service need to be established and onus of proof of such lies on the complainant. Further the OP has also objected that there is no cause of action for filing of this case. In objecting the allegation of the complainant regarding conversion of term loan to cash credit OP has submitted that the allegation is absolutely imaginary having no truth and also substantiated with loan application and appraisal report of the OP which would prove the correctness of the submissions. Further it isalso submitted that the financing Bank (OP) is at liberty, in exercise of contractual rights, to adjust or set off the pledged deposits either to reduce or to liquidate the loan outstanding observing proper procedure it is worth mentioning that the complainant, as a borrower under OP, was not found serious to repay the loan as per repayment schedule. In this connection OP has cited decisions of National Commission in the case of M/S M.I Plywood Industries Versus The Senior Branch Manager (2013 (1) CPR 151, N.C) the Court has held that the consumer Fora has no jurisdiction to entertain compliant concerning loan matter. It is further summarized by the OP that the complainant was disbursed with a term loan of Rs 50,000/- with an interest @ 13% P.A, repayable in 36 equal monthly installments and in order to secure the said loan, complainant had deposited Rs 30,000/- in the SB a/c which was subsequently converted to term deposit under MahalaxmiSanchayaYojana scheme for a period of 36 months. Another term deposit under KuberYojana deposit scheme with UCO Bank Asurali Branch for an amount of Rs 10,000/- face valuewas also pledged by the complainant and the complainant has executed all required loan documents prescribed by the Bank. But the complainant has not acted upon the terms and conditions of the loan agreement as a result of which the OP referred the matter to National LokAdalat for quick recovery of loan. Hence no where the OP has neglected to provide required service to the complainant nor resorted to any unfair trade practice. In view of afore said circumstances, this OP has not caused any deficiency of service and therefore this dispute bears no merit and liable to be dismissed with exemplary cost.

Gone through the complaint, written version of OP and perused materials on record. Evidently complainant is a customer (borrower) under OP who had applied for a business term loan of Rs 50,000/- with an intention to purchase a motor cycle and in order to secure such loan the complainant has pledged a term deposit certificate of his father for Rs 10,000/- held with UCO Bank Asurali Branch and also deposited a sum of Rs 30,000/- in his SB account with OP Branch. Other then the above facts, all other allegations made in the complaint are disputed by the OP.

1. In order to draw a conclusion on the issue of maintainability on the ground of deficiency of service and no cause of action as objected by OP, complainant submitted in course of hearing that at the time of finance, the OP has verbally assured to credit the amount of Rs 30,000/- deposited in the SB account to the loan account and the amount of Rs 12,682/- out of the maturity value of the term deposit held with UCO Bank Asurali Branch in the name of his father would be adjusted to the loan account of the complainant and the residue in the loan account was to be paid by the complainant along with interest on the agreed rate. Secondly the opposite party has not served any demand notice upon the complainant till the date of referring the case to National LokAdalat. Although service of notice quarterly or half yearly or yearly specifying the demand amount therein is the statutory and routine job of the OP which left the complainant to remain in a state of belief that his turn for payment of loan has not come and therefore the matter was aggravated due to callous attitude of the OP. It is also a fact that the complainant has pledged the deposit receipts on execution of letter of lien and setoff which facilitates the OP to adjust the pledged deposit to the loan account in the event of the loan account becomes over due and NPA. But in the instant case the OP has not provided the required service to the complainant which amounts to deficiency of service and non-adjustment of pledged depositto the loan account also attributes to unfair trade practice. Hence the dispute is maintainable on its merit as this is not a dispute of loan matters absolutely.

2. The contention of the complainant is that he has availed term loan for purchase of a motor cycle but the OP has converted the term loan to cash credit account and in support of which he has submitted the Xerox copy of loan pass book which is issued on 03.12.2014 although the loan was sanctioned and disbursed on 10.11.2010 the said loan pass book bears the seal and signature of the branch authority and does not bear the signature of the complainant and the said pass book also reveals that the transactions were posted on a day in the year 2014, when the complainant demanded his loan pass book, which clearly indicates how the OP is negligent in providing service to the complainant and for such action of OP, complainant has been shouldering interest burden. The OP, along with written version, has also submitted a loan transaction sheet which reveals that the complainant has not paid a single rupee to the credit of his loan account till the date of filing dispute. Further it is also understood from the said account statement that on 20^th March, 2014 the OP Bank has converted the term loan to cash credit and has been charging interest @ 18.5% per annum instead of 13% as was agreed between them which is nothing but an unfair trade practice of the OP as understood. Converting or rescheduling or refinancing the amount of loan outstanding in the loan account requires written consent of the borrower but in this case the OP has manipulated the account at its sweet will without the consent of the complainant which is considered as unfair practice.

3. Despite repeated requests and persuasions, OP failed to provide some important documents pertaining to the loan so availed by the complainant which compelled him to file a petition on dt.04.01.2017 before the Forum, praying for a direction to be issued to OP to submitrelevant documents for proper adjudication. Accordingly this Forum passed an order on 04.11.2017 directing OP to submit 11 numbers of documents out of which OP has furnished only four documents such as (1) Term loan application, term loan statement of accounts and two term deposit receipts. The OP was given 7 dates (chances) by the Forum to furnish the document but failed to submit which led to suspicion as if the OP is trying to suppress something important which may unveil the actual truth as alleged by the complainant. Even consecutively for 8 dates, OP did not appear before the Forum for hearing and finally on 8^th occasion this Forum heard the complainant only to close the dispute. Such behavior of the OP compelled the Forum to believe that the activity of OP relating to this loan is not beyond doubt.

4. It is worth discussing that the complainant has executed “letter of lien and setoff” at the time of documentation and availing of loan. The said document empowers the OP to set off pledged deposit to the credit of the loan account. The statement of loan account reveals that the borrower has defaulted in repayment of loan right from the 1^st installment as a result of which the said loan account has become overdue and subsequently NPA. According to the normal practice of Banks, in the event of the loan account becomes NPA, the OP had to adjust the deposit amount to the loan account of the complainant. But due to failure in setting off the deposited amount, the complainant has been shouldering huge interest burden which could have been avoided by a little sincerity of the OP. Hence the OP is responsible for such an unwarranted situation. Heard the deposit pledged against loan adjusted to the loan account during the month of April, the complainant would have been liable for Rs 10,000/- and some odds.

From the afore said discussions it is crystal clear that the OP has neglected in  discharging its duties in due time which resulted extra interest burden on the complainant and consequently dispute was raised in this Forum. Hence the OP is responsible for everything what have happened relating to loan and therefore it is ordered;

ORDER

The complaint be and the same is allowed in part with cost. The OP directed to recalculate the interest from 1^st day of April, 2011 on the principal amount whatever would actually have been arrived after adjustment of deposit amount to the loan account of the complainant and interest would be charged at the agreed rate including penal interest. Under no circumstances the OP can charge more interest over and above 13% and penal interest @ 1% on the overdue portion of loan only, and communicate complainant within 30 days from the date of receipt of this order and the complainant is directed to repay the entire loan together with interest within 15 days from the date of receipt of recalculation sheet of the loan account. OP is also directed to pay Rs 1000/- as cost of litigation to the complainant and to comply the order within 30 days from the date of receipt of this order.

This order is pronounced in the open Forum on this 16^th day of March, 2018 under my hand and seal of the Forum.