Tamil Nadu

South Chennai

CC/203/2015

Mrs.V.Narayani - Complainant(s)

Versus

The Chief Manager, Canara Bank - Opp.Party(s)

T.V.Venkataraman

24 Oct 2018

ORDER

                                                                        Date of Filing  : 27.04.2015

                                                                          Date of Order : 24.10.2018

 

DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, CHENNAI (SOUTH)

@ 2^ND Floor, Frazer Bridge Road, V.O.C. Nagar, Park Town, Chennai – 3.

 

PRESENT: THIRU. M. MONY, B.Sc., L.L.B, M.L.                    : PRESIDENT

                 TMT. K. AMALA, M.A., L.L.B.                                : MEMBER-I

 

C.C. No.203/2015

DATED THIS WEDNESDAY THE 24^TH DAY OF OCTOBER 2018

                                 

Mrs. V. Narayani,

S/o. T.V. Venkataraman,

No.61, U.R. Nagar,

Anna Nagar West,

Chennai – 600 101.                                                     .. Complainant.

 

                                                            ..Versus..

 

The Chief Manager,

Canara Bank – Habibullah Road Branch,

No.150, Habibullah Road,

Chennai – 600 017.                                                 ..  Opposite party.

          

Counsel for complainant      :  Mr. T.V. Venkataraman

Counsel for opposite party  :  M/s. R. Umasuthan & others

 

ORDER

THIRU. M. MONY, PRESIDENT

       This complaint has been filed by the complainant against the opposite party under section 12 of the Consumer Protection Act, 1986 praying to close the overdraft account as on 25.05.2013 as requested with the security given to the opposite party and return the balance of security of Rs.18,353/- with interest at the rate of 12% to till the date of settlement and to pay a sum of Rs.30,000/- towards compensation for deficiency in service, loss of reputation, mental agony and physical hardship with cost of Rs.10,000/- to the complainant.

1.    The averments of the complaint in brief are as follows:-

The complainant submits that she is maintaining an Overdraft Account (No.1283256010727) with the opposite party for the past 20 years.   The complainant submits that she has given 2 numbers Canara Bank Kamadhenu Fixed Deposits (General) for Rs.18,211/- (Rs.12,745/- + Rs.5,466/-) in her name and 2 Nos. Canara Bank Kamadhenu Fixed Deposits (General) for Rs.29,142/- (Rs.12,745/- + Rs.16,397/-) and 1  No. Post Office National Savings Certificate of face value Rs.10,000/- maturing on 27.03.2014 for Rs.16,063/- in her husband’s name as security deposit for  the overdraft facility of Rs.40,000/-.   Further the complainant submits that the overdraft account is normally renewed on an yearly basis.  The renewal for the year 2013-14 was due during May 2013.  The complainant submits that she had not forwarded any requisition for renewal of the overdraft account.  In the normal course the overdraft account should have been closed and the balance of security available should have been returned to the account holder.    The complainant further submits that the opposite party is never in the habit of furnishing any information.  The complainant has pledged Canara Bank Kamadhenu Fixed Deposits and Post Office National Savings Certificate amounting to more than Rs.57,353/- (plus accrued interest on F.D. and National Savings Certificate) as security for the overdraft facility that was provided.  The said facility was renewed on an yearly basis together with the Fixed Deposits.  The opposite party had never furnished renewal details of the overdraft account or the fixed deposits in any of the years. 

2.     The complainant further submits that by her letter dated:25.05.2013 and an e-mail reminder to Mr. Bharath, the Loan officer on 05.04.2014, she had specifically sought for closure of the overdraft account by adjusting the liability in the overdraft account against the Fixed Deposits offered as security.  The opposite party has not closed the account till this day of filing the complaint.  The complainant further submits that the opposite party had chosen to credit Rs.16,063/-, the proceeds of matured National Savings Certificate given as security on 17.05.2014 and reduced the liability on the overdraft account.  But the Fixed Deposits that matured in April and May 2013 & 2014 were not used to reduce / close the liability in the overdraft account. 

3.     The complainant further submits that the opposite party has been levying interest on the balance due in the overdraft account beyond the closure requisition date which is unauthorised and illegal.  A sum of Rs.13,629/- has been debited to the complainant’s overdraft account during the period from 25.05.2013 to 31.03.2015.  the security with the opposite party is sufficient to set off the approximate liability of Rs.39,000/- in overdraft account as on 25.05.2013.  The complainant submits that the opposite party has been negligent and has scant regard for the customer and is only keen to earn usurious interest by unauthorised debit of interest on interest in the overdraft account beyond the closure requisition date.   The complainant further submits that the opposite party charges 2% extra interest on the overdraft account than what is paid for the fixed deposit account.  The complainant further submits that she is an I.T. assessee and non furnishing of the F.D. interest details results in inaccurate particulars being given in the Income Tax Return.   Therefore, this complaint is filed.

4.      The brief averments in the written version filed by the  opposite party is as follows:

The opposite party specifically denies each and every allegation made in the complaint and puts the complainant to strict proof of the same.    The opposite party submits that the complainant is running a proprietorship concern in her name under the name and style of “Systems and Designs” at No.61, U.R. Nagar, Anna Nagar West Extension, Chennai – 600 101.  The complainant herein is the sole proprietrix of the said concern.  Further the opposite party state that the complainant has availed cash credit facility of Rs.40,000/- from the opposite party on 17.08.2012.  the aforesaid loan amount was due and liable to be repaid by the complainant together with interest calculated at the rate of 11% per annum, compounded with monthly rests.

5.     It was towards security for the Prompt and due repayment of the loan amount along with the interest accrued thereon, the complainant and her husband pledged the following FDRS in favour of the opposite party.

1. FDR No.1283401007961 for Rs.15,242/- in the name of Mrs. V. Narayani
2. FDR No.1283401009265 for Rs.6,534/- in the name of Mrs. V. Narayani
3. FDR No.1283401005460 for Rs.12,443/- in the name of Mr. T.V. Venkatraman
4. FDR No.1283401007693 for Rs.15,242/- in the name of Mr. T.V. Venkatraman
5. In addition to the above the husband of the complainant herein also pledged 1 No. National Savings Certificate for the value of Rs.10,000/- held in his name.

 As the complainant did not repay aforesaid financial facility on due date, the loan account of the complainant had become NPA on 13.10.2013.  Hence, the opposite party encashed the NSCs aggregating to the value of Rs.16,010/- and adjusted the same against the part satisfaction of the liability of the complainant on 17.05.2014.  The opposite party further states that the complainant is due and liable to pay a sum of Rs.41,731.85 along with accrued interest thereon to them towards the discharge of her liability under the aforesaid Cash Credit Facility.  In exercise of their statutory rights, the opposite party is entitled to adjust the above referred FDRs against the liability of the complainant to them.  The opposite party reserves their right to file additional version after getting clearance from the appropriate authority concerned in its hierarchy.   Further the opposite party states that the relief as prayed for in the complaint cannot be granted in as much as the same is governed by the loan agreement / contract of loan entered into between the complainant and the opposite party.   In as much as the right to recover the liability of the complainant to the opposite party through the adjustment of the fixed deposit marked as lien by the complainant is a statutory right of the opposite party under section 171 of the contract act, the above relief cannot be granted by this Hon’ble Forum.  

6.     The opposite party further submits that the loan account of the complainant with the opposite party was classified as a non-performing asset on account of and in consequence to the default committed by the complainant in repayment of both the principal and in servicing interest under the loan accounts held by the complainant with the opposite party.  The opposite party submit that the loan account of the complainant was classified as a non-performing asset as per the directive of the Reserve Bank of India, in terms of Master Circular-on prudential norms issued by the Reserve Bank of India dated:22.08.2003 as amended up to date.   Admittedly, the opposite party herein is a Government of India undertaking and is controlled by the Finance Ministry, Government of India and Reserve Bank of India.  While so, the opposite party is bound to comply with statutory directives of the Reserve Bank of India, while administering the loan accounts of its borrowers.   Admittedly, the complainant herein has miserably failed and neglected to discharge her liability to the opposite party under the loan accounts referred to in the above complaint.   While so, the opposite party is fully justified in classifying the loan account of the complainant as a non-performing asset.   The plea of deficiency of service cannot be fastened on the opposite party just because the opposite party complied with the directives of Reserve Bank of India.  There is no deficiency in service whatsoever on the part of the opposite party to the complainant herein and accordingly, the above complaint is liable to be dismissed.

7.   In order to prove the averments in the complaint, the complainant has filed proof affidavit as her evidence and documents Ex.A1 to Ex.A5 are marked.  Proof affidavit of the opposite party is filed and no document filed and marked on the side of the opposite party. 

8.      The points for consideration is:-

1. Whether the complainant is entitled to the relief of closing the overdraft facility by the opposite party as on 25.05.2013 and returning the balance security amount of Rs.18,353/- as prayed for?
2. Whether the complainant entitled to a sum of Rs.30,000/- towards compensation for deficiency in service, loss of reputation, mental agony, physical hardship and cost of Rs.10,000/- as prayed for?

 

9.      On point:-

Both parties filed their respective written arguments.  Heard the complainant’s Counsel also.  Perused the records namely the complaint, written version, proof affidavits, documents etc.  The complainant pleaded and contended that she is maintaining an Overdraft Account (No.1283256010727) with the opposite party for the past 20 years.   The complainant further contended that she had given 2 numbers Canara Bank Kamadhenu Fixed Deposits (General) for Rs.18,211/- (Rs.12,745/- + Rs.5,466/-) in her name and 2 Nos. Canara Bank Kamadhenu Fixed Deposits (General) for Rs.29,142/- (Rs.12,745/- + Rs.16,397/-) and 1  No. Post Office National Savings Certificate of face value Rs.10,000/- maturing on 27.03.2014 for Rs.16,063/- vide Ex.A1 in her husband name as security deposit for  the overdraft facility of Rs.40,000/-.   Further the complainant contended that the overdraft account is normally renewed on an yearly basis.  The renewal for the year 2013-14 was due during May 2013.  The complainant contended that she had not forwarded any requisition for renewal of the overdraft account.  In the normal course the overdraft account should have been closed and the balance of security available should have been returned to the account holder.  The complainant further contended that the opposite party is never in the habit of furnishing any information.  The complainant has pledged Canara Bank Kamadhenu Fixed Deposits and Post Office National Savings Certificate amounting to more than Rs.57,353/- (plus accrued interest on F.D. and National Savings Certificate) as security for the overdraft facility that was provided.  The said facility was renewed on an yearly basis together with the Fixed Deposits.  The opposite party had never furnished renewal details of the overdraft account or the fixed deposits in any of the years. 

10.    The complainant further contended that by her letter dated:25.05.2013 and an e-mail reminder to Mr. Bharath, the Loan officer on 05.04.2014 vide Ex.A2 & Ex.A3 she had specifically sought closure of the overdraft account by adjusting the liability in the overdraft account against the Fixed Deposits offered as security.  The opposite party has not closed the account till this day of filing the complaint.  The complainant further contended that the opposite party had chosen to credit Rs.16,063/-, the proceeds of matured National Savings Certificate given as security on 17.05.2014 and reduced the liability on the overdraft account.  But the Fixed Deposits that matured in April and May 2013 & 2014 were not used to reduce / close the liability in the overdraft account. 

11.    The complainant further contended that the opposite party has been levying interest on the balance due in the overdraft account beyond the closure requisition date which is unauthorised and illegal. A sum of Rs.13,629/- has been debited to the complainant’s overdraft account during the period from 25.05.2013 to 31.03.2015.  The overdraft account is marked as Ex.A4.  The security with the opposite party is sufficient to set off the approximate liability of Rs.39,000/- in overdraft account as on 25.05.2013.  The complainant submits that the opposite party has been negligent and has scant regard for the customer and is only keen to earn usurious interest by unauthorised debit of interest on interest in the overdraft account beyond the closure requisition date.  The complainant further contended that the opposite party charges 2% extra interest on the overdraft account than what is paid for the fixed deposit account.  The complainant further contended that she is an I.T. assessee and non furnishing of the F.D. interest details results in inaccurate particulars being given in the Income Tax Return.   The income tax return acknowledgment is marked as Ex.A5.

12.    The contention of the opposite party is that the complainant is running a proprietorship concern in her name under the name and style of “Systems and Designs” at No.61, U.R. Nagar, Anna Nagar West Extension, Chennai – 600 101.  The complainant herein is the sole proprietrix of the said concern.  Further the opposite party contended that the complainant has  availed cash credit facility of Rs.40,000/- from the opposite party on 17.08.2012.  The aforesaid loan amount was due and liable to be repaid by the complainant together with interest calculated at the rate of 11% per annum, compounded with monthly rests.

13.    It was towards security for the Prompt and due repayment of the loan amount along with the interest accrued thereon, the complainant and her husband pledged the following FDRS in favour of the opposite party.

1. FDR No.1283401007961 for Rs.15,242/- in the name of Mrs. V. Narayani
2. FDR No.1283401009265 for Rs.6,534/- in the name of Mrs. V. Narayani
3. FDR No.1283401005460 for Rs.12,443/- in the name of Mr. T.V. Venkatraman
4. FDR No.1283401007693 for Rs.15,242/- in the name of Mr. T.V. Venkatraman
5. In addition to the above the husband of the complainant herein also pledged 1 No. National Savings Certificate for the value of Rs.10,000/- held in his name.

 As the complainant did not repay aforesaid financial facility on due date, the loan account of the complainant had become NPA on 13.10.2013.  Hence, the opposite party encashed the NSCs aggregating to the value of Rs.16,010/- and adjusted the same against the part satisfaction of the liability of the complainant on 17.05.2014.  But the opposite party has not given any notice to treat the loan as NPA.   The opposite party further contended that the complainant is due and liable to pay a sum of Rs.41,731.85 along with accrued interest thereon to them towards the discharge of her liability under the aforesaid Cash Credit Facility.  In exercise of their statutory rights, the opposite party is entitled to adjust the above referred FDRs against the liability of the complainant to them.  The opposite party reserves their right to file additional version after getting clearance from the appropriate authority concerned in its hierarchy.   Further the opposite party contended that the relief as prayed for in the complaint cannot be granted in as much as the same is governed by the loan agreement / contract of loan entered into between the complainant and the opposite party.   In as much as the right to recover the liability of the complainant to the opposite party through the adjustment of the fixed deposit marked as lien by the complainant is a statutory right of the opposite party under section 171 of the contract act, the above relief cannot be granted by this Hon’ble Forum.    But the opposite party can very well set off the amount.  Further it is also seen that the opposite party has not filed any document or statement of account to prove their contentions.

14.    The opposite party further contended that the loan account of the complainant with the opposite party was classified as a non-performing asset on account of and in consequence to the default committed by the complainant in repayment of both the principal and in servicing interest under the loan accounts held by the complainant with the opposite party.  The opposite party submit that the loan account of the complainant was classified as a non-performing asset as per the directive of the Reserve Bank of India, in terms of Master Circular-on prudential norms issued by the Reserve Bank of India dated:22.08.2003 as amended up to date.   Admittedly, the opposite party herein is a Government of India undertaking and is controlled by the Finance Ministry, Government of India and Reserve Bank of India.  While so, the opposite party is bound to comply with statutory directives of the Reserve Bank of India, while administering the loan accounts of its borrowers.   Admittedly, the complainant herein has miserably failed and neglected to discharge her liability to the opposite party under the loan accounts referred to in the above complaint.   While so, the opposite party is fully justified in classifying the loan account of the complainant as a non-performing asset.   The plea of deficiency of service cannot be fastened on the opposite party just because the opposite party complied with the directives of Reserve Bank of India.  There is no deficiency in service whatsoever on the part of the opposite party to the complainant But as per the agreement the opposite party can very well set off the amount of interest towards credit from the security deposit.  The failure on the part of the opposite party proves unfair trade practice and deficiency in service.  Further on a careful perusal of the records, it is seen that the complainant had sent letters and e-mails to the opposite party for the closure of the overdraft facility.  But the opposite party failed to do so.  Considering the facts and circumstances of the case this Forum is of the considered view that the opposite party shall close the Overdraft Account as on 25.05.2013 after adjusting the dues and refund the balance amount of Rs.18,353/- with interest at the rate of 9% p.a. and pay a compensation of Rs.10,000/- towards mental agony with cost of Rs.5,000/-.

  In the result, this complaint is allowed in part.   The opposite party is directed to close the overdraft account as on 25.05.2013  after adjusting the dues and to refund a sum of Rs.18,353/- (Rupees Eighteen thousand three hundred and fifty three only) being the balance of security with interest at the rate of 9% p.a. from the date of complaint (i.e.) 27.04.2015 to till the date of this order and to pay a sum of Rs.10,000/- (Rupees Ten thousand only) towards compensation for mental agony with cost of Rs.5,000/- (Rupees Five thousand only) to the complainant.

The above  amounts shall be payable  within six weeks from the date of receipt of the copy of this order, failing which, the said amounts shall carry interest at the rate of 9% p.a. to till the date of payment.

Dictated  by the President to the Steno-typist, taken down, transcribed and computerized by her, corrected by the President and pronounced by us in the open Forum on this the 24^th day of October 2018. 

 

MEMBER –I                                                                      PRESIDENT

COMPLAINANT SIDE DOCUMENTS:

Ex.A1	27.03.2008	Copy of National Savings Certificate issued by Alwarpet Post Office for Rs.10,000/-
Ex.A2	25.05.2013	Copy of letter requesting the opposite party to close the Overdraft account of the complainant and Speed Post Acknowledgement
Ex.A3	05.04.2014	Copy of email sent to the opposite party for closure of the overdraft account and seeking F.D. particulars of the complainant
Ex.A4	18.07.2013	Copy of the Overdraft account of the complainant as on 25.05.2013
Ex.A5	31.03.2014	Copy of Income Tax Return acknowledgement of the complainant

 

OPPOSITE  PARTY SIDE DOCUMENTS:  NIL

 

MEMBER –I                                                                      PRESIDENT