BEFORE THE DISTRICT CONSUMER FORUM : MEDAK AT SANGAREDDY

PRESENT: Sri Patil Vithal Rao, B.Sc., LL.B.,President

Smt. Meena Ramanathan, B.Com., Lady Member

Tuesday, the 19^th day of March, 2013

CC. No. 05 of 2012

Between:                                               

Paka Dora Babu S/o Late Chella Rao,

Aged: 45 years, Occ: Deputy Director of Industries,

Sangareddy, Dist: Medak.                         

                                                                                           …….Complainant

And

1.The Chief Manager,

State Bank of India,

Main Branch Sangareddy,

Dist. Medak.

2.The Manager,

State Bank of India,

Branch Eluru, Dist. West Godawari.

                                                                                           ….opposite parties

This case came up for final hearing before us on 05.03.2013 in the presence of Sri N. Chandrashekar Rao, Advocate for complainant and Sri M. Sunil Kumar, advocate for opposite parties No. 1 & 2 and heard the arguments of both sides, on perusing the record and having stood over for consideration till this day, this Forum delivered the following:

O R D E R

(Per se Smt. Meena Ramanathan, Lady Member)

                  The complaint is filed under Section 12 of the Consumer Protection Act, 1986 by the complainant and he submits that he is the account holder, having a SB account vide No. 00000020073920092 with opposite party No. 1 and that his salary was remitted to this account every month. He further states that the salary pertaining to the month of December 2011 was remitted without any instructions to another account. There were no standing orders to deduct or transfer any amount to other accounts. Therefore he issued opposite party No. 1 with a legal notice but received no response hence he approached this Forum to seek redressal. The complainant seeks to direct the opposite parties to recall the transfer amount of Rs. 26,050/- to his account and to award compensation and damages of Rs. 50,000/- and costs of the proceedings.

2.            The opposite parties resisted the claim of the complainant by filing their version to the following effect:

                 The opposite party No. 1 strongly deny the allegations of the complainant and state that the complainant has suppressed material facts which is nothing short of being fraudulent. The complainant claims to be Deputy Director of Industries and availed a personal loan of Rs. 1,60,000/- on 06.07.2006 from SBI, Eluru branch and defaulted in repayment of loan. The loan should have been closed by July 2009 – Suppressing this, the complainant availed another personal loan for Rs. 5,50,000/- on 21.04.2011 from SBI, Sangareddy branch. As per their banking rules, the transfer of amount that occurred on 05.01.2012 is permitted in the core banking system. Hence their contention is that the complainant is not entitled to claim any relief from this Forum against opposite party No. 1.

3.              The opposite party No. 2 submits that the complainant availed a personal loan of Rs. 1,60,000/- (while he was working at Eluru) – under the loan account No. 300063171742 dated 26.07.2006, with an under standing that repayment was in 37 monthly installments of Rs. 5,220/-. He paid up to March 2007, and there after did not continue. The balance loan amount is Rs. 85,726/- as on 16.04.2012.

                   Under Core Banking System and the electronic system at all branches, they have got every right to set off the amount due from borrower who are also account holders. They have only adopted this measure to rightly set off the amount and credited the same to the loan account of the complainant. Hence they seek this complaint has no locus standi and therefore be dismissed.

4.              The complainant has filed his evidence affidavit and marked Exs. A1 to A4 to substantiate his case. The opposite party No. 1 has filed his evidence affidavit, no documents are not marked. Written arguments are also filed by the both parties. Oral arguments also advanced by both parties.

5.            The points for consideration are 1) whether the complainant is a consumer as contemplated under the Act and whether he is entitled to the relief prayed for and 2) whether there is deficiency of service on the part of the opposite parties.

Point Nos. 1 & 2:

6.               It is not in dispute that the complainant is having an account with opposite party No. 1 bank and that he has transacted regularly with this bank. The dispute is that the complainant’s salary which was regularly remitted to this account was transferred for the month of December 2011. The relation ship between the client and his bank certainly comes under the provisions of the Consumer Protection Act and it is intended to protect the consumers from unscrupulous exploitation. The opposite parties cannot claim that the complainant is not a consumer. The complainant filed his bank account statements for the month of November 2011, December 2011 and January 2011 and the acknowledgement of the legal notice.

7.               Evidently the complainant is having two accounts with the opposite parties. Ex.A1 is the bank account statement for December 1^st 2011 to December 31^st 2011. This account is with opposite party No. 1 and amount is transferred to another account number with opposite party No. 1. Two such transfers are shown of Rs. 14,850/- each. Ex.A2 is the statement of account for January 2012 and here a transfer of Rs. 26,050/- is shown to the loan account with opposite party No. 2 (account number). These deductions must be pertaining to the loan account. This fact is evident from the copies of statement of accounts filed by the complainant, with his written arguments. Even as per the copies of statement of accounts under Ex. A1 and Ex.A2, Rs.26,050/- was deducted from the account of the complainant by opposite party No. 1 and credited to the loan account of opposite party No. 2. Whereas Rs. 14,850/- was deducted twice and credited to his loan account by opposite party No. 1.

8.             Ex.A3 is a copy of the legal notice and Ex. A4 is the postal receipt for it, by which the complainant has challenged the said deductions – for the month of January 2012, but the complainant has suppressed the fact that he obtained loan from the opposite parties, therefore the said allegation cannot be accepted as true and acted upon. It is also to be noted that on 24.03.2012, opposite party No. 1 has deducted Rs. 3,055/- from the account of the complainant towards advocates fee for filing the counter in this case, which is also strange because the case is still pending and no orders have been passed entitling the opposite parties to claim the said amount.

9.            It is further to be noted that, no doubt the complainant did not point out any rule position while challenging the deductions made by the opposite parties from his account. At the same time, the opposite parties too did not cite the actual procedure under the core banking system in effecting recoveries of loan amounts, the counsel for the complainant failed to file salary certificate, merely stating that entire salary was deducted doesn’t hold true.

10.          The account numbers mentioned in the complainant bank statements tally with the account numbers mentioned in the opposite parties written arguments yet the opposite parties failed to file any documentary evidence when they could have done so with ease. Loan sanction letter or EMI deductions towards the loan account could have been filed, yet the opposite parties failed to do so. Be that as it may, the fact remains that the recoveries made by the banks are not consistent and on the face of it – arbitrary.

11.          In view of the aforesaid discussions it is crystal clear that the opposite parties are making deductions from the account of the complainant as per their whims and fancies. Therefore we direct them to strictly follow the banking laws, rules and regulations and guidelines given by the RBI – from time to time, governing the procedure in respect of recovery of loans from the borrowers. In the circumstances we also hold that the complainant cannot allege the recoveries made by the bank from his account as illegal.

                    With these observations the complaint has to be disposed off.

12           In the result, the opposite parties are directed to make recoveries from the complainant in respect of his outstanding balance loan amount pertaining to opposite party No. 2, strictly by following the procedure in accordance with the relevant banking laws, rules and regulations and guidelines issued by the RBI – from time to time.

                   The case is disposed of accordingly. In the peculiar circumstances the parties shell bear their own costs.

                   Dictated to Stenographer, after correction the order was pronounced by us in the open court this the 19^th day of March, 2013.

                                     Sd/-                                       Sd/-        

                          LADY MEMBER                      PRESIDENT

WITNESS EXAMINED

For the complainant:                                            For the opposite parties:-

-NIL-                                                                              -NIL-

DOCUMENTS MARKED

For the complainant:                                                   For the opposite parties:-

               Sd/-                                                 Sd/-                                                                                                            

                  LADY MEMBER                                  PRESIDENT

Copy to

1. The Complainant
2. The Opp.parties
3. Spare copy