Date of Filing      : 04.01.2018

                                                                                                                 Date of Disposal: 15.06.2022

DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION

THIRUVALLUR

 BEFORE  TMT. Dr.S.M. LATHA MAHESWARI, M.A.,M.L, Ph.D (Law)                 .…. PRESIDENT

                 THIRU. J.JAYASHANKAR, B.A, B.L.                                                             ..… MEMBER-I

                 THIRU P.MURUGAN, B.Com.,                                                                    ….. MEMBER-II

CC. No.34/2018

THIS WEDNESDAY, THE 15^TH  DAY OF JUNE 2022

D.Lakshmi,W/o.Durairaj,

No.113/4 Opp BDO Office,

Kadambattur.                                                        ....Complainant.

                                                 //Vs//

1.The General Manager,

   Indian Bank, Avvai Shanmugam Salai,

   Royapettai, Chennai – 600 014.

2.The Regional Manager,  Indian Bank,

   No.510/511, Gandhi Salai,

   Kanchipuram – 631 501.

3.The Branch Manager,

   Indian Bank, Kadambattur,

   Thiruvallur Taluk & District. – 631 203.                ....Opposite parties.

Counsel for the complainant                     : Mr.C.Elamaran, Advocate.

Counsel for the opposite parties                : Mr.S Sugadev, Advocate.

 This complaint is coming before us on various dates and finally on 01.06.2022 in the presence of Mr.C.Elamaran, Advocate counsel for the complainant and there was no representation on the side of the opposite parties and hence written arguments of the opposite parties treated as oral arguments on their sides and upon perusing the documents and evidences, this Commission delivered the following:

ORDER

PRONOUNCED BY TMT. Dr.S.M. LATHA MAHESWARI,   PRESIDENT.

The present complaint has been filed by the complainant alleging deficiency in service on the part of the opposite parties seeking a direction to the 3^rd opposite party to release the jewel in account No.6209832859 and to pay a sum of Rs.2,00,000/- towards compensation for negligence of service and to pay a sum of Rs.50,000/- for mental agony to the complainant.

Crux of complainant’s allegations:

The complainant was an account holders in the 3^rd opposite party Bank vide Account No.557823340. On 23/03/2014 complainant pledged her two gold chains weighing about 60.700 grams for a sum of Rs.1,00,000/- at the rate of 7% interest per annum vide jewel Loan No.6209832859. As on 27/03/2015 the complainant had paid the entire jewel loan and closed the jewel loan account. However, when the chains were handed over to the complainant the Branch Manager forcefully entered in to the Cash Manager Cabin and took the jewel to his cabin. Hence the jewels were not released to the complainant.  A complaint was given to the 2^nd opposite party but no action was taken. Thus, after issuance of legal notice the present complaint was filed for the reliefs as mentioned above alleging deficiency of service.

Defense of the Opposite Parties by way of Written Version:-

The 3^rd opposite party filed written version disputing the allegations of deficiency in service which was adopted by the opposite parties 1 and 2.  The opposite parties agreed about the jewel loan transactions however denied the allegation that the 3^rd opposite party forcefully entered the Cash Manager Cabin and pulled the complainant’s chains.  It is submitted that the complainant was one of the member of Suyam Siddha Roja Mahalir Self Help Group and it is their usual practice to obtain loan and to commit default and likewise the 3^rd opposite party submitted that the complainant jointly with the other members had availed two loans in Loan account No.880126383 with the opposite party’s Bank for Rs.5,00,000/- on 17.03.2010 and 2^nd loan Account No.93286036 for Rs.4,00,000/- on 31.01.2011 along with other members and executed necessary documents thereby agreeing to repay the above said two loans jointly and severally with 13.05% interest at monthly rests.  Though several demands were made for the payment of dues to the said woman Self Help Group Loan and the complainant who is jointly and severally liable to repay the loan she has not paid the dues till date and intentionally evaded form making the payment.  Thus cighting the terms and conditions of the jewel loan agreement and section 171 of the Indian Contract Act the opposite parties stated that they are entitled to have lien over the jewel loan account of the complainant.  Thus they sought for the dismissal of the complaint.

Complainant filed proof affidavit and submitted documents marked as Ex.A1 to A15. On the side of the opposite parties proof affidavit and documents marked as Ex.B1 to B10 were filed.

Point for consideration:

1. Whether the opposite party is entitled to exercise lien over the jewels pledged by the complainant for committing default of another Group loan account in which the complainant has obtained loan along with other members of the Group and had committed default?
2. Whether the deficiency in service as alleged by the complainant was proved if so to what relief she is entitled?

Point No.1:

The following documents were filed by the complainant in proof of his allegations;

1. Indian Bank pass book of the complainant was marked as Ex.A1;
2. Indian Bank jewel pass book dated 27.03.2014 was marked as Ex.A2;
3. Police complaint copy dated 10.04.2014 was marked as Ex.A3;
4. C.S.R. Copy dated 10.04.2015 was marked as Ex.A4;
5. Legal notice issued by the complainant’s counsel to the opposite parties dated 10.06.2015 was marked as Ex.A5 and acknowledgement card was marked as Ex.A6 to Ex.A8;
6. Indian Bank pass book front page for pledged watch chain dated 25.08.2014 was marked as Ex.A9;
7. Complaint made by the complainant in which the Loan Account number has been mentioned which was marked as Ex.A10;
8. Statement of account of the complainant was marked as Ex.A11;
9. Resolution passed by the Suyam Siddha Roja Mahalir Self Help Group removing the complainant from Membership which was marked as Ex.A12;
10. Bills were marked as Ex.A13;
11. Bills were marked as Ex.A14;
12. Police Complaint copy issued by Suyam Siddha Roja Mahalier Self Help Group against the member Mrs.Kalpana was marked as Ex.A15;

On the side of opposite parties, the following documents were filed;

13. Loan application of Suyam Siddha Roja Mahalir Self Help Group dated 15.03.2010 was marked as Ex.B1;
14. Resolution of Suyam Siddha Roja Mahalir Self Help Group dated 18.03.2010 was marked as Ex.B2;
15. Suyam Siddha Roja Mahalir Self Help Group members info card was marked as Ex.B3;
16. Suyam Siddha Roja Mahalir Self Heop Group sanction letter dated 17.03.2010 was marked as Ex.B4;
17. Agreement for financing Suyam Siddha Roja Mahalir Self Help Group dated 17.03.2010 was marked as Ex.B5;
18. Inter-se agreement of Suyam Siddha Roja Mahalir Self Help Group dated 17.03.2010 was marked as Ex.B6;
19. Joint and several demand promissory note executed by Suyam Siddha Roja Mahalir Self Help Group dated 17.03.2010 was marked as Ex.B7;
20. Legal notice sent to Suyam Siddha Roja Mahalir Self Help Group and its members dated 08.11.2013 was marked as Ex.B8;
21. Reply submitted to the Chairman, legal services committee, Thiruvallur dated 13.06.2015 was marked as Ex.B9;
22. Indigent original petition before the District Munsif Court, Thiruvallur was marked as Ex.B10;

 We heard the oral arguments adduced by the learned counsel for the complainant. Though the opposite parties were given sufficient opportunities they did not choose to appear and adduce oral arguments and hence we are constrained to adopt the written arguments as oral arguments of the opposite parties to decide the issue on merits.

The sum and substance of the arguments adduced by the learned counsel for complainant is that the complainant is not liable for the non-payment of the loan sanctioned in favour of the Suyam Siddha Roja Mahalir Self Help Group and being a member has repaid the amount which she was liable to pay to the head of the Group, but the Head did not repay it to the opposite parties for which the complainant cannot be made liable.

  The written arguments filed by the opposite parties was perused which states that the 3^rd opposite party has a right of General lien over the jewel loan account when the complainant as a member had defaulted the loan granted to Suyam Siddha Roja Mahalier Self Help Group. They also cited the decision in Branch Manager, Canara Bank V.Chandrababu, 1996 (1) CPR 173, wherein the Hon’ble Court has held that Sec.171 of the Indian Contract Act, 1872 is a special provision which gives the bankers, factors, wharfingers, attorneys of High Court and policy brokers the right to retain as security for any goods bailed to them and hence there is no deficiency in service.

We perused the documents and pleadings submitted by both parties. We are unable to accept the contentions raised by the opposite parties as defence to the allegation of deficiency in service alleged by the complainant.  We also perused the order cited by the opposite parties in support of their defence. Normally it is an accepted position of law that Bank can exercise lien over the securities of a loan account for an unpaid loan of the same person.  But there are certain conditions to be satisfied for exercising the said legal principle. In the order cited by the opposite parties the right of lien was held to be proper when the jewels pledged in respect of a jewel loan were not released even after repayment of the said loan, in exercise of the right of banker's lien as provided under section 171 of the Indian Contract Act, 1872 on the ground that the complainant has failed to repay another loan taken by the very same complainant but from a different branch of the bank. The same was held not to be deficiency in service on the part of the bank.

However, the said order is distinguishable on facts and circumstances of the present case as facts of this case is entirely different.  In the present case the complainant had availed the jewel loan account in individual capacity and had also repaid the entire loan amount even as per the version of the opposite parties which fact was never denied by them at any stage of the proceedings.  Whereas the issue relating to non-repayment of loan relates to a joint loan account taken by the Suyam Siddha Roja Mahalir Self Help Group in which the complainant was one of the member.  The complainant had also filed a document exhibit A12 wherein the complainant was removed from the Membership of the said group.  In such circumstances she cannot be made liable in her individual capacity for the non payment of joint loan taken as a Group.  We find our view supported by a recent decision rendered by the Division Bench of Madras High Court (Madurai Bench) made in M.Shanthi vs Bank Of Baroda dated 9 August, 2017 wherein their Lordships had held that the Bank cannot exercise lien over the securities given for an individual account for the non repayment of a loan account in which the borrower was one of the Trustee of a Trust which availed the loan in their lordships words as follows;

“28. In the judgment of Division Bench of this Court, reported in 2011 (2) CTC 465, in the case of State of Bank of India vs. Jayanthi and others this Court has held that the mortgage deed has to be considered as ?a contract to the contrary?, referred to in Section 171 of Contract Act and that therefore the bank cannot claim the documents of title deed deposited to create equitable mortgage, invoking power of general lien under Section 171 of Indian Contract Act.

29.In this connection, it is also relevant to refer to Sections 58, 59 and 60 of Transfer of Property Act, dealing with the transaction relating to different forms of mortgage. The mortgage is defined as a transfer of interest, in specific immovable property for the purpose of securing the payment of money advanced by way of loan, existing or future debt or the performance of an engagement which may give rise to a pecuniary liability. A person creates an equitable mortgage by deposit of title deeds, if he delivers to a creditor or his agent documents of title deeds in relation to immovable property, with intention to create a security thereon. Section of 60 of the Transfer of Property Act, reads as follows:

60. Right of mortgagor to redeem At any time after the principal money has become due, the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage- money, to require the mortgagee (a) to deliver to the mortgagor the mortgage- deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee, (b) where the mortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor, and (c) at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct, or to execute and (where the mortgage has been effected by a registered instrument) to have registered an acknowledgement in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished:

30.Section 60 of Transfer of Property Act, speaks about specific rights of mortgagor. It is clear that every mortgagor is entitled to collect the mortgage deeds and all other documents relating to the mortgaged properties, which are in the possession or power of mortgagee. This right of mortgagor is certainly a legal enforceable right. The mortgagee is under an obligation to return the title deeds upon payment of the entire money due. This legal obligation gives an enforceable right in favour of the mortgagor in connection with the mortgage. This legal obligation of the mortgagee to return the title deed to the mortgagor upon discharge of mortgage loan for which the title deeds were secured, can be certainly treated as an implied contract contrary to Section 171 of the Indian Contract Act.

31.Hence this Court is of the firm view that the respondent bank cannot exercise right of lien to secure any other liabilities of the mortgagor by retaining the documents of the mortgagor or guarantor, which are deposited with an intention to secure a particular loan transaction. Lien is primarily considered as a right to retain security. It is doubtful, whether in exercise of such right to retain the title deeds the mortgagee can bring the property for sale for recovery of some debt which is due from the mortgagor, in connection with a different transaction, which is not covered by the mortgage.

32.Any agreement conferring a right upon anyone to bring the property which is offered as a security for a loan transaction, is considered to be a transaction creating a right in immovable property and such agreement namely mortgage can be executed by way of a registered instrument. The right of lien, under Section 171 of the Indian Contract Act, will be contrary to the provisions of Transfer of Properties Act, if Section 171 is also made applicable to the title deeds, which are offered as a security in relation to a particular transaction. Considering the scope of Section 60 of the Transfer of Property Act, and the scope and object of Section 171 of the Indian Contract Act, this Court is of the firm view that the respondent Bank cannot retain the title deeds or proceed with the properties which were offered as security in relation to an independent loan transaction, even after the borrower discharged the entire liability of borrower in connection with the loan which is secured by deposit of title deeds.”

Hence we answer the point accordingly holding that the Bank has committed deficiency in service in retaining the jewels even after the entire jewel loan has been repaid by the complainant.

Point No.2:

As we have held above that the Bank has committed deficiency in service in exercising lien over the jewels pledged by the complainant which is not proper, we are of the view that the complainant should be compensated for the retention of the jewels weighing about 60.700 grams from 27.03.2015 to till date by the opposite parties and hence we award Rs.25,000 as compensation to be paid by the opposite parties. 

In the result the complaint is partly allowed and the 3^rd opposite party is directed to release the jewels within 6 weeks from the date of receipt of copy of this order. The opposite parties 1 to 3 are directed jointly and severally to pay a compensation of Rs.25,000/- (Rupees twenty five thousand only)for the mental agony and hardship suffered by the complainant due to the deficiency in service committed by them. Cost of Rs.5000/- (Rupees five thousand only) awarded towards litigation expenses.

Dictated by the President to the steno-typist, transcribed and computerized by him, corrected by the President and pronounced by us in the open Commission on this the 15^th day of June 2022.

     Sd/-                                                           Sd/-                                                   Sd/-

 MEMBER-II                                           MEMBER-I                                     PRESIDENT

List of document filed by the complainant:-

List of documents filed by the opposite parties:-   

     Sd/-                                                    Sd/-                                                             Sd/-

MEMBER-II                                      MEMBER-I                                          PRESIDENT