District Consumer Disputes Redressal Commission, Hooghly

PETITIONER

VS.

OPPOSITE PARTY

Complaint Case No.CC/21/2019

(Date of Filing:-13.02.2019)

1. Ram Prasad Mondal

Residing at Memari Bamun Para More

P.O. & P.S. Memari,

District:- Purba Bardhaman Pin:- 713146

1. The Manager,  State Bank of India,

Boinchee Branch, Boinchee, P.O. Boinchee

P.S. Pandua,

District:- Hooghly, Pin:-712134, represented by its Branch Manager

2. The  General Manager, State Bank of India

1, Strand Road, Samriddhi Bhawan (Block-B),

3. The Chairman, State Bank of India

State Bank Bhawan, Corporate Centre, Madame Cama Road, Mumbai, Marashtra, Pin:- 400021……..….opposite parties

Mr. Debasish Bandyopadhyay, President

           Mr. Debasis Bhattacharya, Member

Mrs. Babita Choudhury, Member

                              Final Order/Judgment

DEBASIS BHATTACHARYA:- PRESIDING MEMBER

                      Being aggrieved by and dissatisfied with the service extended primarily by State Bank of India, Boinchee Branch, in the matter of non-return of certain co-lateral securities in the form of FDR, KVP and NSCs even after repayment of a loan taken from that Bank by the Complainant, the instant case has been filed by the complainant, u/s 12 of the Consumer Protection Act 1986.

All the opposite parties belong to the same organization i.e. State Bank of India.

Brief facts of the case

        The complainant admits to have obtained a loan from the OP Bank , in favour of his ‘organization’  under the name Memari Agro-Service Centre and while applying for the loan he had to deposit nine FDR, KVP, NSCs to the OP Bank as co-lateral securities. However the Complainant claims to have repaid the entire loan ‘in time’ and consequent upon that he made an application dtd.06.03.2010 to the OP bank for issuing a ‘No-dues certificate’ in respect of the repaid loan and to turn back the co-lateral securities as mentioned above. Responding to the application the OP Bank issued a ‘No-dues certificate on 08.03.2010 but remained silent about the issue related to the security deposits.

On 04.04.2011 the Complainant made another communication to OP 1 seeking return of the security deposits.

Now, at this point the Complainant claims that on receipt of this communication the OP Bank filed a general diary on 12.04.2011 with the Pandua P.S. as the security deposit certificates were missing from the Bank’s custody.

The Complainant further informs that the OP Bank made a request to the Memari Post office on 13.04.2011 to provide them duplicate copies of the said security deposit certificates. The Complainant expresses his surprise over the issue that the Bank never intimated him about the disappearance of the certificates. 

      Subsequently the Complainant sent two notices to the OP Bank under RTI Act one on 23.12.2015 and the other on 19.03.2018.

    The Bank on receipt of that letter forwarded the same to State Bank of India, RBO-II, Howrah for necessary disposal, with a copy dtd.27.03.2018 forwarded to the Complainant.

OP 2 in turn informed the Complainant by a letter dtd. 05.04.2018, that the matter had been forwarded to OP 3 for necessary action.

Since then allegedly the OP Bank took no steps to turn back the security deposit certificates to the Complainant.

Considering these as deficiency of service and unfair trade practice on the part of the OP Bank, causing harassment, mental pain and agony the Complainant approaches to this Commission with a prayer to impose direction upon the OPs to turn back the security deposit certificates, to pay Rs.3,00,000/- as compensation and to pay further 35,000/- towards litigation cost.

Cause of action is claimed to have arisen first on 08.03.2010 i.e the date on which the OP bank issued the ‘No-dues certificate’ only and finally on 05.04.2018 i.e. the date on which OP 2 made the communication to the Complainant.

The schedule of the said security deposit certificates has been incorporated in the complaint petition.

The petitioner has annexed copies of the communications made to the OP bank, ‘No-dues certificate’ received from the OP bank, GD lodged with the concerned P.S. by OP 1, request letter sent to the concerned P.O. for duplicate certificates by OP 1, postal receipt and postal track report and communications received from the OP bank with regard to the RTI application.

The Complainant was debarred to file evidence on affidavit by virtue of the order of this Commission dtd.15.03.2021 as the Complainant made almost a habit of making himself absent on the dates fixed for hearing since long. However brief notes of Argument submitted by the Complainant is almost replica of the Complaint petition.

Issues for consideration

1. Whether the complainant is the consumer as defined in the Consumer Protection Act.
2. Whether this Commission has territorial/pecuniary jurisdiction to entertain the instant petition.
3. Whether there is any deficiency of service on the part of the opposite party.
4. Whether the complainant is entitled to get any relief.

Issue No. 1

In the instant case the OP bank was a service provider.

But the question remains whether the Complainant can be treated as a consumer in terms of the relevant provision of the Act as the Complainant has failed to substantiate whether the business establishment for which the loan was taken was the sole source of earning his livelihood.

Issue No. 2

 The opposite party is having their office address within the district of Hooghly.

The claim preferred by the complainant does not exceed the limit of Rs.50,00,000/-

Thus this Commission has territorial as well as pecuniary jurisdiction to proceed in the instant case.

Issue No. 3 and 4

Materials on records are perused. The issues being mutually inter-related, will be taken together for convenient disposal.

Defence Case

The OP Bank contested the case by filing written version, evidence on affidavit and brief notes of argument along with the copies of corroborating      documents.

In this mean time the OP Bank filed a petition challenging the maintainability of the complaint petition on limitation ground which was separately treated as an MA case. However the same has already been rejected by this Commission.

Primarily in the written version The OP bank has denied all the allegations leveled against them.

The OP Bank in their representations points out the following issues.

1. The Complainant applied for a commercial loan for his organization ‘Memari Agro Service Centre’.
2. Prior to sanction of the said loan the Complainant executed various documents in favour of OP 1 and nine nos. of FDR, NSC, and KVP were deposited as co-lateral security. In the security delivery letter dtd.07.07.2000 the Complainant agreed to abide by the condition related to appropriation of the securities by putting his signature in the said security delivery letter.
3. The OP Bank points out that it is expressed principle of law that if the loan account becomes irregular on the part of the borrower then and in that event the OP Bank has full right and absolute authority to appropriate the amount of the security deposits against the outstanding loan amount. In the instant case the co-lateral securities are claimed to have been adjusted with the loan account on its becoming NPA and thereafter the loan was compromised by the borrower/complainant and hence question of returning back of the securities does not arise.
4. The OP bank claims that so far as the lodging of the GD with the concerned P.S. and application made to the concerned P.O. are concerned the OP is not supposed to refer to that, as the issues were thoroughly internal ones of the Bank.
5. The financial dispute between the Complainant and the Bank was closed under ‘Compromise settlement’ and the borrower complainant was issued ‘No-dues certificate’ accordingly on 08.03.2010.

Decision with reason

Materials on records are perused. It is apparent from the complaint petition that the loan was taken for an organization under the name Memari Agro Service Centre which appears to be a business establishment. The Complainant nowhere in his petition has spelt out in categorical terms that the business was the sole source of earning his livelihood.

In the brief notes of argument the Complainant has stated nothing in retaliation to the OP Bank’s charges that the loan A/C was declared Non-performing asset and the financial dispute was resolved through compromise settlement.

Now the key term, which has been used by both the Complainant and the OP bank  and which is the deciding factor in this complaint case is ‘compromise settlement’.

In the ‘No-dues certificate’ issued by the OP Bank it is clearly stated that ‘all dues against the A/C have been paid under compromise settlement. On receipt of the No-dues certificate the Complainant did not raise any objection in the matter of using the term ‘compromise settlement’. This indicates that the loan was not repaid through normal process and in strict compliance of the loan term.

A compromise settlement with the borrowers with or without remission or composition of dues can be negotiated, provided it is ensured that such compromise results not only in early recovery of dues but also saves cost to the bank in terms of legal expenses and other costs.

A financial institution takes recourse to compromise settlement only when a loan cannot be recovered through normal process and only in respect of defaulters.

In a case of compromise settlement there is every possibility of appropriation of security deposit against the outstanding dues.    

The Commission is not supposed to probe into the intricacies of the granting of loans, accrual of month to month interest, paying off the said loans by the borrower, exhaustive calculation of interest, calculation of defaulting period, repayment of loans  and mode of compromise settlement.

 Granting of a loan and realizing of the said loan with interest is the absolute prerogative of the Bank. The Commission is supposed to decide whether there was any deficiency of service or unfair trade practice on the OP Bank’s part while dealing with its customer.

Here, in the instant case it is established that the loan was recovered through compromise settlement but the complainant has willfully suppressed the backdrop of the compromise settlement.

In view of the above the Commission is of the opinion that deficiency of service or unfair trade practice on the OP Bank’s part cannot be established.

Hence it is

                                                ORDERED

That the complainant case no.21/2029 be and the same is dismissed on contest. However there is no order as to costs.

Let a plain copy of this order be supplied free of cost to the parties/their Ld. Advocates/Agents on record by hand under proper acknowledgement/sent by ordinary post for information and necessary action.

The final order will be available in the website www.confonet.nic.in.