PRESENT SRI P.V. NAGESWARA RAO, M.A., LL.M., PRESIDENT

      Friday, 1^st October 2010

 

 

 

 

          This complaint coming on this day for final hearing on 27-9-2010 in the presence of Sri G. Trivikram Singh, Advocate for complainant and Sri N. Dadahayath, Advocate for Responde nt and upon perusing the material papers on record, the Forum made the following:-

 

1.                Complaint filed under section 12 of the Consumer Protection Act 1986.

 

2.                The brief facts of the complaint are as follows:- The complainant availed a loan under account No. 368 for a sum of Rs. 85,000/- on 18-10-2002 from the respondent bank keeping his 12 Kisan Vikas Bonds each worth about Rs. 10,000/-, dt. 7-11-2001 of total Rs. 1,20,000/- with maturity amount of   Rs. 2,40,000/- by 7-11-2007. The Kisan Vikas Bond Nos. 1) 88CC.089082, 2) 88CC.089083, 3) 88CC.089084, 4) 88CC.089085, 5) 88CC.089096, 6) 88CC.089087, 7) 88CC.089088, 8) 88CC.089089, 9) 88CC.089090, 10) 88CC.089091, 11) 88CC.089092 and 12) 88CC.089093. On 27-11-2002 the complainant paid Rs. 4,258/- towards principal and Rs. 1,742/- towards interest totaling Rs. 6,009/-. The Respondent issued a receipt also. Due to financial problem the complainant did not pay the loan amount.  In 2007 the complainant enquired the outstanding loan due amount to be paid to the loan account. The Respondent issued a receipt indicating the outstanding loan as Rs. 1,80,333/- as on 9-3-2007.  After maturity of the bonds by 7-11-2007 the Respondent encashed and adjusted the amount in the loan account of the complainant. The amount received by the Respondent was Rs. 2,40,000/- was Rs. 2,40,000/- towards maturity value of the bonds.  It was exceeding the outstanding due.  After adjusting the bonds the excessive remaining balance was Rs. 59,677/- Rs. 2,40,000/- - Rs. 1,80,333/- = Rs. 59,677/-). In May 2008 the complainant enquired and came to know that the Respondent bank encashed Kisan Vikas Bonds and adjusted the amounts and misappropriated the remaining excessive balance amount of Rs. 59,677/-. When questioned the respondent gave evasive replies stating that the maturity amount was adjusted to the loan account and there was no excessive balance. The respondent refused to issue calculation for adjusting the entire maturity amount.   Therefore, the complainant got issued a notice demanding the excessive amount with interest @ 24% p.a.  There was no response from the respondent. There was deficiency of service. Thus the complaint was filed to receive excessive amount of Rs. 59,677/- together with interest @ 24% p.a. from the date of receiving the maturity amount of Kisan Vikas Bonds till realization and      Rs. 30,000/- towards compensation for mental agony and Rs. 2,000/- towards costs. 

 

3.                The Respondent filed a counter that the District Consumer Forum had no jurisdiction under section 121 of A.P. Cooperative Societies Act. The complainant was not a consumer. The complainant availed a loan of Rs. 85,000/- under loan account No. 368 keeping the 12 Kisan Vikas Bonds dt. 7-11-2001 of          Rs. 10,000/- each of face value with maturity dt. 7-11-2007 and the complainant paid Rs. 6,009/- on 27-11-2002 i.e. Rs. 4,258/- towards principal and Rs. 1,742/- towards interest and the Respondent issued a receipt also.  It was correct as on    9-3-2007 the outstanding loan due was Rs. 1,80,333/- and after maturity of the bonds the respondent adjusted the maturity value towards the said loan. It was not correct that the amount was exceeding outstanding due and the excess amount was Rs. 59,677/-.It was not correct that in May 2008 the complainant enquired and came to know that without any prior intimation the respondent encashed the bonds and adjusted the amount and misappropriated the balance amount of Rs. 59,677/- and also not correct that the respondent gave evasive replies that the maturity amount was adjusted to the loan account and there was no excessive remaining balance and it was not correct that the Respondent refused to issue any calculation for adjusting the entire maturity amount.  It was not correct that the complainant was entitled to receive the excess amount. The allegations in the complaint were created for the purpose of the complaint. The complainant got issued a notice. It was not correct that the Respondent was liable to pay excess amount with interest @ 24% p.a. 

 

4.                The complainant and his wife Nallagondlu Subbamma jointly availed Rs. 85,000/- against Kisan Vikas Bonds from the respondent and repayable with interest @ 17% p.a.   The account was being operated in the name of the complainant.   Subbamma was a necessary party. Thus the complaint was bad for non-joinder of necessary party.  The complainant failed to pay the amount towards loan except payment of Rs. 4,258/- towards principal and Rs. 1,742/- towards interest and thus he became a defaulter.  The Respondent had a lean over the bonds to collect the income become payable on the same from time to time and adjust towards repayment of principal and interest.   The Bank had authority to hold and collect on behalf of the complainant the income derived on the Kisan Vikas Patras in full discharge of the loan. As he failed to repay, the bank had at liberty to encash pre maturely or on or after maturity or otherwise dispose of the assets in any manner as the respondent would deem fit without any notice to the complainant. The bank had at liberty to collect 2% p.a. as penal interest in addition to the normal interest at 17% p.a. as per rules of the loan. 

5.                As on 24-8-2008 the outstanding balance was Rs. 1,60,910/-. The respondent issued a notice demanding payment including the cost of postage. As on 9-3-2007 the outstanding due was Rs. 1,80,333/- the maturity of the bonds was on 7-11-2007. The bank waited for payment of loan but the complainant never repaid and became a defaulter. On 9-2-2008 the respondent issued a notice for payment of the loan but it was not paid. Thus the respondent filed execution petition before Deputy Registrar of Cooperative Societies, Proddatur and on  6-6-2008 award was passed against the complainant for recovery of the loan. On   6-3-2009 the bank encashed the Kisan Vikas Patras and credited the maturity amount of Rs. 2,40,000/- to the loan account of the complainant. As on  6-3-2009 the outstanding balance was Rs. 2,61,772/- and after adjustment there was still balance of loan of Rs. 21,772/-. On 18-3-2009 a dividend of Rs. 1,203/- and Rs. 1,354/- on 85 shares of the complainant and his wife were credited to his loan account and there was balance of loan of Rs. 19,215/-. As on 28-3-2009, the balance of loan under the account was 11,789/- and the same was write off as bad debt. Therefore, there was excessive amount in the said loan account and the complainant was entitled to receive the same was not correct and the respondent was not liable for deficiency of service also. Thus the complaint may be dismissed with costs. The complaint was barred by limitation. 

 

6.                On the basis of the above pleadings the following points are settled for determination. 

i.                   Whether there is any negligence and deficiency of service on the part of the Respondent?

ii.                 Whether the complainant is entitled to the relief as prayed for?

iii.              To what relief?

 

7.                On behalf of the complainant Ex. A1 to A4 were marked and on behalf of the Respondent Ex. B1 to B4 were marked.      

 

8.                Point No. 1& 2.   The complainant availed Rs. 85,000/- as loan under loan account No. 368 on 18-10-2002 from the respondent bank keeping his 12 Kisan Vikas bonds worth about Rs. 10,000/- each, dt. 7-11-2001 totaling Rs. 1,20,000/- as security by way of pledge with maturity amount of Rs. 2,40,000/- under all the 12 Kisan Vikas bonds on the same day 7-11-2007.  It was not a dispute.   On 27-11-2002 the complainant paid Rs. 4,258/- towards principal and Rs. 1742/- towards interest totaling Rs. 6,009/- and to that effect the respondent bank issued a receipt under Ex. A1.   The complainant filed Ex. A2 loan particulars printed card showing the loan account No. 368, dt. 18-10-2002 with loan amount of Rs. 85,000/- and the rate of interest as 17% p.a. and due date for repayment was on 7-2-2009. In Ex. A2 the repayment particulars were shown as Rs. 4,258/- towards principal and Rs. 1,742/- towards interest on 26-11-2002 and the balance amount as on 26-11-2002 of loan was Rs. 80,742/-.  On 9-3-2007 the complainant approached the bank and found the total outstanding balance due of loan was Rs. 1,80,333/- and the same was noted in the printed card Ex. A2 by the respondent bank. The date of maturity of the Kisan Vikas bonds of Rs. 10,000/- each was 7-11-2007 and maturity amount was Rs. 2,40,000/-.  So on 8-11-2007 the maturity period of 12 Kisan Vikas Bonds was completed and the respondent bank should have credited the maturity amount of Rs. 2,40,000/- under 12 Kisan Vikas Bonds to the credit in his bank account.   But the Respondent bank had not done so. 

 

9.                On perusal of its statement of account under Ex. B4 from 30-9-2003 to 28-3-2009, the Respondent bank credited Rs. 2,40,000/-  into the account of the complainant on 6-3-2009 instead of 8-11-2007. There was no proper explanation or reason for not crediting Rs. 2,40,000/- to the account of the complainant on              8-11-2007 and the reason for crediting the said amount on 6-3-2009. In view of it the complainant had a loss of interest for nearly 1 year 4 months i.e. from                 8-11-2007 to 6-3-2009. As on 30-11-2007 as per Ex. B4 the outstanding balance due of loan was shown as Rs. 2,07,001/-. In case the Respondent would have adjusted the outstanding balance due amount as of 30-11-2007 of Rs. 2,07,001/- from the maturity amount as on 7-11-2002 of Rs. 2,40,000/-, the complainant would have got a balance of Rs. 32,999/-. Instead of it the respondent bank issued form – 2 Demand notice (District order) for Rs. 2,28,687/- and treated the complainant as a defaulter. The Form No. 2 notice was Ex. B1 issued by the Deputy Registrar of Cooperative Societies, Proddatur. In Ex. B1 the loan account No. 368 was not found and column regarding “batla to disclaimer” and “subsequent interest on amount of the awarded, decree, decision or order upto date” and “date of distress and delivery of copy to defaulter or if no distress is made date of payment of sum due” were completely blank. There was no proper proof that Ex. B1 was served to the complainant.   The amount was shown under Ex. B1 of Rs. 2,28,687/- under claim No. 7/2008-09 was dt. 6-6-2008.  

 

10.              The respondent bank filed Ex. B2 a Certificate under Section 71 (1) of A.P. Cooperative Societies Act 1964 in case No. 7/2008-09 in which the loan account No. 368 and membership No. 14046 were noted with the amount of   Rs. 2,28,687/- as on 6-6-2008. In Ex. B2 it was mentioned that the complainant had not repaid the same to the bank, whereas a notice of demand calling upon the complainant to pay arrears within 7 days, which was served by the bank on   30-5-2008 whereas he had not repaid the arrears specified in the notice and whereas he was given an opportunity through notice dt. 22-5-2008 to make presentation as to why a certificate under section 71 (1) should not be issued for the arrears due and his explanation was unsatisfactory / had not been received and whereas necessary enquiry was made and examination of accounts and other records and satisfied of the amount due as arrears. There was no proof of serving Ex. B2 to the complainant and more over there was no proof of service of the notice by the bank on 30-5-2008 and the notice dt. 22-5-2008 of the Deputy Registrar. But in Ex. B2 the Deputy Registrar of Cooperative Societies put his signature on 26-6-2008 and in Ex. B1 Demand notice the concerned staff put the initials on      5-7-2008. The Ex. B1 was issued subsequent to Ex. B2. Further in Ex. B3 in the office note the concerned staff put the side initials on 5-7-2008. So the office note as well as form No. 2 demand notice in Ex. B1 were prepared on one day i.e. 5-7-2008.   Apart from it the matured amount under the bonds was credited into the account of the complainant on 6-3-2009. But Ex. B1 to B3 disclosed that the amount of  Rs. 2,28,687/- was adjusted from the loan amount of Rs. 2,40,000/- on 7-6-2008 because by 7-6-2008 as per Ex. B4 the outstanding due loan was   Rs. 2,28,687/-. It was not known how the bank adjusted the balance due amount of Rs. 2,28,687/- as on 7-6-2008, While crediting the total maturity amount of the bonds of  Rs. 2,40,000/- on 6-3-2009.   Even by 30-11-2007 if the bank could have adjusted the outstanding loan amount of Rs. 2,07,001/- the complainant would have benefited without any loss for refund of Rs. 32,999/-. Before adjusting the amount it was the duty to the bank to issue notice to the complainant. It was not done. Therefore, the complainant is entitled for interest from 8-11-2007 on          Rs. 2,40,000/- Instead of crediting Rs. 2,40,000/- on 8-11-2007 into the account of the complainant, the respondent bank calculated its interest on loan from            30-11-2007 also to 6-3-2009 without any fault on the part of the complainant.  In case as discussed earlier the outstanding loan due as on 30-11-2007 of                      Rs. 2,07,001/- was adjusted from out of the maturity bonds amount of   Rs. 2,40,000/-, the complainant would have escaped from the liability of interest calculated by the bank from 30-11-2007 to 6-3-2009. It was purposefully done by the bank to give loss to the complainant.   

 

11.              The Respondent contended that the District Consumer Forum had no jurisdiction to entertain the complaint. In view of 2003 STPL (CL) Supreme Court of India in Secretary, Thirumurugan Co-operative Agricultural Credit Society Vs. M. Lalitha (Dead) through L.Rs and others, it was held under section 3 of C.P. Act and section 90 and 156 of Tamilnadu Cooperative Societies Act 1983 that the Tamilnadu Cooperative Society Act was not a bar on jurisdiction of Consumer Forums. The remedy under C.P. Act was in addition to, and not in derogation of other remedies available Regarding the Tamilnadu Act it was only jurisdiction of the Civil Court in respect of certain matters was barred. If the party would approach to two forums then forum could leave it to the parties either to proceed or avail the remedies before the other fourms, depending on the facts and circumstances of the case.   In that case the Respondents being members of the appellant – Society, had pledged paddy bags for obtaining loan. The appellant society issued notice to the Respondents demanding payment with interest. The Respondents filed petition before the District Forum, Thiruchirapalli seeking direction to the appellant to release the paddy bags pledged on receipt of the loan amount or in the alternative to direct the appellant to pay the market value of the paddy bags with interest thereon from the date of pledging till the date of release and also to pass an order for compensation for mental agony and suffering. But in the present case the respondent bank filed a case before Deputy Registrar of Cooperative Societies, Proddatur as case No. 7/08-09 for recovery of the loan amount with interest outstanding due and the Deputy Registrar of Cooperative Societies issued the Certificate under Section 71 (1) of A.P Cooperative Societies Act 1964. The Deputy Registrar passed an order under Ex. B2 and later issued Ex. B1 i.e. form No. 2 demand notice under Rule 52 (3) of A.P. Cooperative Society Rules 1964. The order was passed by the Deputy Registrar of Cooperative Societies, Proddatur under section 71 (1) for recovery. Against the order under section 71 of A.P. Cooperative Societies Act 1964, any person or society aggrieved by the decision or order made under section 71 (1) may appeal to the Cooperative Tribunal. It was clearly stated in Section 76 A.P. Cooperative Societies Act.   The complainant had not stated anywhere in his complaint about the certificate under section 71 (1) and demand notice under Rule 52 (3) shown in Ex. B1 & B2 respectively.  The complainant purposefully evaded to refer the Ex. B1 and B2 in his complaint. In view of it the District Consumer Forum has no jurisdiction to grant relief of the complainant. Thus the complaint is dismissed without costs. Hence, the points are answered accordingly.  

 

12.              Point No. 3. In the result, the complainant is dismissed without costs.

 Dictated to the Stenographer, transcribed by him, corrected and pronounced by us in the open forum, this the 1^st October 2010

 

 

Witnesses examined.

For Complainant    NIL                                                  For Respondent :     NIL

Exhibits marked for Complainant : -  

 

Ex. A1         Counter foil dt. 27-11-2002 issued by the Respondent.

Ex. A2         Card loan No. 368, dt. 18-10-2002 issued by the respondent.

Ex. A3         Office copy of the legal notice dt. 5-3-2010 from complainant’s advocate

to Respondent.

Ex. A4         Registered post slip and Acknowledgement card.

 

 

 

 

 

            1) Copy was made ready on:

2) Copy was dispatched on:

            3) Copy was delivered to parties: