DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, PALAKKAD

Dated this the 15^th  day of September   2021

Present   : Sri.Vinay Menon.V  President

                : Smt.Vidya.A, Member                                                                           Date of Filing: 19/11/2018

CC/147/2018

1.Pradeepkumar P

   S/o.Chandradas

   Kamala Nivas

   Sreekrishna Colony

   Kavilppad

   Olavakkode Post – 678 017

2.Sujatha PK

   Kamala Nivas

   Sreekrishna Colony

   Kavilppad

   Olavakkode Post – 678 017                                                       -                       Complainants

 (By Adv.S.Radhakrishnan)

                                                                                                Vs

The Secretary

Palakkad Primary Co-operative

Agricultrual and Rural Development Bank Ltd.,

Palakkad                                                                               -                       Opposite party  

 (By Adv.S.Ramesh)

O R D E R 

By  Smt.Vidya.A. Member  

Brief  facts of the complaint.

 The 2^nd complainant has availed a loan of Rs.25,000/- from the opposite party Bank vide No.PNTI109/2006-07. (Member No.A.2004). At the time of availing the loan, she issued a signed blank cheque as required by the bank for the assurance of repayment. The complainants  paid almost half of the loan amount. But as their business was in loss, they had to stop it and because of the financial issues they were not able to make prompt repayment of the balance loan amount and interest.  The cheque issued by the 2^nd complainant for the settlement of the balance  loan amount was presented by the OP bank for clearance and it was returned  due to “insufficient funds.” Consequently,  the opposite party initiated legal proceedings against the 2^nd complainant. They filed a case as CC  165/2010 by presenting the cheque  issued  by the  complainant and a warrant was issued against   the 2^nd complainant in this case. After that the complainants approached the Secretary of the Bank and  paid the entire balance amount in installments and got “Account closed” receipt  from the Bank. The complainants  had closed the loan account in the year 2012. But the bank did not take steps to withdraw the case even after closing the loan. On 4/11/2018, four policemen from Palakkad North Police Station came to the complainants house for arresting the 2^nd complainant. At that time 2^nd complainant was not there and only their aged parents were at home and this incident has caused great mental and physical strain to them. All these happened because of the irresponsible and deficient acts of the opposite party bank in non withdrawal of the case even after closing the loan in 2012. When the complainants approached  the bank for recalling the warrant issued against 2^nd complainant, they insisted them to pay a legal fee of Rs.2000/-  which they paid under protest.

The conduct of the opposite party bank in not withdrawing the case even after the closure of the loan is totally irresponsible. So this complaint is filed for getting a compensation of Rs.1 lakh from the opposite party bank for their deficiency in service and for the mental agony, inconvenience, and defamation suffered by them.

Complaint admitted and notice issued to the opposite party. The opposite party entered appearance and filed their version.

The contentions in the version of the opposite party

In the complaint, there are two complainants and they have not stated why and how they can be complainants. There is no privity of contract or there is no trader or service provider relationship between the complainant and the opposite party and hence the complaint is not maintainable

The real facts as per the opposite party is that Sujatha was an accused in CC/165/2010 before the JFCM No.III Palakkad in an offence under Section 138 of N.I.Act.  After availing the loan, she has not fully remitted the amount which is a legally recoverable debt which includes the total loan amount, interest, penal interest and other charges incurred by the opposite party bank. As they have not fully remitted the amount the opposite party was forced to initiate prosecution against the accused. Subsequently they waived the interest and penal interest and the matter has been settled between the parties. Even though Sujatha appeared through counsel before the JFCM No.III, she has not taken bail and warrant was issued against her by the Magistrate. Only after the issuance of warrant, they have settled the matter by remitting  the balance amount due to the bank.

At the time of settling the matter, it was informed that even though the opposite party could waive all the amounts, a legal fee Rs.2,000/- is mandatory requirement and that cannot be waived and the  complaint could be withdrawn only after that remittance. Even after remitting the other amounts, they did not remit the legal fee and the NBW issued against the accused is kept in force and subsequently the matter has been converted into long pending case. After a long gap of 6 years in 2018, the complainant remitted the amount and the opposite party has withdrawn the case.

The issuance of NBW by a court of law  which is a procedural aspect and it cannot be termed as deficiency in service on the part of the opposite party.

The complaint is frivolous and vexatious and is devoid of any merit and hence it  is to be dismissed with cost.

The complainants filed chief affidavit and the opposite party filed IA 145/2019 to cross examine the complainant and it was allowed. The 1^st complainant was examined as PW1 and Ext.A1 to A3 were marked from their  side. The opposite party filed  chief affidavit and on the application filed by the complainant the opposite party was cross examined as DW1. No documents were marked from their side.

Issues

1. Whether the 1^st complainant is competent  to give evidence on behalf of the 2^nd complainant ?
2. Whether there is any deficiency in service / unfair trade practice on the part of the opposite party ?
3. If so, what is the relief as to cost / compensation ?

Heard both parties and perused the affidavits  and documents on record produced from both sides.

The preliminary  objection raised by the opposite party is that there is no privity of contract or any trader or service provider relationship between the  first complainant and the opposite party and so he is not competent to give evidence before the Forum and on that  aspect the complaint is not maintainable.

Here the first complainant is the husband of the second complainant and the loan was taken by the  2^nd complainant from the opposite party. It is true that there is no privity of contract between the first complainant and opposite party. But as per Section 120 of the Indian Evidence Act “In all civil proceedings, the parties to the suit and the husband or wife of any party to the suit shall be competent  witnesses.”  So the first complainant can be competent witness on behalf of second complainant even though he is not a party  to the case and moreover in this complaint he is arrayed as first complainant. Furthermore opposite party does not have a case that the 1^st complainant is not a beneficiary of the loan availed by the 2^nd complainant.  So the first complainant is   competent to give evidence and that issue is decided accordingly.

Issues 2  & 3

It is admitted that the 2^nd complainant took a loan for Rs.25,000/- from the opposite party. The complainant had stated that even though they were promptly repaying the loan in the beginning because of their loss in the business and consequential financial difficulties they couldn’t repay the entire loan amount within time.

The bank initiated legal proceedings against the 2^nd complainant as CC/165/2010 before the JFCM court III Palakkad in an offence under section 138 of NI Act as the cheque issued by her towards repayment returned with endorsement  “insufficient funds” and warrant was issued against her by the Hon’ble  Magistrate. She appeared before the court through counsel. After that the complainant approached the bank and the entire amount was paid in installments and closed the loan account and bank issued  receipt indicating the closure of the  loan. Bank’s contention in this regard is that even though the complainant had paid other amounts, they failed to pay the legal fee of Rs.2000/- and that is the reason for non withdrawal of the complaint before the JFCM Court III even after the closure of the loan account. So the case was converted to long pending case and NBW has been continuing against the 2^nd complainant and there is no deficiency in service on their part.

From Ext.A1  it can be seen that the 2^nd complainant made payments of Rs.6,000/- on 30/6/2011, Rs.10,000/- on 20/6/2012 and Rs.14,860/- on 16/7/2012 towards the balance principle and interest as stipulated by the bank and the loan  account was closed.  Ext.A3 dated 16/7/2012 clearly shows that the “loan outstanding is NIL” So the 2^nd complainant had closed the loan account  on 16/7/12 itself after paying Rs.30,860/-. This is evident from the receipts issued by the Bank. The bank is duty bound to withdraw the case against the 2^nd complainant as soon as the loan account is closed. But they didn’t do that and it is clear deficiency in service/dereliction of duty on their part. Their contention that the non withdrawal of the case is because of the failure on the part of the complainant to pay Rs.2000/- as legal fee to the counsel and they have informed about this to the complainants  is not tenable.

In our opinion,  it is the  responsibility of the Bank to pay fee for their panel  advocates.    The bank cannot charge the legal fees separately  once the loan account is closed and  receipt  is issued. Panel advocate’s fee has to be paid by the bank and it is not a common practice to insist the client to pay it directly to the lawyer.   Further there  was no written communication demanding this amount from the bank to the 2^nd complainant.

Here the loan account was closed by the complainant  in 16/7/2012 itself and the bank had certified that there is no outstanding balance. Then they are duty bound to withdraw  the case filed by  them. As they did not do this in time, the warrant stood  pending against the 2^nd complainant and this caused the authority concerned  to proceed against  her in furtherance of its execution.

So there is a clear deficiency in service /dereliction of duty on the part of the bank in not withdrawing case on a timely manner.  They  cannot wash off their hands by saying that the issuance of warrant by a court of law is procedural aspect and cannot be termed as deficiency in service on the part of the opposite party. The non withdrawal of the case even after closing the loan  account amounts to deficiency in service on the part of the opposite party. The conduct  of the opposite party   has definitely caused mental stress and agony to their family members and cast a dent in the standing in the society   for which the opposite party is liable to compensate the complainants.

In the result, the complaint is allowed. We direct the opposite party to pay Rs.10,000/- (Rupees Ten thousand only) as compensation for their deficiency in service and for the mental strain and inconvenience suffered by the complainant and Rs.2,500/- (Rupees Two thousand five hundred only) as cost of this litigation.

    Pronounced in the open court on this the 15  day of  September    2021.

                                                                                       Sd/-

                                                                               Vinay Menon V

                                                 President

  Sd/-

 Vidya.A

                    Member   

APPENDIX

Exhibits marked on the side of the complainant

Ext.A1 –  Recovery slip  No.163 dated 30/6/11  issued by OP

Ext.A2 –  Receipt No.55 dated 28/6/2012 issued by OP

Ext.A3 –  Recovery slip No.3 dated 16/7/12 issued by OP

Exhibits marked on the side of the opposite party

Nil

Witness examined on the side of complainant

PW1 – Pradeepkumar P

Witness examined on the side of opposite party

DW1 – Kannadas A  Cost : Rs.2,500/- allowed as cost.