Kerala

StateCommission

CC/14/31

THOMAS JOHN - Complainant(s)

Versus

UNION BANK OF INDIA - Opp.Party(s)

BIJU ABRAHAM

30 Jun 2016

ORDER

KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION SISUVIHARLANE VAZHUTHACADU THIRUVANANTHAPURAM

 

CC.No.31/2014

ORDER DATED : 30.06.2016

PRESENT

 

SRI.K.CHANDRADAS NADAR   : JUDICIAL MEMBER

SMT.A.RADHA                         : MEMBER

 

COMPLAINANT

 

Thomas John,

S/o.Thomas,

Padappanmkkel,

Cullen Road, Alappuzha – 688 011

 

(By Adv.Sri.Biju Abraham)

 

Vs

OPPOSITE PARTY

 

Union Bank of India,

Rep.by its Manager,

Mullackal Branch, Kabeer Plaza,

CCNB Road, Alappuzha – 688 011

 

(By Adv.Sri.R.Jagadish kumar)

 

ORDER

 

SRI.K.CHANDRADAS NADAR   : JUDICIAL MEMBER

This is a complaint filed under section 17 of the consumer protection act. The allegations in the complaint in brief are the following. The complainant is a small scale industrialist and for the purpose of his business he had availed credit facilities from the Alappuzha branch of the opposite party Union bank. As security for the facilities availed title deeds were deposited with the bank with intent to create equitable mortgage. Due to financial constraints there was delay in repayment of amounts due in some of his accounts .Therefore, the bank issued notice dated 16.01.2012 under section 13 (2) of the securitization and reconstruction of financial assets and Enforcement of security Interest Act 2002 and threatened to sell the property offered as security. On approaching the Deputy General Manager of the bank he told the complainant that he had to pay Rs.1,60,00,000/- before 31.03.2012 in full and final settlement. The complainant could not agree with the suggestion to pay the amount immediately. On 31.03.2012, the Deputy General Manager contacted the complainant and informed him that the bank was prepared to allow one time settlement of his accounts and asked the complainant to remit Rupees.one crore immediately and remit Rs.25,00,000/- on 03.04.2012. He has to pay the balance amount of Rs.35,00,000/- within four months. The complainant expressed his inability to do so. But on compulsion of the Deputy General Manager the complainant arranged Rupees.one crore on promising to pay exorbitant rate of  interest On 31.03.2012 by evening application for one time settlement was submitted as agreed to the branch manager but nothing was heard about it and the complainant deposited Rs.25,00,000/- immediately.  But the branch manager and the deputy general manager of the bank changed their attitude and wanted the complainant to pay more amount. Since the application for one time settlement was not considered the complainant was constrained to approach the Hon’ble High court of Kerala and the court directed the bank manager to consider the proposal for one time settlement and take appropriate decision on it.

        2.     The Bank Manager rejected the request for one time settlement proposed by the complainant as per letter dated 10.10.2012 for the reason that the properties mortgaged by the complainant would be worth more than Rupees.five crores. He asked the complainant to remit Rs.67,11,957/- with contractual  rate of interest from 01.10.2012. The complainant challenged the order before the Hon’ble High Court of Kerala and the court directed the bank to pass appropriate orders on the SARFEASI proceedings initiated. The bank issued letter dated 19.12.2012 stating that since the value of the properties was higher no concession could be given to the complainant. Though he complained to the Head Office at Bombay, they refused to interfere in the matter. The Bank Manager and the Deputy General Manager declined the request to take a final decision in the proposal for one time settlement. They also declined the request of the complainant to allow him to sell the property saying that they would sell the property and give the balance amount to the complainant. By letter dated 24.05.2013 the bank asked the complainant to remit Rs.49.4 lakhs within 15 days. The complainant requested to reconsider the demand of the bank but the bank was not prepared to do so. The request of the complainant to release at least one of the documents pertaining to the loan transaction was not heeded by the Branch Manager and the Deputy General Manager. They insisted that without clearing all the liabilities they were not in a position to release any document to the complainant. On verification of the accounts maintained in the bank the complainant understood that the Manager had deliberately added certain charges in the account to inflate the amount due. Under the guise of non rating charges an amount of Rs.1,54,872/- is added in the account of M/s.Kallai Saw Mills and Timber Industries, Rs.1,36,181/- is seen added in the account of M/s.Thomas John and Company and Rs.1,77,936/- is seen added in the account of M/s.Aristocrat Furnishers . Thus as non rating charges alone total amount of Rs.4,68,989/- is seen added which the complainant was not bound to pay. Rs.75,000/- is seen added as cost of litigation charges but the Hon’ble high court had not permitted the bank to recover any cost relating to the proceedings before it. The bank had also levied penal interest though there was no default on the part of the complainant to pay the amounts demanded. The complainant remitted Rs. 10,00,000/- to show his bonafides and approached the Hon’ble High Court questioning the right of the opp.party to levy  non rating charges litigation expenses and high rate of interest and to direct release of the title deeds . The Honble High Court as per judgment dated 11.07.2013 directed release of the title deeds on payment of the balance amount due on or before 16.07.2013.

        3.     In obedience to the judgment of the Hon’ble High Court the complainant approached the bank manager on 13.07.2013 and remitted Rs,.42,69,799.12/- as asked by the Branch Manager who assured the complainant to release all the title deeds on the next day. Though the bank manager released three title deeds, he has not given the original partition deed number  4024 of 1990 of the Ernakulam Sub Registrar’s Office in respect of an extent of 75.736 cents of property in survey no.972/4  and 1061/2 of Ernakulam village . The market value of the land covered under the document will come to around Rs.10 crores. The complainant gave written request on 16.07.2013 to release the said title deed but no reply was given.  The complainant approached the Hon’ble High Court and filed contempt petition as contempt case number 892/2013 but the High Court relegated the parties to other forums as per judgment dated 19.08.2013.

        4.     The complainant maintains that the title deeds were deposited in trust with the bank and they are bound to return the same. The Deputy General Manager and the bank Manager have deliberately destroyed or kept aside the original partition deed number 4024 /1990 or have given it to some others, since the complainant could not succumb to the request to give away his property to them. They inflated the accounts with heavy interest and charges to the maximum so that the complainant would not pay the amount. All this was done with hidden agenda to compel the complainant to submit to their demands. The missing of the deposited documents is suspicious. The bank had accepted the title deed and had kept the same in safe custody. By the above activities the bank has committed breach of trust. Initially the complainant was told that the document was misplaced but subsequently they told the complainant that the document was missing and recently they are pretending that only photocopy of the document was produced. Failure to locate and return the original title deed despite full settlement of the accounts amounts to deficiency in service on the part of the opposite parties. The complainant had issued notice through his lawyer demanding payment of Rs.25,00,000/- as compensation for the deficiency in service. Though receipt of the notice is acknowledged by the bank no reply is given. The complainant is now precluded from enjoying his property fully. The complainant is entitled to get the original document back or a document capable of being used as original document. The opposite party is liable to compensate the complainant. Hence this complaint.

        5.     The opposite party filed version raising the following contentions. The complainant has concealed true facts to get illegal gain. The complainant had six loan accounts with the opposite party bank. The loan accounts were maintained shabbily by the complainant. Hence the opposite party was forced to initiate proceedings under the SARFAESI Act. Against this proceedings complainant filed three writ petitions and writ Appeal No.1833/2012. In all the proceedings the complainant’s case was negatived. Further no relief was granted to him in contempt case no.892/2013 filed by him.

        6.     The loans were granted by the opposite party on the security of title deed numbers 864/93, 2427/73, 2911/75 and 4024/90. The first three documents were registered before the sub Registrar, Alappuzha and the fourth one was registered before the Sub Registrar, Ernakulam. The respective owners of property executed necessary documents in favour of the opposite party. The first two documents referred to were produced in original. The certified copy of the third document and the xerox copy of the fourth document, that is, document no.4024/90 were produced and loan was availed. The complainant was an existing customer with satisfactory dealings. Additional loan was in fact sanctioned on the strength of existing securities which were in its original form. All the loans were sanctioned by the then chief manager of the bank one T.S.Balaswami Pillai. The loans were closed by one U.B.Thakkur, who was the subsequent chief manager of the bank. The contention of the complainant that original of document No.4024/90was deposited is incorrect. The xerox copy of the document produced by the complainant was also released to him when the loan accounts were closed. After the complainant paid the entire amount due as per the judgment of the Hon’ble High Court the opposite party handed over all the four documents along with connected papers such as encumbrance certificate, tax receipt, prior title deeds, possession certificate etc. However, the complainant insisted for return of the original partition deed xerox copy of which was given, stating that he had handed over the original partition deed to the opposite party bank. The chief Manager who had sanctioned the loans and the manager of the bank were contacted to ascertain the correctness of the claim of the complainant. Both the officers had retired from service. The bank accepted the Xerox copy of the partition deed given on 28.12.2006 on the assurance of the complainant that the original or duplicate copy would be given later. But the complainant never gave the original or duplicate copy of the partition deed. The matters agitated in this complaint were agitated before the Hon’ble High Court in the writ petition and the writ appeal. The complainant also approached the banking ombudsman. Approaching this commission for the very same purpose is an abuse of process of law and the complaint deserves to be dismissed.

        On the above pleadings the following points arise for determination.

1. Whether the opposite party had committed deficiency in service as alleged by the complainant?

2. What are the reliefs if any to be granted to the complainant?

        7.     The evidence in this case consists of the deposition of the complainant as PW1, Exts.A1 to A34 marked on his side, the deposition of two witnesses examined on the side of the opposite party and Exts.B1 to B9 (series) marked on the side of the opposite party. After evidence is recorded arguments were heard.

Point No.1

        8.     Admittedly for the purpose of the partnership business of the complainant credit facilities were granted by the opposite party bank. There were six loan accounts operated by the complainant. The credit facilities were granted on the security of equitable mortgage created by the complainant. It is not disputed that title deeds relating to four properties were deposited with the bank. According to the opposite party of the four title deeds deposited with them two documents were in original. The third one was a certified copy and the fourth one namely partition deed number 4024/90 was the xerox copy of the document. According to the complainant original of the said partition deed was deposited with the bank. This is the main point in dispute in this case.

        9.     It is alleged in the complaint itself that there was delay in effecting payment of arrears in some of the accounts. It is also seen that the Deputy General Manager and Manager of the opposite party bank insisted for repayment of the entire amount due to the bank. They also threatened the complainant with proceedings under the SARFAESI Act. There upon the complainant approached the Hon’ble High Court on more than one occasion. It is unnecessary to consider this aspect in detail. The complainant has also a case that the opposite party has claimed amounts which the complaint was not liable to pay such as non rating charges and cost of litigation in relation to the proceedings filed by the complainant before the Hon’ble High Court. This aspect also need not be considered in detail because no consumer dispute is involved. As per judgment dated 11.07.2013 in WP(c) No.16904 of 2013 (K) the Hon’ble High Court of Kerala directed the opposite party to return the original title deed deposited by the petitioner (complainant) (and nothing else) in case the petitioner remits a sum of Rs.43,00,000/- on or before 16.07.2013. Any belated payment would carry interest and the bank was liable to return the title deeds only if the interest component was also paid. It was observed that payment of Rs.43,00,000/- by the petitioner would not disentitle him to question the extent of liability before any other forum. But issues such as non rating charges were liable to be imposed or the cost of litigation could be realised from the complainant are really civil disputes based on the agreement between the parties and no consumer dispute is involved. Adjudication of the above disputes involve determination of extent of liability which it is not for a consumer court to decide. But admittedly pursuant to the direction of the Hon’ble High Court of Kerala in WP(C) No.16904/2013 (K). Copy of which is produced and marked as Ext.A16, the complainant remitted the entire amount due to the opposite party. This is admitted in the version itself.Ext.A14 letter issued by the opposite party also shows that on 13.07.2013 the bank has closed the six loan / cash credit accounts in the name of the complainant and others by accepting cheque no.81126 dated 13.07.2013 for Rs.42,69,799.12 drawn on the Union Bank of India, Thevara Branch. It is further mentioned in Ext.A14 that the four documents deposited by the complainant and others for creating equitable mortgage would be released on Monday - 15.07.2013. Among the documents mentioned is document No.4024/90 which is the disputed document. It is seen that the complainant submitted Ext.A10 request for return of the title deeds including the disputed document No.4024/99 relating to 75.736 cents of property. Ext. A10 is dated 25.06.2013. On 16.07.2013 the complainant sent Ext.A15 letter stating that they had not so far received document No.4024/1990 of Ernakulam Sub Registrar’s Office along with other supporting documents if any.

        10.   It also appears that the complainant approached the Hon’ble High Court of Kerala and filed contempt case (C.No.892/2013 S) complaining that partition deed number 4024/90 had not be returned by the opposite party. The Hon’ble High Court noted that the parties agreed that the original of the sale deeds and certified copy of the release deed were deposited and were returned to the petitioner in the said proceedings on closing the loan account. But the parties were at variance as regards the fourth document namely partition deed number 4024/90. The assertion of the complainant was that the original of the partition deed was deposited with the bank but the bank maintained that 0nly a photostat copy of the partition deed was deposited with them. Noting that whether the original or the photocopy was deposited could not be adjudicated in contempt proceedings, the Hon’ble High Court directed the complainant petitioner there in to resort to other civil or other criminal proceedings for redressal of his grievance. Accordingly

the contempt proceeding was closed without prejudice to the right to initiate appropriate civil or criminal proceedings. It is accordingly the complainant has approached this commission.

        11.   So the first question is whether the above dispute between the parties can be adjudicated by this commission. Once the loan is paid in full, it is the duty of the bank concerned to return the security documents. Any breach of his duty involves deficiency in service in the broad sense of the term in deciding this aspect as an ancillary issue only, the question whether the original document or xerox copy was deposited with the bank can be adjudicated. To the said limited extent this commission is entitled to exercise its jurisdiction. Hence the further question that arises for adjudication as ancillary issue is whether only xerox copy of partition deed number 4024/990 was deposited with the bank.

        12.   It is seen from Ext.A20 certificate issued as per request of the party that partition deed number 4024/90 dated 07.12.90 relating to 75.763 cents of land in survey numbers 972/4 and 1061/2 is deposited with the Alappuzha branch of the opposite party towards loan availed by M/s.Kallai Saw Mills and Timber

Industries and Aristocrat Furnishers . Ext.A34 receipt dated 28.12.2006 issued by the opposite party also shows that among other documents partition deed number 4024/1990 dated 07.12.1990 was deposited with a view to create equitable mortgage. The opposite party produced list of documents submitted on 13.11.2003 with intent to create equitable mortgage by deposit of title deeds which also shows that partition deed number 4074/1990 was deposited along with other documents such as tax receipt, encumbrance certificate etc.

        13.   The argument advanced by the learned counsel for the opposite party is that in none of the documents creating the equitable mortgage or in any subsequent document. It is not mentioned whether original of the partition deed number 4024/90 was deposited. It is equally pertinent to point out that it is not mentioned either that only xerox copy of the document was deposited. DW2 the Senior Manager of the Ernakulam Branch of the opposite party admitted that records do not reveal when the partition deed number 4024/90 was returned by the opp.party.

        14.   Thus the evidence already referred to does not decisively show whether original of the partition deed or a Xerox copy was deposited. Then, it is only possible to go by the legal presumptions. Only the deposit of original title deed can create a valid equitable mortgage. The officers of the bank are bound to accept only the original title deed in order to create an equitable mortgage. Any failure on their part cannot be accepted in law. If as a matter of fact they accepted a Xerox copy on the assurance that the parties would later submit the original partition deed that is done at their risk and cannot be recognized in law in the absence of clear evidence. Since the document in dispute is a partition deed, it may be that the party is in possession of not the original but the duplicate or triplicate copy of the document. But it is the case of none of the parties that only duplicate or triplicate was produced. The dispute is whether original or xerox copy was produced. In urging the contention that only xerox copy was produced, the opp.party also relies on Ext.B8 legal opinion furnished by the legal adviser of the opposite party. From Ext.B8 it is seen that only Xerox copy of the partition deed was placed before the legal adviser of the opp.party but a legal adviser may furnish legal opinion based on the xerox copy of a document assuming it to be the true copy of the original. But that does not validate an equitable mortgagee if created with xerox copy. So the legal presumption is always that the original document was deposited to create the equitable mortgage and in the normal course of human conduct the officers of the bank would accept only the original partition deed. It appears from the legal opinion furnished that as a matter of fact the partition deed was executed between the complainant and one Grecykutty and her daughters, M/s.Gracykutty and her daughters were the title holders of the A schedule property and the complainant became the title holder of B schedule property. The complainant had paid Rs.60,000/- to M./s.Gracy kutty and others for transfer of their property in the partition deed. Thus, he became the title holder of 75.73 cents of property covered by the partition deed. So the possibility is that the original partition deed came into the possession of the complainant. It was for the opp.party to insist for production of the original itself in order to create a valid equitable mortgage. On closing the loan evidently this document was not returned to the complainant. So the opp.party committed deficiency in service.

Point No.2

15.   Regarding the reliefs to be granted it is pertinent to mention that merely because the original title deed is lost the complainant would not loss the absolute right and possession over the property .It is true that he may experience difficulty in transferring the property or raising further loans and is entitled to be compensated only to the said limited extent. It is for the opp.party to provide the next best evidence of title to the property to the complainant. So the complaint can be disposed of with suitable reliefs indicated above.

        In the result, the complaint is allowed as below.

The opp.party is directed to provide the certified copy of document No.4024/90 of Sub Registrar office, Ernakulam at their cost with a certificate that the original of the document went missing or could not be traced after it was deposited with them for creating equitable mortgage. They should also publish the fact of missing the document from their custody in two prominent newspapers – one Malayalam daily and one English daily. The opp.party is also directed to pay Rs.50,000/- to the complainant for the deficiency in service committed by them. They shall pay Rs.10,000/- as cost of litigation. The order shall be obeyed within two months from the date of receipt of copy of this order.

K.CHANDRADAS NADAR : JUDICIAL MEMBER

 

 

A.RADHA                         :MEMBER

 

Be/

APPENDIX

List of witness for the complainant

 

PW1                 - P.Thomas John

 

Exihibts for the complainant

Ext.A1              - Copy of power of attorney dated 16.07.2013

Ext.A2              - Copy of the Enforcement of Security Interest Action

                           Notice dated 16.01.2012

Ext.A3              - Copy of the application for one time settlement,

                           Dated 31.03.2012

Ext.A4              - Copy of the judgment dated 17.09.2012

Ext.A5              - Copy of the reply given by the bank dated

                          10.10.2012

Ext.A6              - Copy of the letter issued by the  Banking

                          Ombudsman to the complainant dated 12.11.2012

Ext.A7              - Copy of the judgment dated 22.11.2012

Ext.A8              - Copy of the reply notice under the SARFEASI dated

                           19.12.2012

Ext.A9              - Copy of the statement of account for the period

                          from 30.06.2011 to 26.04.2013, dated 26.04.2013

Ext.A10            - Copy of the request for return of title deeds before

                          the bank dated 25.03.2013

Ext.A11            - Copy of the letter issued by the bank to the

                          complainant, dated 24.05.2013

Ext.A12            - Copy of the request before the bank, dated

                          08.06.2013

Ext.A13            - Copy of the letter issued by the bank to the

                          complainant, dated 19.06.2013

Ext.A14            - Copy of the letter issued by the bank dated nil

Ext.A15            - Copy of the letter of complainant to the bank dated

                          16.07.2013

Ext.A16            - Copy of the judgment dated 11.07.2013

Ext.A17            - Copy of the judgment dated 19.08.2013

Ext.A18            - Copy of the legal notice issued at the Union Bank

                          of India and Deputy General Manager of the bank

                          dated 13.08.2013

Ext.A19            - Copy of the acknowledgment card dated

                           24.08.2013

Ext.A20            - Copy of the letter dated 21.08.2012

Ext.A21            - Copy of statement of account for the period from

                           25/08/2011 to 13/07/2013

Ext.A22            - Copy of statement of account for the period from

                           3/8/2012 to 13/7/13

Ext.A23            - Copy of statement of account from 31/12/2011 to

                          13/07/2013

Ext.A24            - Copy of cheque remitted to UBI on 13/7/13 for

                           Rs.4269799.12 but credited in various account.

Ext.A25            - Copy of e-mail cheque from Union Bank of India

Ext.A26            - Copy of cash credit statement

Ext.A27            - copy of Paper publication

Ext.A28            - Copy of invoice publication

Ext.A29            - Copy of paper publication

Ext.A30            - Copy of invoice

Ext.A31            - Copy of paper publication

Ext.A32            - Copy of paper publication

Ext.A33            - Copy of invoice publication

Ext.A34            - Copy of Union Bank receipt

 

List of witnesses for the opposite party

 

DW1                 - Shafee K Hassan

DW2                 - Nizamudeen Ibrahim

 

Exibits for the opposite party

Ext.B1             - Copy of judgment dated 22.11.2012 from Hon’ble

                          High Court, Ernakulam

Ext.B2             - Copy of judgment dated 29.10.2012 from Hon’ble

                           High Court, Ernakulam

Ext.B3             - Copy of judgment dated 11.07.2013 from Hon’ble

                          High Court, Ernakulam

Ext.B4             - Copy of judgment dated 17.09.2012 from Hon’ble

                          High Court, Ernakulam

Ext.B5             - Copy from office of the Banking Ombudsman

                           Dated 12.11.2012.               

Ext.B6             - Copy of judgment dated 19/08/2013 from Hon’ble

                           High Court, Ernakulam

Ext.B7             - Copy of memorandum of deposit of title deed

 

 

Ext.B8             - Advocate letter to the Manager, Union Bank of

                           India dated 30/11/2006

 

Ext.B9             - Copy of letter from Indian Overseas bank dated

                          04.01.2016

 

        K.CHANDRADAS NADAR : JUDICIAL MEMBER

 

 

A.RADHA                         :MEMBER

 

Be/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

KERALA STATE

CONSUMER DISPUTES

 REDRESSAL COMMISSION

SISUVIHARLANE

 VAZHUTHACADU

 THIRUVANANTHAPURAM

 

CC.No.31/2014

ORDER DATED : 30.06.2016

 

 

                                                                          Be/