BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM,

ERNAKULAM.

Date of filing : 28/07/2012

Date of Order : 13/12/2013

Present :-

Shri. A. Rajesh, President.

Shri. Sheen Jose, Member.

Smt. V.K. Beena Kumari, Member.

C.C. No. 464/2012

Between

And

O R D E R

V.K. Beena Kumari, Member.

1. The facts of the case leading to this complaint are as follows :-

The complainant is a retired Headmaster, who received National Award from the Hon'ble President of India for the prestigious service rendered by him and the 1^st opposite party is a nationalized bank and the 2^nd opposite party is the Chief Manager of the 1^st opposite party. The complainant started an account with the 1^st opposite party bearing No. 337503040050020 and he availed financial facility to the tune of 30 lakhs in the year 2002 after furnishing security. The agreement with the 1^st opposite party will get expire after one year and the same has to be renewed year after year. The rate of the interest also has to be fixed in each year and the same has to be intimated to the complainant by the opposite parties forthwith and the same will be debited in the account of the complainant in that financial year and the complainant has to pay the debited amount. The complainant paid the interest without any default and the said payment was debited in the account of the complainant and the complainant is also a regular tax payer, both income tax and sales tax for the last several years. The interest amount paid by the complainant during the period from 2007 to 2012 as detailed below :

On 22-03-2012, to the great surprise of the complainant, the 1^st opposite party informed that the interest charged for the years from 2007 to 2012 is less and an amount of Rs. 2,98,396/- will be debited in his account without stating any reason which is in utter violation of the terms of agreement and the same amounts to deficiency of service by the opposite parties. From the printed statement of account, it came to notice of the complainant that an amount of Rs. 2,98,396/- had been debited in his account on 29-03-2012 and that his queries met with no response which amounts to deficiency of service by the opposite parties. The complainant vide his letter dated 31-03-2012 wanted the 2^nd opposite party to issue a fresh account statement after deducting and deleting the illegally debited amount of Rs. 2,98,396/- from his account. The 2^nd opposite party in reply letter dated 31-03-2012 stated that the amount of Rs. 2,98,396/- debited in the account as per the terms of agreement entered into between the complainant and the bank. The opposite parties had not cared to delete the illegal demand. Therefore, the complainant approached the Insurance Ombudsman and the complainant was directed to approach the appropriate Forum. It is contended that the present illegal demand is a time barred debt which is in utter violation of the agreed terms of service and unfair trade practice. The complainant sought for deletion of Rs. 2,98,396/- which was debited in the account of the complainant by the 2^nd opposite party and to credit the said amount in the account of the complainant. He also sought for compensation of Rs. 2,00,000/- towards for mental agony suffered due to the defective service and unfair trade practice of the opposite parties along with costs of the proceedings.

2. The version of the opposite parties is as follows :-

In the version filed by the 1^st and 2^nd opposite parties, it is stated that this complaint filed by the complainant is only an experimental litigation, since the issue was considered and dismissed by the Hon'ble Banking Ombudsman and the complainant, if aggrieved has every right to prefer an appeal against the said decision before the Deputy Governor, Reserve Bank of India as per Section 3 (2) of the Banking Ombudsman Scheme, 2006. Therefore the question, maintainability of the present complaint may be decided as a preliminary issue. Without prejudice to the above contention, it is stated that no officer of the Bank stands to gain by overcharging a customer, the statement of the complainant that the financial facility will be extinguished at the end of one year is not true, in fact the cash credit account is an on going account, which sometimes may run for several decades uninterruptedly, that the rate of interest is fixed as per the agreement provision of automatic revision of interest rate as and when the Base rate/BPLR/PLR changes. It is submitted that the change in Base rate/BPLR/PLR rate is occasioned when Reserve Bank of India changes its rates from time to time and that the opposite parties have put the changes in rates on the notice board and the contention of the complainant that the interest rates are changed every year is not correct. Also no fresh documents are taken by the Bank every year and the complainant is required only to submit a request to renew the account every year so as to get orders thereon of the sanctioning authority. It is contended that in the letter dated 31-03-2012, the opposite parties have categorically stated that the account of the complainant had been charged interest at the constant rate of 9.5% from 2007 onwards without taking into account the changes in the BPLR/Base rate and that the amount of Rs. 2,98,396/- debited in the account of the complainant was as per the terms of agreement executed by the complainant. It is submitted that the inadvertent mistake on the part of the opposite parties has in fact resulted in the complaint enjoying upto 3 lakhs rupees for 5 years which he ought to have paid then and there when it was due, that actually the complainant approached the Banking Ombudsman on the very same issue and the mention of the Insurance Ombudsman is a calculated attempt of the complainant only to mislead the Consumer Forum to show that the complainant had by mistake approached the insurance company, that the averment of the complainant that the amount debited in his account is nothing but a time barred debt is not correct, since the limitation runs from the date of knowledge of the mistake/fraud. It is also submitted that there is not deficiency of service or unfair trade practice on the part of the opposite parties, therefore, the complaint filed by the complainant may be dismissed as a case of no merit with costs of proceedings to the opposite parties.

3. The complainant filed documents marked as Exts. A1 to A4 and the evidences furnished by the opposite parties are marked as Exts. B1 to B10. The 2^nd opposite party was examined as DW1. We have heard the counsel for both sides and considered the contentions raised by both parties.

4. The main issues to be decided in this case are as follows :-

1. Whether the complainant is entitled to get credited the amount of Rs. 2,98,396/- which was debited in the account of the complainant by the 1^st opposite party or not?

2. Whether the complainant is entitled to get Rs. 2,00,000/- towards compensation for the mental agony and monetary loss suffered by the complainant along with cost of the proceedings or not?

5. Point No. i. :- The complainant is a retired headmaster. He is a recipient of national Award from the Hon'ble President of India for the meritorious service rendered by him and the complainant had availed financial facility to the tune of Rs. 30 lakhs in the year 2002. He was maintaining a cash credit account with the 1^st opposite party, which is a running account as deposed by the 2^nd opposite party who is the Chief Manager of the 1^st opposite party before this Forum. The complainant stated that the agreement with the bank is valid for one year and the same has to be renewed year after year and interest to be charged has to be intimated without fail by the opposite parties and such interest will be debited in the account of the complainant. The opposite parties on the other hand stated that the renewal of the account on the basis of the balance sheet and profit and loss account submitted by the complainant does not mean that the account comes to a grinding halt on the 366^th day and that the complainant is trying to confuse the Hon'ble Forum with postulates not known to the banking industry, the complainant contended that he made no default in payment of interest as agreed in the agreement to which the opposite parties stated that the payment is not at the agreed rate. The complainant stated that anything done by the opposite parties in contravention to the agreed terms shall not be binding on the complainant and an amount of Rs. 10,74,502/- (Rupees Ten lakhs seventy four thousand five hundred and two only) was paid in total by the complainant towards interest for the years from 2007, the 1^st opposite party informed the complainant that the interest charged in the account of the complainant is less and an amount of Rs. 2,98,396/- will be debited in his account. The complainant contended that no reasons stated by the 1^st opposite party to debit the said amount, which is in utter violation of the terms of the agreement. It is submitted by the complainant that he came to notice that the 1^st opposite party had on 29-03-2012 debited in his account an amount of Rs. 2,98,396/-, when he received the printed statement of account. It is also submitted that the complainant received the reply of the 1^st opposite party on 02-04-2012, wherein the reason for debiting Rs. 2,98,396/- was not mentioned. The above averment of the complainant was denied by the 1^st opposite party and it is pointed out by the 1^st opposite party in paragraph 6 of the version that in the reply dated 31-03-2012, it was categorically stated the reasons and reiterated that there is no breach of contract, that there has not been any violation, but only compliance, though belatedly. It is further pointed out that in fact, the inadvertent mistake on the part of the bank in not applying Base rate/BPLR/Base rate changes occasioned by the changes made by the Reserve Bank of India, benefited the complainant and he was enjoying the undebited amount without interest for 5 years, that by mistake the interest rate fed in the computer in 2007 happened to be 9.5% and the said rate continued till 2012 without being corrected. The Chief Manager who was examined as DW1 deposed before the Forum that the cash credit account maintained by the complainant is a running account and the interest rate contracted is a variable one that the primary concern of the auditors is the correctness and enforceability of the document and the error in applying low interest at 9.5% was actually detected in System Audit made separately by the system auditor, that the above fact was intimated to the complainant through documentation, and thereafter, the account was debited with the shortfall. From the facts stated above, we find that the opposite party duly intimated the complainant vide Ext. A4 reply dated 31-03-2012 wherein it is stated that the account of the complainant is linked to BPLR and Base rate as per the agreement executed by the complainant and the interest charges at the constant rate of 9.5% from 2007 onwards without taking into account the changes in the BPLR/Base rate. Thus, it is found that that the amount of Rs.2,98,396/- debited is as per the agreement executed by the complainant and the allegation of the complainant that the opposite parties had not provided any satisfactory reply to the queries is found against facts.

6. Another contention of the complainant is that the debiting of Rs. 2,98,396/- in the account is clear violation of the terms of loan agreement entered into between the complainant and the 1^st opposite party. Para 2 (a) of Ext. B6 agreement reads as under :-

“That the Borrower shall pay to the Bank interest on the amount of the advance/advances for the time outstanding at the rate of 14.75% per annum with monthly rests or at such other revised rate/s as may be prescribed by the Bank from time to time depending upon the changes in the Prime Lending Rate of the Bank or the directives of Reserve Bank of India from time to time or the policy of the bank on advances, such interest to be payable whether actually debited to the account or not, and until so paid shall form part of the advance/s granted by the Bank to the Borrower and the Borrower agrees to execute necessary promissory notes or Debit balance confirmations accordingly from time to time.”

Thus, we find that the agreement clearly makes payment of interest obligatory on the part of the borrower whether debited or not.

7. The complainant alleged that the demand of revised rate is nothing but a demand for a time barred debt, which is in utter violation of the terms of service offered by the opposite parties. It is pointed out by the opposite parties that the complainant is maintaining a running account. A running account means mutual accounts and reciprocal demands between the parties in which the accounts and demand remain unsettled and open. It is distinct from a stated and/or liquidated account where the amount stands crystallized that the period of limitation in the case of open and current account, is 3 years from the close of the year in which the last item admitted or proved is entered in the account as prescribed by Article 1 and Article 26 of the schedule to the Limitation Act, 1963. Therefore, the inadvertent omission to debit the account in the circumstances detailed by the manager in his deposition cannot be treated as negligence. In view of the above, we find that the complainant is not entitled to get credited the amount of Rs. 2,98,396/-, which was debited by the 1^st opposite party. The 1^st point is therefore decided against the complainant.

8. The 2^nd point to be decided is whether the complainant is entitled to get Rs. 2,00,000/- towards compensation for the mental agony, monitory loss suffered due to negligence, defective service and unfair trade practice of the opposite parties along with costs of the proceedings. In the instant case, the opposite parties inadvertently omitted to debit Rs. 2,98,396/- in the account of the complainant. It is argued that the above fact cannot be adjudged as negligence on the part of the opposite parties, in view of the decision of the Hon'ble Supreme Court in Achutrao Haribhau Khodwa Vs. State of Maharashtra reported in AIR (1996) 2 SCC 634 (645-46) : AIR 1996 SC 2377. It was held in the above case that negligence involves 3 constituents namely : (a) a legal duty to exercise due care. (b) breach of duty and (c) consequential damages. In the instant case, the complainant could not prove 'negligence' on the part of the opposite parties leading to consequential damages. The complainant also could not prove any loss/injury caused due to debiting the amount of Rs. 2,98,396/- in his account. In fact, we find that the complainant had enjoyed an amount of Rs. 1.49 lakhs without interest for 5 years. Thus, no injury or loss established in this case. Therefore, the complainant is found not entitled to any compensation as prescribed in Section 14 (1) of the Consumer Protection Act, 1986. We find no merit in the complaint filed by the complainant. Therefore, the complaint is liable to be dismissed and is dismissed. This Forum is not inclined to award costs of proceedings to either party, in view of the facts and circumstances of the case.

Pronounced in the open Forum on this the 13^th day of December 2013.

Sd/- V.K. Beena Kumari, Member.

Sd/- A. Rajesh, President.

Sd/- Sheen Jose, Member.

Forwarded/By order,

Senior Superintendent.

A P P E N D I X

Complainant's Exhibits :-

Opposite party's Exhibits :-

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