BEFORE THE MANDYA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANDYA PRESENT: 1. SIDDEGOWDA, B.Sc., LLB., President, 2. A.P.MAHADEVAMMA, B.Sc., LLB., Member, ORDER Complaint No.MDF/C.C.No.113/2008 Order dated this the 19th day of February 2009 COMPLAINANT/S Sri.M.G.Goolesh Gowda S/o Gooligowda, Marashinganahalli Village, Maddur Town, Mandya District. (By Sri.K.M.Sreekantaswamy., Advocate) -Vs- OPPOSITE PARTY/S 1.The Manager, Visveshvaraya Grameena Bank, Maraliga Branch, Besagarahalli, Maddur Taluk. 2.The Managing Director, Visveshvaraya Grameena Bank, Ganapathi Temple Road, Mandya. (By Sri.Shivalingaiah., Advocate) Date of complaint 31.10.2008 Date of service of notice to Opposite parties 11.11.2008 Date of order 19.02.2009 Total Period 3 Months 8 Days Result The complaint is dismissed. However, there is no order as to costs. Sri.Siddegowda, President 1. This complaint is filed under section 12 of the Consumer Protection Act 1986, against the Opposite party Bank for refund of F.D. amount of Rs.4,910/- with interest from 24.07.2005 at 15% p.a. and compensation of Rs.20,000/- with costs. 2. The case of the complainant is that the complainant had obtained loan of Rs.15,000/- during the year 2000-01 and at that time, he had deposited Rs.3,000/- as F.D. and the Opposite party issued Visveshvarya Cash Certificate and the said F.D. matured on 24.07.2005 and the maturity amount is Rs.4,910/-. After the maturity date, the complainant approached the 1st Opposite party for payment of the F.D. amount, but the 1st Opposite party prolonged. After some days, when he approached 1st Opposite party informed that without paying the crop loan, the F.D. amount would not be paid and that amount would be adjusted towards the loan. Along with one Shivananjaiah, he contacted the 1st Opposite party and 1st Opposite party had informed that he would contact the Head Office at Mandya but there was no response. Thereafter, complainant and his friend contacted 2nd Opposite party Head Office, they told to approach the 1st Opposite party. 1st Opposite party has illegally adjusted the F.D. amount towards the loan. Since he was financial difficulty he could not repay the loan, therefore he kept quiet without demanding the F.D. amount. He received letter at the end of 2008 from 1st Opposite party that the loan of Rs.15,000/- borrowed by him has been waived by the Central Government. In spite of it, the 1st Opposite party could not have adjusted the F.D. amount and therefore, the 1st Opposite party has committed deficiency in service. 3. The 1st Opposite party has filed version admitting that the complainant had borrowed loan of Rs.15,000/- during the year 2000-01 and for the purpose of getting the loan he had deposited Rs.3,000/- on 24.07.2000 and Visveshvaraya Cash Certificate was issued for 5 years. After maturity of the F.D. amount when the complainant approached, he was informed to pay the loan which was due and it would exercise general lien and the F.D. amount would not be paid and it would be adjusted towards the loan. It has denied that the 1st Opposite party Bank informed to come for months together and the complainant approached with Sri.Shivananjaiah etc. Under the loan waiver scheme of the Central Government, the loan due by the complainant as on the date was waived and informed the complainant. The loan amount due after adjustment of the F.D. amount has been waived as only loan due as on the date was informed to the Central Government. Therefore, the 1st Opposite party has not committed any deficiency in service and 1st Opposite party is not liable to pay any compensation and interest. The complaint is barred by limitation. Hence, the complaint is liable to be dismissed. 4. During trial, the complainant is examined and produced the documents Ex.C.1 to C.5. The 1st Opposite party is examined and the documents Ex.R.1 to R.4 are produced. 5. We have heard both sides. 6. Now the points that arise for our considerations are:- 1. Whether adjustment of the F.D. amount towards the loan by the Opposite party Bank is justified? 2. Whether the Opposite party has committed deficiency in service? 3. Whether the complaint is barred by limitation? 4. Whether the complainant is entitled to the relief sought for? 7. Our findings and reasons are as here under:- 8. The undisputed facts are that the complainant being an agriculturist borrowed loan of Rs.15,000/- during the year 2000-01 for growing sugar cane. The complainant has also deposited Rs.3,000/- with the 1st Opposite party Bank on 24.07.2000 and 1st Opposite party has issued the deposit certificate i.e., Visveshvaraya Cash Certificate as per Ex.C.1 and the maturity date is 24.07.2005 and the maturity amount is Rs.4,910/-. It is admitted fact that 1st Opposite party has sent letter to the complainant about debt relief scheme 2008 as per Ex.C.2 and this reveals that under loan account number VKC 36/2001, the complainant borrowed loan of Rs.15,000/- for sugar cane and the loan due in between 31.12.2007 and 29.02.2008 is Rs.14,309/- and that loan is waived off. 9. The contention of the complainant is that though the Government has extended debt relief, the Opposite party has not refunded the F.D. amount and without asking him the adjustment of the F.D. amount to the loan is illegal and therefore, the 1st Opposite party has committed deficiency in service. But, the contention of the 1st Opposite party is that after the maturity of the F.D. amount when the complainant approached he was directed to repay the loan, otherwise the F.D. amount would be adjusted towards the loan exercising right of general lien and accordingly, the F.D. amount has been adjusted and the remaining loan amount has been waived after the Central Government Loan Relief Scheme. 10. Now, in the complaint itself, the complainant has stated that after the maturity of the cash certificate, he approached 1st Opposite party and requested to pay the F.D. amount. But, the 1st Opposite party dragged on for months together and after some days when he approached for F.D. amount, 1st Opposite party informed that the loan due should be paid, otherwise the F.D. amount would be adjusted towards the loan. Admittedly, the F.D. matured on 24.07.2005. So during 2005 itself, the complainant has approached for claiming the F.D. amount and Opposite party had informed that unless the loan amount is repaid, the F.D. amount will not be paid and it would be adjusted towards the loan due. Admittedly, the complainant did not repay the loan amount. As per the document Ex.R.1, this F.D. amount has been adjusted on 28.07.2005 to the loan of the complainant and after the balance amount is Rs.14,724/- and before adjustment of the F.D. amount, the loan amount was Rs.19,500/-. In Ex.C.2, the letter issued by the 1st Opposite party to the complainant about the waiver of the loan in between 31.12.2007 and 29.02.2008 is Rs.14,309/-. Ex.R.2 is the deposit extract in which the F.D. amount with interest i.e., Rs.4,916/- has been debited to VKC 36/2001 on 28.07.2005. There is no dispute that VKC 36/2001 refers to the loan account of the complainant. Further, as per Ex.R.3 dated 25.09.2001, the complainant has executed a letter called as Common Letter Authorisation. Item No.3 of this letter reads;- Transfer the required loan installments, interest and any other charges from my S.B./Current A/c No.3076 to my captioned loan account. In this Ex.R.3, the loan account number is 36/2001, this document is not disputed. The contention that without intimation about the adjustment towards the loan and without calling for the cash certificate from the complainant and without recovery proceedings, the Opposite party is not entitled to adjust the amount and it is illegal. As per the oral evidence of the 1st Opposite party and also the complainant immediately after the maturity date, the complainant approached for payment of the F.D. amount and he was informed that unless the loan amount is paid, the F.D. will not be paid and it would be adjusted towards the loan. Merely because, the 1st Opposite party has not sent letter informing about the adjustment of the F.D. amount towards the loan and not calling for the production of the F.D. receipt is not a ground to hold that the 1st Opposite party has no right to adjust the F.D. amount towards the loan. As contended by the Opposite party Bank, it has right of general lien under section 171 of Contract Act, in addition to the common letter of authorization Ex.R.3. In the decision reported in 2000(2) KCCR 1237 in the case of Smt.K.S.Nagalambika Vs- Corporation Bank. High Court has relied upon the decision of AIR 1992 Supreme Court 1066 and observed that Section 171 of the Contract Act, gives a general lien to the bank and it has got to be recognized. The Supreme Court has observed the above passages go to show that by mercantile system, the Bank has a general lien over all forms of securities or negotiable instruments deposited by or on behalf of the customer in the ordinary course of banking business and that the general lien is a valuable right of the banker judicially recognized and in the absence of an agreement to the contrary, the banker has a general lien over such securities or bills received from a customer in the ordinary course of banking business and has a right to use the proceeds in respect of any balance that may be due from the customer by way of reduction of customers debit balance, such a lien is also applicable to negotiable instruments including FDRs which are remitted to the Bank by the customer for the purpose of collection. Our Supreme Court has held the presence of two letters created a general lien in favour of the Bank over the two FDRs. Even otherwise having regard to the mercantile custom as judicially recognized the Banker has such a general lien over all forms of deposits or securities made by or on behalf of the customer in the ordinary course of banking business. So, the right of general lien exercised by the Opposite party Bank in respect of the F.D. amount of complainant by adjusting to the loan due cannot be said to be illegal, merely because a letter is not sent, when it is admitted by the complainant that he was orally informed that the loan due by him, if not paid, the F.D. amount would be adjusted towards the loan. The records clearly shown that the F.D. amount has been adjusted on 28.07.2005 itself to the loan account as per Ex.R.1, though the maturity date of the F.D. is 24.07.2005 and thereafter, only the balance of loan amount is furnished by the Opposite party Bank for Debt Relief Scheme and Ex.C.2 produced by the complainant proves the same. Therefore, the complainant has failed to prove that the 1st Opposite party has committed deficiency in service by adjusting the F.D. amount towards the loan by exercising right of general lien. 11. The 1st Opposite party contended that the complaint is barred by limitation. Admittedly, the F.D. matured on 24.07.2005. Except oral demand in 2005 by the complainant, but there is no other letter to the Opposite party demanding the payment of F.D. amount. Only after waiver of the loan due as per Ex.C.2, the complainant has filed this complaint on 30.10.2008 i.e. after 3 years of the maturity date, though the Opposite party has adjusted the F.D. amount on 28.07.2005 to the loan account. The complainant has not made any attempt to the loan due by him by obtaining the loan extract. Under these circumstances, the complaint is barred by limitation. 12. Such being the case, the complainant is not entitled to refund of F.D. amount, nor any interest and compensation as claimed. 13. In the result, we proceed to pass the following order; ORDER The complaint is dismissed. However, there is no order as to costs. (Dictated to the Stenographer, transcribed, corrected and then pronounced in the open Forum this the 19th day of February 2009). (PRESIDENT) (MEMBER)
