BEFORE THE MANDYA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANDYA PRESENT: 1. SIDDEGOWDA, B.Sc., LLB., President, 2. M.N.MANOHARA, B.A., LLB., Member, 3. A.P.MAHADEVAMMA, B.Sc., LLB., Member, ORDER Complaint No.MDF/C.C.No.3/2009 Order dated this the 31st day of March 2009 COMPLAINANT/S Smt.Yashodamma W/o M.K.Puttaswamy, Madegowdana Koppalu, Yeliyur Post, Mandya Taluk, Mandya District. (By Sri.Chikkamari., Advocate) -Vs- OPPOSITE PARTY/S Yeliyur Finance Corporation (r), Near Syndicate Bank, Yeliyur 02. Rep. by R.Kanthamani, Managing Partner, 3rd Cross, Subhashnagar, Mandya. (By Sri.K.M.Basavaraju., Advocate) Date of complaint 05.01.2009 Date of service of notice to Opposite party 23.01.2009 Date of order 31.03.2009 Total Period 2 Months 8 Days Result The complaint is partly allowed, directing the Opposite party to refund Rs.477/- with interest at 12% p.a. from 17.09.2000 with compensation of Rs.2,000/- and cost of Rs.500/- to the complainant. Sri.Siddegowda, President 1. This complaint is filed under section 12 of the Consumer Protection Act 1986 against the Opposite party to refund the FD amount of Rs.12,000/- with interest at 18.70% from 07.09.2000 and compensation of Rs.20,000/-. 2. The case of the complainant is that the Opposite party is a Finance Corporation and the complainant had deposited Rs.6,000/- on 22.08.1996 and the Opposite party has issued FD receipt and stating that the maturity amount is Rs.12,000/- and would mature on 07.09.2000 with interest at 18.70%. After the maturity date, though the complainant demanded several times for payment of the FD amount, the Opposite party went on postponing telling reasons. Thereafter, the Opposite party Office was kept closed and nobody was coming and the complainant tried to get the address of the Opposite party Partner and recently complainant came to know that Opposite party Managing Partner is residing at Mandya City and though the Opposite party was approached several times for return of the FD amount, it was of no use. Even now, the Opposite party Office is closed in the address. The complainant got issued a legal notice on 05.12.2008 and the Opposite party has not claimed. The complainant has suffered loss and without refunding the FD amount, the Opposite party has committed deficiency in service. Therefore, the Opposite party is liable to refund the FD amount with interest and compensation. 3. The Opposite party has filed version, admitting that the complainant is not a Consumer and the complaint is not maintainable and complaint is barred by limitation. The Opposite party is the Managing Partner of the Finance Corporation and the complainant had deposited Rs.6,000/- on 22.08.1996 and it would mature on 07.09.2000 at the rate of 18.70% interest for Rs.12,000/- and the Opposite party had issued FD receipt. But after the maturity date, it is not correct that the complainant was approaching the payment and Opposite party was postponing and the Office was closed. One Maniyamma W/o late Ganesh Rao along with the complainant obtained loan of Rs.5,000/- on 15.01.1998 under cheque No.493414 of Syndicate Bank, Yeliyur Branch and at that time, the complainant has executed the documents to the Opposite party and thereafter Maniyamma and complainant failed to pay the installment from 18.04.1998 and when the Opposite party demanded for payment, they had told to adjust the FD amount to the loan. Therefore, after maturity of the FD receipt, the Opposite party has adjusted the amount of Rs.11.522.41 paise to the loan on 17.09.2000 and though the complainant was told to receive back the balance of Rs.477/-. The complainant telling that the FD receipt is lost demanded for payment of the balance amount and also balance amount was not paid. Hence, the present complaint is filed with bad intention. Further, the Opposite party is a Finance Institution and as per Section 171 of the Indian Contract Act, it has got right of general lien and hence, it has exercised the right of general lien to adjust the FD receipt amount to the loan and hence the Opposite party is not liable to repay any amount with regard to the FD receipt. Therefore, the claim of the complainant is illegal and barred by limitation and the complaint is liable to be dismissed with costs. 4. During trial, the complainant is examined and she has produced Ex.C.1 to C.3. On behalf of the Opposite party Sri.G.K.Nagesh, the Manager of the Opposite party is examined and has produced Ex.R.1 to R.8. 5. We have heard both sides. 6. Now the points that arise for our considerations are:- 1. Whether the complainant is a Consumer? 2. Whether the complainant is a surety for the loan of Rs.5,000/- borrowed by Maniyamma and the loan was not paid? 3. Whether the Opposite party has got right of general lien to adjust the FD receipt amount to the loan? 4. Whether the complainant is entitled to the FD amount as claimed? 5. Whether the complainant is entitled to interest and compensation? 6. Whether the complaint is barred by limitation? 7. Our findings and reasons are as here under:- 8. The admitted facts are that the complainant had deposited Rs.6,000/- on 22.08.1996 with Opposite party Finance Corporation and the Opposite party had issued Ex.C.1 FD receipt showing that Rs.6,000/- would mature to Rs.12,000/- on 07.09.2000 and it is a deposit of 48½ months with interest at the rate of 18.70% p.a. 9. The complaint is filed stating that the Opposite party has failed to make payment of FD amount. The Opposite party has pleaded that the complainant is not a Consumer and the complaint is not maintainable. When admittedly the Opposite party is a Finance Corporation having finance transaction like a Bank, it cannot be understood how the Opposite party has taken the plea that the complainant is not a consumer and the dispute would not come under the Consumer Protection Act. Therefore, we have no hesitation to hold that the complainant is a consumer of the Opposite party and the complaint is maintainable before this Forum. 10. According to the complainant, in spite of several demands, the Opposite party has not paid the FD amount and the office of the Opposite party was closed for years together and nobody was available and later traced the address of the Managing Partner and legal notice was issued. According to the Opposite party, one Maniyamma along with the complainant borrowed loan of Rs.5,000/- on 15.01.1998 and executed loan documents and they had agreed to take the FD amount as security for this loan and the loan was not discharge and hence exercising the right of general lien provided under section 171 of Indian Contract Act, the Opposite party has adjusted Rs.11,522.41 paise on 17.09.2000 and though the complainant was informed to take back the remaining amount producing the FD receipt, but she was telling that the FD receipt was lost and demanded the amount and hence, the remaining amount was not paid. But the evidence of the complainant is that he has not executed any documents offering the FD amount as security for the loan, but admitted that she is a surety for the loan of Rs.5,000/- borrowed by Maniyamma. The Opposite party has produced Ex.R.1 the voucher signed by Maniyamma on 15.01.1998 for Rs.5,000/- issued by cheque and Ex.C.2 is the loan application signed by Maniyamma and also complainant as a surety and Ex.R.3 is the details of the loan wherein for the security FD No.85 is mentioned to which that Maniyamma and Yashodamma have put signature and even a pronote Ex.R.5 is executed by the complainant Yashodamma and Maniyamma. 11. Admittedly, the FD receipt matured on 07.09.2000. According to the Opposite party, the complainant and Maniyamma did not pay the loan installments and as the loan was not repaid, on 17.09.2000 towards the principle of Rs.4,155/- and interest of Rs.7,367.41 paise totally Rs.11,522.41 paise, the FD amount of the complainant was adjusted and the balance was Rs.477.19 paise and the complainant was told to return the FD receipt and get back the balance amount, but the complainant demanded the balance amount without production of the FD receipt saying that it is lost and Opposite party did not make the payment of balance amount. 12. The contention of the complainant side is that no notice was issued to the complainant about the non-payment of the loan by Maniyamma and informing that they are going to adjust the FD amount to the loan, if not paid and only after filing the complaint the documents are created. But, it is an admitted fact that the Maniyamma has not repaid the loan amount, the complainant has not examined Manyiamma to prove otherwise. To prove the loan, the Opposite party has produced the loan extract Ex.R.6 and Ex.R.7 and Ex.R.8 is the counterfoil of the FD receipt. Though the wordings on Ex.R.8 are not proper and it does not prove that the complainant has agreed for adjusting the FD amount to the loan, but when it is admitted fact that the complainant is a surety for loan and executed the loan documents offering the FD amount as security for the loan as per Ex.R.3 & R.4, now it is not open to complainant to say that she has not offered the FD amount as security for the loan. Ex.R.3 and R.4 are in Kannada language and hence, it cannot be said that the complainant has simply put the signature without knowing the contents. It is not a case that she is illiterate lady. 13. Now the question is whether without giving the notice before adjusting the FD amount to the loan, it is open to the Opposite party to adjust the FD amount to the outstanding loan. In the decision reported in 2000(2) KCCR 1237 the Honble High Court of Karnataka in the case of Smt.K.S.Nagalambika Vs- Corporation Bank, relying upon the decision of the Supreme Court in AIR 1992 SC 1066 has held 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. The recital in the two letters clearly creates a general lien without giving any room whatsoever for any controversy and Section 171 of the Indian Contract Act is clear and categoric that unless a contract to contrary is established by plaintiff, the banks right of lien will have to be accepted. So, in the present case also, the documents Ex.R.3 & R.4 clearly gives right of general lien to the Opposite party in case of default of payment of loan, to adjust the FD amount of the complainant who is admittedly a surety for the loan. Therefore, no notice is required to exercise the right of lien and hence, the Opposite party has established it has got right of general lien to exercise in case of default of payment of loan. 14. As observed above, the complainant has not examined Maniyamma to prove the loan was discharge and as per the loan account extract Ex.R.6, R.7 Maniyamma was due of Rs.4,155/- towards the principle and interest of Rs.7,367/-.81 paise as on 17.09.2000 and totally Rs.11,522.81 paise has been adjusted from the FD amount of the complainant and the balance to be payable is only Rs.477.19 paise. 15. According to the complainant, after the maturity of the FD receipt, she demanded, but the Opposite party went on dragging giving some reasons and thereafter, the Office was closed and nobody was available and the address of the partner was not at all traceable. But according to the Opposite party when the complainant came she was informed that the loan amount of Maniyamma has been adjusted and the remaining would be paid on producing the FD receipt, but the FD receipt was not produced by saying that it was lost and hence, the balance amount was not paid. But the Opposite party has not at all issued any notice to the complainant stating that the FD amount has been adjusted to the loan amount of the Maniyamma and there is balance of Rs.477.19 paise and to produce the FD receipt and to obtain the balance amount. It cannot keep quiet without informing the complainant for years together, though it has got right to adjust the FD amount towards the loan as the complainant is a surety. Therefore, the Opposite party has not discharge his duties to the customers by informing the adjustment of the loan from the FD amount and to take back the balance amount. The evidence of the complainant that after some days after the maturity, the Office was closed nobody was available is supported by the evidence of Opposite party Manager that they stopped the transaction. For several years, the complainant could not trace the address and she got issued legal notice to the Opposite party the registered post Ex.C.3 and it was returned answer stating that there is no board of the Opposite party and there is no office at all. Thereafter, the complainant has traced the address of the Managing Partner at Mandya and filed the complaint. Therefore, the complainant was made to struggle for claiming the FD amount and only after tracing the address the present complaint is filed. Though the Opposite party has taken a contention that the complaint is barred by limitation as the FD amount matured on 07.09.2000 and the complaint is filed in the year January 2009. But admittedly there is no refusal of the payment of the FD amount in writing to the complainant and even there is no information in writing to the complainant that the FD amount was adjusted towards the loan and there is only balance of Rs.477/- and complainant was directed to receive the balance by producing the FD receipt, so that the cause of action starts from that date. When the Opposite party Office was closed in the year 2000 itself and when there was no refusal by the Opposite party to pay the amount, but simply went on postponing by giving some reasons at the earlier days, after the maturity, the cause of action has continued and there is no limitation to claim the FD receipt until it is paid or refusal to pay. It is well known that FD amount if not claimed it will be deposited in the account of the depositor and when the demand is made by production of the FD receipt the amount would be paid and there is no question of limitation. Hence, it cannot be accepted that the complaint is barred by limitation. 16. The complainant has sought for the FD amount with interest at 18% and compensation of Rs.20,000/-. Since, it is established that after the maturity of the FD receipt, the Opposite party Office was closed and nobody was available to claim the FD amount and the address of the Managing Partner of the Opposite party was not traceable for years together and this has made the complainant to suffer monitory loss and mental agony. Therefore, the Opposite party is liable to refund the balance of Rs.477/- with interest at 12% p.a. from 17.09.2000 and further liable to pay compensation of Rs.2,000/- for mental agony. 17. In the result, we proceed to pass the following order; ORDER The complaint is partly allowed, directing the Opposite party to refund Rs.477/- with interest at 12% p.a. from 17.09.2000 with compensation of Rs.2,000/- and cost of Rs.500/- to the complainant. (Dictated to the Stenographer, transcribed, corrected and then pronounced in the open Forum this the 31st day of March 2009). (PRESIDENT) (MEMBER) (MEMBER)
