A. Annadurai vs Sanjay Nair & 5 Ors

This revision petition has been filed under section 21(b) of the Act 1986 in challenge to the Order dated 03.08.2012 of the State Commission in appeal no. 100 of 2011 arising out of the Order dated 05.05.2009 of the District Commission in complaint no. 347 of 2007.

We have heard the learned counsel for the legal heirs of the deceased complainant (the petitioner herein) and the learned counsel for the citi bank (the respondents herein). We have also perused the record, including inter alia the Order dated 05.05.2009 of the District Commission, the impugned Order dated 03.08.2012 of the State Commission and the petition.

The crux of the case has been captured by the State Commission in paragraph 7 of its impugned Order of 03.08.2012, which is reproduced below for reference:

Further the opposite party relied upon the documents under Ex. B.1 to B.5 related to the earlier loan transactions the terms and conditions of loan granted and under Ex.B.8.  We are able to find from the paper publication according to the proposed action taken by the opposite party by issuing demand notice under section 13(2) of Securitization Act under reconstruction of Financial Assets and Enforcement of security interest Act under in which showing the details of.. Ex.B.8 the complainants name mentioned in the serial No. 12 for the loan amount of Rs. 2,79,192/- availed for which outstanding amount of Rs.3,63,380/- pending recovery for which the mortgaged property is mentioned the same property which was shown as security for the earlier loan availed and in the document under Ex.A.9 relied upon the complainant requested the opposite party regarding the details of housing loan availed and also requested not to initiate any further proceedings on the property as per the notice dated 3.9.2005 and as per the discussions between the parties on 17.2.2007 until other dispute on the property Loan is solved. From this letter It is clear that  the complainant was aware of the proposed proceedings against the properties by the opposite party for discharging of loan. In those circumstances the complainant availed the 1st loan and subsequently entered in agreement for another loan during the year 2003 for Rs. 2,99192/- as per the details under Ex.A.7 and also under Ex.A.12 from which we are able to observe that certain amounts are not paid towards the loan for many months and now as per the additional document under Ex.B.9, the loan agreement entered into by the complainant along with surety one Arumugam on 25.1.2003 by mentioning the same property as security against which already he availed the present loan in dispute and discharged the same as per document under Ex.A.5 dated 30.1.2003 and before issuing such certificate Ex.B.9 loan agreement was accepted on 25.1.2007 would go to show that the complainant was fully aware of the existing of 2nd loan availed and the complainant by suppressing those entire details would reflect that he had not come with clean hands in filing the complaint. Since the opposite parties had proceeded under SARFASI Act for the recovery of 2nd loan which is knowingly denied by the complainant and the same have to be resolved between the parties which is not the subject matter before the district forum or before this commission unless such dispute is resolved between the parties, the District Forum cannot direct the opposite parties to return the title deeds on which basis the 2nd loan was also availed and also as far as the refund of the excess payment of Rs. 65,304/- is concerned which was not proved by the complainant that amount was paid only as an excess payment for the discharge of the earlier loan alone and not for any other transactions and thereby the District Forum order cannot be sustained in this regard also in view of the fore going reasons and discussions made as above and the appeal to be accepted as meritorious.

The factual matrix which emanates is that the complainant first took loan no. 1001357 from the bank on 07.12.2001. The bank thereafter issued a letter dated 30.01.2003 indicating therein that he had discharged the said loan no. 1001357. However prior thereto on 25.01.2003 the complainant entered into a loan agreement with the bank in respect of a second loan no. 1001874 against which the entire outstanding of the first loan no. 1001357 was adjusted and subsequent thereto the afore-mentioned letter dated 30.01.2003 indicating that the first loan no. 1001357 had been discharged was issued. For default in repayment of the second loan no. 1001874 proceedings under the SARFAESI Act were initiated against the complainant by the bank. The learned counsel for the bank informs that cognizance was taken by the competent court and the property furnished as security was attached and pending auction a receiver was appointed. No evidence whatsoever was adduced by the complainant for having repaid the first loan no. 1001357 in its entirety from some account of his by cheque or in cash or from any other source / third party etc. The principal document on which the complainant had relied before the District Commission was the afore-mentioned letter dated 30.01.2003 which was issued subsequent to the second loan being sanctioned and the outstanding of the first loan having been adjusted thereagainst. Meaningfully enough the same property was offered as security in the second loan as had been offered for the first loan. The fact of the second loan was not brought to the notice of the District Commission by the bank either. The District Commission chiefly relied on the letter dated 30.01.2003 and ordered the bank to return the title deeds of the property furnished as security along with Rs.65,304/- said to have been paid in excess by the complainant with interest at the rate of 12% per annum. In appeal the bank furnished additional evidence including inter alia the loan agreement dated 25.01.2003 entered into by the complainant in respect of the second loan. The State Commission took an adverse view against the complaint for having concealed the factum of the second loan before the District Commission and also formed an adverse opinion against the complainant for having hidden the fact that proceedings under the SARFAESI Act had been initiated against him for default on the second loan. It came to the conclusion that there was no basis for the District Commission to have ordered for return of the title deeds which were again furnished as security for the second loan. It also concluded that there was no basis whatsoever for having concluded that Rs.65,304/- had been paid in excess by the complainant and therefore its refund with interest was ordered erroneously by the District Commission.

We find that the State Commission has marshalled the facts and appraised the circumstances correctly in determining that the complainant suppressed material facts before the District Commission and that in fact the outstanding on the first loan no. 1001357 was adjusted in the second loan no. 1001874 whereafter the discharge letter dated 30.01.2003 for the first loan was issued and that the same property was furnished as security for the second loan as had been furnished for the first loan and that he was a defaulter in the second loan in respect of which proceedings under the SARFAESI Act had also been initiated against him.

The State Commission has not erred in any manner in arriving at its conclusions and has rightly allowed the appeal and dismissed the complaint.

We also notice that even though the complainant had hidden the fact of the second loan and of the ongoing proceedings under the SARFAESI Act before the District Commission, the bank too in its part had not placed the loan agreement and other related documents in respect of the second loan before the District Commission but had subsequently placed them before the appellate forum i.e. the State Commission. Had the complete facts as available with it been placed before the forum of first instance i.e. the District Commission by the bank it could have avoided such wasteful dissipation of judicial time and resources. In this respect the bank is advised to inculcate systematic improvements for future.

At this stage learned counsel for the complainant submits that he wishes to withdraw the petition.

The petition stands dismissed as withdrawn, without the option to file it again before this Commission.

The Registry is requested to send a copy each of this Order to the parties in the petition as well as to their learned counsel immediately. The stenographer is also requested to upload this Order on the website of this Commission immediately.