BANK OF BARODA vs SAVINDER KAUR

The complainant/respondent along with her husband late Shri Ratan Singh held a joint account with the Civil Lines, Pakhowal Road, Ludhiana Branch of the petitioner bank, she being the second account holder. Three withdrawals/deductions for a total sum of Rs.1,22,000/- were made by the bank from the aforesaid account. Alleging the said withdrawals to be unauthorized and unlawful, she approached the concerned District Forum by way of a complaint, seeking payment of the aforesaid amount along with interest and compensation.

The complaint was resisted by the petitioner bank. It was stated in the reply that late Shri Ratan Singh had availed ODP limit to the extent of Rs.3,00,000/- from the bank, against mortgage of an immovable property owned by him, by depositing the title deed of the said property with the bank. An ODP account was then opened by Ratan Singh with the bank which was operated by the deceased as well as his wife. However, the borrower failed to regularize the said ODP account which came to be declared as a Non Performing Asset (NPA) on 31-12-2007. Proceedings under Section 27 of the SARFAESI Act were then initiated by the bank wherein the complainant and other legal heirs of the borrower were directed to pay an amount of Rs.3,46,867/- along with

interest on that amount. The said payment having not been made, the bank served a notice under Section 13(4) of the SARFAESI Act and took symbolic possession of the mortgaged property on 27-11-2008. Thereafter, the property was sold by the bank to one Smt. Manju Bains for Rs.1,64,000/-, by inviting tenders. The action taken by the bank was challenged by the complainant before the Debt Recovery Tribunal by filing a petition under Section 17 of the SARFAESI Act, which came to be dismissed by the said tribunal. It was further stated in the reply that since the ODP account turned NPA on 31-12-2007 the interest could not be applied earlier and the unapplied interest was debited by the system of the bank on 03-03-2011 for the period from 01-03-2008 to 02-03-2008. A sum of Rs.111/- was debited towards statement charges on 31-03-2011 and Rs.19,000/- were debited towards interest amount which were reversed on 20-03-2009. Thus, in nutshell the case of the bank is that the debit entries made in the account of the complainant represented the unapplied interest which could not be applied at the time when the account had turned into NPA but was applied after the sale proceedings of the mortgaged property were received by the bank and credited in the said account.

Vide its order dated 25-02-2014 the concerned District Forum dismissed the complaint holding that no deficiency in the service or unfair trade practice on the part of the bank could be proved.

Being aggrieved from the order passed by the District Forum the complainant approached the concerned State Commission by way of an appeal. Vide impugned order dated 04-12-2014 the concerned State Commission allowed the appeal, set aside the order of the District Forum and directed the bank to refund the total sum of Rs.1,22,049/- to the complainant along with interest at the rate of 12% per annum. The petitioner was also directed to pay Rs.20,000/- as compensation and Rs.10,000/- as litigation expenses to the complainant. Being aggrieved the petitioner bank is before us by way of this revision petition.

A perusal of the order passed by the State Commission would show that the said Commission was of the view that the mortgaged property having been sold for Rs.4,61,000/-, the amount should have been refunded to the complainant and since nothing remained due to the bank after sale of the mortgaged property, there could be no question of debiting any interest in the account for the period subsequent to the said sale. Vide order dated 20-02-2015 we required the petitioner bank to explain to us in particular (i) what was the amount due from the borrower, inclusive of upto date interest, on the date 25% of the sale price of the mortgaged property was received by the bank, (ii) on which date the bank received 25% of the sale price and on which date it credited the said amount to the account of the borrower, (iii) what was the amount due from the borrower inclusive of interest on the date balance sale consideration in respect of the mortgaged property was received by the bank, (iv) on which date the bank gave credit in the account of the borrower for the aforesaid balance sale consideration.

During the course of the arguments it was explained by the learned counsel for the petitioner bank that in fact the interest applied by the bank was for a period prior to the receipt of the sale proceeds of the mortgaged property by the bank and not for the period subsequent to the receipt of the sale consideration. He led us through the statement of account filed by the bank as well as the affidavit of the concerned Senior Branch Manager. The said affidavit clearly shows that the sale proceeds of the mortgaged property were received by the bank on five different days between 16-09-2009 to 21-12-2009 and the aforesaid amounts find duly entered in the Excel sheet containing the complete working of interest, which is Annexure A1 to the affidavit of the Senior Branch Manager. The principal amounts are reflected and recorded in the certificate which is

Annexure A2 to the aforesaid affidavit. The affidavit of the Senior Branch Manager would also show that an amount of Rs.1,02,888/- was due from the borrower, towards interest from 01-03-2008 to 11-12-2009. The amount of Rs.19,100/- was the interest which by mistake was reversed on 20-03-2009 and the remaining amounts were towards sundry debits. The aforesaid affidavit would also show that the sale consideration of the mortgaged property was credited by the bank to the account of the borrower, on the same date on which the said consideration was received. The affidavit also shows that an amount of Rs.19,000/- was found payable to the borrower after making all the adjustments which was withdrawn by her in two installments, the first withdrawal being of Rs.15,000/- made on 25-07-2011 and the second being of Rs.4,000/- made on 20-08-2011.

From the aforesaid affidavit and statement of accounts we are satisfied that the petitioner bank has given due credit to the complainant for the sale consideration received by it on sale of the mortgaged property. We are also satisfied that the interest in question was debited later by the bank since it could not have been debited when the account was an NPA. Though the said interest was debited later, it pertained to a period prior to receipt of the entire sale consideration by the bank. Therefore, there was no unauthorized withdrawal or deduction from the bank account of the complainant.

For the reasons stated hereinabove, no deficiency on the part of the petitioner bank in rendering services to the complainant is made out. The impugned order passed by the State Commission, therefore, could not be sustained and the same is hereby set aside. The complaint is consequently dismissed with no order as to costs.