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Judgment
Avm J. Rajendra, Avsm, Vsm (Retd.) Member
The present First Appeal has been filed under Section 19 of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act”) against the Order dated 29.11.2017 passed by the learned State Consumer Disputes Redressal Commission, West Bengal, (hereinafter to be referred as “the State Commission”), in Consumer Complaint No. 332 of 2015, wherein the Complaint filed by the Complainant (Respondent herein) was partly allowed.
There was a delay of 9 days in filing the present Appeal. For the reasons stated in IA/2439/2018, vide Order dated 10.08.2018, the delay was condoned subject to costs.
For the sake of Convenience, the parties in the present Appeal are referred to as mentioned in the Complaint before the State Commission. The Complainant Md. Mozammel Haque is Proprietor of ‘M/s. Mahatron Enterprises’ engaged in distributorship of electronic goods and the said business is run by him for the purpose of earning his livelihood. The Bank of India is referred to as the Opposite Party (OP Bank in short).
Brief relevant facts of the case as per the Complainant are that he availed a cash credit loan from the OP Bank, mortgaging his NSC, KVP, Title Deeds etc. Due to heavy rainfall on 29.06.2013 and 30.06.2013, their stock suffered significant damage, causing substantial losses. The OP Bank, vide letter on 12.06.2014, notified him that the loan facility was terminated from 29.12.2013 and refused further financial assistance. He then requested OP Bank to release all securities, including original title deeds etc. vide letter dated 04.09.2014. Despite requests, the OP failed to release the same. Even after multiple follow-ups and letter dated 11.12.2014, the OP Bank did not action, causing him significant financial losses.
Being Aggrieved Complainant (Respondent herein), filed the Consumer Complaint (CC No. 332 of 2015) before the State Commission and prayed as under:-
a. For-direction upon the Opposite Party to return the original four Title Deeds being nos. i) 3712 for the year 2002, ii) 9341 for the year 2003, iii) 6617 for the year 2004 and iv) 9998 for the year 2008 along with all the original 10 FDRs which are kept with the Opposite Party Bank;
b. For direction upon the Opposite Party to pay Rs.53,81,261,22 only to the Complainant towards business loss of the A Complainant;
c. For further direction upon the Opposite Party to pay Rs.1,00,000/- only for harassment and mental agony. Further the Complainant claims Rs.50,000/- for litigation cost and expenses;
d. The costs of and incidental to the Complainant;
e. Such further and other directions/orders as this Hon'ble Commission may deem fit and proper in order to extend complete justice to the Complainant.
In response to the complaint, the Appellant/OP Bank refuted all significant claims made by the Complainant. The bank asserted that it had never hesitated to return the security documents and, in fact, had made multiple requests to the Complainant to collect the documents from its branch, after complying the required formalities. Despite these efforts, the Complainant did not respond positively and instead opted to approach this Commission. Consequently, the bank requested the dismissal of the complaint.
The learned State Commission, in its decision on 29.11.2017, ruled in favor of the Complainant with the following observation:-
In the wake of settlement of loan account, it was the sacrosanct duty of the OP to return all relevant documents to the Complainant and that it did not do so despite repeated pleadings of the Complainant, is a clear pointer of gross deficiency in service on the part of the OP.
It is to be kept in mind that the Complainant mortgaged those documents in anticipation of getting due financial assistance from the OP that he badly needed to run/ expand his business. We have no such desire to call in question the rationale of OP's decision to stop rendering any further financial assistance to the Complainant for we are firmly of the view that rendering financial assistance to someone is the sole discretion of the Bank. At the same time, to be fair to the Complainant, we feel that the OP had no right whatsoever to unnecessarily withhold the concerned documents with it even for a single day, thereby put in jeopardy the business prospect of the Complainant. No doubt, had the OP acted with due alacrity, the Complainant could court some other financiers for obtaining due assistance. We, therefore hold the OP liable to make good the loss suffered by the Complainant for such whimsical act of the OP.
It appears that the Complainant has claimed a sum of Rs.53,81,261.22 as compensation towards loss to his business on account of non availability of financial assistance from the OP/other financier and to substantiate such fact, he has filed a projection being made by one Chartered Accountant. However, the projected loss, as figured out by the said Chartered Accountant, on a comparison with the audited net profit earned by the Complainant during the preceding two years, we find that the same was very quite inflated. Also, the Complainant has not filed any order copies to show that he had pending orders worth Rs. 60,00,000/- to execute but could not do so due to paucity of fund.
Considering all aspects, we feel that compensation worth Rs. 2,00,000 would be just and fair to mitigate the loss suffered by the Complainant, thanks to the insensitivity of the officials of OP towards the Complainant. Besides this, the Complainant shall also be entitled to get litigation cost.
The Complainant, thus, succeeds in part. Hence,
ORDERED
that the complaint stands allowed in part on contest. OP is directed to pay, within 45 days hence, compensation to the tune of Rs. 2,00,000/- to the Complainant together with a litigation cost of Rs. 10,000/-. OP shall also return all the concerned documents to the Complainant within the aforesaid stipulated period. Non-compliance of this order in toto shall warrant simple interest @ 9% p.a. over the sum of Rs. 2,00,000/- for the entire period of default, which would have to be paid to the Complainant by the OP.
Aggrieved by the Order of the State Commission, the Appellant / Opposite Party Bank filed the Instant Appeal No. 213 of 2018 before this Commission with the following prayer:
a. Call for the records of Complaint no. CC/332/2015 titled as 'Md. Mozammed Haque Vs Bank of India' decided on 29.11.2017 by the State Consumer Disputes Redressal Commission, West Bengal.
b. Quash/set aside impugned judgment dated 29.11.2017 passed in Complaint no. CC/332/2015 titled as 'Md. Mozammed Haque Vs Bank of India' decided on 29.11.2017 by the State Consumer Disputes Redressal Commission, West Bengal.
c. Condone the delay if any in filing the present appeal.
d. Pass such other order as this Hon'ble Commission may deem fit and proper in the facts of the present appeal.
In the Appeal, the Appellant mainly raised following grounds:-
a. The State Commission failed to grasp the essential facts of the case. The Appellant was deemed deficient in service for not returning the documents on receipt of notices dated 04.09.2014 and 11.12.2014. However, it overlooked that on those dates, his loan account still had outstanding amounts. Therefore, no legal grounds existed for returning documents which were security against the money lent. The notices and the account reflecting outstanding dues till 01.01.2015 were part of the record, which the Commission failed to consider.
b. The State Commission failed to recognize that there was no dispute between the parties. Even during pendency of the complaint, when the he requested for documents, the bank promptly returned them on 06.08.2016, as by that time he cleared the dues. He received them without any objections, indicating there was no deficiency in the bank's service.
c. The State Commission overlooked the premature nature of the complaint. Instead of seeking documents after clearing the dues, he immediately invoked the State Commission's jurisdiction, misleading it by asserting that the bank was at fault for not returning the documents on 04.09.2014, by concealing crucial fact that outstanding dues were pending.
d. The State Commission failed to recognize that the matter concerned a commercial transaction involving a cash credit facility for commercial operations. Therefore, the Complainant did not qualify as a consumer, and the State Commission lacked jurisdiction to entertain the case in the first place.
Upon notice on the memo of Appeal, the Respondent has not filed any reply/objections. Nonetheless, the Respondent reaffirmed the case's facts, asserting that the State Commission correctly issued the impugned order after thoroughly considering all the facts and circumstances. The Appellant Bank returned the securities only after the Complaint case was filed, causing significant losses in business. This delay debars the Respondent from approaching other financial institutions for loan facilities. Consequently, the Appellant Bank's was negligent and deficient. The Respondent prayed for the dismissal of the present appeal, along with costs.
In his arguments, the learned Counsel for the Appellant/OP reiterated the grounds stated in the Appeal and argued that the learned State Commission failed to grasp the basic facts and held the Appellant to be at fault for not returning the documents, upon receiving notices dated 04.09.2014 and 11.12.2014, disregarding the fact that the loan account still had outstanding amounts. The failure to renew credit facilities was due to the Respondent's inability to provide necessary financials. When outstanding balance was due, the bank could not have released the security held. He further pointed the absence of any document on record indicating that the Complainant had demanded the return of security documents after clearing the bank dues on 01.01.2015. It was emphasized that the Appellant bank promptly returned the documents on 06.08.2016 once the dues had been cleared. Additionally, the Counsel argued that the matter pertains to a commercial transaction, making it ineligible as a consumer complaint. The State Commission wrongly penalized the bank, which had not breached the contract, while compensating the party responsible for the breach.
The learned Counsel for the Respondent reiterated the facts of the case and the Affidavit of evidence filed before the State Commission. He pointed that the mention of outstanding amount of Rs.2,48,352.23 was misleading, as it actually represented a credit balance in the Statement of Accounts. The inclusion of 'Cr' denoted a credit balance. The Counsel accused the Appellant Bank of cunningly attempting to mislead the National Commission with this misinformation. He further argued that the Respondent didn't have any debit balance in the cash credit account as of 10.11.2014. The Appellant Bank had unlawfully halted the cash credit account from 29.12.2013, despite the account having a credit balance. Thus, the Respondent was entitled to the return of FD certificates, National Savings certificates and four Title Deeds. No evidence was provided by the Appellant Bank to demonstrate any overdrawing or the demand for payment from Respondent to rectify the account. Given the cash credit limit of Rs.70,00,000, the claim of an outstanding amount of Rs.2,48,352.23 was utterly implausible and unsupported by any document. He vehemently contested the assertion that the complaint case was premature. The Counsel argued that the cause of action arose when, despite having no debit balance or outstanding amount in the cash credit account, the securities were not released by the Appellant. The securities were returned only after the complaint was filed. The delay in returning the securities caused great business losses to the Respondent, as they were prevented them from seeking financial support from other institutions without securities. Thus, the Appellant Bank was negligent and deficient in its service towards the Respondent. The Counsel urged that the Appeal of the Appellant Bank with costs.
We have examined the pleadings and associated documents placed on record and rendered thoughtful consideration to the arguments advanced by the learned Counsels for both the Parties.
The central issue at hand revolves around the Appellant Bank's refusal to release securities belonging to the Respondent. The Respondent contends that the bank, after stopping the cash credit account, failed to return Fixed Deposit certificates, National Savings certificates, and Title Deeds, causing significant losses to the Respondent's business. On the other hand, the Appellant bank asserted that, with dues from the Complainant being outstanding, the Appellant Bank could not have returned the securities held and that the same were in fact returned after the dues were cleared. Therefore, the primary question for resolution is whether the Appellant Bank was justified in withholding these securities and whether such withholding constituted a deficiency in service.
The Complainant is Proprietor of M/s. Mohatron Enterprise and running distributorship of electronics goods and the business is run exclusively for the purpose of earning his livelihood, by means of self-employment which outlined in para 1 of the Complaint filed. Hon’ble Supreme Court in Rohit Chaudhary & Anr. Vs. M/s. Vipul Ltd., 2023 SCC OnLine SC 1131 has held that:
“ 13. Now turning our attention to the facts on hand, namely, perusal of the complaint filed before the Commission would indicate that appellants have specifically pleaded that they were in search of office space “for their self-employment and to run their business and earn their livelihood”. In the statement recorded on oath by the Commission, while hearing the maintainability of the complaint, the first appellant has stated that he was earlier engaged in the business of caustic soda as a dealer of M/S Reliance Industries and presently engaged in the business of investment/dealing in property. He has nowhere stated that he had proposed to purchase the office space from the respondent for the purpose of either selling the same for higher price or the said property was being purchased as an investment for being sold in future. The statement of the appellant was that he engaged in the business of investment/dealing in property would not ipso facto suggest or indicate the property proposed to be purchased from the respondent was for commercial purpose. Even according to the statement of the first appellant, he was earlier engaged in the business of caustic soda and now engaged in the business of investment/dealing in property. There will be varied eventualities. By way of illustration it can be noted that the appellants might have intended to take this property for running their business to eke out their livelihood or open the office for the purposes of dealing in the existing business or the possibility of the proposed office being used as a corporate office or head office or branch office of their existing business which cannot be ruled out. It is in this background the averment made in paragraph 6 of their complaint filed before the Commission would acquire significance and the relevant averment has been noticed hereinabove and at the cost of repetition when perused it would clearly indicate that when the appellants were in search of office space “for their self-employment and to run their business and earn their livelihood” they had entered into an agreement to purchase the same from the original allotees. Neither this plea nor the statement made on oath recorded by the Commission would belie the stand of the appellants that they intended to purchase the office space for their livelihood. In this scenario, the finding recorded by the Commission in Paragraph 8 of impugned order is erroneous and contrary to the definition clause of the expression “consumer” as defined under section 2(1)(d).”
In view of the above precedents, the Appellant’s contention that the services availed by the Complainant from the Respondents is for commercial purposes is untenable.
The Complainant forwarded two letters dated 04.09.2014 & 11.12.2014 and requested the OP Bank to release all the security documents including four original titled Deeds, all the National Saving Certificates and Fixed Deposits Certificates. The Complainant also returned the unused pages of the cheque book along with the letter dated 04.09.2014 to the OP Bank.
The Complainant’s Credit Account No. 404230110000023 had Rs.2,48,352.23 credit as on 10.11.2014. This account was finally closed on 01.01.2015 and Rs.18,402.23 as credit balance was transferred by the OP bank to the Current Account No. 404220110000219 of the Complainant on 01.01.2015. As the said cash credit account was outstanding till 01.01.2015, there was no cause of action for return of the documents as demanded vide letter dated 11.12.2014. Thereafter, during pendency of Consumer Complaint before the State Commission and after clearing the outstanding dues of OP Bank on 01.01.2015, he requested the OP bank for Security documents, which were released on 06.08.2016.
As regards claim, of losses, the Complainant made strong assertions regarding business losses incurred due to the Appellant Bank's delayed return of securities as he could not approach other financial institutions for loan without the Securities. He, however, failed to provide any evidence to substantiate these losses. It is an admitted position that the Account of the Complainant was settled on 01.01.2015 and, whereas, the loan security documents of the Complainant held by the Respondent Bank were returned on 06.08.2016. Thus, delay in the return of the securities is evident. Therefore, notwithstanding the absence of any specific details of loss produced by the Complainant, the learned State Commission observed that:-
“It appears that the Complainant has claimed a sum of Rs.53,81,261.22 as compensation towards loss to his business on account of non-availability of financial assistance from the OP/other financier and to substantiate such fact, he has filed a projection being made by one Chartered Accountant. However, the projected loss, as figured out by the said Chartered Accountant, on a comparison with the audited net profit earned by the Complainant during the preceding two years, we find that the same was very quite inflated. Also, the Complainant has not filed any order copies to show that he had pending orders worth Rs. 60,00,000/- to execute but could not do so due to paucity of fund.
Considering all aspects, we feel that compensation worth Rs.2,00,000 would be just and fair to mitigate the loss suffered by the Complainant, thanks to the insensitivity of the officials of OP towards the Complainant. Besides this, the Complainant shall also be entitled to get litigation cost.”
In view of the foregoing discussions, we are of the considered view that the order dated 29.11.2017 passed by the learned State Commission does not suffer any infirmity or illegality or irregularity. Thus, the First Appeal No.213/2018 is dismissed.
All the other pending Applications, if any, are disposed of accordingly.
The Registry is directed to release the statutory amount, if any, deposited by the Appellant before this Commission or the State Commission, with accrued interest, if any, to the Appellant within six weeks from today