B.Prasada Rao vs Branch Manager, Bank of Baroda

THIS complaint was presented on 14.11.1996 by one B. Prasada Rao stating that he had made three fixed deposits with the opposite party Bank, (1) of Rs. 3,03,403/- "as of" 19.8.1995 for a period of 120 days maturing on 17.12.1995 (evidenced by TDR/94/B. No. 682521, dated 21.11.1995, (2) of Rs. 1,44,988/- for a period of 105 days maturing on 31.12.1995 (evidenced by TDR/94/B. No. 682826, dated 21.11.1995), and (3) of Rs. 28,000/- for 46 days maturing on 8.1.1996 (evidenced by TDR/94/B. No. 682529 dated 23.11.1995 and that inspite of his several requests, representations and personal approaches the opposite party did not repay the maturity amounts. He also stated in his complaint that he got issued a legal notice through his Advocate dated 6.8.1996 to the opposite party demanding release of the amounts covered by the three deposits with 24% interest and claiming compensation of Rs. 1,00,000/- towards loss and injury to him for the inaction of the opposite party. He also alleged that inspite of receiving that notice of opposite party did not give any reply.

ACCORDING to the complainant, under the circumstances he had to approach this Commission for directions to the opposite party to pay Rs. 4,76,391/- being the total maturity amount on the three deposits, Rs. 91,818.44 Ps., being the interest on each of the deposits from their maturity dates till the date of filing of the complaint, and a further sum of Rs. 1,00,000/- towards compensation for inconvenience and loss caused to the complainant. Alongwith the complaint the complainant filed xerox copies of the three deposit receipts and nothing else.

The opposite party received notice and filed counter admitting the deposits made by the complainant and stating as follows : "It is pertinent here to submit that the complainant is the guarantor in the repayment of the term loan of Rs. 5,00,000/- availed by his son Sri Beggam Rajesh Putra from the opposite party. The complainant also executed a guarantor agreement on 14.11.1994. In the said agreement under Clause No. 8, the complainant agreed that the opposite party shall have lien on all the monies standing to his credit in the account. Further, it is submitted that under the provisions of the Contract Act, the opposite party has right to claim set off all the amounts due to the complainant against the liability under the guarantee agreements. It is respectfully submitted that when the loan account has become irregular, the opposite party was constrained to exercise the right of lien and also claim set off all the amounts under the deposit made by the complainant. To this effect the opposite party issued legal notice on 22.12.1995, which was received by the complainant on 23.12.1995. The amounts appropriated by the opposite party by claim set off are as follows : FDR Amount Date of Number appropriated maturity 1. 231 195 Rs. 1,01,260 7.1.1996 2. 677 005 Rs. 28,353 3.1.1996 3. 682 521 Rs. 3,12,380 8.1.1996 Thus an amount of Rs. 1,51,542/- was appropriated on 1.1.1996 and the amount of Rs. 4,41,993/- was appropriated on 8.1.1996 towards the loan account of the complainant''s son Sri B. Rajesh Putra. The complainant''s son Sri B. Rajesh Putra has paid the balance amount outstanding in the loan account on 17.9.1996. Thus the loan account was closed and the documents of title deposited by him were returned to him. Therefore, it is submitted that the complainant has suppressed all the material facts which are to his knowledge and to his consent. In fact the complainant and his son came to the opposite party Bank and collected the title documents. The complainant was served with a notice of appropriation on 23.12.1995 and appropriation was done on 8.1.1996 and the complainant remained silent for some months and after closure of all the account and after taking back the title deed has decided to embark upon speculative litigation by resorting to a false complaint by suppressing all the material facts. It is true that the complainant has got issued legal notice on 6.8.1996 suppressing the service of notice of appropriation on 23.12.1995 by the opposite party. It is submitted also that the opposite party got issued reply notices on 2.10.1996 and 3.10.1996, informing the set off of the amounts in the fixed deposits towards the liability of the complainant''s son by virtue of the facts that the complainant is the guarantor."

THE complainant filed affidavit dated 30.6.1999 in support of his complaint. He had not disputed that his son Sri B. Rajesh Putra took a loan of Rs. 5,00,000/- from the opposite party and that he stood as a guarantor for repayment of that loan. However, he disputed the receipt of the legal notices said to have been got issued by the opposite party dated 23.12.1995, 2.10.1996 and 3.10.1996. He stated as follows : "...It is not correct to say that I was served with notice of appropriation on 23.12.1995 and appropriation was done on 8.1.1996. ...... It is not true to say that the opposite party got issued reply notices on 2.10.1996 and 3.10.1996 informing set off of the amounts in the fixed deposits towards the liability of my son and the said action is legal and sustainable. THE opposite party cannot resort to set off my fixed deposits to discharge the loan of some others. Without taking appropriate legal action against him for recovery of debt if any."

He has not denied that the loan taken by his son was discharged and that the documents of title which were deposited with the Bank towards equitable mortgage were returned to his son and that he was discharged from the guarantee under the guarantee bond dated 14.11.1994. Mr. V. Chiranjeevi Rao, the Branch Manager of Bank of Baroda, Gavaravaram Branch, Eluru filed an affidavit dated in support of the version/counter filed for the opposite party. He has also placed before us the original general form of guarantee signed by the complainant and office copies of the notices dated 22.12.1995, 2.10.1996 and 3.10.1996 and also copy of the notice sent by the complainant through his Advocate dated 6.8.1996 and acknowledgement signed for the complainant B. Prasad Rao dated 23.12.1995. We may also state that the learned Counsel for the complainant has placed before us the notice dated 3.10.1996 received by the complainant. The learned Counsel states that the said notice was received by the complainant after he presented the complaint before this Commission on 14.11.1996 and that because of that no mention was made in the complaint about it. But he has no explanation for the statement in the affidavit dated 30.6.1999 filed by the complainant stating that it was not true that the opposite party got issued reply notices dated 2.10.1996 and 3.10.1996 informing set off of the amounts in the fixed deposits towards the liability of his son. If the receipt of the notice dated 3.10.1996 is now admitted, it is obvious that the said statement in the complainant''s affidavit dated 30.6.1999 atleast to the extent of notice dated 3.10.1996 is false.

CLAUSE 8 of the general form of guarantee dated 14.11.1994 states as follows : "I/We further agree that in respect of my/our liability hereunder the Bank shall have a lien on all securities belonging to me/us now or hereafter held by the Bank and all moneys now or hereafter standing to my/our credit with the Bank on any current or any other account."

From this it is obvious that the Bank was authorised under the guarantee bond given by the complainant to appropriate any amount of the complainant with the Bank on any current or any other account towards the amounts due on the term loan taken by his son. Even though the counter of the opposite party specifically referred to the guarantee agreement dated 14.11.1994 executed by the complainant, the same was not denied by the complainant in his affidavit dated 30.6.1999. He has also not denied the term loan of Rs. 5,00,000/- taken by his son B. Rajesh Putra even though that was also specifically mentioned in the counter. The complainant had not made any mention of those in his complaint. We also find that the complainant has suppressed the receipt of notice dated 22.11.1995 evidenced by acknowledgement dated 23.12.1995 and also reply got issued by the opposite party through his Lawyer dated 3.10.1996. From this it follows that the complainant had suppressed the fact that his son taken a term loan of Rs. 5,00,000/-, that he himself executed a Bank Guarantee bond dated 14.11.1994 and that the amounts deposited by him were appropriated towards that loan and approached this Commission with false pretences. Under the circumstances, we find that this complaint is frivolous and vexatious and without any merit whatsoever. We, therefore, dismiss this complaint with exemplary costs under Section 26 of the Consumer Protection Act, 1986 of Rs. 5,000/-. Costs of Rs. 5,000/- shall be paid to the opposite party within six weeks from to-day, i.e. by 14.3.2000. Complaint dismissed.