Chairman, Dhanlaxmi Bank Ltd. & 2 Ors vs S. Loganathan

Heard Mr. T.K. Goon, Advocate, for the appellants and Mr. S. Loganathan (the respondent), in person.

Aforementioned appeal has been filed from the order of Tamil Nadu State Consumer Disputes Redressal Commission, Madurai dated 19.03.2014, passed in Consumer Complaint No.37 of 2012, whereby the complaint filed by the respondent was partly allowed and the appellants were directed to redeem the jewels on receipt of principal amount and interest up to 28.12.2008 and pay compensation of Rs.50000/- to the respondent.

S. Loganathan (the respondent) filed Consumer Complaint No.37 of 2012 for directing Chairman, Dhanlaxmi Bank Ltd. and others (the appellants) to (i) redeem his property, taking interest up to 28.12.2008, (ii) pay compensation of Rs.26/- lacs for withholding the property, (iii) pay compensation of Rs.10/- lacs for mental agony and harassment, (iv) pay compensation of Rs.5/- lacs, for deficiency in service, (v) pay Rs.15/- lacs as exemplary cost for abusing their position in derogation of law, (vi) pay Rs.50000/- as cost of litigation and (vii) any other relief which may be deemed fit and proper, in the facts and circumstances of the case.

The complainant stated that Dhanlaxmi Bank Ltd. was a banking company and engaged in banking business. The complainant had his account in Dhanlaxmi Bank Ltd., Branch Sastri Road, Thillai Nagar, Trichy, from a long time and availed several credit facilities. The complainant took term loan against pledging jewel on 20.12.2007, vide Reference Nos.PN/GL 309/2007-2008 for Rs.477000/- and PN/GL 313/2007-2008 for Rs.496000/-. The complainant went to the branch office on 28.12.2008, for paying the aforesaid loan amount and redeeming his jewels but the opposite party-3 refused to redeem the jewels. The complainant gave a notice dated 25.09.2009, for redemption of his pledged jewels but no reply was given. The complainant again went to the branch office on 22.10.2010 for paying the loans amount but the Branch Manager again refused to accept the amount and redeem the jewels. In this respect, the complainant wrote various letters to the opposite parties. The complainant obtained some contracts from Highways Authority, Tamil Nadu and in that connection had submitted bank guarantee issued by opposite party-3. When bank guarantee was presented for encashment, opposite party-3 denied issue of bank guarantee, which resulted in filing of criminal complaint against the complainant. Opposite party-3 malafide filed three criminal complaints under Section 138 Negotiable Instrument Act, without presenting the cheque to the bank for encashment. The opposite parties put a condition for executing indemnity bond, for redemption of the pledged jewels, the language of which amounts to admission of guilt.

The appellants filed their written reply on 21.04.2012 and contested the complaint. It has been stated that the complainant had availed services of the bank for commercial purpose and was not a consumer. The complainant forged bank guarantees for Rs.10.81 lacs, using bank seal. When the bank guarantees were presented for encashment by Highways Authority, Ariyalur, Tamil Nadu on 01.04.2008, then the fact relating for fabrication of bank guarantee came to the notice of the bank and criminal complaint was filed. Opposite party-3 again received a letter dated 07.04.2008 from Highways Authority, Nagapattinam, for renewal of bank guarantee dated  22.02.2006 for Rs.187000/-. This bank guarantee was also fabricated using bank seal. Highways Authority, Nagapattinam, vide letter dated 15.04.2008, sought verification of bank guarantees No.2/2005-06 for Rs.292000/, dated 01.02.2006, 3/2005-06 for Rs.419000/- dated 15.02.2006 and 4/2005-06 for Rs.187000/- dated 22.02.2006. On examination, these bank guarantees were also found fabricated using seal of the bank. The complainant was sanctioned Term Loan of Rs.15/-lakhs, mortgaging immovable properties in the name of his wife namely Mrs. Kannukkiniyal. Said loan was not paid in time and declared as NPA. When opposite party-3 verified Encumbrance Certificate of the said loan, then it was found that Mrs. Kannukkiniyal had executed an agreement for sale of the mortgage property. In order to realize the loan, opposite party-3 initiated proceeding under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. So far as Gold Loan Nos.309 and 313 dated 20.12.2007 were concerned, in view of the fact that the complainant had fabricated various bank guarantees using seal of the bank, opposite party-3 put a condition for execution of indemnity bond for redemption of Gold Loans. There was no deficiency in service on the part of the opposite parties.

State Commission, after hearing the parties, by judgment dated 19.03.2014, held that the indemnity bond was self-incriminatory and amounts to confession of execution of fake bank guarantees. When the bank had not issued any bank guarantee in favour the complainant, then the complainant could not be insisted to execute indemnity bond. The condition put by the bank for redemption of pledged jewel was unreasonable. On these findings, the complaint was allowed and the appellants were directed to redeem the jewels on receipt of principal amount and interest up to 28.12.2008 and pay compensation of Rs.50000/- to the respondent. Hence this appeal has been filed.

We have considered the arguments of the counsel for the parties and examined the record. It is admitted in written reply that Term Loan obtained by the respondent had been realized by initiating proceeding under Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The appellants have denied executing any bank guarantee in favour of the respondent. If the respondent had no other loan or any liability against the bank, then we failed to understand as to for what purpose, the bank had put a condition for executing indemnity bond for redemption of Gold Loans. So far as the criminal cases, initiated by the bank or Highway Authority, Tamil Nadu are concerned, if the charges are proved, the respondent would be punished for it.

The respondent offered to pay the amount of Gold Loans with interest on 28.12.2008 and redeem his jewels but the payment of the loan amount was not accepted and redemption had been denied, putting unreasonable condition. The action of the appellant was illegal and arbitrary. The order of State Commission does not suffer from any illegality. The respondent is being harassed illegally and forced for litigation.

ORDER

In view of the aforesaid discussions, the appeal is dismissed with cost of Rs.50000/-. The appellants are directed to comply the order of State Commission within a month from the date of this judgment. While accounting, the loan amount of the respondent, the cost imposed by this Commission and compensation awarded by State Commission be credited in the account of the respondent.