K.N. NAGARAJU vs SENIOR MANAGER, CENTRAL BANK

THE Complainant has filed this complaint against the Respondent alleging unfair trade practice by the Bank. THE allegations in brief are as follows :-

THE Complainant is the Managing Director of M/s. Linas Engineering Enterprises (P) Ltd., Mysore, a company registered under the Companies Act. THE Complainant was one of the Guarantors to the loan borrowed by the company from the Canara Bank, Sara- swathipuram, Mysore. As on 1.10.1989 the liability of the Company to the Bank was Rs. 1,90,510/- exclusive of interest. THE Complainant borrowed a some of Rs. 75,000/- from the Canara Bank, Saraswathipuram, Mysore, on a mortgage by deposit of title deeds of site No.789, 4th Stage, Thonachikoppal, Mysore. The Complainant discharged this loan on 27.8.1989 by paying Rs. 50,647.05 by taking an advance from the prospective buyer of his house and requested the Bank to release the title deeds. The Bank informed the complainant that the title deeds would not be released unless the loan outstanding against the company''s account for which the complainant was one of the guarantors was cleared. The complainant therefore obtained the balance amount from the buyer and credited a sum of Rs. 1,80,000/- to his S.B. Account in the Bank. The Bank transferred the said amount to suspense account on 1.2.1989 and further transferred the said amount to the Company''s Account on 5.2.1989.

After the title deeds were released the Complainant came to know that there was no lien on his house property with respect to the company''s Account and that his liability was similar to that of the other guarantors. Thereafter he made a representation to the Bank requesting them to return the amount collected from him by-passing the practice adopted by the Bank to recall the advance made to companies. The Bank gave him a reply stating that the amount had been credited to the Company''s Account at his request and consent and therefore the question of return of the amount to him did not arise.

THE Complainant therefore alleges that since the Bank collected Rs. 1,80,000/- from him without following steps which are required to be followed for recalling loans advanced to companies he has suffered a loss of Rs. 1,80,000/-. He therefore, seeks a direction to the Bank to pay the said amount as damages together with interest at 19% from 1.2.1989. The Respondent contends inter alia that the complainant is not a consumer within the meaning of Consumer Protection Act and the complaint is not maintainable; that the Respondent had not deviated from the Bank norms and as the Company had itself informed that the unit had become sick and desired the sale of the machinery the question of rehabilitation of the unit did not arise; that the complainant had himself requested the bank to adjust the sum of Rs. 1,80,000/- towards the discharge of the Company''s debts; that the Bank has not done anything illegal; that the complainant has not suffered any loss and that the complaint is therefore liable to be dismissed.

NEITHER party adduced any evidence and they wanted the matter to be disposed on the basis of the documents produced by them. The thrust of the argument of the Complainant was that the company of which he is the Managing Director has become sick and without taking steps to rehabilitate it, the loan advanced to it could not be recalled by the Bank. The Bank was also required to follow certain norms and procedures prescribed by the Reserve Bank in this regard. But during the course of arguments he conceded that he had already sold away the plant and machinery of the Company and what remains is only the shed in which it was functioning. In view of this, as contended on behalf of the Respondent, the question of rehabilitating the company according to the norms of Reserve Bank is no longer there. Moreover, the company has not filed any complaint about it. The Respondent contended that the amount of Rs. 1,80,000/- was adjusted to the Company''s Account at the specific request of the complainant and therefore the Bank has not committed any illegality. They have produced letter dated 27.1.1989 from the complainant addressed to the Senior Manager, Canara Bank, Mysore (Annexure-B objection Statement). In this letter the Complainant has clearly requested the Manager to credit the amount of Rs. 1,80,000/- to his S.B. Account and thereafter to transfer it to the account of M/s. Linas Engineering Enterprises (P) Ltd. When confronted with this letter the complainant started to argue that it was not voluntary and that it was taken by coercion. There is not a whisper about this in the Complaint. The complainant has also not entered the witness box to substantiate the said allegation. In the agreement of sale between him and his purchaser, the complainant has clearly stated that he was carrying on an industry and in respect of that industry he has to meet heavy commitments and therefore he is disposing of the said house. In view of this it appears that the complainant voluntarily gave the said letter Annexure-B requesting the Respondent to credit the amount of Rs. 1,80,000/- from his S.B. Account to the Account of the Company. It had come to the notice of the Manager of the Bank that the Company of which complainant was the Managing Director besides being guarantor to the loan taken by it, was sick and that the complainant was selling his only house. Under the circumstances, any prudent Manager of the Bank would have asked the Complainant to pay the dues of the company and then take the title deeds of his house. It is therefore, not possible to accept his argument that the said letter (Annexure-B) was taken from him by force.

THE Complainant being a guarantor to the loan taken by the Company was jointly and severally liable to pay the said amount. By paying the said amount it cannot be said that he suffered any loss. THE Bank cannot be considered to have done anything contrary to law in view of the Complainant''s own request.

IN view of the above, the other contentions of the party become irrelevant. In the result, the complaint is dismissed. No costs. Complaint dismissed.