Vyavasaya Seva Sahakari Bank Ltd vs Sannadyamanagouda

MR. S.K. Naik, Member-These three revision petitions have been filed by the Vyavsaya Seva Sahakari Bank Ltd., Dharwad, opposite party No. 2 before the District Consumer Disputes Redressal Forum, Dharwad (''District Forum'' for short) against the order dated 28th of February, 2006 of the Karnataka State Consumer Disputes Redressal Commission, Bangalore (''State Commission'' for short), by which the State Commission has dismissed the three appeals filed by them on the ground of delay as also on merits of the case.

FACTS of the case are that three complainants, who are agriculturists had participated in the Crop Insurance Scheme floated by the Government. They had paid the requisite premium towards the crop insurance for the year 2003-04. The said premium had been remitted to the General Insurance Corporation of India, respondent No. 2/opposite party No. l, through the petitioner-Vyavsaya Seva Sahakari Bank Ltd. To their misfortune, there, was failure of the crop due to drought conditions and the General Insurance Corporation of India indemnified the damaged crop and remitted he insurance compensation amount as per eligibility of each one of the claimants/complainants to the petitioner-Bank. Taking recourse to their right of lien, the petitioner recovered the loan amounts due from each, one of the complainants from the crop insurance compensation amount and paid only the balance after adjustment of the loan. According to the complainants, even though they had requested the petitioner-Bank not to adjust their crop insurance amount against their loans, they paid no heed. They thereafter filed separate complaints before the District Forum, who, on consideration of the pleadings and evidence before it, allowed the complaints and directed the petitioner-Bank to pay the full amount of crop insurance as received from the General Insurance Corporation of India with 9% interest w.e.f. 8th of October, 2004 till payment. It also gave liberty to the petitioner-Bank to separately proceed against the complainants for recovery of the loan amount, if any.

WHEN the petitioner-Bank challenged this order of the District Forum before the State Commission in three different appeals, as stated above, the appeals were dismissed on ground of limitation as also on merits. Aggrieved once again that the petitioner-Bank has approached this Commission by these three revision petitions.

LEARNED Counsel for the petitioner-Bank has contended that the State Commission has not condoned even a small delay of 12 days in filing the appeals and has gone on to dismiss the appeals by passing a non-speaking cryptic order. The order does not discuss the grounds advanced in the memorandum of appeals filed by the petitioner-Bank and on this count alone the order of the State Commission is liable to be set aside. However, dilating on the merits as discussed by the District Forum, the learned Counsel has submitted that the Fora below have failed to appreciate that the complainants had voluntarily paid their loan amounts by way of cheques towards the adjustment of their dues and this fact had been suppressed from them. No authority can force an individual to sign his own cheque and it was voluntary act with consent and, therefore, there was no question of any deficiency in service. It should have been appreciated that the Bank has a general lien over the loan amounts due and, even otherwise, the Bank was entitled to adjust the receipt against their loan account. However, that is not the case here as the complainants themselves had issued the cheques corresponding to the dues that stood on their loan accounts.

IN all the three revision petitions despite service no body has appeared on behalf of respondent No. 1/complainants, who are the main beneficiaries of the order passed by the Fora below. Learned Counsel appearing for General Insurance Corporation of India has contended that it is only a proforma respondent and in any case there is no claim or allegation of deficiency in service against them.

WE have heard the learned Counsel for the petitioner-Bank and the learned Counsel appearing for the General Insurance Corporation of India and perused the records of the case carefully. The complainants have no grouse against the General Insurance Corporation of India and the Fora below have rightly absolved them of any liability.

THE only point that remains for consideration thereafter is as to whether the petitioner-Bank on receipt of the crop insurance compensation amount was entitled to adjust a part thereof against the loan accounts of the individual complainants?

WHILE the answer would definitely be in the affirmative under the general right of lien of the Bank, the facts, in this case further justifies their action as the individual farmers, who after credit of their crop insurance compensation amount into their respective accounts, have issued cheques on their own to discharge their loan liabilities and, therefore, it would be wrong to hold that there has been any deficiency in service by the petitioner-Bank. It was a voluntary and consensual act of the complainants. The petitioner-Bank in their memorandum of appeals had clearly referred to their general lien over the loan amounts due as they are bound by the circulars and guidelines under the Banking Regulations/Rules for recovering the amounts due. This aspect has not been considered by the State Commission while dismissing the appeals. The order of the State Commission, therefore, cannot be sustained and has to be set aside. Under the circumstances, all the three revision petitions are accepted and the complaints are ordered to be dismissed, however, with no order as to cost. R. Ps. allowed.