A.K. RAMADOSS vs Indian Overseas Bank

THE complainant is the appellant. THE case of the complainant is as follows: THE complainant secured a loan from the opposite party for Rs. 33,000/- by creating an equitable mortgage after deposit of title deeds and he was making payments and that there was default in payment due to theft of his Tempo Vikram for the purpose of which the loan was sought. THE opposite party has taken legal proceedings against the complainant in O.S. 68 of 1997. In the meantime the complainant negotiated with the opposite party from an out-right settlement of the loan and a compromise was arrived at between the complainant and the opposite party. THE complainant has paid the agreed amount to the opposite party towards full and final satisfaction in the month of June, 2000. THE complainant raised the loan amount as hand loan from others. Prior to settling the loan, the complainant has written a letter dated 21.12.1999 to the opposite party stating his intention to pay the amount due to the opposite party in full and for return of title deeds deposited with them. THE opposite party assured the complainant to return his title deeds within a month period from the date of settlement of the loan. THE opposite party has also sent to the complainant a copy of the letter addressed to their Advocate at Kallakurichi dated 22.6.2000. On the basis of the assurance given by the opposite party, the complainant entered into an agreement of sale on 8.1.2001 with one Muthukumarasamy to sell one of the items of the properties covered by the will date 17.1.1971 which was deposited by the complainant with the opposite party. THE complainant agreed to sell the property for Rs. 80,000/- and on the date of agreement, he received Rs. 20,000/- as advance to settle his hand loan. As per the agreement, the complainant has to execute the sale deed with all his original title deeds in favour of the purchaser within a period of 3 months from the date of agreement failing which the complainant has to pay the purchaser double the advance amount. THE complainant approached the opposite party and insisted for the return of title deeds. THE opposite party assured to return the documents well within the period of the said agreement. As the opposite party did not comply with their assurance, the complainant issued a notice dated 4.4.2001 stating his position to compensate the purchaser, if the sale is not performed on or before 10.4.2001. Even after that the opposite party did not return the title deeds within the stipulated period. As the complainant could not get the title deeds on or before 10.4.2001, the intending purchaser demanded for the payment of double the advance amount. He has also reported the matter to the mediators against the complainant and, as such, the complainant has to pay a sum of Rs. 40,000/- as agreed to by him. THE payment of excess money to the intending purchaser and loss of opportunity to sell his property for settling his loan has caused mental agony and financial shortage to the complainant. This happened only due to the negligence and deficiency of service on the part of the opposite party. If the opposite party had returned the title deeds to the complainant, the sale would have been performed and the obligation of the complainant as a vendor could be completed satisfactorily. THErefore, the opposite party may be directed to pay Rs. 20,000/- to the complainant towards additional payment made by him to the purchase and also Rs. 10,000/- towards mental agony.

THE case of the respondent is as follows: THE opposite party was forced to file mortgage suit on 25.6.1997 in O.S. 68 of 1997. THE complainant filed his statement on 21.10.1998 admitting the liability. Finally on 22.6.2000, the complainant remitted the amount in full. THE same was reported in the said Court and the documents filed in the said Court were returned from the Court and the opposite party obtained the same from his Counsel on 10.4.2001. Immediately, the complainant was informed vide letter dated 10.4.2001 to call on the Bank to receive the documents. But he failed to call on the opposite party to receive the document. THE complainant suppressed the fact that the opposite party by letter dated 10.4.2001 called upon the complainant to collect the title deed deposited by him. Since the complainant has not come with clean hands, the complaint has to be dismissed for suppression of facts. THE allegation that the opposite party assured the complainant to return his title deeds deposited with it within a month period is denied. When the settlement was arrived by remittance of money by the complainant, the documents were in the custody of the Court and in the said circumstances, the opposite party did not give any assurance. THE opposite party denies the allegation that there was sale agreement by the complainant with one Muthukumarasamy to sell one of the items of the properties covered by the Will. THE alleged agreement is fraudulently created for the purpose of this case without possession of document or title deed of the said property. THE allegation in the complaint that he agreed to sell his property for Rs. 80,000/- and that on the date of agreement, he received Rs. 20,000/- as advance are not true. THE opposite party denies the genuineness of the complaint mentioned document. THE allegation that the opposite party assured to return the document well within the period of the sale agreement is denied. THE original title deed of the property is the deed of transfer and not Will. Even assuming without admitting that the agreement is a genuine one, the amount of Rs. 20,000/- is stated to have refunded along with the damages of Rs. 20,000/- only on 7.5.2001. But the opposite party has informed the complainant to collect the title deed as early as on 10.4.2001 itself. Hence, the opposite party is in no way responsible for the alleged damages of Rs. 20,000/-. THErefore, the complainant is not entitled for any compensation. Before the District Forum, the parties died not let in any oral evidence. The complainant has marked Exs. C1 to C8. Exs. R1 to R3 were marked by the opposite party. On consideration of the above materials, the District Forum has held that the transaction between the complainant and the opposite party is a transaction of borrowing money which has no nexus to establish that the complainant is a person hiring the services of the opposite party for consideration and that the above transaction is giving rise to civil dispute and that the complainant is not a consumer. In view of the above fact, the District Forum has not given any finding on other issues. Aggrieved by the said order, the complainant has filed this appeal.

It is contended by the appellant in the grounds of appeal that the District Forum has committed an error in holding that the complainant is not a consumer and that the order of the District Forum is based only on mere assumption and presumption. It is contended by the appellant''s Counsel that there is inordinate delay in handing over the documents to the complainant.

THE learned Counsel for the respondent contended that the complainant is not a consumer and that elaborate inquiry is essential to determine the actual loss and damage sustained by the complainant and as such the remedy of the complainant is only to approach the Civil Court. It is further contended by the learned Counsel for the respondent that the deficiency of service against the respondent pertains to hiring service for commercial purpose and that in any event, the complainant is not entitled to any relief. The points for determination are: (1) Whether the appellant is a consumer? (2) Whether the complainant is entitled to any compensation; if so, to what quantum?

POINT No. 1: It is admitted that the appellant borrowed a loan from the respondent Bank by creating equitable mortgage by depositing title deeds and that as he was unable to discharge the loan, the respondent filed a civil suit on the files of the Sub-Court, Kallakurichi in O.S. No. 68 of 1997 and that during the pendency of the said suit, a settlement was reached between the parties as a result of which the appellant discharged the loan in the month of June, 2000. The grievance of the appellant is that even though he discharged the loan as early as in the month of June, 2000, the respondent failed and neglected to return the title deeds deposited by him with the Bank. It is the case of the complainant that he entered into an agreement of sale with one Muthukumarasamy, under the terms of which the sale should be completed on or before 10.4.2001. The complainant has also marked the sale agreement dated 9.1.2001 as Ex. C6 and it is the case of the complainant that as he did not hand over the title deed to the vendee, he had to pay a sum of Rs. 20,000/- for breach of contract along with Rs. 20,000/- received by him as advance and that, therefore, the respondent is guilty of deficiency of service. The respondent Bank contended that even though the complainant was intimated by letter dated 10.4.2001 that the documents were ready for return, the complainant failed to take delivery of the same and as such it is not proper on the part of the complainant to contend that the respondent failed to return the documents. The main contention of the respondent is that the relationship between the Bank and the complainant is that of a creditor and debtor and as such the complainant cannot be said to be a consumer. To substantiate the above plea, the respondent relies upon a decision reported in 1997 (2) CPR 3. The District Forum relying upon the above decision has held that the transaction involved in this case pertains to borrowing of money by deposit of title deeds giving rise to the civil dispute and that, therefore, the complainant is not a consumer. In view of the above finding, the District Forum has dismissed the complaint giving liberty to the complainant to seek his remedy before the Civil Court. The learned Counsel for the complainant contended that the District Forum has not properly appreciated the dispute between the complainant and the Bank and that the decision relied on by the District Forum will not apply to the facts of this case. For proper appreciation of the rival contention of the parties, it will be useful to refer to the decisions submitted by both parties. In the decision reported in 1997 (2) CPR 3, (NC) the National Commission has held that non release of document by the Bank, which were deposited as security for loan gives rise to a civil dispute and that the complainant cannot be said to be a consumer. The facts of the above case will show that the bank claimed to have retained document in exercise of general lien. In view of the peculiar facts of the above case, the National Commission gave the above ruling. But it is not shown in this case that any other loan is outstanding against the complainant.

THE question whether the Bank while granting loan to its customer will be rendering any service has drawn the attention of the Apex Court also. In a decision reported in 2001 (1) CPR 7, (SC) the Apex Court has held that when the Bank is engaged in different types of business, it is apparent that when Bank is granting overdraft facilities to its client, it is providing service to him and that the appellant as consumer was hiring service of the Bank for consideration by way of payment of interest by the overdraft facilities. THE above decision is an authority for the proposition that when a Bank receives interest from its customer for advancing loan, the Bank cannot absolve from its liabilities by contending that it is not rendering any service to its customer. In the instant case, the complainant deposited title deeds and secured loan and that he also paid interest.

IN another decision reported in I (2003) CPJ 214 (NC), it is held thus: "May be at this stage we need not, however, go into the question of loss but on the fact of it there was gross deficiency in service on the part of the Bank after having received the whole amount from the complainants there was no reason for the Bank to hold on to the title deeds for such a long period. Bank failed in its duty to return the documents within reasonable time." It is clear from the above decision that failure or inordinate delay on the part of the Bank in returning the documents to its customer when no loan is outstanding would amount to deficiency in service and that, therefore, it is held that the appellant is a consumer within the purview of the definition given in the Consumer Protection Act. IN view of the decisions reported above, the finding rendered by the District Forum cannot be sustained. Therefore, we hold that the complainant is a consumer. Point No. 2 : The District Forum has not given any finding on the question whether there is any deficiency in service on the part of the Bank in not returning the title deeds. As all the materials are available on record, it is not proper to remand the matter. On the other hand, we will proceed to give finding on the crucial question on the available materials.

It is seen from Ex. C1 that the appellant intimated the Bank on 21.12.1999 stating that he is willing to discharge the loan. Ex. C2 is the letter issued by the respondent Bank to their Counsel to show that the appellant remitted the amount on 22.6.2000. The Bank has also requested the Counsel to file FS Memo and arrange to deliver the security papers. Ex. C3, the letter dated 4.4.2001 addressed to the respondent Bank will show that the appellant has entered into an agreement of sale with one Muthukumarasamy and that the agreement period lapses on 10.4.2001. Ex. C8, the letter issued by the Bank to its Counsel will show that the Counsel was already requested to obtain the documents. Ex. R3 is the letter sent to the respondent Bank by the Counsel dated 28.9.2001 wherein he has stated that due to pressure of work, the Counsel could not be able to obtained the certified copy and that he has already dispatched the relevant documents on 16.2.2001. The certified copy of return application will show that the Court ordered return of documents on 8.2.2001. The return application was filed on 18.1.2001. The learned Counsel for the complainant contended that the Bank did not take earlier steps to get back the documents from the custody of the Court and that he was unable to hand over the documents on or before 10.4.2001 as per the agreement. He also relies upon a decision reported in I (2003) CPJ 214; wherein it is held that the Bank failed to return the documents within reasonable time and that 10 days if not earlier was sufficient time for the purpose. The facts of the above case will show that the complainant was trying hard to get their documents of title for availing loan from certain bank to complete a building complex and that the delay in the construction escalated the costs and that there was no reason for the Bank to hold on the title deeds for long period. It is seen from the facts of the case that the documents were in the custody of the Bank itself. As already stated, the documents in this case are filed in the civil suit by the Bank and that the Court also passed preliminary decree. After passing the preliminary decree, steps would be taken for passing final decree and that after loan is discharged, the Bank has to take steps to deliver the documents in their possession. The Bank has also taken steps by addressing their Counsel to file application for return of documents and after intimation by the Counsel, the Bank also communicated the complainant by letter dated 10.4.2001 calling upon the complainant to receive the document. The postal cover in which the said letter is sent is dated 9.5.2001. The complaint was presented on 23.5.2001 before the District Forum. It is, thus, clear that even before the date of presenting the complaint, the complainant received the above letter. It is, however, clear that before filing the complaint, the Bank directed the complainant to approach the Bank to get back his documents. It is nowhere stated in the complaint as to what happened after the above letter dated 10.4.2001. The mere delay in delivering the documents by the Bank to the customer will not always amount to deficiency in service. The complainant has suppressed the fact relating to the events occurred after the letter dated 10.4.2001.

THE complainant has not established that he sustained loss in getting back the document from the Bank after some delay. THE respondent has denied the genuineness of the sale agreement and endorsement in Ex. C7. THE endorsement in Ex. C7 on the sale agreement will show that on 7.5.2001, the complainant paid Rs. 40,000/- to the vendee. It is contended by the complainant that he had to pay Rs. 20,000/- as damages for breach of contract to the vendee. THE above facts are denied by the respondent Bank. Except marking the certified copy of the sale agreement and endorsement, the complainant has not filed affidavits of the vendee and attestors of the above documents. As the complainant has not let in any evidence on this aspect, we are not inclined to accept the contention of the complainant that he sustained damages due to delay in returning the documents to the complainant. THErefore, in the absence of any materials, we are unable to accept the case of the complainant that he sustained damages and that the endorsement, Ex. C7 itself is sufficient to uphold the claim. It is contended on behalf of the respondent Bank that the dispute pertains to a commercial purpose and, as such, the complainant will not come under the Consumer Protection Act. The learned Counsel for the Bank contended that though a specific plea was not taken on this aspect in the counter, the contention raised at the time of argument can be considered by the Commission. In support of the same, they relied upon the decision reported in AIR 1971 SC 2018, wherein it is held that the plea of non-maintainability of suit is a legal plea and can be accepted although no specific plea was taken. It is needless to delve deep into the above question since the dispute is limited to the delay in not delivering of documents, as the main dispute is with regard to non-delivery of document, the question whether original loan was sanctioned for commercial purpose will not loom large in this case.

WE are unable to accept the above contention of the Counsel for the Bank for other reasons also. On the date of filing the complaint, the amended provision which states that the consumer "but does not include a person who avails of such services for any commercial purpose" was not there. As the amendment came into force after the date of filing the complaint, it is not open to the Counsel for the respondent to invoke the above amended provision. But the learned Counsel for the respondent relies upon a decision reported in AIR 1995 Madras 305, wherein it is held by the full Bench as follows: "Where a statute takes over and occupies a field previously not regulated by legislation,... If a statute confers a particular right and prescribes a particular mode for its enforcement, the enforcement of the right must be sought in that made."

The above decision will not apply to the facts of this case. It is well settled that the rights of the parties have to be adjudicated as per the law prevailing on the date of initiating the proceedings. It is, no doubt, true that if the amended provision expressly or impliedly contains a provision to apply the amended provision retrospectively, then there is some force in the argument advanced by the learned Counsel for the respondent Bank. But in the amended provision no "retrospective effect" can be inferred expressly or impliedly. For the above reasons, we hold that the contention raised at the time of argument by the learned Counsel for the respondent that the dispute pertains to commercial dispute has to be rejected. The learned Counsel for the respondent relies upon a decision reported in 2002 (2) SBR 113, wherein it is held that where complainant required detailed evidence to prove the claim and to prove the damages and expenses, it is not an appropriate case to be heard and disposed of in a summary fashion. The District Forum has already given liberty to the complainant to move the Civil Court. Even assuming that the complaint can claim the relief against the Bank in the Consumer Forum, the complainant has not let in any materials to show that he has sustained damages due to delay in return of documents. Thus, looked at from any angle, we are unable to accept the case of the complainant that there is deficiency in service on the part of the Bank. We hold that there are no merit in the appeal. In the result, the appeal is dismissed. No cost. Dated at Pondicherry on this 25th day of March, 2004. Appeal dismissed.