B.G.ACHAR vs Bank of India

THIS is an appeal filed by the complainants, challenging the order dated 31st March, 1995 passed by the District Forum, Bellary in Complaint No. DFB/C-58/94, on its file.

1st COMPLAINANT is a Consulting Physician and Cardiologist and the 2nd COMPLAINANT, the wife of the Ist COMPLAINANT, is a Consulting Obstetrician and Gynecologist. They complained that the opposite party No. 1, namely Bank of India, Hospet Branch had charged excess interest and the officials of the said Bank at different levels have refused to give satisfactory explanation for charging excess interest. They sought the following reliefs : (i)(a) Refund of excess interest charged and collected in a sum of Rs. 15,440/-in respect of the Housing loan and a direction to charge further interest on that loan only @ 15.5.%. (b) Refund of excess interest charged and collected in a sum of Rs. 17,557/-in respect of Ultrasound Scanner Loan and a direction to charge future interest 15.5% only. (c) Refund of Rs.22,740/-interest charged and collected towards Syndicate Bank Building Loan Account and a direction to charge future interest on this loan only @ 18% per annum. (d) Refund of excess interest of Rs. 4,695.34 charged and collected under the working capital loan account. (ii) For future interest @ 18% per annum on all the above items of refundable excess interest, till ; (iii) For compensation towards loss of income during the COMPLAINANT''s absence from Hospet. (iv) Compensation as may be fixed towards loss and injury; (v) Costs; and (vi) For such other reliefs as this Forum may deem fit.

The opposite party-Bank of India filed a detailed objection contending as follows : (a) Interest having been charged only as per agreement and Circulars and Guidelines issued by Reserve Bank of India from time to time, there has been no excess charging of interest. (b) That there is no withholding of any information from the COMPLAINANTs about any information sought for by them and in fact Pass Books and/or Periodical Statement of accounts were being issued and the COMPLAINANTs have been periodically have executed letters of acknowled gements of debts without any protest. (c) That there has been no deficiency of service and that the District Forum has no jurisdiction, inasmuch as, it involves a very detailed examination of Banker''s accounts which cannot be done in a summary proceedings of this nature. (d) That there being deformatory and sucurrilious allegations, the respondent is entitled to compensation with costs of Rs.1,00,000/-.

The Ist COMPLAINANT was examined as PW 1 and a Chartered Accountant was also examined as PW 2 on behalf of the COMPLAINANTs. On behalf of the opposite party No. 1-Bank of India, the Deputy General Manager (Credit) has been examined. Several documents were marked.

DURING the cross-examination of the Chartered Accountant, a witness for the complainants, who had prepared, detailed calculation sheet of interest, that could be charged by the Bank, admitted that he had calculated the interest on the basis of the rate of interest initially agreed upon without taking into consideration the subsequent understanding between the complainants and the Bank, enhancing the rate of interest, as contended by the Bank. There was also a dispute between the complainants and the Bank as regards the validity of the letters of acknowledgements which, are relied upon by the Bank, to show that the complainants have agreed to pay interest at higher rate. The complainants have alleged that their signatures have been taken on blank papers. So question of fraud has also been raised. The District Forum found that, the determination of the exact quantum of excess interest charged, required it to go into the details of accounts, taking as many as 112 entries in Housing Loan Account; 117 entries in the Syndicate Bank Building Loan; 29 entries in the Working Capital Loan and 18 and 84 entries in Ultrasound Scanner Loan Account. Therefore, the District Forum came to the conclusion that it would not be just, to go into the details and determine to what extent there has been excess charging of interest in a summary enquiry, relying on a decision of the National Commission reported in I (1995) Consumer Protection Judgments, Page 1 (NC) Omega Packing Pvt. Ltd. v. Central Bank of India & Ors., wherein it was held that where the details of excess interest charged required detailed examination of large number of entries it would be difficult for a Consumer Forum to give finding. A Consumer Court cannot go into such details in a summary inquiry.

THE District Forum therefore held that it has no jurisdiction to go into the complaint and observed that the complainants may seek such remedy as are open to them to claim relief based on their allegation of excess interest charged. THE adjudication before the District Forum involved, (1) determination of allegation of fraud and (2) going into 360 entries of accounts. We are of the opinion that the conclusion of the District Forum in this regard cannot be interfered with. Dr. B.C. Achar, Ist appellant, who himself argued his appeal, contended that the District Forum should not have commented on the merits of the case, when it found that it has no jurisdiction to decide the allegations made in the complaint regarding charging of excess interest. He read the offending portions of the impugned order in support of his contention. The Ist appellant is justified in saying that the District Forum should have refrained from commenting on the merits of the case, while holding that it has no jurisdiction. We, therefore, make it clear that any observation made by the District Forum with regard to the dispute relating to charging of excess interest, in the impugned order, will not bind the parties. The complainants have also alleged that the officers of the opposite party-Bank at different levels have refused to give satisfactory explanation and on that ground the complainants had to go to various places like Bangalore and Bombay to request the Bank officers to set right the things and that the complainants suffered loss of professional income and were made to suffer mental stress and tension. They have claimed a sum of Rs. 10,000/-for having undertaken frequent journeys to Bangalore and Bombay. They have also claimed a sum of Rs. 25,000/-as loss of professional revenue during the period of their absence from Hospet. A sum of Rs. 1.00 lakh has been claimed for having suffered mental agony, anguish frustration and disability.

THE District Forum has awarded a sum of Rs. 5,000/-to the complainants towards compensation and costs of Rs. 750/-from the Ist respondent-Bank of India, Hospet Branch. THE Ist opposite party-Bank has not challenged this portion of the order.

THE complainants have been making repeated requests to the Manager of the Bank, viz., the Ist respondent and other officers at various levels from 1992. It is in evidence that the Ist complainant, had visited the Bank offices at Bangalore and Bombay. Finally he sent a letter to the Chairman and Managing Director of the Bank vide Ex. P5 dated 16.3.94. THE Chairman sent a reply as per Ex. P. 24 dated 12.4.94 through the Regional Manager of the Bank admitting over charging of interest to the extent of Rs. 27,358/-. Later these amounts were given credit to the accounts of the complainants under Exs. P.25, P.26 and P.27. In Ex. P.24 it is stated as follows : "Now coming to the point, we do agree that there have been some inadvertent mistakes while arriving at the rate of interest in the advance accounts of your group. We could not take an overall view of the matter as the branch had not given us earlier comprehensive picture of all the accounts of your group. Please note that we have carefully gone through the details and we have instructed our Hospet Branch to charge correct rate of interest in all the advance accounts and refund the excess interest charged, if any......"

The District Forum found that these materials were sufficient to show that there were mistakes in levying the rate of interest.

Dr. B.C. Achar, the Ist complainant contends that the District Forum should not have awarded a meager sum of Rs. 5,000/-for the sufferings undergone by them because of the negligence of the Bank. He relies on a decision reported in II (1993) CPJ 745 of West Bengal State Consumer Disputes Redressal Commission, Calcutta (J. Bhaumik v. Manager, The Honkkong & Shanghai Banking Corporation Ltd.).

IN this case, when the Bank had wrongly debited in the account of the complainant a sum of Rs. 5,000/-it was asked to pay compensation of Rs. 20,000/-. Therefore, the contention of the 1st complainant is that when the Bank had admitted over charging of interest of Rs. 27,358/-, the compensation awarded should have been much more than Rs. 5,000/-. We find some justification in the contention of the Ist complainant. The compensation awarded by the District Forum is enhanced to Rs. 10.000/-instead of Rs. 5.000/-. Further, the complainants are entitled to a sum of Rs. 2.000/-towards costs in this appeal. In other respects the order of the District Forum will stand.

WE are also of the view that the amount payable by the Bank of India should be recovered by the Bank from officials/officers responsible for the negligence. Before we part with this case, we would like to state that we did not have the assistance of any Advocate on behalf of the respondent Bank, as none represented the Bank when the appeal was heard. The appeal is, therefore, allowed in part. Appeal partly allowed.