B.L. Joshi vs Bank Of India, Kedareshwar

CAN a Consumer Court set aside the ''compromise '' entered into between the parties, pursuant to the order passed by the learned DRT? Can it set aside the order rendered by the DRT itself? Can it modify the directions given by the Hon ''ble High Court of Gujarat?

THIS order shall decide four complaints, above mentioned, which entail the same questions of law and fact. All the complainants, namely, B.L. Joshi, S.L.Joshi, D.V.Joshi, (since deceased) through Legal Heirs B.L.Joshi and D.L.Joshi, K.B.Joshi, D.B.Joshi, Krishna B.Joshi, Bina (Uma) B.Joshi, Ravindra D.Joshi and Charulata D.Joshi, in Consumer Complaint No.171 of 2010 and again B.L. Joshi, through its Managing Director, Dayaram Liladhar Joshi and also through its Directors, Ravindera B. Joshi, Dr.(Mrs.) Krishna G.Thanky, Daksha B.Joshi, all through General Power of Attorney Holder, Jaysukh Bhimji Modha in Consumer Complaint No.172 of 2010, Glayland Ltd. (S.A.), London, U.K., through its Managing Director, U.B. Joshi and Dr. Girshchandra A. Thanki and through its Director Daksha M. Thanki all through General Power of Attorney Holder, Jaysukh Bhimji Modha in Consumer Complaint No.173/2010 and Glayland Ltd. (U.K.) through its Managing Director, Dayaram Liladhar Joshi and Ravindra D.Joshi, Dr.(Mrs.) Krishna G.Thanky, Daksha B.Joshi, Directors, all through General Power of Attorney Holder Jaysukh Bhimji Modha, filed the present four complaints in this Commission on 17.09.2010. Case No. 171 of 2010: All the complainants are Non-Resident Indians (NRIs). They had deposited Rs.89,70,000/- in the monthly Income Certificates/Double Benefit Certificates with the Bank of India, Porbandar Branch, OP1. The Zonal Manager and the Chairman, Bank of India have been arrayed as OPs 2 & 3. Monthly interest on receipts was to be credited in an NRE Savings Bank Account No. 2410, so that complainants may withdraw the same. The amount was deposited on different dates. On the respective due dates, the complainants requested the OP Bank to pay the receipts and transfer the funds to Syndicate Bank, Porbandar Branch. The Bank did not do the needful. Consequently, the complainants were constrained to file a Civil Suit No. 102/1999 before the Civil Judge, Porbandar. The complainants also could not withdraw the monthly interest amount in the sum of Rs.37,01,908.84 which was lying in their Account No.2410. On the contrary, the OP Bank went on renewing the aforesaid receipts after original dues in an arbitrary, illegal and negligent manner, without approval and consent of the complainants. Finally, OP paid Rs.3,39,75,316/- to the complainants in respect of the above said six receipts on 04.01.2008. However, the prevailing rate of interest on original due dates was 16% p.a. on a NRE Term Deposit. The Bank should have renewed the above said receipts at 16% p.a. from the original due dates till the date of payment, i.e. 04.01.2008. It is contended that as a matter of fact, at the above said rate, the amount due to the complainants came to be Rs.7,49,44,494/-. The Bank is yet to pay a sum of Rs.4,09,69,178/-.

IN the meantime, the Civil Suit was withdrawn as per the settlement reached between the parties. The above said deposits were detained by the Bank on the pretext of default in the account of M/s.Jupiter Cement Ltd. However, the complainants formed a separate legal entity and were in no way connected with M/s.Jupiter Cement Ltd. The Bank vide proposal dated 01.12.2007 had given proposal for settlement of dues concerning M/s. Jupiter Cement Ltd, as well as list of deposits under reference. Thereafter, on acceptance of the same by the Guarantor of M/s. Jupiter Cement Ltd., under protest, the deposits were released on 04.01.2008 and amounts were paid as detailed above.

THE Bank illegally retained a sum of Rs.3,39,75,316/-. The cause of action to file the present complaints is a recurring one. The complainants also approached the High Court of Gujarat at Ahmedabad, vide Special Civil Application wherein the Hon ''ble High Court of Gujarat at Ahmedabad was pleased to order that "let petitioner be approached in respect of grievances raised in all four petitions, the appropriate forum, in accordance with law ". This order was passed on 31.07.2010. It was further ordered that in view of the above said observations, "the petitions filed by the complainants are disposed of by the Hon ''ble High Court without expressing any opinion on merits ". The present complaint (CC No. 171/2013) was filed with the following reliefs:- (a) To grant rate of interest @ 16 percent with quarterly compounding from original due date of amount and pay the difference between amount payable as per the above rate and amount already paid as per the bank ''s calculations. Difference amount comes to Rs. 4,09,69,178.00 only. (b) to grant suitable compensation for loss of reputation, embarrassment, harassment etc. meted out to the complainants by the respondent Bank. (c ) Any other relief which this Hon ''ble Forum deem fit in the circumstances of the case may also be granted in favour of the complainant and against the respondent Bank.

Complaint No. 172 of 2013: Complainant Company, i.e. B.L. Joshi UK Ltd. Overseas Corporation Body deposited Rs.48.00 lakhs with the OP Bank under Double Benefit Deposit Scheme, NRE as follows:- Sl. No. Receipt No. Amount (In Rs.) Date of deposit Maturity value Rate of interest Maturity value (In Rs.) 1. DBD 25/475 10,00,000 19.11.87 18.11.93 13% 21,54,600/- 2. DBD 25/476 10,00,000 19.11.87 18.11.93 13% 21,54,600/- 3. DBD 25/477 10,00,000 19.11.87 18.11.93 13% 21,54,600/- 4. DBD 25/478 10,00,000 19.11.87 18.11.93 13% 21,54,600/- 5. DBD 26/60 08,00,000 05.02.88 13.01.94 13% 17,23,680/- Total : 48,00,000 1,03,42,080

ON the maturity date, i.e. 13.01.1994, the complainant company asked the OP Bank to pay the Term Deposit Receipts as per terms of the contract and remit the entire fund to City Bank, Switzerland from whom it availed certain credit facility. The Bank failed to comply with the request made by the complainants and continued to defy the instructions continuously for a period of about 14 years. The deposits receipts were finally paid on 04.01.2008 with a delay of 14 years, approximately. The Bank kept on renewing the FDRs arbitrarily. The principal, plus interest was at 16% p.a. compounded from 18.11.1993 to 04.01.2008, which came to Rs.8,24,72,345.10. The Bank paid a sum of Rs.4,30,40,159.78. It did not give the remaining amount of Rs.3,94,32,185.32. In this case too, Civil Suit was filed and was withdrawn and in view of the proposal/settlement given by the Bank. The deposits were detained due to the pending Account of M/s. Jupiter Cement Ltd. The money was released after settlement with M/s. Jupiter Cement Ltd. Ultimately, the present complainants filed the present complaint and the following reliefs were claimed :- (a) To grant rate of interest @ 16 percent with quarterly compounding from original due date of amount and pay the difference between amount payable as per the above rate and amount already paid as per the bank ''s calculations. Difference amount comes to Rs. 3,94,32,185.32 only. (b) To grant suitable compensation for loss of prestige, harassment and credibility of the company, its Directors and Shareholders. (c) Any other relief which this Hon ''ble Forum deems fit in the circumstances of the case may also be granted in favour of the complainant and against the respondent Bank.

CONSUMER Complaint No. 173 of 2013 In Consumer Complaint Case No. 173 of 2013, Glayland Limited S.A. (Zurich), Overseas Corporate Body (OCB)/complainant, deposited Rs.75.00 lakhs with the OP, Bank, Porbandar Branch on 05.06.1986 under NRE Monthly Income Certificate Deposit Scheme for a period of 120 months at interest rate of 13% per annum. Monthly interest on this deposit came to Rs.80,736/- which was to be credited in the current account of the complainant company and the due date was 05.06.1996. On 05.06.1996 the complainant asked the Bank to pay the maturity value of Rs.75.00 lakhs but the Bank defied the said value for about 12 years and thereafter, it paid a sum of Rs.2,27,39,683.07 on 04.01.2008. The prevailing rate of interest on foreign deposit was 16% p.a. As per calculation, there is a difference of Rs.2,29,97,417.93 which is due to the Bank. The said amount was detained on the pretext of default of M/s.Jupiter Cement Limited which is a separate legal entity. Consequently, the above said complaint was moved for recovery of Rs.2,29,97,417.03 with interest and compensation. Consumer Complaint No. 174 of 2013: Same is the position with the last case, being CC No.174 of 2013. In this Case, Glayland Limited (U.K) had deposited Rs.30.00 lakhs with Bank of India, OP for a period of 72 months. Due date was 18.11.1993. The rate of interest was 13% p.a. On the date of maturity, the Bank was asked to return the money along with interest, but it retained the money for 14 years '' on the ground that maturity value was detained because the account of M/s. Jupiter Cement Limited was in defulat but the complainants were in no way connected with the same. In this case, the complainant has demanded the remaining amount of Rs.2,58,87,172.42 and they have also demanded interest @ 16% p.a. as well as compensation, etc.

DEFENCE : The OPs have set up the following defences. First of all, the jurisdiction of this Commission has been called into question. It is also contended that the complainants are not the consumers as per Consumer Protection Act, 1986. It is contended that the matter should be decided by a Civil Court. It has also been pointed out that the disputes pending between the parties have already been resolved and compromised before the Civil Court. The proceedings initiated by the complainant under the Act are non-est, null and void and without jurisdiction.

IT is submitted that the complainants have already approached the Civil Court and other Forums and are guilty of "forum shopping " to suit ''his '' or ''her ''/their ill-advised wishes. The complainants have not approached this Commission with clean hands. As a matter of fact, M/s. Jupiter Cement Limited was established on 09.10.1979 and the company set up a mini cement plant at Village Mokhana, Bhanvad, District-Jamanagar, Gujarat with installed capacity of 300 tonnes per day. There being Principal Promoters/Directors, Mr.K.J.Modha, Mr.T.D.Nadiapara, Mr.R.N.Seth, Mr.M.P.Bhatt, Mrs. D.B.Joshi, Mr.R.D.Joshi and Mrs.K.B.Joshi. The original cost of the project was Rs.880.00 lakh which was revised to Rs.1320.00 lakh which was again revised to Rs.1330.00 lakh. The source of finance was projected as Promoters Equity Rs.290.00 lakh, Public Issue Rs.235.00 lakh and rest financed by Financial Institutions. The ICICI Bank first commissioned the project and later joined Bank of India, Bank of Baroda and State Bank of Saurashtra. The State Bank of Saurashtra was subsequently was replaced by UCO Bank.

THE Bank of India financed term loan as well as working capital against security of paripasu charge on 28.11.1986 and LC for Rs.68.00 lakh, lien was marked on TDRs worth Rs.75.00 lakh of the associate company Glayland Ltd. S.A. This was one of the considerations for the advances. The advance amount is largely deposited, oriented and NRE Deposits of Directors, their relatives and associate company aggregating Rs.192.08 lakh will remain with the Bank. The unit could not run properly and incurred heavy losses and the account was classified as NPA on 01.04.1993. A suit was filed in the Court of Civil Judge, Jamkhanmbhalia, District-Jamnagar on 31.03.1993 for recovery of Bank Dues in the sum of Rs.4,61,17,782.60 plus interest and costs, etc. Since the party was not co-operating particularly its Director-Guarantor, Sh.B.L.Joshi, who, even had declined to execute renewal documents. Besides, the borrowers and Guarantor, a U.K based company, M/s. Glayland Ltd. S.A. which had also been promoted by Mr.B.L.Joshi was impleaded since it had deposited its Monthly Income Certificates/TDRs for Rs.75.00 lakh as security for Letter of Credit facility granted to the Company and on development, the amount was debited to Cash Credit Account of the Company.

UPON establishment of DRT, the case was transferred to DRT, Ahmedabad on 26.04.1995. There was reference to BIFR and proceedings were stayed. Mr.B.L.Joshi demanded pre-mature payment of 3 Monthly Income Certificates vide his letter dated 01.04.1993. Consequently, the OP Bank filed a Suit on 04.10.1993 in the Court of Civil Judge for injunction to restrain withdrawal of the money from the Bank because the Bank properties as security pending in DRT accounts were inadequate. The suit was dismissed on 20.05.1997. Aggrieved by that order, the Bank preferred an Appeal bearing No.5927 in the High Court of Gujarat at Ahmedabad. The Hon ''ble High Court restrained the complainants from encashing the Monthly Income Certificates and withdrawing the amount lying in the account No.2410 with the OP Bank. The complainant was permitted to invoke the right of set off against the Defendant Nos. 1 to 8 in respect of the aforesaid Monthly Income Certificates and SB A/c No. 2410.

IN the meantime, DRT, Ahmedabad, decided the case in favour of the Bank and company factory, land, building and machinery were sold for a sum of Rs.217.00 lakh and 50% of the sale proceeds were deposited with ICICI Bank and 50% was given to the OP Bank. As the entire suit amount could not be satisfied, therefore, the proceedings were initiated against Company/Guarators. Ultimately, Mr.B.L.Joshi, in the capacity of Guarantor, as well as the Director of the company, approached the Bank with a compromise proposal and initially offered a sum of Rs.350.00 lakh, which was subsequently raised to Rs.500.00 lakh and the terms and conditions of the settlement were decided by the Bank and Borrowers, mutually. It would be worthwhile to produce the compromise deed which runs, as under :- "We hereby unconditionally agree that all the deposits in personal name of Sh.B.L. Joshi/with his family members/associates OCBs (M/s. Glayland Ltd S.S. and or M/s. B.L.Joshi, U.K. etc.), have been renewed properly from time to time and our representative and we have verified and satisfied ourselves. We would also never raise any objection to the periodic renewal of all the terms deposits and amount of interest paid thereon, as applicable from time to time and the treatment given to the balance lying in our saving account by the bank as per court order, in future. We also unconditionally agree and undertake that we will not raise any dispute or claim with the deposits and all objections, contentions, etc., made whether by letter of application or otherwise pending with the bank or in any court proceedings in connection with the account of M/s. Jupiter Cement Ind.Ltd., stand withdrawn and hereafter be regarded as having come to an end without further claim in that respect against the Bank either by way of additional interest, damages, compensation or otherwise ".

AFTER the above said statement, the complainants, with ulterior motive and vexatious desire also, approached the Bank ''s Ombudsman, Home Minister of Gujarat and the Hon ''ble Prime Minister. Ultimately, they have filed these frivolous complaints before this Commission. Ops also set up the similar defences in case Nos. 172/2013, 173/2013 and 174/2013, respectively.

SUBMISSIONS and Findings : We have heard the learned counsel for the parties on the question of admission of these complaints. On 06.10.2006, the learned DRT, Ahmedabad, passed a detailed order and the operative portion of which is as under : "OPERATIVE ORDER "I) Transfer application is allowed with costs. II) Defendants No. 1 to 3 do jointly and severally pay applicant Rs.4,61,17,782.06 with simple interest @ 6% per annum from the date of the filing of the suit, i.e. 31.03.21993, until realization. III) Applicant shall be entitled to appropriate the Proceeds of MIC originally pledged by the defendant No.8 and thereafter came to be reinvested from time to time towards the satisfaction of the certified dues. IV) Applicant shall deduct the payment received in the account of the defendant No.1, now under liquidation, during the pendency of the Special Civil Suit/Transfer Application. V) Application stands disposed against the defendants No. 4 to 7 with in order as to costs. VI) Issue Recovery Certificate under Section 19 (22) of the Act ".

AGAINST the order of the Learned DRT, Ahmedabad, Gujarat, a Writ Petition was filed in the Hon ''ble High Court of Gujarat, which was withdrawn. Mr. B.L.Joshi, UK, Ltd, and Director, B.Joshi wrote a letter to the Bank, which runs as follows :- "With reference to your letter No.PBR: ADV: GCN " 1010 Dt.01.12.2007 para 2 (e), we, hereby, unconditionally agree that all the deposits in our name/s have been renewed properly from time to time and our representative and we have verified and satisfied ourselves in this regard. We undertake that we would never raise any objection to the periodic renewal of all of our term deposits and amount of interest paid thereon, as applicable from time to time, in future. We, also, unconditionally agree and undertake that we will not raise any dispute or claim with respect to the interest on these deposits or any other amount in connection with the deposits, and all objections, contentions, etc., made whether by letter or applications or otherwise pending with bank hereafter be regarded as having come to an end without further claim in that respect against the bank either by way of additional interest, damages, compensation or otherwise. Date : Thanking you, Place : Yours faithfully B.L.JOSHI U.K.LTD. Sd/- Sd/- DIRECTOR DIRECTOR "

THEREAFTER , the above said ''compromise '' took place on 12.12.2007. The compromise was entered by Mr.B.L.Joshi in the capacity of ''Guarantor ''.

THE learned counsel for the complainants vehemently argued that the matter pending between the DRT was between other parties and this case is between separate parties. He contended that Mr.B.L.Joshi had entered into a contract/compromise with the OPs of his own choice. He was not given authority by the other Directors too enter into the said compromise. The counsel for the complainants has cited few authorities in support of his case. The first authority is reported in Kiran Krishna Agro Tech Ltd. Vs. P.V.Shantha Kumari, II (2012) CPJ 531 (NC) wherein the case regarding FDR was entertained by the National Commission; the second authority reported in Allhabad Bank and Anr. Vs. Paper Product Machines, IV (2012) CPJ 495 (NC), is a judgment of this Bench. This case also pertains to a Bank. In this case, cheques were deposited, the same were neither credited into the account nor were received back. It was held that cause of action is continuing unless or until the complainant gets that amount. He has also invited our attention to another authority reported in Poonam Constructions and Ors., Vs. Manjusha Ashok Dudhane, IV (2012) CPJ 790 (NC), wherein it was held that due to delay of 1072 days, the case was barred by time. He has also invited our attention towards the Hon ''ble Apex Courts '' authority reported in Basant Singh and Anr., Vs. Roman Catholic Mission, which is regarding ''service '' of summons. He has also cited another authority reported in Punj Lloyd Limited Vs. Corporate Risks India Pvt.Ltd., I (2009) CPJ 10 (SC). In this case, this Commission dismissed the complaint because the disputed questions raised were found to be beyond the purview of this Commission. It was held that dismissal of the complaint was unjustified. The Commission ought to have issued notice to the respondent and place pleadings on record. The above said authorities have left no impact upon us. The aforesaid authorities hardly apply to the present cases. We do not pick up a conflict with the law laid down in these authorities. These authorities certainly are applicable to the Consumer Fora. It must be borne in mind that the facts are stubborn things. The facts of these cases are altogether different from the above cited authorities.

THE facts of these cases are peculiar and unique. The Order was rendered by the learned DRT, Gujarat. Some directions were also given by the Hon ''ble High Court of Gujarat. Those have attained finality. Although the Consumer Fora, by virtue of Section 3 of the Consumer Protection Act, 1986 has got the parallel jurisdiction, yet when the case is decided by the Civil Court or DRT, it remains bound by that. It cannot re-open the controversy again. It is well settled that Consumer Fora is bound by the orders pronounced by the Civil Court. It cannot take a contrary view from that of the Civil Court. It must be borne in mind that the Civil Court has already decided the case and this Commission shall refrain from interfering into it. This Commission is not armed with power to sit as an Appellate Court over the orders passed by the DRT. The DRT has got its own Appellate authority, which is known as Debts Recovery Appellate Tribunal.

MOREOVER , it is difficult to fathom as to why the other Directors could not move the application for being impleaded as parties before the learned DRT. They should have filed an application for impleadment before the learned DRT. In case this Commission interferes, it may lead to multiplicity of judgments, which is not desirable and not permissible by any law. Even now, those Directors can move before the DRT or DRAT for seeking further relief. It is also surprising to note that Mr.B.L.Joshi is one of the complainants in this case. It is not understood as to how he can challenge his own authority. It is also surprising to note that other Directors have joined hands with him and they are working in cahoots with each other. All the complainants had the knowledge about the compromise. They should have raised objection there and then. It is well settled that "A Stitch in Time, Saves Nine ". The delay on the part of the complainants for such a long time is unfathomable. Consequently, this Commission has no jurisdiction to entertain these complaints. These are barred by principles of res judicata. Following authorities go to fortify the case of OPs.

IN S.James Vincent Vs. Greater Cochin Development Authority, 1994 (1) CPJ 174 (NC), this Commission held that "a complaint filed by the complainant suppressing the fact that the matter was already sub judice in the Sub-Court, Ernakulam, was dismissed by the State Commission as the case was already sub judice before a Civil Court. In appeal, the National Commission upheld the order of the State Commission holding that the complaint was gross abuse of the Consumer Protection Act ".

IN Oswal Fine Arts Vs. H.M.T., 1991 CPC 43: (1991) 1 CPJ 330: 1991 (1) CPR 386 (NC), this Commission upheld the important principle that when a matter is sub judice before the ordinary Civil Courts of the land, the Consumer Commission cannot and will not entertain any claim for compensation in respect of the same subject matter. Last, but not the least, this Commission clearly, specifically and unequivocally held in Traxpo Trading Co. Vs. The Federal Bank Ltd, I (2002) CPJ 31 (NC) that under Section 18 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, jurisdiction of this Commission has been barred, where the Bank has filed ''suit for recovery '', before DRT.

LIMITATION : Moreover, this case is hopelessly barred by time. The cause of action arose when the matter was settled on 01.12.2007. The cause of action again arose on 04.01.2008, when the alleged amount was paid to the complainants and the Bank had refused to pay the remaining amount. Thereafter, the complainants approached the Hon ''ble High Court of Gujarat and the Hon ''ble High Court of Gujarat vide its order dated 21.07.2010 passed the following order :- "ORAL ORDER Heard learned advocate Mr.Ashish M. Dagli Appearing on behalf of petitioner for all four Petitions. Let petitioner may approach, in respect to Grievance raised in all four petitions, the Appropriate forum in accordance with law. In view of the above observation, present Petitions are disposed of by this Court without Expressing any opinion on merits ".

IT is, therefore, clear that the Hon ''ble High Court did not condone the delay on the part of the complainants. The present complaints were filed on 17.09.2010. Our predecessor Bench, vide its order dated 12.09.2011, passed the following order :- "Heard. Prima facie, some of the complaints appear to be barred by period of limitation. As per complaints, certain deposits were made in 1987 and maturity date was 1993, in respect of those deposits. Further, there has been civil litigation between the parties. Complainant is directed to file copies of the pleadings of those litigations which took place earlier between the parties, qua the deposits made by the complainant. Same be filed within 8 weeks. List on 05.12.2011, for admission hearing ".

WE also gave opportunity to the complainants to file an application for condonation of delay. Our order dated 04.01.2013, runs as follows:- "Heard counsel for the parties. Counsel for the opposite party submits that there is a question of limitation, but no application in this connection has been filed. An opportunity is granted to the complainant to file an application for condonation of delay. He submits that he has filed the complaint before the Registry, but the Registry had raised no objection. Evidence to that context be also produced. Stand over to 18th March, 2013 "

HOWEVER , the needful was not done. Application for condonation of delay was never moved despite opportunities granted to the complainants. It is thus clear that the present complaints are barred under Section 24-A of the Consumer Protection Act, 1986. There is not an iota of evidence that cause of action has arisen two years prior to the above said case. Consequently, we dismiss the complaints with punitive costs of Rs.15,000/- in each case, total being Rs.60,000/- to be deposited with the Consumer Welfare Fund established by the Central Government under Section 12 (3) read with Rule 10 (a) of the Consumer Protection Act, 1986, of the Central Excise Act, 1944, within one month from the date of the order, failing which it will carry interest @ 10% p.a. Registrar to submit compliance report immediately, after the expiry of two months.