DOSON CHEMICALS PVT. LTD. vs United Bank of India

IT is the complainants who are in appeal before us. Their complaint was dismissed by the State Commission. Complaint was that the documents of title of the complainants kept as security with the respondents-Bank were not being returned and alleging deficiency in service on the part of the Bank, complainants had filed a complaint before the State Commission seeking direction to the Bank to return the title deed and also a compensation of Rs. 9.00 lakhs till the date of filing of the complaint and thereafter Rs. 2.00 lakhs per month till the documents of title were returned. Since during the course of the proceedings before the State Commission documents of title were returned, State Commission dismissed the complaint treating as infructuous. IT is against this order that complainants have come before us. No doubt State Commission held that there was deficiency in service but it observed that complainants had not suffered any loss on account of delay in returning the documents.

COMPLAINANTS were having a cash credit facility to the tune of Rs. 10.00 lakhs from the respondents-Bank. By way of security for availing this limit complainants had offered immovable property to the Bank by way of mortgage. Documents relating to cash credit facility were executed and title documents relating to immovable property were deposited with the Bank. Thereafter, cash credit facility was sanctioned. In course of time, complainants wanted to built a multi-storey complex and wanted more money. One of the prospective tenants was Federal Bank Ltd. who offered to provide loan over Rs. 20.00 lakhs for completing the building provided immovable property of the complainants was mortgaged to it. COMPLAINANTS, therefore, approached the respondents-Bank for release of the title deeds for the first time on 5.8.1998 and offered other securities in lieu of immovable property which comprised deposits of the complainants with the respondents-Bank itself as well as fixed deposit receipts of other Banks. Since nothing happened and there was urgent need to get the loan from the Federal Bank, complainant requested the Bank to close its account and gave a cheque on 22.9.1998 for Rs. 9,63,895/- towards the balance in the account and also offered to make payment of balance amount of interest in cash. Complainant, therefore, desired the Bank to return all the documents of title within 10 days. Again nothing happened and reminders of the complainant went on and ultimately a complaint was filed before the State Commission. Notices were issued on 23.12.1998 by the State Commission and it was at that time that in March, 1999 documents of title were returned by the respondents-Bank. However, no written version was filed by the Bank and time was again granted for the purpose. In spite of two adjournments written version was not filed, yet on 21.9.2000 State Commission dismissed the complaint as aforementioned. Respondent-Bank had not filed its written version. We are of the view that in the circumstances, State Commission failed to exercise jurisdiction vested in it by law. Once having held that there was deficiency in service complainant should have been compensated even though according to the State Commission complainants did not suffer any loss. Again State Commission fell in error when it was specifically pleaded by the complainant as to the requirement of the loan from the Federal Bank to complete construction of their multi-storey complex. There being no written version from the Bank it could not be assumed that the complainant did not suffer any loss. State Commission should have examined the matter in more pragmatic manner after holding that there was deficiency in service by the Bank than rush to dismiss the complaint. In the absence of written version there was nothing on record for the State Commission to observe that complainants did not suffer any loss. It was unfortunate observation to make. Complainants were trying hard to get their documents of title back for availing loan from the Federal Bank to complete their building complex. They even refunded whole of the amount to the Bank standing in their cash credit account. Delay in construction escalated the cost.

May be at this stage we need not, however, go into the question of loss but on the face 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. Ten days if not earlier, in our view, was sufficient time for the purpose.

IN this view of the matter we set aside the order of the State Commission, allow the complaint and award a compensation of Rs. 50,000/- with interest @ 12% from 29.1.2000 when the complaint was dismissed by the State Commission, till payment. We also award cost of Rs. 10,000/- to the appellant-complainant. Appeal allowed.