SURESH KUMAR AGARWAL vs ALLAHABAD BANK

BOTH the cases have been heard together as they are analogous in nature having similar facts and circumstances.

IN brief, the case of the complainant/petitioner in C.P. No. 5 of 1990 is that he as proprietor of M/s. City Carriers obtained an order from Oil INdia Limited for supply of 6 Nos. of brand new Tata Diesal Pick Up Vans with composite body for a period of 4 years with effect from 1.4.1985. The charge per vehicle per month was fixed-at Rs. 8,540/- over and above the running charges and driver charge. The petitioner applied to the opposite party Bank for a loan and the opposite party after completion of the necessary formalities granted a term loan of Rs. 11.18 lakhs for the purchase of the vehicles. The petitioner kept his landed property as mortgage against the loan, and the vehicles purchased were also placed in hypothecation to the Bank. That after payment of the entire loan, the complainant vide his letter dated 16.12.1988 (Ext.3) asked the opposite party to return all the documents of the properties kept in mortgage with the Bank, and to revoke the power of attorney with intimation to Oil INdia, and also to issue a letter to the DTO/RTA, Dibrugarh to delete the lien of the Bank from the registration certificates. The opposite party by letter dated 19.12.1988 informed the petitioner that the matter have been referred to the Regional Office at Guwahati. The petitioner again wrote a letter dated 20.1.89, but the opposite party by letters dated 1.2.89 informed the petitioner that the matter had been referred to the North Eastern Zonal Office at Calcutta by the Regional Office. That over and above several reminders, the petitioner wrote a letter dated 30.8.90 (Annexure-X) to the complaint) to the opposite party drawing the latter''s attention that due to non-relinquishment of the hypothecation charges of Tata Pick Up vans under registration No. ART-1294, 1295, 1296, 1297, 1298 and 1299 the petitioner could neither convert these vehicles into his source of income nor could sell out the same resulting in loss of Rs. 300/- per day per vehicle from 29.11.88 and as such the petitioner is entitled for compensation. But the requests were of no avail. Hence this complaint claiming compensation for Rs. 9,91,200/-. 3.IN C.P. 6/90 the concerned six vehicles bear Registration No. ART-1300, 1301,1302,1303,1304 and 1305. Here the complainant by his letter dated 28.8.90 (Annexure-XI of the complaint) asked for compensation from the opposite party at the rate of Rs. 300/- per day. The complainant as proprietor of M/s. Cosmopolitan Transport Company claimed compensation amounting to Rs. 9,92,400/-. Otherwise the facts and circumstances of this case are similar to that of C.P. 5/90. One common grievance of the petitioner in both the complaints is that the opposite party instead of writing to the DTO/RTA, Dibrugarh for relinquishment of the hypothecation charge intentionally wrote a letter dated 16.3.90 to the RTA, Khonsa, Arunachal Pradesh to deprive the petitioner of his benefits. 4. IN the show cause filed separately on 5.12.90 in both the cases the opposite party raises the question of maintainability of the complaint on the ground of the complaint being frivolous and vexatious, suppression of material facts, mala fide intention, non-disclosure of cause of action, non-joinder and mis-joinder of necessary parties and lack of jurisdiction to invoke the provisions of the Consumers Protection Act, 1986. The opposite party admits that the letter dated 16.3.90 was issued to the RTA but states that the same was issued without any bad intention. It is also stated that after receipt of the advice, the opposite party on 6.1.89 released all the security documents and returned them to the petitioner. The opposite party further stated that the petitioner stood as a guarantor by depositing the title deeds of lands with Allahabad Bank for creating mortgage of the land to secure the advance made by the Bank to M/s. Mach Wood Product. That on the basis of complaint dated 11.1.89 lodged by the complainant in the Court of the Sub-Divisional Judicial Magistrate, Tinsukia, the police (vide complaint case No. 280/89 under Section 406 IPC) seized all the documents relating to the loan account shown in the present complaint. However, the Hon''ble High Court vide order dated 17.2.89 passed in Criminal Revision No. 75/89 stayed the proceedings before the SDGM, Tinsukia, and vide order dated 30.8.89 the Hon''ble High Court directed the SDJM to return all the seized documents to the Bank, and the Bank accordingly on 6.10.89 returned the documents to the petitioner. That however after receipt of all the documents by the petitioner the opposite party sent the letters dated 16.3.90 and 8.9.90 to the RTA regarding relinquishment of the hypothecation charges. 5. We have heard at length the learned Counsels of both the parties. We have also taken into consideration all the affidavits and documents filed by the parties concerned in both the cases. The complainant has examined himself as his witness, and the opposite party has examined 3 witnesses. At this stage it may be mentioned that the Commission has adopted the principle that the statements made in the petitions and counters if supported by an affidavit will be treated as part of the deposition. 6. The admitted facts in the case are that the complainant paid up the loan account and accordingly the opposite party also wrote to the RTA, Khonsa releasing the vehicles from hypothecation though the complainant informed that the RTA, Dibrugarh is the competent authority has subsequently registration was transferred to Dibrugarh. The question that falls for determination now is whether the opposite party acted with delay and deficiency in issuing the release letter to the DTO/ RTA, Dibrugarh relinquishing the hypothecation charges of the vehicles, and if so, whether the complainant is entitled to compensation. Undoubtedly service offerred by the opposite party is not in the nature of gratis. The Bank has realised interest on the loan "Service under Section 2(o) of the Act has been defined to include amongst others the provision of facilities in connection with banking. We have no hesitation in repelling the contention of the opposite party that the present complaints do not fall under the purview of the Act. 7. It is admitted by the opposite party that on 19.12.88 they received Ext. 3 dated 16.12.88. Ext-3 clearly states about the request made by the complainant asking the opposite party to send the letter to the DTO/RTA, Dibrugarh to delete the lien from the registration certificates. We propose to accept this date of 19.12.88 as the cut-off-date when the opposite party first gains knowledge about the complainant''s requirement for the release letter. It is admitted by the opposite party that they after receipt of the advice from the Regional Manager released all the security documents on 6.1.89 which were duly received by the complainant. We do not understand as to why the opposite party failed to release the hypothecation of the vehicles by this day. DW-1 who has deposed that on 6.1.89 he handed over the documents which were in connection with the loan given by the Bank to City Carriers and Cosmopolitan Transport Company. He further deposed that the documents seized by police in the criminal case were in respect of another account in the name of Mach Wood Products. The witness admitted that on several occasions the complainant both before and after 6.1.89 requested him to issue the release letter, but he could not do so as he received instruction from the AGM, Calcutta on 7.1.89 not to issue the same. 8.The further case of the opposite party in their written statement is that the police seized some documents in connection with criminal complaint case lodged by the complainant on 11.1.89 in the Court of SDJ, Tinsukia, and as the allegations made in the criminal case also related to the same loan account which is the subject matter of the present complaints, the Bank could not issue the release letters. We do not accept the contention of the opposite party that the criminal case has restrained the opposite party to issue the release letter in connection with the loan account of M/s. City Carriers and M/s. Cosmopolitan Transport Company, as the evidence of DW-1 is quite contrary, and the written statement of the opposite party also does not support it. On a reading of the criminal complaint (Ext.5) we also find that the complainant referred to some another loan and to his other title deeds. We therefore accept the evidence of DW-1 that the documents seized by police in the criminal case related to the accounts in the name of M/s. Mach Wood Products which is not the subject matter in the present dispute. 9. That takes us to the admission of the opposite party in their W.S. that they issued letters dated 16.3.90 and 8.9.90 to the RTA, Khonsa informing about the payment of dues by the petitioner and discharge of hypothecation over the vehicles in question. Let us pause over this watershed on 8.9.90 and examine the path followed in the course of time. And what we see is that till 8.9.90 it is at Khonsa and not at Dibrugarh who have been informed by the opposite party about the discharge. At this stage it is pertinent to refer to our order dated 2.2.91 whereby we directed he opposite parties to write to the RTA, Dibrugarh for releasing the vehicles from hypothecation within 7 days of the order. This order was complied with by the opposite party who accordingly issued the release letter to the District Transport Officer, Dibrugarh by its letter dated 14.2.91 (Annexure to the Additional Affidavits filed by the complainant). The above sequence of events leads us to examine as to how the demand for issue of the release letter to the DTO, Dibrugarh was placed before the opposite party by the complainant, and what efforts were made by the opposite party to meet the same during the period from 19.12.88 to 2.2.91. The demands was first set out in the complainant''s letter dated 16.12.88 and thereafter in the letters dated 7.1.89, 20.1.89, 28.8.90 and 30.8.90. Note is taken of the letter dated 20.1.89 issued by the National Chamber of Commerce, Tinsukia to the Regional Manager, Allahabad Bank, Guwahati and the letters dated 5.10.90 and 20.12.90 issued by the Consumer Education and Research Society, Ahamdabad to the Manager Allahabad Bank, Tinsukia which have been annexed with the affidavits-in-reply filed by the complainant. From the end of the opposite party there are two letters dated 16.3.90 and 8.9.90 both addressed to the Secretary, RTA, Tirap Region, Khonsa, Arunachal Pradesh informing him about the payment of the entire loan and relinquishment of the hypothecation charge. The opposite party in their re-joinder (Ext. D) avers that as no instruction from the sanctioning authority have been received, and as there was some enquiry pending against the complainant over a transaction at the Duliajan Branch of the Bank, there was delay in the matter. The further contention of the opposite party is that the release orders were issued to RTA, Khonsa where the vehicles were registered, and that the complainant did not inform the opposite party regarding transfer of the registration to the DTO/RTO, Dibrugarh. As a proof of registration at Khonsa the opposite party has annexed with Ext. D. the copy of the registration certificate dated 15.5.85 and the permit dated 15.5.85 in respect of one vehicle only, on the other hand, the complainant annexes to his additional affidavits the copies of registration certificates Nos. ART-1294 to ART-1305 with endorsements thereon stretching from 3.5.86 to 12.1.89. Further copies of the motor vehicle tax payment receipts during 1987, 1988 and 1989 and fitness certificates dated 21.12.88 issued by the DTO, Dibrugarh in respect of vehicles. We fail to understand as to why the complainant would not bring to the notice of the opposite party the information about the endorsements made in the registration certificates in the Office of the DTO, Dibrugarh as that would be to the disadvantage of the complainant. We, therefore, hold from the evidence on record that the opposite party was duty bound and under obligation to inform the DTO, Dibrugarh about the discharge of hypothecation as requested in writing by the complainant, but the opposite party has failed to perform the same during the period from 19.12.88 to 2.2.91. We rely on the evidence of DW-2 that if a specific request is made by the borrower for the release of hypothecation, the Bank issues the release order of the vehicle to the DTO concerned. IN the present cases there is evidence of written request by the complainant. No tangible evidence have been shown by the opposite party to any compelling circumstance which has obstructed them to write to the DTO, Dibrugarh during the period in question. The plea of writing to the RTO, Khonsa even with bona fide intention will not absolve the opposite party of its due responsibility. We, therefore, can not to resist but hold that this failure in informing the DTO, Dibrugarh constituted deficiency on the part of the opposite party in the ma nnerof performance of service for providing Bank facilities to its customer. As such we hold that the complainant is entitled to some relief in the form of compensation. 10. The next vexed question is to examine as to what extent the complainant has suffered loss, and to what quantum of compensation he is entitled. As to the dispute in terms of loss sustained by the complainant, we have to traverse a jungle of facts brought on record by both the parties. As such we travelled cautiously and took time in treading it. At the first flush we thought of referring the parties to the Civil Court, but what prevented us is the spirit and law under the new enactment-the Consumer Protection Act, 1986 which seeks to provide for better protection of the interest of the consumers, and speedy and simple redressal to consumer disputes. IN particular, we have kept in view the provisions of Section 14(1)(d) of the Act in adjudicating the present cases. 11.From Annexure-I of the complaints which is not disputed in the cases it appears that the contract with the Oil INdia Ltd. was for a period of 4 years commencing from 1.4.85 upto 31.3.89. Fixed charge of Rs. 8450.00 per vehicle per month was payable to the petitioner. IN addition the petitioner was entitled to running charges per kilo metre and driver charges at specified rates. On calculation the total amount of fixed charge per year per vehicle comes to Rs. 101400.00 (Rs. 8450.00 X12). We have no materials on record to arrive at some calculation with regard to the running and driver charges. However, we propose to consider these charges to have been expended for the purpose they were meant for during the period of 4 years. Now coming to Annexure II (Ext-I) we find that the repayment of the loan was recoverable in three years by equal monthly instalments of Rs. 33,500/- plus interest at the end of each quarter. We also propose to consider this yearly fixed charge of Rs. 101400.00 per vehicle to have been expended in repayment of the principal amount with interest thereon per vehicle, and other maintenance charges for the vehicle. IN the absence of adequate materials before us, as to the exact date on which the vehicle was placed at the disposal of Oil INdia Ltd., or exact date on which repayment schedule of the loan commenced we propose to accept 1.4.85 as the cut-off-date as per the aforesaid document (Annexure I and Ext.1) on which placement of the vehicle and repayment schedule commenced. IN such a situation it must be assumed in all fairness that the contract period end on 31.3.89 and similarly the repayment schedule came to an end on 31.3.88. This may have offered an opportunity to the petitioner to earn an income of Rs. 101400.00 for the year that remained i.e. from 1.4.88 to 31.3.89 per vehicle subject of course to necessary costs of maintenance, tax etc. 12. Let us now examine whether any loss have been sustained by the petitioner from 31.3.89 to 14.2.91. The petitioner admits that the hypothecation charge was released on 14.2.91. IN his deposition the petitioner has stated that after the contract he kept all the vehicles at his premises at Makum, and the vehicles were there upto 20.2.91, and the petitioner sold 8 vehicles. Ext. 2 is a letter dated 23.3.90 from the petitioner requesting D.T.O. Dibrugarh to grant exemption of Road tax in respect of the vehicles from Nos. ART-1300 to ART 1305. A similar letter is there in respect of vehicle from Nos. ART-1294 to ART-1299. Both these letters informed that concerned H-Form had already been deposited in the office on 15.6.89. The O.P. has not denied about the H-Forms. D.W.2 in his deposition stated that legally if a vehicle is hypothecated by the owner to a bank, it cannot be sold without a release order from the bank. He further stated that on 20.2.91 he along with the complainant went to the place near Makum where the vehicles were parked, and he saw some ten vehicles. Fact therefore, emerges that if the petitioner had sold some vehicles the same may have been sold after 20.2.91 i.e. after the release of hypothecation on 14.2.91. The complainant in his additional affidavits filed on 2.3.91 in support of his complaints stated that the vehicles since the termination of the contract period were lying idle without payment of tax, nor could the petitioner sell the vehicles without release of the hypothecation charge. It was also stated that he fetched prices ranging from Rs. 35,000/- to Rs. 50,000/- only as the same have deteriorated in the meantime. Note is also taken of the letters dated 14.2.91 and 18.2.91 whereby the O.P. requested the petitioner for information as to whether the vehicles were in operation or lying idle, the present position and status of the vehicles, and the reply of the complainant to the same detailing the deteriorating value of the vehicles. We find from the letter dated 14.2.91 that at least till that date the O.P. had no information of any allegation that the vehicles were running in the meantime. However the O.P. merely denied the complainant''s charge that the vehicles were lying idle, and that the value of the vehicles had been deminished. It was further stated that the Branch Manager of the O.P''s Tinsukia Branch (D.W.2) again inspected the vehicles on 30.4.91 when he found only 4 vehicles and noticed that the number plates and Engine number, chassis number were not the same with the vehicles claimed by the complainant. D.W.2 in course of his deposition exhibited a Report (marked as Ext. C) wherein it had been stated that on inspection on 30.4.91 he found difference in the RTA No. on front and back side in two of the four vehicles. We find the inspection which was made in the absence of the complainant to be vague without details. However we accept his statement on oath that he saw some ten vehicles during his earlier inspection on 20.2.91. The witnesses of the opposite party have not brought any allegation of the running of the vehicles during the time following the termination of the contract, in their deposition before the Commission. We therefore accept the evidence of the complainant that vehicles remained idle at least from 15.6.89 when the concerned H-Forms in respect of the vehicles had been deposited in the office of the D.T.O. Dibrugarh. We are of the opinion that the complainant had suffered some loss on account of non-running of the vehicles resulting from the delay and negligence in issuing the release letters by the opp. party. We hold that the failure of the opp. party to release the hypothecation charge within reasonable time constituted deficiency on the part of the opp. party in providing service facilities of banking to the complainant. However, it cannot be ascertained from the evidence and materials on record as to whether the placement of the vehicles under H-Forms resulted solely from the fact of delay in issuing the release certificates, or whether the inability to run the vehicles arose due to wear and tear of the vehicles during the contract period. The complainant has not been able to prove to the hilt that the vehicles were in fit condition of running during 1989 and 1990. IN such circumstances it is difficult to assess the quantum of loss sustained by the complainant. As such we are of the opinion that payment of an amount of Rs. 5,000/- per vehicle as token compensation for the period of non-running of the vehicle following the date of termination of the contract file filing of the complaints will meet the ends of justice in the cases. We, therefore, direct the opp. party to make payment of an amount of Rs. 30,000/- (Rupees thirty thousand) to the complainant in C.P. No. 5/1990 for the six vehicles in question. We also direct the opp. party to make payment of an amount of Rs. 30,000/- (Rupees thirty thousand) to the complainant in C.P. No. 6/90 for the six vehicles in question. Both the amounts are directed to be paid within a period of 3 months from today in default of which the sum shall accrue interest at the rate of 18% per annum till realization. No award as to costs. Complaint allowed.