VIJAYA SHANKAR vs State Bank of India

THIS appeal by the complainant is directed against an order dated 31.10.1996 passed by District Forum, Gaya, in Case No. 2 of 1995 whereby the complaint filed by the complainant (appellant) was dismissed.

THE case of the complainant (appellant) is that he being an educated unemployed decided to purchase an auto-ricksha for earning his livelihood. For this purpose he obtained a loan of Rs. 24,500/- in April, 1987 from the opposite party under bank''s scheme of loan to unemployed youth and executed an agreement for the same. As per the term of agreement, the loan amount was repayable in sixty monthly instalments of Rs. 500/- commencing from October, 1987 with interest @ 12% with effect from 23.4.1987. THEre were defaults in payment of instalments. Under the circumstances his (complainant''s) father under his letter dated 29.9.1987 advised the opposite party to credit to the loan account quarterly a sum of Rs. 687.50 paise which was accruing as interest on his three term deposits in the same branch of the Bank and this arrangement continued from 13.11.1987 to 27.4.1989. THE last payment was made on 27.4.1989 and thereafter the said arrangement for payment discontinued. On 5.10.1993 the opposite party (respondent) filed a requisition before the District Certificate Officer, Gaya for recovery of a sum of Rs. 36,928/- as loan dues and Rs. 3,065/- as Court-fee (Total 36,928 + 3,065 = 39,984) and Certificate Case No. 241 of 1993-94 was started. In order to save limitation the opposite party managed to show a payment of Rs. 250/- in cash in April, 1991 which he had never paid. Apart from that, the opposite party also inflated the loan dues by adding Rs. 2,993/- as insurance premium, Rs. 372/- as cost of legal notice, and Rs. 367/- as guarantee fee to the principal loan amount against the term of agreement. Instead of interest at the rate of 12%, the opposite party has charged interest @ 12.5% per annum. THE loan being subsidised, 25% thereof (Rs. 6,125/-) is to be borne by the Government of India. To inflate the loan amount the opposite party managed to keep the 25% amount (Rs. 6,125/-) in term deposit instead of crediting the same to loan account. In the certificate proceeding distress-cum-attachment warrant was issued against him (complainant). Under the circumstances he appeared before the Certificate Officer who orally ordered for deposit of atleast half of the said amount so that his objection may be entertained. Having no alternative he (complainant) deposited Rs. 20,000/- and filed an objection under Section 9 of Bihar Public Demands Recovery Act denying his liability to pay the certificate dues. On the allegations aforesaid, the complainant (appellant) in his complaint petition had prayed for a compensation of Rs. 40,000/- for distress payment of Rs. 20,000/- in certificate proceeding and Rs. 20,000/- for mental strain and harassment caused to him. The opposite party filed written statement in the form of objection petition and contested the case before the District Forum. The case of the opposite party (respondent) was that the complainant is not a consumer and the complaint case has been filed with ulterior motive and malafide intention as a counter-blast to the Certificate Case No. 241 of 93-94 and is not maintainable. On the request of the complainant and recommendation of District Industries Officer, Gaya, a loan of Rs. 24,500/- was sanctioned to the complainant on 31.3.1987 under Government sponsored "self-employment to educated unemployed youth scheme" for purchasing three-wheeler and the same alongwith interest was to be repaid by the complainant in sixty monthly instalments. Inspite of repeated request and service of demand/legal notice the complainant failed to liquidate the loan amount which led to the filing of certificate case for the recovery of the bank dues. The complainant having appeared before the Certificate Officer in Certificate Case No. 241 of 1993-94, his grievance can be looked into by the Certificate Officer. The complainant himself under his own handwriting had deposited Rs. 250/- on 27.4.1991 which will be apparent from the original inner foil of the pay-in-slip in the custody of the opposite party. If the complainant is desirous to raise this point, the appropriate Forum is the Court of Certificate Officer where the certificate proceeding is pending. The loan dues have not been inflated. The charges have been debited according to the terms of the agreement and as per the guidelines of the Reserve Bank of India. The amount debited on account of insurance premium is the amount paid by the Bank as insurance premium according to the agreement. There was no direction by the complainant not to pay insurance premium. The rate of interest has been charged according to the agreement and directives of the Reserve Bank of India as the rate of interest is subject to variation as per direction of the Reserve Bank of India. The capital subsidy of Rs. 6,125/- kept in term deposit was adjusted according to the terms of agreement. The subsidy being Government money has to be dealt with in accordance with the direction of the Government and the terms of the agreement. The relationship between the complainant and the opposite party is that of borrower and lender. The opposite party is neither provided any service to the complainant nor the complainant is paying any charge for the alleged service and hence the question of deficiency in service does not arise. On the aforesaid pleas, the opposite party in its written statement had prayed for dismissal of the complaint petition.

Both the parties had filed affidavit and documents in support of their respective cases and the District Forum after hearing the parties had passed the impugned order dismissing the complaint case. At the time of hearing of this appeal, no one appeared on behalf of the respondent to contest it and hence it has been heard ex-parte. The question to be considered is as to whether the impugned order calls for any interference by this Commission or not.

CERTAIN facts are not disputed. It is not disputed that the opposite party had advanced a loan of Rs. 24,500/- to the complainant-appellant in the year 1987 under self-employment to educated unemployed youth scheme for purchase of three-wheeler which was to be repaid to the opposite party with interest in sixty monthly instalments of Rs. 500/-. It is also not disputed that the complainant defaulted in payment of instalments and under the circumstances his father under his letter dated 29.9.1987 advised the opposite party to credit to the loan account every quarter a sum of Rs. 687.50 which was accruing as interest on his three term deposits in the same branch of the Bank and this arrangement continued from 13.11.1987 to 27.4.1989 and thereafter the said arrangement for payment discontinued. It is also not disputed that the opposite party on 5.10.1993 filed Certificate Case No. 241 of 1993-94 before the Certificate Officer, Gaya, for realisation of the dues in which the complainant deposited Rs. 20,000/- as part payment to avoid execution of distress warrant against him. It is also not disputed that the complaint case before the District Forum was filed by the complainant-appellant several months after the filing of certificate case by the opposite party before the Certificate Officer, Gaya. The above facts go to show that default on the part of the complainant in payment of instalments resulted in initiation of certificate proceeding for realisation of bank dues and several months thereafter the complaint case was filed. It was contended on behalf of the appellant that the dues of the Bank had become time-barred and hence initiation of certificate proceeding for realisation thereof was unjustified. It may be pointed out that the proper Forum for raising the question of limitation is the Court of Certificate Officer where the certificate proceeding is pending. The question of limitation concerning the certificate proceeding is not relevant for the purpose of this appeal and hence it is not thought proper to go into the same.

IT was further contended that 25% of the loan amount i.e. Rs. 6,125/- was not deducted at the outset which he (appellant) had to pay as certificate dues. For raising this question also, the Court of the Certificate Officer was the proper Forum. Apart from that, the loan agreement shows that the 25% amount (Rs. 6,125/-) to be provided by Government as capital subsidy was to be kept in term deposit for the period fixed for payment of the term loan component and was to be adjusted towards an equal amount of balance of instalments falling due in the term loan account. In view of this, there was no question of deduction of the same from the loan amount at the outset. It was further contended on behalf of the appellant that in the certificate proceeding the complainant was compelled to pay Rs. 2,162/- as insurance premium, Rs. 274/- as cost of legal notice and Rs. 267/- as guarantee fee which were not covered by the agreement. It may be pointed out that the proper Forum for raising this question was the Court of the Certificate Officer. If the appellant was of the view that the realisation of the said amounts in the certificate proceeding was not justified, he should have challenged the same before the proper Forum. The Court of Certificate Officer is not a subordinate Court of this Commission and this appeal is not against the order of Certificate Officer and hence this Commission has no jurisdiction to examine if the Certificate Officer was legally justified in realising the said amounts or not. It was further contended on behalf of the appellant that his father under his letter dated 29.9.1987 had advised the opposite party to credit to the loan account every quarter a sum of Rs. 687.50 which was accruing as interest on his three term deposits and this arrangement continued till 27.4.1989 and hence the action of the opposite party in initiating certificate proceeding without calling upon his (complainant''s) father to pay the loan amount was not justified and amounted to deficiency in service. In this connection it had been rightly pointed out in the written statement of the opposite party that the father of the complainant was not a guarantor of the loan and hence the Bank could not have served notice on him in this regard. So there is no merit in the above contention of the complainant.

IT was further contended on behalf of the appellant that as per agreement the interest on the loan amount was to be realised @ 12% but the same was partly realised at 12% and partly @ 12.5 percent which amounted to deficiency in service. This aspect of the matter has been explained in para-9 of the written statement of the opposite party (respondent). In the said paragraph of the written statement it has been stated that the rate of interest was charged according to the agreement and directives of the Reserve Bank of India. The statement to this effect in para-9 of the written statement has not been challenged by the complainant by filing reply thereto and hence there is no reason for not accepting the same. The Banks are bound by the directives of the Reserve Bank of India and hence charging of interest according to the directive of the Reserve Bank of India and as per terms of agreement cannot amount to deficiency in service.

IN Original Petition No. 33 of 1994 decided on 26.4.1996 by the National Commission the Bank had already initiated proceedings before the Competent Authority for the recovery of the amount due against the complainant and in view of this the National Commission did not go into the merits of the case and left it to the complainant to defend those proceedings and raise all questions available to them in those proceedings and dismissed the complaint. IN the instant case before this Commission also the certificate proceeding for realisation of Bank dues has been initiated and hence it is open to the complainant to raise all questions available to him in the said proceeding. From the above discussion it is apparent that there was no deficiency in service on the part of the opposite party. That being so, the question of awarding compensation to the complainant does not arise. The District Forum, under the circumstances, was justified in dismissing the complaint and hence the impugned order does not call for any interference by this Commission. In the result, this appeal is hereby dismissed without any order as to cost. Appeal dismissed.