Mr. Kumar Gowda, Member—This is a complaint under Section 17 of the Consumer Protection Act, 1986. The claim of the complainant is that he had obtained a loan availing over- draft facility upto a sum of Rs. 15,000/- with opposite party No. 1-Canara Bank under loan account No. VSL. 136/91. As a security for the due payment of the loan, the complainant had pledged four L.I.C. policies with the 1st opposite party-Bank. The policies given in security were as follows:

S. No. Policy No. Sum assured.

1. 61175288 Rs. 10,000/-

2. 64292132 Rs. 10,000/-

3. 73986701 Rs. 25,000/

4. 73986702 Rs. 25,000/-

Total S.A. Rs. 70,000/-

The sum assured under the above policies was a total sum of Rs. 70,000/- and on maturity the complainant would have received more than Rs. 1,50,000/ - by way of bonus and other benefits declared by the 2nd opposite party-The Life Insurance Corporation of India. On 26.2.92, the 1st opposite party wrote a letter to the complainant that he was due in a sum of Rs. 12,159/- out of which Rs. 6,394/- was over due. The 1st opposite party-Bank in a high-handed manner and without affording an opportunity to the complainant has surrendered all the four L.I.C. policies, which was unnecessary for discharging the amount of Rs. 12,159/- due to the 1st opposite party-Bank. On surrendering the 4 polices, the 1st opposite party-Bank has received a sum of Rs. 39,107.50 but has not furnished any statement of account to the complainant as to the amount received from each of the policy surrendered to L.I.C. for premature payment. After the surrender, the 1st opposite party-Bank has withheld the amount so realised on the ground that the complainant was a co-obligant to one Sri. N.R. Patil and he having not discharged the loan, the amount belonging to the complainant is withheld. This action of the 1st opposite party is unlawful and opposed to law. Thus there has been deficiency in service on the part of the 1st opposite party-Bank in surrendering all the four L.I.C. policies for recovery of a meagre sum of Rs. 12,159/-. The 2nd opposite party-Life Insurance Corporation of India, from whom the complainant had taken the four L.I.C. policies, before permitting premature encashment has failed to inform the complainant about the surrendering of the L.I.C. policies by the 1st opposite party- Bank. Thus the 2nd opposite party has also failed to notice that the face value of all the 4 L.I.C. policies was Rs. 70,000/ - which had been pledged with the 1st opposite party-Bank and the 1st opposite party wanted to surrender the said policies to recover the loan amount of Rs. 12,159/- only. Thus the 2nd opposite party has failed in its service to the policy holders and thereby there is deficiency in service. The complainant got issued a notice on 27.1.93 calling upon the 1st opposite party-Bank to make good the loss suffered by the complainant on account of the premature encashment of the policies. The 1st opposite party-Bank by its letter dated 24.2.93 has stated that the direct and indirect liability of the complainant amounted to Rs. 37,714.75 and the amount realised by surrendering the policies is adjusted towards the direct and indirect liability of the complainant. In the end the claim of the complainant is that on the maturity of the L.I.C. policies he would have got more than Rs. 1,50,000/- on all the four L.I.C. policies surrendered by the 1st opposite party-Bank. Hence he seeks for compensation in a sum of Rs. l,50,000/-for the loss suffered by him alongwith 18% interest and any other, relief this Authority may feel just and proper.

2. The 1st opposite party Canara Bank has filed its version admitting that the complainant had given the four L.I.C. policies of the face value of Rs. 70,000/- as security for his overdraft account to a sum of Rs. 15,000/-. The complainant being a defaulter and his conduct of the account being was not satisfactory, the running of over- draft account was converted into a single trans- action VSL. account on 12.6.91 and