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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
B.N.P. Singh, Presiding Member and S.K. Naik, Member
BANK OF INDIA, GOMOH - Appellant
Versus
RADHA NATH SINGH AND ANR. - Respondents
Revision Petition No. 1467 of 2006 against Order dated 21.11.2005 in Appeal No. 377 of 2004 of Jharkhand State Consumer Disputes Redressal Commission, Ranchi
Decided on : 26-05-2010
Mr. Harsh Aggarwal, Proxy Counsel for Mr. Vivek Kumar Tandon, Advocate, for the Appellant; Mr. C.P. Saw, Advocate, Mohd. Parvez, Advocate, for the Respondent
The central legal point established in the judgment is the requirement for the bank to consult the borrower before remitting the working capital to a third party, and the equity in restricting the borrower's liability for non-receipt of the residual loan amount.
Headnote:
Delay Condonation - Loan Disbursement - Prime Minister's Rozgar Yojna - [Consumer Protection Act, 1986 - Section 21, Limitation Act, 1963 - Section 5] - The court discussed the delay in filing the revision petition and the reasons for condoning the delay. It also examined the loan disbursement under the Prime Minister's Rozgar Yojna and the actions of the bank in remitting the working capital amount to a third party without the borrower's consent. The court highlighted the normal practice of crediting the working capital into the loan account of the beneficiary and the requirement for the bank to consult the borrower before sending the amount to a dealer/supplier. The court also addressed the issue of limitation and the continuing cause of action, emphasizing the equity in restricting the borrower's liability for non-receipt of the residual loan amount.
Fact of the Case:
The respondent/complainant took a loan under the Prime Minister's Rozgar Yojna for running an auto parts shop. The bank released two instalments, but the second instalment was remitted to a third party without the borrower's consent, resulting in the wastage of the first instalment. The complainant filed a complaint seeking repayment of the loan amount, damages, and the return of academic certificates. The bank's appeal was dismissed by the State Commission on the ground of delay.
Finding of the Court:
The court found that the bank's actions frustrated the borrower's attempts to seize the opportunity of the government scheme for self-employment. It highlighted the departure from the normal practice in remitting the working capital to a third party without the borrower's consent. The court also addressed the issue of limitation and the continuing cause of action, emphasizing the equity in restricting the borrower's liability for non-receipt of the residual loan amount.
Issues: Delay condonation, loan disbursement, borrower's consent, limitation, continuing cause of action, equity in restricting borrower's liability.
Ratio Decidendi: The court held that the bank's departure from the normal practice in remitting the working capital to a third party without the borrower's consent was unjustified. It also emphasized the equity in restricting the borrower's liability for non-receipt of the residual loan amount.
Final Decision: The court set aside the State Commission's order and disposed of the revision petition in favor of the borrower, restricting the borrower's liability for non-receipt of the residual loan amount.
ORDER
B.N.P. Singh, Presiding Member - There has been delay of 13 days in filing revision petition, for which an application for condonation of delay has been filed by petitioner and for the reasons stated therein, the delay is hereby condoned.
2. Respondent No. 1/complainant had taken a loan of Rs. 50,000 from the petitioner/opposite party/Bank under the Prime Minister's Rozgar Yojna for running auto parts shop. Two instalments of Rs. 20,000 and Rs. 27,000 were released by the petitioner/ Bank. While after the pre-sanction inspection the first instalment was disbursed to the complainant for arranging furniture, signboard, etc., the second instalment was released after the post-sanction inspection directly to the respondent No. 2 (M/s. Deepak Agency) by demand draft for sending auto parts to the complainant, under intimation to the complainant that he may contact the respondent No. 2 for getting the auto parts. The respondent No. 2 neither supplied the goods nor returned the draft to the petitioner/Bank, resulting in wastage of amount of first instalment of Rs. 20,000.
3. In this background, the respondent No. 1/complainant filed a complaint before the District Consumer Forum, Dhanbad (District Forum for short), praying for amount of Rs. 85,000 towards repaying the loan amount, damages, mental agony and physical harassment as well as for direction to the petitioner/Bank to return all his academic certificates which were kept by them at the time of sanctioning the loan in his favour. When notice was issued by the District Forum to the petitioner/Bank through courier, they refused to accept the same and on the basis of the report to that effect the District Forum proceeded to dispose of the complaint after hearing the learned Counsel for the respondent No. 1/complainant. The respondent No. 1/complainant contended before the District Forum that the petitioner/Bank in collusion with the respondent No. 2 (M/s. Deepak Agency) had sent the DD of Rs. 27,000 to the respondent No. 2 without his consent, just for extracting commission. The District Forum having admitted the contention of respondent No. 1/complainant in absence of any reply on behalf of the petitioner/opposite party/Bank and observing their improper action in not taking any action for recovery of Rs. 27,000 from the respondent No. 2 held them to be guilty of taking commission and directed them to pay to the respondent No. 1/complainant a sum of Rs. 85,000 within 30 days from the date of the order i.e. 3.6.2004, failing which the said amount was directed to carry interest @ 12% p.a. from 1.9.2003 till the date of actual payment. Against the order of the District Forum, the petitioner/opposite party/Bank filed a time-barred appeal before the Jharkhand State Consumer Disputes Redressal Commission (State Commission for short). The petitioner/ Bank alleged that they had not received any notice from the District Forum and could know about the complaint only on 9.7.2004 when they received a copy its order dated 3.6.2004. Upon receipt of that order, the Bank Manager concerned inspected the records of the case at the District Forum on 12.7.2004 and found that the case was proceeded ex parte against them on the basis of a report which stated that they had refused to accept the notice sent by the District Forum through courier. After getting sanction/approval from the appropriate authorities and engaging a lawyer to pursue the matter, the petitioner/opposite party/Bank filed an appeal before the State Commission along with delay condonation application. The State Commission while passing its order dated 21.11.2005 observed that no sufficient cause had been made out for condoning the delay and as such dismissed the appeal of the petitioner/opposite party/Bank on the ground of limitation. Hence, this revision petition by the petitioner/opposite party/Bank.
4. The grounds on which the learned Counsel for the petitioner/Bank attempts to find fault with the impugned order are that the State
