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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
Anupam Dasgupta, Presiding Member and Suresh Chandra, Member
INDIAN OVERSEAS BANK AND ANR. - Appellants
Versus
N. DEVADAS PAKKALA - Respondent
Revision Petition No. 2880 of 2006 against Order dated 21.7.2006 in Appeal No. 1823 of 2004 of Karnataka State Consumer Disputes Redressal Commission, Bangalore
Decided on : 06-08-2012
Mr. S.S. Saluja, Advocate, for the Appellant; Mr. B.S. Sharma and Mr. V.B. Bhandarkar, Advocates, for the Respondent
The main legal point established in the judgment is the obligation of the complainant to fulfill the written undertaking and the bank's right to create a lien on the savings account balance for the substituted security.
Headnote:
Deficiency in Service - Banking Dispute - [Consumer Protection Act, 1986, Section 2(1)(g), Section 2(1)(o), Section 2(1)(r), Section 2(1)(u), Section 2(1)(g), Section 2(1)(o), Section 2(1)(r), Section 2(1)(u), Section 21, Section 27] - The court discussed the deficiency in service on the part of the bank, the complainant's failure to fulfill the written undertaking, and the fraudulent attempt to evade responsibility. The court's decision was influenced by the interpretation of the complainant's actions and the bank's obligation to inform the complainant of creating a lien on the savings account balance for the substituted security.
Fact of the Case:
The complainant filed a consumer complaint alleging deficiency in service by the bank for returning a cheque unpaid due to a lien on the savings account balance. The bank denied the allegations and stated that the action was necessary due to the complainant's failure to deposit the collateral security for his small loan.
Finding of the Court:
The State Commission allowed the appeal, finding deficiency in service on the part of the bank and awarded compensation to the complainant. However, the revision petition set aside the State Commission's order, citing the complainant's failure to fulfill the written undertaking and a fraudulent attempt to evade responsibility.
Issues: The issues revolved around the bank's actions in creating a lien on the savings account balance, the complainant's failure to fulfill the written undertaking, and the alleged deficiency in service.
Ratio Decidendi: The court found that the complainant's actions constituted a fraudulent attempt to evade responsibility and upheld the bank's actions in creating a lien on the savings account balance. The court also emphasized the complainant's failure to fulfill the written undertaking.
Final Decision: The revision petition was allowed, setting aside the State Commission's order, and the parties were left to bear their own costs.
ORDER
Anupam Dasgupta, Presiding Member - This revision petition challenges the order dated 21.7.2006 of the Karnataka State Consumer Disputes Redressal Commission, Bangalore (in short, the State Commission ) in Appeal No. 1823 of 2004. By this order, the State Commission allowed the appeal filed by the complainant (respondent in this revision petition), set aside the order dated 17.11.2004 of the Bangalore Urban District Consumer Disputes Redressal Forum, Bangalore (in short, the District Forum ) in complaint case No. 637 of 2004. The operative part of the State Commission's order reads as under:
"Appeal is allowed.
Impugned order is set aside.
The complaint filed by the complainant is allowed in part.
The OPs are jointly and severally liable to pay Rs. 5,000 as compensation to the complainant within two months from today.
In the event if the OPs failed to pay the amount of Rs. 5,000 within two months as directed above, the OPs are directed to pay interest at 6% per annum on the said sum of Rs. 5,000 from the date of the complaint filed before the DF till realization.
The parties are directed to bear their own costs in this appeal."
2. It is an admitted position that the respondent/complainant had five accounts with the petitioner Bank's branch at Residency Road, Bangalore. Two cash credit accounts and one housing loan account were closed in 2004 and two accounts (a small loan account of Rs. 1.5 lakh and Savings Account No. 6047) were in operation. The complainant's housing property situated at No. 18, Purushothama Road, Ulsoor, Bangalore was offered and accepted as collateral security for both the housing loan and the small loan account of Rs. 1.5 lakh. However, at the request of the complainant on closure of the housing loan account, the title deeds of the aforesaid house (which, as stated above, was also concurrently hypothecated to the Bank as security for the housing loan account No. 350000003) were released and handed over to the complainant on the condition that he would deposit Rs. l lakh as collateral security for the small loan account of Rs. 1.29 lakh. The complainant agreed to deposit the aforesaid sum of Rs. l lakh before 27.3.2004 as "substituted security". However, instead of separately depositing Rs. l lakh by 27.3.2004, the complainant deposited Rs. 97,000 in his savings account on 29.3.2004, creating a credit balance of Rs. 1,01,892.70 in that account. The Bank marked a lien on Rs. l lakh out of the above credit balance in the savings account because the complainant was required to keep a security of Rs. l lakh with the Bank against his small loan account. On 30.3.2004, however, the complainant issued cheque No. 756566 for Rs. 95,000 in favour of his wife. The Bank returned this cheque unpaid on the same day in view of the Bank lien of Rs. l lakh on the credit balance in the savings account, towards collateral security of the small loan account.
3. Aggrieved by the action of the petitioner bank, the complainant filed a consumer complaint before the District Forum on 25.2.2004 alleging deficiency in service on the part of the bank and praying for award of compensation of Rs. 2 lakh towards loss, damage and injury alleged to have been suffered by him with interest @ 18% per annum as well as cost of legal proceedings.
4. The petitioner/OP/Bank denied the allegations in its written version and stated that the Bank was constrained to return the cheque dated 30.3.2004 unpaid on account of the lien for Rs. l lakh that had to be created by the Bank on the credit balance in the complainant's savings bank account for the latter's failure to separately deposit the collateral security for his small loan.
5. On appraisal of the pleadings and evidence brought on record, the District Forum dismissed the complaint by its order dated 17.11.2004.
6. Aggrieved by this order, the complainant filed an appeal before the State Commission with the result stated above.
7. We have heard Mr. S.S. Saluja, learned Counsel for the petitioner Bank and
