Govind Jana Vs. the Branch Manager Indusind Bank Ltd.

Oral Order: (R. Lakshminarasimha Rao, Member)

1. The unsuccessful complainant is the appellant.

2. The appellant filed complaint stating that he obtained loan of Rs.192,134/- on 24.6.2004 repayable in regular instalments. The appellant cleared the loan on 13.6.21008. Thereafter, the appellant on 13.6.2008 obtained a fresh loan of Rs.1,15,000/- from the respondent by pledging the Maruti Alto Car No.AP 13H 3133 repayable in equal instalments of Rs.4022/- per month. The respondent obtained five post-dated cheques from the appellant and for balance instalment amount the respondent has obtained Electronic Cleaning Service Authority letter of appellant on the appellant bank. The respondent instead of sending monthly ECS letters to the bank has sent ECS for three months on the wrong name of the appellant. The respondent has sent the ECS on the name of Govind Dnyanoba Jain instead of Govind Dnyanoba Jana. The Bank viz., Canara Bank has returned the ECS to respondent with an endorsement name differs. Due to the negligence of the respondent, the appellant forced to pay late payment charges, return charges and legal charges at Rs.18,294/-. The appellant paid the entire loan amount on 3.11.2010. The respondent failed to issue No Objection Certificate inspite of paying the entire loan amount. Due to not issuing the NOC the appellant is unable to sell his car.

3. The respondent resisted the case contending that as per clause 23 of the Loan Agreement any dispute/differences arising out of the loan agreement has to be decided by the Arbitrator. The complaint is not maintainable against the respondent since there is no consumer relationship between the appellant and the respondent as the appellant is a borrower and respondent is a lender. Due to delay in submission of the requisite documents for processing of the hypothecation agreement, the EMIs dated 7.7.2008 and 7.8.2008 were presented on 7.8.2008 and the same was informed to the appellant for honouring the same cheques. The ECS presentations were dishonoured with the reason of “insufficient Funds”.

4. The name of the customer Govind Dnyanoba Jana was mistakenly entered as Govind Dnyanoba Jain while in presentation of ECS mandate. It is typographical error. The ECS were not returned with the reason of Accountant Name Differs, they were returned with the reason of insufficient funds alone. The appellant paid periodically and submitted current Account Post Date cheques for the balance instalments and the same were presented from 7.10.2009 vide cheque bearing Nos.680582 to 680591 series and 771137 series of Canara Bank. Pathergatty Branch Hyderabad. On being presented of for realisation of the instalments, 7 cheques were dishonoured with a reason of exceeds arrangement. As per the agreement in first schedule of dishonouring of every cheque, customer need to pay of cheque dishonoured charges and service tax as well as interest for the delayed payments. The respondent issued notice u/s 138 of NI Act and filed the complaint before the VIII Addl.Chief Metropolitan Magistrate at Nampally Hyderabad vide CC NO.324 of 2010 after clearing of the dishonoured cheque amount the complaint was withdrawn. On 9.12.2010 the appellant has received NOC from the respondent.

5. The appellant filed his affidavit and the documents Exs.A1 to A15 and on behalf of the respondent, its Legal Executive filed his affidavit and the documents Exs.B1 to B17.

6. The District Forum dismissed the complaint on the premise that as the cheques were dishonoured for want of sufficient funds the respondent justified in levying the penal charges as per their banking norms and that NOC cannot be issued without verifying the records.

7. Aggrieved by the order of the District Forum, the appellant has filed appeal contending that the respondent-bank failed to deposit every month the cheques issued by him and the respondent-bank had sent the ECS in the name of Govind Dnyanoba Jain instead of sending them in the name of the appellant. It is contended that ECS was returned as the name of the appellant was not tallied and that the cheques and ECS were returned due to negligence of the respondent-bank and as such the appellant is not liable to pay penal charges of Rs.18,294/-.

8. The point for consideration is whether the appellant is not liable to pay penal charges to the respondent-bank collected due to bouncing of ECS and 6 cheques?

9. It is beyond any dispute that the appellant availed loan amount of Rs.1,15,000/- on 13.06.2008 by pledging his Maruti Car bearing number AP36 H 3133 to the respondent-bank and the loan amount was agreed to be repayable @ Rs.4,022/- per month in 36 months. It is not disputed that at the time of obtaining loan, the appellant issued 5 blank cheques and letter authorizing the respondent-bank to avail Electronic Service Clearance for clearance of balance 31 installments.

10. The Statement of Account dated 20.06.2008 of the appellant would show that the cheques dated 9.08.2008, eight had been returned unpaid. Extract of Item wise Destination Ledger dated 11.09.2008 establish the name of Govind Dnyancoba Jain as the account holder bearing account number 0608111044325. At the bottom of the ledger it is mentioned that undebited items have to be returned to the service branch and the service charges should not be collected from the customers. The note reads as under:

“Please return undebited items to service branch along with return memo. No service charge to be recovered from customers. For debited items please indicate the name of the user institution (in brief) in ledger and pass-book entry”.

11. Statement of Account dated 22.03.2011 indicated two items bearing numbers 2041285815 and 2041285816 for Rs.4,0222.00 each are undebited though the name of the appellant is mentioned as Govind Dnyandoba Jana. Thus, it can be said that the cheques were not honoured as there was no sufficient funds in the account of the appellant and in regard to the ECS, except the aforementioned two items, the other items contain the name of Govind Dnyancoba instead of the name of the appellant. The cause for the return of the ECS according to the respondent is the insufficient fund in the account of the appellant. The wrong mention of the above mentioned two items of the ECs contributed to their being returned.

12. The respondent except stating that NOC was to be issued within 45 days, it has not adduced evidence in this regard. After the appellant paid the entire loan amount, the respondent –bank issued the NOC after a period of 36 days which is not justified in absence of any guidelines or norms. The appellant claims for refund of Rs.18,294/- towards penal charges demanded by the respondent-bank. The appellant cannot be oblivious of the fact that the cheques and most of the ECs were returned on account of insufficient funds in his bank account.

13. The Honble Supreme Court in “State of Gujarath vs Shantilal Mangaldas” AIR 1969 SC 634. held the compensation to mean”…..In ordinary parlance the expression compensation means anything given to make things equivalent; a thing given to or to make amends for loss recompense, remuneration or pay, it need not therefore necessarily in terms of money. The phraseology of the Constitutional provision also indicates that compensation need not necessarily be in terms of money because it expressly provides that the law may specify the principles on which, and the manner in which , compensation is to be determined and given . If it were to be in terms of money along, the expression ‘paid would have been more appropriate”.

14. The Supreme Court held that the compensation to be awarded is to be fair and reasonable. In “Charan Singh vs Healing Touch Hospital and others” 2000SAR(Civil) 935 the Apex Court stressed the need of balancing between the compensation awarded recompensing the consumer l and the change it brings in the attitude of the service provider. The Court held “While quantifying damages , consumer forums are required to make an attempt to serve ends of justice so that compensation is awarded, in an established case, which not only serves the purpose of recompensing the individual, but which also at the same time aims to bring about a qualitative change in the attitude of the service provider. Indeed calculation of damages depends on the facts and circumstances of each case. No hard and fast rule can be laid down for universal application. While awarding compensation, a Consumer Forum has to take into account all relevant factors and assess compensation on the basis of accepted legal principles, on moderation. It is for the Consumer Forum to grant compensation to the extent it finds it reasonable, fair and proper in the facts and circumstances of a given case according to established judicial standards where the claimant is able to establish his charge”.

15. The respondent-bank is held to the extent of wrong mentioning of the appellants name in two ECs and for not issuing the NOC within reasonable time and not sending the cheques every month for which we hold the appellant entitled to Rs.5,000/- towards compensation.

16. In the result, the appeal is allowed setting aside the order of the District Forum. Consequently, the complaint is allowed. The opposite party is directed to pay an amount of Rs.5,000/- towards compensation and Rs.2,000/- towards costs. Time for compliance four weeks.