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Devi Dayal s/o Sh.Puran Chand v. Ujjivan Small Finance Bank
Structured Summary — District Consumer Disputes Redressal Commission, Yamuna Nagar (Complaint No. 253 of 2020)
Factual and Procedural Background
The complainant, Devi Dayal, took a loan of Rs.7,00,000/- from Ujjivan Small Finance Bank by mortgaging property (sale deed Ex.C5). The loan account number was 2291210080000014. The loan was stated to have been sanctioned (opponent's admission) on 21.06.2019 (the complainant pleaded 29.06.2019) and was repayable by monthly instalments of Rs.15,126/-. The complainant paid about 13 instalments; as per the statement of account (Ex.C2) on 17.09.2020 the outstanding balance was Rs.6,69,442/-. The complainant submitted an application for foreclosure (Ex.C3) together with a bank demand draft dated 17.09.2020 for Rs.6,83,146/- (Ex.C4) to discharge the liability. The opponent did not accept the demand draft immediately and did not, at that time, close the account or issue a no dues certificate (NDC) or release the mortgaged property, which prompted the complainant to file the consumer complaint under Section 35 of the Consumer Protection Act, 2019 on 25.09.2020.
Following the complainant's interim application, this Commission directed the opponent to accept the demand draft by order dated 28.09.2020; the opponent accepted the demand draft on 01.10.2020. The Commission's record shows the loan account was closed in early October 2020 (the record reflects closure on 07.10.2020 and an NDC dated 12.10.2020 / letter No. UJJ/OPS/3883/2021 Ex.R3). The opponent contended that certain formalities remained and that the complainant had been requested to sign documents and pay interest as per sanction terms (sanction letter and loan agreement were not on record).
Legal Issues Presented
- Whether the opponent (Ujjivan Small Finance Bank) committed negligence, deficiency in service and/or unfair or restrictive trade practice by not accepting the demand draft dated 17.09.2020 (Ex.C4), not closing the loan account promptly and not issuing the no dues certificate and releasing the mortgaged property, thereby entitling the complainant to relief; and, if so, to what extent.
Arguments of the Parties
Complainant's Arguments (as advanced in the record)
- The complainant submitted Ex.C1 to Ex.C8 in support of his case.
- He paid about 13 monthly instalments; outstanding shown as Rs.6,69,442 on 17.09.2020 (Ex.C2).
- He filed application Ex.C3 for foreclosure and furnished demand draft Ex.C4 for Rs.6,83,146/- to discharge the liability, but the opponent did not accept it, did not close the account, did not issue NOC/NDC and failed to release the mortgaged property, causing negligence, deficiency, mental agony, harassment and financial loss.
- He sought interim direction to the opponent to accept the demand draft; this Commission granted interim relief on 28.09.2020, after which the opponent accepted Ex.C4 on 01.10.2020.
Opponent's Arguments (as advanced in the record)
- The opponent admitted receipt of application Ex.C3 and demand draft Ex.C4 (Para No.5 of written statement) but denied negligence or deficiency.
- The opponent contended that the complainant applied for foreclosure on 31.08.2020 (after expiry of 12 months from sanction dated 21.06.2019) and was requested to sign necessary documents and pay interest as per the sanction letter and loan agreement (neither of which were produced on record).
- The opponent asserted that after completion of required formalities the loan account was closed on 06.10.2020 and a no dues certificate dated 12.10.2020 (Ex.R3) was issued, but the complainant refused to accept it.
- The opponent relied on documents Ex.R1 to Ex.R3 in support of its defence.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Commission examined the pleadings and the documentary record, including Ex.C1–Ex.C8 (complainant) and Ex.R1–Ex.R3 (opponent). Key elements of the Commission's analysis were:
- The Commission noted admissions by the opponent: the loan account existed and receipt of the complainant's application Ex.C3 and the demand draft Ex.C4 were admitted in the written statement.
- The Commission observed factual inconsistencies in the opponent's written statement: although it admitted receipt of Ex.C4, it initially stated non-acceptance on the ground that the complainant had issued the demand draft without a foreclosure request; but Ex.C3 itself requests foreclosure. The Commission treated these statements as self-contradictory.
- The Commission applied the factual premise that when a lender receives full repayment of outstanding dues (here, by demand draft representing the outstanding amount plus dues), the lender is ordinarily bound to close the loan account and issue a no dues certificate and release security. The Commission found no justification recorded by the opponent for refusing to accept Ex.C4 when it represented the outstanding amount.
- On chronology, the Commission recorded that after the interim order dated 28.09.2020 directing acceptance of Ex.C4, the opponent accepted the demand draft on 01.10.2020 and thereafter issued the NDC. The Commission also accepted that a letter (Ex.C8) showing account closure had a typographical date but that the account was in fact closed on 07.10.2020.
- Given the non-acceptance of Ex.C4 until after the Commission's order, the Commission concluded this conduct amounted to negligence and deficiency in service and also constituted unfair and restrictive trade practice and an unfair contract (insofar as the bank refused repayment of debt on payment of applicable penalty). The Commission found this conduct to have caused mental agony, harassment and financial loss to the complainant.
- Considering compensatory and punitive considerations, the Commission determined that punitive/compensatory amounts should be imposed both to compensate the complainant (for mental agony, harassment, financial loss and litigation cost) and to punish/deter the opponent from committing such unfair/restrictive trade practices in future.
- The Commission noted procedural delay in deciding the complaint beyond prescribed time, attributing it to the second wave of COVID-19 and shortage of manpower and infrastructure in the Commission.
Holding and Implications
Holding: The complaint is accepted. The Commission held the opponent liable for negligence, deficiency in service and unfair/restrictive trade practice in connection with non-acceptance of the demand draft Ex.C4 and delay in closing the loan account and releasing the security.
Reliefs and Directions (Direct Effect on Parties):
- The opponent (Ujjivan Small Finance Bank) is directed to pay punitive/compensatory damages of Rs.50,000/- (Rupees Fifty Thousand only) to the complainant within 30 days from the date of order (28.06.2022).
- The opponent is further directed to deposit Rs.25,000/- (Rupees Twenty Five Thousand only) as punitive damages into the Consumer Legal Aid Account, Yamuna Nagar, within 30 days from the date of order.
- If the total amount of Rs.75,000/- (Rs.50,000 + Rs.25,000) is not paid within the stipulated 30 days, it will carry simple interest at 8% per annum from the date of the order until realization.
- The opponent is directed to return the title deeds / sale deed relating to the mortgaged property to the complainant (as referenced in Para No. D(d) of the written statement) within 30 days from the date of the order.
Broader Implications: The order expressly characterizes the opponent's conduct as negligence, deficiency in service and unfair/restrictive trade practice and imposes monetary penalties both for compensation and to punish/deter future misconduct. The opinion does not cite or rely on any precedent and does not state that it is laying down new legal precedent; the effect is primarily remedial and directive as between the parties.
Administrative / Miscellaneous Notes from the Order
- The order records that the complaint was instituted on 25.09.2020 and decided on 28.06.2022.
- The Commission acknowledged delay in disposal attributable to the COVID-19 second wave and internal shortages (clerical/steno staff and infrastructure).
- File was ordered consigned to records. The order is signed by Gulab Singh (President), Geeta Parkash (Lady Member) and Dr. Barhm Parkash Yadav (Member).
BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL
COMMISSION, YAMUNA NAGAR AT JAGADHRI.
Complaint No.: 253 of 2020. Date of institution: 25.09.2020. Date of decision: 28.06.2022. Devi Dayal S/o Shri Puran Chand, R/o VPO Buria, Tehsil Jagadhri, Distt. Yamuna Nagar.
…Complainant.
Versus
Ujjivan Small Finance Bank, Kapoor Complex, Kamani Chowk, Behind Krishana Palace, Jagadhri Road, Yamuna Nagar, through its Branch Manager/authorized signatory.
...Respondent.
CORAM: GULAB SINGH, PRESIDENT.
DR. BARHM PARKASH YADAV, MEMBER.
GEETA PARKASH, LADY MEMBER.
Present: Shri Sunil Kamboj, Advocate for the complainant. Shri Ritesh Goel, Advocate for the opponent.
ORDER:
1. This is a complaint under Section 35 of the Consumer Protection Act, 2019 (for short "Act").
2. Going through the contents of the complaint, supportive documents Ex.C.1 to Ex.C.8, written statement, supportive documents Ex.R.1 to Ex.R.3, briefly, admitted facts of the complaint are, complainant borrowed a loan in the sum of Rs.7,00,000/- from the opponent by mortgaging his property, subject matter of the sale deed Ex.C5, loan account bearing No.2291210080000014
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maintained by the opponent against the complainant. The loan was sanctioned on 21.06.2019 as per own admission of the opponent (whereas, complainant pleaded sanction of loan on 29.06.2019). The loan was repayable by way of monthly installment of Rs.15,126/- each. Complainant paid about 13 installments of the loan and ultimately, as per statement of account Ex.C2, on 17.09.2020, the complainant was in arrears of Rs.6,69,442/- and in order to discharge his total liability, the complainant filed an application Ex.C3 alongwith bank demand draft in the sum of Rs.6,83,146/- Ex.C4, but the opponent did not close his account and had not accepted the demand draft Ex.C4 and also failed to issue no objection certificate in favour of the complainant and also failed to release his property from the mortgage, which according to the complainant was an act of negligence, deficiency in service, causing him mental agony, harassment, financial loss, constraining him to file this complaint.
3. On receipt of notice of the complaint, in its written statement, the opponent has not disputed the version of the complainant to the extent of filing of application Ex.C3 alongwith bank draft Ex.C4, but denied the allegation of the complainant qua any act of negligence, deficiency in service on the ground, on 31.08.2020, after the expiry of the period of 12 months from the date of sanction of loan i.e. 21.06.2019, the complainant applied for foreclosure of the loan. The opponent had requested to him to sign the necessary documents in order to complete the process of foreclosure of loan and also to pay the interest as per the
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terms and conditions mentioned in the sanction letter and the loan agreement (none of the party brought on record sanction letter and loan agreement). The complainant did not pay any heed to the request of the opponent bank and filed the false complaint. After completing all the required formalities, the loan account of the complainant was closed on 06.10.2020 and no dues certificate vide letter dated 12.10.2020 Ex.C3 was issued in favour of the complainant, but he (complainant) refused to accept the NDC.
4. In order to substantiate his version, complainant kept reliance upon documents Ex.C1 to Ex.C8.
5. The opponent, in order to substantiate defence version, kept reliance upon the documents Ex.R1 to Ex.R3.
6. Sh. Sunil Kamboj, Ld. Counsel for the complainant, in the course of arguments, reiterated to the version made into the complaint and apprised the Commission about the evidence adduced on record by the complainant i.e. documents Ex.C1 to Ex.C8
7. Sh. Ritesh Goel, Ld. Counsel for the opponent in his marathon arguments, reiterated to the version made into the written statement and he also apprised the Commission about the evidence adduced on record by the complainant as well as opponent i.e. documents Ex.R1 to Ex.R3.
8. After hearing the ld. Counsel for the parties and baring the anatomy of pleading of both the parties and documents placed on record by both the
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parties, the moot question before this Commission is whether the opponent committed any act of negligence, deficiency in service as well as unfair trade practice, making the complainant entitled to the relief, as prayed or to what extent?
9. Admittedly, the complainant on 31.08.2020 filed an application Ex.C3 with the opponent making prayer to foreclose his loan account. On 17.09.2020, the loan amount in the sum of Rs.6,69,442/- was outstanding against the complainant in favour of the opponent. The complainant alongwith application Ex.C3 also attached demand draft in the sum of Rs.6,83,146/- Ex.C4 in favour of the opponent and the opponent in Para No.5 of the written statement admitted receipt of demand draft Ex.C4 dated 17.09.2020 from the complainant and also admitted its non acceptance on the ground, the complainant issued the demand draft dated 17.09.2020 Ex.C4 in favour of the opponent bank without foreclosure request letter submitting to the opponent bank. The complaint was instituted on 25.09.2020 and at the time of filing of complaint, the complainant filed an application before the Commission for interim relief making prayer to give direction to the opponent to accept the demand draft dated 17.09.2020 Ex.C4. The prayer of the complainant was allowed by this Commission vide order dated 28.09.2020 and in compliance of order dated 28.09.2020, the opponent accepted the demand draft Ex.C4 from the complainant on 01.10.2020, fact is not disputed. The version made by the opponent in the written statement is self contradictory. In
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Para No.2 of the written statement, on merit, the opponent admitted the loan account was joint in the name of complainant and his wife Monika. In para No.5 of the written statement, the opponent admitted the receipt of application Ex.C3 for foreclosure of loan account alongwith demand draft dated 17.09.2020 Ex.C4 and in the same paragraph in the last two lines from bottom to top, the opponent stated the complainant issued demand draft dated 17.09.2020 Ex.C4 to the opponent bank without foreclosure request letter to the opponent bank. Whereas, in application Ex.C3, it has clearly been mentioned the complainant intended to foreclose his loan account. Assuming, as stated by the opponent that in order to complete the necessary formalities, the complainant refused to sign certain documents. Then, the question arises, why the opponent failed to accept the demand draft in the sum of Rs.6,83,146/- Ex.C4. When the opponent has received entire outstanding loan amount, it was bound to close the loan account even if, there was no request from the complainant regarding this. There was no justification on the part of the opponent to deny the acceptance of demand draft Ex.C4, it from the facts of the case is clear. It mean, the bank was bent on to harass the complainant with the intension to cause him financial loss and for the purpose of earning more interest on the loan amount. The opponent accepted the demand draft Ex.C4 by the order of this Commission on 01.10.2020 and thereafter, after receiving the installment in the month of October, 2020, the opponent issued NDC vide letter No.UJJ/OPS/3883/2021 dated 12.10.2020 Ex.R3
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in favour of the complainant. During the course of argument, complainant brought on record Ex.C8 dated 10.08.2020, which also proves the loan account of complainant was closed on 07.10.2020. The contents of this letter have not been disputed by the counsel for the opponent except its date. The date 10.08.2020 Ex.C8 appears to be a typographical mistake and it is established on the record the loan account of the complainant has been closed on 07.10.2020.
10. The non-acceptance of the demand draft dated 17.09.2020 Ex.C4 from the complainant by the opponent is an act of negligence, deficiency in service to earn more interest on the loan amount and it was accepted on 01.10.2020 by the opponent only after passing order dated 28.09.2020 by this Commission. The non-acceptance of demand draft Ex.C4 promptly by the opponent with malafide intension to earn interest also amounts to unfair as well as restrictive trade practice on its part. Refusing to accept repayment of debts on payment of applicable penalty also amount to unfair contract. The act of gross negligence, deficiency in service, on the part of the opponent caused mental agony, harassment, financial loss and constrained him to file the complaint, for it, the opponent deserved to be burdened with punitive damages to compensate the complainant in all heads such as mental agony, financial loss, harassment, cost of litigation and this Commission is of the firm view, in case, punitive damages in the sum of Rs.50,000/- (Rupees Fifty Thousand) only awarded against the opponent to compensate the complainant in all heads, it will suffice the purpose
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and end of justice will meet. Apart from it, the opponent bank is also liable to be punished for its act of unfair and restrictive trade practices. This Commission is of the firm view, in case, punitive damages to punish the opponent so that in future, it should not commit any such unfair, restrictive trade practice and this Commission is of the firm view, in case, punitive damages in the sum of Rs.25,000/- (Rupees Twenty Five Thousand) only are awarded against the opponent to punish then, it will suffice the purpose and end of justice will meet.
11. Hence, due to the reasons stated hereinbefore, complaint is accepted, holding the opponent liable to make payment of punitive damages in the sum of Rs.50,000/- (Rupees Fifty Thousand only), to the complainant to compensate him in all heads. Apart from it, the opponent is also burdened with penalty in the form of punitive damages for its act of unfair, restrictive trade practices, in the sum of Rs.25,000/- (Rupees Twenty Five Thousand Only) and the amount of this Rs.25,000/- (Rupees Twenty Five Thousand Only) shall go into the head of Consumer Legal Aid Account Yamuna Nagar. The opponent bank is directed to make payment of punitive damages in the sum of Rs.50,000/- (Rupees Fifty Thousand Only) to the complainant within the period of 30 (Thirty) days from the date of order and further deposit an amount of Rs.25,000/- (Rupees Twenty Five Thousand Only) in the head of Consumer Legal Aid Account Yamuna Nagar within the period of 30 (Thirty) days from the date of order, in default of it, the total amount mentioned under both the heads (Rs.50,000/- + Rs.25,000/- =
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Rs.75,000/-) shall carry on simple interest @8% per annum from the date of order till its actual realization. The opponent is also directed to return the title deeds or sale deed to the complainant qua the property mentioned in the Para No. D(d) of the written statement within the period of 30 days from the date of the order.
12. Before parting with this order, it is pertinent to mention here that the complaint has not been decided within the prescribed period of limitation of time. History of proceedings show, second wave of COVID-19 became stumbling block in the timely disposal of the complaint. Apart from it, there is a shortage of manpower in the Commission such as Clerks and Stenos as well as requisite infrastructure.
13. File be consigned to the records. Dated: 28.06.2022.
(Gulab Singh)
District & Sessions Judge (VRS) (Geeta Parkash) (Dr. Barhm Parkash Yadav) President, Lady Member. (Member). DCDRC, YNR.
Typed by: Jitender Sharma, Steno.
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