STATE BANK OF INDIA Vs. JAI NARAIN SHARMA

JUDGEMENT

(1.) This appeal has been filed by the State Bank of India against the judgment and order dated 15.7.1994 passed by District Consumer Forum, Kanpur Nagar in Complaint Case No.425/1992.

(2.) The facts of the case stated in brief are that the complainant Sri Jai Narain Sharma had taken a loan of Rs.60,000/- from State Bank of India for purchase of a Fiat Car. Accordingly Fiat Car No. UMT-1641 was purchased by the complainant. The entire money consisting of loan and the interest accrued thereon was paid back to the bank. As per rules of the bank, the car was hypothecated to the State Bank of India and the papers relating to the vehicle were also in the possession of the said bank. As per the agreement, when the entire loan was cleared all the papers in regard to the vehicle should have been released by the bank and information to this effect should have been sent to the R. T. O. , Kanpur, complainant had been repeatedly requesting the opposite party for release of the papers and letter of release to the R. T. O. , Kanpur but to no avail. After the loan was repaid, the bank had no right to retain the papers of the complainant as a charge inasmuch as the charge of the bank was over immediately after the loan was repaid. The complainant sold the car in question to one Sri Shukla but the transfer of the same could not be made on account of the fact that the b ank continued to keep the papers of car. This has resulted into the illegal and unwarranted harassment of the complainant resulting into his mental torture and the bank is liable to pay the compensation. The complainant, therefore, lodged a complaint with the District Consumer Forum for awarding compensation of Rs.15,000/- and for directing the opposite party to release all the papers in respect of the Fiat Car.

(3.) The case of the opposite party before the District Consumer Forum was that the opposite party had given a loan of Rs.60,000/- to the complainant for purchase of Fiat Car. The opposite party admitted that the amount of loan alongwith the interest has been repaid by the complainant but the complainant is a partner in the firm, M/s. B. L. Industries and the opposite party had also given loan to the said firm. The complainant had guaranteed the repayment of the loan and dues outstanding against the said firm, M/s. B. L. Industries. The said firm committed a default in payment of bank dues and, therefore, the opposite party filed a Suit 1029/87, The State Bank of India V/s. M/s. B. L. Industries, which is pending in the Court of Addl. District Judge. Since the complainant is liable to pay the bank's dues not only as a partner but also as a guarantor of the loan to M/s. B. L. Industries, the bank had a legal right to exercise its charge/lien over the assets of the complainant which are with the bank and, therefore, the vehicle cannot be released in favour of the complainant. The bank had a charge on the said vehicle and any such transfer by the complainant is illegal and not binding on the bank. The RTO has rightly not transferred the vehicle to the alleged purchaser.