CHAIRMAN & MANAGING DIRECTOR INDIAN OVERSEAS BANK AND ORS Vs. CHIEF MANAGER INDIAN OVERSEAS BANK AND ORS

JUDGEMENT

(1.) This revision petition challenges the order dated 21.07.2006 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:

(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.1 lakh as collateral security for the small loan account of Rs.1.29 lakh. The complainant agreed to deposit the aforesaid sum of Rs.1 lakh before 27.03.2004 as "substituted security". However, instead of separately depositing Rs.1 lakh by 27.03.2004, the complainant deposited Rs.97,000/- in his savings account on 29.03.2004, creating a credit balance of Rs.1,01,892.70 in that account. The Bank marked a lien on Rs.1 lakh out of the above credit balance in the savings account because the complainant was required to keep a security of Rs.1 lakh with the Bank against his small loan account. On 30.03.2004, 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.1 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 25.02.2004 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.