STATE BANK OF INDIA Vs. S R BALE

JUDGEMENT

(1.) Nine complainants jointly filed a complaint against the State Bank of India-first opposite party, Sachin Chandi of Andheri of Bombay-second opposite party, Hitesh C. Sanghani-third opposite party and M / s. Otis Elevator Co. (I) Ltd.-fourth opposite party, alleging deficiency in service against the opposite parties. The Maharasthra State Commission by its order dated 4th June, 1993 allowed the complaint and made opposite party Nos. 1 & 2 and 3 jointly and severally liable to pay to the complainants the amounts shown in Table No. 2 of the complaint besides costs of Rs. 500/-. This First Appeal by the State Bank of India is directed against this decision of the Maharashtra State Commission.

(2.) The complainants alleged in the complaint that they had booked various consumer durables as indicated in Table No. I, with the opposite party No. 2 under the "Big Buy Scheme" of the State Bank of India, opposite party No. 1. It is pleaded that Mr. Sachin Chandi and Mr. Hitesh C. Sanghani-opposite party Nos. 2 and 3 represented to the complainants in the month of October, 1990 that they would be able to organise loans for the purchase of consumer durables for the complainants and other employees of Otis Elevators through the State Bank of India's "Big Buy Scheme", that opposite party Nos. 2 and 3 represented to them that they had simply to sign on the forms of the State Bank of India and to hand over the salary slips and rest of the formalities with the opposite party Nos. 1 and 4 would be taken care of by opposite party Nos. 2 and 3, that the opposite party Nos. 2 and 3 also arranged among the employees to sign as guarantors for each other, that the guarantee froms were blank when the signatures of the guarantors were obtained, that the forms presented for the guarantors signatures were only initialled by the loaners and that opposite party Nos. 2 and 3 explained that they were obtaining signatures of the guarantors on the blank forms with a view to expedite formalities with the opposite party Nos. 1 and 4 enabling the second opposite party to deliver the goods to all the complainants latest by Diwali of that year. The complainants were further told that their employer-opposite party No. 4 had agreed to deduct the monthly instalments as fixed by the opposite party No. 1 from the monthly salary and to remit the same to the opposite party No. 1. It is then alleged that having signed all the requisite papers, the complainants were eagerly awiting the delivery of the goods booked by them under the "Big Buy Scheme" prior to Diwali but the opposite party No.. 2 failed to keep up his promise and failed to deliver the goods booked by the complainants. It is further pleaded that in December, 1990 the complainants found that monthly instalments were being deducted from their salary although none of the complainants had received any goods from the opposite party No. 2. The complainants further alleged that they took up the matter with the first opposite party and the fourth opposite party as well as with the second and third opposite parties for cancellation of the loans and for the refund of the instalments deducted by their employer towards the loan. The complainants alleged to have issued several notices and ultimately filed the complaint before the Maharashtra State Commission alleging deficiency in service of the opposite parties and claiming the relief of a direction to the first opposite party to refund the amounts unjustly and unfairly collected from the complainants with interest at the relate of 18% per annum and for a direction to the fourth opposite party to forthwith stop future collections of instalments from the complainants. They also claimed relief of grant of compensation against the opposite parties besides costs of the complaint.

(3.) Notices were issued to the opposite parties. The State Bank of India and M/s. Otis Elevators Co. filed their written versions. The second opposite party and the third opposite party remained absent though duly served. It appears that State Bank of India did not appear on 21st April, 1993 the date fixed for hearing of the complaint and was proceeded ex-parte. The Counsel for the State Bank of India however, made his submissions after the case was closed for orders and the State Commission has recorded this fact. The version of the State Bank of India is that the complainants applied to the Bank for a loan under what is called the "Big Buy Scheme" introduced by the Bank for the purpose of financing money to mostly salaried employees for purchasing high value consumer durables like T. V. sets, VCRs, washing machines etc. The repayment of the advance for the loan was ensured by the concerned employer taking the responsibility for the payment of the agreed instalments to the Bank on behalf of their concerned employees. It is pleaded that in this case the fourth opposite party vide its letter dated 26th July, 1990 wrote to the Bank to extend the said scheme to their employees with various liberalisations. In the said letter it was specifically stated by the opposite party No. 4 that opposite party Nos. 2 and 3 running their business in the name and style of Neelima Enterprises were their authorised dealers to supply consumer durables to their employees. According to the Bank the loans were sanctioned and disbursed by the Bank to the said dealer on behalf of the concerned buyers (complainants) after receiving a number of documents, inter alia, applications from the complainants, hypothecation agreement, guarantee agreement from third party, authority letters singed by the complainants authorising the employer to deduct from their salary the monthly instalments as fixed and to remit the same to the Bank towards repayment of the loan, the copy of the challan of the dealer with the acknowledgement of the complainants-or their family members for having received the consumer durables booked by them with the dealer and the authority letter signed by the complainant to hand over the cheque towards the disbursement of the loan amount to the said dealer. It is then pleaded that the repayment of loan commenced by the opposite party No. 4 remitting to the Bank the instalment amounts deducted by it from the salary of the concerned employees between January, 1991 and March, 1991. It is pleaded that it is only on 18th June, 1991 that the complainants approached the Bank complaining that the goods stated to have been delivered, for which the delivery acknowledgements were given to the Bank, were not in fact executed by the complainants as no goods were received and a request was made to the Bank not to collect the instalments from the opposite party No. 4. It was pleaded that the complainants had filed a complaint with the police alleging fraud by the second and third opposite parties. The Bank pleaded that there was no deficiency in service by the Bank so as to attach the provisions of the Consumer Protection Act, 1986 as the Bank only disbursed the loans to the complainants for the goods purchased and the amount of loan was repayable by instalments after the same was deducted by the 4th opposite party under the authority given by the complainants to their employer.