STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH. First Appeal No.359 of 2007

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1 STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH. First Appeal No.359 of 2007 Date of institution : Date of decision : The Ferozepur Primary Co-operative Agriculture Development Bank Ltd, Ferozepur through its Manager. Versus Appellants 1. Jugraj Singh son of Shri Maghar Singh, resident of Talwandi Bhai, Tehsil & District Ferozepur. 2. Gurjeet Engineering Works, Nava Bus Stand, Talwandi Bhai, District Ferozepur through Amarjeet Singh Proprietor. Before:- Present:- Respondents First Appeal against the order dated passed by the District Consumer Disputes Redressal Forum, Ferozepur. Hon ble Mr.Justice S.N.Aggarwal, President. Sh.Baldev Singh Sekhon, Member For the appellants : Sh.D.K.Kaushal, Advocate. For respondent no.1 : Sh.N.K.Manchanda, Advocate. For respondent No.2 : Ex-parte. BALDEV SINGH SEKHON, MEMBER This order will dispose of two appeals namely FA No. 359 of 2007 (The Ferozepur Primary Co-operative Agriculture Development Bank Ltd. VS. Jugraj Singh and others) and FA No. 374 of 2007 (Surinder Kumar Vs. Jugraj Singh). These appeals are directed against the same impugned order dated passed by District Consumer Disputes Redressal Forum, Ferozepur (in short District Forum ). 2. The facts have been taken from FA No. 359 of 2007 and parties have been referred to as per the status in this appeal. 3. Briefly stated, the facts of the case are that Sh. Jugraj Singh complainant-respondent No. 1 (herein after called the respondent ) is a

2 First Appeal No. 359 of small Farmer having land measuring 37 kanals 16 marlas situated at Talwandi Bhai and was earning his livelihood through this land. The respondent No. 1 wanted to supplement his income. So he intended to buy a tube well boring machine for using with the help of his sons and for that purpose, he approached the appellant bank for raising loan for the boring machine. The appellants agreed to the proposal and the respondent obtained a quotation for Rs. 5,50,000/- from respondent No. 2 for the purchase of boring machine. He paid Rs. 50,000/- to the respondent No. 2 and applied for loan of Rs. 5 lacs to the appellants. 4. It was pleaded that the respondent was made to sign on number of papers by the appellants and it was assured by the appellant bank that the respondent can take the delivery of the machine in the month of April, 2005 and in the meantime the necessary loan would also be sanctioned. 5. It was further pleaded that in the month of April, 2005 the respondent approached the respondent No. 2 to take the delivery of the machine but he was told that since the machine of best quality was not ready, he was asked to come again after 15 days. The respondent enquired about the loan from the appellants but it was told that the loan would be sanctioned after the manufacturing of the machine, otherwise the respondent would be burdened with un-necessary interest. Thereafter, the respondent visited respondent No. 2 a number of times but in the month of May, 2005 it was told that the season of the boring machine had expired so the respondent can take delivery in the month of November, In the month of November, 2005 again respondent went to respondent No. 2 but the matter was again kept on lingering pleading that the best quality of machine was not ready. Ultimately, in the month of January, 2006 the respondent asked respondent No. 2 to return the amount of Rs. 50,000/- if he cannot manufacture the machine. The respondent No. 2 has neither returned the amount nor delivered the machine to the respondent.

3 First Appeal No. 359 of It was further pleaded that an undated notice was sent by appellants in which the respondent was asked to pay an amount of Rs.1.50 lacs on account of three un paid installments towards the loan sanctioned by the appellants. The respondent immediately approached the appellants and told that the respondent No. 2 had not delivered the machine till today and therefore, on what account the respondent was required to pay the installments. But the appellants informed the respondent that the loan to the tune of Rs. 5 lacs had already been sanctioned by mortgaging the land of respondent and the appellants had already sent a cheque No dated to the respondent No. 2. The respondent inquired how the appellants sanctioned the loan without verifying the delivery of the boring machine. It was further pleaded that the appellants and respondent No. 2 had joined hands with each other to cheat and defraud the respondent which amounted to unfair trade practice and deficiency in service. Hence the complaint before the District Forum for directing respondent to refund Rs.50,000/- with interest and compensation and further directing the appellants not to recover the loan amount. 7. Inspite of service of notice, the respondent No. 2 did not appear before the Ld. District Forum and therefore was proceeded against exparte. 8. The appellants filed a written statement in which it was pleaded that a cheque dated bearing No of Rs. 5,00,000/- lacs was given to the respondent NO. 2 and before issuing of the said cheque a bill of Rs. 5,00,000/- was submitted by the respondent to the appellant Bank on wherein it was agreed that boring machine will be delivered by respondent No.2 by It was further pleaded that on inspection of the file, it was found that respondent had already given an application intimating that he had not

4 First Appeal No. 359 of received the boring machine. A sum of Rs. 5 lacs as principal amount and Rs. 62,384/- as interest was payable by the respondent on It was further stated that the loan was advanced to the respondent when he mortgaged the land in favour of the appellant bank for the purpose of raising the loan. A quotation was submitted by the respondent No. 2 through the respondent whereby he agreed to deliver the machine by It was further pleaded that the amount was paid to the respondent No. 2 through cheque as per the instructions of the respondent to the appellants and therefore, the appellant bank is entitled to recover the amount advanced by it. Even the receipt of the cheque was signed / witnessed by respondent. 12. Parties filed their respective evidence by way of affidavits and documents. 13. Learned District Forum, after going through the pleadings of the parties and evidence on record, accepted the complaint of the complainant-respondent with Rs. 5000/- as cost against respondent No. 2, who was directed to refund Rs. 50,000/- to the complainant-respondent with 12% per annum from the date of its deposit till realization. A compensation of Rs. 25,000/- was also awarded. The complaint was also accepted against the appellants with Rs. 5,000/- as cost. The appellants were further directed not to recover any amount from the complainant-respondent as the payment of Rs. 5 lacs was not made by it to the respondent No. 2 under instruction of the complainant-respondent. The appellants were further directed to issue no due certificate to the complainant-respondent. 14. Hence the appeal by the appellants. 15. Learned counsel for the appellants submitted that the respondent applied for loan of Rs.5 lacs for purchase of tubewell boring machine and he produced a bill from respondent No.2 namely Gurjit Engineering

5 First Appeal No. 359 of Works, Nawa Bus Stand, Talwandi Bhai, District Ferozepur showing estimated value of machine and respondent introduced the said company to the appellant himself. The respondent also submitted a project report and mortgaged his land before the Sub Registrar in favour of the appellant bank and promised to repay the loan advanced by the bank within a period of ten years on installments. It was further submitted that the respondent Jugraj Singh duly signed the receipt of taking loan of Rs.5 lacs from the appellant bank. The said loan for the machinery had been duly paid to respondent No.2 at the instance of respondent No.1 and the third party receipt was duly signed by respondent. It was clear that the payment of Rs.5 lac made to respondent No.2 was at the specific instructions of respondent. It was further submitted that the learned District Forum has wrongly held that payment of Rs.5 lac was not made to respondent No.2 under instructions of complainant / respondent and that the amount should not be recovered from the respondent. Acceptance of the appeal was prayed. 16. Learned counsel for the respondent submitted that there is no merit in the appeal and same be dismissed. 17. Respondent No.2 did not appear before this Commission inspite of notice. Hence he was proceeded against ex-parte. 18. Submissions have been considered. Record has been perused. 19. The complainant / respondent has contended that respondent No.2 has not supplied boring machine to him for which the loan was applied by the respondent, but the appellants have strongly contended that the loan was advanced to the respondent against the specific bill / estimate submitted by the respondent himself. The appellants have placed on record the loan papers and estimate submitted by respondent No.2 and further placed on record the bill No.78 dated (page 53 of District Forum file) issued by respondent No.2, perusal of which shows that costs of boring machine has been mentioned as Rs.5,50,000/- and an amount of

6 First Appeal No. 359 of Rs.50,000/- has also been shown as advance money paid by respondent to respondent No.2. The promised date of supply of boring machine has been mentioned by respondent No.2 as The appellants have also placed on record receipt for Rs.5 lacs received by respondent No.2 on vide cheque No (page 51 of trial court file). This third party receipt has also been jointly signed by respondent No.2 and respondent No.1 and witnessed by one Sh.Gurdev Singh son of Udham Singh and Sh.Kuldeep Singh son of Sh.Kulwant Singh. The appellants have further placed on record mortgage deed executed by respondent in favour of appellant bank before availing the loan. They have also placed on record the affidavit submitted by respondent in which he has deposed that he had applied for loan of Rs.5 lacs and has undertaken to utilize the loan for the purpose for which it had been sanctioned and he has also undertaken to the repayment of loan in installment to the bank well in time. The appellants have also placed on record Form Authority Letter (Annexure Form A) dated submitted by the respondent authorizing appellants to make payment of loan amount to respondent No.2 on behalf of respondent, which bears signature of the respondent and same is also witnessed by Sh.Gurdev Singh and Sh.Kuldeep Singh. 20. The appellants have placed on record a letter (page 49 of the District Forum filed) by respondent informing the appellants about non delivery of machine, in which it has been admitted by him that the cheque for loan was delivered to M/s. Gurjit Engineering Works (respondent No.2) and therefore necessary legal action be initiated against him for non delivery of boring machine. 21. From the above documents, it is evident that the loan was advanced by the appellants to the complainant / respondent and payment of Rs.5 lacs was made to respondent No.2 on vide cheque No against third party receipt as per instructions of the respondent. It is also evident that the machinery was not delivered by

7 First Appeal No. 359 of respondent No.2 to respondent No.1, for which respondent No.2 is directly responsible. Since the payment of loan amount was made to respondent No.2 as per the specific instructions issued by respondent, the appellants are authorized to recover the loan amount as per terms and conditions of the loan agreement. Respondent No.2 is directly responsible for non delivery of machine inspite of receipt of Rs.5,50,000/-. He has deliberately not appeared before the District Forum or this Commission in spite of notice having been served to him. 22. Accordingly, the appeal of the appellant is accepted and order dated passed by the District Forum qua the appellants is set aside. The appellants are entitled to recover the loan amount from the respondent / complainant. 23. The appellants have deposited Rs.25,000/- in this Commission at the time of filing of appeal. This amount along with interest, if any, be refunded to the appellants after expiry of 45 days. F.A.No.374 of In view of above discussion and order passed in F.A.No.359 of 2007, this appeal is also accepted and impugned order dated qua the appellant is set aside. 25. The arguments in this case were heard on and the order was reserved. Now parties be communicated about the same. 26. The appeal could not be decided within the statutory period due to heavy pendency of court cases. (JUSTICE S.N. AGGARWAL) PRESIDENT April 02, 2012 Davinder (BALDEV SINGH SEKHON) MEMBER