Seizure of Vehicles by the BANKS

Gurgaon Gramin Bank, Gurawara vs Anil Kumar on 11 March, 2011

REVISION PETITION 863 OF 2007

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI

REVISION

PETITION NO.863of 2007

(From

the Order dated 12.12.2006 in Appeal

No.116/2001 (Haryana) RBT No.273/2006 of the State Commission, UT Chandigarh)

Gurgaon

Gramin Bank, Gurawara

Through:

Manager,  Gurgaon

Gramin Bank,

Guruwara, Tehsil and District Rewari    Petitioner

Versus  Anil

Kumar  S/o

Shayam Sunder  Resident

of Village Guruwara

Tehsil and

District Rewari   Respondent

 BEFORE: -

HONBLE MR. JUSTICE ASHOK BHAN, PRESIDENT

 HONBLE MR. SURESH CHANDRA, MEMBER

For the Petitioner  : Mr.

Vikas Soni, Advocate

 For the Respondent : Mr.

Deepak Kumar and   Mr. Mandeep Singh, ADvocates 

 PRONOUNCED ON:

11.03.2011

 O R D E R

ASHOK BHAN, J., PRESIDENT:   Gurgaon Gramin Bank, Petitioner herein which was the Opposite Party before the District Forum has filed this Revision Petition against the Order dated 12.12.2006 passed by the State Consumer Disputes Redressal Commission, UT, Chandigarh ( for short, the State Commission) by which the State Commission has upheld the Order of the District Consumer Disputes Redressal Forum (for short the District Forum).

Facts:

Respondent-Complainant was having a Saving Bank Account with the Petitioner. Respondent along with one Balbir stood guarantor for the loan amount of Rs.8000/- secured by one Ravi Kumar on 23rd March 1990. The aforesaid amount was payable in 54 instalments each amounting to Rs.150/- commencing from 22nd April, 1990. The last installment was to be paid on or before 22.9.1994. Ravi Kumar failed to maintain the financial discipline and committed default towards repayment of the loan in the year 1993. Left with no other alternative, Petitioner Bank issued a notice dated 6.11.999 to all the concerned parties including the Respondent demanding to regulate the loan account and informing the borrower and sureties that an amount of Rs.18,794/- plus interest from 1.10.1999 was due and outstanding against the borrower, failing which the amount would be recovered from their Saving Bank Accounts. No reply was received from Respondent or Ravi Kumar. As the loanee as well as Respondent who stood guarantor for the loan amount, failed to make any payment to regulate the loan account, Petitioner on 20th November, 1999 debited the sum of Rs.9500/- from the SB Account of the Respondent and credited the same in the Loan account.

Respondent, being aggrieved, filed a complaint before the District Forum.

On notice being issued, Petitioner entered appearance and took the stand that the Complainant, being guarantor, was jointly and severally liable along with the loanee for repayment of the loan amount advanced to Ravi Kumar. That at the time of granting loan, it was made clear to the Respondent that he will be jointly and severally liable along with the loanee for the payment of the loan amount in case of failure of Ravi Kumar to pay the same. Without going into the question as to whether Respondent, being surety, was jointly and severally liable for repayment of the aforesaid amount, District Forum allowed the complaint and directed the Petitioner to deposit the sum of Rs.9,500/- in the account of the Respondent along with interest w.e.f. 20.11.1999 till the date of deposit within two months. Aggrieved by the Order of the District Forum, Petitioner filed appeal before the State Commission. By the impugned Order State Commission has held that Respondent being guarantor, was jointly and severally liable along with the Ravi Kumar loanee to pay the amount, but dismissed the Appeal holding that debt could not be recovered as the same had become time-barred. That acknowledgement taken after the debt had become time barred was of no consequence. It was held that when a demand is made by the creditor on the guarantor, under a guarantee which requires a demand as a condition precedent for the liability of the guarantor, such demand should be for payment of a sum which was legally due and recoverable from the principal debtor. If the debt had already become time barred against the principal debtor, the question of creditor demanding payment thereafter, for the first time, against the guarantor would not arise. That Petitioner had advanced loan to Ravi Kumar on 22nd March, 1990 and the first acknowledgement was made by the loanee on 13th December, 1993 after a lapse of three years and nine months by which time the loan had already become time barred. That the acknowledgement had to be made before 22nd March, 1993, as under Section 18 of the Limitation Act acknowledgement had to be made before the expiry of prescribed period for recovery of the loan. Counsel for the parties have been heard. Admittedly, Ravi Kumar had taken a loan on 22nd March, 1990 from the Petitioner. It is also not disputed that Respondent stood guarantor to pay the amount along with Ravi Kumar. Loan was to be repaid in 54 EMIs of Rs.150/- each. Ravi Kumar started defaulting in making payment in the year 1993. Petitioner obtained first acknowledgement on 13th December, 1993 (Exhibit.P-5) and second acknowledgement on 6th December, 1996 and the third acknowledgement on 26th August, 1999 (Exhibits P-6 & P7).   Petitioner raised the demand on the Respondent on 6th September, 1999. As Respondent failed to make the payment, petitioner transferred the sum of Rs.9500/- from his account to the loan account. State Commission has proceeded on the premises that the first acknowledgement obtained by the Petitioner was beyond the prescribed period of limitation In our view the State Commission has erred in law by holding that the loan had become time barred. The State Commission failed to appreciate that the aforesaid loan amount was payable in 54 installments and the last installment was to be paid on 22nd September, 1994.

The last installment was recoverable till 22nd September, 1994 and the period of recovery was from 22nd September, 1994 and not from the date of grant of loan. The period of limitation for recovery of the loan was to expire on 22.9.1997 and not on 22nd March, 1993. The State Commission failed to appreciate that the acknowledgement of debt was made on 13th September, 1993 which was well within time.

It is not disputed before us that the liability of the Respondent, being the guarantor, was coextensive with the loanee. The State Commission has also recorded this finding. The Supreme Court has held in many judgements that the liability of the guarantor is coextensive with the loanee. The Supreme Court in Industrial Investment Bank of India Ltd. vs. Biswanath Jhunjhunwala [ Civil Appeal No.4613 of 2000] after considering the case law has held as under:

The legal position as crystallized by a series of cases of this court is clear that the liability of the guarantor and principal debtors are co-extensive and not in alternative. When we examine the impugned judgement in the light of the consistent position of law, then the obvious conclusion has to be that the High Court under its power of superintendence under Article 227 of the Constitution of India was not justified to stay further proceedings in O.A. 156 of 1997.

[emphasis supplied]   For the reasons stated above, we accept this Revision Petition, set aside the Orders passed by the fora below and dismiss the complaint being bereft of any merit. No costs.   

. . . . . . . . . . . . . . .                         (ASHOK BHAN J.) PRESIDENT    

. . . . . . . . . . . .                                 (SURESH CHANDRA) MEMBER