Cecilia Marina Nirmala Fernandes vs State Bank Of India
2021 Latest Caselaw 2399 Kant

                             1


   IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 25TH DAY OF JUNE, 2021

                         BEFORE

    THE HON'BLE MR. JUSTICE S. SUNIL DUTT YADAV

              CIVIL PETITION No.1/2021
BETWEEN:

Cecilia Marina Nirmala Fernandes
Aged about 46 years,
R/o Door No.12-4-50C
Jagannath Nayak Road,
Kadbettu, Udupi-576101
                                         ...Petitioner
(By Sri. Paras Pandey, Advocate)

AND:

State Bank of India
Having its
RACPC Branch Office,
At No.117 Ground Floor,
Opposite Vaidehi Hospital,
Whitefield Road,
Bengaluru-560066

Also at:
Indiranagar Branch,
2987, 12th Main, HAL II Stage,
Indiranagar, Bangalore-560038

Also at:
State Bank Bhavan,
Corporate Centre,
Madame Cama Road,
Nariman Point,
                               2


Mumbai-400 021 (Maharashtra)
Represented by its
Branch Manager.
                                                   ...Respondent
(By Sri.S.Rajashekar, Advocate)

      This Civil Petition is filed under Section 24 of CPC,
praying to pass appropriate orders directing transfer of the
suit bearing S.C.1109 of 2019 pending on the file of the
Ld. X Small Cause Judge and ACMM, at Bengaluru (SCCH-
16) to the file of the Ld. XII Addl. Civil and Sessions Judge
at Bengaluru (CCH-27) and consequently and etc.

      This Civil Petition coming on for Admission this day,
the Court made the following:


                           ORDER

The petitioner, who is the defendant in

S.C.No.1109/2019 and the plaintiff in

O.S.No.2474/2020 has filed the present petition

seeking for transfer of the proceedings in

S.C.No.1109/2019 pending on the file of the X

Additional Small Cause Judge and ACMM at Bengaluru

and has sought for transfer of the same to the file of

XII Additional Civil and Sessions Judge at Bengaluru.

The petitioner has also sought for consolidation of

proceedings in S.C.No.1109/2019 along with

O.S.No.2474/2020.

2. The learned counsel for the petitioner would

submit that the respondent - Bank has initiated the

proceedings for recovery in S.C.No.1109/2019 with

respect to a sum of Rs.82,517/- which is stated to be

with respect to a loan-cum-Hypothecation Agreement

between the parties.

3. Learned counsel for the petitioner draws

attention to the prayer made in the Small Cause case

and submits that subsequently O.S.No.2474/2020 has

been filed before the Court of City Civil and Sessions

Judge at Bengaluru seeking for the following reliefs:

79. It is submitted that on the basis of what is stated hereinabove, the plaintiff prays that this Hon'ble Court may kindly:

(i) Issue a declaration as to the interpretation of the terms of the loan agreement documents executed between

the parties on 06 November 2009, i.e. the Agreement read with Loan and Hypothecation Agreement dated 06.11.2009, specifically that it is a fixed-

term loan with 83 EMIs of pre-determined amounts in three interest-rate stages as agreed to in the repayment schedule set out in the above mentioned Agreement, and titled 'Repayment', and that no floating rates were agreed to;

(ii) Issue a declaration that the floating interest rates sought to be charged by the Bank as stated by the bank in its plaint in S.C.No.1109/2019, are inconsistent with the contract between the parties, and even otherwise, are void for being unconscionable and are accordingly not enforceable;

(iii) Issue a declaration that the Defendant Bank has waived its right to collect the 82nd and 83rd EMI payments because of their refusal to accept the duly and timely proffered and tendered payments;

(iv) Grant an injunction against the Defendant bank to take all steps necessary to clear Plaintiff's name fully and permanently from all credit reporting agencies, including but not limited to Trans Union CIBIL, to whom SBI has reported any negative information, in a speedy and efficient manner so that the Plaintiff's name is clear of all such negative reports and information regarding anything to do with SBI, the Defendant Bank, or its agents and associates;

(v) Issue an injunction requiring the Defendant Bank to immediately release the lien/hypothecation they have on the plaintiff's property (Car), grant a no-dues certificate to the plaintiff, and permit plaintiff to deal with the property free and clear of all interference or other claims from the Defendant bank or any other third-parties to which the Defendant bank may have transferred any right or title;

      (vi)    Decree         a       judgment            for
Rs.12,000/-        (Rupees         Twelve     Thousand)

along with interest at 18% p.a. from the date on which the amount was wrongfully withdrawn to the date of payment to Plaintiff, this being the funds that the Defendant Bank misappropriated from the Plaintiff's Bank accounts;

(vii) Decree a judgment for Rs.1,50,000/- as damages for the mental harassment and pain suffered by the Plaintiff regarding the prolonged and unnecessary dispute generated by the bank, as well as for depriving the plaintiff of the lawful use of her bank account, and the bank's harassment of Plaintiff through threats or otherwise;

(viii) Decree a judgment of Rs.1,00,000/- (One Lakh) as damages for the harm caused to Plaintiff's reputation and financial standing because of misreporting by the bank of Plaintiff's credit status;

(ix) Grant an injunction against Defendant bank requiring them, in the interest of the greater public and other

customers similarly placed, to modify all similar future loan agreements where the bank purports to charge a "floating interest rate", to clarify the nature of the loan and the interest charged, and remove all misleading contract language which have the potential to trick consumers or which is liable to mislead customers into believing they are signing up for a fixed set of EMI payment with fixed pre-determined amounts throughout the repayment period, whereas the bank's intentions are otherwise;

(x) Issue declarations similar in substance as to the declaration humbly requested in (i) through (iii) above, as to the interpretation of similar agreements entered into by the Defendants with other customers, as part of the relief to be provided in the representative suit;

(xi) Grant an injunction, in addition, requiring the Defendant bank to reimburse all similarly placed clients for any excess interest payments received by the bank as

floating interest rates, consistent with the judgment of this Hon'ble Court;

(xii) Grant an injunction against the Defendant bank requiring them to provide copies of all documents that the customer and/ or loan applicant is required to sign, to the said customer/loan applicant, at the time of signing and/or executing such documents.

(xiii) Grant an injunction against the defendant bank restraining them, either directly or indirectly through third-party agents, from engaging in any "collection" or "recovery" practice that is inconsistent with their own published rules or RBI guidelines, such as threatening the customer by calls or in person, and specifically, not to use any such methods when there is a dispute regarding such outstanding amounts between the defendant bank and any customer.

(xiv) Grant an injunction against the Defendant bank to clear all incorrect credit reportings directly with the credit agencies

within three months of any such discrepancy being brought to the notice of the defendant bank, in addition to providing letters to the customer clarify the matter.

(xv) Grant an injunction directing the Defendant bank to pay punitive and exemplary damages for an amount as deemed fit and proper by this Hon'ble Court for the deceptive and unfair trade/loan practices of the defendant bank, and to all others represented in the representative suit, especially with respect to enticing customers to sign up to what are presented as fixed-term, fixed payments loan but in a later stage of the loan payment schedule or after payment of all or substantially all of the term payments, springing a surprise on the customer about a "floating rate" and then harassing such hapless customers until such unwarranted bloated lumpsum payment are made, especially by the use of

male goondas to harass women clients or other weaker clients of the bank;

(xvi) Grant a permanent injunction restraining the defendant bank from continuing their fraudulent, misleading the unfair loan practices as set out hereinabove or otherwise;

(xvii) Award costs of this suit and all other exemplary and punitive costs that the Hon'ble Court feels appropriate;

(xviii) Grant any an all other relief(s) that this Hon'ble Court may deem fit and proper in the interest of justice.

4. It is pointed out that there is a requirement

of consolidation of the suit in light of the

comprehensive relief sought for in the original suit and

in order to save time of the Court as well as that of

the respondent - Bank, it would be appropriate to

consolidate the suit pending before the Court of the

Small Cause Judge along with the suit filed before the

City Civil Court.

5. The learned counsel for the petitioner has

relied upon the judgment in (2004) 3 SCC 85 in the

case of Chitivalasa Jute Mills V/s. Jaypee Rewa

Cement, as well as the judgment of this Court in the

case of Venkatesh Prabhu V/s. Thejappa Shetty

.K in AIR 1982 KAR 319. It is submitted that the

equity of the facts would require that the suit is to be

consolidated with the Small Cause case.

6. Learned counsel appearing for the

respondent - Bank contends that the suit filed before

the Court of Small Cause is one for recovery on the

basis of the loan agreement and that some of the

relief sought for in the original suit are matters that

could be raised as a defence in the written statement

before the Court of the Small Cause which has not

been done. He has further contended that the suit in

O.S.No.2474/2020 being a representative suit under

Order I Rule 8 of CPC, the relief sought for in the said

suit are of application to the public in general being

filed in representative capacity and that the intention

of the present petitioner is to prolong with the

recovery proceedings initiated by seeking

consolidation with the proceedings in

O.S.No.2474/2020.

7. Heard learned counsel for the petitioner and

respondent.

8. Insofar as the power of the

Court to transfer proceedings in exercise of the power

under Section 24 of CPC, there is no dispute as to the

availability of such power nor is there any dispute as

to the legal position as comes out from the judgments

referred to by the petitioners in para '5' above, as to

whether the case is made out in the present factual

matrix that requires transfer of proceedings and

consolidation as sought for is a matter that requires to

be decided.

9. On perusal of the plaint in S.C.No.1109/2019

it would indicate that the suit is filed on the basis of a

Loan-cum-Hypothecation Agreement between the

parties and the Bank in its suit for recovery rests it

case on loan application and loan-cum-Hypothecation

Agreement. Insofar as the prayer sought for in

O.S.No.2474/2020, it ought to be noted at the first

instance that the suit is filed in a representative

capacity under Order I Rule 8 of CPC and on perusal

of the prayers sought for in the said suit reproduced

above, it comes out that declaratory reliefs are sought

for with respect to interest rates charged by the

respondent - Bank, injunctory relief for modification of

terms regarding interest rates, and certain other

reliefs which are general in nature. No doubt, it is

also noticed that particular to the transaction between

the petitioner and respondent - Bank herein judgment

for damages is sought against the respondent - Bank

and certain other reliefs which may have an impact on

the loan agreement between the parties. However,

what ought to be noted is that S.C.No.1109/2019 was

filed on 03.08.2019 while the original suit has been

filed on 09.06.2020.

10. The declaratory suit if filed prior in point of

time to the suit for recovery instituted by the

respondent - Bank in S.C.No.1109/2019 it would

made some difference about request made by the

petitioner herein. Further it would not be appropriate

to exercise the power for transfer of consolidation

where the suit is filed in a representative capacity and

the judgment passed would be binding on the whole

class which is sought to be represented under Order I

Rule 8 of CPC proceedings.

11. The contention of the respondent - Bank

opposing the clubbing of the Small Cause suit along

the O.S.NO.2474/2020 as such consolidation would

lead to undue delay in an aspect that requires

affirmative acceptance. The suit based on contract

filed by the respondent - Bank has to be decided on

its own merits on the basis of the suit documents

which is loan cum Hypothecation Agreement relied

upon by the respondent - Bank. If there has to be

any change in the terms of the said contract by virtue

of the suit for declaration filed by the petitioner herein

that is a matter to be decided on its own merits before

the Civil Court. The power under Section 24 of CPC is

to be exercised with due judicial discretion and clearly

not in this case. Looking into the nature of omnibus

prayer sought for in the suit, no case is made out for

exercising of such judicial discretion to transfer

proceedings and direct for consolidation.

12. The legal effect of the relief sought for in

the suit in O.S.No.2474/2020 and its consequence on

the Commercial Agreement between the petitioner

herein and the respondent - Bank is a matter to be

decided by the Civil Court while deciding the suit.

Accordingly, without prejudice to the contents that are

raised nor expressing any opinion as regard to the

merits of the prayers sought for by the petitioner in

the original suit in O.S.No.2474/2020, no case is

made out for exercising the power under Section 24 of

CPC to withdraw the proceedings in S.C.No.1109/2019

and have the same to be clubbed along with

O.S.No.2474/2020.

Accordingly, the petition is dismissed.

Sd/-

JUDGE

GJM