National Consumer Disputes Redressal Commission (NCDRC) has found that Sahara India’s books are in such as mess that it did not record properly a particular loan given, repayment and accounting thereof. It then tried to pass on the blame to the complainant
The National Consumer Disputes Redressal Commission (NCDRC) directed Sahara India to pay Rs25,000 to its investor as compensation and deposit Rs25,000 in the Consumer Welfare Fund in a case that showed how shoddy Sahara’s accounting is.
On 31 March 2003, Orissa-based Jatakishore Das invested Rs1 lakh in Sahara Swarna Yojana Scheme Certificate. This was a 10-year scheme. However, Das took a loan of Rs80,000 against his investment certificate from Sahara for medical treatment. On 28 December 2006, Das repaid the loan of Rs80,000 along with an interest of Rs1,289.
The branch manager at Sahara India Commercial Corp's office in Deogarh recorded the repayment of loan and interest in Das' passbook-cum-certificate. The same however was not entered into the company's accounts. When Das came to know about this, he visited Sahara's office for about 20 times, but the company refused to make any changes and continued to show Rs80,000 as outstanding loan against his name.
In its submission before the District Consumer Disputes Redressal Forum at Deogarh, the Subrato Roy group company stated that, "Sahara India Parivar is a financial institution to the creditors/borrowers to the customers undertaken by the Reserve Bank of India (RBI). Further, it is admitted that the petitioner/opposite party has introduced a scheme ‘Sahara Swarna Yojana’ for the benefit of the customer subject to payment of dues as per the terms and conditions provided under the scheme."
"The endorsement made by the then Branch Manager of Sahara India, Deogarh Branch regarding clearance of loan amount is unknown to the present opposite party (new branch manager). No such documents show in the official records that the respondent (Das) has cleared up the loan amount. The endorsement made in the passbook of the respondent is not clear nor does it bear any meaning. There is no such provision provided under that scheme to clear up the loan amount by way of putting such type of endorsement made in the pass book. The claim of the respondent is fictitious and frivolous. Therefore, the opposite party is not in any way liable for the same," Sahara claimed.
The District Consumer Forum, however, said, the said passbook-cum-certificate bears endorsement to the effect that a sum of Rs81,287. "The endorsement bears the official seal of the opposite party along with the signature of the Branch Manager, nor have they averred that the endorsement is a forged one. In the aforesaid circumstances, it can safely be concluded that the endorsement of the pass book has been made by the then Branch Manager of the opposite parties (OPs-Sahara) after the receipt of the loan amount along with the interest. The OPs have claimed that is was not according to the proper procedure. It is not expected that all should be aware of the procedure practice by all the financial institution. An investor is expected to believe the Branch head of the Institution and thus the complainant has made no mistake in believing the Branch Manager of the OPs," the Forum said.
It then directed Sahara India "to reflect the payment made by the respondent in the loan account and to pay Rs10,000 towards the compensation and Rs1,000 towards the litigation expenses within one month."
Aggrieved by the decision of the District Forum, Sahara India filed an appeal before the State Commission. Sahara also filed an application for filing additional evidence. “That it is respectfully stated that subsequently (after the order passed by the District Forum) the petitioner invented the payment advice of loan bearing no. BLLE 11020459 dated 9 May 2006 from the office where it has been found that on 11 May 2006 the claimant (respondent herein) has taken a loan of Rs1 lakh vide cheque no 882974 dated 11 May 2006,” the company said in its miscellaneous application.
On 15 January 2013, the State Commission while dismissing the miscellaneous application recorded that “on the contrary learned counsel for the opposite party-loanee (Das) contents that in their written version the petitioner who was the opposite party before the District Forum admitted that the present opposite party – loanee (complainant before the District Forum) took Rs80,000 as loan. So once, it has been so admitted, the document in question should not be taken as additional evidence. Moreover, the signature found in the said documents does not tally with the admitted signature of the opposite party – loanee."
"Considering the rival submissions of the parties, we are of the view that since the petitioner admitted in the written version before the District Forum that the opposite party – loanee took Rs80,000 as loan and in fact the signature said to be that of the opposite party – loanee as found in the documents sought to be admitted as additional evidence does not tally with his admitted signature and further, since it appears improbable that while putting his signature a person would omit some alphabets of his first name which has been found in the so called signature of the opposite party – loanee and those alphabets have been written below his signature, the document should not be admitted as additional evidence," the State Commission said.
Later, while upholding the order of the District Consumer Forum, the State Commission said that "The innocent customer should not suffer for the illegality/ irregularity committed by the agent that too not less than a Branch Manager of the appellant company (Sahara). So there is deficiency of service on the part of the appellants in not reflecting the repayment of the loan amount in the loan account/ledger of the respondent. The amount awarded towards compensation and litigation expenses is also not exorbitant."
Sahara India then filed a revision petition before the National Commission. A Bench of Justice VB Gupta and Rekha Gupta, said, "...it is worthwhile mentioning that if the respondent (Das) had deposited the loan amount he would have received a payment receipt. In the absence of any ‘payment receipt’ both the District Forum and the State Commission committed an error of relying solely on an alleged endorsement made by the then Branch Manager."
"The State Commission should have taken the additional evidence on record and remitted the matter back to the District Forum for fresh consideration. The first appellate court fell into an error of adjudging the genuineness of the document itself when it could have avoided the same by referring the document in question to a handwriting expert," the Bench said.
The NCDRC stated, "The State Commission failed to appreciate the fact that the respondent has not repaid the loan amount and thus the same was not reflected in his account statement. It is humbly pointed out that in all financial sectors, whenever any kind of payment is made such a payment corresponds to a payment receipt. In the present case the absence of such payment receipts shows to proof that such payment was never made by the respondent herein."
"The State Commission failed to appreciate that pass book of an account holder is not a conclusive evidence for determination of balance in the account of the account holder. The correct balance is to be determined from the ledger and not from the pass book. Furthermore, it is well settled principle in banking law that the pass book cannot be called conclusive proof of any payment as the same is always in the custody of the account holder and entries made therein are capable of being tampered with, thus entries made in the pass book cannot be called as conclusive proof of any payment," it added.
During the hearing, counsel for Sahara India stated that as per the policy of the company, the pass book cannot be used for the purpose of acknowledging the repayment of loans.
The Bench, after a scrutiny of the document, however, found that the said document was not only a pass book but pass book-cum- certificate. Some of the important instructions to the applicant as printed in the passbook read as under: “After paying the monthly instalment please tender the pass book- cum-certificate to the Branch office for the purpose of updation. Please verify the entries in the pass-book-cum-certificate with receipt issued by the company and in case of any discrepancy please report the same to the branch office immediately."
The NCDRC also noted that all the entries entered in the passbook-cum-certificated were endorsed by the concerned official. "Similarly receipts towards repayment of loan of Rs80,000 and interest of Rs1,289 has also been recorded in the pass book-cum-certificate and signed by the scheme officer with his code no. 06641-226081.
Sahara India further stated that the pass book of the account holder is not conclusive evidence for determination of balance in the account of the account holder. The correct balance is to be determined from the ledger and not from the pass book. "Here it should be appreciated that the individual depositing any amount in a bank or a financial institution or any with other body can only ensure that entry is made in the pass book given to him or take formal receipt if given. He cannot ensure that the thereafter necessary entries are made in the ledger and other related accounts, the Bench said.
Earlier in the miscellaneous application Sahara India admitted that they had filed the written statement before the District Forum to avoid delay and wherein it has been stated that the claimant has obtained loan of Rs80,000/- and that subsequently “the petitioner (Sahara) invented the payment advice of loan bearing no. BLLE11020459 dated 9 May 2006 from the office where it has been found that on 11 May 2006 the claimant (Das) has taken a loan of Rs1 lakh vide cheque no.882974 dated 11 March 2006”.
Dismissing the application, the State Commission in its order on 15 January 2013, had stated, “Considering the rival submissions of the parties, we are of the view that since the petitioner (Sahara) admitted in the written version before the District Forum that the opposite party – loanee (Das) took Rs80,000 as loan and in fact the signature said to be that of the opposite party – loanee as found in the documents sought to be admitted as additional evidence does not tally with his admitted signature and further since it appears improbable that while putting his signature a person would omit some alphabets of his first name which has been found in the so called signature of the opposite party – loanee and those alphabets have been written below his signature, the document should not be admitted as additional evidence”.
In its judgement on 7 May 2013, the NCDRC bench said, "It would be quite apparent that the petitioner company (Sahara) has not been zealously and scrupulously following any prescribed system for accounting or maintenance of accounts. They have chosen to distance themselves and disown the entries made in the said pass book-cum-certificate and signed by the Branch Manager/scheme officer. They have sought to cover up their lapses with regard to amount of loan given, repayment thereof by the respondent and accounting thereof behaving in a most irresponsible manner and trying to pass on the blame to the respondent for not having produced a receipt to validate the entry in the passbook-cum-certificate. If they had indeed been keeping their accounts accurate they would not need to plead ignorance of the entries regarding respondent’s loan in the pass book-cum-certificate due to lack of corresponding entry in the ledger book of the petitioner."
"Instead of instituting an enquiry against the then Branch Manager of Deogarh Branch to ascertain the exact circumstances of the case and enquire from the then Manager as to why he appended his signature on the pass book-cum-certificate in receipt of Rs81,287, they (Sahara) have sought to penalise the respondent (Das). There is no affidavit on record from the then Branch Manager with regard to the facts of the case. Even the written statement contains the verification of Bipin Chandra Patnaik, presently working as the Branch Manager, Sahara India Pariwar, Deogarh. The affidavit attached to the revision petition has also been signed by Bipin Chandra Patnaik, Junior Executive."
"It is indeed a sad state of affairs where the petitioner was taking money for the scheme launched by them for the benefit of the customers and they failed to put in place a proper accounting system to support this scheme. They have thereafter failed to order an enquiry into the actions of their official for failing to record the exact amount of loan, repayment of the same, updating of records and following a system for ensuring accountability and transparency with regard to amounts collected from the public and held in trust," the Bench said.
While upholding the decision of the State Commission, the NCDRC asked Sahara India to pay a cost of Rs50,000. It directed the company to pay Rs25,000 to Das directly by way of demand draft and to deposit the balance amount of Rs25,000/- by way of demand draft in the name of ‘Consumer Welfare Fund’ as per Rule 10 A of Consumer Protection Rules, 1987, within four weeks.
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