First Appeal No.430 of 2008,Consumer Complaint No.586 of 2006

24th October, 2008

Petitioner Counsel: Mr. S. M. ANTARKAR

JUDGMENT

-Shri. P. N. KASHALKAR, Hon'ble Presiding Judicial Member :- This is an appeal filed by Janata Sahakari Bank Ltd., Pune against the order passed by District Consumer Forum Pune in consumer complaint no.586/2006, whereby Forum below while allowing the appeal directed Janata Sahakari Bank Ltd., Pune and its Staff Provident Fund Trust to refund the amount of Rs.5,05,717/- together with past and future interest @ 9% p.a. from 27-05-2005 till realization thereof by the complainant within a period of two months from the date of order and also directed to pay cost of Rs.2,000/-.

2. Facts to the extent material may be stated as under:-

Complainant was the employee of O.P. no.2 - Janata Sahakari Bank Ltd. It is Co-operative Bank and O.P. no.1 is Staff Provident Trust of Janata Sahakari Bank Ltd. O.P. no.3 is the branch office of the bank and O.P. no.4 is the Commissioner of Employees Provident Fund Organization.

3. The services of the complainant were dismissed from 30-10-2004. He was entitled to get accumulated provident fund from the opponents. He was further entitled to get contribution from O.P. no.2 and interest thereon. On 22-12-2004, complainant demanded provident fund arrears. The same was not complied with. An amount of Rs.5,05,777/- was credited in the Saving Bank account of the complainant on 26-05-2005 and immediately forfeited by the Bank. Earlier amount of Rs.38,080/- deposited in his account was forfeited under Rule 15 of the Provident Fund Rules. Complainant submitted that said forfeited ex-facie was bad-in-law. Correspondence to that effect was going on between complainant and opponents. Ultimately, on 01-08-2006, said amount was refunded to the complainant with interest thereon. It is averred by the complainant that immediately after depositing Rs.5,05,777/- in his Saving account on 26-5-2005, the said amount was transferred to his loan account by the opponent. Same was without his consent. O.Ps had no right or title to transfer the said amount, so as to deprive the complainant of his provident fund amount. The same was illegal and bad-in-law. Complainant therefore prayed that said amount be refunded to him. He also claimed Rs.50,000/- towards compensation and Rs.5,000/- towards cost of the complaint.

4. O.P. nos.1, 2 & 3 filed their written statement and took up the plea of want of jurisdiction of the Forum to entertain and try the present complaint. They also raised the plea that complaint is barred by limitation and complainant had not sought condonation of delay by filing separate application to that effect. According to opponents, cause of action for filing the complaint arose on 30-10-2004 and complainant ought to have filed consumer complaint within two years thereafter, but the complainant filed the complaint on 22-12-2006 and therefore, complaint is barred by limitation. It appears that the complaint was filed in the Forum below after complainant was terminated from the service of the bank. Complainant was found guilty of alleged misconduct. Writ petition filed by the complainant was dismissed by the Hon'ble High Court.

5. O.P. no.4 filed separate affidavit in reply. O.P. no.4 pleaded that by letter dated 13-7-2006, O.P. nos.1 to 3 were informed that they are required to pay the amount of provident fund to the complainant. O.P. no.4 received the application under the provisions of Right to Information Act, on 27-4-2006. Same was replied to by O.P. no.4 on 29-8-2006. The Complainant was informed that an employer cannot adjust or forfeit amount of provident fund under the provisions of Section 10 of the Provident Fund Act. O.P. no.4 also adopted written version filed by O.P. nos.1 to 3 and pleaded that O.P. no.4 is not a necessary or proper party and the complaint should be dismissed as against them with cost.

6. Forum below on considering affidavits and documents placed on record by rival parties, was pleased to hold that complaint was not at all barred by limitation and it also held that it had jurisdiction to entertain the present complaint.

7. As far point of limitation is concerned, it must be noted that amount of provident fund was credited to the account of the complainant on 26-5-2005 and on the same day, it was forfeited for satisfaction of the Home loan given by the appellant bank to the respondent and this was high handedness. It was unfair trade practice. It was illegal deduction and therefore complainant moved the consumer forum by filing consumer complaint. So cause of action accrued to the complainant only on 26-5-2005 and not earlier to that. His services may have been terminated by the bank on 30-10-2004, but his grievance about illegal termination of service was turned down by Hon'ble High Court in the writ petition he had filed against the bank. So his grievance in consumer complaint was in respect of provident fund dues not paid till 26-5-2005 and misappropriated immediately after they had accounted the said amount in the Saving bank account of the complainant. So cause of action for filing this complaint accrued on 26-5-2005 and complaint came to be filed on 22-12-2006. It means consumer complaint was filed within 1 1/2 year roughly and in any case within two years from 26-5-2005 and therefore point of limitation was not at all involved. Forum below rightly held that the consumer complaint was maintainable and period has to be computed only from 26-5-2005. We totally agree with the finding given by Ld. District Consumer Forum in this behalf and we find no substance in the submission made by Ld. Advocate for the bank in this behalf.

8. Second point of jurisdiction was also agitated before us by Advocate for the bank. We are finding that complainant is a resident of Pune. He was employed with Janata Sahakari Bank Ltd. Pune. He was terminated at Pune. He was employed with Janata Sahakari Bank Ltd. Pune. He was terminated at Pune. On termination, some amount of provident fund was repayable at Pune. Therefore District Consumer Forum, Pune had very much territorial jurisdiction to entertain and try the present complaint. So on the ground of want of territorial jurisdiction, we are not with Ld. Counsel for the appellant. Forum below had very much jurisdiction to entertain and try the present complaint.

9. Third argument made before us was that Forum had committed error in law in not acting upon the undertaking given by the complainant. Undertaking is dated 16-9-1998 and while taking Home loan advance from the bank, it is the contention of the appellant bank that Mr. Anil Bhaskar Joshi had executed undertaking and agreed that bank will have undisputed right to appropriate the amount of his provident fund and gratuity payable to him towards repayment of the above advance, which was sanctioned only on the strength of the said undertaking. He also by this letter authorized bank to transfer without any notice to him from his Provident Fund account with bank and Gratuity payable to him, such amount or amounts as may be necessary to liquidate his indebtedness. Now, under section 10 of Employees Provident Fund and MP Act 1952, the provident fund amount standing to the credit of the member shall not be liable to attachment under any decree or order of any court in respect of any debt or liability incurred by the member. This is the mandare of law and this has been expressly told to the complainant by sending letter to him by Central Assistant Public Information Officer/Assistant Provident Fund Commissioner, Regional Office Pune. In view of section 10 of E.P.F. & M.P. Act 1952, we are of the view that whatever undertaking given by the complainant in favour of bank on 16-9-1998 was itself void ab initio, because it was undertaking given contrary to the express provisions of law. What is not permissible under the law cannot be held permissible by agreement between the parties. If the contractual obligation is contrary to the statutory prohibition, statutory prohibition will prevail over the contractual obligation. So the undertaking given by Mr. Anil Bhaskar Joshi on 16-9-1998 in favour of Janata Sahakari Bank Ltd. is meaningless, void ab initio and cannot be acted upon and once that undertaking has gone, the appellant bank must be held to be guilty of high handedness. They are guilty of unfair trade practice and they illegally acted upon the undertaking ignoring mandate of section 10 of EPF & MP Act 1952. In the result, we hold that Forum below rightly held that bank is required to pay back the amount of provident fund illegally withdrawn from his Saving Bank account of 26-5-2005 and therefore, Forum below rightly passed order directing refund of said amount with interest @ 9% p.a. from 27-5-2005 till realization of same amount by the complainant.

10. However, we are finding some substance in the submissions made by Ld. Counsel for the appellant. Counsel for the appellant submitted that the bank would comply with the order passed by Forum as being confirmed by this Commission in appeal. But question is he had been given discharge of Home loan and charge of his flat has been released, since his Home loan account had been closed by issuing No Dues Certificate. We hold that when we are asking the appellant bank to credit to the account of the complainant an amount of Rs.5,05,777/- with interest, charge on his flat credited in favour of the appellant, bank will be still in force and will be enforceable till Home loan account is wholly settled by the respondent. Respondent fairly conceded before us that after he receives amount due as per award, he shall pay all the arrears of installments from 30-10-2004 till today i.e. 24-10-2008 to bank at one stroke and shall continue to pay remaining amount of Home loan as per EMI being recovered by the bank while he was in service. When this is the concession agreed before us, we direct that bank shall have continuing charge on the flat of the respondent till all the installments of the whole EMIs are paid by the respondent and this charge shall be recorded in the property register by supplying copy of this judgment to the Sub-Registrar of Assurance at Pune. Hence, the following order:-

order

1. Appeal is dismissed with cost of Rs.2,000/-.

2. Besides the cost awarded by the Forum in its award. But the flat of the complainant shall be under charge as security for Home loan provided by appellant bank till complainant pays all the installments as per EMI fixed by the bank. He shall pay immediately amount of all the installments from 30-10-2004 till today in lumpsum and continue to pay remaining amount of Home loan installments as per EMI already fixed between the parties. Rate applicable shall be the same as was given by the bank to the respondent/org. complainant. Default in payment of Home loan installment shall entitle the bank to take appropriate legal action against the respondent.

3. Copies of the order be furnished to the parties.

Appeal dismissed.