Dt. of filing : 09/01/2019
Dt. of Judgement : 25/03/2021
Mrs. Sashi Kala Basu, Hon’ble President
This consumer complaint is filed by the Complainant namely Sri Suman Haldar under Section 12 of the Consumer Protection Act, 1986 against the Opposite Party (referred as OP hereafter) namely Branch Manager, HDFC Bank Limited, Ekdalia Branch alleging deficiency in service on its part.
Case of the Complainant in short is that due to necessity of urgent money Complainant applied for personal loan before the Opposite Party against the deposit of gold ornaments as co-lateral security. An amount of Rs.1,15,000/- was sanctioned by the Bank on 6/8/2016. The tenure of loan was fixed for a period of 12 months from the date of disbursement together with interest @14.50% p.a. Complainant made the payment of monthly interest of Rs.1390/- through ECS. Since the Complainant was in judicial custody from 16/1/2017 in connection with a criminal case, his wife Suparna Halder approached the Opposite Party in June, 2017 for payment of principal amount and balance residual interest in order to close the loan account but the Opposite Party Bank denied the wife of the Complainant from making said payment and ultimately on the date of maturity Opposite Party forcefully renewed the said loan procuring the consent against will of the Complainant through his agent. Thus the date of maturity of said extended loan was to expire on 30/8/2018. Opposite Party Bank time and again denied the Complainant through its representative, opportunity to close the loan account for want of physical presence of the Complainant. However, ultimately on relentless approach by the Complainant, Opposite Party directed the representative of the Complainant to furnish certain documents which were furnished before the Opposite Party by the Complainant. Inspite of furnishing those documents Opposite Party failed and neglected to communicate and apprise the wife of Complainant about any tangible solution causing further delay. Thereafter Complainant served a notice upon the Opposite Party on 2/5/2018 but of no use. The Complainant also served a notice upon the higher authority of the Opposite Party requesting foreclosure of the said account on 29/11/2018. But the Opposite Party failed and neglected to comply the lawful demand of the Complainant regarding foreclosure of the loan account. On the contrary Opposite Party has sent a notice dated 10/11/2018 for sale of pledged gold. Thus the present complaint has been filed praying for directing the Opposite Party to close the loan account on receiving of principal amount and to release the gold ornaments held as co-lateral security, to direct the Opposite Party to pay compensation of Rs.1,00,000/- and litigation cost of Rs.30,000/-.
Complainant has annexed with the complaint, loan sanctioned order dated 6/8/2016 and 30/8/2017, copy of Power of Attorney dated 28/9/2018 and 8/10/2018, e-mail correspondence, copy of the charge-sheet/FIR in connection with criminal case, letter dated 25/2/2018 sent by the Complainant to Opposite Party, Order of Hon’ble High Court in connection with an application filed under Section 439 of CRPC, notice sent by the Opposite Party for sale of pledged gold dated 10/11/2018 and copy of letter dated 21/11/2018 sent by the Complainant to the higher authority of the Opposite Party.
Opposite Party has contested the case by filing written version denying and disputing the allegation made by the Complainant. It is contended that the relationship between the parties are that of debtor and creditor as such Complainant is not a consumer under the provision of Consumer Protection Act, 1986. On the application of the complainant alongwith a declaration, loan was sanctioned in August, 2016. Complainant thereafter had applied for renewal of said loan amount vide loan agreement on 30/8/2017 upon maturity. So the request of renewal was accepted by the Bank for a further period of 12 months. It is also contended that Complainant also availed Credit Card from the Opposite Party Bank and holding the same since 9/3/2013. But the Complainant failed and neglected to repay the dues in respect of the Credit Card statement regularly. So a notice was sent by the Opposite Party to the Complainant dated 10/10/2018 to repay the entire dues within 7 days due to the persistent default committed by the Complainant. A sum of Rs.96,889/- is due and payable by the Complainant for the said Credit Card account as on 2/3/2019. A sum of Rs.1,12,092/- is due to be paid by the Complainant as on 12/3/2019 payable under the loan account. It is further contended that the application form submitted by the Complainant for disbursement of the loan accompanied with a declaration of terms and conditions of the loan and as per one of the terms and conditions out of various terms stated therein, it is stated that if any amount remains due and payable to the Bank under any other account of the borrower, the bank has right to exercise its charge on the pledged gold against the said account also. So the Opposite Party has prayed for dismissal of the case.
During the course of the trial both the parties filed their respective affidavit-in-chief followed by filing of questionnaire and reply thereto and ultimately argument has also been advanced.
At the time of hearing of the argument Ld. Advocate appearing for the Complainant has argued that the Bank has no right to exercise lien over the pledged gold for any outstanding in respect of other account. He has referred to the following case laws:
- Mannangi Subba Rao Vs Marella Venka Reddy
- M/s. Agarwal Keregency Vs State Bank of India
- Bhaskar Ramkrishna Vasco Vs Manager, Goa Urban Co-operative Bank Limited.
Ld. Advocate appearing for Opposite Party has also referred to the decision of Hon’ble State Commission of Kerala, in the case of Manager, Panamaram Syndicate Bank Vs V. J. Thomas and has argued that Section 171 of the Contract Act gives general lien to the Bank over the gold pledged with the Bank. It is also argued by citing the said decision that the relationship between the parties are of debtor and creditor and not of a consumer and service provider.
So the following points require determination:
- Whether the Complainant is a consumer under the provision of Consumer Protection Act?
- Whether there has been deficiency in rendering service on the part of the Opposite Party?
- Whether the Complainant is entitled to the relief as prayed for?
Decision with reasons
Point No.1
Section 2(42) of the Consumer Protection Act, 2019 and Section 2(O) of 1986 Act defines what ‘service’ is and the ‘banking service’ is covered under the various services mentioned under the said provision. So any person who own an account in the bank and takes service of the bank may file the complaint under the Act. In this case, Complainant has claimed that on his application bank sanctioned /disbursed loan of Rs.1,15,000/- on 6/8/2016 against deposit of gold ornament weighing 89.200 gm in total. Thereafter inspite of several approaches by the Complainant through his representative as he was in judicial custody, for making payment of principal amount for closure of loan account, he was denied by the Opposite Party bank. According to Complainant instead of settling the loan and closure of the loan account, bank sent a notice dated 10/11/2018 for sale of pledged gold which was illegal. So it is apparent that the Complainant availed the service of the Opposite Party bank of providing loan on deposit of gold and as it is claimed that even though Complainant all along was willing and ready to make repayment for release of the deposited gold but the same has been denied by Opposite Party, case of the Complainant does fall within the definition of ‘service’ as provided under the Act. Whether Complain ant made the payment and was always ready as claimed by him will be discussed in other points but failure in returning the securities even after the borrower repays the loan or is ready to pay the same, will be deficiency in service and thus the Complainant is a consumer under the provision of Consumer Protection Act.
Point No.2 & 3
Opposite Party in this case contended that on the application of the Complainant being accompanied with a declaration, loan was sanctioned for a period of 12 months and the maturity date was 6/8/2017. Subsequently, Complainant applied for renewal of the loan vide loan agreement on 30/8/2017 upon maturity and so further period of 12 months was extended aiding the Complainant to pay the amount due to the bank. Opposite Party has filed the said renewal letter. Even though Complainant has alleged that he was forced to renew the loan agreement and he consented against his will but in support of his said claim, he has not filed any document. He neither made any complaint before the bank itself protesting the alleged forceful renewal nor he made any complaint before any other authority. However the main dispute in this case is whether the bank has any right to exercise charge over the pledged gold?
Opposite Party has contended that the Complainant also availed a credit card from Opposite Party bank bearing no.1017720000419285. But Complainant has failed and neglected to repay the dues. A sum of Rs. 96,889/- is due and payable under the said credit card account as on 02/03/2019. For his such default, bank has also sent a notice dated 10/10/2018 to the complainant to repay the same. Towards loan account a sum of Rs.1,12,092/- is due and payable by the complainant as on 12/03/2019. As per terms and conditions of the gold loan, if any amount remains due and payable to the bank under any other account of the borrower, the bank has right to exercise its charge on the pledged gold against the said account also.
Complainant has not disputed and denied about the credit card account and that a sum of Rs.96,889/- as alleged by the bank is due to be paid. It is only argued on behalf of the Complainant that the bank cannot exercise any lien or charge over the pledged gold as credit card account is no way connected with the gold loan account.
Opposite Party has filed the said “Declaration cum Terms and Conditions of loan collateralized by Gold” duly signed by the complainant on 06/08/2016 and on a careful scrutiny of the said declaration, it appears that clause 27 of the said agreement or the declaration reads as follows :-
“In addition to any general lien or similar right to which the Bank as bankers may be entitled by law, practice, custom or otherwise, the Bank may at any time and without notice to me/us combine or consolidate all or any of my/our accounts with and liabilities to the bank and set-off or transfer any sum or sums standing to the credit of anyone or more of such accounts in or towards satisfaction of any of my/our liabilities to the bank on any other account or in any other respect, whether such liabilities be actual or contingent, primary or collateral and several or joint. The Bank may also exercise lien on any gold security in respect of dues in relation to any other account held by me/any of us with the Bank”.
So as per said declaration containing terms and conditions, bank may exercise lien on the gold pledged by the Complainant as security for the dues payable by him even under the said credit card account. The declaration cum terms and condition is dated 06/08/2016 which was admittedly signed and submitted by the Complainant. So far as the signature therein the declaration, it is not the case of the Complainant that his signature was obtained forcefully or against his will. He has claimed that he was forced to sign against his will in the renewal loan agreement which was done in August, 2017. If that be so, Complainant cannot go beyond the terms and conditions of the declaration executed by him.
Ld. Advocate for the OP has also argued that in terms of Section 171 of the Contract Act, bank may retain the gold pledged by the Complainant. Section 171 of Contract Act specifies that “Bankers, factors, wharfingers , attorneys of a High Court and Policy brokers may, in the absence of a contract to the contrary, retain as a security for a general balance of account, any goods bailed to them but no other persons have a right to retain as a security for such balance, good bailed to them unless there is an express contract to that effect “.
So as per Section 171 of the Contract Act , in order to exercise the banker’s lien or right to set-of, the demands must be mutual and between the same parties. In this case Complainant is the account holder of both the account with the Opposite Party. Aforesaid Section is very categorical that bankers may in the absence of a contract to the contrary retain as a security for a general balance of account, any goods bailed. In this case there is no contract to contrary to disable the bank to exercise the general lien as per Section 171 of the Contract Act. On the contrary the specific terms and conditions of the agreement or declaration by the Complainant has already been highlighted above.
So far as case laws relied upon by the Ld. Advocate for the Complainant, in view of the declaration cum terms and conditions of loan dated 06/08/2016 executed by the Complainant as discussed above that the bank may exercise lien on any gold security in respect of dues in relation to any other account held by the Complainant with the bank, the three case laws referred to above, has no application in the given facts and situation of this case.
Thus in view of the discussions as highlighted above, we find no illegality in Opposite Party Bank exercising right of charge on the pledged gold against dues payable also under the credit card account.
Hence,
ORDERED
CC/12/2019 is dismissed on contest.
