BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM AT BANGALORE (URBAN)

30^TH DAY OF DECEMBER 2015

O R D E R

SRI.P.V.SINGRI, PRESIDENT

This complaint is filed by the complainant under Section 12 of Consumer Protection Act,1986 against Opposite Party (herein after referred as OP) with a prayer to direct the OP Bank to pay him a sum of Rs.5,48,832/- being the difference in sale value, Rs.1,00,000/- towards additional interest paid, Rs.50,000/- towards deficiency in service with cost.

2.      The brief averments made in the complaint are as under:

The complainant was working as an officer in the OP Bank and after a departmental enquiry the complainant was compulsory retired from service by order dated 23.05.2004.  The complainant was holding several shares of different Companies which he had pledged in the OP Bank.  The complainant after his compulsory retirement from OP Bank wanted to close all his liabilities with the OP Bank and made repeated request to OP Bank to sell the shares pledged to the OD account.  He wrote a letter dated 15.12.2007 requesting the OP Bank to sell the shares.  Thereafter, he wrote one more letter dated 01.01.2008 again requesting the OP Bank to sell the shares and credit the same to his liabilities.  The OP Bank failed to response to the above said letters.  That after several request made to the OP Bank, the OP Bank decided to sell the shares pledged by the complainant and accordingly, on 19.09.2008 the shares were sold and adjusted to his OD account.  The total value of the shares as on 19.09.2008 was Rs.10,54,331/06ps.  On the date the complainant wrote his letter dated 15.12.2007 requesting the OP Bank to sell the shares, the total value of the shares was Rs.14,87,827/-.  This has been confirmed by the Bangalore Stock Exchange in the letter dated 11.09.2008.

3. Despite several request and remainders the OP Bank failed to sell the shares immediately.  Had the Bank acted as per the request of the complainant and sold the shares as per his letter dated 15.12.2007. The dues of the OP Bank would have been reduced by over Rs.16,00,000/-.  The conduct of the OP Bank in not selling the shares immediately after the request made by the complainant has resulted in huge financial loss to the complainant and he was forced to pay interest on his dues at penal rate.  The complainant apart from suffering huge loss also suffered unnecessary expenses and mental agony.  Had the Bank sold the shares as per the request made by the complainant the sale proceeds would have been Rs.16,03,163/-.  However, the OP Bank sold the shares on 19.09.2008 for a price of Rs.10,54,331/06ps thereby causing a loss of Rs.5,48,832/- to the complainant.  The OP Bank has caused delay of more than nine months in selling the shares.  The said delay has caused loss to the tune of Rs.5,48,832/-  to the complainant.  The OP Bank was not only negligent in selling the shares, but also has shown hostile discrimination due to the departmental enquiry held against the complainant.  There is deficiency of services on the part of the OP Bank. 

4. For the aforesaid reasons, the complainant prays for an order directing the OP Bank to pay him Rs.5,48,832/- being the difference in sale value of the shares, Rs.1,00,000/- towards additional interest he has paid to the OP Bank, Rs.50,000/- for deficiency of service on the part of the OP Bank together with cost of litigation.  

5. The OP Bank appeared through their Advocate and filed their version admitting that the complainant was an officer working in their Bank and retired compulsorily from service in the year 2004 and further admitted the OD account held by the complainant in the Bank and also pledging of shares belonging to various Companies with the OP Bank and further contended in brief as under:-

The complainant was a defaulter in repaying loan borrowed from the OP Bank.  On receipt of letter dated 15.12.2007 and 01.01.2008 from the complainant to sell the shares, a request was made to the higher authorities in circle office seeking the sale of shares and circle office vide letter dated 04.02.2008 permitted the OP Branch to sell the shares through the trading account of ARM Branch, Bangalore.  After observing the formalities and procedure required the shares of the complainant  were transferred to the Canara Bank DP Cell stock exchange branch, Bangalore for selling shares vide their letter dated 29.07.2008.   Due to the recession in the economy there was huge fall in the share market and the share value were at their lowest webb.  Therefore, it was not desirable to sell the shares.  However, constant watch was kept over the share market trends.  Later after some improvement the shares were sold on 09.09.2009 by which a sum of Rs.10,54,331/06ps was realised.  The said amount was adjusted to the four loan accounts held by the complainant.  The shares were pledged by the complainant as security for the loan and the OP Bank had right over all these shares.  These shares were required to be sold only after obtaining necessary permission from the higher authority and observing the depository cell formalities by opening a separate account, therefore sometime was taken.  However, there is no delay in selling the shares.  That due to the fall in the share market the shares were not sold immediately after opening a separate account.  The complainant is not a ‘consumer’ as defined under the C.P.Act.  There is no deficiency of service on the part of the OP.  OP Bank is not responsible for any loss suffered by the complainant due to fall in value of shares.  The OP does not admitt the price of the shares as stated in Annexure-E, the letter dated 11.09.2008 issued by Bangalore Stock Exchange Limited, Bangalore.  The complainant is not entitled to any of the reliefs claimed by him. 

6. For the aforesaid reasons OP Bank prays for dismissal of the complaint.

7. On the rival contention of both the parties, the points that arises for our determination are as under:

1. Whether, the complainant proves the deficiency in service on the part of the OP Bank as alleged in the complaint?

2. What relief or order?

8. After the version was filed by the OP Bank, the complainant was called upon to file his affidavit evidence.  Accordingly, the complainant filed his evidence by way of affidavit in lieu of oral evidence.  The OP Bank to substantiate the averment made in the version also filed the affidavit evidence of their Senior Manager Mr.Gouse Mohiddin.  Both the parties have submitted their written arguments.

9. Perused the allegation made in the complaint, averments made in the version, the sworn testimony of both the parties, written arguments, various documents produced by both the parties and other material placed on record.

10. Our answer to the above points:

11. POINT NO.1:  Admittedly, the complainant was working as an officer with OP Bank and was retired compulsorily from services after holding a departmental enquiry by order dated 23.05.2004.  It is also not in dispute that the complainant had two OD accounts and two home loan accounts in the OP bank.  After his removal from service the complainant wanted to close all the four accounts held by him in the OP Bank. Admittedly, the complainant had pledged certain shares/securities of different Companies as security for the OD account and loan account held by him in the OP Bank.  The number of the shares and securities pledged by the complainant are as under:-

1. Reliance Industries               -        367 Shares
2. Reliance Communication     -        367 Shares
3. Reliance Capital                    -        16 Shares
4. Reliance Energy                    -        27 Shares
5. Reliance Natural

Resources Limited                -        367 Shares

6. ICICI Bank                            -        50 Shares

12. The complainant after having decided to discharge his liability requested the OP Bank to take steps to sell the shares pledged by him with the OP Bank and adjust the sale proceeds towards his OD account as well as home loan accounts.  OP admits receipt of a letter dated 15.12.2007 from the complainant requesting for sale of the shares pledged by him and adjust the sale proceeds towards OD account bearing No.351 & 352. 

13. In para 5 of the version, OP admitted the receipt of letter dated 15.12.2007 written by complainant.  The OP Bank did not dispute or deny the contents of the said letter.  In the said letter dated 15.12.2007 the complainant has referred to his earlier letters dated 22.05.2005 and 04.07.2005 under which he repeatedly requested the OP Bank to dispose of shares pledged by him to secure the OD account and clear the  outstanding liabilities under the OD account.  The complainant further mentioned in the said letter that he was even learnt that the Circle Office, Bangalore has accorded necessary permission to the Branch for the sale of the securities and adjust the sale proceeds to the outstanding liabilities under the OD accounts.  The OP Bank did not deny the receipt of the letter dated 15.12.2007 as stated above and also did not deny the contents of the said letter as referred supra. Thus, the said letter makes it abundantly clear  that much prior to 15.12.2007 the complainant had requested the OP Bank by his letters dated 22.05.2005 and 04.07.2005 to dispose off some of his shares and adjust the sale proceeds to clear his liability under the OD accounts.  OP Bank having admitted the receipt of the said letter neither denied the contents nor explained the steps taken by it for disposal of the shares.  The OP Bank also did not deny the contention of the complainant in the said letter that the Circle Office has already accorded permission to the Branch for the sale of the said shares.  The OP Bank did not explain the reason in not taking steps for the sale of the said securities/shares in pursuance of the letter dated 22.05.2005 and 04.07.2005 written by the complainant.  As rightly contended by the complainant in para two of the said letter  that due to inaction on the part of the OP Bank in disposing of the said shares, resulted in mounting of his liability under the said OD accounts thereby causing considerable financial burden on him.

14. The complainant alleges that since no action was taken on his earlier letters as well as his letter dated 15.12.2007 he again wrote another letter on 01.01.2008 at Annexure-B requesting the Op Bank to initiate necessary steps for disposal of the shares pledged to secure the OD accounts and clear outstanding liabilities under the said accounts.  OP Bank admits the receipt of said letter dated 01.01.2008, in para 5 of their version.  It is pertinent to note that the OP Bank did not dispute the contention of the complainant raised in the said letter dated 01.01.2008.  Thus from the said letters at Annexure A & B it is apparent that the OP Bank despite repeated request failed to initiate necessary steps for the sale of shares pledged by the complainant for securing the above mentioned OD accounts. 

15. It is contended by the OPs that after receiving the above mentioned two letters from the complainant they sought permission from their superiors in the circle office for sale of shares and the Circle Office  vide their letter dated 04.02.2008 permitted the Bank to sell the shares through the trading account of ARM Branch, Bangalore.  However, the OP Bank did not mention the date on which they addressed a letter to their superiors seeking permission to sell the shares. 

16. Now it has to be seen as to whether the OP Bank was prompt and punctual in initiating necessary steps for the sale of the shares after getting necessary permission from Circle Office vide their letter dated 04.02.2008.  The complainant alleged that the Op Bank deliberately delayed the sale of the shares.  It is pointed out that on behalf of the complainant that only on 20.07.2008 the OP Bank transferred the said shares to Canara Bank DP Cell Stock Exchange Branch, Bangalore facilitating the sale of shares. The OP Bank did not provide any plausible explanation for the delay of nearly six months in transferring the shares to Canara Bank DP Cell Stock Exchange Branch for the sale of the shares.  Though it is contended by the OP Bank that the time taken for transferring the shares was for observing the formalities and procedures required for transfer of shares but this explanation of the OP Bank cannot be accepted.  One cannot believe that the compliance of procedure and formalities for transferring the shares to the Canara Bank DP Cell Stock Exchange Branch, would take nearly six months’ time.  Therefore, we are of the opinion that OP Bank has certainly not justified in taking nearly six months’ time just for transferring the shares to DP Cell Stock Exchange Branch, Bangalore.  In absence of any satisfactory explanation we have to infer that the said delay is either deliberate or due to callous attitude of the concerned officials in the Branch. 

17. The complainant has produced a letter dated 11.09.2008 issued by Bangalore Stock Exchange Limited, Bangalore certifying  market   value prevailing at Bangalore Stock Exchange for the shares belonging to Reliance Industries Ltd., Reliance Communication Ltd., Reliance Capital, Reliance Energy Ltd., Reliance Natural Resources Ltd., and ICICI Bank Ltd., on 17.12.2007 and 31.12.2007.  Though the OP Bank denied the value of the said shares as mentioned in the said letter, but did not produce any similar letter or document issued by Bangalore Stock Exchange Ltd., to show that the value of the said share/Scripps was lower than mentioned in the said letter.  We do not have any reasons to disbelieve the said letter as false or concocted.  The value of the above mentioned shares was much lesser on the dates the same were sold by the OP Bank as per their own documents issued by GILF Securities Trading Corporation Ltd., dated 09.09.2008.  It is submitted on behalf of the complainant that had the OP Bank disposed off shares on 15.12.2007 in pursuance of his letter dated 15.12.2007, the total sale proceeds would have been Rs.14,87,827/- as per the value of the said shares as on 15.12.2007.  it was further submitted that had Op Bank sold the shares on 31.12.2007 as per the price of the shares that were prevailing as on that date, the total sale proceeds would have been Rs.16,03,143/-.  Thus according to the complainant due to the unexplained and inordinate delay on the part of the OP Bank in selling the shares resulted in a huge loss of Rs.5,48,832/-.  Admittedly, as observed in the above paragraph the OP Bank has failed to explain for the delay of nine months in taking steps for sale of the shares pledged by the complainant.  The failure on the part of the OP Bank prompt in disposing of the shares has caused substantial loss to the complainant.  Further, the said delay has burdened the complainant with interest payable on the said OD accounts.  Even if the OP Bank had taken immediate steps after getting permission from the Circle Office in the first week of February 2008 the loss to the complainant would have been much lesser. 

18. For the discussion made above, we are of the opinion that the unexplained inordinate delay on the part of the OP Bank in disposing of the shares pledged by the complainant has resulted in substantial loss to the complainant. Certainly, the OP Bank is liable to compensate complainant for the said loss.

19. Now we have to determine the actual financial loss suffered by the complainant due to inordinate delay on the part of the OP Bank in disposing off the shares.  According, to the OP Bank the Circle Office permitted them to sell the shares only on 04.02.2008 and after receiving the said letter they have taken steps to transfer the shares to the concerned Branch for sale of shares.  During the course of discussion in the above paragraph we have already held that there is inordinate delay on the part of the OP Bank in transferring the shares to the concerned Branch for effecting the sale.

20.  It appears to us that the OP Bank was unable to sell the shares without obtaining permission from their superior officers in the Circle Office.  However, the OP Bank has failed to transfer the shares to the concerned Branch for sale immediately, after receipt of the permission from the Circle Office.  We do not find any records to show as to what was the price of the above shares during the month of February 2008. Without knowing the price of the above mentioned shares during the month of  February 2008 or atleast in the first week of March, it is not possible for us to quantify the actual loss suffered by the complainant.  However, it is apparent that due to inordinate delay on the part of the OP Bank, which amounts to deficiency in service, the complainant was made to suffer huge financial loss.  It is also pertinent to note that the OP Bank has resorted to sell the shares when the price of the same had hit the bottom.  Looking to the facts and circumstances of this case, we feel it appropriate to direct the OP Bank to pay a sum of Rs.1,00,000/- being the difference in the sale value.  Since, the complainant has failed to provide the exact amount of interest he was burdened with due to the delay in disposing of the shares, we are not able to award him Rs.1,00,000/- as prayed by him, towards penal interest.  However, we feel it proper to direct the OP Bank to pay a sum of Rs.10,000/- for burdening the complainant paying penal interest during the said period of nine months.  The conduct of OP Bank certainly amounts to deficiency in service.  The unexplained delay on the part of the OP bank in disposing of the shares must have put the complainant to great hardship, inconvenience and mental agony apart from causing financial loss.  Therefore we feel it appropriate to direct the OPs to pay a sum of Rs.50,000/- for deficiency in service on their part together with litigation cost of Rs.4,000/-. 

21.  After his retirement from the OP Bank the complainant who holds the above mentioned account in the OP Bank becomes a customer of the Bank and therefore he is a Consumer as defined under the C.P. Act 1986.  We do not find any basis in the contention of the OP Bank that complainant is not a Consumer as he was former officer of the Bank.  Therefore, we are of the opinion that present complaint is maintainable in this Forum.

22. The order could not be passed within the stipulated time due to heavy pendency.  For the discussion made above we proceed to pass the following:

ORDER

1. The complaint filed by complainant under section 12 of the Consumer Protection Act, 1986 is allowed in part. 

2. The OP Bank is directed to pay a sum of Rs.1,00,000/- to the complainant towards difference in value of the shares and Rs.10,000/- towards interest paid by the complainant.

3. Further OP Bank is directed to pay compensation of Rs.50,000/- towards deficiency in service resulting in hardship, inconvenience and mental agony to the complainant together with litigation cost of Rs.4,000/-.

4. The OP Bank shall comply the order within four weeks from the date of communication of the order.

5. Furnish free copy of this order to both the parties.

 (Dictated to the Stenographer and typed in the computer and transcribed by her, verified and corrected, and then pronounced in the Open Court by us on this the 30^th day of December 2015)

MEMBER                                                                      PRESIDENT

NRS* 

C.C.No.469/2010

Witness examined on behalf of the complainant dated 14.06.2010

1. Sri.Srinivasa Rao Desai,

Witnesses examined on behalf of the OP Bank dated 27.07.2010

1. Sri.Gouse Mohiddin

MEMBER                                                                     PRESIDENT