Haryana

Ambala

CC/213/2021

Bhagat Singh - Complainant(s)

Versus

HDB Financial Service - Opp.Party(s)

Suresh Bhola

01 Mar 2023

ORDER

BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, AMBALA.

Complaint case no.	:	213 of 2021
Date of Institution	:	13.07.2021
Date of decision	:	01.03.2023

 

Bhagat Singh age about 58 years son of Sh. Jeet Singh resident of H.No.108, Village Sounda Distt. Ambala.

          ……. Complainant.

                                                Versus

1. HDB financial Services Limited, Ground floor, Zeinth House, Keshavrao Marg, opposite Race Course, Mahalaxmi, Mumbai-40003 through its Managing Director/Chairman.
2. HDB financial Services Limited. Having its Regd. Office Radhika, 2nd floor, Law Garden Road, Navrangpura, Ahemdabad-380009 through its Managing Director/Chairman
3. HDB financial Services Limited, Branch office S.C.O 7, 1^st Floor, Kalgidhar Enclave, Baltana, Zirakpur Distt. SAS Nagar Mohali, Punjab 140607 through its Branch Manager.
4. HDB financial Services Limited, Branch office S.C.O 9, 1^st floor, sector 7, Urban Estate, Ambala City through its Branch Manager.

….…. Opposite Parties

Before:        Smt. Neena Sandhu, President.

                             Smt. Ruby Sharma, Member,

          Shri Vinod Kumar Sharma, Member.           

 

Present:      Shri Suresh Bhola, Advocate, counsel for the complainant.

                             Shri Rajeev Sachdeva, Advocate, counsel for the OPs.            

Order:        Smt. Neena Sandhu, President.

1.                Complainant has filed this complaint under Section 35 of the Consumer Protection Act, 2019 (hereinafter referred to as ‘the Act’) against the Opposite Parties (hereinafter referred to as ‘OPs’) praying for issuance of following directions to them:-

(i) To issue No Objection Certificate

(ii) To pay Rs.2,00,000/- on account of mental agony, torture and physical harassment and inconvenience suffered by the complainant

(iii) To pay Rs.1,00,000/- on account of deficiency in services

(iv) To pay Rs. 25,000/- as litigation expenses.

Or

Grant any other relief which this Hon’ble Commission may deems fit.

 

2.            Brief facts of the case are that the complainant has purchased Truck/ LPT2518TC BSII make TATA Motors bearing registration no.HR63B-5057 Chassis no.MAT448050C5A00336 Engine No.11M84036599 to earn his live hood for himself and his family. The above said truck has been purchased by the complainant with the financial assistance of the OPs vide loan account no.1715123 dated 1.8.2016 for an amount of Rs.10,05,968/-. Against the said loan, the truck in question stood hypothecated by the complainant with the OPs. As per the terms of the loan agreement, the complainant has agreed to repay the loan amount alongwith interest in 42 monthly installments to the OPs. The complainant has been regularly paying the amount of installments from time to time and he has cleared the entire loan account in full and final on 17-7-2019 and nothing remained outstanding against him and in the account obtained by the complainant, overdue, future due and Statement of Hypothecation is shown as 0.00, which clearly shows that the said account has already been settled in full and final and nothing is due against the complainant. The complainant visited and requested the OPs number of times to issue him 'No Due Certificate' in his favour regarding the loan account, so that he may be able to get the hypothecation of the OPs cancelled from the original RC of the above said truck, but the OPs  always postponed the matter on one pretext or other. The complainant again visited the office of OPs in the last week of March 2021 and requested them to issue 'No Due Certificate' in his favour regarding the above said loan account, but they flatly refused to do so on the ground that the complainant has given guaranty/surety for Jaswinder Singh who has taken the loan to purchase a vehicle/truck and has failed to repay the loan amount and due to his failure the complainant is liable to repay the loan amount of the said borrower-Jaswinder Singh. The complainant simply stood as a personal guarantor of the loan account of Jaswinder Singh and did not give his vehicle/truck as security for the loan account of Jaswinder Singh. The said action of the OPs is arbitrary, illegal and unethical. The OPs have no right to withhold the No Due Certificate in respect of the above said truck as the loan account has already been settled in full and final. Hence this complaint.
3.           Upon notice, the OPs appeared and filed written version and raised preliminary objections with regard to maintainability, not come with clean hands, cause of action, no locus standi, bad for non-joinder and mis-joinder and cause of action etc.  On merits, it has been stated that the complainant approached to the OPs for finance facility in respect of purchase of the truck in question.  The OPs relying upon the particulars and information provided by the complainant in the proposal form, agreed to provide loan facility to the tune of Rs.10,05,968/- and for this purpose, a loan agreement was got executed between the parties. Vide agreement no. 1715123 dated 01.08.2016, an amount of Rs.10,05,968/- was financed and disbursed to the complainant, which has been admittedly repaid by the complainant. As per the terms and conditions of the said loan agreement, the complainant has agreed to pay the loan and also it was specifically admitted by the complainant that, the borrower and co- borrower, guarantor in the agreement are bound and charged with the liabilities under the agreement and also for any other agreement by either borrower & guarantor executed with the OPs.  As per the Point 20 in the agreement i.e. 20. SET OFF & LIEN it has been specifically agreed that:

Set off & Lien :

20.1) the borrower expressly accepts that if the borrower fails to pay any monies when due or which may be decided due prior to the date when it would otherwise have become due or commits any other default under any agreement (including the agreement) with HDBFSL under which, the borrower is enjoying any financial/credit/other facility, then in such event HDBFSL shall, without prejudice to any of it's specific right under each of the agreements, be absolutely entitled to exercise all or any of it's rights under any of the borrower's agreement (including this agreement) with HDBFSL at the sole discretion of HDBFSL. ]

1.  

Until the ultimate balance owing by the borrower or the guarantor(s) to HDBFSL has been paid or satisfied in full HDBFSL shall have a lien on all property and assets of the borrower and/or the guarantor(s) from time to time in the possession of HDBFSL and a charge over all stocks, shares and marketable or other security from time to time and get any or all of them registered in the name of HDBFSL or it's nominees whether the same be held for safe custody or otherwise including but not limited to the dematerialized shares or other securities of the Borrower (s), held by HDBFSL as a depository participants.

4.           The complainant has also executed another loan agreement with the OPs i.e. agreement no. 2076182 dated 31.12.2016 wherein the complainant stood as CO-BORROWER for the said loan agreement and in the said loan agreement, there occurred an event of default in the repayment of loan and the complainant being Co-Borrower, agreed to have been liable for the said loan as Co-Borrower. The company as per the rights in the agreement, has charge over the vehicle in the loan agreement no. 1715123 dated 01.08.2016, for outstanding amount of Rs.10,05,968/- against loan agreement no. 2076182 dated 31.12.2016  in which the complainant is a CO-BORROWER. Under the said loan agreement no. 2076182, as on 21.10.2021, an amount of Rs.10,48,996/- is outstanding due toward borrower and the complainant being co-borrower in the said loan. Arbitration proceedings were already initiated in the above said loan no. 2076182 against the complainant and borrower Jaswinder Singh by the OPs and the same is now fixed for passing of arbitral award on next date under Arbitration proceedings. Therefore the present complaint is liable to be dismissed being devoid of any merits. The OPs had intimated to complainant/borrower regarding the default of payments and regarding the loan amount balance along with interest and other charges, but the complainant did not bother to repay the same. Rest of the averments of the complainant were denied by the OPs and prayed for dismissal of the present complaint.
5.           Learned counsel for the complainant tendered affidavit of the complainant as Annexure CA alongwith documents as Annexure C-1 and C-2 and closed the evidence on behalf of the complainant. Learned counsel for the OPs tendered affidavit of Amit Kumar, Authorized Person cum Legal Manager of HDB Financial Services Limited Branch Office at SCO-234, Sector-12, Karnal as Annexure OP-1/A alongwith documents Annexure R-1 to R-5 and closed the evidence on behalf of OPs.
6.           We have heard the learned counsel for the parties and have also carefully gone through the case file.
7.           Learned counsel for the Complainant submitted that by not issuing the NOC in respect of hypothecated truck in question under loan account bearing no. 1715123 dated 01.08.2016, despite the fact that the entire loan amount under the said agreement stood repaid by him and on the other hand, taking a ground of entrusting general lien  over the hypothecated truck in question to other  loan account bearing no. 2076182 dated 31.12.2016, wherein the  complainant is only a guarantor, the OPs are deficient in providing service and indulged into unfair trade practice.
8.           On the other hand, learned counsel for the OPs submitted that since the complainant being a co-borrower alongwith borrower Jaswinder Singh in another loan account bearing no. 2076182 dated 31.12.2016 is still liable to make loan payment of more than Rs.10 lacs, as such, the OPs have rightly marked general lien over the hypothecated truck in question, irrespective of the fact that he has cleared the loan amount under account bearing no. 1715123 dated 01.08.2016.
9.           Since, admittedly, though the complainant had cleared the loan account bearing no. no.1715123 dated 1.8.2016, Annexure R-1 against which he had mortgaged/hypothecated truck bearing no.HR63-B-5057, yet, he being co-borrower in another loan account, which was obtained under agreement no. 2076182 dated 31.12.2016, Annexure R-2, wherein the complainant stood as CO-BORROWER alongwith Jaswinder Singh Borrower, has not cleared the amount of the OPs, which is more than Rs.10 lacs under the said agreement (2076182). Under these circumstances, the moot question which falls for consideration is as to whether, the OPs  can mark general lien in the  matter over the hypothecated  truck in question or not. It may be stated here that a similar question fell for determination before the Hon’ble National Commission in STATE BANK OF PATIALA VERSUS NARINDER PAL SINGH I(2012) CPJ 352 (NC), wherein it was held that a Banker has a general lien over such securities and has a right to use the proceeds in respect of any balance that may be due from the customer by way of reduction of customer’s debit balance and that the provisions of Section 171 of the Indian Contract Act, 1872 carves out an except to the said general rule in order to protect the interest of the bank by ensuring right to retain the documents so that other loan accounts of the bank are also cleared by borrowers or guarantors without forcing the bank to file suits. Relevant part of the said order is reproduced hereunder:-

          “It is a settled principle of law that the bank has ‘General Lien’ over all forms of securities deposited by or on behalf of the customer in the ordinary course of banking business and that the general lien is a valuable right of the banker judicially recognized and in the absence of agreement to the contrary. A Banker has a general lien over such securities and has a right to use the proceeds in respect of any balance that may be due from the customer by way of reduction of customer’s debit balance. The provisions of Section 171 of the Indian Contract Act, 1872 carves out an except to the said general rule in order to protect the interest of the bank by ensuring right to retain the documents so that other loan accounts of the bank are also cleared by borrowers or guarantors without forcing the bank to file suits…….”

10.           Similar view was taken by the Hon’ble Madra High Court in  C.Lalitha Raj vs The Assistant General Manager, W.P.No.19096 of 2011 & M.P.No.1 of 2010, decided on on 16 March, 2012 wherein it was held as under:-

“……6. In support of right of lien of the respondent bank, learned counsel for the respondents placed reliance on the judgment of the Hon'ble Division Bench of this Court in the case of State Bank of India, Kotagiri Branch vs. Chokkalingam and others (C.R.P.(NPD) No. 3019 of 2007, decided on 10.01.2008, wherein it has been laid down as under:

"5. The question of bankers lien/general lien fell for consideration before the Supreme Court in Syndicate Bank Vs Vijay Kumar & Ors. reported in AIR 1992 SC 1066. The provision of Section 171 of the Indian Contract Act, 1872 was also noticed in the said case. Taking into consideration Halsbury's Laws of England and provisions of the Contract Act in respect of bankers lien, the following observation was made by the Supreme court :- "6. In Halsbury's Laws of England, Vol. 20, 2nd Edn. p.552, para 695, lien is defined as follows :-

Lien is in its primary sense is a right in one man to retain that which is in his possession belonging to another until certain demands of the person in possession are satisfied. In this primary sense it is given by law and not by contract. In Chalmers on Bills of Exchange, thirteenth Edition page 91 the meaning of "Banker's lien" is given as follows :

"A banker's lien on negotiable securities has been judicially defined as "an implied pledge." A banker has, in the absence of agreement to the contrary, a lien on all bills received from a customer in the ordinary course of banking business in respect of any balance that may be due from such customer." In Chitty on Contract, Twenty-sixth Edition, page 389, Paragraph 3032 the Banker's lien is explained as under :

"By mercantile custom the banker has a general lien over all forms of commercial paper deposited by or on behalf of a customer in the ordinary course of banking business. The custom does not extent to valuables lodged for the purpose of safe custody and may in any event be displaced by either an express contract or circumstances which show an implied agreement inconsistent with the lien........................ The lien is applicable to negotiable instruments which are remitted to the banker from the customer for the purpose of collection. When collection has been made the process may be used by the banker in reduction of the customer's debit balance unless otherwise earmarked." (Emphasis supplied) In Paget's Law of Banking, Eighth Edition, Page 498, a passage reads as under :

"THE BANKER'S LIEN Apart from any specific security, the banker can look to his general lien as a protection against loss on loan or overdraft or other credit facility. The general lien of bankers is part of law merchant and judicially recognised as such." In Brandao v. Barnett (1846) 12 Cl & Fin 787 it was stated as under :

"Bankers most undoubtedly have a general lien on all securities deposited with them as bankers by a customer, unless there be an express contract, or circumstances that show an implied contract, inconsistent with lien." The above passages go to show that by mercantile system the Bank has a general lien over all forms of securities or negotiable instruments deposited by or on behalf of the customer in the ordinary course of banking business and that the general lien is a valuable right of the banker judicially recognized and in the absence of an agreement to the contrary, a Banker has a general lien over such securities or bills received from a customer in the ordinary course of banking business and has a right to use the proceeds in respect of any balance that may be due from the customer by way of reduction of customer's debit balance. Such a lien is also applicable to negotiable instruments including FDRs which are remitted the Bank by the customer for the purpose of collection. There is no gainsaying that such a lien extends to FDRs also which are deposited by the customer."

6. In view of the finding of the Supreme Court, we are of the view that the bank has a general lien over the securities and other instruments deposited by respondents 1 to 3 in the ordinary course of banking and such general lien being valuable right of the banker, as per Supreme court decision, it cannot be ignored in absence of an agreement to the contrary.…….”

11.           Thus in view of the settled principle of law laid down in STATE BANK OF PATIALA VERSUS NARINDER PAL SINGH  and C.Lalitha Raj’s cases (supra), in our considered opinion, the OPs cannot be held deficient in providing service or guilty of adoption of unfair trade practice, by marking general lien on truck bearing no.HR63-B-5057 mortgaged/hypothecated under loan account no.1715123 dated 1.8.2016, to secure the outstanding loan amount under agreement no. 2076182 dated 31.12.2016 wherein the complainant stood as CO-BORROWER alongwith the borrower.   
12.           In view of the aforesaid discussion, we do not find any force in the present complaint, consequently we dismiss the same, being devoid of merits. The parties are left to bear their own costs. Certified copy of this order be supplied to the parties concerned, forthwith, free of cost as permissible under Rules. File be indexed and consigned to the Record Room.

 Announced:- 01.03.2023.

 

(Vinod Kumar Sharma)	(Ruby Sharma)	(Neena Sandhu)
Member	Member	President