Delhi

North East

CC/342/2015

Yatin Kapoor - Complainant(s)

Versus

HDFC Bank Ltd. - Opp.Party(s)

16 Mar 2020

ORDER

 DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: NORTH-EAST

GOVT. OF NCT OF DELHI

D.C. OFFICE COMPLEX, BUNKAR VIHAR, NAND NAGRI, DELHI-93

 

Complaint Case No.  342/15

 

In the matter of:

 

	Yatin Kapoor 14/134 Subhash Nagar, New Delhi-110027.	Complainant
	Versus
	HDFC Bank Ltd 2nd floor, Express Building 9-10, Bahadur Shah Zafar Marg, ITO, New Delhi-110002.	Opposite Party

 

DATE OF INSTITUTION:      JUDGMENT RESERVED ON:               DATE OF DECISION      :

15.09.2015 16.03.2020 16.03.2020

 

 

N.K. Sharma, President

Ms. Sonica Mehrotra, Member

 

Order passed by Ms. Sonica Mehrotra, Member

 

ORDER

1. Brief facts as culled out in the present complaint are that the complainant approached by marketing executive of OP in December 2010 offering a credit card and obtained the necessary documentation alongwith application form from the complainant. The OP thereafter issue HDFC card bearing No. 4854XXXXXXXX0155 to the complainant with credit limit of Rs. 75126.59 Paise. The complainant paid the dues of the credit card regularly from time to time. However due to family problem, some dues on the said credit card could not be made in time. In the month of April 2014, the OP executive called the complainant and a settlement of Rs. 64,500/- was arrived at between the parties payable in six installments. The complainant agreed for such settlement which culminated into settlement letter dated 24.04.2014 issued by OP to the complainant for making the said payment between April 2014 to September 2014. However, the OP informed the complainant that his EMIs have been increased in number and would be below Rs.4,000/-. Thereafter the complainant, believing the said information given by OP started making the installments payment from April 2014 to May 2015 varying between Rs. 3,650/- to Rs. 4,130/-. But to the utter surprised to the complainant, the OP vide notice dated 03.07.2015 placed a ‘Hold on Funds’ notice in the salary account number 1374XXXXXX8148 of complainant held with OP bank to the tune of Rs. 14,278/- demanding to clear the outstanding on his credit card. Thereafter OP started threatening the complainant to pay the dues, aggrieved with which act alleging the same to be unfair, illegal and uncalled for, complainant filed the present complaint alleging unfair trade practice and deficiency in service on the part of OP and prayed issuance of directions against OP to release amount of Rs. 14,278.41 Paise and to restrain OP from debiting his salary account and refund Rs. 20,000/- alongwith compensation of Rs. 30,000/- for mental harassment and pain and Rs. 25,000/- as cost of litigation.

Complainant has attached copy of settlement letter dated 24.04.2014, copy of payment receipts issued by OP between April 2014 to May 2015 for payments made by complainant qua in cash against the subject credit card and copy of lien notice dated 03.07.2015 issued by OP to the complainant.

2. Notice was issued to OP on 06.10.2015. OP entered appeared on 09.11.2015 through counsel to whom copy of complaint with annexure was handed over. OP filed written statement on 02.02.2016 vide which while admitting the complainant having been issued credit card No. 4346781010847952 to the complainant on 15.12.2010 on his application dated 10.12.2010 made for the same and complainant availing credit facility of OP bank subject to terms and conditions of Card Member Agreement issued to him alongwith the said credit card binding him, submitted that complainant was aware of the terms and conditions stipulated therein. The subject card was replaced with the new credit card  No. 4854990000460155 in December 2013 which is the subject matter of dispute. OP submitted that as per the ‘Most Important Terms and Conditions’, ‘Fees and Charges’, ‘Cash Advance Fee’, ‘Late Fee Charges’, ‘Finance Charges’, ‘Right of Lien’ etc were applicable to the complainant as theses documents were part of the credit card and card member agreement but the complainant was very regular in making payment towards his credit card account which he was using extensively for various cash retail transaction reflecting the monthly statement and despite OP’s repeated reminders, complainant failed to clear the dues and even the minimum amount dues on the credit card. Due to the erratic payment and regular default by the complainant, a settlement was arrived at with respect to the subject credit card between OP and complainant vide settlement letter No. S1409218 dated 24.04.2014 for Rs. 64,500/- which was payable in six installments of Rs. 7800/- (first installment) and Rs. 11,340/- each for remaining five installment from April 2014 to September 2014 and timely payment of each installment on or before the agreed date of payment as per the settlement letter was the very essence of the settlement arrived at. However complainant failed to make payments as per the settlement offer due to which the said settlement became null and void and stood revoked making complainant liable to pay the entire outstanding dues in the card account and the payment received thereafter by the OP were credited only towards the total outstanding in the card account. OP in its defence stated that as per the terms and conditions of the settlement, ‘in the event of the above repayment schedule not being adhere to an any of cheques not being honored, this settlement letter would be rendered null and void and you would be required to pay the entire outstanding at that point of time. The Bank also reserves the right to initiate legal action on the dishonored cheques’. But the complainant despite being fully aware of the terms and conditions of the settlement, did not adhere to the schedule of payment mentioned in the settlement letter and only paid an amount of Rs. 27,690/- till September 2014 and that to not as per the schedule mentioned in settlement letter which therefore resulted in rendering the settlement offer null and void. Therefore OP in exercise of its Right of Lien and Set Off on the amount deposited with it belonging to the complainant as per the Lien and Right of Set off which stipulated that the Bank, at any time and without notice, will have lien and right of set-off on all moneys belonging to the card member standing to their credit in any account whatsoever with the bank or in the possession or custody of the bank. If upon demand by the Bank, the balance outstanding on the card account is not repaid within the prescribed time, such credit balance in any account in the possession of custody of Bank, whether for safe keeping or otherwise, including shares securities etc, held by bank as Depositary Participant may be adjusted towards dues under the said account, as also envisaged under Section 171 of Indian Contract Act, 1872, issued a notice dated 03.07.2015 for holds on funds on the complainant’s bank account held with it to the extent of Rs. 14278.41 Paise on the total outstanding dues of Rs. 75126.59 Paise as on the said date as per the card member agreement. OP further submitted that as per the credit card statement dated 14.12.2015 there are total due of Rs. 81,667/- against the said credit card which the OP is entitled to recover from the complainant alongwith charges interest thereon from 14.12.2015 till realization. OP denied having informed the complainant of increase number of installment of capping the same to below Rs. 4,000/-. For the defence so taken OP prayed for dismissal of the complaint.
3. Rejoinder and evidence by way of affidavit was filed by the complainant reiterating the grievance against OP.
4. Evidence by way of affidavit was filed by OP through its AR exhibiting copy of GPA, copy of credit card Brochure Cum Application Form No. CC06102165, copy of credit card  and card member agreement with complete usage guide, copy of duplicate monthly credit card statement issued by OP between January 2011 to December 2015, copy of settlement letter dated 24.04.2014 and copy of lien notice dated 03.07.2015 as exhibit RW1/A to RW1/E respectively. OP alleged that the complainant failed to clear outstanding due despite regularly receiving the credit card statement which our evidence of erratic payment history of the complainant.
5. Written arguments were filed by both parties in reiteration of their respective grievance / defence.
6. We have heard the rival contentions of both the parties and have thoroughly scrutinized the complete case file alongwith documents exhibited and relied upon by both the parties in support of their case/defence.

The core question for adjudication is whether OP was justified in creating / exercising right of lien hold on funds in the complainant’s bank account held with it for outstanding credit card dues. On scrutiny of case file, undisputedly a credit card ending 7952 was issued by OP to the complainant on 15.12.2010 which was replaced by credit card number ending 0155 in December 2013. On perusal of the credit card statements filed by OP alongwith its evidence as exhibit RW1/D, we observe that the dues on the same started mounting January 2013 onwards and from Rs. 24,000/-, the arrears escalated to Rs. 90,000/- in December 2015 and as per the credit card statement for April 2014 (before OTS), the dues were Rs. 82,576/-. The settlement amount as per the OTS arrived at between parties on 24.04.2014 was for payment of Rs. 64,500/- as one time settlement offer towards full and final payment of credit card dues to be paid between April 2014 to September 2014. The said settlement exhibit RW1/E stipulated inter alia that failure to adhere to the repayment schedule would render the settlement offer null and void. The said OTS was counter signed by Saroj Kapoor on behalf of complainant. However the schedule was not adhered to by the complainant as is evident from the record placed before us which manifest that the complainant paid only Rs. 27690/- between April to September 2014 (period of OTS). Therefore notice of lien dated 03.07.2015 for hold on funds to the tune of Rs. 14,278.41 Paise was issued by OP against outstanding due of Rs. 75,126/- on the complainant’s account ending 8148 held with it being placed on ‘Hold on Funds’ under ‘Right of Lien and Set-off’ due to non-payment of credit card dues by the complainant which credit card was issued by OP to the complainant. The OP had given a settlement proposal to the complainant of Rs. 64,500/- in April 2014 payable by September 2014 against which the complainant could not honour the payment schedule and the offer was therefore revoked and the entire amount stood payable all over again. The entire history of the credit card dues and payments made as per statement of credit card statement reveals that January 2013 onwards till last statement dated 14.12.2015, the complainant’s dues escalated from Rs. 24,000/- to Rs. 81,000/- and complainant made erratic payments intermittently, the dues having peat to Rs. 90,000/- in January 2014 and thereafter continued to be more than Rs. 70,000/-. In so far as the Lien and Right of Set-off is concerned which is the primary defence, the Hon’ble National Commission in the case of M. Mallika Vs State Bank of India reported as IV (2006) CPJ 1 (NC) held that bank can exercise its power of general lien. The relevant portion of the judgment is reproduced as under:-

“if any amount is due against a person either as borrower or as guarantor, in the account of another branch, the bank along with all its branches being one legal entity could exercise its general lien over documents/title deeds deposited in one branch in respect of loan in another branches for documents are with the bank.” The Hon’ble Supreme Court in the case of Syndicate Bank Vs Vijaya Kumar reported as (1992) 2 SCC 330 held as under:-

“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.” The Hon’ble National Commission in the case of Canara Bank Vs C.D. Patel reported as II (2001) CPJ 19 (NC) held that Bank can exercise its power of general lien if there is a default by the customer in discharging its liabilities.

Section 171 of Contract Act, 1872 gives statutory recognition to the concept of bankers general lien it provides that the bankers may, in the absence of the contract to the contrary, retain as a security for a general balance of account any goods bailed to them including money and attaches to all good and securities deposited with them as bankers by a customer or by a third person on a customer’s account provided there is no contract, express or implied, in consistent with such lien.

A banker’s lien on attach to money so long as it remains an ear marked a sum of money.

In the case of State Bank of India Vs Aggarwal Karogency 1996 (1) CPJ 250 (NC) the Hon’ble National Commission came to the conclusion that Bank has Lien under the Contract Act, 1872 as well as under the agreement upon that amount and was entitled to appropriate any amount of the complainant that was in its hand. In the present case the agreement was in the nature of card member agreement enter into between complainant and the OP with respect to the credit card taken by the complainant from the OP and therefore was bound by the term and conditions stipulated therein in which Lien and Right of Set-off was clearly laid down at Page 30 of the Credit Card Usage Guide exhibited by the OP as Ex- RW1/C alongwith its affidavit which stated that it is agreed that the bank, at any time and without notice, will have a lien and right of set-off on all moneys belonging to the card member standing to their credit in any account whatsoever with the bank or in the possessionor custody of the bank and that if the balance outstanding on the card account, despite demand of payment is not repaid within the prescribed time such credit balance in any accountin the possession of custody of bank, including shares securities etc, held by bank as Depositary Participant may be adjusted towards dues under the said account. The Hon’ble NCDRC in the case of SBI vs Shanti Lal Magan Lal Patel III (2017) CPJ 430 (NC) had dealt with similar issue where the exercise of lien of bank was made on all deposited amounts including FDRs in which the Hon’ble National Commission had inter alia held that non issuance of notice was no major lacuna in whole process of exercising general lien as banks public money on one side and Loanee / Guarantor cannot denied to repay loan while keeping money with the same bank. The Hon'ble National Commission in the recent judgment of HDFC Bank & Anr. Vs Somesh Chandra Sharma II (2019) CPJ 174 (NC) held in a similar case of credit card dues and settlement offer not adhered to by the complainant rendering it null and void held that the bank was well within its right to mark lien in complainant’s saving bank account ‘Hold on Funds’ against the outstanding dues and the complainant having got a concession from the bank in terms of settlement was duty bound to adhere to time bound schedule. 

7. In the present case we have seen that against the credit card dues which were outstanding since January 2013 the complainant had not made any substantial payment for more than two years and the dues had mounted to a sum of Rs. 82,576/- at the time when the OTS was entered into for Rs. 64,500/- which the complainant failed to pay within the stipulated time period of September 2014, the OP exercised  its power under lien of ‘Hold on Funds’ vide letter dated 03.07.2015 and Rs. 14,278.41 Paise was attached under lien out of the total balance of Rs. 75,126.59 Paise in the complainant’s account.

After appreciating the entire evidence, we are of considered opinion that the OP bank was well within its right to exercise the general lien on the amount kept as deposits by the complainant. In view of the gargantuan and surmounting unpaid dues and default in payment and financial indiscipline shown by the complainant in settlement of his credit card dues he cannot be allowed to take advantage of his own act omission and commission and therefore we find no merits in the present complaint against the OP bank as no deficiency of service or unfair trade practice can be attributable to it as there has been no illegal withdrawal / adjustment made by OP in the account of the complainant held with it. The tendency among borrowers to default and later seek concession in terms of the settlement and than not adhering to the same needs to be curbed. The complainant by his own admission as per cash payment receipts filed by him did not pay the requisite amount per month between April to September 2014 and thereafter too till May 2015 showing willful non compliance / default / non adherence to the settlement agreement arrived at. The complaint is therefore dismissed as devoid of merits. No order as to cost.

8. Let the copy of this order be sent to both parties free of cost as per Regulation 21 (1) of Consumer Protection Regulation 2005.
9.   File be consigned to record room.
10.   Announced on 16.03.2020.

 

(N.K. Sharma)     President

(Sonica Mehrotra)  Member