BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

========

Complt. Case No : 1277 of 2009

Date of Institution:    04.09.2009

Date of Decision  :    11.06.2010

Nishant Rao s/o Sh.Jagdish, R/o H.No.962/1, Sector 41-A, Chandigarh.

 ……Complainant

V E R S U S

1]       The General Manager, HDFC Bank, SCO No.77-78, Sector 8-C, Chandigarh.

2]       The Chief Manager, HDFC Bank Card Division, No.8, Lattice Bridge Road, Thiruvanmivur, Chennai.

3]       The Branch Manager, HDFC Bank, Ansals Fortune Arcade,K Block, Sector 18, Noida, Uttar Pradesh.

.…..Opposite Parties

CORAM:          SH.LAKSHMAN SHARMA                         PRESIDENT

                    SH.ASHOK RAJ BHANDARI            MEMBER

                    MRS.MADHU MUTNEJA                        MEMBER

PRESENT:     Sh.Anuj Sharma, Ad. For the complainant.

Sh.Sandeep Suri, Adv for OPs.

PER ASHOK RAJ BHANDARI, MEMBER

                    The complainant while working with Exl Services Ltd. at Noida opened an account with OP Bank (OP-3) in the year 2006 and after shifting to Chandigarh, he was still using the same account, operating it from Chandigarh Branch of the OPs (OP No.1).  The complainant for the first time received a letter dated 24.9.2008 (Ann.C-1) from OP No.2 on 1.10.2008, stating that some dues were pending against his Credit Card Account No.43467711005474326 and therefore, they held a sum of Rs.56,092.79Ps. against his savings bank account on the ground that he failed to pay such an amount to OPs.  It is stated that the complainant neither got any credit card from OPs nor used the same nor received any such letter earlier to Ann.C-1 showing any outstanding dues against him. He brought this matter to the notice of OPs through  e-mail and requested them not to hold his account or any amount therein on any such ground but the OPs did not pay any heed.  Ultimately, legal notices were sent to the OPs on 22.11.2008/21.1.2009 but it too was not replied to.  However, inspite of all that, the OPs illegally and fraudulently withdrew an amount of Rs.56,125.85Ps from the account of the complainant on 10.10.2008 as a result of which a cheque of Rs.40,000/- issued to one Sh. Sunil Arthur by the complainant was dishonoured due to insufficient funds. Therefore, the present complaint has been filed, alleging the above acts of OPs as gross deficiency in service and unfair trade practice due to which the complainant had to suffer great mental tension, physical harassment and financial loss.

2]                 OPs filed reply stating therein that the complainant did receive the card and also utilized the same.  The finance availed by him against the credit card was credited into the savings bank account of the complainant and the same was duly utilized by him.  It is also stated that the complainant failed to clear the dues against him and the bank traced another account opened by the complainant with their bank  and in exercise of its right of lien imposed a hold on the account of complainant.  On account of default in the payment of the dues of the bank by the complainant, the bank had the right to mark a hold/lien on the account of the complainant and therefore, the same was done since complainant inspite of notice dated 24.9.2008 failed to make the outstanding payment. Pleading no deficiency in service on the part of OPs, it is prayed that the complaint be dismissed.

3]                 We have heard the learned counsels for the parties and perused the evidence led by the parties in support of their contentions. 

i)             The basic facts of the case in question of the complainant having opened a saving bank account with OP No.3 in the year 2006 and that the same was later on utilized by him at the Chandigarh Branch of the OP, have been admitted. It is also a fact that the OPs had kept a lien/hold and subsequently deducted a sum of Rs.56,125.85Ps. from the said account in settlement of the outstanding dues in the credit card account of the complainant against credit card No.43467711005474326.

ii)           As per the complainant, the OPs have illegally deducted a sum of Rs.56,125.85Ps. from his savings bank account by first marking a lien/hold on the said account, against the credit card dues shown against his name and subsequently they actually deducted the said amount from his savings bank account.  The complainant says that he never got any credit card from the OPs, therefore, there was no question of either taking a cash loan or utilization of said credit card for any transaction.  The act of deducting the said sum of Rs.56,125.85Ps. from his savings bank account has been deemed as deficiency in service against the OPs by the complainant and this has led to the present complaint.

iii)          The OPs have refuted all the allegations made by the complainant in respect of the wrongful/illegal deduction of a sum of Rs.56,125.85Ps. from the savings bank account of the complainant saying that a credit card was issued to the complainant and the same was received by him.  Further, the complainant had taken a cash loan of Rs.4500/- from the OPs, which was not paid back by him.  No doubt he made some small payments against the utilization of the credit card but the amount in question was never paid in full by the complainant, which led to the imposition of overdue interest, late payment charges and finance charges resulting in the multiplication of the amount of Rs.4500/- to Rs.56,125.85Ps.

iv)         As per the OPs, the amount in question has been rightly deducted from the savings bank account of the complainant as the OPs bank was holding a lien/hold on the said account against the dues not paid by the complainant in his credit card account.

4]                 On close perusal and study of the entire case, we find that the important questions under consideration are as under:-

a)           Whether the credit card was actually issued by the OPs to the complainant and that the same was received by the complainant ?

b)           Whether the complainant had actually utilized the credit card in respect of taking a cash loan from the OPs and also made part payments against the credit availed by him in his credit card account?

c)           Whether the OPs had the right to mark a lien/hold on the savings bank account of the complainant against the outstanding dues in his credit card account and that the OP Bank could make actual deductions of the outstanding amount from the said account?

5]                 In respect of point as at (a), the OPs have produced on record documents showing that the complainant had himself made an application for the issuance of a credit card to him.  A copy of the Silver Credit Card Application made by the complainant has been placed on record.  Not only that, the OPs have also submitted a letter dated 9^th March, 2010 from Blue Dart Express Limited, a courier service company, stating that the package against Airwaybill Number 42520558183, dated 26^th October, 04 had been delivered to the complainant on 30.10.2004 and the same was received by the complainant himself.  All this clearly proves that not only the complainant had made an application for the issuance of a Silver Credit Card to him but that he had infact himself received the credit card.

6]                 In respect of point as at (b), the OPs in support of their case annexed the credit card statements showing that a sum of Rs.4500/- was credited to the savings bank account of the complainant on 2.11.2004 against credit card No.4346771005474326.  Subsequently in payment of the cash loan availed by the complainant, he had made the cash payment of Rs.270/- on 31.5.2005 and later on a sum of Rs.500/- on 29.6.2005.  These payments were made by the complainant in his credit card account in part payment of the cash loan taken by him from the OPs.  This clearly establishes that not only the complainant had availed the cash loan from the OPs but also made part payments in liquidation of the same.  It further proves that the only thing which remained there that the complainant failed to make full payment of the loan availed by him from the OPs, which consequently led to the multiplication of the outstanding amount on account of finance charges, overdue interest and other penal dues imposed by the OPs from time to time on account of non-payment of the cash loan by the complainant.

7]                 With regard to point (c) as above, the OPs have quoted Section 171 of the Contract Act dealing with general lien of bankers, factors, wharfingers, attorneys and policy-brokers and reads as under:-

“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, goods bailed to them, unless there is an express contract to that effect.”

They have further quoted Section 25(3) of the Contract Act which says that a barred debt is good consideration for a fresh promise to pay the amount.  When a debtor makes a payment without any direction as to how it is to be appropriated, the creditor has the right to appropriate it towards a barred debt.

8]                 The complainant has raised a point that the present complaint is time barred as the period of 3 years had already expired by the date the OPs wanted to recover the outstanding dues from the complainant.  He also quoted the relevant Section of the Limitation Act, 1963, which is as under:-

 9]                On the question raised by the complainant in respect of the law of limitation and that the period of 3 years had already expired on the date the OPs made a claim for recovering the outstanding dues, the OPs stated that the statute of Limitation only bars the remedy but does not extinguish the debt itself.  Section 28 of the Limitation Act provides that when the period limited to a person for instituting a suit for possession of any property has expired, his right to such property is extinguished and when the property, is incapable of possession, such as debt, the section has no application and lapse of time does not extinguish the right of a person thereto. 

10]               Supporting their case further, the OPs have cited an authority of Hon’ble Supreme Court of India in the case of Punjab National Bank and Others Vs. Surendra Prasad Sinha.  The relevant part of the said judgment is quoted below:-

“From the aforesaid decisions it is amply clear that though the remedy to recover the debt from the principal debtor is barred by limitation, the liability still subsists and the bank is entitled to appropriate the debt due from the amounts which are in its possession either belonging to the principal debtor or the surety, as it is settled law that the liability of the surety is co-extensive with that of the principal debtor.  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 to the banker judiciously recognized and in the absence of agreement to contrary by virtue of statutory provisions under Section 171 of the contract act the banker has a general lien over such securities and amounts in its possession.  He has the right to use the proceeds towards adjustment of the debt due to him from the customer.  Such a lien is also applicable to negotiable instruments including fdrs of the customer which are lying with the bank.  Merely because the said fixed deposit was created subsequent to the loan transaction it would not make any difference.  The bank has a right to adjust all the amounts which are in their possession and which belong to the customer on the date they adjust the said amount irrespective of the date on which the transaction which gave rise to the said claim took place.

10.         In the light of Section 25(3) and Section 60 and 171 of the Act specified supra and also in the light of the view expressed by the Apex Court in Bombay Dyeing’s case (2^nd supra) and Punjab National Bank’s case (3^rd supra) in particular, this court is of the considered opinion that the concurrent findings recorded by both the court of first instance and also the appellate Court cannot be sustained since the banker’s lien and the right of a banker to make suitable deductions or to make adjustments by way of set off to be upheld positively even if otherwise it may be time barred and in view of the same, the appellant-defendant is bound to succeed and accordingly the Second Appeal is hereby allowed.  But however since on the ground of banker’s lien, the appellant bank is succeeding, the parties to the litigation to bear their own costs.”

AIR 1984 S.C. 1012;  AIR 1958 S.C. 328

AIR 1992 S.C. 1815; AIR 1992 S.C. 1066

2001-ILR(Kar)-5015”

11]               From the arguments put forth by the OPs as also the concerned authorities in the present case, it is quite clear that the OPs were within their rights to not only mark a hold/lien on the savings bank account of the complainant against his outstanding dues in his credit card account, which remained unpaid but also to subsequently deduct the outstanding amount from his savings bank account against the said due.  Therefore, there is nothing wrong or illegal about the marking of lien or making such a deduction by the OPs.

12]               In view of the detailed analysis of the entire case, in our considered opinion, there is no merit, weight or substance in the present complaint, which cannot be accepted in favour of the complainant as it has no merit.  In fact the present complaint deserves rejection.  We, therefore, dismiss the complaint.  However, the respective parties shall bear their own cost. 

13]               Certified copies of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

11.06.2010                                                                     

(LAKSHMAN SHARMA)

PRESIDENT

                                       (ASHOK RAJ BHANDARI)

MEMBER

                                                             (MADHU MUTNEJA)

MEMBER

‘Om’