STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Sarita Chaudhary D/o Sh.Karam Chand Rana, R/o House No.616, Sector 36-B, Chandigarh.

……Appellant/Complainant

V e r s u s

HDFC Bank, SCO No.371-372, Sector 35-B, Chandigarh, through its Branch Manager.

              ....Respondent/Opposite Party

Appeal under Section 15 of the Consumer Protection Act, 1986.

BEFORE:    JUSTICE SHAM SUNDER (RETD.), PRESIDENT.

                   MRS. NEENA SANDHU, MEMBER.

Argued by:  Sh. C.L. Chaudhary, Advocate for the appellant.

                   Respondent already exparte.

PER  JUSTICE SHAM SUNDER (RETD.), PRESIDENT

1.                This appeal is directed against the order dated 16.04.2012, rendered by the District Consumer Disputes Redressal Forum-I, U.T.,  Chandigarh (hereinafter to be called as the District Forum only) vide which, it partly accepted the complaint, and directed the Opposite Party, as under:-

“Keeping in view the above situation, discussion as well as documents on record, we are of the opinion that the present complaint deserves to be partly allowed.  The same is allowed partly.  The OP Bank is directed to refund the amount of Rs.576.50 along with interest @ 9% p.a. from the date of their respective debits till its actual payment, apart from paying litigation cost of Rs.5000/-.  The OP bank is also directed to supply complete details, to the complainant, about her shares, sold by it from time to time, with rates & numbers etc.  There is no order as to costs. 

This order be complied with by the OP within in a period of 30 days from the date of receipt of copy of this order, failing which the OP shall be liable to refund the awarded amount along with interest at the rate of 12% p.a. from the date of filing this complaint i.e.17.1.2012 till its actual payment, besides paying litigation cost, as aforesaid”.

2.             The facts, in brief, are that the complainant (now appellant), had opened LAS A/C No.00352100002092, with the Opposite Party (now respondent), operative from 10.12.2004. The complainant had regularly paid interest, on the loan amount utilized, from December 2004 to December 2010. Till then, there was no outstanding amount of interest. It was stated that the Opposite Party, vide letter dated 03.11.2011, (Annexure C-1) demanded interest of Rs.74,719.21P, from the complainant.  The complainant, vide letter dated 25.11.2011 Annexure C-2, agreed to pay the amount of Rs.74,719.21P, by 31.3.2012.  It was further stated that the Opposite Party, did not send any reply, and resorted to the sale of shares, without the consent of the complainant. The statement of account, Annexure C-3,  submitted by the Opposite Party, to the complainant, showed that it (Opposite Party), had sold her shares, for an amount of Rs.85,301.80P, which act on their part was totally illegal and unfair. It was further stated that the Opposite Party, also did not give any details, about the shares, their numbers, and at what price those were sold. It was further stated that the Opposite Party, also arbitrarily debited Rs.500/- on 9.12.2011, to the account of the complainant, besides debiting a sum of Rs.51.50P on 18.12.2011 and Rs.25/- on 28.12.2011. It was further stated that the matter was brought to the notice of the Opposite Party, but to no avail. It was further stated that the aforesaid acts of the Opposite Party, amounted to deficiency, in rendering service, as also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), for issuance of directions to the Opposite Party to credit the shares,  sold out,  to the account of the complainant; to credit the account of the complainant, to the tune of Rs.500/-, Rs.51.50P and Rs.25/-, respectively, which were debited illegally; to pay Rs.50,000/-, as compensation, for mental agony and physical harassment; and Rs.11,000/-, as litigation expenses, was filed.

3.             The Opposite Party, in its written version, admitted that the complainant had availed of a credit limit from it, by pledging her shares. It was stated that, as per the terms and conditions of  the contract, executed between the parties, the complainant was required to maintain shares, of the value, as required, to continue to avail of the facility, failing which, the Opposite Party, was free to sell the same, for recovery of dues. It was further stated that there was deficiency, in the account of the complainant, which was intimated to her, vide letter dated 06.10.2011.  The permissible credit limit was for a sum of Rs.5.00 lacs, and the account was overdrawn. The complainant, was, thus, asked to pay cash, into the account, to maintain the permissible credit limit, but she neither deposited the amount, in the account, nor paid interest, which had accrued. It was further stated that since the complainant failed to clear the dues, by 10.12.2011, the Opposite Party, was constrained to recover the amount, by sale of shares pledged, as per the agreement. It was further stated that Rs.500/-, had been charged on account of LAS-AMC charges for maintaining the account, besides service tax and cess, as per the guidelines of the Government. It was further stated that, thus, there was neither any deficiency, in rendering service, on the part of the Opposite Party, nor it indulged into unfair trade practice. The remaining averments, were denied, being wrong.

4.             The Parties led evidence, in support of their case.

5.             After hearing the Counsel for the parties, and, on going through the evidence, and record of the case, the District Forum, came to the conclusion, that as per the Loan Agreement-cum-Guarantee, executed between the parties, the Opposite Party was entitled to sell the shares pledged, if at any time, the value of the securities fell, so as to create a deficiency, in the margin, specified by the bank or the amount was overdrawn. It was further held by the District Forum, that since the value of the securities fell, as a result whereof a deficiency was created in the margin specified by the bank, the complainant was duly intimated, about the same, with a request to deposit the amount, so as to make up the deficiency, but she did not do so, the Opposite Party was right in selling the shares. The District Forum, further held that a sum of Rs.5,00/-, Rs.51.50P, and Rs.25/-, respectively, had been illegally, and arbitrarily, debited to the account of the complainant, and to that extent, there was deficiency, in rendering service, as also indulgence into unfair trade practice, on the part of the Opposite Party.

6.             The District Forum, thus, ultimately, partly accepted the complaint, in the manner, referred to, in the opening para of the instant order. 

7.             Feeling aggrieved, the instant appeal, has been filed by the appellant/complainant.

8.             Notice of the appeal, was given to the respondent. The respondent was duly served, but no legally authorized representative, on its behalf, put in appearance, as a result whereof, it was proceeded against exparte, vide order dated 01.08.2012.

9.             We have heard the Counsel for the appellant, and, have gone through the evidence and record of the case, carefully. 

10.           The Counsel for the appellant, submitted that, no doubt, the credit limit facility was availed of, by the complainant, against the pledge of securities/shares. He further submitted that the  letter dated 06.10.2011, was received by the complainant, from the Opposite Party, intimating that there was a deficiency, in her account, as the same was overdrawn. He further submitted that the complainant was asked to deposit cash, in the account, so as to make up the deficiency. He further submitted that the complainant, vide letter dated 25.11.2011, Annexure C-2, agreed to clear the interest amount of Rs.74,719.21P, by 31.03.2012, but despite that her pledged shares were sold by the Opposite Party, arbitrarily, in the sum of Rs.85,301.80P. He further submitted that even the AMC charges for the years 2007 to 2010, were illegally deducted by the Opposite Party.  He further submitted that the District Forum, fell into a grave error, in not directing the Opposite Party, to refund the amount of AMC, illegally charged, for four years. He further submitted that even the District Forum, did not grant any compensation, for causing mental agony and physical harassment, to the complainant, by the Opposite Party. He further submitted that the order of the District Forum, is, thus, liable to be modified.

11.           Undisputedly, the complainant had opened LAS A/C No.00352100002092, with the Opposite Party (now respondent), operative from 10.12.2004. He utilized the loan amount from December 2004 to December 2010. This loan facility was granted on pledge of securities/shares. At the time of grant of loan facility, Loan Agreement-cum-Guarantee- Annexure A, was executed between the parties. Clause 12 of the Loan Agreement-cum Guarantee, reads as under:-

“In the even that the Borrower creates a pledge/mortgage  of the Securities in favour of the Bank and the Bank advances monies to the borrower under the overdraft facility in the manner set out in this Agreement then it is agreed by and between the parties that :

(i)            xxxxxxx

(ii)      If at any time the value of the said Securities falls so as to create a deficiency in the margin requirement specified by the Bank from time to time or there is an excess over the overdraft facility limit, the Borrower shall within seven days of notice from the Bank, deposit with the Bank additional Security in the form of cash or such other Securities which may be acceptable to the Bank, failing which the Bank may at its discretion sell, dispose off or realize any or all of the Securities then held by the bank without being liable for any loss or damage or diminution in value sustained thereby.”

12.           From the afore-extracted Clause 12 of the Agreement aforesaid, Annexure A, it is evident that the Opposite Party was duly authorized to sell, dispose of or realize any or all of the Securities, if the borrower/complainant failed to clear the deficiency, in the margin, within the stipulated time, specified by the Opposite Party, from time to time or there was an excess overdraft facility limit. Admittedly, there was deficiency, in the margin of the aforesaid facility. Accordingly, letter dated 03.11.2011, Annexure C-1, was written by the Opposite Party, to the complainant, about non-servicing of interest, in her loan account against securities. The relevant portion of the said letter is reproduced below:-

“As you are aware, interest is debited to your Overdraft account on a monthly basis.  Please note that as per guidelines issued by RBI, interest debited should be serviced by way of deposits in the overdraft account. This deposit for the interest servicing has to be done even if the outstanding balance in your account is lower than credit limit.

Based on the above, we note that there is a shortfall of Rs.74,719.21 in the interest serviced. We therefore request you to fund the account latest by 11-Nov-11.”  

13.           Since the complainant, herself, failed to make up the deficiency in the Credit Loan Account, by paying the due amount, as demanded by the Opposite Party, vide the letter referred to above, it (Opposite Party) was left with no option, than to sell the securities/shares, to recover the amount, in view of clause 12 of the agreement, aforesaid.

14.           The statement of account, Annexure C-3, which was produced by the complainant, on the file, clearly showed the position. Even the statement of account of the complainant, at pages 52 to 61 of the District Forum file, also clearly showed the credit availed of, by the complainant; the amount which was over due, against her; and the amount for which the shares were sold, for the purpose of recovering the outstanding amount. Since, the Opposite Party, acted, in accordance with the terms and conditions of the Agreement, referred to above, and, even before the sale of the shares, a notice was given to the complainant, to make up the deficiency, by paying the amount, but when she failed, in our considered opinion, it (Opposite Party), was right in exercising its right, in selling the securities, pledged by the complainant, for recovering the amount. There was, thus, no deficiency, in rendering service, in this regard, on the part of the Opposite Party.  The District Forum, was also right, in holding so.

15.           No guidelines, were produced, on the record, by the Opposite Party, to the effect,  that it could recover the amount of Rs.5,00/- on account of LAS/AMC charges; Rs.51.50P and Rs.25/-, respectively, from the complainant. In the absence of any written guidelines/instructions, or Agreement, having been signed or executed between the parties, in this regard, the Opposite Party, could not arbitrarily and  illegally charge these amounts. The District Forum, was right in holding that by charging these amounts illegally and arbitrarily, certainly there was a deficiency, in rendering service, on the part of the Opposite Party. The District Forum, was, thus, right in ordering the refund of these amounts, alongwith interest.

16.           Coming to the submission of the Counsel for the appellant, that even the AMC charges for the years 2007 to 2010,  should have also been ordered  to be refunded, by the District Forum, to the complainant, by the Opposite Party, it  may be stated here, that, no such prayer was made by the complainant, in the complaint. If, in the appeal, such a plea was taken, that could not be said to be sufficient to grant the relief to the complainant, in this regard. When no prayer, for the refund of AMC charges for the years 2007 to 2010, was made in the complaint, by the complainant, the District Forum, could not go beyond the pleadings, to award the amount, to her.  The submission of the Counsel for the appellant, in this regard, being devoid of merit, must fail, and the same stands rejected.

17.           No doubt, no compensation was granted by the District Forum. As stated above, as per the Agreement, referred to above, the Opposite Party, was entitled to recover the outstanding amount, by selling the securities/shares, pledged by the complainant, as the margin fell deficient, and outstanding amount had not been deposited by the complainant, despite due intimation, there was no deficiency, in rendering service, on the part of the Opposite Party, with regard to the recovery of Rs.74,719.21P. The complainant was duly compensated, by way of ordering the refund of AMC and two other sums, arbitrarily deducted, alongwith interest @9% p.a., from the respective dates of debits, till the actual payment, with penal interest @12% P.A., from the date of filing the complaint i.e. 17.01.2012, till its actual payment, in case of non-compliance of the order within the stipulated period. Not only this, the complainant was also awarded litigation costs to the tune of Rs.5,000/-. Grant of interest, by the District Forum @9% P.A., and penal interest @12% P.A., in our considered opinion, could be said to be sufficient, to take care of the amount of compensation. No further compensation was required to be granted in this case, to the complainant, by the District Forum. The submission of the Counsel for the appellant, in this regard, being devoid of merit, must fail, and the same stands rejected.

18.           No other point, was urged, by the Counsel for the appellant.

19.           In view of the above discussion, it is held that the order passed by the District Forum, being based on the correct appreciation of evidence, and law, on the point, does not suffer from any illegality or perversity, warranting the interference of this Commission.

20.           For the reasons recorded above, the appeal, being devoid of merit, must fail, and the same is dismissed, with no order as to costs. The order of the District Forum is upheld.

21.            Certified copies of this order, be sent to the parties, free of charge.

22.           The file be consigned to Record Room, after completion

Pronounced

September 3, 2012

Sd/-

[JUSTICE SHAM SUNDER(RETD.)]

PRESIDENT

Sd/-

[NEENA SANDHU]

MEMBER

Rg