Punjab

StateCommission

FA/12/538

Jagdish Kaur - Complainant(s)

Versus

IDBI Bank Ltd. - Opp.Party(s)

J.M.Aggarwal

22 Jan 2016

ORDER

                                                               FIRST ADDITIONAL BENCH

 

STATE  CONSUMER  DISPUTES  REDRESSAL COMMISSION, PUNJAB

          SECTOR 37-A, DAKSHIN MARG, CHANDIGARH.

                                     

                   First Appeal No.538 of 2012

 

                                                Date of Institution: 02.05.2012

                                                Date of Decision:  22.01.2016

 

Jagdish Kaur Rihal wife of Darshan Rihal, resident of House No.B/1/306, Mohalla Gadurian, Phillaur, District Jalandhar.

 

                                                                        …Appellant/Complainant

                             Versus

 

1.      Industrial Development Bank of India Ltd., IDBI, Tower, WTC Complex, Cuffe Parade, Mumbai through its Managing Director.

 

2.      Branch Manager, IDBI Bank Ltd., Phagwara, District   Kapurthala

 

3.      Rohit Mahajan c/o IDBI Bank Ltd., Phagwara, District      Kapurthala at present posted as Acting Branch Manager, IDBI         Bank          Ltd., Pathankot.

 

 

                                                           ..Respondents /Opposite Parties

                                                           

 

First Appeal against order dated 21.02.2012 passed by the District Consumer Disputes Redressal Forum,  Jalandhar

Quorum:-

 

          Shri J. S. Klar, Presiding Judicial Member.

            Shri. H.S. Guram, Member

 

 

Present:-

 

          For the appellant                  : Sh.Munish Goel, Advocate

          For the respondent no.1       : Sh.Namit Gautam, Advocate

          For the respondent no.2&3  : None

         

          . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

 

          J.S KLAR, PRESIDING JUDICIAL MEMBER :-

         

          The appellant of this appeal (the complainant in the complaint) has directed this appeal against the respondents of this appeal (the opposite parties in the complaint), challenging order dated 21.02.2012 of District Consumer Disputes Redressal Forum Jalandhar, dismissing the complaint of the complainant. The instant appeal has been preferred against the same by the complainant now appellant.

2.      The complainant Jagdish Kaur has filed the complaint U/s 12 of The Consumer Protection Act, 1986 (in short, "the Act") against the OPs on the averments that she maintained a demat account no.11440050 besides availing facility of loan against shares held by her in her demat account and the said loan account bearing no.LAS 077653700000028 with OP No.2 since 03.03.2004. The sanctioned loan limit of the complainant against her holding is Rs.15,00,000/- The complainant was holding the shares of various companies in her name in the demat account maintained by OPs. The detail of which is given in the complaint and against the same, the complainant obtained a loan facility by pledging them with OP No.2. The details of pledged shares, which is given as under :-

                   Detail of Shares                   No. of shares held & pledged

i)                 Exide Industries                    21000-00

ii)                ITC                                            4000-00

iii)                Tata Tea                                    800-00

iv)               Hindustan Uni Lever               2000-00

 

On 25.03.2009 the total debit value in the loan account of complainant was Rs.16,45,173/-. The complainant has long history of share trading to earn livelihood by self-employment with OPs. The complainant made compliance of notice of OPs by depositing 2000 shares of Hindustan Uni. Lever Ltd in December 2008, when the complainant was served with a notice to deposit the overdue amount or provide additional security. It was mandatory on the part of the OPs to give at least three days notice beyond the repayment due to the account holder to make good the deficiency, failing which OP could exercise the right of security holder including the right to sell the shares to any person to appropriate the proceeds in the loan account to the extent of overdrawn value of loan. OP No.2 obtained the signatures of the complainant on a few stamp papers on the plea that same were to be used to be getting the shares converted into demat account. The detail of these shares are given as under:-

 

                   Detail of Shares                                      Quantity

i)                 East India Hotels                                      305-00

ii)                Ashok Leyland                                735-00

ii)                 Goosdricke Group Ltd                    360-00

 

The OP without giving any notice to the complainant sold her shares to third party. The complaint lodged with OP no.2 by the complainant through email and verbally, wherein OP no.2 admitted that Mr. Rohit carried those shares with him to Ludhiana when he was transferred instead of getting the same demat. The complainant alleged deficiency in service or unfair trade practice on the part of OP. The complainant has prayed that OPs be directed to reimburse the complainant with the value of shares sold by them without giving any notice or in the alternative the demat account of the complainant be credited with the same quantity of shares sold by them along with the shares, as detailed in para no.4 of the complaint handed over to OP no.3 for the purpose of getting them demat along with damages for deficiency in their service to the tune of Rs.5,00,000/- for financial loss and compensation for mental harassment.

3.      Upon notice, OPs appeared and filed written reply and contested the complaint of the complainant by raising preliminary objections that complaint is not maintainable. The trading of shares vide demat account do not fall within the definition of 'goods' or 'service' defined in Consumer Protection Act, 1986 and complainant is not a 'consumer' of the OPs. The complainant took financial assistance from OPs, as loan against securities (LAS), which deals in shares only. The OPs in connection with the trading of shares did not render banking or financial service; hence, complainant is not a 'consumer'. The jurisdiction of the Consumer Forum to entertain the complaint was disputed. The complainant is alleged to have no cause of action to file the complaint and complaint is bad for non-joinder of necessary parties, as shares in question were in the joint names of complainant's husband and father. The LAS and demat account are subject to the loan documents dated 12.02.2004  and demat account agreement dated 03.09.2003. The complainant was entitled to withdraw up to extent of 40% value of the deposited (dematerialized) shares in view of LAS Agreement. There was no occasion to convert the joint name shares certificate in dematerialized form in her said single name's account. The complainant purposely furnished/deposited the same with the OP, just to create evidence with ill intention. On merits, OPs averred that LAS to the complainant with initial limit of Rs.1,73,400/- was sanctioned, which was gradually enhanced up to Rs.15,00,000/- by the OPs, in view of number of shares available in the demat account and respective current market value. At the relevant time, limit was up to Rs.10 lacs due to the fall in the market value of the shares. LAS account has been declared, as NPA since December 2008 as it was running overdue for more than 90 days and the complainant did not maintain the said demat account in the declining market. The complainant weaved a false story that OP no.3 had received the said shares certificates due to oversight, which were in the joint names and they could not be dematerialized. Intimation in this regard was given to complainant through letter dated 16.12.2008  and dated 23.03.2009. OPs prayed for dismissal of the complaint.

4.      The complainant tendered in evidence, her affidavit Ex.C-A, affidavit of Darshan Singh Rihal, husband of the complainant Ex.C-B along with copies of documents Ex.C-1 to Ex.C-11. As against it; OPs tendered in evidence affidavit of Gurminder Singh Branch Head, IDBI Bank Phgwara Branch District Kapurthala Ex.RW-A along with copies of documents Ex.R-1 to Ex.R-6. On conclusion of evidence and arguments, the District Forum Jalandhar, dismissed the complaint of the complainant by virtue of order dated 21.02.2012. Dissatisfied with the order of the District Forum Jalandhar dated 21.02.2012, the complainant now appellant has preferred this appeal against the same.

5.      We have heard learned counsel for the parties and have also examined the record of the case, as none appeared on behalf of respondent no.2 and 3 in this appeal. We have also examined the written arguments placed on record by respondent no.1.

6.      The District Forum overturned the complaint of the complainant primarily on the ground that it has been held by West Bangal State Commission, Kolkatta in Hemant Kumar Chokani vs. Bank of America that -By pledging shares by complainant. The agreement being an agreement of a creditor and a debtor allowing overdraft facility - Question of hiring service would not arise and complainant is not a 'consumer' under the CP Act. The complaint was dismissed primarily on the ground that in the matter of banking service overdraft facility by pledging shares by complainant, the agreement being an agreement of a creditor and a debtor allowing overdraft facility. On the other hand, the counsel for appellant Sh. Munish Goel Advocate placed reliance upon law laid down in Vimal Chandra Grover versus Bank of India, reported in 2000 AIR (SC) 2181 by the Apex Court, wherein it has been held that over draft facility to customers -Bank provides service- Customer availing overdraft facility is a 'consumer'. In this authority, it has been observed by Apex Court that overdraft limit allowed against pledge of shares. Customer requested the bank to sell some of the share to liquidate the account -Bank agreed, but did not sell - Loss to customer due to fall in marked value of shares - Bank to make payment for the loss along with interest.  The counsel for appellant then referred to law laid down by Apex Court in Standard Chartered Bank Ltd versus  Dr. B.N Raman, reported in 2006 AIR (SC) 2810 wherein Apex Court has held that banking service relates to non-sovereign powers of statutory bodies like Banks and are covered under the term of 'service' within the purview of the Act. The Bank renders services to its customers or even non-customers. The next reliance placed before us is on law laid down by National Commission in M/s Indiabulls Financial Services Ltd and another vesus Varghese Skaria and another, reported in 2012(2) CPC, wherein it has been held that shares were sold at a low price causing huge loss by the petitioner. It was contended that matter being of commercial nature. The complaint was not maintainable. National Commission has held that argument is without force. Investment in share was only for earning their livelihood by the respondents/complainants was held to be a 'consumer'. On the basis of law laid down by National Commission in the above referred authority, we hold that complainant is a 'consumer' of the OPs and order of the District Forum is not sustainable. Consequently, the District Forum dismissed the complaint of the complainant primarily on the ground that complainant is not a 'consumer' and as such, the impugned order is not sustainable.

7.      As a result of our above discussion, we accept the appeal of the appellant and by setting aside the order of District Forum dated   21.02.2012 and remand the case to the District Forum, Jalandhar for fresh decision on merits in accordance with law. The parties are directed to appear before District Forum, Jalandhar on 16.03.2016. Record of District Forum be sent back forthwith so as to reach there well before the date fixed.

8.      Arguments in this appeal were heard on 18.01.2016 and the order was reserved. Copies of the order be communicated to the parties as per rules.

9.      The appeal could not be decided within the statutory period due to heavy pendency of court cases.

 

 

                                                                          (J. S. KLAR)

                                                          PRESIDING JUDICIAL MEMBER

                       

                                                         

                                                                           (H.S.GURAM)

                                                                              MEMBER

 

January 22, 2016                                                                

(ravi)