BEFORE THE DISTRICT CONSUMER DISPUTES
REDRESSAL FORUM, JALANDHAR.
Complaint No.125 of 2016
Date of Instt. 16.03.2016
Date of Decision: 30.01.2019
Jagdish Kaur Rihal wife of Darshan Singh Rihal, resident of House No.B-1/306, Mohalla Gadurian, Phillaur, Distt. Jalandhar
..........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, Distt. Kapurthala.
3. Rohit Mahajan c/o IDBI Bank Ltd., Phagwara, Distt. Kapurthala at present posted as Acting Branch Manager, IDBI Bank Ltd., Pathankot.
….….. Opposite Parties
Complaint Under the Consumer Protection Act.
Before: Sh. Karnail Singh (President)
Smt. Jyotsna (Member)
Present: Sh. K. C Malhotra, Adv Counsel for the Complainant.
None for the OPs No.1 to 3.
Order
Karnail Singh (President)
1. The instant complaint received by way of Remand from the Hon'ble State Commission, vide order dated 22.01.2016, whereby the judgment of the District Forum has been set-aside and further direction given to the District Forum to decide the instant complaint afresh, on merits accordance with the law and parties were directed to appear before this Forum.
2. The brief facts of the complaint are that the complainant is maintaining a demat account No.11440050 besides availing a facility of loan against shares held by her in her demat account and the said loan account bears number LAS 077653700000028 with the 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 with the OP, the detail of which is given hereunder as per the record of OP as on 25.03.2009 and against the same, the complainant has obtained a loan facility by pledging them with the OP No.2. Detail of pledged shares is also given here under corresponding to the total holdings:-
Details 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
3. That as on 25.03.2009, the total debit value in the loan account of the complainant was Rs.16,45,173/-. The complainant is having a long history of share trading to earn livelihood as self employment with the OP and transpiration of her account statement pertaining to her loan account reveals that she had always complied with the terms of the bank and in the event when her loan account revealed excess drawings against the value of security of shares, she had met with the requirement and had made the deficiency either by depositing cash or in the alternative by providing additional security in the shape shares. In the month of December, 2008 the complainant made a compliance of notice of the OP by depositing 2000-00 shares of Hindustan Uni Lever Ltd, when the complainant was served with a notice to deposit the over due amount or provide additional security. It is incumbent on the OP to give at least three days notice beyond the repayment date to the account holder to make good the deficiency and in the event of the account holder's failure to meet the requirement, the OP is at liberty to exercise its right as the 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. It is pertinent to mention here that the complainant handed over the following shares to Rohit Mahajan OP No.3, who was Assistant Manager with the OP No.2 in the month of December, 2008 for getting the same demat. Along with this, he also obtained signatures of the complainant on few stamp papers on the plea that the same are to be sued for getting the shares converted into demat account. The detail of the shares are as under:-
Details of Shares Quantity
(i) East India Hotels 305-00
(ii) Ashok Leyland 735-00
(iii) Goodricke Group Ltd. 360-00
4. The OP No.3 despite obtaining all the share certificates in original along with required stamp papers duly signed, miserably failed to get the same converted in demat account resultantly all these shares which should having been reflecting in the demat account of the complainant much earlier then March 2009 could not accounted for by the OP till March as such while exercising their discretion and right to sell the security as stated in the agreement after serving mandatory notice on the complainant. Value of these shares could not be accounted for. Had the shares been got demat by the OP, then the over due amount as alleged would not had been any occasion for selling the shares by the OP. Even otherwise, the OP had gravely erred by selling shares of the complainant much more than the required value. The value of overdue amount and the shares sold is given hereunder for the sake of comparison:-
(i) Amount Overdue Rs.4,67,003/-
(ii) Value of shares old Rs.10,89,344/-
5. The act and conduct of the OP in regard to selling shares over and above the amount due is also illegal, unlawful, unwarranted and misuse of their discretion, which has resulted in financial loss to the complainant. It is also worth to mention here that in circumstances where the amount in the loan account becomes overdue due to fluctuation in the stock market, before resorting to the remedy of selling the shares to the third party, it is incumbent upon the OP to give three days notice in writing before exercising its rights as the security holder, pledge, assignee or secured creditors asking for the amount overdue, but the OP miserably failed to make due compliance of the said condition. When contacted, the OP alleged that it has resorted to the remedy of selling the shares after giving due opportunity to the complainant for depositing the overdrawn amount, when no such letter or notice was ever served upon her instructing her to fund the overdue amount or pledge additional securities within three days from the date of such letter. When the complainant made an enquiry from the bank in this regard, she was handed over a photocopy of letter dated 23.03.2009 addressed in her name, the copy of which is enclosed herewith. The complainant asked the OP to verify about the delivery of letter to her on which OP refused and also could not give any satisfactory reply as to why shares worth value of almost two and half times were sold by them, then the required value except stating that it was due to miscommunication among the bank and the broker.
6. That a complaint was made in this regard to the OP No.2 through email as well as verbally and after series of correspondence finally OP No.2 admitted that Mr. Rohit carried those shares with him to Ludhiana when he was transferred instead of getting the same demat. This admission on the part of the OP itself brings the case of the complainant within the scope of deficiency in service of the OP as OPs No.1 and 2 are vicariously liable for act and conduct of OP No.3, who is in direct employment of the OP No.1 and as such necessity arose to file the present complaint with the prayer that the complaint of the complainant may be accepted and OPs be directed to reimburse the value of the shares sold them 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 detailed in Para No.4 of the complaint handed over to the OP No.3 for the purpose of getting them demat along with damages for deficiency in service, to the tune of Rs.5,00,000/-
7. Notice of the complaint was given to the OPs and accordingly, reply of the amended complaint filed by the OPs, wherein took preliminary objections that the complainant does not come within the definition of the term Consumer as she is running the trading of shares, vide her demat account No.11440050. Moreover, by mentioning the word “that the complainant has been trading in shares to earn livelihood as self employment”, does not bring the same into the definition, as the very purpose is commercial activity and further alleged that the complaint is liable to be dismissed on the ground as the same is not maintainable due to the act and conduct of the complainant herself. In fact, the complainant has suppressed the material facts from the Forum because the complainant was having an account in default i.e. NPA. There was already default of more than of Rs.5 Lakh with her account, so there was no occasion for go for issuance of cash credit limit. Moreover, she was only entitled to withdraw power to the extent of 40% of the deposited share. In her case, the share she has deposited could not be de-materialized as the same were in the joint name along with her husband, whereas her account is in her own name. So, there was no occasion to convert the same, certificate of which was given to bank for conversion to her account. She knew this fact fully, but she furnished the same just to create evidence with ill-intention. It is further alleged that this Forum has got no jurisdiction to entertain and try the present complaint. On merits, it is admitted that the complainant got sanctioned a loan limit Rs.15,00,000/-, but she was having power to withdraw upto Rs.10,00,000/-. The other allegations as made in the complaint are categorically denied and lastly submitted that the complaint of the complainant is without merits and the same may be dismissed.
8. In order to prove the case of the complainant, the counsel for the complainant tendered into evidence affidavits Ex.CA, Ex.CB, Ex.CC and Ex.CD along with some documents Ex.C-1 to Ex.C-11 and closed the evidence.
9. Similarly, counsel for the OPs tendered into evidence affidavits Ex.RW1/A and Ex.RW2/A along with some documents Ex.R-1 to Ex.R-21 and closed the evidence.
10. We bestowed our thoughtful consideration to the submissions made by learned counsel for the respective parties and also gone through the case file very minutely.
11. In nutshell, the case of the complainant regarding maintaining a demat account as well as getting loan facility against share held by the complainant in her demat account and the loan account of the complainant has been separately issued by the OP since 03.03.2004 and sanctioned loan limit of the complainant against her holding is Rs.15,00,000/- and it is also admitted that the complainant pledged the shares with the OP against the loan amount and share of the complainant had been put on sale to the tune of Rs.10,89,344/- by the OP in order to recover the over due amount of Rs.4,67,003/-, sold by the OP. The complainant alleged that the said share of the complainant was sold by the OP without serving a require notice of 3 days as envisaged in the agreement and due to that reason, the complainant alleged that there is a negligence on the part of the OPs and alleged the claim be awarded in her favour.
12. First of all, the OP took a legal plea that the complainant is not a consumer. We like to make it clear that this plea had been earlier decided by this Forum in the instant complaint, vide order dated 21.02.2012 and against that order, the OP bank preferred a first appeal before the Hon'ble State Commission and the said appeal had been disposed of by the Hon'ble State Commission on 22.01.2016 and resolved the issue in question regarding the dispute of the OP that the complainant is not consumer and the Hon'ble State Commission apparently held that the complainant is a consumer, vide its judgment dated 22.01.2016 and remanded back the case in hand for fresh decision. So, we are of the considered opinion that this question is not required to discuss again.
13. Further the OP set up a case that a loan account of the complainant was non performing account since December, 2008 . The complainant was asked to deposit some more shares as a security and accordingly, the complainant handed over some shares in December, 2008 to OP No.3 for demat. There were 305 shares of East India Hotel and 735 shares of Ashoka Lay Land and 360 shares of Goodrick Group Ltd., but the said shares were not subject to demat and same were rejected on the ground that holders name is different as compare to that in share certificate and information regarding that was given to the complainant and thereafter, a letter dated 16.12.2008 was sent to the complainant that due to fall in the market value of her securities pledged with the bank, the drawing power on money equity account has been lowered. According to loan sanctioned limit, which was Rs.15,00,000/-, but the value of the security deposited by the complainant was Rs.21,2000/- and drawing power at that time was 10,51,000/- and outstanding as on date was Rs.15,13,827/- and over due amount was Rs.4,62,867/- and due to that reason, the complainant was informed to pledge more additional security within 3 days from the date of this letter. The complainant has not denied the aforesaid letter dated 16.12.2008, which is Ex.R-6.
14. On the other hand, the complainant alleged that he had handed over more share as additional security, but those shares were required to be demnt in the account of the complainant, but in reply to this query of the complainant, the OP alleged that these shares were in the joint names of the complainant with her husband/father. These shares were rejected by Demat Authority, vide letter Ex.R-5 dated 26.12.2008 and accordingly, through this memo, the said share was returned to the complainant.
15. It is established on the file that as per requirement of the agreement, executed between the parties i.e. Ex.R2/A, the OP has served a notice for deposit of the more shares, vide notice Ex.R-7 dated 23.03.2009 and the said letter was sent to the complainant through courier and photostat copy of the receipt of courier is available on the file Ex.R-1, so we can say without any hesitation that the plea taken by the complainant that the said notice dated 23.03.2009 was never received by the complainant nor its receipt or mode of sending, has been placed on the file by the OP, but this plea of the complainant is rectified by the OP by placing on the file documents i.e. copy of notice as well as receipt copy of the courier. So, one thing is established that a prior notice has been served to the complainant for deposited more shares. But further, question arises whether 3 days time has been given to the complainant to make a settlement or not, for that we have gone through the copy of notice, which is dated 23.03.2009 and date of the receipt of the courier is 25.03.2009, it means the said letter/notice was sent to the complainant on 25.03.2009 and 3 days time is required to provide to the complainant to deposit more share, but the OP hurdly put on sale the deposited share of the complainant on 25.03.2009, means on the same day when the notice was sent through courier, the document showing the sale of the deposited share of the complainant, is Ex.R-12, wherein the date of trade is mentioned 25.03.2009 and settlement date is 30.03.2009. It is clear that the deposited share of the complainant was sold by the OP on 25.03.2009 and its payment was received on 30.03.2009. Without affording three days time to the complainant, the OP has sold the share which is exactly violation of the terms of the agreement executed between the parties and thus, there is a deficiency in service on the part of the OPs and thus, we reached to the conclusion that the complainant is entitled for the relief claimed.
16. In view of the above detailed discussion, the complaint of the complainant is partly accepted and accordingly, the OPs are directed to reimburse the amount of Rs.10,89,344/- to the complainant with interest @ 12% PA from the date of sale of shares i.e. 25.03.2009, till its realization. The OPs are further directed to compensate the complainant, for causing mentally harassment, to the tune of Rs.30,000/- along with litigation expenses of Rs.10,000/-. The entire compliance be made within one month from the date of receipt of the copy of judgment. This complaint could not be decided within stipulated time frame due to rush of work.
17. Copies of the order be supplied to the parties free of cost, as per Rules. File be indexed and consigned to the record room.
Dated Jyotsna Karnail Singh
30.01.2019 Member President
