Delhi

North East

CC/429/2012

Sh. Devender Kumar Sharma Proprietor of M/s Radhey Krishna Traders - Complainant(s)

Versus

M/s HDFC Bank Ltd. - Opp.Party(s)

30 Jan 2018

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. 429/2012

 

In the matter of:

 

		Sh. Devender Kumar Sharma Proprietor of M/s Radhey Krishna Traders Having its Registered office at: 1/5525-B, Gali No.16 Balbir Nagar Extn. Shahdara, Delhi-32.		Complainant
		Vs
	1.           2.	M/s HDFC Bank Ltd HDFC Bank House Sana Pati, Bapat Marg Lower Parel (West) Mumbai-400013 Through its President.   Branch Manager, HDFC Bank, Main Loni Road, Shahdara, Delhi-32.		Opposite Parties
			DATE OF INSTITUTION:		23.10.2012
			JUDGEMENT RESERVED ON :		15.01.2018
			DATE OF DECISION      :		30.01.2018

 

 

N.K.Sharma, President:-

Ravindra Shankar Nagar, Member

Ms. Sonica Mehrotra, Member:-

 

 

 

Order passed by Ms. Sonica Mehrotra, Member:-

ORDER

1. Case of the complainant is that he is a proprietor of M/s. Radhe Krishna Traders Firm having a current account No. 15652560001592 with the OP bank i.e. HDFC Bank at Loni Road Branch, Shahdara Delhi-110093, in which account the last balance as on 29.05.2012 was Rs. 1,15,207/- on which day  the complainant had presented a cheque of Rs.  1,00,000/- vide cheque No. 150754 for encashment before the OP for meeting urgent payment requirement in the business. The branch manager of OP allowed the same for clearance and affixed its seal with the remark ‘cash paid’ after verifying the signature and the identity of the bearer. However, the teller returned the aforesaid cheque to the bearer without making any payment for which the complainant personally visited the OP bank and asked the bank manager for the explanation / reason on the same day and asked for the statement of account of the said current account which showed the balance amount of Rs.  1,15,235.09 Paise on the given date which was sufficient to clear the cheque of Rs. 1,00,000/-. At this point the branch manager of OP informed the complainant that his firm account was put on hold by the debt management and legal support credit card by the main branch of OP named HDFC Bank Cards Division at Chennai. When the complainant asked for details of the credit card and any such directions / instruction received by the said branch from the OP, the branch manager of OP refused to entertain the complainant or clear the aforesaid cheque. The complainant also stated that earlier on 24.05.2012 the cheque Numbers 104815 of Rs. 20,000/- issued in favour of Sh. Vijay Kumar and cheque Number 104820 issued in favour of Sh. Anil Kumar Tayal dated 25.05.2012 from the complainant’s Firm Radhey Krishna Traders were also denied encashment by OP on grounds of insufficient funds.   The complainant has further stated that as against the compromise proposal / settlement offer letter No. 32944 dated 26.10.2006 for Rs. 17,310/- towards the credit card account No. 4346771002633429, the complainant had already paid Rs. 19,870/- and nothing was due against the complainant against the OP current account since the payment amount was in excess / surplus to that of the demand of the bank. Therefore, the branch manager of OP was not entitled to put on hold or stop payment of the complainant’s bearer cheque.   This act of the OP in non clearance of bearer cheque of the complainant on 29.05.2012 despite having sufficient balance in the account without any satisfactory explanation was illegal for which reason the business transaction of the complainant was put on hold and suffered. The complainant served a legal notice through counsel on 31.05.2012 on OP and wrote a letter on 10.06.2012, in response to which the OP vide response dated 20.06.2012 asked the complainant to contact the OP representative on the given number therein for amicable resolution and further assistance / clarification. Thereafter the complainant wrote a letter dated 18.07.2012 to the concern person in compliance of the letter dated 20.06.2012 received by him from HDFC bank International Credit Card Account through registered AD which was duly served but no reply has ever been received by the complainant in response of the aforesaid letter.  The complainant was having HDFC Credit Card Account                                            No. 4346771002633429 and a settlement letter dated 26.10.2006 was provided by the OP bank card division asking the complainant to pay in full and final payment of Rs. 17,310/- as settlement amount towards dues against the said credit card against which the complainant has already paid Rs.  19,870/- and therefore nothing was payable. Hence the present complaint was filed by the complainant disputing the non encashment of his bearer cheque without any sufficient cause and without any liability of payment towards credit card which act is alleged to be deficiency in service causing mental agony humiliation and harassment to the complainant at the hands of the OP and prayed for directions to OP to clear the amounts of Rs. 1,02,277/- from the current account of the complainant’s Firm on grounds of illegal withdrawal,                 Rs. 75,000/- as compensation for deficiency in service and Rs.  25,000/- towards legal proceedings.    
2. Notice was issued to the OPs and written statement was filed by them in which the OPs took the primary defence / preliminary objection that since the issuance of the credit card No. 4346771002633429 in 2003 to the complainant by the OP, the complainant was bound by term and conditions of card member agreement and by using the credit card there was deemed acceptance of the same by the complainant. ‘Fees and service charges’ and ‘interest’ ‘payment and monthly repayments to card member’s card account’, ‘statement of accounts’, details as to “Lien and Right of Set Off ” were explained in the card member agreement which the complainant was aware of. The OP further stated that complainant was very irregular in making credit card dues despite several reminders and requests and had been regularly defaulting habitually in making payments to the OP bank which are evident from the credit card statements of the complainant. Therefore, on the account of complainant was created ‘Lien’ as a matter of right by the OP as available to it. The relevant portion highlighted by the OP in the card member agreement pertaining to Lien and Right of Set Off hereunder:-

It is agreed that the Bank, at any time and without notice will have lien and right of set-off on all monies belonging to the Cardmember and / or Add-on Cardmember standing to their credit in any Account whatsoever with the Bank or in the possession or in the 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 including fixed deposit accounts and any properties of the Cardmember and/or Add-on Cardmember in the possession or custody of the Bank whether for safe keeping or otherwise, including but not limited to dematerialized shares or other securities of the Cardmember and / or Add-on Cardmember, held by the Bank as a Depository Participant, may be adjusted towards dues under the Credit Account. In case of any deficit, the deficit amount may be recovered by the Bank from the Cardmember and/or Add-on Cardmember.   

 

 The Banker’s right of lien is also envisaged under section 171 of Indian Contract Act 1872. The OP thereafter has quoted certain case laws relied upon passed by Hon’ble NCDRC and Hon’ble Apex Court on this point. The OP further took the plea that settlement offer made to the complainant by the OP in October 2006 for Rs. 17,310/ payable in 3 equated monthly installments of Rs. 5770/- each payable by 15.12.2006 was not honored by the complainant due to which the settlement became null and void and stood revoked and the complainant became liable to pay the entire outstanding due as on date of settlement i.e. 26.10.2006 on the said credit card since the said settlement clearly stipulated that “Please Note That Failure To Honor Commitments As Detailed In The Payment Schedule Below Will Result In Immediate Cancelation Of This Offer.” The OP further submitted that thereafter it had offered another settlement to the complainant in January 2007 for an amount of Rs. 15,260/- vide a settlement letter number N1 40516 dated 23.01.2007. However the complainant failed to adhere to the payment schedule of this second settlement which was therefore rendered null and void and this fact was concealed by the complainant in his complaint willfully. The OP also stated that as on 24.05.2012 there was a total outstanding of Rs. 1,30,385.01/- due to against the complainant on account of the above stated credit card. The OP bank had issued a notice dated 24.05.2012 to the complainant for exercise of the ‘Banker’s Lien and Right of Set-off against the complainant on his above said Bank account No. 15662560001592 on his failure to pay the amount outstanding in his credit card account within 7 days of the receipt of the said notice and the said bank account was placed on ‘Hold on Funds’. Despite the banker’s lien notice dated 24.05.2012 and repeated reminders, the complainant failed to make the payment to the OP bank. Therefore, the OP bank created Banker’s Lien of Rs. 1,02,277.09/- on the complainant’s bank account No. 15662560001592 on 08.06.2012 as per the Card Member Agreement. The OP explained to the complainant vide letters dated 20.06.2012 and 03.07.2012 as to why debit had been made to his bank account. The OP further denied having received Rs. 19,870/- allegedly paid by the complainant to it against the settlement amount of Rs. 17,310/- or that nothing was due against the complainant towards OP credit card account or that the complainant had paid anything excess to the OP bank. In view of the rebuttal, the OP denied any deficiency of service or illegal adjustment or that the bank manager of OP was not entitled to put on hold the payment of bearer cheque of Rs. 1,00,000/- of the complainant. The OP stated that the non clearance the bearer cheque on 29.05.2012 was done with sufficient explanation and as per Rules and Regulation of the RBI.    

3. Rejoinder to the written statement was filed by the complainant in which the complainant stated that he had no knowledge of alleged credit card dues till 29.05.2012 when for the first time he acquired knowledge from the bank manager of the OP that his current account was put on hold by Debt Management And Legal Support Credit Card. The complainant further rebutted that the alleged liability of the complainant as per the card member agreement and terminology of the bank of Lien and Right of Set off were not applicable on the present facts of the complaint since the complainant was having no liability due towards the credit card since against the settlement amounts of Rs.  17,310/- in 2006, the complainant had already made an excess payment of Rs. 19,870/- and denied any subsequent settlement offer made by the OP. Therefore the complainant stated that denial encashment of the earlier two cheques dated 24^th and 25^th May 2012 and the subsequent cheque on 29^th May 2012 on the part of OP amounts to deficiency in service. The complainant also submitted that in reply to the OP letter dated 03.07.2012 wherein the OP had informed the complainant of putting on hold his current account and debiting the same by their credit card department, the complainant had duly replied to the same detailing the amount paid by him to the OP but no response came forth from the OP in this regard.
4. In his evidence by way of affidavit the complainant placed on record the cheques in question, legal notices, letter to SHO, Jyoti Nagar dated 10.06.2012 by the complainant voicing his grievance, correspondence with the OP and its card division, settlement offer letter dated 26.10.2006, credit card payments receipt No. 3144608 amounting to Rs. 10,000/- dated 09.11.2006 and credit card statements from 2004 to 2007 till when the complainant had claimed to have completed the credit amount.
5. Evidence by way of affidavit was filed by OP placing on record GPA in favour of deponent for OP, application form of the credit card issued to complainant on 03.10.2003, user guide and credit card member agreement, credit card statements of complainant’s account from issuance in 2003 till November 2007 alongwith consolidated sheet of the same from November 2007 to May 2013, settlement letters Numbers N1 32944 for a sum of Rs.  17,310/- dated 26.10.2006 and settlement letter No. N1 40516 for a sum of Rs. 15,260/- dated 23.01.2007 and lastly notice dated 24.05.2012 to the complainant for exercise of the ‘Banker’s Lien and Right of Set-off’ on the bank account of complainant bearing No. 15662560001592 asking him to pay the outstanding dues towards his credit card within 7 days of receipt of said notice whereby the said account was placed on ‘Hold on Funds’.
6. Written arguments were filed by both the parties alongwith citation of case laws in their support.
7. 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 dispute in question arises from the fact that the bearer cheque in question of the complainant’s firm dated 29.05.2012 was denied encashment by the OP on grounds of the bank account of the complainant with the OP 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 two settlement proposals to the complainant of Rs. 17,310/- and Rs. 15,260/- in October 2006 and January 2007 respectively against which the complainant could not honour the payment schedule and the offers were 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 the complainant paid Rs. 19,200/- from November 2006 till June 2007 against the credit card after which he did not make any payment and the dues qua the credit card kept mounting from thereon and from November 2007 where the closing balance was Rs. 36,148.78 paise, the outstanding dues mounted to Rs. 1,33,579.44 paise by May 2012 which is the period and time when the cheque in question was put for encashment by the complainant in his account. The consolidated statement of the credit card account of the OP bank in the name of the complainant has been exhibited by the OP. In so far as the Lien and Right of Set-off is concerned which is the primary defence, the OP has relied upon Judgment passed by Hon’ble National Commission in the case of M. Mallika Vs State bank of India reported as IV (2006) CPJ 1 (NC) which 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 OP has also relied upon the judgment of Hon’ble Supreme Court in the case of Syndicate bank Vs Vijaya Kumar reported as (1992) 2 SSC 330 in which the Hon’ble Apex Court held as under:-

“By Merchantile 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.” Further the OP has also highlighted the ratio passed by 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 gives statutory recognition to the concept of Banker’s 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 goods 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 can attach to money so long as it remains an ear marked 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 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 the complainant was bound by the term and conditions stipulated therein in which Lien and Right of Set-off was clearly laid down at page 33 of the usage guide exhibited by the OP 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 money 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 and that if the balance outstanding on the card account, despite demand of payment is not repaid within the prescribe time such credit balance in any account  in 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 complainant had argued in the present case that it was never served notice of lien dated 24.05.2012 by the OP bank but could not prove the same to the satisfaction of this Forum. The recent judgment passed by Hon’ble NCDRC in the case of SBI Vs Shanti Lal Madan Lal Patel III (2017) CPJ 430 (NC) the Hon’ble National Commission 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 interalia 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. So the complainant cannot be protected in his defence of non-receipt of lien notice.

 In the present case we have seen that against the credit card dues which were outstanding since June 2007, the complainant had not made any payment for five years and the dues had mounted to a sum of Rs. 1,33,579/- at the time when the complainant had presented the bearer cheque for encashment before the OP bank by which time the OP had already exercised its power under lien of ‘Hold on Funds’ vide letter dated 24.05.2012 and therefore denied honour of the said cheque as the amount of Rs. 1,02,277.09Paise was attached under lien out of the total balance of Rs. 1,15,235/- in the complainant’s account.

8. 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 of 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 with it. The complaint is therefore dismissed as devoid of merits. No order as to cost.         

 

Public money availed of in credit cards loan etc is recoverable by the Bank as its duty if the complainant can keep the funds parked in his account, why he cannot pay his Bank dues?. In the interest of recovery of public money, the Banks have been given the general lien on the amounts deposited in the Bank. 

9. Let a copy of this order be sent to each party free of cost as per regulation 21 of the Consumer Protection Regulations, 2005.
10.  File be consigned to record room.

(Announced on  30.01.2018)

 

(N.K. Sharma) President

(Sonica Mehrotra) Member

(Ravindra Shankar Nagar)   Member