1. This appeal arises out of order dated 11.12.2006 passed by Karnataka State Consumer Disputes Redressal Commission, Bangalore (for short he State Commission in complaint case no. 164 / 2002. 2. The appellant is the original complainant. By the impugned order, the State Commission dismissed his complaint. 3. Some of the undisputed facts may be stated at the outset in order to highlight the real controversy and the epicentre of the controversy. The admitted facts are thus:- 4. The appellant opened account with the respondent Bank on 29.02.2000 with a view to obtain loan against pledging of his shares by way of securities. The appellant was then upholding shares of approximately valued at Rs.29 lakhs. Considering the upfront value of the shares, the respondent Bank sanctioned loan to the extent of 65% of the securities, i.e., the shares pledged by the appellant. The appellant was thus given overdraft (OD) facility to the tune of Rs.16.74 lakh. The agreement between the parties was that in case of shortfall of the securities below the bench-mark of 65% on account of fluctuations of the prices of the shares, the appellant would make good of the deficit so as to continue the OD facility. The parties agreed that in case, the shortfall to furnish the necessary securities up to 65% will not be filled up by providing additional securities / shares, the respondent Bank will give notice of 15 days to the appellant borrower for the purpose of depositing the additional security in the form of cash or such other securities, failing which the Bank may sell or deposits of or realise the securities. In case of such sale of the securities due to default of the borrower, i.e., appellant, the Bank was not to be held liable for any loss, damage or diminution in value sustained by such act. 5. The case of the appellant before the State Commission was that the respondent Bank informed him by letter dated 3.3.2000 that the list of approved securities was supplied alongwith the sanction letter. The subsequent letter was issued to him on 3.10.2000 by the respondent Bank. By that letter, he was informed that there was shortfall in his account. It was informed to him that excess amount of Rs.6,04,835.17ps. was withdrawn by him. He was called upon to regularise the account by furnishing the shortfall amount or pledging additional shares within 10 days from receipt of the said letter. Thus, he was called upon to make compliance on or before 13.10.2000 by making the good of the deficit by another letter dated 14.10.2000 again he was informed that there was deficit in his account. The letter reads as follows:- ear Customer, Sub: Excess Drawn in Loans against shares A/c No. 0092100002147 We invite your attention to the earlier communication regarding the above mentioned subject matter. Please note that the limit on your account has now been reduced and the account continues to be in excess. The details are as under: Current outstanding : Rs.-1321750.13 Permissible Drawing Power: Rs.1246407.16 Excess : Rs. 75342.97 A statement detailing the valuation of your securities is enclosed for your reference. You are informed to regularise the account by pledging additional securities as per Bank approved list or fund the account within 7 days of receipt of this communication. If your account is not regularised within the said period. Without any prejudice to the bank rights as per the Agreement, we will proceed with the sale of any / all securities to cover the deficit your account. Please inform us your email address for a immediate update on your current limit. If in the meantime, you have regularised the account, you may please ignore the letter. Thanking You, For HDFC Bank Ltd. Sd/- This is a computer generated letter and does not require signature. Fas Code : 5843 6. The third letter issued by the respondent Bank on 27.10.2000 indicated that there was further deficit. The complainant alleges that he furnished share to fill up the deficit and maintained the required level of securities up to loan value, i.e., 65%. The appellant alleged that subsequently without service of due notice on him, the respondent sold away his shares pledged with the Bank. Since the shares were sold away at palpably low rates, the transactions resulted into loss to him. He was not served with notice for sale of shares. The unilateral act of the respondent Bank amounts to deficiency in the service and, therefore, he was entitled to seek compensation of the amount as per difference between highest trading price of the scrip during the relevant period and the price at which the shares were sold on 17.04.2001. He also claimed compensation of the amount in respect of the difference between the highest trading price of the scrip during the period and the price at which he was forced to sell the remaining securities pledged with the respondent in distress manner on 10.05.2001. The appellant further claimed interest and non-pecuniary damages over and above the above claims. 7. By filing written version, the respondent flatly denied all the material averments made by the appellant. The respondent Bank pointed out that in the second week of March 2001 there was a shortfall to the tune of Rs.1,79,351.48ps. and, therefore, a notice dated 13.3.2001 was issued and served on the appellant. The respondent Bank further alleged that by end of March 2001, there was shortfall of Rs.1,73,349/- and, therefore, another notice dated 2.04.2001 issued to the appellant, calling upon him to make the good of the deficit. According to the respondent Bank, the appellant successively failed and neglected to comply with the demands made in the said notice. He had not furnished additional securities to match the upper level of the O.D. facility. The respondent Bank justified the sale of shares in order to regularise transactions. The respondent Bank contended that by notice dated 2.04.2001, the appellant was granted 10 days time to regularise the account by furnishing additional securities and, therefore, it was sufficient notice served on him, which could justify the subsequent sale of the shares in the open market. The respondent Bank asserted that the shares of appellant were sold on 17.04.2001 because in spite of due notice, the appellant failed to regularise the loan account by furnishing the adequate securities. 8. On merits, the State Commission held that the appellant had sought extension of the time to furnish the additional securities but that was an afterthought request. The State Commission held that despite service of the letters dated 3.3.2001, 13.3.2001, 17.03.2001 and 2.04.2001, the appellant failed to furnish the additional security. With the result, the respondent Bank resorted to sale of the securities on 17.04.2001. In other word, the State Commission held that sale of the shares by the respondent Bank was justified and as such there was no deficiency in the banking service. The complaint was, therefore, dismissed. 9. We have heard learned counsel for the parties in extenso. We have perused the relevant record. We deem it proper to formulate following points for determination:- (i) Whether in the facts and circumstances of the present case, the respondent Bank gave reasonable notice of sale of the securities, i.e., the shares as contemplated under section 176 of the Indian Contract Act, 1872? (ii) Whether in the facts and circumstances of the present case, the appellant was put to loss on account of deficiency in the banking service of the respondent Bank? If yes, to what extent? (iii) Whether in the facts and circumstances of the present case, the appellant is entitled to claim compensation from the respondent Bank and if so, then what is the reasonable quantum of compensation payable to him? 10. There cannot be any two opinion about the fact that share market is always fluctuating. Value of the shares increases at sometimes and decreases at sometimes in accordance with the pattern of transactions of the trading. The value of the shares depends on different variables. The OD facility was equivalent to 65% of the upfront value of the shares. The OD limit was of Rs.20 lakh. Copy of the agreement (Anx. P-1) reveals that the actual OD facility would depend upon the value of the securities at the time of sale. The relevant term, i.e., term No. 1 of the agreement may be reproduced as below:- 1) The overdraft limit shall not exceed the said amount. However, the actual overdraft facility would depend upon the value of the securities at the time of the said facility. The valuation of securities, margin money and actual overdraft facility would be exclusive decisions of the Bank and will be binding on the parties. The facility is repayable unconditionally on demand at the Bank absolute discretion. The Bank would give fifteen days written notice to the Borrower to repay the amount due. The next important terms of the agreement are term nos. 6 & 7 which are reproduced as follows:- 6) It is agreed that the Bank will have a lien and right of set-off on all moneys belonging to the Borrower and / or Guarantor standing to their credit in any account whatsoever with the Bank. If upon demand by the Bank, the balance outstanding in the overdraft account is not repaid within the prescribed time, such credit balance in any account may be adjusted towards dues under the overdraft account. In case of any deficit, the deficit amount may be recovered by the Bank from the Borrower and / or Guarantor. 7) 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 if there is an excess over the overdraft facility limit, the Borrower shall within fifteen 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 said securities without being liable for any loss or damage or diminution in value sustained thereby. 11. Perusal of the Agreement-cum-Pledge-cum-Guarantee go to show that the Bank could get right to sale the securities (shares) without incurring any liability for the loss or damage or diminution of the value thereof after giving due notice to the borrower. When the margin requirement exceeded the overdraft facility limit and subject to condition that the borrower will not deposit with the Bank additional security within 15 days. It is amply clear, therefore, that at least 15 days grace period was allowed for utilization of the OD facility after the excess was noticed. The valuable securities could be sold only when the limit of overdraft amount was in excess of 65% of the actual amount borrowed or drawn from the OD account. 12. The appellant has placed on record the letters issued by the respondent Bank on 3.03.2001, 13.03.2001, 17.03.2001 and 2.04.2001. All these letters are in particular format which give details of the account, excess amount of the loan availed beyond the permissible limits of the securities and request made by the respondent Bank to pledge additional shares within a period of 10 days for reaching the bench mark of 65%. At the same time, a note appended to all the letters shows that the letters were computer generated communications. All these letters further show that if, in the meantime, the appellant (borrower) had already regularized his account then the communication was to be ignored. It is obvious, therefore, that in case of due compliance of such letters, the same were requested to be ignored. In other words, these letters were not to be deemed as oticeof 15 days for the purpose of furnishing of the securities. It appears that after receiving the letter dated 3.03.2001, the appellant furnished certain shares towards securities. The additional securities were given by the appellant on 17.04.2001. Thereafter the respondent Bank did not give any specific notice for sale of the securities to him. 13. Copy of letter dated 17.04.2001 (Anx. P-8) may be reproduced as follows:- ate :- April 17, 2001 U BHIKAMCHAND K 72, SEPPINGS ROAD, BANGALORE 560001 KARNATAKA Sub: Sale of securities in Loan Against Share account No. : 0092100002147 We refer to our earlier correspondences and subsequent telephonic messages regarding sale of securities to cover the deficit in your account. In spite of repeated reminders and assurance from your side the account has not been regularized. The Bank has proceeded with the sale of share to cover the deficit in your account. The share realization will be credited to the above account. Yours sincerely For HDFC Bank Ltd. Sd/- Sanjay Douza Manager Retail Assets. FAS No. : 5843 14. The said letter does not show as to when the sale of securities was effected by the respondent Bank. The respondent Bank informed the appellant that he had not regularized the account and, therefore, the Bank had proceeded with the sale of shares to cover the deficit in the account. It appears that letter dated 2.04.2001 was sent to the appellant by courier. The date of receipt of the said letter shows that it was received by the appellant on 10.04.2001. Obviously, even assuming that he was supposed to comply with the request letter for regularization of the account within period of 10 days from receipt of that letter, the outer limit to make compliance was 20.04.2001. However, before the appellant could have made compliance within given period of 10 days, prior to 20.04.2001, the securities were sold away. This is no short of deficiency in the banking service. For, it was hasty and uncalled action taken by the respondent Bank. 15. Learned counsel for the respondent Bank submits that the earlier letter dated 13.03.2001 itself was sufficient notice for regularization of the account. He would further submit that the State Commission arrived at proper conclusion regarding the lapses on part of the appellant. He would submit that the sale of the shares was in keeping with terms of the agreement. He contended that no separate notice was required to be issued to the borrower in asmuch as there was bankerslien over the security. 16. What appears from the observation of the State Commission is that the State Commission was much influenced by the contention raised by the complainant about his requests for extension of time to furnish additional securities. The State Commission observed that the respondent Bank had given reasonable time to the appellant to furnish the additional securities before selling the securities on 17.04.2001. In fact, there is nothing on record to show that the securities were sold away on 17.04.2001 because the letter referred to above shows that the shares were sold away prior to 17.04.2001. The respondent Bank did not give the date of effecting the sale and the price or the amount recovered by way of such sale of the shares. 17. In this context, it would be useful to refer section 171 of the Indian Contract Act, 1872, which reads as follows:- 171. General lien of bankers, factors, wharfingers, attorneys and policy-brokers. 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. The above provision has to be read alongwith section 176 of the Contract Act, 1872. Section 176 reads as follows:- 176. Pawnee right where pawnor makes default. if the Pawnor makes default in payment of the debt, or performance; at the stipulated time or the promise, in respect of which the goods were pledged, the pawnee may bring a suit against the pawnor upon the debt or promise, and retain the goods pledged as a collateral security; or he may sell the thing pledged, on giving the pawnor reasonable notice of the sale. If the proceeds of such sale are less than the amount due in respect of the debt or promise, the pawnor is still liable to pay the balance. If the proceeds of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawnor. (emphasis supplied) 18. Perusal of section 171 and 176 of the Contract Act would make it amply clear that the holder of the lien may sale the things pledged only on giving the pawnor easonable noticeof the sale. What can be regarded as reasonable notice is to be gathered from provisions of General Clauses Act. Ordinarily, 15 days notice ought to be treated as easonable noticefor the purpose of section 176 of the Contract Act. It is important to mention here that section 176 of the Contract Act, is generally applicable even though no particular period of notice is mentioned in the agreement of the loan. Section 176 does not commence with any non-obstante clause. It follows, therefore, that sale of the pledged shares could not be effected without giving reasonable notice of sale to the appellant. The earlier communications issued by the respondent Bank on 21.03.2001 and 2.04.2001 as well as on 10.04.2001 were the intimations given to the appellant for the purpose of making the regularization of the account by giving additional securities to make the deficit filled-up. Thus, said communications could not be treated as notice of sale as required under section 176 of the Contract Act. It follows, therefore, that the respondent Bank committed illegality in conducting the sale of the shares without consent of the appellants and without giving a reasonable notice to him prior to 17.04.2001. The hasty action of the respondent Bank would amount to deficiency in the banking service. 19. We may refer to observations in ooperative Hindustan Bank Ltd. Vs. Surendra Nath Dey [AIR 1932 Calcutta 524]in which case the Division Bench of the Calcutta High Court observed that in view of the wording of section 176 as compared with the wording of the other sections of the Contract Act, the proper interpretation to put on section 176 is to hold that notwithstanding any contract to the contrary notice has to be given for sale of the pledged goods / securities. The Division Bench further observed that it shall be a easonable notice of the sale The mere intimation that if compliance is not made, the bank will arrange for sale of hypothecated stock was held as no notice under section 176 of the Contract Act. The Apex Court in imal Chandra Grover Vs. Bank of India [(2000) 5 SCC 122]held that grant of overdraft facility to the customer by a bank does amount to providing of service. It has been observed that customer having pledged shares for overdraft facility is a onsumer The settled legal position is that when the Bank gives overdraft loan facility by charging certain fees for services and pledging of the securities, the borrower becomes onsumer. Needless to say that the unilateral sale of the pledged shares by the respondent Bank was deficiency in service in asmuch as no notice of sale was served on the appellant as required under section 176 of the Contract Act. 20. Taking over all view of the matter, we are inclined to hold that the appellant proved his case regarding deficiency committed in the service, by the respondent Bank. The complaint deserves to be allowed, therefore, in terms of the directions enumerated herein below. Hence, the appeal is allowed. The impugned order of the State Commission is set aside. The complaint is partly allowed. The complainant / appellant is entitled to recover difference between the highest trading price of the scrip which prevailed on 17.04.2001 and the price for which the shares were sold by the respondent Bank. The appellant shall submit the necessary particulars of the highest price which prevailed on 17.04.2001 and the details of the difference between the prices which shall be worked out by the State Commission on basis of the value of the shares as was declared at the close of the day of 16.04.2001 if such detailed and duly authenticated information is furnished by the appellants. The appellant is further entitled to claim compensation of Rs.30,000/- for the mental agony and loss of business and also cost of litigation which the respondent shall pay to him. The prayer for compensation on account of forced sale of remaining security as on 10.05.2001 is, however, rejected being unsustainable. The respondent shall also pay interest @12% p.a. on the difference of the amount of the value of the shares which prevailed in the evening of 16.04.2001 at the closure of the share market and the price for which the shares held in securities were sold on 17.04.2001 or in the proximity thereof from the date of complaint till the entire amount is paid. Appellants will also be entitled to amount of Rs.10,000/- being cost of this appeal. The appeal is accordingly disposed of.