SRI. MARUTHI VADDAR

          MEMBER

1.     This Complaint is brought U/s 35 of the Cp Act 2019 by the complainant Anand P R/o Mysuru against opposite party the manager AXIS Bank ltd., Saraswathipuram Mysuru alleging deficiency of service praying this commission to pass on order directing the opposite party to make good the loss of Rs.40,00,000/- excluding the loan value and direct the opposite party to pay damages by means of compensation to the complainant in a sum of Rs.1,00,000/- and such other relief which deems fit to this Hon’ble Commission for the monetary loss, mental agony and injury suffered by the complainant in the interest of justice and equity.

2.  Brief facts of the complainant case is as here under:-

       It is stated in the complaint that, the complainant had availed a overdraft loan of Rs.5,00,000/- from the opposite party against the                   security of his shares of reputed companies pledged to the opposite parties bank vide loan A/c No.919030042810078  on 31-5-2019.               The shares he pledged were of high value and of reputed companies (TATA Motor, JK tyres and Ashok Leyland)  which had potential             growth despite possible odds. The complainant was given twelve months time for repayment of the said loan and the opposite party had          undertaken to intimate him of the DP limit and the saving of interest charged from time to time and the opposite party also had                        undertaken to give him four days clear written notice to the complainant to repay the amount in case the opposite party raised any                  demand.

3. It is further stated that the opposite party had taken a unilateral decision of selling the highly valued shares of the complainant without his consent intentionally to have pecuniary gain in the guise of crossing LTV Clandestinely and caused him heavy financial loss denting his image in his family as well as in the society. The opposite party has not given four days clear notice in writing before selling his pledged shares and the said shares might have been purchased by the interested parties in  connivance with the opposite party causing heavy loss to the complainant. If he had been intimated with in four days clear notice by opposite party, the complainant would have serviced the interest or repaid the loan by making some other arrangement or had given additional security to save the shares. But  the opposite party intentionally avoided serving of mandatory notice. The opposite party did not respond to the request of the complainant to provide him the details of his loan account and sold value of his pledged shares, interest charged and the charges if any etc.,   
4. The complainant further stated that through RBI guidelines to the Banks in the country are very clear that attempt to demand recovery should be postponed or reschedule in view of Covid-19 pandemic, the opposite party had failed to extend the concessions extended by RBI. The complainant availed the said loan only for a productive purpose and not for any speculative purpose and is eligible for the benefits extended by RBI to the loaners like postponement of repayment of instalments and  sevicing of interest and not to compound interest that was charged and to give reasonable time to repay/service the loans availed. The opposite party had flouted all these guidelines and misusing the discretion vested with it by the bank abusing his position which is illegal. That the acts of the opposite party exhibits gross deficiency of service on his part. After issuing legal notice this complaint was filed.
5. After registration of the complaint notice was ordered to be issued to the opposite party and in response to the notice opposite party appeared through its counsel and filed written version contending that the complaint filed by  the complainant is not maintainable either on facts or an law and the same has to be dismissed in limine. Opposite party further contended that on request and on receipt of the application form seeking loan against shares/overdraft facility from the complainant opposite party had sanctioned loan of Rs.5,00,000/- on 31^st May 2019 under the loan A/c No.919030042810078. The terms and conditions governing the said facility were duly explained to complainant and subsequent to same complainant has executed loan against securities agreement dated.22^nd May 2019 and had agreed and undertaken to adhere to the same after being fully satisfied. The terms of the agreement articulates strict adherence to maintain the prescribed margin on the value of shares securities and in case of short fall as compared with advanced value of shares/securities, drawing power and actual outstanding in overdraft facility, opposite party is at liberty to enforce the security to recover their dues. Contrary to the agreed terms after availing the above credit facility, complainant has failed to adhere to the agreed terms in spite of reminders to abide with the terms of the sanction, complainant has failed, refused and neglected to make payment there by attracting overdue charges and other contractual levies as per the terms and conditions governing the said facilities.

6. Opposite party further contended that, the security offered being shares and the value of the same being fluctuating as daily basis, a mail dated.26-3-2020was sent to the regd e mail id of the complainant to comply the demands, however complainant failed to act, as such opposite party to recover their dues had to sell the shares at price available on the date of sale and adjust the proceeds amounting to Rs.3,19,259.56/- to the loan A/c. The mail was sent to complainant on the Regd mail id, in fact all the communications pertaining to the above transactions were sent to the Regd e mail of complainant and hence complainant cannot contend that if he had received a written demand, he would have complied cannot be tenable defence.
7. It is further submitted that the shares were offered as security so that opposite party can sell the same and recover their dues. It is  an undisputed fact there was default and email also was triggered and hence none of the action can be contributed as illegal, since the shares have been sold and adjusted towards the dues and questions of acceding to the prayer of the complainant does  not arise at all. Further section 73 of the Indian contract act clearly bars complainant to claim compensation, when he himself breached the terms of the contract. Hence prayed to dismiss the complaint with costs.
8. The complainant filed affidavit evidence and the same was taken as pw1 and got marked the documents as Ex.p1 to p7. On the otherhand opposite party filed affidavit evidence and the same was taken as Rw1 and and got marked the documents as Ex.R1 to R5.
9. Heard the arguments on both sides. Both parties have filed their written arguments also.

         10. Now the points that arise for the consideration of this commission are:-  

             1.Whether the complainant proves  the alleged deficiency of service on the part of opposite party and there by he is entitled to the reliefs as sought?

2.What order?

10. This commission findings to the above points is as here under :-

          Point No.1:-  Negative

   Point No.2 :- As per  the final order for the following

:: R E A S O N S ::

        11.Point No.1:- It is the specific case of the complainant that, the complainant availed overdraft loan of Rs. 5,00,000/- from the opposite          party against the security of the reputed companies shares pledged to the opposite party Bank vide loan Account No. 919030042810078             on 31.05.2019.  The shares he pledged were of high value pertaining to TATA Motors, JK tyres and Ashok Leyland which had potential          growth despite possible odds.  The complainant was given twelve months time for repayment of the said loan and the opposite party had          undertaken to intimate him of the DP limit and the servicing of interest charged from time to time and four days clear written notice to              the complainant to clear the amount in case opposite party raised any demand.  Opposite party had undertaken a unilateral decision of              selling the highly valued shares without the complainants consent intentionally to have pecuniary gain in the  guise of choosing LTV                clandestinely and caused him heavy financial loss denting his image in his family  and in the society.  The opposite party has not given              four days written notice before selling his pledged shares and the said shares might have been purchased by the interested parties in                   connivance with the opposite party.  If the complainant had been intimated he would have serviced the interest or repaid the loan by                making some other arrangements or had given additional security to save his shares.  Opposite party further did not respond to the                    requests to provide the complainant’s the details of loan account and sold value of his sold shares, interest charged.

12. Complainant further submitted that even though RBI issued guidlines to the Banks that attempts to demand recovery should be postponed or rescheduled in view of covid-19 pandemic, opposite party had failed to extend the concessions extended by the RBI.  The complainant availed the said loan only for a productive purpose and not for any speculative purpose.  The opposite party had floated all the guidelines and misusing the disrection vested with him.   
13. To substantiate his case, the complainant filed affidavit evidence and reiterated the averments of the complaint in his affidavit.  Ex.P1 is the loan against securities agreement dated 31.05.2019.  Ex.P2 copy of the statement of holding shares/stocks,  Ex.P3 loan agreement of the complainant with opposite party bank, Ex.P4 copies of representations dated 23.07.2020 and 03.03.2021 Ex.P5 copy of the RBI guidelines dated 27^th March 2020, Ex.P5 office copy of the legal notice dated 03.04.2021 Ex.P7 reply notice issued by the opposite party through counsel dated 22.04.2021.
14. Per contra, opposite party contended that on request and on receipt of the application form seeking loan against shares/overdraft facility from the complainant opposite party had sanctioned loan of Rs. 5,00,000/- on 31.05.2019 under the loan Account No. 919030042810078 and the terms and conditions governing the said facility were duly explained to complainant and subsequent to same, the complainant has executed loan against securities agreement dated 22^nd may 2019 and had agreed and undertaken to the adhere to the same after seeing fully satisfied.  As per the terms of the agreement in case of short fall as compared with the advanced value of shares/securities, drawing power and actual outstanding in overdraft facility opposite party is at liberty to enforce the security to recover their dues.  After availing the above credit facility, complainant is failed to adhere to the agreed terms inspite of reminders to abide with the terms of the sanction. Complainant has failed, refused and neglected to make payments.
15. Opposite party further says that the value of the shares being fluctuating on daily basis, a mail dated 26/03/2020 was sent to registered email Id of the complainant to comply the demands, however complainant failed to act as such opposite party to recover their dues had to sell the shares at price available in the date of sale and adjusted the proceeds amounting to Rs. 3,19,259.56/- to the loan Account.  All the communications pertaining to the above transactions were sent to the registered email Id of the complainant.  Further opposite party said that as per Sec 73 of the contract  act which clearly bars complainant to claim compensation.
16. To prove his defence opposite party filed its affidavit evidence and reiterated the averments of the complaint in its affidavit. Ex.R1 is the copy of the special power of attorney executed by the bank to its attorney, Ex.R2 is the copy of the loan agreement, Ex.R3 statement of A/c, Ex.R4 mail communication to the complainant dated.26-3-2020, 2.45pm with regard to the intimation to sell the pledged shares for recover of current outstanding balance alongwith unapplied as well a penal interest charges to regularise the account. Ex.p5 reply notice dated.22-4-2021. These exhibits will corroborate the defence taken by opposite party.
17. After perusing the pleadings and documents of both parties, it is noticed that there is no dispute between the parties with regard to the taking overdraft loan of Rs.5,00,000/- dated.31-5-2019 against the security of shares pledged by the complainant. But the only dispute with regard to the selling of the shares. As per the complainant, he pledged shares of TATA Motors, JK Tyres, Ashokleyland and obtained overdraft loan of Rs.5,00,000/- from the opposite party bank. He was given 12 months time for repayment of the said loan. This statement of the complainant is corroborated with Ex.p1 to p3. But his further contention that opposite party had undertaken to intimate him of the Dp limit the servicing of interest charged from time to time and the opposite party had also undertaken to give him four days clear written notice to repay the amount in case the opposite party raised any demand without issuing notice opposite party sells the pledged shares of the complainant. This statement of the complainant holds no water as the opposite party has sent invocation mail communication as per Ex.R4 to the complainant on 26-3-2020 stating invocation is triggered to the breach in loan to value ratio percentage. However complainant failed to act as such opposite party recover their dues had to sell the shares at price available on the date of sale and adjusted the proceeds amounting to Rs.3,19,259.56/- to the loan A/c.
18. after sending email communications by the opposite party to the complainant the opposite party  proceeded further to sell the shares of the complainant and has adjusted the same to the loan A/c of the complainant, moreover, the complainant has executed loan agreement, demand promissory note, D.P note delivery-cum-waiver letter, Irrecoverable undertaking, deed of indemnity dated.22-5-2019 in favour of the opposite party. After intimating  through email and after sold out of the shares, then the complainant approach the opposite party and write several representations dated.23-7-2020 and 3-3-2021 after the lapse of 6 to 12 months. The said representations of the complainant were time barred. The complainant further quoted about the RBI guidelines issued to the banks in the country are very clear that attempt to demand recovery should be postponed  or rescheduled in view of Covid-19 pandemic, opposite party failed to extend the concessions extended by the RBI to the complainant. It is presumed that after sending the email communications by opposite party on 26/3/2020 stating “Loan to value Ratio Percentage” the complainant kept quiet without responding it. If he really saved his shares for not being sold by the opposite party he would have approached the opposite party within time. From the pleadings and documents produced by the parties. it is seen that the complainant approached after the lapse of 6 to 12 months from the date of email communications. Moreover, he kept quite without paying any amount after obtaining overdraft loan. Hence his contention is not worthy to be considered. Opposite party had done everything after informing the complainant. Hence the complainant failed to prove the case against the opposite party. Hence this commission holds the opinion that the complaint of the complainant is devoid of merits and is liable to be dismissed with costs of Rs.2000 consequently this commission answered this point as negative.

19. Point No.2:- From the discussion made herein before, we proceeded to pass the following.

:: ORDER ::

The complaint of the complainant is hereby dismissed. With the costs of Rs.2000/-.

Supply copies of the order to both parties with free of cost.

       (Dictated to the Stenographer transcribed, typed by her, corrected by us and then pronounced in open Commission on this the             3^rd  May 2023)