State Consumer Disputes Redressal Commission
Hdfc Bank Ltd. vs Sukhdev Singh on 21 March, 2022
ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No. 255 of 2020
Date of institution : 10.09.2020
Reserved on : 09.03.2022
Date of decision : 21.03.2022
HDFC Bank Ltd., Branch at Fazilka through its authorized
Representative Mr. Yatin Khanduja.
.....Appellant/Opposite Party
Versus
Sukhdev Singh aged 42 years son of Sh. Nishan Singh resident of
village Baken Wala, Tehsil and District Fazilka.
First Appeal under Section 41 of the
Consumer Protection Act, 2019 against the
order dated 12.03.2020 passed by the District
Consumer Disputes Redressal Forum (now
'Commission'), Ferozepur.
Quorum:-
Mr. Rajinder Kumar Goyal, Presiding Member
Mrs. Kiran Sibal, Member Argued by:-
For the appellant : Sh. B.D.Jindal, Advocate
For respondent : Exparte
KIRAN SIBAL, MEMBER
The instant appeal has been filed by the appellant/opposite party against the impugned order dated 12.03.2020 passed by District Consumer Disputes Redressal Forum, Ferozepur (in short, now "the District Commission"), whereby the complaint filed by complainant against opposite party (in short 'OP'), under Section 12 of the Consumer Protection Act, 1986, was allowed and the following relief has been granted:
FA No.255 of 2020 2
"10. In view of evidence produced by respective parties and above discussion, this Forum is of considered opinion that OP is not entitled to retain the NOC and other documents, which was taken by the Opposite party at the time of sanction of loan with them in security of loan. Hence, present complaint in hand is hereby allowed. The OP Bank is directed to return documents and blank cheques, received from the complainant. The OP is also directed to issue No Objection Certificate to the complainant and also issue the necessary documents for removal of hypothecation from the registration certificate of the vehicle of the complainant".
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission.
3. Brief facts for the disposal of the appeal are that the complainant had obtained a vehicle loan from the OP, vide loan account No.31654213, for his vehicle i.e. 'Mahindra Thar' bearing Registration No.PB-22-M-1974. The OP had issued a notice dated 22.12.2018 regarding one time settlement of the said vehicle loan and for settlement, the complainant was to pay Rs.1,10,100/- by 31.12.2018 as agreed date of payment. The complainant accepted the settlement offer and paid said amount on 28.12.2018 as full and final payment. After payment of the amount, he requested to the OP to give clearance certificate/No due certificate and also to hand over the original documents along with blank signed cheques, which were obtained by the OP as security at the time of sanctioning the said loan. But the OP put off the matter on one pretext or the other and did not hand over the said documents to the complainant. The complainant also served a legal notice but all in vain. Alleging deficiency in service, the complainant filed the complaint before the District Commission and sought return of documents, blank signed cheques, NOC and to delete FA No.255 of 2020 3 the hypothecation entry along with compensation to the tune of Rs.50,000/- as well as Rs.11,000/- for litigation expenses.
4. The complaint was contested by the OP and filed written reply before the District Commission. In reply to complaint, OP raised preliminary objection that the complainant had concealed the material facts and had not come with clean hands. On merits, OP stated that the complainant had obtained two loans from it i.e. one vehicle loan of Rs.4,16,438/- vide loan account No.31654213 under UCIC No.51594532 and second KGC term loan of Rs.4,80,000/- vide loan account No.80709509 under UCIC No.51594532 and he was defaulter in both the said loans. The bank officials had requested many times to the complainant to repay the loan amount but he failed to do so. Ultimately, the OP offered the complainant to settle the vehicle loan by paying one time settlement amount, which was paid by him and nothing was due towards the vehicle loan. As per clause 17 of the loan agreement regarding Set-off and Lien, "Until all the outstanding under the ultimate balance owing by the borrower(s) to the bank paid or satisfied in full, the bank shall have a lien on any property and assets of the borrower(s) from time to time in the possession of the bank and a charge over all stocks, shares and marketable or other security from time to time and get any or all of them registered in the name of the bank or its nominees whether the same be held for safe custody or otherwise". Apart from the said clause, the bankers have general lien as per the law. Moreover, the OP clearly mentioned in settlement letter at point No.7 that, "The settlement amount shall be accepted as full and final settlement of FA No.255 of 2020 4 the subject loan account and on receipt of the said settlement amount, NOC for the said account shall be issued subject to Borrower/Hypothecator does not owe any direct/indirect liability to the bank". The complainant was to pay the KGC loan of the bank as he was defaulter in the same. Since, the OP was having a general lien and as per agreement, no NOC could be issued to the complainant with regard to the vehicle loan account. After denying the other averments made in the complaint, the OP prayed for dismissal of the complaint.
5. The parties led their evidence in support of their respective contentions and the District Commission after going through the record and hearing learned counsel for the parties, accepted the complaint of the complainant, vide impugned order. Aggrieved with the same the present appeal has been filed by the appellant/OP.
6. Notice of the appeal was issued to the respondent/complainant, but he did not appear despite service and was proceeded against exparte vide order dated 20.11.2020.
7. We have heard learned counsel for the appellant and have gone through the written argument submitted by him and also perused the record of the case.
8. Learned counsel for the appellant vehemently contended that the respondent/complainant had taken two loans from the appellant bank i.e. one vehicle loan and another KGC term loan. The respondent/complainant has settled only vehicle loan, vide settlement offered by the appellant bank and the amount of another term loan is FA No.255 of 2020 5 still lying outstanding against the respondent/complainant. The District Commission has miserably failed to appreciate and consider the contents of the settlement letter under clause 7 that, " the settlement amount shall be accepted as full and final settlement of the subject loan account and on receipt of the said settlement amount, NOC for the said account shall be issued subject to Borrower/Hypothecator does not owe any direct/indirect liability to the bank". The learned counsel further contended that the District Commission, also failed to consider the contents of vehicle loan agreement under clause 17 (Supra) and the banks have general lien on the account of the customers as per Section 171 of the Indian Contract Act. In support of his contentions the learned counsel relied upon the following case laws in the case of :-
a) State bank of India Vs. Jawahar Lal, (1996) CPJ 293 (NC).
b) M. Mallika Vs. State Bank of India, IV(2006) CPJ 1 (NC).
c) Syndicate Bank Vs. Vijaya Kumar, (1992) 2 SCC 330.
d) Canara Bank Vs C.D. Patel, II (2001)CPJ 19 (NC).
The learned counsel for the appellant prayed for acceptance of the appeal.
9. We have given thoughtful consideration to the contentions raised by learned counsel for the appellant.
10. The admitted facts of the case are that the respondent/complainant had obtained the vehicle loan from appellant/OP and vide settlement offer dated 22.12.2018, Ex. C-4, the appellant/OP offered the respondent/complainant to pay an amount for 1,10,100/- as one time settlement for the vehicle loan. The respondent/complainant paid the said amount offered by the OP vide FA No.255 of 2020 6 receipt dated 28.12.2018, Ex. C-3. After paying the settlement amount the respondent/complainant demanded from appellant/OP to give clearance certificate/No due certificate and also to hand over the original documents along with blank signed cheques, which were obtained by the OP as security at the time of sanctioning the said loan. But the OP put off the matter on one pretext or the other and did not hand over the said documents to the complainant. Alleging deficiency in service, the complainant filed a complaint before the District Commission, which was allowed by the District Commission vide impugned order. Aggrieved by the same, the appellant bank has filed the present appeal.
11. The grievance of the appellant/OP is that the District Commission has wrongly allowed the complaint without considering the contents of Settlement letter, Loan agreement and Indian Contract Act. A perusal of statement of account, Ex.OP-4, shows that the respondent/complainant had obtained another loan; namely KGC-Term Loan, vide loan account No.80709509 for an amount of Rs.4,80,000/-, which was repayable in 60 half yearly installments of Rs.64,446/-. It also shows that the respondent/complainant has not paid the installments in time and is defaulter in the said loan account. It is pertinent to mention that both vehicle loan and KGC term loan were granted by the OP bank under the UCIC No.51594532, which belongs to the same customer of the bank. Now, the point for consideration before us is that whether the appellant bank has 'General Lien' over the securities of a customer, who owes any liability to the bank. FA No.255 of 2020 7
12. The contention of learned counsel for the appellant is that the bank has lien on the account of the complainant as per clause 17 of the auto loan agreement. In this regard, we have perused the Agreement of Auto-loan, Ex. OP-2. A perusal of Clause 17.2 of said agreement shows that the bank has a lien on any property and assets of the Borrower from time to time in the possession of the bank until all the outstandings under the ultimate balance owing by the Borrower to the bank has been paid or satisfied in full. The relevant part of clause 17 is reproduced as under:-
"17. Set Off and Lien:
17.2 Until all the outstanding under the ultimate balance owing by the borrower(s) to the bank paid or satisfied in full, the bank shall have a lien on any property and assets of the borrower(s) from time to time in the possession of the bank and a charge over all stocks, shares and marketable or other security from time to time and get any or all of them registered in the name of the bank or its nominees whether the same be held for safe custody or otherwise".
The learned counsel for the appellant placed reliance on the judgment of Hon'ble Supreme Court in the case of Syndicate Bank Vs. Vijaya Kumar reported as (1992)2 SCC 330, wherein it has been held, " ....by mercantile 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 FA No.255 of 2020 8 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". In view of the law laid down by the Hon'ble Supreme Court, the bank has a general lien over all securities deposited by the customer, in the absence of any agreement contrary thereto. Moreover, the appellant Bank has specifically mentioned in para No.7 of the settlement offer dated 22.12.2018, Ex.C-4, that, "This settlement amount shall be accepted as full and final settlement of the subject loan account and on receipt of the said settlement amount, NOC for the said account shall be issued, subject to Borrower/Hypothecator does not owe any direct/indirect liability to the bank". The respondent/complainant had duly signed and accepted the terms of said settlement offer and paid the requisite amount for clearance of vehicle loan. As per KGC term loan account statement for the period from 25.07.2013 to 10.09.2020, attached by the appellant with the present appeal as Annexure A-7, an amount of Rs.4,35,800.09 is overdue towards the said term loan. Therefore, respondent/complainant cannot raise the said demand without clearing the outstanding amount of another KGC term loan. Accordingly, we are of the view that there is force in the contention of learned counsel for the appellant. The District Commission had ignored the aforesaid contents raised by the appellant/OP before it.
FA No.255 of 2020 9
13. Sequel to our above discussion, we allow the appeal of the appellant and the impugned order of the District Commission is hereby set aside.
14. The appeal could not be decided within the stipulated period due to heavy pendency of Court cases and non-sitting of this Commission due to pandemic of Covid-19.
(RAJINDER KUMAR GOYAL) PRESIDING MEMBER (KIRAN SIBAL) MEMBER March 21st, 2022 (dv)