Delhi District Court
Mangalore (South Kanara vs Shinder Pal Singh on 27 April, 2016
IN THE COURT OF SH VINOD KUMAR MEENA: CIVIL JUDGE11 (CENTRAL):THC:DELHI CS No. 415/14 Unique ID no.02401C0137332013 Corporation Bank, LIC Card Centre, New Delhi, A body Corporate constituted under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (Act no.3 of 1980 (Act No.3 of 1980) having its Head Office at Mangalore (South Kanara, Karnataka State) and having a branch at Corporation Bank, LIC Card Centre, 16/10, FF, Main Arya Samaj Road, Karol Bagh, New Delhi 110005. ... Plaintiff VERSUS Shinder Pal Singh, S/o Sh. Inder Pal Singh, C/o Mahindra Singh Pal, 188/7, Surya Nagar, Chand Pur Road, Bulandshahar203001(UP) Also at Bharat Immunological & Biological Corporation Ltd. (Employee Code 0143) Village Chola, Bulandshahar203 203 ...Defendant SUIT FOR RECOVERY OF RS. 1,06,242.58/ (RUPEES ONE LAKH SIX THOUSAND TWO HUNDRED FORTY TWO RUPEES AND FIFTY EIGHT PAISA ONLY) Date of institution of case : 20.03.2013 Reserved for judgment : 23.04.2016 Date of pronouncement of judgment : 27.04.2016 Suit No. 415/14 Corporation Bank Vs Surinder Pal Singh Page 1 of 12 EXPARTE JUDGMENT 1 By this order, I shall dispose off the suit filed by the plaintiff for recovery of Rs. 1,06,242.58/ (Rupees one lakh six thousand two hundred forty two rupees and fifty eight paisa only) 2 The relevant facts pleaded in the plaint which are inevitable to be reproduced here are as follows:
(i) That the plaintiff is Nationalized Bank and is a body corporate under the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (Act No.3 of 1980) having its Head Office and registered office at above mentioned address.
(ii) The defendant approached the plaintiff bank for issuing a LIC Credit Card and submitted duly filled and signed application no. 584/17 dated 02.02.2010 alongwith self attested copies of PAN Card, BIBCOL ID Card, Salary Slip, Certificate issued by BIBCOL etc. for the proof of identity and residence of the defendant. After due consideration of the request of defendant, the plaintiff bank sanction a limit of Rs.30,000/ on 12.02.2010 issued a LIC Credit Card No. 4628460005862008 to defendant.
Suit No. 415/14 Corporation Bank Vs Surinder Pal Singh Page 2 of 12(iii) As per terms and conditions of the LIC Credit Card, the defendant was under an obligation to sign the original charge slip at the time of purchasing from the sellers/member establishments and to collect original bill from the Sellers/Member Establishments at the time of purchasing of goods/service etc.
(iv) The defendant purchased goods/things from the different stores/shops (Member Establishments) by using the LIC Credit Card on 20.03.2010 and the amount of those goods/things have been claimed by the Sellers/member Establishment and Canara Bank/Bulandshahar, ATM Branch through VISA and the same have been paid by the plaintiff by debiting the LIC Card account no. 4628460005862008 of the defendant which were duly reflected in the periodical statement/bills of the defendant.
(v) As per the terms and conditions of the LIC Credit Card user guide, defendant is liable to make the payments of all the outstanding of the said credit card and other charges as applicable w.r.t the LIC Credit Card No. 4628460005862008. The plaintiff has repeatedly called upon the defendant to clear and liquidate the dues in respect to the said credit card. The defendant failed to maintain financial discipline and to deposit regular Suit No. 415/14 Corporation Bank Vs Surinder Pal Singh Page 3 of 12 minimum amount in the Card account, therefore, the plaintiff sent a Recall Notice dt. 01.12.2012 upon the defendant for payment of outstanding amount but to no avail. Hence, the present suit has been filed for recovery of Rs. 1,06,242.58/ includes outstanding (principal) of Rs. 21,000/ and finance charges, late payment, over limit, other charges and interest of Rs. 85,242.58/ in favour of plaintiff and against the defendant.
3 The plaintiff has filed the present suit for recovery under Order 37 CPC, however, vide order dt. 12.11.2013 the Ld. Predecessor has treated the present suit as an ordinary suit.
4 The summons were issued against the defendant, however, the same received back with the report that the defendant has left the premises. On the application under Order 5 Rule 20 of CPC, the summons were issued against the defendant by way of publication. The summons were duly served by way of publication in the newspaper "Veer Arjun issued dated 06.02.2015. However , the defendant failed to appear in the court. Thereafter, the defendant was proceeded exparte vide order dt. 23.02.2015 by the Court.
Suit No. 415/14 Corporation Bank Vs Surinder Pal Singh Page 4 of 125 In support of his case, the plaintiff has examined Sh. Manish Singh, Asst. Manager of plaintiff bank as PW1. PW1 stated and reiterated on oath the contents of the plaint. He has exhibited certain documents on record which are marked as under: I) Ex. PW1/1 is the application.
ii) Ex. PW1/2 to Ex. PW1/36 are estatements/ bills. Iii) Ex. PW1/37 is the recall notice
iv) Ex. PW1/38 is the postal receipt of recall notice.
v) Ex PW1/39 is the screen shot.
vi) Ex. PW1/40 is the certificate under Banker Books
Evidence Act.
vii) Ex. PW1/41 is the terms and conditions
viii) Ex. PW1/42 is the agreement dated 30.03.2009
ix) Ex. PW1/43 is the agreement between plaintiff and Opus Software Solutions Pvt. Ltd.
x) Ex. PW1/44 is the Power of Attorney of the Chief Manager who send the plaint 6 I have heard the Ld. Counsel for plaintiff and perused the record carefully.
Suit No. 415/14 Corporation Bank Vs Surinder Pal Singh Page 5 of 127 After going through the pleadings, documents and evidence, it is observed by the Court that the plaintiff by way of the present suit, has sought recovery of money/damages allegedly arising out of default by the defendant of his contractual obligation. The plaintiff has claimed that the defendant is under a legal liability to pay the outstanding amount in respect of the credit card issued by the plaintiff bank on an application made by the defendant through M/s. LIC Card Services Ltd. It is further observed by the Court that there is no direct contract between the plaintiff and defendant.
At this stage, the Court deem it fit to mention here the well settled principle of the law that only the following persons can sue a defaulting party to a contract for breach or enforcement of its terms and conditions as follows:
(a). Firstly, a party to the contract himself (based on principle of privity of contract).
(b). Secondly, a party who is falling under the exceptions to the principle of privity of contract; and
(c). Thirdly, a party who has acquired or derived the rights and remedies pertaining to the actionable claim (based on the Principle of subrogation).Suit No. 415/14 Corporation Bank Vs Surinder Pal Singh Page 6 of 12
In order to ascertain the claim of alleged liability of the defendant towards the plaintiff, the defendant has to be covered under any one of the aforesaid three categories. It is expedient to examine as to under which of the three above mentioned categories, the plaintiff has found its right to sue the defendant.
(a) Privity of contract: In the present case the application form for issuance of credit card placed on record by plaintiff makes it evident that defendant had applied to the LIC Card Services Ltd for the credit card facility. The defendant had transacted/contracted with LIC Card Services Ltd through the sales representative of LIC Card Services Ltd as is evident from the declaration of sales representative of LIC Card Services Ltd made in the application form. There is no averment in the plaint that the LIC Card Services Ltd had acted as an agent of plaintiff while entering into contract with the defendant. On the contrary, the plaintiff has claimed that the company M/s LIC Cards Services Ltd. Was an agent of the defendant. However, it is an admitted fact on record that an agreement dated 30.03.2009 was executed between the plaintiff bank and M/s LIC Card Services Ltd. only. The defendant had neither authorized the said M/s LIC Card Services Ltd. to enter into the impunged agreement Suit No. 415/14 Corporation Bank Vs Surinder Pal Singh Page 7 of 12 dated 30.03.2009 with the plaintiff bank nor the defendant has later on appointed M/s LIC Card Services Ltd. as its agent in any form. Evidently, the contract is bipartite between the defendant and LIC Card Services Ltd. The plaintiff bank is not a party to the said contract though it has maintained the account of the defendant. In this regard, merely maintaining the account of defendant or determining the credit limit of the credit card does not entitle the plaintiff to sue the defendant for the amount accrued towards usage of the credit card. Simply stating, there is no privity of contract between the plaintiff and defendant and, undoubtedly, the plaintiff is a stranger to the contract entered into between the LIC Card Services Ltd and defendant. The position of the law in this regard has been clearly laid down by the Hon'ble Apex Court in case titled as M.C. Chacko vs. The State Bank of Travancore AIR 1970 SC 504. The Hon'ble Apex Court in its judgment while dealing with the principle of privity of contract has held that:
"It is well settled that a person not a party to a contract cannot subject to certain well recognized exceptions, enforce the terms of contract: the recognized exceptions are that beneficiaries under the terms of the contract or where the contract is a part of a family Suit No. 415/14 Corporation Bank Vs Surinder Pal Singh Page 8 of 12 arrangment may enforce the covenent..........it must therefore, be taken as well settled that except in the case of a beneficary under a trust created by a contract or in case of family arrangment, no right may be enforced by a person who is not a party to the contract." (underline added) As noted above, the plaintiff is a stranger to the contract entered into by the LIC Cards Services Ltd and defendant. Hence, the Court is of the view that the plaintiff's claim of right to sue the defendant does not fall under the first category.
(b) Exceptions to the principle of privity of contract: As evident from record, plaintiff has failed to carve out the well recognized exceptions to the prinicple of privity of contract as observed in M.C.Chacko vs. The State Bank of Travancore (Supra). Hence, the Court is of the view that the plaintiff's claim of right to sue the defendant does not fall under the second category being exceptions to the principle of privity of contract too.
(c) Principle of subrogation: Suit No. 415/14 Corporation Bank Vs Surinder Pal Singh Page 9 of 12 It is observed by the Court that the MITC of the agreement between LIC Cards Services Ltd and defendant indeed confer upon the Corporation Bank a right to sue the defendant in case of default in payment of dues. However, it may be noted that the parties to a contract cannot contract out or override the mandate of law. Such terms and conditions overriding the statutory law is perse void and unenforceable.
By virtue of the MITC, plaintiff is claiming its right to sue the defendant for recovery of dues pertaining to the usage of credit card. It is worthwhile to mention that the transfer of a mere right to sue is not permissble under the law as Section 6 of the Transfer of Property Act, 1872 bars the transfer of a mere right to sue.
The mode and manner of tranfer of an actionable claim are specifically provided under Section 130 of the Transfer of Property Act, 1872. The law provides that an actionable claim can be transferred only by way of execution of an instrument in writing by the transferor conferring all the rights and remedies pertaining to the actionable claim upon the transferee. In other words, it is sine qua non for transfer of an actionable claim that all the rights and remedies pertaining to the actionable claim are assigned to the transferee. The assignment of only one right attached to the actionable claim Suit No. 415/14 Corporation Bank Vs Surinder Pal Singh Page 10 of 12 i.e. mere right to sue is not permissible. In the present case, as evident from record, there is no such assignment/ transfer of actionable claim by LIC Cards Services Ltd in favour of the plaintiff. In fact, there is not even an averment to this effect in the plaint and the plaintiff has merely washed off its hands by alleging LIC Card Services Ltd to be an agent of the defendant only. However, the plaintiff bank has failed to point out the appointment or authorization of LIC Card Services Ltd., as its agent by the defendant in any manner. Moreover, the agreement executed between the plaintiff bank and LIC Card Services Ltd. on 30.03.2009 further negates the claim of the plaintiff bank as the said agreement is prior in time before the allotment of credit card to the defendant which the latter allegedly applied through LIC Card Services Ltd.
In view of the aforesaid discussion, the court is also of the view that the plaintiff's claim of right to sue the defendant does not fall under the third category also.
Therefore, in view of the abovementioned reasons, it is established that the plaintiff does not have any legal right to sue or the locus to institute a suit for recovery against the defendant.
In view of the abovementioned, the suit of the plaintiff is disposed of as dismissed. No order as to cost. Applications, Suit No. 415/14 Corporation Bank Vs Surinder Pal Singh Page 11 of 12 if any, which are pending in the present judicial file and have not been pressed for by the parties are also disposed of as dismissed as not pressed.
8 Decree sheet be prepared separately accordingly. File be consigned to record room after due compliance.
Announced in the open court
today i.e. on 27.04..2016
(Total pages 1 to 12) (Vinod Kumar Meena)
Civil Judge/Central11/27.04.2016
Suit No. 415/14 Corporation Bank Vs Surinder Pal Singh Page 12 of 12