Delhi District Court
Jaswant Rai Agarwal vs Hdfc Bank on 22 July, 2022
IN THE COURT OF MS. SHRIYA AGRAWAL
JSCC, ASCJ, GJ, SOUTH EAST DISTRICT,
SAKET COURTS, NEW DELHI
CS SCJ 51746/2016
CNR No. :DLSE03-000498-2016
Jaswant Rai Agarwal
S/o late Sh. Moti Lal
R/o 421, Pkt-E, Mayur Vihar
Phase-II, Delhi-110091. ............ Plaintiff
Versus
HDFC Bank
Through its Branch Manger
D-23, Defence Colony
New Delhi-110024. ....... Defendant
SUIT FOR DECLARATION, MANDATORY AND
PERMANENT INJUNCTION
Date of Institution of the case : 13.05.2016
Date of reserve of judgment : 04.07.2022
Date of pronouncement of judgment : 22.07.2022
JUDGMENT
1. The present suit has been filed by the Plaintiff against the Defendant for declaration of charges to the tune of Rs.45,000/- which have been levied under a new head of "commitment charges" by the Defendant Bank as illegal, for directions for the same to be credited into CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 1 of 20 SHRIYA Digitally signed by SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:55:35 +05'30' the bank account of the Plaintiff and for the relief of permanent injunction to restrain the Defendant from imposing such charges upon the Plaintiff in future and also from specifically taking any such action which may adversely affect the rights of the Plaintiff.
CASE OF THE PLAINTIFF AS PER THE PLAINT
2. The brief facts as averred in the plaint are that the Plaintiff has been maintaining his Current Bank Account bearing No.01348020000210 for the last more than 15 years with the Defendant Bank, under which he has availed a Dropline Overdraft Facility (hereinafter referred to as 'DOF') for a decade now vide approval letter dated 30.09.2010. The same is stated to have been sanctioned with a rider that the Plaintiff would pay interest on the utilized amount from the DOF. The limit of the DOF in the regular course is stated to have now been reduced to Rs.22,28,000/-.
3. It is claimed that on 01.11.2013, the Defendant Bank intimated the Plaintiff for the first time that he was liable to pay interest/ commitment charges dehors the consumption under the limit sanctioned by the former Bank. The Plaintiff therefore claims to have protested and asserted that he would be paying interest only on the actual utilized amount under the DOF. The Plaintiff has averred that the Defendant Bank out of its ulterior motive has been attempting to unlawfully earn interest on an amount which was neither borrowed by the Plaintiff nor used, by way of creating another chargeable head viz. 'commitment charges'. The Plaintiff claims that he had never agreed or consented to the imposition of any interest or charges on the unused amount of the DOF. Therefore, debiting any amount either on account of interest or CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 2 of 20 SHRIYA Digitally signed by SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:55:54 +05'30' 'commitment charges' is outrightly illegal and against the agreement terms, since the said condition of 'commitment charges' was never a part of the conditions consented to by the Plaintiff at the time of availing / subscribing for the DOF. Therefore, it is stated that the Defendant Bank has no legal right to impose a unilateral condition now belatedly and force the Plaintiff to pay up under any such head.
4. It is also averred that initially the Defendant Bank had assured the Plaintiff that his account would not be debited by any amount, except the interest on used amount from the DOF sanctioned by the Bank and if the Plaintiff account is debited by any such Commitment Charges, contrary to the initial understanding, the entry of the same would be reversed. Consequentially, the Defendant Bank did reverse, as assured, the debit entry made on account of Commitment Charges on 29.04.2015. The Plaintiff asserts that the same is clearly an admission on the part of the Defendant Bank qua wrongly charging the former as aforesaid and hence the need to rectify and reverse the debits made. The Plaintiff claims to have sent several emails to the Defendant Bank raising the issue.
5. It is specifically pleaded that the Defendant Bank in order to harass and humiliate the Plaintiff are consciously charging him interest at rate of 13.75%, whereas the same DOF is being provided by the Defendant Bank to other customers at lower interest rate of 11.25%, thereby alleging that the Bank has been discriminating against the Plaintiff specifically by overburdening him. There is no consistency in approach. Even otherwise, the Defendant Bank is bound by the terms and conditions of the DOF upon which the Plaintiff was initially offered the Facility. The Defendant Bank is not within its rights now to suo-
CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 3 of 20 Digitally signed bySHRIYA SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:56:08 +05'30' motu unilaterally alter the terms and conditions of the subsisting legal arrangement inter-se the parties, much to the prejudice of the Plaintiff without seeking his consent.
6. Hence, the present suit has been filed seeking the relief of Declaration in favour of the Plaintiff and against the Defendant thereby declaring the charges of Rs.45,000/- which have been levied by the Defendant Bank as illegal and for directions for credit of the same into the account of the Plaintiff.
REPLY AS PER THE WRITTEN STATEMENT
7. It is stated that the Plaintiff being the Proprietor of Jaswant Rai Aggarwal & Co. and one Mr. Vikrant Nilesh Goyal (co-applicant) had together approached the Defendant for availing the DOF and had submitted an application form duly filled. The Defendant Bank had sanctioned the DOF on 01.08.2008. It is averred that the Plaintiff never raised any objections/ issues while accepting the terms of the DOF agreement dated 2.8.2015 bearing no.01348020000210. It is therefore underscored that the Plaintiff was well aware of the terms of the DOF and also that the parties to the contract have also acted on the same. The Defendant accordingly relies upon the principle of law of estoppel to assert that the Plaintiff cannot be permitted to now resile from the contractual understanding. The Defendant has claimed that the present suit is nothing but an afterthought to evade paying the lawful dues.
8. It is also claimed by the Defendant that since the Plaintiff being the proprietor of Jaswant Rai Agarwal & Co. availed the DOF for business expansion along with Mr. Vikrant Nilesh Goyal, the latter was CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 4 of 20 SHRIYA Digitally signed by SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:56:22 +05'30' equally a necessary and property party for fair and complete adjudication of the present suit. Thus, the suit is bad for non-joinder and not maintainable.
9. The Defendant has further asserted that it is the Plaintiff who on the contrary is guilty of not adhering to the terms and conditions of the DOF. It is averred that the Plaintiff after having secured the loan facility and enjoying the same, under the agreed terms and conditions has now raised a false and vexatious plea. The Defendant in its pleadings has drawn attention to Article 15 (k) of the Loan Agreement per which ' the Borrower shall keep himself acquainted with the rules (if any) prescribed by the Bank in force from time to time' and to the Article 18.5 of the Agreement which provides that 'the Borrower shall bear and pay all taxes, rates, duties (including stamp duties) charges, and other imposts and obligations, existing as well as future, in respect of (a) the execution, delivery and performance of Agreement (b) the payment of any interest or other amounts pursuant to this Agreement, and (c) the creation, perfection and enforcement of the Security, if any'.
10. At the time of execution of the DOF dated 01.08.2008 and 17.02.2009, it is stated that the commitment charges were nil. However subsequently, on 01.07.2011 pursuant to the Agreement, the Bank Capital Adequacy Framework Base -II acknowledged by the Reserve Bank of India (hereinafter referred to as 'RBI'), had come into force, which required adherence and adoption. Under the said policy, the Defendant Bank was required to provide capital for the un-utilized portion of the sanctioned credit facilities. It is further underscored that the Defendant Bank is also governed the Guidelines issued by Banking Codes and Standards Board of India (for short referred to as 'Banking Standards Code') which is a voluntary code, that sets minimum standards of banking practices for the CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 5 of 20 SHRIYA Digitally signed by SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:56:36 +05'30' Banks to follow, when they are dealing with individual customers. It lays down a blueprint governing the day-to-day operations of the banks. As per clause 3.4.2 of Banking Standards Code, in the event of there being any increase in the charges or introduction of a new charge, the same are to be notified one month prior to the revised charges being levied/ becoming effective. In adherence to these guidelines, the Defendant Bank has stated that three letters informing the Plaintiff were issued, whereby the introduction/ levy of commitment charges was duly brought to the notice of the end borrower as per rules. The same was made clear to become leviable in the event of the average quarterly utilization of the Overdraft limit being less than 30%. The Plaintiff was accordingly suggested either to utilize the limit or request to get the Dropline Overdraft limit suitably downsized (though not less than 11 lacs), in order to avoid levy of such commitment charges.
11. The Defendant Bank has issued the letter dated 26.10.2013 to the Plaintiff apprising the latter about the said charges which were to become applicable w.e.f. 01.01.2014. A follow up/ reminder letter dated 14.12.2013 was also sent and duly delivered to the Plaintiff in the same context. The third intimation issued in this regard was letter dated 10.09.2014.
ISSUES FRAMED
12. Summons of the suit were issued vide Order dated 13.5.2016, pursuant to which the Defendant entered appearance on 2.8.2016. Post carrying out of formal admission denial of documents the following issues were framed in the matter vide Order dated 16.12.2021:
a. Whether the suit is bad for mis-joinder of Mr. Vikrant Nilesh CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 6 of 20 Digitally signed by SHRIYA SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:56:54 +05'30' Goyal? OPD b. Whether the defendant bank had levied commitment charges of Rs.45,000/- as per rules and regulations by RBI ? OPD c. Whether the plaintiff is entitled for decree of declaration to declare the charges of Rs.45,000/- as levied by the defendant bank as illegal? OPP d. Whether the plaintiff is entitled for credit of commitment charges of Rs.45,000/-OPP e. Whether the plaintiff is entitled for decree of permanent injunction restraining the defendant bank from charging commitment charges in future? OPP f. Whether the suit has been properly valued for the relief of credit of amount of Rs.45,000/- and appropriate court fee has been paid by the plaintiff? OPP g. Relief.
PLAINTIFF EVIDENCE
13. The sole witness to depose for the Plaintiff was the Plaintiff himself who was examined as PW1. He led his evidence in chief on the strength of his detailed affidavit Ex PW1/1 and tendered in evidence, approval/ sanction letter (Ex PW1/2) qua the secured facility of Dropline Overdraft, copy of statement of account reflecting reverse entry qua commitment charges by the Defendant Bank (Ex.PW1/3), copies of the correspondence/ exchanges with the Defendant about grievances qua levy and response letters (Ex.PW1/4) and email letter dated 1.12.2015 (Ex.PW1/5) offering the option of utilization of the facility or downsizing of the same.
CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 7 of 20 Digitally signed bySHRIYA SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:57:11 +05'30'
14. In his cross examination by the Ld. Counsel for the Defendant, he stated that he was maintaining the account in question with the Defendant bank since the year 2011 and that initially the DOD facility was of Rs.50,00,000/- and gradually it was reduced to Rs.22,80,000/-. He acknowledged that his co-applicants in the DOD facility were Mr. Vikrant Goyal and Ms. Anita Goyal and that they have not been impleaded as Plaintiffs in the present suit. He admitted to have availed the DOD facility of Rs.30,00,000/- from the HDFC Bank on 01.08.2008, though could not recollect if he had executed two agreements on 01.08.2008 and 17.02.2009. He claimed he had partial knowledge about the 'Bank Capital Adequacy Framework Base -II' prescribed by the RBI, that too from the letter sent by the Defendant Bank, the date of which he could not recollect. He admitted that the Defendant Bank had imposed the commitment charges as per Base II Capital Adequacy Framework prescribed by the RBI, though qualifying the answer stating that the same had been reversed. He also admitted that he along-with the co-applicant Vikrant Goyal had signed on each and every page of the agreement. He mentioned during his deposition his correspondence address to be '421, Pocket-E, Mayur Vihar Phase-II, New Delhi' and that he had duly received the letter dated 26.10.2013 issued by the Defendant bank. He answered in the affirmative when asked if he had been advised by the Defendant Bank through letters to either use the entire limit of the DOD facility or downsize the same (to not less than Rs.11,00,000/-). The Plaintiff admitted that the address mentioned in the letter dated 14.12.2013 was his postal address, though was unable to remember if the letter dated 14.12.2013 was received by him.
CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 8 of 20 Digitally signed bySHRIYA SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:57:23 +05'30' DEFENDANT EVIDENCE
15. The Authorized Officer of the Defendant Bank, deposed as the sole witness for the Bank as DW1, who was examined on the strength of his affidavit Ex DW1/1 and relied upon the copy of the loan application form (Ex. DW1/A), original loan agreement dated 02.08.2008 for the loan account no.01348020000210 along with the schedule [Ex.DW1/B (colly)], copy of loan agreement dated 17.02.2009 for the loan account no.01348020000210 along with the schedule [Ex.DW1/C (colly)], Copy of loan agreement dated 17.02.2009 (supplementary) for the loan account no. 01348020000210 along with the schedule [ Ex.DW1/D (colly)], statement of loan account no.01348020000210 [Ex.DW1/E], Copy of Master Circular Prudential Norms on Capital Adequacy Framework dated 01.07.2011 issued by Reserve Bank of India (Ex.DW1/F), Copy of the Guidelines issued by the Banking Codes and Standards Board of India ( Ex.DW1/G), Office Copy the letter dated 26.10.2013 issued by the Defendant Bank to the Plaintiff ( Ex.DW1/H ) along with those of letters dated 14.12.2013 and 10.9.2014 ( Ex DW1/I and Ex DW1/J respectively).
16. The witness was cross examined by the Ld. Counsel for the Plaintiff. As per the same, the witness admitted that there were no commitment charges imposed/ due when the DOD facility was started in the year 2008. He stated that the interest for the DOD facility was base + 4% which amounted to 11.5%. He was not aware if the rate of interest on the Plaintiff was also reduced when the general rate of interest was reduced in the market. The witness in the course of the cross examination was confronted with Ex PW1/5 to assert to the contrary. The witness when asked specific questions about the termination of the facility or the last charged interest, failed to give any specific answer. He could not tell when CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 9 of 20 Digitally signed by SHRIYA SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:57:37 +05'30' asked as to what was the current outstanding amount from the Plaintiff. He denied the suggestion that there were no dues outstanding and also explained that the original title deeds of the Plaintiff had not been returned since the latter was still required to clear the dues. He could also not tell the date and year when the commitment charges were levied on the Plaintiff for the first time. With respect to the return/ reversal of Rs. 11, 236/- to the Plaintiff, it was explained that the same had been done on account of a service gesture, acknowledging that the same had also been levied under the commitment charges head. He explained that at the time of grant of facility, there were no RBI guidelines to levy commitment charges, however later the same were notified to be introduced and levied as per the RBI guidelines dated 01.07.2011. He denied the suggestion that the RBI Guidelines dated 1.7.2011 (Ex DW1/F) do not mandate the levy of such charges. The witness was confronted with Ex DW1/F and he failed to point out the specific rule/ guideline as per which such levy could be made. He denied the suggestion that the letter dated 01.09.2014 was never delivered to Plaintiff, adding that the same had been delivered to Mr. Sukhram as per the tracking details of the Blue Dart courier. He could not recollect if any such letter was also sent to the Co-applicant. The witness upon being confronted with the complete written statement record admitted that there was no report of delivery by Blue Dart, but only proof of dispatch of the notice.
17. Final arguments have been heard at length. Record stands carefully perused.
ANALYSIS
18. The Plaintiff has filed the present suit for the reliefs, inter-alia, CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 10 of 20 Digitally signed by SHRIYA SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:57:53 +05'30' declaration of the debit to the tune of Rs. 45,000/- under the head of 'commitment charges' by the Defendant Bank in respect of the Dropline Overdraft Facility availed by the Plaintiff from the latter as illegal and for directions for reversal of the same as credit along with other ancillary reliefs as previously mentioned.
19. As regards the preliminary objections (framed as issues for trial) over the non-joinder of the co-applicants as Co-Plaintiffs and improper valuation for the purposes of Court fees, of the relief for reversal of erroneous debit are devoid of merits per-se. The Plaintiff has sought to agitate a cause which per him had arisen qua him personally and with the Plaintiff being the dominus litus, it cannot be said on this count that the suit is not maintainable since other beneficiary under the Facility did not opt to join the cause. As far as valuation of the relief of credit for Court Fees is concerned, the prayer being couched in such terms as though it were a prayer for mandatory injunction, the objection raised is not worthy of consideration, since the valuation for such a relief would even otherwise be in complete discretion with the Plaintiff.
20. The primary contention on merits of the Plaintiff is that charges were imposed unilaterally and arbitrarily beyond the scope and in breach of the contractual terms, there having been neither such levy agreed upon at the threshold nor proposed in the follow on. It is the assertion of the Plaintiff that the levy is illegal per se and the same could not have been imposed upon him, either by way of a formal intimation or by in the form of a proposal for him to either utilize the entire facility or downsize the same in order to escape the levy.
21. Per contra, the Defendant Bank has justified the levy on the ground that the additional head of charges was covered under the CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 11 of 20 SHRIYA Digitally signed by SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:58:06 +05'30' contractual terms which allowed the Bank to revise the clauses, in sync with the broader guidelines issued by the RBI or otherwise come into force, and which would require adherence in order to secure bank capital stability. The Defendant has drawn strength for such the revamped policy from the introduction of the Bank Capital Adequacy Framework Base -II by the RBI. Pursuant to the said change, the Defendant Bank has asserted in reply that the introduction of the commitment charges was imperative and unavoidable and that the same has been done by duly following the procedure prescribed under the Banking Standard Code.
22. Underlying the issues on which the matter was tried, is essentially the dispute qua the legality or otherwise of the commitment charges to the tune of Rs. 45,000/- debited by the Defendant Bank upon the Plaintiff. Hence, the discussion hereinafter on the issues framed, touching upon the main relief of declaration and ancillary reliefs, is overlapping and comprehensive.
23. At the threshold, it is pertinent to acknowledge that the DOF availed by the Plaintiff is regulated by certain terms and conditions agreed upon inter-se the parties. The relationship is accordingly governed by some specific contractual stipulations which are noteworthy and reproduced as under for consideration on the subsisting issue:
a. 'The bank reserves the right to withdraw and/or amend any of the terms and conditions hereof (including to reduce or cancel any of the facility) at its sole discretion, in the event of any change in circumstances & subject to legal and title clearance.' [The sanction letter dated 30.9.2010 Ex PW1/2] b. 'All charges subject to applicable taxes and levies CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 12 of 20 Digitally signed by SHRIYA SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:58:19 +05'30' which may change from time to time.' [The sanction letter dated 30.9.2010 Ex PW1/2] c. The Borrower shall bear and pay all taxes, rates, duties (including stamp duties), charges, and other imposts and obligations, existing as well as future, in respect of (a) the execution, delivery and performance of Agreement, (b) the payment of any interest or other amounts, pursuant to this Agreement, and (c) the creation, perfection and enforcement of the Security, if any.' [Clause 18.5 of the Overdraft Agreement Ex DW1/B] [Emphasis Supplied]
24. The Defendant Bank after the execution of the aforesaid agreement sought to introduce w.e.f. 1.1.2014 (vide intimation dated 26.10.2013 (Ex DW1/H) the imposition of 'commitment charges' which under the banking parlance is commonly understood as the fee charged by the lender upon the borrower in order to compensate the lender qua its commitment to lend and these typically concern the unused credit lines or undisbursed loan.
25. The main thrust of the Plaintiff's case is that these have been introduced and levied upon him by the Defendant Bank much to his prejudice, by way of an illegal unilateral novation of terms. The Plaintiff asserts that the agreement (Ex DW1/B) is conspicuously silent on any such charge agreed to be leviable. Moreover, the RBI guidelines also do not make a mention of the same. The Plaintiff throughout his correspondence with the Bank over the issue, claims to have sought for clarification by way of disclosure, the source of authority under any such RBI Circular to CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 13 of 20 Digitally signed by SHRIYA SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:58:33 +05'30' impose such charges, but to no avail. The Plaintiff therefore claims that the levy was completely baseless and without any authority in teeth of the contractual terms and conditions. The Plaintiff has relied upon his communication with the Defendant Bank through letters dated 22.10.2015 and dated 19.11.2015 and emails exchanged over time (Ex PW1/ 4) to underscore that the latter had been duly put to notice of his grievance which remain unaddressed.
26. The Defendant Bank on the other hand has tendered in evidence three letters dated 26.10.2013 [Ex DW1/H],14.12.2013 [Ex DW1/I] and dated 10.9.2014 [Ex DW1/J] whereby the Plaintiff was not only intimated about the proposed introduction of the new levy w.e.f. 1.1.2014, but also reminded accordingly and advised to either utilize the entire facility or downsize the same to avoid facing the levy. The Defendant Bank has also placed reliance upon the Banking Standards Code [Ex DW1/G] to establish due compliance with the procedure recommended to be followed by Banks before introducing new charges. The relevant rule is reproduced hereunder:
"Clause 3.4.2 If we increase any of these charges or introduce a new charge, it will be notified one month prior to the revised charges being levied/ becoming effective."
27. The Defendant has also referred to the RBI circular of the year 2011 to highlight the basis for change in policy and the need for imposition of additional charges.
28. The principles of law governing contractual interpretation are well settled. It has been observed in Govt. of Maharashtra v. Deokar's Distillery [(2003) 5 SCC 669] by the Hon'ble Apex Court in paragraph no.
CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 14 of 20 Digitally signed bySHRIYA SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:58:47 +05'30' 80 as hereunder:
"The rule of construction of a contract is that if the terms of the agreement are so vague and indefinite that it may not be ascertained with reasonable certainty as regard intention of the parties, the same would not be enforceable at law."
Also, in CITI Bank N.A. v. Standard Chartered Bank, (2004) 1 SCC 12 : 2003 SCC OnLine SC 1106 it was observed that 'a term can only be implied by way of sense to give efficacy to the transaction, as was intended by the parties'.
29. After hearing detailed arguments from both sides and perusing the record, it is noteworthy to consider the terms of the loan agreement herein, ex-facie lucid, as those primarily binding the parties and their contractual relationship. The overdraft facility was availed on the understanding that the terms and conditions of the Overdraft Agreement may be subjected to revision as per norms existing then by the Defendant Bank. This right has been accordingly reserved by the Defendant Bank and stands exercised in the form of levy of the impugned charges.
30. It has been admitted by the Plaintiff in his cross examination that the Defendant Bank had served him with letter [Ex DW1/H] whereby the change of policy qua commitment charges was duly notified as per the required procedure to him. This reveals that the Bank had complied with the requirements set out in the Banking Standards Code as condition precedent to application of new charges. Although the RBI circular of 2011 does not expressly cover or make a mention of such commitment charges, CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 15 of 20 Digitally signed by SHRIYA SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:59:03 +05'30' the Court cannot turn a blind eye to the preceding circulars [such as of years 2005, and 2009] which in essence hold the ground on the issue, as per which imposition of such levies are left to the discretion of the Commercial Banks.
31. Throughout the pleadings or otherwise it has gone unexplained as to why the cause, irrespective of merit, was not taken up all the while from the date of first intimation by the Bank i.e. 26.10.2013 as a change in policy across board for all its customers, till the date of first grievance letter in the year 2015 sent by the Plaintiff to the Bank. Even if the grouse were to be considered as duly registered, the RBI circular of the year 2011 indeed makes a mention of commencement of the Bank Capital Adequacy Framework-II in the Country which necessitated the introduction of this new head of charges, duly also explained to the Plaintiff vide communication through email dated 1.12.2015. The Plaintiff has therefore virtually acquiesced to the levy, by not agitating the cause, merits aside, until 2015, despite he having been intimated as per the required procedure about this change.
32. Section 62 of the Indian Contract Act, 1872 provides for the effect of novation, rescission and alteration of contracts. It reads as under:
"The parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract, need not be performed."
33. The key word used in the provision for a lawful substitution of new terms to qualify for a novation to take effect and result in a legally enforceable contract is that parties ought to have 'agreed' upon the same. The Plaintiff in the present case has by CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 16 of 20 Digitally signed by SHRIYA SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:59:16 +05'30' admitting the fact that he was given due intimation of the commitment charges through letter dated 26.10.2013 and thereafter waiting till the year 2015, agreed to the novation of the terms by way of acquiescence, for which even otherwise the Bank under the contractual terms acceded to, by the Plaintiff, had reserved the right to amend.
34. A similar situation had arisen in a case titled ICICI Bank Ltd. v. Maharaj Krishan Datta [(2015) 17 SCC 535] where the subsequent revision of the interest rate (floating) on loan liability had been questioned as much higher than the original contractual rate. The contentions of the Ld. Senior Counsel appearing for the Petitioner were eventually accepted by the Hon'ble SC and the same are reproduced as under:
"The learned Senior Counsel also pointed out that the National Commission has only discussed about one clause of the loan agreement while deciding the matter and has interpreted it in isolation and without taking into account other terms of the contract. It is settled law that a contract has to be read as a whole and the terms of the contract cannot be read or construed in isolation. He also submitted that the Bank has to follow the RBI Guidelines especially Schedules A and B thereto, and the Bank must be given liberty to act in the matter in accordance with the guidelines so issued by RBI from time to time. Fixed rate, floating rate and other rates which have been mentioned in the Guidelines and the right which has been given to the banks in respect of floating reference rate (FRR) has also to be followed in all cases by the Bank."CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 17 of 20 Digitally signed by
SHRIYA SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:59:29 +05'30'
35. In the present case as well, the Bank has only in furtherance of the RBI guidelines and recognition of commencement of Base II Capital Adequacy Framework, felt the need to introduce the charges as levied. It is clearly not a customer specific alteration, but under a policy overhaul across the board.
36. There is therefore clearly no merit in the claim of the Plaintiff seeking to assail legality of the commitment charges, to the introduction of which he himself had subscribed by agreeing to the terms discussed above. The Plaintiff also cannot be permitted to now as an afterthought question the imposition, which has the due backing of guidelines issued translating into a policy change for all customers alike. The argument that the Plaintiff has been specifically discriminated against has had no support of any evidence or testimony throughout the trial. Even the argument with respect to the part reversal of one such debit entry under the commitment charges readable as an admission on the part of the Defendant Bank is baseless, since it is clearly a one-off entry, that too explained by the Bank to be nothing more than a service gesture. The Plaintiff has not adduced anything to establish otherwise.
37. Thus, in view of the above discussed reasons, the Plaintiff has failed to establish any cloud over the legality of levy of commitment charges as stand debited already and consequentially a case for reversal or any restraint against imposition of the same in future has not been brought home.
ISSUE -WISE FINDINGS
38. The following are the issue-wise findings in the present case :
CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 18 of 20 Digitally signed bySHRIYA SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 15:59:42 +05'30' Issue (a) Whether the suit is bad for mis-joinder of Mr. Vikrant Nilesh Goyal?' The issue is decided in favour of the Plaintiff and against the Defendant as an individual cause is agitated against the Defendant Bank and the other co-applicants not joining the Plaintiff would not affect the maintainability of the suit.
Issue (b) 'Whether the defendant bank had levied commitment charges of Rs.45,000/- as per rules and regulations by RBI ?' The issue is decided in favour of the Defendant for reasons detailed hereinabove.
Issue (c ) 'Whether the plaintiff is entitled for decree of declaration to declare the charges of Rs.45,000/- as levied by the defendant bank as illegal?' Consequentially to finding on Issue (b), this issue is decided against the Plaintiff in favour of the Defendant.
Issue (d) 'Whether the plaintiff is entitled for credit of commitment charges of Rs.45,000/-?' Consequentially to finding on Issue (b), this issue is decided against the Plaintiff in favour of the Defendant.
Issue (e) 'Whether the plaintiff is entitled for decree of permanent injunction restraining the defendant bank from charging commitment charges in future?' Consequentially to finding on Issue (b), this issue is decided CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 19 of 20 Digitally signed by SHRIYA SHRIYA AGRAWAL AGRAWAL Date: 2022.07.26 16:00:00 +05'30' against the Plaintiff in favour of the Defendant.
Issue (f) 'Whether the suit has been properly valued for the relief of credit of amount of Rs.45,000/- and appropriate court fee has been paid by the plaintiff?' This issue is decided in favour of the Plaintiff, dehors the issue of maintainability of the suit in the present form which was neither raised nor agitated.
39. For the above discussed reasons, the suit is hereby dismissed. Decree sheet be prepared. File be consigned to Record Room.
Digitally signed bySHRIYA SHRIYA AGRAWAL (Announced in the open court on 22th July, 2022) AGRAWAL Date: 2022.07.26 16:00:19 +05'30' (Shriya Agrawal) JSCC cum ASCJ cum GJ South East District/Saket Courts 22.07.2022 CS SCJ 51764/2016 JASWANT RAI AGGARWAL VS HDFC Page 20 of 20