National Consumer Disputes Redressal
Sri Rakesh Mohan Sharma vs The Chief Manager Federal Bank Ltd. & ... on 5 October, 2015
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI CONSUMER CASE NO. 151 OF 2002 1. SRI RAKESH MOHAN SHARMA KM - 62 KAVI NAGAR GHAZIABAD U.P. ...........Complainant(s) Versus 1. THE CHIEF MANAGER FEDERAL BANK LTD. & ORS. CONNAUGHT CIRCUS NEW DELHI 110 001 ...........Opp.Party(s)
BEFORE: HON'BLE MR. JUSTICE J.M. MALIK, PRESIDING MEMBER HON'BLE DR. S.M. KANTIKAR, MEMBER
For the Complainant : In person For the Opp.Party : Mr. P.I. Jose, Advocate
Opposite Party No.3 - Deleted from the array of parties
vide order dated 05.12.2002.
Dated : 05 Oct 2015 ORDER
JUSTICE J. M. MALIK, PRESIDING MEMBER
1. On 07.03.2000, Sh. Rakesh Mohan Sharma, the complainant, was sanctioned over draft facility in the sum of Rs.20,00,000/- by Federal Bank and its functionary, OPs 1 & 2, M/s.Abhipra Capital Ltd., OP3, whose name was subsequently deleted, the broker, against pledge of the following shares in demat form :-
Market value
"DSQ SOFTWARE 400 x 2138 = Rs. 8,55,200/-
HFCL 500 x 2214 = Rs. 11,07,000/-
INFOSYS 181 x 11944 = Rs. 21,61,864/-
Total = Rs.41,24,064/-
2. However, he was given the loan in the sum of Rs.18.21 lakhs only. A loan agreement was executed between them. Clauses 14 & 18 of the said agreement are reproduced here as under:-
"14. The Bank shall at its absolute discretion may permit the borrower(s) to release part of the securities and such partial release of securities and accepting of additional securities, invocation of pledge of partial securities, etc., will not, in any way, affect the holding of the remaining securities by the Bank and the rights and liabilities created in terms of these presents.
18. The borrower(s) agree that in the event of any default on his/her/their part, in discharging its obligation hereunder or payment of dues, or on becoming the account irregular, or on violation of any of the terms and conditions of this agreement, or at any point of time during the currency of loan/credit facilities at the discretion of the bank, the bank shall be entitled to invoke the pledge as provided under SEBI (Depository and Participants) Regulations 1996 and exercise any right as a pledgee as per the provisions of Indian Contract Act and thereby sell, transfer in its own name as beneficial owner or otherwise dispose of the said securities or such part as the bank may desire and appropriate the sale proceeds first in the payment of the cost, secondly, towards repayment of the balance amount due with interest.
Emphasis supplied".
3. Soon after the pledge, in the second week of March, 2000, the value of the pledged shares further increased and taking advantage of this increase, the complainant requested the OPs 1 & 2 to release or replace the said shares. However, the Bank declined on various pretexts, such as March closing, orders of the higher authorities, individual targets, etc. On 28.03.2000, the complainant personally visited and requested the OPs to sell his shares, but again, in vain. The complainant had to suffer a loss in the sum of Rs.20.00 lakhs, as per details in his letter dated 17.05.2000, marked as Annexure - B. In the said agreement, the complainant was required to keep margin of 25% on the market value of the shares. The complainant was required vide letter dated 02.05.2000 to deposit a further sum of Rs.2,61,437.25, computed on the aforesaid basis. It was further mentioned that the shares in the market would not be sold at that point of time. It was also explained that as the shares were not sold in March, therefore, the complainant had suffered loss in the sum of Rs.20.00 lakhs. The complainant also mentioned about his personal visit on 28.03.2000.
4. It is averred that in September, 2000, the market picked up partially and in order to liquidate the overdraft, the complainant sent a letter dated 20.09.2000 to sell 500 HFCL shares and the market price per share was Rs.1,470/-, total amount being Rs.7,35,000/- and 181 Infosys shares, the market price being Rs.7,975/- per share, total being Rs.14,43,000/-. The total amount of the two kinds of shares came to Rs.21.78 lakhs, whereas, the total overdraft including interest on that day, was Rs.19.71 lakhs. Letter dated 20.09.2000 has been annexed on record as Annexure C, which is reproduced here as under :
"Dear Sir,
Re : O.D. A/ No. 250.
Kindly issue instructions through the bearer of this letter for sale of following shares pledged with to offset your loan. The shares would be sold through your Bank as per my advice through bearer in this week itself.
Infosys 181 Equity shares
Himachal Futuristic Comm 500 Equity shares
5. However, the needful was not done. The complainant received a letter from OP1, dated 09.01.2001, wherein it was mentioned that since the market value of the pledged shares have come down and his accounts show an overdraft balance of Rs.6.62 lakhs, therefore, he should pledge more shares and / or shod deposit the amount to bring the balance within is DP limit, otherwise the pledged shares would be disposed of. On 12.01.2001, the complainant deposited more shares.
6. On 25.06.2001, the complainant's shares i.e., 500 HFCL and 181 Infosys Ltd. were sold and were duly transferred from his DP Account, on 21.09.2000. The complainant received no dividend. The shares in question were transferred from the complainant's folio in the books of the company. A copy of the statement of holding dated 26.05.2001 issued by M/s. Abhipra Capital Ltd., OP3 was placed on record as Annexure E. In his OD Account, no sale proceeds of the 500 HFCL and 181 Infosys Ltd., was credited but the same was transferred from his DP account on 21.09.2000, as per the complainant's request to sell them.
7. The complainant sent a legal notice dated 30.07.2001 which was replied by OP on 16.08.2001 repudiating the claim of the complainant, in a hostile and vindictive manner by selling the entire pledged shares on 'throw-away' prices and evoking litigation against the complainant.
8. Vide its reply dated 16.8.2001, the opposite party contended that the letter dated 20.9.2000 did not contain the instructions to sell the shares. The complainant had to pledge more shares. Ultimately, this complaint was filed on 24.04.2002, with the following prayers :
i) Loss on account of not crediting the sale proceeds of 400 shares and 181 Infosys Ltd. Shares sold on 21.09.2000 and interest thereon @ 18% p.a., till the filing of the complaint
(interest 01.10.2000 to 31.03.2002, computed quarterly).
Rs. 21,66,689/-
Rs. 6,54,236/-
ii) Loss on account of not releasing 400 shares of DSQ Software illegally retained by the OPs with interest thereon @ 18% p.a., till the filing of the complaint
(interest 01.10.2000 to 31.01.2002, computed quarterly)
Rs. 2,09,600/-
Rs. 63,289/-
iii) Loss on account of subsequently pledged shares with interest thereon @ 18% p.a., till the filing of the complaint
(interest 01.04.2001 to 31.01.2002, computed quarterly).
Rs. 33,580/-
Rs. 6,465/-
iv) Loss of business on account of illegally restraining the complainant from using his O.D. limit
Rs. 20,00,000/-
v) Loss on account of harassment and mental agony suffered by the complainant
Rs.10,00,000/-
TOTAL
Rs. 61,33,859/-
a) To pay to the complainant a sum of Rs.61,33,859 with interest thereon till payment at the rate of 18% per annum.
b) to release 400 shares of DSQ illegally retained and the shares subsequently pledged;
c) Award the costs of the complaint;
d) Pass any other order or orders as may be deemed fit and proper in the facts and circumstances of the case".
9. The opposite parties No. 1 and 2 in their joint written version, listed the following defences. The complaint does not disclose any cause of action against OP 2. Therefore, the complaint against him is not maintainable. The concerned Branch of Federal Bank Ltd. Connaught Circus, New Delhi was not made a party. The opposite parties are not parties to the agreement of loan. The bank has filed the recovery suit before the Debts Recovery Tribunal, Delhi. The execution of agreement dated 7.3.2000 has been admitted. The opposite party No. 3 is dealing in dematted shares. It is explained that the market value of the said pledged shares as on 7.3.2000 was Rs.28,08,673/- and not Rs.41,24,064/-. As per the agreement, the complainant was required to keep 25% margin and taking into consideration the said margin, Rs.20 lakh were sanctioned by the bank as overdraft to the complainant. However, the complainant availed a sum of Rs.18,21,313/- out of the above said Rs.20 Lakh Limit. The complainant did not send his official for release of shares. It is averred that assuming though not admitting that the complainant had sent any person and/or that he wanted to replace the security by another security but the acceptance of the alternative security was at the discretion of the Bank. The complainant had no right to claim release of the securities, which had been pledged by him and/or replace any of the said securities. It is denied that the complainant suffered loss in the sum of Rs. 20 Lakh.
10. It is further averred that on 2.5.2000, the complainant was informed that the prices of the shares had gone down to Rs.20,77,295/- and keeping in view the margin of 25% his drawing power (DP) would be Rs.15,57,900/-. As his OD account was showing a debit, therefore, he was called upon to remit Rs. 2,61,437.85 or pledge more shares worth market value of Rs.5.90 Lakh vide annexure R-2. He was also informed that the said needful be done within 15 days', otherwise his shares would be sold.
11. The letter dated 20.09.2000 clearly shows that it was a conditional advise. The complainant was to advise the broker of the opposite party directly for sale, which he did not do. The complainant did not approach the opposite party in March, 2000, for release/ replacement of shares nor he was entitled to do so.
12. There was correspondence between the parties. Vide its letter dated 23.10.2000, the Bank called upon the complainant that the market value of his shares had gone down to Rs.17.33 lakhs and called upon him either to remit Rs.8.23 lakhs or to pledge more shares with a market value of Rs.15.67 lakhs so as to bring his shares within the DP limits. The Bank, again vide letter dated 23.10.2000, informed the complainant that his DP was reduced to Rs.10.40 lakhs whereas his OD account was showing a debit of Rs.18,63,000/-. The complainant was also warned that if the needful was not done, the Bank would sell his shares. The bank had a chance to sell the shares after 23.10.2000 at anytime. The bank waited and gave another chance to the complainant when the bank wrote a letter dated 9.1.2001. The complainant pledged the additional shares on 12.1.2001 and requested the Bank not to dispose of the shares.
13. It is alleged that the a notice was given to forestall the legal action which the Bank was contemplating against him for the recovery of the amount. The sale of the security is always at the choice of the pawnee and not of the pawner. Even if the pawner had given any such request, the same is not binding on the pawnee.
14. It is further alleged that on 20.9.2000, 15 shares of Infosys were sold and a sum of Rs. 1,07,762/- was received on 28.3.2001, 20 shares of Infosys were sold and a sum of Rs.89,267/- were received. On 01.08.2001, 87 shares of Flex Chemicals, 50 shares of Motherson Sumi, 200 shares of Neelkamal Plastic, 2000 shares of Parekh Plantium, 80 shares of Sterlite Industries, 80 shares of Sterlite Chemicals were sold. On 03.08.2001, 50 shares of Motherson Sumi and 113 shares of Flex Chemicals were sold. On 27.08.2001, 500 shares of HFCL and 146 shares of Infosys were sold. On 29.08.2001, 400 shares of DSQ were sold. Rs.8,69,714.15 was received as sale price thereof. The said amount was credited in the account of the complainant. After giving the credit of the sale proceeds, the complainant still owes a sum of Rs.14,83,991.10 including interest as on 26.12.2001. As, a suit for recovery has been filed with the Debts Recovery Tribunal.
15. Learned Debts Recovery Tribunal vide its ex-parte judgment dated 24.5.2004, passed a decree in the sum of Rs. 14,83,991.10 paise, along with interest @18% in favour of the bank. It also awarded the costs in the sum of Rs.58,100/- in favour of the Bank. Aggrieved by this order, the complainant approached the Debts Recovery Appellate Tribunal, Delhi (in short, 'DRAT') and it accepted the appeal and dismissed the O.A.
16. The first submission made by the opposite party was that there were no instructions to the Bank to sell the shares mentioned therein. It was wrongly argued that the said letter was addressed to the Broker. The letter dated 20.9.2000 clearly goes to show that it was addressed to the Manager. It was also argued that the letter suggests that shares would be sold as per his advice. There is no evidence to show that the complainant himself or through the agent, gave them instructions or advice. However, only 15 shares of Infosys were sold on 20.9.2000. No explanation is forthcoming as to why the remaining shares were not sold, on the same day. The complainant was also not informed that 15 shares of Infosys were sold on the same day. Instructions could be sought either by the bearer or by the complainant, on telephone/mobile phone, etc., in a jiffy. The submission made by learned counsel for the opposite party was that the letter dated 20.9.2000 was referred to the opposite party on the same day. The complainant had acted upon that letter immediately.
17. All these arguments have left no impression upon us in view of the volatile position of shares. These must have been sold within no time. Again, there is no evidence that OP3 contacted the complainant after the receipt of the letter sent by the complainant. It is well known that the prices of shares change each and every hour. The delay can cause havoc with the finances of its holders. As per advice given by the complainant, the same should have been sold immediately, within a day or two. The silence on the part of the Federal Bank and its promoter OP3 is pernicious. They took the complainant for a ride. In case the rates were coming down, the Bank should have apprised of the then situation to the complainant and should have sold the shares, within no time. Consequently, the deficiency on the part of the OPs stand proved.
18. The Hon'ble High Court of Delhi in W.P. (Civil) No.7652 of 2002, titled Federal Bank Ltd. Vs. Rakesh Mohan Sharma, vide its order dated 10.12.2012, approved the following observations of DRAT :-
"The issuance of the Invocation Slip as well as transfer of shares from appellant's account go to show that the broker had clearly understood the instructions of the bank qua the sale of those shares and that is why it had transferred the shares, as were sought to be sold from the appellant's account. The contention of Mr.Dhawan is, therefore, not acceptable that as per the letter of the appellant, the bank was only required to hand over a letter, containing instructions to its broker for the sale of specified shares, to the bearer (of the letter) who was the appellant's man, and thereafter the appellant was to decide as to when and at what price the shares were to be sold and to give advice to the broker, because the bank's letter to its broker, which was probably sent through the appellant's man and received on the same day, was not carrying any reference of the appellant's advice and that is why the broker had admittedly sold some shares on that date itself. I am of the considered view that since the appellant's instructions qua sale of his pledged shares in his letter dated 20.09.2000 were quite clear, therefore, the bank had issued the instructions to its broker to sell the said shares and to send the cheque thereof for crediting in the appellant's OD account".
The High Court further observed, as under :-
"The DRAT takes note of the fact that 15 shares of Infosys ltd were sold on 20.09.2000 itself. The DRAT has disbelieved the petitioner's contention that the respondent had instructed the Broker to sell the said 15 shares. The only other possibilities were that the Broker sold these shares of its own, or on the instructions of the petitioner bank. The DRAT further concludes that it was nobody's case that the Broker had acted on its own in selling the said shares and, therefore, the only irresistible conclusion that could be drawn was that the Broker had acted on the instructions of the petitioner bank while selling the 15 shares of Infosys Ltd".
Again, at para Nos.18, 19 & 20 of its judgment, the Hon'ble High Court has further held as under :-
"18. The respondent, who is present in court, fairly does not object to this submission of the petitioner and concedes that the respondent cannot possibly seek to take advantage of the pledged shares twice over, i.e., once for seeking adjustment of the OD account and the second time to claim the entire sale proceeds in respect of the said pledged shares. He, however, submits that the claim made before the NCDRC is not an overlapping claim.
19. Since, admittedly, the respondent cannot seek to take advantage of the pledge of the shares twice over, we do not propose to say anything more on this aspect, except that the NCDRC while dealing with the respondent's complaint shall take into account the factum of the adjustment of the respondent's OD account since the petitioner's Original Application now stands dismissed.
20. For the aforesaid reasons, we find no merit in this petition and dismiss the same leaving the parties to bear their respective costs".
19. The next submission made by the OPs is that the complainant, as a Pledger, has no right to instruct the Bank to sell shares and Bank was under no obligation to accede to the request and in this connection, he has cited three authorities reported in S.L. Ramaswamy Chetty & Anr. Vs. M.S.APL Palanippa Chettiar, AIR 1930 (Madras) 364, Bank of Maharashtra Vs. M. S. Racmann Auto (Pvt.), Ltd., AIR 1991 (Del) 278 China & South Sea Bank Vs. Tan 1989 (3) All ER 839. It is also pointed out that the said judgments were noted by the Hon'ble Supreme Court in Vimal Chandra Grover Vs. Bank of India, 2000 (5) SCC 122 but the Hon'ble Supreme Court did not over-rule the said judgments.
20. The complainant has placed reliance on the agreement entered into between the Pledger and Pledgee under which the Pledgee had undertaken to sell the shares. However, there is neither any provision of a contract, particularly Section 177 nor agreement executed between the parties confirmed any such right, confirmation in the complaint. The instructions contained in the letter dated 20.09.2000 were neither legal nor valid. The learned counsel for OP submitted that no permission was sought from the SEBI. There is another document dated 23.08.2004 on the record with the caption "The queries raised by the Hon'ble National Consumer Disputes Redressal Commission (NCDRC), Janpath Bhavan, New Delhi, in the matter of Original Petition Nos. 150-151/2002". Query Nos. 1, 4 and 6 are reproduced as under :-
" Query No.1 :
What was the manner in which the transactions relating to transfer of shares relating to HFCL and Infosys, belonging to complainant and pledged with the Federal Bank got transferred showing the balance in the D-Mat account of the complainant as Zero (Page 21)?.
Comments :
Section 12 of the Depositories Act, 1996 and Reg. 58 of SEBI (Depositories and Participants) Regulations, 1996 (hereinafter referred to as 'SEBI Regulations) deal with recording of Pledge, etc., in respect of securities which are held in depository in demat/electronic form. Further, the bye-laws and business rules of Depositors also deal with the same. As per Reg. 58(8) of the SEBI Regulations, the Pledgee may invoke the pledge subject to the provisions of the pledge document. Thus, the invocation of the pledge would have to be in terms of the pledge document and the Contract Act. The Depository merely registers the pledgee as Beneficiary Owner (BO) after the invocation. In the given statement (i.e., page No.21), it appears that pledgee has invoked the pledge and Depository would have transferred the shares from pledger's account to pledgee's account. Further, it is also to be noted that obligation is cast on the depository participant (DP) by regulation 58(9) to inform the pledger about the invocation. Further, DP has the obligation to send the transaction statements to the BOs every month (before the year 2003, it was fortnightly requirement), in case of any transactions in respect of securities. In case there are no transactions, DP has to send a quarterly statement to the BO.
The complainant has stated that he became aware of the invocation of the pledge only on receipt of the de-mat statement dated 25.06.2001 from his DP. This seems to be unlikely in the normal course since the DP is specifically required to inform the pledger-complainant about invocation of the pledge and since the DP was also required to send many periodical statements between 21.09.2000 to 25.06.2001, to Sh. Rakesh Mohan Sharma, the complainant as specified above.
Query No.4:
If in the statement (Page 21), the balance is shown as Zero, then what does the word transfer mean: does it mean 'sale' or mere 'transfer' in favour of the Bank, as alleged in the case. If they were not sold and only transfer in favour of the Opposite party, Federal Bank, then, what are the guidelines of SEBI with regard to the wording to be used in such cases?. Whether it will be deemed to be the 'sale' or 'transfer'.
Comments :
In the Depositor's books, Pledgee becomes the BO after the invocation of Pledge. It is opined that for all practical purposes, pledgee gets title to the shares in question (subject to the terms of the pledge agreement)/ provisions of Contract Act.
Query No.6 :
Whether consideration in terms of the payment took place or not, and the guidelines of SEBI on such issues. Considering the D-Mat record and the letter written by the complainant, what ty0pe of transaction took place between the parties in the present case.
Comments:
There are no guidelines issued by SEBI in this regard. The paper books (five volumes) containing the case record are being returned herewith. The submissions made by both the parties before the undersigned are also being forwarded in original for the Hon'ble Commission's consideration. The operational module of NSDL, the depository herein are also downloaded from internet and enclosed herewith to assist the Hon'ble Commission".
21. It is contended that the complainant has placed reliance on Clause 18, as already quoted above. It was argued that the word 'transfer' in the said clause of the agreement, viz., transfer of shares in Bank's name, does not mean to sell all the said shares. In case the 'transfer' was to mean 'sale', then there was no need to use said expression of 'transfer'. It is contended that as different words vis., 'sale' and 'transfer' have been used in the same clause in relation to the same subject matter, it is presumed that those words would have not been used in the same sense, AIR 1956 SC 35, 1999 (9) SCC 700 and JT 2003 SC 114. Again, as per RBI's instructions, the Bank used to get the pledged shares transferred in its own name. The said instructions read, as under :-
"As per Reserve Bank of India directives when advances of limit of above of Rs.Three lakhs are sanctioned, the shares should be transferred in the Bank's name and the Bank will have voting rights thereof. However, prior approval of Reserve Bank of India is required to exercise voting right. In the case of advances to share brokers for a period not exceeding nine months the above condition is not applicable".
22. It was further contended that the revised RBI instructions run, as follows :-
".... The Securities pledged by the borrowers get blocked in favour of the lending Bank. In the case of default by the borrower, the Bank may invoke the pledge. Subject to the provisions of pledged document and on such invocation, the depository will register the name of the Bank as beneficial owner of such securities. In view of the above position, it has been decided for securities which are held in dematerialise for under the depository system, the requirement that the shares/debentures should be transferred in Bank's name be withdrawn. Banks are therefore free to take their own decision in regard to transfer of securities in their name. The shares pledged with the Bank under the depository mode will, however, continue to be included for the purpose of determining the limit prescribed in Section 19(2) of the Banking Regulation Act, 1949".
It is contended that the discretion has been left with the Bank.
23. All these arguments lack conviction. No due discretion has been left with the Bank. The Bank is opposed to exercise the discretion judiciously. It cannot exercise discretion in an arrogant, despotic, highhandedness manner. It cannot act in a very fruitful manner. The purpose of law is to prevent the strong, always having their way.
24. There is not even an iota of evidence which may go to show that the instructions in the letter dated 20.09.2000 were followed. The defence of OPs suffers from various contradictions and variations. On the one hand, they say that they were not aware that 15 shares of Infosys were sold, and on the other hand, there is no explanation why the remaining shares were not sold. The OPs submit that no entry was made in the leger of the complainant. The OPs flips flops demolish their case. Although, the DRT decreed the Original Application (OA) filed by the Bank, in favour of the complainant, yet, this decree was reversed by the DRAT, whose order was confirmed by the Hon'ble High Court. The DRAT, further mentioned :
".... He also pointed out that the following chart, which was submitted through an affidavit by the bank itself before the NCDRC shows as to how the share prices of Infysos and HFCL had moved during the relevant week, as per the price movement of the share market.
INFOSYS LTD.
Date Price-High Price-Low Difference Per share Amount of Difference On 181 Infosys 20.09.2000 7975 7575 400 72,400 21.09.2000 7761 7550 211 38,191 22.09.2000 7520 6975 545 98,645
25.09.2000 7604 7300 304 55,024 26.09.2000 7650 7192 458 82,899 Weekly 7975 6975 1000 1,81,000 HFCL Date Price- High Price-Low Difference Per share Amount of Difference On 500 HFCL 20.09.2000 1470 1216 254 1,27,000 21.09.2000 1524 1430 94 47,000 22.09.2000 1480 1280 200 1,00,000 25.09.2000 1498 1351 147 73,500 26.09.2000 1412 1292 120 60,000 Weekly 1524 1216 308 1,54,000
25. Moreover, clause 8 of the regulation 58 of SEBI (Depository & Participants) Regulations, 1996 reads, as follows :-
"Subject to the provisions of the pledged document, the pledgee may invoke the pledge and on such invocation, the depository shall register the pledgee as beneficial owner of such securities and amend its records accordingly".
26. Vide these provisions of law, read in conjunction with clause 18, quoted above, the Bank was fully empowered to invoke the shares as per the SEBI Regulations. Again, the Bank, on its own, exercised the right of invocation vide invocation slip No.5910 dated 20.09.2000 and transferred all the pledged shares in its own name. Thus, it had become the beneficial owner of the invoked shares and was entitled to be registered as such, qua, the such security, by the Depository, by virtue of Regulation 58(8) of SEBI Regulations as well as the Agreement.
27. It is clear that the Bank did not act in accordance with Clause 18 of the agreement of the pledge or exercised its powers as beneficial owner for which the complainant cannot be held liable. It is thus clear that the OPs have taken a number of objections merely for the sake of cavil. It also shows the conduct and the character of the persons concerned. They have violated the law, being an authority. The construction of contract entered into between the parties assumes importance. It is a settled law that court should refrain from any interpretation, which would result in injustice and absurdity, AIR 1963 SC 25. The question to be considered is, not what was intended, but what has been said. We cannot amend or substitute anything in the contract, as per law laid down in Surat Mal Ram Niwas Oil Mills (P) Ltd., Vs. United India Insurance Co. Ltd. & Anr., (2010) 10 SCC 567, General Assurance Society Ltd. Vs. Chandmull Jain, 1966 ACJ 267 (SC), (1) United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal, (2004) 8 SCC 644.
28. Moreover, the Bank cannot raise this objection due to principle of estoppel. The Bank agreed to do so. The objection was never raised at the nick of time. See the Law laid down in Vimal Chandra Grover Vs. Bank of India, 5 SCC 122, M/s. Dhani Ram and Sons Vs. Frontier Bank Ltd., AIR 1962 Pb 321.
29. According to the OPs, the complainant suffered losses to the tune of Rs.3,35,000/- (Rs. 18,01,000 + Rs. 1,54,000/-). The bank did not credit the amount of the invoked shares. The earlier dividend of 415 received by Bank in November, 2000 on 166 shares held 50% or Rs.250/- per share on its 166 shares was never credited to the complainant's account.
30. Now, we come to the relief in the written submissions filed by the complainant. The complainant has claimed Rs.2,04,51,900.50. It is three times more than the claim made in the complaint itself. The complainant has been changing his stand every now and then. The 'but and ben' stand, set up by him, has not helped the legal proceedings.
31. On the other hand, the calculation made by the OP appears to be correct. The said value, runs as follows :-
Annexure-A RAKESH MOHAN SHARMA DIFFERENCE IN VALUE Name of shares No. of shares Total value received by the respondent on sale Value as on the date of alleged advice Difference in value HFCL 500 28,710.00 7,17,500.00 6,88,790.00 Infosys L td.181
7,77,096.33 13,54,785.00 5,77,688.67 TOTAL 8,05,806.00 20,72,285.00 12,66,478.67 Shares pledged after the disputed instructions by the complainant and sold by the bank 92,617/-
N/A N/A Grand Total 8,98,423/--
20,72,285/-
12,66,478.67 Recovery Certificate issued by the DRT towards the Outstanding due to the bank in the loan account ----
Rs.14,83,991.00 (excluding interest @13% p.a. from 26.12.2001 awarded by DRT
32. Under these circumstances, we come to the conclusion that the complainant is entitled to a sum of Rs.12,66,478.67. He is also entitled to have interest @ 13% p.a., from 01.09.2000, till realisation. The said amount be adjusted towards the Recovery Certificate issued by the Bank. The complainant will also get Rs.2.00 lakhs, towards compensation and Rs. 1.00 lakh, towards litigation charges.
......................J J.M. MALIK PRESIDING MEMBER ...................... DR. S.M. KANTIKAR MEMBER