IMPORTANT POINT
Where Complainant had an overdraft facility with OP Bank which was provided after he pledged his four LIC Policies, and where Bank adjusted Rs. 1,17,309.31p of policies towards his loan account prematurely surrendering policies amounting to Rs. 3,21,078, without any prior notice to complainant then it amounted to deficiency in service on part of Bank.

Headnote:(i) Consumer Protection Act, 1986—Section 2(1)(g)—Banking— Complainant had a savings bank account with OP HDFC Bank— He approached the OP for an overdraft facility which was provided after he pledged his four LIC Policies amounting to Rs. Three lakh as Security— Complainant’s case that Bank adjusted Rs. 1,17,309.31p of policies towards his loan account prematurely surrendering policies amounting to Rs. 3,21,078—Complaint alleging deficiency in service—District Forum on consideration of evidence of both parties held that only an amount of Rs. 5,787.16 was due against the Complainant/Respondent and the OP Bank made premature surrender of the policies without knowledge of complainant and adjusted their amounts— The District Forum also held that complainant had sent a letter to Bank to provide the details of his account• for one time settlement to which Bank had not responded— District Forum, held the Bank guilty and ordered Bank to return LIC Policies and to provide final figures of the overdraft account within seven days so as to enable complainant to settle the account and also to pay him Rs. 10,000 towards compensation and Rs. 1,000 towards costs of litigation—Appeal—Absence of any proof regarding service of any alleged notice served on Respondent before policies were surrendered by Appellant, to establish that Respondent was given due notice or that he was asked to show cause as to why his Policies be not surrendered due to default or for not maintaining the financial discipline, which was pre-requisite for upholding principles of natural justice— District Forum held justified in holding that the conduct of the Appellant tantamounted to deficiency in service—Appeal dismissed. (Para 11)
(ii) Consumer Protection Act, 1986—Section 2(1)(d)—Complainant had a savings bank account with OP HDFC Bank- He approached the OP for an overdraft facility which was provided after he pledged his four LIC Policies amounting to Rs. Three lakh as Security- Complainant’s case that Bank adjusted Rs. 1,17,309.31 of policies towards his loan account prematurely surrendering policies amounting to Rs. 3,21,078—Complaint alleging deficiency in service—Contention of Appellant that loan/overdraft facility was a “commercial activity” as envisaged by definition of “Consumer” under Section 2(1)(d) of Act, 1986 and for that reason complaint of Respondent did not fall within ambit of Act held unacceptable- Loan facility was availed by Respondent in his personal capacity and it was against a personal saving account which was not a business or commercial transaction- Simply utilizing the loan amount for business purposes, by no stretch of reasoning could term the availing of services for commercial purposes, as alleged on behalf of Appellant-Appeal Dismissed (Paras 12, 13)

ORDER (ORAL)

Barkat Ali Zaidi, President — The short facts of the case are that the complainant had a savings bank account since 1.10.2001 with the OP HDFC Bank. He approached the OP for an overdraft facility which was provided after he pledged his four LIC Policies amounting to Rs. Three lakh as Security. In the month of August 2003 the complainant asked the OP Bank to give the details of the overdraft loan in order to enable him to settle the accounts and to return his policies and not to adjust the amount of the Policies towards the loan of Rs. 3,25,000 approximately (matured being over-draft, Rs. Three lakh), which the Bank did not supply. On 28.1.2003 the Bank adjusted Rs. 1,17,309.31p of the policies towards his loan account prematurely surrendering the policies amounting to Rs. 3,21,078.

2. The complainant, therefore lodged a complaint before the District Consumer Forum with a prayer that the Bank be directed to give final figures of the overdraft account for settling his accounts and to release LIC Policies of the complainant and also award compensation of Rs. 50,000 besides the costs.

3. The OP opposed the claim and filed written statement denying any deficiency of service on its part alleging that overdraft facility provided to the complainant being a commercial transaction, no relationship of consumer existed between the debtor and the creditor. The Bank sent written intimation thrice respectively on 1.8.2003, 1.9.2003 and 3.10.2003 to the borrower for updating his account to which he did not respond. The Bank, therefore, surrendered his policies on different occasions which were lying as security with the Bank. The complainant violated the conditions of the overdraft facility, and that it was regularly sending the details of his account to the complainant. Since a loan agreement existed between the borrower and the creditor, which provided for surrendering of the securities in case of default in payment of the account, in terms for the repayment schedule, no Court could interfere into the contract.

4. The District Forum on consideration of the evidence of both the parties held that only an amount of Rs. 5,787.16 was due against the Complainant/Respondent and the OP Bank made premature surrender of the policies without the knowledge of the complainant and adjusted their amounts. The District Forum also held that the complainant had sent a letter on 8.10.2003 to the Bank to provide the details of his account• for one time settlement to which the Bank had not responded. The District Forum, therefore, held the Bank guilty and ordered the Bank to return the LIC Policies and to provide final figures of the overdraft account within seven days so as to enable the complainant to settle the account and also to pay him Rs. 10,000 towards the compensation and Rs. 1,000 towards the costs of litigation.

5. That is what brings the appellant OP in appeal before this Commission.

6. We have heard Mr. P.K. Bhalla Counsel for appellant and Respondent Mr. O.P. Choudhary in person.

7. The Appellants have assailed the impugned order mainly on the ground that the learned District Forum failed to appreciate that the Respondent had agreed to the terms and conditions of overdraft limit, according to which the Respondent was required to maintain the financial discipline and had been irregular in clearing the dues as per scheduled time, which was the essence of the agreement. On their behalf it is submitted that it is the admitted case of the Respondent that he has not updated his account, the appellant was constrained to surrender three LIC policies to cover the overdrawn amount in Respondent account. Still one LIC policy bearing No.110078483 for a sum of Rs. 1,00,000 has not been surrendered. That, after adjustment of three LIC policies the respondent is still liable to pay a sum of Rs. 54,505.90 to the appellant bank.

8. It is also pleaded that the Respondent had been given several notices to regularize his account, but despite receipt of the same,

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2011(1) CPR 151DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHIMr. Barkat Ali Zaidi, President and Mr. M.L. Sahni, Member.HDFC Bank Limited — AppellantversusO.P. Choudhary — RespondentCase No. FA-08/147Decided on : 5-10-2010

2011(1) CPR 151
DELHI STATE CONSUMER DISPUTES REDRESSAL COMMISSION, NEW DELHI
Mr. Barkat Ali Zaidi, President and Mr. M.L. Sahni, Member.
HDFC Bank Limited — Appellant
versus
O.P. Choudhary — Respondent
Case No. FA-08/147
Decided on : 5-10-2010