VIMAL CHANDRA GROVER Vs. BANK OF INDIA

JUDGEMENT

(1.) THIS appeal is directed against the order dated 21/06/1996 of the National Consumer Disputes Redressal Commission (National Commission) holding that there was no negligence on the part of the respondent Bank in dealing with its security of pledged shares of the appellant or its release in part to him and that the Bank could also not be faulted on its practice not to dispose of shares through brokers not on the approved list of the Bank and lastly that it could not be said that there was any deficiency in service by the Bank as defined in Section 2(1)(g) of the Consumer Protection Act, 1986 ('Act' for short). Leave was granted limited to the claim of the appellant to his shares of Castrol Limited pledged with the Bank.

(2.) ON the request of the appellant, Bank sanctioned to him on 20/09/1990 an overdraft limit of Rs. 5,00,000.00 against pledge of shares of various companies, value of all the shares being Rs. 10,60,900.00 at the relevant time. Out of these number of shares of the Castrol Limited were 1400 @ Rs. 200.00 per share of the total value of Rs. 2,80,000.00. It is not disputed that as per the guidelines issued by the Reserve Bank of India banks are allowed to make advance against pledge of shares retaining 50% margin. As per the terms of sanction of the overdraft limit shares were got transferred in the name of the Bank. In due course of time Bank received bonus shares numbering 2,224 of Castrol Limited. It is stated that value of shares also increased manifold. Appellant also paid an instalment of Rs. 1,45,600.00 to the Bank against the overdraft limit. Overdraft amount was to be adjusted in three equal instalments. In order to clear the overdraft account the appellant, apart from shares of other companies, requested the Bank to arrange sale of 500 shares of Castrol Limited. This he did by letter dated 23/04/1992.

(3.) BANK has submitted before us that relationship between the parties is governed by Sections 172 to 177 of the Contract Act, 1972 and BANK was within its right to choose the time and place as to when it would like to dispose of the pledged goods and that the only requirement is that before that notice is to be given to pawnor, appellant in the present case. In support of its submissions reference was made to a Division Bench decision of the Punjab High Court in Bharat BANK v. Bodhraj, AIR 1956 Punjab 155. We were also referred to "Chitty on Contracts", Twenty Seventh Edition, and other decisions to which we will presently refer.