CANARA BANK Vs. GAJJALA VENKATESH

JUDGEMENT

(1.) Aggrieved by the order passed by the District Forum, Ranga Reddy District in C.D. No. 131 of 1999 dated 22.9.2003, the present appeal has been filed by the opposite party.

(2.) THE brief facts set out in the complaint are that the complainant approached the bank for overdraft of Rs. 1,35,000/ - against the security pledge of shares of various approved companies but availed only Rs. 1,27,433.12 in March, 1995. The total worth of the share certificates by that date was Rs. 2,75,000/ -. The opposite party obtained letter of authorization from the complainant to receive the dividend in respect of the above referred shares from the concerned companies and the opposite party was directly receiving the dividend from the concerned companies. In order to liquidate the over draft amount he authorized the opposite party in his letter dated 10.3.1997 to dispose of 10 Rajapalam Mills shares amounting to Rs. 28,875/ - and 150 shares of Jyothi Structures amounting to Rs. 24,750/ -, in all he is expecting an amount of Rs. 53,625/ -. In the same letter he has also informed the opposite party that he has pledged 100 shares of Wyeth Laboratories Limited and the said Company is amalgamating and he would get 150 shares of Wyeth Laboratories Ltd., and that the market value of each share would be Rs. 500/ -. He has already addressed a letter to the Company Secretary to find the correct date and on being informed he would authorize the bank to dispose of 150 shares expecting an amount of Rs. 75,000/ - and to credit the same to overdraft account. On 13.4.1997 the opposite party addressed a letter stating that they will not wait for conversion as it may take considerable time for conversion. Though the complainant has authorized the bank to dispose of 10 Rajapalam Mills shares and 150 shares of Jyothi Structures, the opposite party did not inform him the position of the sale of his shares. On 10.3.1997 he addressed a letter again to the opposite party stating that he is prepared to liquidate the entire principal amount besides requesting to waive the interest and also to inform about the sale of shares on which he has given authorization. On 12.7.1997 the opposite party informed the complainant by their letter that as per his request they disposed of 10 Rajapalam Mills shares and only 100 shares of Jyothi Structures Limited as against 150 shares for which the opposite party was authorized and an amount of Rs. 33,122.47 was credited to the overdraft on 17.6.1997 after a delay of 90 days. The opposite party further informed him that they sold 100 Wyeth Lab. shares for which the complainant has not given authorization and requested him to execute fresh transfer deeds to enable the bank to dispose of the balance shares. Subsequently the complainant further stated that vide his letter dated 27.4.1998 and 1.5.1998 he authorized the opposite party bank to dispose of 350 Raasi Cement shares as the market price was Rs. 300/ - and there was an open offer by India Cements enclosing necessary share transfer authorization forms expecting an amount of Rs. 1,05,000/ - for liquidating the balance liability. Since there was no response from the opposite party he has once again addressed a letter dated 13.5.1998 and received a letter dated 2.5.1998 from the opposite party bank that they have disposed of all the share certificates and also demanded Rs. 43,376.15 from the complainant towards the settlement of the entire overdraft as on 2.5.1995 on which date the shares were sold. Thereafter the complainant got issued a legal notice since the shares which were not authorized by the complainant to the bank were sold. Since there was no response he again issued a legal notice to the opposite party on 19.11.1998. The opposite party thereafter issued a legal notice for payment of Rs. 51,895.15 ps by the complainant. The complaint filed by the complainant before the Banking Ombudsman was rejected as not maintainable since the transaction was outside the jurisdiction. Hence the complainant approached the District Forum for appropriate relief.

(3.) BASED on the pleadings and Exs. A -1 to A -31 and Exs. B -1 to B -7, the District Forum allowed the complaint directing the opposite party to pay Rs. 62,215/ - towards the loss sustained by the complainant with interest at 9% p.a. from 2.5.1998 till the date of payment, to pay the dividend amount collected on the shares with costs of Rs. 500/ -.