HDFC BANK LTD Vs. KISHORE R WORAH

JUDGEMENT

(1.) This is a case wherein HDFC Bank had sold the shares pledged by the borrower when the latter had over-drawn beyond his authorized limits on several occasions. The issue involved in this case is whether the action of the Bank in selling a part of the pledged shares to make good the deficit in borrowing power and the margin when the borrower had overdrawn in excess of the eligible limits, amounts to deficiency of service. The answer is No. The complaint in brief as under:

(2.) The complainant had applied for loan against shares to HDFC Bank, (hereinafter referred to as the Bank), Chembur Branch. The opposite party the Bank sanctioned loan to the tune of Rs. 5,00,000 against security of shares. The drawing power granted was to the extent of 65% of value of shares. An agreement to that effect was executed between the parties. The grievance of the complainant are that the opposite party failed to supply him the copy of the said agreement though demanded repeatedly. The complainant has also alleged the lack of transparency in communication between the opposite party and the complainant in respect of determining the market value of the said shares. It is further alleged by the complainant that sometime in May 2000 the opposite party arbitrarily reduced the drawing power from 65% to 60% without obtaining approval from the complainant. It is also alleged by the complainant that on 21.9.2001 which was a Friday, the opposite party Bank called upon the complainant to pay Rs. 38,325.17 within 2 days. The opposite party also threatened to sell the shares in case of non-payment of the said amount. According to the complainant the said amount was above minimum margin. The complainant however, paid Rs. 5,000 on 22.9.2001 on the next day, leaving the balance of Rs. 3,315.17 and in spite of payment of the said amount the opposite party sold the shares worth Rs. 1,40,481 on 26.9.2001 which were deposited with the Bank as security.

(3.) The case of the complainant is that the said sale of shares is in excess of their demand which was made on 23.9.2001 and is in breach of contract/agreement entered into between the parties. The opposite party ought to have given 7 days' notice as required under the agreement. It is also pointed out that the opposite party never demanded the excess amount. The amount demanded was only to the extent of Rs. 3,315.17 as on 23.9.2001. The complainant came to know the said fact only when he received the statement from the opposite party. The complainant, therefore, has filed this complaint claiming the following reliefs: 1. To produce the agreement entered with complainant and the entire loan file executed by opponent Bank with the complainant. 2. To credit to the complainant's account restoring all shares sold (e.g. ACC and Colgate Ltd.) 3. To give Rs. 10,000 as compensation for the great mental torture caused and harassment undergone on account of sale of shares.