JIGNISHABEN SHITALKUMAR PATEL Vs. IDBI BANK LTD

JUDGEMENT

(1.) The dispute involved in this case falls in a narrow compass i.e., whether the IDBI Bank should have given seven days written notice before the shares pledged by the complainant/borrower were disposed off to make good the deficit in the security which was increasing day by day. Submission of the learned Counsel for the complainant :

(2.) The complainant Mrs. Jignishaben Shitalkumar Patel is the individual investor in the shares and security having an account with the respondent bank and had approached the bank to provide loan of Rs. 20 lakhs against placement of shares and securities which was sanctioned with a margin of 50% or 35% of the market value of shares subject to changes in the bank's policy from time to time.

(3.) Complainant has stated that loan has been taken by pledging shares and signing money equity application form (Loan against Demat Shares). He stressed upon the first clause of the agreement which reads as follows : The overdraft limit shall not exceed the said amount. However, the actual overdraft facility would depend upon the value of the securities at the time of grant of the said facility. The valuation of securities, margin money and actual overdraft facility would be exclusive decisions of the bank and will be binding on the parties. The facility is repayable unconditionally on demand at the bank's absolute discretion. The bank would give seven days written notice to the borrower to repay the amount due. He submitted that the bank has obviously not given this notice. He has also stated that Clause 19, which reads as follows : The borrower as well as the Guarantor also undertake to give irrevocable power of attorney in favour of the bank to authorise the bank to sell or transfer the said pledged securities for the purpose. This power of attorney was not given at the time of sale of shares.