HDFC Bank Limited vs Sharmila Das Gupta

Challenge in this Revision Petition, under Section 21(b) of the Consumer Protection Act, 1986 (for short "the Act"), is to the order dated 05.02.2013, passed by the West Bengal State Consumer Disputes Redressal Commission at Kolkata (for short "the State Commission") in First Appeal No. 63 of 2012. By the impugned order, the State Commission has affirmed the order dated 08.12.2011, passed by the District Consumer Disputes Redressal Forum, Unit-1, Kolkata (for short "the District Forum") in Complaint Case No. 40 of 2008, and consequently dismissed the Appeal, preferred by the Revision Petitioner herein, namely, HDFC Bank Ltd.

For the sake of convenience, the Revision Petitioner is referred to as the Bank and the Respondent as the Complainant.

The facts, material to the case, are that the Complainant had taken a gold loan amounting to ₹48,000/- against deposit of 113 grams of gold ornaments from the Bank. The maturity period of the said loan account was 05.05.2007. It was averred that due to her weak financial condition and also owing to heavy rainfall, she had failed to deposit the necessary EMIs as fixed. It was pleaded that as per advice of the Bank, on 07.07.2007, the Complainant deposited a sum of ₹1,500/- with the Bank and was further advised to pay the rest of the amount as early as possible, so that her loan account could be renewed automatically. It was further averred that on 10.08.2007 she had received a letter, along with a banker's cheque for an amount of ₹10,024.79 ps., stating that this was the balance amount, which was due to the Complainant, after having sold the gold deposited, and adjusting the loan amount. It was pleaded that the act of the Bank in selling the gold without issuing any notice prior to sale was an unfair trade practice adopted by the Bank.

Hence, the Complainant approached the District Forum, seeking a direction to the Bank to pay to her a sum of ₹1,25,656/-, which is the price of 113 grams of gold; ₹1,500/-, deposited by her with the Bank as renewal fees on 07.07.2007; and ₹82,000/- towards consultancy and other costs.

The Bank contested the Complaint by filing its Written Version, stating that the Complainant herself annexed the letter, dated 22.06.2007, which speaks for itself that the Bank had given an opportunity to the Complainant to clear off her dues; the Complainant failed to pay the requisite amount as per the loan agreement and, therefore, the Bank was compelled to take action for realizing the money; and there was no deficiency on its part in selling the gold ornaments for realizing the loan amount, and crediting the amount of ₹10,024.79 ps. to the Complainant.

The District Forum, based on the evidence adduced by the parties, allowed the Complaint in part, directing the Bank to pay the amount of 113 grams of gold at the present market price of gold to the Complainant after deducting the amount due to the credit of the Bank on the date of sale of the deposited gold ornament without imposing any delayed interest. Further, there was a direction to the Bank to pay to the Complainant compensation of ₹5,000/- and litigation costs of ₹1,000/-. The District Forum gave 45 days' time to comply with the order, failing which the total decretal amount was to carry interest @ 9% p.a. till the date of realization.

Aggrieved by the said order, the Bank preferred the Appeal before the State Commission. The State Commission while dismissing the Appeal observed as follows:

"We have duly considered the submissions so put forward on behalf of the Appellant and also gone through the materials on record including the impugned judgment and find that in this case the complainant has come forward with case to the effect that she obtained loan facilities from the OP Bank after depositing gold ornaments with fixed period of the payment schedule. According to the complainant, she failed to pay the instalment due to paucity of fund, incessant rainfall and that she deposited Rs.1500=00 with the Bank towards instalment and interest amount and was assured that on payment of rest interest amount, the loan account will be renewed. But to her utter surprise, she received Bankers' cheque from the OP Bank with the intimation that the gold ornaments has been sold away by the Bank in satisfying the loan amount and balance amount has been sent to her by way of bankers cheque. According to the complainant, this act on the part of the OP Bank tantamounted to deficiency in service and hence the petition of complainant.

The Bank, on the other hand, has tried put up a case that the Bank was well within the permissible rules as per Banking law to sell out the gold ornaments for the purpose of satisfying the outstanding loan amount and balance amount has been duly sent to the complainant through bankers' cheque and that in the absence of any deficiency in service at the instance of bank, the petition of complaint is liable to be dismissed. We are of the considered view that the Ld. District Forum was quite justified in upholding the case of the complaint. When admittedly the Bank sold away the gold ornament without written intimation/notice to the complainant, it was a gross deficiency in services at the instance of the OP bank and Ld. District Forum having correctly observed so, we find there is no illegality or irregularity in the impugned judgment, which in our opinion should affirmed."

Learned Counsel for the Bank submitted that it was only because the Complainant did not pay the balance amount due that the gold was auctioned and that after deducting a sum of ₹48,000/- out of the total amount recovered, the balance amount of ₹10,024.79 ps. was refunded to the Complainant. He further contended that due notice was issued to the Complainant and drew our attention to the letters dated 08.06.2007 and 27.06.2007, which had been addressed by the Bank to the Complainant, requesting her to arrange for repayment of the loan. It is observed that in the afore-noted communications, there is absolutely no reference to any notice regarding the auctioning of the deposited gold or to the date on which the gold was auctioned.

It is relevant to reproduce the portion of the letter dated 10.08.2007, wherein the Bank had communicated to the Complainant that 'we refer to our earlier communication in which we had informed you to repay/renew the above gold loan account and since there was no response from you as a last resort, we arranged to sell off the gold to recover our dues'.

It is pertinent to note that the Bank had accepted an amount of ₹1,500/- on 07.07.2007, which is subsequent to the issue of letter dated 27.06.2007, addressed by the Bank to the Complainant. Having accepted this amount subsequent to the afore-noted letter, no substantial reasons have been given by the Bank for stating in their letter dated 10.08.2007 that there was no response from the Complainant and as a last resort, they had arranged to sell off the gold.

It is significant to mention that in the entire record there is absolutely no documentary evidence filed by the Bank to establish the actual rate, on which the gold was sold; what was the market rate as on the date of the auction; and, further, the procedure that was followed during the auction process. A perusal of the record does not anywhere show that a notice was issued to the Complainant prior to the auction to have given an opportunity to her to exercise the option whether to participate in the auction or not. This is against the principles of natural justice and audi alteram partem. Hence, we are of the view that the conduct of the Bank in auctioning the gold without prior notice to the Complainant amounts to unfair trade practice. In this view of the matter, the Revision Petition does not require any interference.

Lastly, Learned Counsel for the Bank vehemently contended that the market price as directed by the District Forum ought to be construed as the market price as on the date of the auction. Learned Counsel for the Complainant contended that the order of the District Forum does not specifically mention that the market price is to be taken as on the date of the auction. A perusal of the direction given by the District Forum clearly states that the Bank should pay 'the amount of 113 grams of gold at the present market price of gold to the Complainant after deducting the amount due to the credit of the Bank on the date of sale of deposited gold ornaments without imposing any delayed interest on such amount'. It is clarified that as per the direction given by the District Forum, present market price is the market price of gold as on the date of the passing of the order, i.e. 08.12.2011.

For all the above reasons and keeping in view our limited jurisdiction, as specified in Rubi (Chandra) Dutta v. M/s United India Insurance Co. Ltd., II (2010) CPJ 19 (SC), we are of the considered opinion that there is no illegality or infirmity in the concurrent orders of the Fora below.

In the result, the Revision Petition fails and is dismissed accordingly.