J&K Bank Ltd. vs Girdhari Lal Gupta

B.S. Walia, J. - Instant Letters Patent Appeal impugns judgment and decree dated 02.06.2006 dismissing CIA No. 28/1996 titled as

Jammu and Kashmir Bank Ltd. v. Girdhari Lal Gupta and others"" whereby the judgment and decree dated 15.03.1996 passed by the

learned District Judge, Udhampur dismissing the suit of the appellant was upheld.

Brief facts as noticed by the trial Court are that loan of Rs. 1,09,800/-under Self Employment Scheme was sanctioned by the appellant-bank in

favour of respondent No. 1 on the recommendation and sponsorship of respondent No. 4 on behalf of respondent No. 3, with respondent No. 4

guaranteeing on behalf of respondent No. 3 repayment up to 25% of the loan with interest. Respondent No. 1 executed two demands Promissory

Notes for Rs. 82,800/- and Rs. 27,000/- respectively dated 06.05.1971 besides Deed of Hypothecation whereby Mini Bus, for which demand

loan had been sanctioned, was hypothecated as a security in favour of the plaintiff bank. Respondent No. 2 by executing the Deed of Guarantee

undertook to repay the loan amount to the Bank in case of default by respondent No. 1; whereas respondent Nos. 3 & 4 also executed Deed of

Guarantee to the extent of 25% of the loan amount. Respondent No. 1 availed the loan facility and purchased the Mini Bus, but did not stick to the

schedule of repayment. As on 29.06.1977 balance amount due and payable by respondent No. 1 to the appellant bank as per statement of

account placed on record, was Rs. 1,32,860.17 paisa. In view of default by respondent No. 1 in making payment of instalments despite repeated

requests by the appellant-bank for a period of over one year, the appellant took the vehicle in question into its possession under Section 176 of the

Contract Act in July, 1977 in terms of the Deed of Hypothecation dated 06.05.1975.

As per the appellant bank, taking over of possession of the vehicle was done only to force respondent No. 1 to make payment of due amount

but respondent No. 1 neither made payment to redeem the vehicle nor insisted/cooperated in the selling of the vehicle. On the contrary, respondent

No. 1 is stated to have served Notice dated 27.07.1977 that the bank should get the value of the vehicle assessed by an independent Valuer

before auction, that despite Notice by respondent No. 1 to the appellant, the appellant scheduled the auction of the vehicle but had to cancel the

same as the price offered was less.

Despite demand notice as well as notice u/s 80 CPC, respondents defaulted in clearing the liability leading to institution of the suit seeking

decree for recovery of the suit amount along with interest @ 15% per annum thereon.

Suit for recovery was filed by the appellant in the High Court of J&K at Jammu, which was transferred to the Court of the District Judge,

Udhampur. CMP No. 288 of 1980 was filed by the appellant in the High Court for the sale of the vehicle in question by mentioning that the market

value of the vehicle was Rs. 60,000/- at the time of seizure but in the auction proceedings lesser price was being offered, therefore, the same was

not accepted.

In the written statement by respondent Nos. 1 & 2, it was contended that the Bank had the right to seize the vehicle pursuant to the deed of

hypothecation and to auction the same to recover the outstanding amount and as the hypothecated vehicle was seized by the Bank in the year

1977 and the value thereof was more than the amount due under transaction but despite Notice from the borrower on the appellant bank in July,

1977, neither was value of the hypothecated vehicle got ascertained nor was auction conducted to the knowledge of the borrower despite the fact

that the possession of the vehicle remained with the bank all along. On the basis of the same, it was pleaded that the borrower and the guarantor

stood absolved of their liability on seizure of the vehicle and retention thereof by the bank. Respondent Nos. 3 & 4, on the other hand, pleaded

that liability of the State extended to only 25% of the loan amount and that having taken possession of the hypothecated vehicle, the bank ought to

have auctioned or disposed off the vehicle to realise the amount outstanding under the transaction. Since no steps were taken in respect thereto,

resultantly, the price of the vehicle went on depreciating while interest on the loan amount went on increasing.

On behalf of the appellant bank, reliance was placed on clause 2 of the Guarantee Deed executed by respondent No. 2 and clause 4 of the

Guarantee Deed executed by respondent Nos. 3 & 4, whereby the guarantors agreed that they would not be released from their obligations as

guarantors by any forbearance, act or omission by the Bank under law as also that they would not be entitled to the rights conferred on sureties

under Sections 133, 134, 135, 139 and 141 of the Contract Act.

On the pleading of the parties, the trial Court framed the following issues:-

Whether the defendants Nos. 1 and 2 stand relieved of the liabilities of debt due as the plaintiff has seized the vehicle involved JKP-2721, if so,

to what extent? OPD 1 & 2.

Whether the defendant Nos. 3 and 4 whose liability to pay the amount to the extent of 25% is admitted are relieved of their liability, if so how?

OPD 3 & 4.

Relief.

After hearing the parties and going over the evidence, learned District Judge, Udhampur, dismissed the suit vide judgment and decree dated

15.03.1996 i.e. Annexure A-3 and A-4 respectively.

That appeal bearing CIA No. 28/1996, filed against the judgment and decree passed by the learned trial Court was dismissed by the learned

Single Judge of this Court vide judgment and decree dated 02.06.2006 i.e. Annexures A-l and A-2 respectively.

Learned counsel has argued that the main points for determination were as to whether the borrower and guarantors stood relieved of their

liability on seizure of the vehicle by the appellant, whether under law the appellant was bound to sell the seized vehicle as also whether the appellant

was responsible for any loss to respondent No. 1 on account of delay of sale of the vehicle by the trial Court in 1990 when it had filed an

application seeking sale of the vehicle in December, 1980.

We have heard learned counsel for the parties. As per admitted position, on purchase of the vehicle the same was plied by respondent No. 1

and some instalments were paid by him to the appellant bank till seizure of the vehicle by the appellant bank on 20.07.1977. However, suit was

instituted by Sh. Jawahar Lal Bhan, on behalf of the appellant-Bank through its Attorney in December, 1980.

The learned trial Court recorded admission of the aforesaid Attorney i.e. Sh. Jawahar Lal Bhan, of the vehicle having been seized on

20.07.1977 as also of the value of the seized vehicle on the date of seizure of the vehicle being much more than the amount due under the

transaction. Relevant extract from the judgment of the learned trial Court is reproduced hereunder:-

Mr. Jawahar Lal Bhan, the power of Attorney holder for the Bank, instituted this suit on behalf of the bank in December, 1980.. He has

conceded that he on behalf of the Bank seized the Mini Bus on 20.07.1977. He has further conceded that the value of the seized vehicle on the

date of seizure was much more than the amount due under the transaction on that date.

It was admitted that the appellant had not conducted auction and put the vehicle to sale right from the date of seizure i.e. 20th July 1977 till

filing of the suit.

It also appears that the appellant had moved CMP No. 288/1980 an application on 18.12.1980 admitting seizure of the vehicle on

20.07.1977, inability to sell the vehicle due to non cooperation by the respondents and for auction to be conducted under court orders. Another

application was moved by the bank on 11.04.1983 for appointment of auctioneer so that the vehicle could be auctioned. Same came to be granted

and Commissioner Shri Sham Dass Gupta came to be appointed on 12.12.1984. Said commissioner made an effort for conducting auction of the

vehicle but was not able to do so therefore was constrained to move an application for discharging him from his duties on the ground that the bank

authorities had not assisted him properly nor allowed him to conduct the sale of the vehicle. Said Commissioner in his application before the High

Court prayed for his discharge on the ground that despite repeated requests by him, the bank had not furnished papers/documents of the vehicle so

as to enable auction to be concluded, therefore, in the circumstances, to be discharged. The prayer of the Commissioner was accepted by the

Court vide order dated 01.08.1986 in CMP No. 330/1986, he was discharged and in his place, Sh. D.S. Parihar, Advocate, was appointed to

auction the vehicle. Said Sh. Parihar reported highest bid of Rs. 41,000/- by one Bharat Bushan. Vehicle was sold but in its books, appellant Bank

reflected amount of Rs. 23,300/- having been credited in the account on 18.02.1990 as the sale proceeds of the seized vehicle under reference.

Admittedly, the Bank took possession of the vehicle on 20.07.1977 and remained in possession of the same till it was actually sold for a

meager amount resulting in a sum of Rs. 23,300/- being credited by the Bank on 22.07.1994 to the debtor's account. On the other hand, as has

been noticed by the trial Court, the appellant banks attorney conceded that the value of the seized vehicle on the date of its seizure was much more

than the amount due under the transaction on that date. Thus, had the bank sold the vehicle immediately on its seizure in 1977, the sale proceeds

would not only have liquidated the amount under transaction but would have resulted in surplus to be paid to the debtor. This aspect of the matter

has been specifically admitted by the attorney holder of the Bank. The possession of the vehicle remained with the Bank from July, 1977 to 1990.

Apparently during this long period of close to 13 years the appellant bank did not take proper care of the vehicle. Although the possession of the

vehicle was taken in July, 1977, the suit was instituted in December, 1980 while the vehicle was actually sold in 1990. On the basis of the same, it

was contended that having not mitigated the loss of respondent No. 1, the appellant was not entitled to claim the amount under transaction.

Reliance has been placed by learned counsel for the respondents on the decision of the Hon'ble Supreme Court in case reported in AIR 1967 SC

1322.

Learned trial Court came to the finding that the appellant had conceded vital fact of seizure of the vehicle by it in July, 1977, therefore, the

possession of the vehicle was with the Bank not only on the date of presentation of the plaint, but also on the date CMP Nos. 120/83 and 330/86

were laid before the High Court seeking directions to sell the seized vehicle, but the appellant did not disclose at the time of filing of the suit that the

vehicle remained off the roads from 1977 when it was seized by the Bank. Trial Court further came to the finding that the alleged non sale of the

vehicle immediately after its seizure on account of the debtors alleged non cooperation as projected in CMP No. 120/83, was not at all established

or proved by any evidence. On the other hand, having taken over possession of the vehicle by the Bank in the year 1977 i.e. just two years after

its purchase, the bank not only concealed the facts but even did not take any steps to mitigate the loss and the vehicle suffered considerable

depreciation as is evident from the fact that only Rs. 23,300/- as sale proceed was credited to the debtors account on 22.07.1994 on sale of the

vehicle in the year 1990 and that in the circumstances, interest kept on accumulating while the value of the vehicle went on depreciating.

The trial Court went to the extent of observing:-

the affairs of the bank appear from the present case to be totally mismanaged. The lack of accountability and responsibility of the functionaries of

the bank is sufficiently illustrated by the case at hand. It is not comprehendible as to what could have prevented the plaintiff bank from selling the

hypothecated vehicle immediately after its seizure in July 1977 when its price/value was as per PW Jawahar Lal Bhan more than the amount due

from the debtor. It is rightly in this situation contended for the defendants that having abdicated from its duty to take proper care and steps to

mitigate the loss the plaintiff bank allowed the value of the vehicle to get depreciated for long 13 years so it cannot be heard to say that it had any

cause of action vis-a-vis the transaction against the defendants

and further that the claim had got forfeited by the total inaction of the bank in not selling the hypothecated vehicle after its seizure in the year 1977.

The learned Single Judge of this Court, while taking into account the facts of the case, observed as under:-

Defendant No. 1 has specifically pleaded in his written statement that the value of the vehicle was more than Rs. 1.5 lacs at the time of seizure and

had made a claim for awarding Rs. 40,000/- as counter claim after adjusting the loan amount. Plaintiff has not filed replication in terms of Order 8,

Rule 6A of CPC. Further, he has also stated before the Court that the value of the vehicle was more than Rs. 1.5 lacs at the time of seizure and

plaintiff has not led any evidence in rebuttal to the said stand of respondent No. 1. While going through the plaint and account statement, the

liability of defendant No. 1 to the plaintiff was Rs. 1,32,860.17 paisa at the time of seizure i.e. 20.07.1977. Had the plaintiff put the vehicle to

auction and conducted sale in time, the claim of the plaintiff would have been adjusted and defendant would have got balance amount of sale price

at least to the tune of Rs. 17,000/-.

Further, while answering the question as to whether the appellant Bank was bound to conduct the sale, in the negative, the learned Single

Judge observed that in terms of provisions of Sections 172 and 176 of the Contract Act, Pawnee had a right to retain the property and to file the

suit, but at the same time he had to mitigate the loss and if he was not in a position to re-deliver the property seized in the same condition, in which

it was at the time of seizure, the suit was not maintainable and no decree could be passed in favour of the Pawnee. Learned Single Judge relied

upon the decision of the Hon'ble Supreme Court in case titled ""Lallan Prasad v. Rahmat Ali and another' reported in AIR 1967 SC 1322 in

support of the proposition that if Pawnee was not in a position to re-deliver the seized vehicle in the same condition, in which it was at the time of

seizure, the suit was not maintainable and no decree could be passed in favour of the plaintiff.

In the aforesaid context, learned Single Judge held that the appellant bank i.e. Pawnee was not in a position to re-deliver the seized property to

the Pawnor in the same condition in which it was at the time of seizure and in the circumstances, the Trial Court rightly dismissed the suit.

The plea that respondent No. 1 did not cooperate in the sale of the vehicle in question has been rejected by the trial Court on the ground of

there being no evidence nor the same having been established or proved and on the contrary, no steps having been taken by the bank to preserve

the goods, which was its duty in terms of Section 175 of the Contract Act though Pawnee was entitled to receive from the Pawnor extra ordinary

expenses incurred for preservation of the goods pledged. In other words, the appellant bank was under obligation to take steps to preserve the

good pledged, possession of which was taken over by it, but it had a right to receive extra ordinary expenses if incurred in the preservation of the

goods pledged. Apparently, no steps were taken by the Bank for the preservation of the vehicle in question as is evident from the fact that the

attorney of the bank had conceded before the trial Court that the value of the vehicle was more than the amount due from respondent No. 1 (Rs.

1,32,860.17) at the time of seizure of the vehicle on 20.07.1977 whereas admittedly the vehicle was sold in 1990 and only Rs. 23,300/- was

reflected in the statement of account. Thus, it is crystal clear that due to seizure of the vehicle on 20.07.1977 and non preservation of the same by

the appellant-bank, the value of the vehicle depreciated tremendously. None else than the bank was responsible in terms of Section 175 of the

Contract Act for discharging its obligation to preserve the seized vehicle. Having failed to discharge its statutory duty, it is not open to the appellant

bank to seek payment of the loan amount as per the terms and conditions of the Agreement for the simple reason that had proper steps been taken

by the Bank in terms of Section 175 of the Contract Act, the value of the seized vehicle would not have deteriorated to the extent of approximately

15% of its admitted value at the time of its seizure. Secondly, the loan was given to respondent No. 1 to purchase a vehicle for earning his

livelihood by plying the mini bus. Once the vehicle was seized, opportunity of earning of money by respondent No. 1 by plying the vehicle came to

an end. In the circumstances, the appellant bank was under duty to take reasonable steps to sell the seized vehicle at the earliest so as to mitigate

the loss more so when respondent No. 1 had requested for sale of the vehicle though after getting its price determined from a valuer. Apparently,

the bank took its own sweet time of close to 13 years for selling the vehicle seized by it on 20.07.1977. Commissioner appointed by the Court for

auction of the vehicle was discharged by the Court on his request due to non cooperation by the appellant bank by not providing documents in

order to enable conclusion of the sale. In the circumstances, the claim of the appellant bank for recovery of the loan amount along with interest at

the agreed rate was rightly rejected by the trial Court and the dismissal of the suit thereof rightly upheld by the learned Single Judge.

The plea that the appellant was not responsible for the delay in the sale of the vehicle in 1990 when it had filed application for sale of the

vehicle in December, 1980 is also of no avail to the appellant-bank for the simple reason that the trial Court had come to the finding that although

the possession of the vehicle was with the Bank not only on the date of presentation of the plain in 1980 but also on the date when CMP Nos.

120/83 & 330/86 were laid down before the High Court seeking direction to sell the seized vehicle, but the Bank did not disclose at the time of

filing of the suit that the vehicle remained off the road from 1977 onwards on its seizure. Plea of the bank of non cooperation by respondent No. 1

to enable the bank to sell the seized vehicle, was categorically held by the learned Trial Court, do not have been established or proved by any

evidence. No evidence, whatsoever has been pointed out even during the hearing of this case. On the contrary, the trial Court has recorded a

finding that Sh. Sham Dass Gupta, Commissioner appointed by the Court vide order dated 12.12.1984 to sell the seized vehicle, moved an

application before the Court praying for his discharge on the ground that despite his repeated requests, bank had not furnished the requisite

papers/documents of the vehicle for the conclusion of the sale. Consequently, vide order dated 01.08.1986 passed in CMP No. 330/1986, Sh.

Sham Dass Gupta, Commissioner was discharged and Sh. D.S. Parihar, Advocate, was instead appointed as Commissioner to auction the vehicle.

Pursuant to proceedings conducted by the said Commissioner, highest bid of Rs. 41,000/- was offered by one Bharat Bushan but the Bank

credited a sum of Rs. 23,300/- only in the account of respondent No. 1 on 18.02.1990 as sale proceed of the seized vehicle under reference.

Therefore, failure to preserve the vehicle as also to take steps to sell the vehicle are all attributable to the appellant bank. Respondent No. 1 could

not have sold the vehicle once the same was in the custody of the appellant bank and without being in possession of the documents of the vehicle.

In the light of the position as has been noticed in the preceding part of this judgment, learned counsel for the appellant bank has not been able

to counter the observations of the learned trial Court of mismanagement of the case by the appellant bank.

Another aspect of the matter which needs noticing is that prior to the filing of the instant Letters Patent Appeal, communication (Ref. No.

CLD/06-2510, dated 12.07.2006) was addressed by Sh. Roshan Khayal, Senior Manager Law, Central Law Department, Corporate

Headquarters, MARoad, Srinagar to Senior Manager Law, Zonal Office, Jammu. Relevant extract of the same is reproduced below:-

Please refer to your note dated 15.06.2006 seeking approval for filing Letters Patent Appeal (LPA) against the judgment dated 02.06.2006

passed in Civil First Appeal No. 28/1996 by Single Bench of the Hon'ble J&K High Court at Jammu.

We have scanned the entire facts of the case and perused the judgment of the Single Bench as well. It is our considered opinion that the Bank has

not followed the provisions of law in the case. Firstly, in terms of Section 176 of Contract Act, no action was taken by the Bank for sale of the

vehicle. Secondly, proper care was not taken of the vehicle, with the result it suffered tremendous depreciation. In this way, protection under

Section 175 of the Contract Act was done away with. The case, as is evident, from the judgment of the trial Court as well as of the appellate court

has not been conducted properly.

Be that as it may, the competent authority has approved proposal for filing of LPA only if the advocate is sure of his success. The competent

authority has approved payment of misc. expenses only to the advocate for filing LPA and counsel fee has been approved to be paid to him only if

he succeeds in the LPA.

The same reveals that the bank on perusal of the entire factual position was of the considered opinion that i) it had not followed the provisions

of law in the case; ii) it had not taken action in terms of Section 176; and iii) proper care of the vehicle was not taken by it with the result that the

value of the vehicle depreciated tremendously.

Learned counsel for the appellant has relied on the decision of the Delhi High Court in case titled as 'Bank of Maharashtra v. Racmann

Auto (P) Ltd. reported in AIR 1991 Delhi 278. By referring to aforementioned decision it has been contended that the Pawnee was not under

any obligation to sell the seized vehicle. Relevant extract of the same is reproduced hereunder:

In view of the provisions of Section 176 of the Contract Act, there remains no doubt about the legal proposition that it is in the discretion of the

plaintiff Bank to have filed the suit for recovery of the debt and retain the pledged goods as collateral security or in the alternative could resort to

selling the pledged goods after giving reasonable notice of sale to the defendant. Plaintiff Bank had in its wisdom exercised the first option of filing

the suit and retained the pledged goods as collateral security. So, even if the value of the goods had deteriorated due to passage of time, no relief

can be obtained by the defendant against the plaintiff as the defendant was legally bound to clear the debt and obtain the possession of the pledged

goods from the plaintiff Bank before the pledged goods were sold during the pendency of the suit. That is clearly provided in Section 177 of the

Contract Act.

There is no dispute with the aforementioned position. It was the discretion of the bank to file a suit for recovery of the debt and retain the

pledged goods as collateral security or in the alternative to resort to sell the pledged goods by giving reasonable notice to respondent No. 1. No

doubt, the Bank seized the vehicle on 20.07.1977 but waited for close to 3½ years prior to institution of the suit in December, 1980 and then

moved an application on 18.12.1980 for appointment of a Commissioner for sale of the seized vehicle but as has been found by the trial Court, the

Commissioner moved an application before the Court for his discharge on account of failure of the Bank to hand over the documents so as to

enable him to sell the seized vehicle. Once respondent No. 1 had requested on seizure of the vehicle in July 1977 to auction it after getting its price

evaluated then the bank was duty bound to ensure that the sale was effected at the earliest possible and not by delaying the sale proceedings for

close to thirteen years by adopting an indifferent attitude and by creating obstacles in the sale of the vehicle by not making available the documents

of the vehicle to the Commissioner appointed by the Court for the sale of the vehicle.

The pleas raised by the appellant are without merit in the light of decision of the Hon'ble Supreme Court in Vimal Chandra Grover v. Bank

of India, (2000) 5 SCC 122. Relevant extract thereof is reproduced hereunder:

There cannot be any doubt if action had been taken by the Bank promptly or within a reasonable time the appellant would have been able to

clear his overdraft account.......

The Bank has submitted before us that the relationship between the parties is governed by Sections 172 to 177 of the Contract Act, 1872 and

the 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 the pawnor, the 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 Ltd. v. Bodh Raj. We were also referred to Chitty on Contracts, 27th Edn.,

and other decisions to which we will presently refer.

Mr. Krishnan Venugopal, it appears, made this point in answer to the objection by the appellant that the Bank did not raise any issue regarding

the law of pledge or the jurisdiction of the National Commission before the National Commission. We heard Mr. Venugopal on the applicability of

the law of pledge as contained in Sections 172 to 177 of the Contract Act on a plea that there was no deficiency in service because the Bank was

not under a legal obligation to follow a customer's instructions to sell the pledged shares. He said that the statute not only imposes no obligation on

the pledgee to sell the pledged shares on the request of the pledgor, it grants a positive option to the pledgee to either retain or sell the pledged

shares which would be nullified by creating an obligation on his part to sell on the request of the pledgor. We may refer to some of the decisions

cited by Mr. Venugopal at the Bar on this aspect.

We do not think it is necessary for us to go into all these legal niceties in view of the clear provisions of law and in this mass of judicial

pronouncements referred to above we should not forget the real issue. We have held that the appellant is a consumer and the Bank is the provider

of the service. The appellant's case is simple. He did not want his shares back. He only wanted part of the shares to be sold and for the Bank to

keep the money to liquidate part of his overdraft account. The Bank agreed. Each branch of the Bank is independent. The Bank has taken two

principal pleas: (1) it was not obliged to sell the shares as under law the Bank is not bound to follow the instructions in view of the provisions

regarding pledges as contained in Sections 172 to 177 of the Indian Contract Act; and (2) it was the appellant who misled the Bank by saying that

the shares were lying in the Head Office of the Bank at Bombay. That the Bank has a right under the law to retain the pledged goods is not in

dispute. But once the Bank having agreed to sell part of the pledged goods, it could not fall back on those very provisions to raise a plea of its right

under the law to retain the pledged goods. The Bank says it was misled by the appellant that the shares were lying in Bombay when in fact these

were lying in the Nagpur branch itself where the appellant had the overdraft account. Could not the Bank verify as to where the pledged shares

were kept when on the basis of those very shares as security overdraft facility was granted? We think that the Bank is just firing a shot from the

shoulders of the appellant to hide its own defaults, nay negligence. As far as the appellant is concerned, he has clearly stated, which has not been

denied, that the pledged shares were to be transferred in the name of the Bank and a sufficient number of blank'.transfer forms duly signed by him

were submitted to the Bank and further that the Share Department of the Bombay Head Office of the Bank was centralised for handling all matters

concerning shares and that bonus shares in this very case were received by the Bombay Head Office of the Bank. The Bank also advanced a plea

that the appellant was guilty of contributory negligence by which the Bank tacitly admitted its own negligence on its part as well. That the appellant

suffered loss because of the delay in not disposing of his shares as agreed to by the Bank cannot be disputed. In these days of revolution in

information technology the Bank is merrily going on corresponding with its customer, the appellant, and also its own Head Office. It was not

difficult for the Bank to find out on receipt of the letter dated 23-4-1992 of the appellant where the pledged shares were lying. It took 12 days to

transmit the request of the appellant to its Head Office. When the Nagpur branch received letter dated 19-6-1992 from the Head Office that the

shares were not lying there, it took another 40 days to inform the appellant of this fact by its letter of 29-7-1992. Then the Nagpur branch finds

that the shares are lying with it and then it is too late. It is true that the Bank is not expected to process the request of its customer at once but

within a reasonable time and certainly promptness and diligence is required which we find lacking in the present case. Whatever may be the fault of

the appellant being not regular in his account with the Bank, all these pleas raised by the Bank are merely afterthoughts in order to hide its own

default and inefficiency. Once the Bank agreed to sell part of the shares on request by the appellant and without any preconditions, it cannot fall

back on other alleged defaults of the appellant in his dealing with the Bank. The plea of the Bank that it could dispose of the shares only through its

own broker is without substance as it never apprised the appellant of this fact. We, therefore, find ourselves unable to agree with the view of the

National Commission that there was no negligence on the part of the Bank or that the Bank was not bound to dispose of the shares.

In view of the factual position as noticed in the preceding part of this judgment as also the decision of the Hon'ble Supreme Court referred to

above it is clear that the bank cannot escape its responsibility for having delayed the sale of the vehicle in question and the resultant loss caused to

respondent No. 1 on account of delayed sale after thirteen years from the date of seizure of the vehicle. It is clear that if the pawnor is of the view

that pledged goods were losing value with passage of time, it would always be open to the pawnor to request the pawnee to sell the pledged

goods. If the facts of the instant case are seen, it is apparent that on seizure of the vehicle, respondent No. 1 served a legal notice on the appellant-

bank to sell the vehicle after getting it valued, therefore, it is clear that respondent No. 1 did all that was possible within his means to get the vehicle

sold, which was in the custody and possession of the bank along with all documents after getting the same valued before putting it to auction.

However, as noticed above, there is no whisper of the bank having got the same valued or taken steps to sell the seized vehicle expeditiously. With

the result that thirteen years' time was consumed by the bank in getting the seized vehicle sold. The same can aptly be described as being in gross

negation of commercial values, which were required to be followed by the Bank. While discharging its functions as a bank, the appellant was not

only required to seek return of the loan amount advanced by it but also to ensure that appropriate steps were taken by it to minimise the loss to the

respondent borrower who had taken loan to purchase a mini bus to earn his livelihood. It defies logic that when the vehicle was seized within two

years of the release of the loan, how the bank expected the borrower i.e. respondent No. 1 repay the loan and interest on the same by depriving

him of earning his livelihood and in the process repaying the loan amount along with interest.

In the circumstances, in our considered opinion, the decision of the learned Single Judge upholding the judgment and decree of the learned trial

Court dismissing the suit, does not warrant any interference. Resultantly, instant Letters Patent Appeal is dismissed. No order as to costs.