D.P.WADHWA - (1.) THIS appeal is directed against the order dated 21/06/1996 of the National Consumer Disputes Redressal Commission (National Commission) holding that there was no negligence on the part of the respondent Bank in dealing with its security of pledged shares of the appellant or its release in part to him and that the Bank could also not be faulted on its practice not to dispose of shares through brokers not on the approved list of the Bank and lastly that it could not be said that there was any deficiency in service by the Bank as defined in Section 2(1)(g) of the Consumer Protection Act, 1986 ('Act' for short). Leave was granted limited to the claim of the appellant to his shares of Castrol Limited pledged with the Bank.
(2.) ON the request of the appellant, Bank sanctioned to him on 20/09/1990 an overdraft limit of Rs. 5,00,000.00 against pledge of shares of various companies, value of all the shares being Rs. 10,60,900.00 at the relevant time. Out of these number of shares of the Castrol Limited were 1400 @ Rs. 200.00 per share of the total value of Rs. 2,80,000.00. It is not disputed that as per the guidelines issued by the Reserve Bank of India banks are allowed to make advance against pledge of shares retaining 50% margin. As per the terms of sanction of the overdraft limit shares were got transferred in the name of the Bank. In due course of time Bank received bonus shares numbering 2,224 of Castrol Limited. It is stated that value of shares also increased manifold. Appellant also paid an instalment of Rs. 1,45,600.00 to the Bank against the overdraft limit. Overdraft amount was to be adjusted in three equal instalments. In order to clear the overdraft account the appellant, apart from shares of other companies, requested the Bank to arrange sale of 500 shares of Castrol Limited. This he did by letter dated 23/04/1992. After 12 days of the receipt of this letter the Bank at Nagpur, where the Overdraft Account of the appellant was maintained, sent a letter dated 5/05/1992 to its Head Office at Bombay (copy of this letter was endorsed to the appellant) agreeing to the terms of the appellant set out in his letter of 23/04/1992. Nagpur Branch received a letter of 19/06/1992 from its Head Office stating that it did not receive the letter dated 23/04/1992 of the appellant and further that the shares were not in the Head Office. By letter dated 29/07/1992 Nagpur Branch of the Bank informed the appellant that Head Office was not holding the shares it was, however, found that the shares were lying with the Nagpur Branch itself. By this time it appeared that the price of the share fell and the shares could not be sold at the price indicated by the appellant. He, therefore, filed a claim with the National Commission for Rs. 5,09,037.53 in respect of shares of Castrol Limited as under :- There cannot be any doubt if action had been taken by the Bank promptly or within a reasonable time appellant would have been able to clear his overdraft account. About the prevalent price of the share as claimed by the appellant there cannot be any dispute.
(3.) BANK has submitted before us that relationship between the parties is governed by Sections 172 to 177 of the Contract Act, 1972 and 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 pawnor, 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 v. Bodhraj, AIR 1956 Punjab 155. We were also referred to "Chitty on Contracts", Twenty Seventh Edition, and other decisions to which we will presently refer. 4. 172. "Pledge", "Pawnor" and "pawnee" defined.- The bailment of goods as security for payment of a debt or performance of a promise is called "pledge". The bailor is in this case called the "pawnor". The bailee is called the "pawnee". 173. Pawnee's right of retainer.- The pawnee may retain the goods pledged, not only for payment of the debt or the performance of the promise, but for the interest of the debt, and all necessary expenses incurred by him in respect of the possession or for the preservation of the goods pledged. 174. Pawnee not to retain for debt or promise other than that for which goods pledged : Presumption in case of subsequent advances.- The pawnee shall not, in the absence of a contract to that effect, retain the goods pledged for any debt or promise other than the debt or promise for which they are pledged; but such contract, in the absence of anything to the contrary, shall be presumed in regard to subsequent advances made by the pawnee. 175. Pawnee's right as to extraordinary expenses incurred.- The pawnee is entitled to receive from the pawnor extraordinary expenses incurred by him for the preservation of the goods pledged. 176. Pawnee's right where pawnor makes default.- If the pawnor makes default in payment of the debt, or performance, at the stipulated time, of the promise, in respect of which the goods were pledged, the pawnee may bring a suit against the pawnor upon the debt or promise, and retain the goods pledged as a collateral security; or he may sell the thing pledged, on giving the pawnor reasonable notice of the sale. If the proceeds of such sale are less than the amount due in respect of the debt or promise, the pawnor is still liable to pay the balance. If the proceeds of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawnor. 177. Defaulting pawnor's right to redeem.- If a time is stipulated for the payment of the debt, or performance of the promise, for which the pledge is made, and the pawnor makes default in payment of the debt or performance of the promise at the stipulated time, he may redeem the goods pledged at any subsequent time before the actual sale of them; but he must, in that case, pay, in addition, any expenses which have arisen from his default. Prima facie it does appear to us that Bank has failed to honour its commitment resulting in loss to the appellant. The question still, however, arises if the alleged default on the part of the Bank could be termed as deficiency in service. "Service" has been defined in clause (o) of sub-section (1) of Section 2 of the Act and "deficiency" in clause (g) thereof. These are as under :- "(g) "deficiency" means any fault, imperfection, shortcoming or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any law for the time being in force or has been undertaken to be performed by a person in pursuance of a contract or otherwise in relation to any service;" "(o) "service" means service of any description which is made available to potential users and includes the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, board or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service;" ;