Q. Whether the District Forum was justified in allowing the interim application of the Respondent seeking return of the documents from the bank that kept it as a lien for another loan, at a different branch, even after the original loan was paid.?
As per Section 171 of the Indian Contract Act, 1872 as well as the law laid down by the Supreme Court of India, it is well established that that the Bank could claim lien on the title documents pertaining to the plot in question even for the loan of their different branch.
However, the provisions of the Recovery of Debts Due to Banks and Financial Institutions, Act, 1993 leave no doubt that the Legislature has clearly forbidden any other Court or Authority to exercise any jurisdictional power or authority except the Supreme Court and High Court under Articles 226 and 227 of the Constitution in relation to matters specified in Section 17 of the 1993 Act. The object of the Act was that such matters should not be considered and decided by any other Court or authority except the Tribunal constituted under the 1993 Act.
The order passed by the District Forum and affirmed by the State Commission were legally unsustainable and were liable to be set aside.
Bank of Baroda v. Ranjeet Singh MANU/CF/0491/2012
Q.Whether the Complainants who used the bank’s services to forward certain documents, were engaged in commercial activity?
As held by the Supreme Court, commercial purpose shall depend on the facts and circumstances of each case. The dispatch of papers by the Bank per se is not going to generate any profit to the Complainant as the actual profit will come from the dispatch and sale of the exported goods. Further, the Commission observed that the Complainant had availed banking services for forwarding certain documents to a particular destination. It is clear that availing of this service is not an activity directly leading to profit. Thus, the Complainant is a consumer.
Metco Export International v. Federal Bank Limited and others
Q. Whether Regulation 15 of the Consumer Protection Regulations, 2005 intra-vires of Section 22 of the Consumer Protection Act, 1986?
Supreme Court held that the regulations were framed in accordance with law. The Court minutely went through regulation 15(2) of the Regulations and found that power to deal with review applications lies with Commission. Procedure was to be adopted by National Commission, whether review petition would be decided after hearing parties orally or could be disposed of by way of circulation.
SC did not find that any mischief was done by framing said Regulations under Section 22 of the Act and could not be said to be ultra vires the said Act. There was no reason to believe that National Commission by enacting regulation 15 exceeded its jurisdiction or power vested in it under Section 30A of the Act.
Surendra Mohan Arora v. HDFC Bank Ltd. MANU/SC/0367/2014.
Q. The bank admitting that they misplaced the title deed and as a result, won’t able to return it even after the repayment of loan. Will this amount to deficiency in service by the bank?
The National Commission held that there has been deficiency in service on the part of the Bank towards the Complainant, as the title deeds had been lost from their custody only. The Bank is, therefore, liable to compensate the Complainant.
Bank of India v. Mustafa Ibrahim Nadiadwala MANU/CF/0809/2016
Q. Whether the Financier is the real owner of the vehicle which is the subject of a hire purchase agreement?
Q. Whether service of proper notice on the hirer is necessary for repossession of a vehicle which is the subject of a hire purchase agreement, and if so, what is the consequence of non-service of proper notice?
It was held that the Financier remains the owner of the vehicle taken by the Complainant on hire, on condition of option to purchase, upon payment of all hire installments. It was held that the hire installments are charges for use of the vehicle as also for the exercise of option to purchase the vehicle in future.
Regarding the service of proper notice on the hirer for repossession of a vehicle which is the subject matter of a Hire-Purchase Agreement, Supreme Court held that it would depend on the terms and conditions of the Hire Purchase Agreement. If the hire purchase agreement provides for notice on the hirer before repossession, such notice would be mandatory. It was held that notice may also be necessary, if a requirement to give notice is implicit in the agreement from the course of conduct of the parties. In a case where the requirement to serve notice before repossession is implicit in the hire purchase agreement, non-service of proper notice would tantamount to deficiency of service for breach of the hire purchase agreement giving rise to a claim in damages.
Magma Fincorp Ltd. v. Rajesh Kumar Tiwari MANU/SC/0735/2020
Q. Can the bank take forceful repossession of a hypothecated vehicle by employing musclemen?
The National Commission expressed shock that the bank had hired musclemen directly or through its recovery agents to recover the loan/repossess the vehicle. The Commission also referred to the State Commission’s order, which had observed that the alleged letter produced by the bank purporting to the Complainant voluntarily handing over possession of the vehicle was unreliable and that no notice was given to the Complainant at the stages of repossession and sale of the vehicle.
The Commission relied upon its judgment in Citicorp Maruti Finance Ltd. v. S Vijaylaxmi [MANU/CF/0112/2007] where it had strongly deprecated such practices. The Commission dismissed the petition and awarded Rs. 25,000/- as exemplary costs in this case.
HDFC Bank Ltd. v. Balwinder Singh MANU/CF/0182/2009
Q. Whether there was any deficiency of service on the part of the bank in not covering the whole set hypothecated assets under the insurance policy when it took the liberty to obtain insurance of the assets on its own even though it was the obligation of the opposite party?
The Supreme Court held that the Complainant had suffered loss because of the inaction and negligence on the part of the Bank and this constituted deficiency of service. Any loss arising out of such deficiency was compensable under the Consumer Protection Act, 1986. Once the bank exercised the liberty to effect the insurance, it was implicit that such insurance ought to have covered the entire set of hypothecated assets, against which the credit facilities were extended. If the bank had exercised liberty to effect insurance, it was their duty to take out policies covering the entire set of hypothecated assets.
Canara Bank v. Leatheroid Plastics Pvt. Ltd. MANU/SC/0446/2020.
Q. Whether there was any deficiency of service on the part of the bank in not encashing the petitioner’s cheque because he did not submit an ID despite the fact that the bank called him twice and he confirmd issuing the cheque?
NCDRC held that no doubt Complainant had not furnished his ID but fact remains that admittedly not only cashier but also Bank Manager separately rang up account holder on his mobile number who verified having issued the subject cheque and gave clearance for encashment. Bank officials however declined to encash the cheque. This is clear deficiency in the service. The National Commission considered this case of unnecessary harassment and humiliation and directed the bank to pay Rs. 10,000/- as compensation to the Complainant.
Prakash Chimanlal Sheth v. HDFC Bank limited, Maharashtra 2017 MANU/CF/1163/2017
Q. Whether a stock broker is a consumer under Consumer Protection Act, 1986 if he avails the services of a bank for commercial purposes?
Complainant had availed of the services of the Opposite Party bank i.e. overdraft facility against the security of shares with the intention to expand his business and increase his business profits. Therefore, it cannot be said that Complainant had availed of services of the Opposite Party exclusively for the purpose of earning his livelihood by way of self-employment. The Commission came to the conclusion that the Complainant is not a consumer as envisaged under Section 2 (1)(d) of the Act because he had availed of the services of the Opposite Party bank for commercial purpose. As the Complainant is not a consumer, he cannot invoke jurisdiction of Consumer Fora by raising a consumer dispute.
Shrikant G. Mantri v. Punjab National Bank
Q. Whether complaint can be filed by Trust under provisions of Consumer Protection Act, 1986?
On a plain and simple reading of all the above provisions of the Act it is clear that a Trust is not a person and therefore not a consumer. Consequently, it cannot be a Complainant and cannot file a consumer dispute under the provisions of the Act. Thus, the National Commission was quite right in holding that the complaint filed by the Appellant Trust was not maintainable.
Pratibha Pratisthan and Ors. v. Manager, Canara Bank and Ors. MANU/SC/0238/2017