VIMAL CHANDRA GROVER versus BANK OF INDIA

Citation: [2000] 3 S.C.R. 587 · Decided: 26-04-2000 · Supreme Court of India · Bench: S. SAGHIR AHMAD · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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VIMAL CHANDRA GROVER 
v. 
BANK OF INDIA 
APRIL 26, 2000 
[S. SAGHIR AHMAD AND D.P. WADHWA, JJ.] 
Consumer Protection Act, 1986-S. 2{l)(o), 2(l)(g) & 2(2)(d)-Bank-
Deficiency in service-Overdraft facility availed by a customer by pledging his 
shares-Request for selling in a part of shares pledged-Delay on the pm1 of 
the Bank in disposing the shares-Meanwhile share prices falling down-
Customer incurring loss-Claim for compensation-Dismissed on the gmund 
that there was no deficiency in service-Validity of-Held, grant of ovenlraft 
facility to a customer by charging interest amounts to 'service' by Bank-
Delay in disposing the shares resulting in loss to the customer amounts to 
'deficiency' in service-Customer entitled to claim compensation along with 
interest-Banking Regulation Act, 1949-S. 6-lndian Contract Act, 1972-
Ss. 172 to 177. 
Pleadings-New plea-Raising of-No foundaJion laid either ill the 
pleadings or in the evidence before the court below-Held, cannot be allowed 
to be raised. 
Worru & Phrases: 
"Service"-Meaning and scope of in the context of S. 2(l)(o) of the 
Consumer Protection Act, 1986. 
A 
B 
c 
D 
E 
"Customer"-Meaning of in the context of S. 2(2)(d) of the Consumer 
F 
Protection Act, 1986. 
"Deficiency" -Meaning and scope of in the context of S. 2(1 )( g) of the 
Consumer Protection Act, 1986. 
Appellant availed an overdraft facility from the respondent-Bank by 
G 
pledging his shares. In order to clear his overdraft account, appellant 
requested the Bank to sell part of his shares. However, the Bank sold the 
shares after a delay of several months, by which time prices of shares fell 
down resulting in monetary loss to the appellant. Consequently, appellant 
filed a claim before the National Consumer Disputes Redressal Commis-
H 
587 
588 
SUPREME COURT REPORTS 
(2000) 3 S.C.R. 
A 
sion, and it was dismissed on the ground that there was no deficiency in 
service in disposing the shares. Hence the present appeal. 
~· 11 
Allo,,,ing the appeal, the Court 
HELD : 1.1. National Consumer Disputes Redressal Commission 
B 
was not justified in holding that there was no negligence on the part of the 
Bank or that the Bank was not bound to dispose of the shares. Appellant 
is entitled to claim compensation for the loss incurred along with 
interest. [605-E; 606-B-C] 
c 
D 
E 
F 
G 
1.2. Grant of overdraft facilities to its customers by a Bank amounts 
to providing 'service' within the meaning of S. 2(1)(o) of the Consumer 
Protection Act, 1986. Bank is rendering service by providing overdraft fa. 
cilities to a customer which is not without consideration. Bank is charging 
interest and other charges as well in providing said service. Request for sale 
of part of the pledged shares for clearing overdraft facilities and which is 
agreed to by the Bank is certainly part of the service connected with the 
grant of overdraft facilities. Appellant as a consumer was hiring service of 
the Bank for consideration by way of payment of interest for the overdraft 
facilities received by him by pledging the shares of different companies. 
Thus, it cannot be accepted that appellant is not a consumer or that the 
Bank is not providing any service to the appellant. [594-G-H; 596-B-D] 
1.3. There was 'deficiency' in service on account of negligent conduct 
of the Bank in disposing the shares. H action has been taken by the Bank 
promptly or within a reasonable time, appellant would have been able to 
clear him overdraft account. Thus, it cannot be disputed that appellant 
suffered loss because of the delay in not disposing of his shares. It is true 
that the Bank is not expected to process the request of its customers at once 
but within reasonable time and certainly promptness and deligence is 
required which was lacking in the instant case. Once the Bank agreed to 
sell the part of the shares, on request by the appellant and without pre-
conditions, it cannot fall back on other alleged defaults of the appellant in 
his dealing with the Bank. [605-A-E] 
2. The plea of respondent-Bank that the provisions of Ss. 172 to 177 of 
the Contra~tAct, 1972 were applicable to the parties and thus the Bank was 
not under a legal obligation to follow a customer's instructions to sell the 
pledged shares or the plea regarding jurisdiction of National Commission 
H 
cannot be permitted to be raised since no foundation was laid either in the 
V.C. GROVER v. BANK OF INDIA [D.P. WADHWA, J.] 
589 
.- • )It 
pleadings or evidence be

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