BEFORE THE HON’BLE SUPREME COURT OF INDIA

UNDER SECTION 11 OF THE CONSUMER PROTECTION ACT,1986

In the matter of

THE STATE BANK OF INDIA................................................................Appellant

v.
ROSHAN SAHA..........................................................................................Respondent

Submission on behalf of the Respondent

Submitted To:
Submitted By:
Ms. Pragya Aishwarya
SHIVAM GUPTA
Assistant Professor, Law
Roll. No. 889

SEMESTER-II
 TABLE OF CONTENTS

CONTENTS PAGE NUMBER

INDEX OF AUTHORITIES 2-3

INDEX OF ABBREVIATION 4

STATEMENT OF JURISDICTION 5

STATEMENT OF FACTS 6

ISSUES RAISED 7

SUMMARY OF ARGUMENTS 8

ARGUMENTS ADVANCED 9-13

PRAYER 14

1|Page
Memorial on behalf of the Respondent
 INDEX OF AUTHORITIES

CASES

1. S.L Ramaswamy Chetty and Anr. v. M.S.A.P.L. Palanlappa Chettiar,

AIR1930Mad364.(Page-9)
2. Bank of Maharashtra v. Racmann Auto (P) Ltd. AIR1991Delhi278.( Pages-9,10)
3. Suraimal v. Fulchand, AIR 1951 Nag 264.( Page-11)
4. Bharat Bank Ltd. V. Bodh Raj, AIR 1996 MP 32.( Page-11)
5. F. Nanakchand Ramkishan Das v. Lal Chand Ganeshi Lal:, AIR 1937 Bom 26. (Page-11)
6. Standard Chartered Bank v. Custodian, AIR 2000 SC 1448. (Page-12)
7. Halliday v. Holgate,1868 LR Exh 299. (Page-12)
8. Union Of India & Ors vs Major General Madan Lal Yadav ,1996 SCC (4) 127. (Page-13)

STATUES

1. The Indian Contract Act, 1872.

2. The Consumer Protection Act, 1986.

BOOKS

 Dr.Avatar Singh, Law of Contract and Specific Relief (EBC Publishing Co.,Lucknow,
12th Edition, 2017).
 Pollock And Mulla, The Indian Contract Act & Specific Relief Acts (LexisNexis,
Gurgaon, Volume 1, 15th Edition, 2017).
 Dr. V.K. Agarwal, Law Of Consumer Protection (Bharat, Allahabad, 3rd Edition,
2012).
 Dr. S.R. Myneni, Law Of Torts & Consumer Protection (Asia Law House,
Hyderabad, 9th Edition, 2014).
5. Dr. J.N.Pandey, Law of Torts with Consumer Protection Act and Motor Vehicle
Act(Central Law Publication)(9th Edition, 2014).

 Justice D P Wadhwa, The Law Of Consumer Protection (LexisNexis, Gurgaon,

Volume 1, 2nd Edition, 2009).

WEBSITES

1. www.manupatra.com
2. SCC online
3. JSTOR
 INDEX OF ABBREVIATIONS

1. AIR ALL INDIA REPORTER

2. ANR. ANOTHER
3. CPA CONSUMER PROTECTION ACT,1986
4. HC HIGH COURT
5. HON’BLE HONOURABLE
6. ICA INDIAN CONTRACT ACT,1872
7. Ltd. LIMITED
8. ORS. OTHERS
9. Rs. RUPEES
10. S. SECTION
11. SC SUPREME COURT
12. SCC SUPREME COURT CASES
13. ST. STATE
14. V. VERSUS
15. @ AT THE RATE OF
16. & AND
 STATEMENT OF JURISDICTION

The Appellant has invoked the jurisdiction of this forum under Sec. 11 1 of the Consumer
Protection Act, 1986 to claim a compensation of Rs. 5,10,000. The complaint involves
complicated questions of fact which require extensive oral and documentary evidence therefore,
matter cannot be adjudicable in summary jurisdiction and as such the matter can only be
adjudicated by a Civil Court. Therefore this Hon’ble Forum need not entertain its jurisdiction in
this Complaint.

1
Jurisdiction of the District Forum
(1) Subject to the other provisions of this Act, the District Forum shall have jurisdiction to entertain complaints
where the value of the goods or services and the compensation, if any, claimed does not exceed rupees twenty lakhs.
(2) A complaint shall be instituted in a District Forum within the local limits of whose jurisdiction,—
(a) the opposite party or each of the opposite parties, where there are more than one, at the time of the institution of
the complaint, actually and voluntarily resides or carries on business or has a branch office or personally works for
gain; or
(b) any of the opposite parties, where there are more than one, at the time of the institution of the complaint, actually
and voluntarily resides, or carries on business or has a branch office, or personally works for gain, provided that in
such case either the permission of the District Forum is given, or the opposite parties who do not reside, or carry on
business or have a branch office, or personally work for gain, as the case may be, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arises.
 STATEMENT OF FACTS

On the request of Mr. Arvind Prasad, the applicant, the State Bank of India sanctioned him on
20th September, 2010 an overdraft limit of Rs.5,00,000 against pledged shares of various
companies worth Rs.10,60,900. Shares of carol ltd. were 1,400 @ Rs.200 per shares of total
value of Rs.2,80,000. As per terms overdraft limit shares were got transferred in the name of the
bank. Bank received bonus shares 3,244 of Carol Ltd. value of shares increased. Applicant paid
an instalment of Rs. 1,45,000 to the bank against the overdraft limit. The amount was to be
adjusted in five instalments. On 23rd March, 2012 the applicant requested the bank to arrange
sale of 500 shares of Carol Ltd. to clear the rest. The bank sent a letter to its head office at
Bombay agreeing to the terms of the applicant. Kanpur branch received a letter of 19th May,
2012 from its head office stating that it didn’t receive letter dated 23rd March, 2012 of the
appellant and shares were not in the head office. On 29th June, 2012, Kanpur bank informed the
applicant that head office was not holding the shares and latter discovered, the shares were with
the Kanpur branch itself. By this time shares value fell and could not be sold at price indicated
by the applicant. He, therefore, filed a claim against the bank in consumer forum for Rs. 5,10,000
in respect of shares of Carol Ltd.
 ISSUES RAISED

THE FOLLOWING ISSUES ARE PRESENTED BEFORE THE HON’BLE FORUM IN THE
PRESENT MATTER:

1. WHETHER THERE WAS A DEFICIENCY IN SERVICE ON PART OF THE BANK.

i. The Appellant can direct the Bank and was Bank under a legal obligation to
follow Appellant's instructions to sell the pledged shares or not.
ii. The Bank can choose any time and place where to dispose of pledged goods or
not.
iii. The Bank had right to lein to retain all the shares, which were in its possession or
not.

2. WHETHER THE APPELLANT CAN TAKE ADVANTAGE OF HIS OWN MISTAKE.

 SUMMARY OF ARGUMENTS

1. That there was no Deficiency in Service on part of the Bank.

The respondent contended that there was no deficiency in service on part of the bank by virtue
of the following points.
i. The Appellant cannot direct the Bank to sell the pledged shares because it is well
settled principle of law that the pawnor has no right to call upon the pawnee to sell
the goods pledged.
ii. The Bank can choose any time and place where to dispose of pledged goods, thus
cannot be called negligent in its service because the power of sale is conferred for
the benefit of the pawnee, and can be exercised at his discretion.
iii. Bank had right to lein to retain all the shares including bonus shares, which were in
its possession, upon the default of appellant that he was failed to discharge his
contractual obligations in five installments.

Thus from all the above points it is clear that Bank was neither negligent in its service nor
there was deficiency in its service.

2. The Appellant cannot take advantage of his own mistake.

According to the maxim “nullus commodum capere potest de injuria sua propria” no man can
take advantage of his own wrong, and in instant case the appellant had done the wrong that
according to terms of the contract he did not discharge his contractual obligation in five
installments. Having committed breach of contract, the Appellant cannot take advantage of his
own mistake by claiming for this hefty compensation.
 ARGUMENTS ADVANCED

1. THAT THERE WAS NO DEFICIENCY IN SERVICE ON PART OF THE BANK.

It is mostly submitted before the Hon’ble Forum that there was no deficiency in service on part
of the Bank according to “deficiency” as has been defined in Clause (g) of Sub-section (1) of
Section 2 of the CPA2 , because the CPA not only imposes no obligations on the pledgee to sell
pledged shares on the request of the pledger it also grants a positive option to 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 pledger.

i. The Appellant cannot direct the Bank and Bank was under no legal obligation to
follow Appellent's instructions to sell the pledged shares.

It has been held in S.L Ramaswamy Chetty and Anr. v. M.S.A.P.L. Palanlappa Chettiar 3
that “The pledgor could not compel the pledgee to exercise the power of sale as a means of
discharging or satisfying the decree.”

Moreover in the case of Bank of Maharashtra v. Racmann Auto (P) Ltd. 4 the court held that
“The pawnor has no right to call upon the pawnee to sell the goods pledged.”

In view of the provisions of S.176 5 of the Contract Act, there remains no doubt about the legal
propositions that it is in the discretion of the plaintiff bank to have filed the suit for recovery of

2
"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.
3
AIR1930Mad364.
4
AIR1991Delhi278.
5
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.
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 S. 1776 of
the Contract Act.7

It is, thus, evident from the above that the appellant cannot direct the bank to sell the pledged
shares.

ii. The Bank can choose any time and place where to dispose of pledged goods, thus
cannot be called Negligent in its service.

According to facts of the case the appellant was a regular defaulter and time and again had failed
to liquidate his dues and discharge his obligations, therefore the delay was caused to process the
request of the appellant to sell the shares held by the Bank as security as his request needed to be
carefully examined especially in view of the fact that he had several irregular accounts and was a
habitual defaulter which led to the time consuming process of checking and again rechecking.
The Bank which is a custodian of public funds could hardly be rushed into making its
commercial/business decisions, so the Bank lamented. Therefore, conduct of the Bank in dealing
with the alleged securities was not negligent. It is thus the alleged delay which was caused could
not be attributed to the negligence of the Bank as it was the appellant himself who misled the

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.
6
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 pledged 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, on that case, pay, in addition, any expenses which have arisen from his default.
7
Bank of Maharashtra v. Racmann Auto: AIR1991Delhi278.
Bank. Bank who carried out its duty with due diligence and care was hampered by the
misleading information given by the appellant himself.

Moreover, S.1768 of the Contract Act which requires a reasonable notice of the sale that the sale
should take place within a reasonable time of the notice but it is not necessary as in Suraimal v.
9
Fulchand it was held that a pawnee who has given a reasonable notice of sale under S.176,
Contract Act can sell at any time and is not bound to sell within a reasonable time after the
expiry of the period mentioned in the notice. The pawnor is warned by notice that if he does not
discharge the debt within a reasonable time the pledged goods would be put to sale. This will
mean that if there is default by the pawnor the goods would be put to sale after expiry of a
reasonable period from the date of the notice.

In Bharat Bank Ltd. V. Bodh Raj10 court held that “the power of sale is conferred for the
benefit of the pawnee, and can be exercised at his discretion.” Merely because the pawnee gave a
notice that he would sell the goods, cannot compel the pawnee to effect the sale. 11 And if the
pawnee does not exercise that discretion, the pawnee cannot be blamed.

It is, thus, evident from the above that the Bank can choose any time and place where to dispose
of pledged goods and was not negligent in its service.

8
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.
9
AIR 1951 Nag 264.
10
AIR 1996 MP 32.
11
F. Nanakchand Ramkishan Das v. Lal Chand Ganeshi Lal: AIR 1937 Bom 26.
 iii. Bank had right to lein to retain all the shares, which were in its possession.

It was well-settled principle of law that the Banker's lien extended to all securities deposited in it
in its character as a banker. It is, therefore that the Bank had every right to exercise lien over the
pledged shares.

The Pledge Extend to bonus shares:

It has been held in Standard Chartered Bank v. Custodian12 that the “bonus shares, the
dividend and the interest accrued were accretions to the pledged stock, and the pledge extended
to them. The pledge had a right to retain them and to sell them; and was not liable to return them
until the pledge goods were redeemed. The pledger was entitled to sell the accretions on default,
and was entitled to sell the original shares and bonus shares; as also entitled to retain the
dividend and interest accrued on the original shares.” Therefore under sec. 17113of ICA the
Bank had right to retain all the bonus as well as original shares.

In Halliday v. Holgate14 the facts (as appeared from the Head Note) a holder of scrip certificates
for shares borrowed of the defendant a sum of money on his own promissory note, payable on
demand, and on the security of the shares, and deposited with the defendant the scrip certificates.
He afterwards became bankrupt, and the defendant, without demand and without notice, sold ten
of the fifteen shares to repay himself his debt. The creditor's assignee, without making any tender
of the amount of the debt, brought an action of trover against the defendant to recover the value
of the shares. It was held that even assuming the sale to be wrongful, the immediate right to the
possession of the shares was not by the sale revested in the plaintiff, and that he could not,
therefore, maintain trover, either for the whole value of the shares or for nominal damages.

So, even if the value of the goods had deteriorated due to passage of time, no relief can be
obtained by the Appellant against the Respondent Bank as the appellant was legally bound to

12
AIR 2000 SC 1448.
13
General lien of bankers, factors, wharfinger, attorneys and policy brokers - Bankers, factor, wharfingers, attorneys
of a High Court and policy brokers may, in the absence of a contract to the contrary, retain as a security for a general
balance of account, any goods bailed to them; but no other person have a right retain, as a security for which
balance, goods, bailed to them, unless is an express contract to that effect.
14
1868 LR Exh 299.
clear the overdraft limit and obtain the possession of the pledged shares from the bank before the
pledged shares were to be sold. That is clearly provided in S. 17715 of the Contract Act. and in
the instant case the appellant made a default in the payment of the overdraft amount at the
stipulated time therefore bank can't be blamed for any fluctuations on the market price of the
shares.

2. THE APPELLANT CANNOT TAKE ADVANTAGE OF HIS OWN MISTAKE.

It is mostly submitted before the Hon’ble Forum that it is a well settled principle of law and
according to the maxim “nullus commodum capere potest de injuria sua propria” and the
Hon’ble Supreme court in Union Of India & Ors vs Major General Madan Lal Yadav 16 held
that no man can take advantage of his own wrong or mistake .There was specific promise by the
complainant that he would adjust the overdraft account in five instalments, he did not keep his
promise. Had the Appellant done so, he could have got all the securities released on paying the
last instalment and could have dealt with the securities in the manner which would be more
suitable to his interest. Having committed breach of contract, the complainant cannot take
advantage of his own mistake by claiming for this hefty compensation. Hence the Appellant
cannot secure the assistance of forum for enjoying the fruit of his own wrong.

15
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 pledged 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, on that case, pay, in addition, any expenses which have arisen from his default.
16
1996 SCC (4) 127
 PRAYER

Wherefore, in the light of the facts of the case, issues raised, arguments advanced and
authorities cited this Hon’ble Forum may graciously be pleased to adjudge and declare that:

 No compensation shall be awarded to the Appellant.

 The cost be borne by the Appellant.

And pass any other order that this Honourable Court deems fit in the interests of justice,
equity and good conscience.

All of which is most humbly and respectfully submitted.

Place: Sd/-

(counsel for the respondent)

Date: