A.A.ABDU vs BRANCH MANAGER, CANARA BANK

THIS appeal is directed against the order passed by the District Forum, Thrissur, in O.P. No. 508/ 95. The complainants are the appellants.

THE notice sent to the first appellant in the address given in the order was returned stating that ''not Known''. The notice issued to the second appellant was also returned with endorsement "left India" in the circumstances we treat that there is proper service.

We heard the Counsel for the respondents.

ON going through the matter we. are unable to see any merit in the appeal. The case of the complainant is that the first complainant is the father of the second complainant. The second complainant purchased 3 demand drafts from the first opposite party on 16,6.1993 to send it to the first complainant, while the first complainant was in Bombay. The 3 Demand Drafts were in favour of M.A. Ali, M.M. Moosa and first complainant for Rs. 20,000/- each. Even though the first complainant has received the three Demand Drafts he had not encashed the said Demand Drafts at Bombay and he brought back the Demand Drafts and returned them to the second complainant. The second complainant. cancelled two Demand Drafts, which were in the name of M.A. Ali and M.A. Moosa on presenting those Demand Drafts to the first opposite party. The other Demand Draft No. 701314 which was in the name of the first complainant was not cancelled for the reason that the 1st complainant might be able to use the said Demand Draft in his business later on. ON 21.7.1993 the first complainant had to go to Malappuram for his business purposes and he had taken the above said Demand Draft alongwith him. ON 29.7.1993 he lost the Demand Draft at the Prasanthi Tourist Home, Malappuram. When he came to know about the loss he immediately intimated his son, the second complainant by telephone that the Demand Draft was lost and instructed him to intimate the said matter to the Bank. Accordingly the second complainant intimated the said matter in writing on 3.8.1993 to the first opposite party and requested to take necessary steps to stop payment. Subsequently when the second complainant enquired this matter, the first opposite party assured that they have taken all necessary steps and they have informed the Bombay Office and the money will be paid back immediately. After more than two months the second complainant received a letter dated 16.11.1993, informing the complainant that the lost Demand Draft has been encashed through the second opposite party by the third opposite party on 8.9.1993. The opposite party informed the complainants that the said Demand Draft was encashed through the account of the first complainant in the Syndicate Bank, Andheri Branch. The first complainant had no account with the said Syndicate Bank or any other Bank in Bombay. The complainant had informed the first opposite party about the loss of Demand Draft immediately after it came to his knowledge. The first opposite party unreasonably delayed to act to prevent the misuse of the lost Demand Draft. The first and second opposite parties acted negligently which is deficiency in service. The second complainant sent a notice through a lawyer to the first opposite party demanding compensation to which the first opposite party sent a reply stating that the matter was referred to the higher Authorities for necessary action but the complainants have not received any intimation thereafter. Therefore, the complaint was filed before the District Forum. The first opposite party filed a counter, raising some baseless allegations against the complainants. According to the counter the Demand Draft was encashed by M/s. Safe Travel Aid and Guide (P) Ltd., Bombay, through the second opposite party. It was alleged that the complainants have no connection with the said party. The first opposite party claimed that they had conducted a local enquiry about the complaints and raised some allegations against the complainants. Since the second complainant was the only complainant in the said O.P. No. 100/94, the District Forum ordered that the first complainant was also to be impleaded as a party in the complaint. Therefore, the complaint was withdrawn reserving the complainant''s right to file a fresh complaint. That was withdrawn for the reason that the necessary parties were not arrayed as opposite parties in the complaint and reserving complainant''s right to file fresh complaint. Ultimately this complaint was filed. The opposite parties 1 and 3 filed written objection but the second complainant did not file written objection. The first opposite party contended that there is no bona fides in the petition, that the complainants have will fully suppressed the material facts and that the complaint was also barred. It was admitted that three Demand Drafts were brought back and cancelled and a letter dated 3.8.1993 was submitted by the second complainant in the office of the opposite party stating that he had lost the Demand Draft purchased in the name of Sri A.A Abdu while he was travelling and requested to send a message to Bombay to stop payment. The opposite party has no obligation to arrange repayment of the amount. However the opposite party sent a telegram to Bombay Accounts Section stating the above facts. In Bombay the Canara Bank has several branches located in different parts of the city. The Demand Draft can be presented in any of the Branches in Bombay and can be encashed and that was why the caution was sent to the Accounts Section of the Bank. In one branch alone there will be dealings in lakhs of Demand Drafts and cheques in a day and hence it is practically impossible to trace out the lost Demand Draft. Again a letter was sent to the Accounts Section, Bombay, on 3.8.1993. Asimilar letter was also sent on 4.9.1993 and 22.10.1993. A reply dated 4.11.1993 was received informing that the Demand Draft had already been paid on 8.9.1993 through Syndicate Bank, Andheri Branch. A photo copy of the above Demand Draft was also received by the opposite party. Soon after the receipt of information, the second complainant was intimated about the fact as per letter dated 16.11.1993. But on receipt of this letter the second complainant sent a notice through lawyer demanding payment of the amount covered by the Demand Draft. It is also stated in the lawyer notice that the Demand Draft was lost from the second complainant. A letter dated 31.8.1994 was sent to the second complainant''s Counsel stating that a detailed reply would be sent on receipt of certain pertinent information from the Bombay Branch in this matter. It was never agreed that the opposite party would repay the amount. The opposite party sent a letter to the Syndicate Bank, Andheri Branch, requesting for the details of the complainant''s Demand Draft drawn in the name of A.A. Abdu and they sent a reply dated 5.10.1994 stating that they could not trace out the Demand Draft in question and also informing that Syndicate Bank had got another Branch at Andheri West. Thereafter a letter dated 12.10.1994 was sent to Syndicate Bank, Andheri West Branch, requesting for in forma tion and they informed that the concerned Demand Draft was deposited in the normal course of business in their Branch and the amount was credited to the Current Account of second payee namely M/s. Safe Travel Aid and Guide (Pvt.) Ltd : , who was the regular customer of their Branch. It is understood that Sri. A.A. Abdu endorsed the draft in favour of M/s. Safe Travel Aid and Guide (Pvt.) Ltd., and the Demand Draft was not actually lost as claimed. Therefore, there is no deficiency on their part.

THE District Forum observed that the contentions of the opposite party is that the second complainant purchased the draft in the name of the first complainant Abdu and that draft was encashed from the Bombay Branch of the first opposite party-Bank on 8.9.1993 by presenting it by the third opposite party through the second opposite party. Syndicate Bank alleging that the draft had been endorsed by the first complainant Abdu in favour of the third opposite party. Before encashing the draft the second complainant, purchaser of the draft, requested the first opposite party-Bank which issued the draft to stop payment alleging that draft was lost from his possession. THErefore, it was contended that there is no deficiency in service on the part of the opposite parties. As regards the purchase of the draft the relationship of the customer and Bank is that of creditor-debtor until the draft is delivered by the purchaser to the payee. When the purchaser has delivered the draft, the Bank is bound to honour the draft when it is presented by the purchaser or the endorser for encashment clearing through another Bank in whose favour the draft is endorsed. THE District Forum also referred to the provisions in Negotiable Instruments Act, 1981. THE District Forum also quoted a passage from Tannan''s Banking Law and Practices in India, 8th Edition at page 582 and ultimately held that a purchaser of a draft is not entitled to stop payment after he delivered the draft to the payee and the drawee Bank cannot refuse payment of the draft when it is presented by the payee or his endorsee when the drawee Bank has nothing to suspect about the genuineness of the endorsement. In that view the District Forum dismissed the complaint. Feeling aggrieved by the said order this appeal has been preferred. On going through Hie matter we do not "find any merit in the complaints. In this connection reference may be made to Tannan''s Banking Law and Practices in India, 18th Edition at page 582 where it is stated stop payment/cancellation of draft : "In Takuma Bapuji Nikam v. The Belgaum Bank Ltd., AIR 1976 Bombay 185 : (1979) 49 Comp. Cas. 937, it was held that the relationship of the purchaser of a draft and the Bank from which the draft has been purchased is merely that of the debtor and creditor. The purchaser of the draft can, therefore, call upon the Bank from which he has purchased it to cancel the draft and pay back the money to him at any time before the draft has been delivered to the payee. Once the draft has been delivered to the payee or his agent the purchaser is not entitled to stop payment of the draft to the payee and the Bank cannot refuse to pay the amount thereof unless there is reasonable ground for disputing the title of the person presenting the draft."

(See also the decision in Sidh Nath Shuklu v. Punjab National Bank of India Ltd., AIR 1960 Allahabad 238).

IT is clear from the above discussion that the purchaser of a draft is not entitled to stop payment after the Bank delivered the draft to the payee and the drawee Bank cannot refuse payment of the draft when it is presented by the payee or his endorsee and when the Bank has nothing to suspect about the genuineness of the endorsement. In this case it is admitted by the complainants that second complainant purchased the draft from its payee the first complainant Abdu. So the second complainant-purchaser has no more right in the draft and he has no authority to stop payment. Only the first complainant-payee alone can stop payment but he has not requested the first opposite party or the payee Bank to stop payment. Therefore, there is no duty cast on the drawee Bank to stop payment. We accordingly dismiss the appeal. Appeal dismissed.