ALLAHABAD BANK vs GREATER HYDERABAD BENEFIT FUND LTD.

-THE opposite party Nos. 1 and 2 are the appellants.

AGGRIEVED by the order of the District Forum-II, Hyderabad in O.P. No. 848/1996, dated 21.6.2000, the present appeal is filed. The facts leading to the filing of the appeal are set out as hereunder : The complainant has opened a current account under Account No. 696 at the Branch of the third opposite party and issued a cheque dated 5.11.1995 drawn on Himayatnagar Branch for issuing a demand draft in favour of its customer B. Kutumba Rao who is a resident of Vijayawada. The demand draft is issued for a sum of Rs. 3 lakhs drawn on Allahabad Bank, Vijayawada branch. It is contended by the complainant that on inquiry they came to know that the demand draft was not issued by the opposite party in favour of B. Kutumba Rao, but issued in favour of M/s. Jaya Machinery, Vijayawada which is clearly contrary to the instructions given to the opposite party. It is further stated that the opposite party acted contrary to the instructions and acted in a negligent manner in discharging their obligations as a Banker. The inquiry reveals that somebody has encashed the demand draft and the complainant was disabled from recovering the said sum of Rs. 3 lakhs on account of the negligence of the opposite party.

The complainant addressed a letter dated 15.2.1996 enquiring about the factum of demand draft not being issued in favour of B. Kutumba Rao but it was issued in favour of M/s. Jaya Machinery, the Chief Manager appears to have wrote that the cheque was presented with a requisition for issuing draft for Rs. 3 lakhs favouring M/s. Jaya Machinery by one P. Durga Prasad purporting to be the representative of B. Kutumba Rao. The opposite party acted contrary to the instructions which resulted in the loss of Rs. 3 lakhs to the complainant. Hence he approached the District Forum seeking for a direction to the opposite parties to pay a sum of Rs. 3 lakhs with interest at 24 per cent per annum from 6.11.1995 till the date of realization and for damages.

THE claim was resisted by the opposite party. THE opposite party admitted issuance of cheque payable to "yourself for B. Kutumba Rao" and contended that the said cheque was presented by one P. Durga Prasad on 6.11.1995 with an application to issue a demand draft in favour of Jaya Machinery. THE opposite party under the impression that the application was in order, issued a demand draft in favour of Jaya Machinery. THE opposite party states that whenever an application was made for issuance of demand draft the Bank gives counterfoil of the application and the demand draft would be collected on showing the counterfoil which would be retained by the applicant and that the applicant would have enough time of taking delivery of the demand draft. In this case, the complainant had not made any complaint at any stage till 15.3.1996, i.e., for a period of four months. hence there is no deficiency in service on their part. The complainant filed affidavit evidence and marked Exs. A-1 to A-13 documents. On behalf of the opposite parties Exs. B-1 to B-3 were marked.

THE District Forum conducted a detailed inquiry and came to the conclusion that there is deficiency of service on the part of the opposite parties and directed them to pay to the complainant a sum of Rs. 3 lakhs with interest at 18 per cent per annum from 6.11.1995 till the date of payment together with costs of Rs. 1,000/-. Aggrieved by the said order, the present appeal has been filed. Mr. B. Damodar Reddy, the learned Counsel for the appellant submits that the cheque was presented along with an application for issuing a demand draft in favour of Jaya Machinery and the same was issued in accordance with the banking practice and there is no negligence on their part. Mr. S. Surya Prakasha Rao, the learned Counsel for the respondent supported the order of the District Forum. He submitted that the opposite party has acted negligently and contrary to the instructions. It is his contention that they sanctioned the loan against pledge of shares and they have issued cheque bearing No. 130624, dated 5.11.1995 for Rs. 3 lakhs drawn on Allahabad Bank, Himayatnagar Branch with a specific endorsement pay order/DD for B. Kutumba Rao and hand over the cheque to B. Kutumba Rao. Contrary to these instructions the first respondent has prepared a demand draft in favour of Jaya Machinery, Vijayawada which came to light in March, 1996. Since the demand draft was issued straightaway in the name of Jyothi Machinery instead of Kutumba Rao the complainant could not proceed legally against G. Kutumba Rao.

IT is undisputed fact that the complainant has given clear instructions to prepare the demand draft in the name of B. Kutumba Rao and it is not established that there is an application to issue the demand draft in favour of Jaya Machinery.

THE appellant has also filed I.A. No. 1761 of 2003 under Order IV Rule 27 of CPC, received the plaint, decree and judgment in O.S. No. 163 of 2000 on the file of XI Additional Chief Judge, City Civil Court, Hyderabad as additional evidence. After the proceedings of the District Forum the complainant has filed O.S. No. 163/2000 for recovery of Rs. 5,88,000/- together with interest at 24 per cent per annum against Sri. T.M. Raju alleging that T.M. Raju introduced Kutumba Rao and stated that he was in need of money for his business needs and that he requested to advance a loan of Rs. 3 lakhs to him and he offered to stand as guarantor to Kutumba Rao and submitted a loan application on 5.11.1995. Sri Kutumba Rao executed a promissory note on 5.11.1995 for which T.M. Raju stood as co-obligant and after executing the above said documents, the first respondent herein has issued the cheque in favour of B. Kutumba Rao bearing No. 130624, dated 5.11.1995 drawn on Allahabad Bank, Himayatnagar Branch, Hyderabad. It came to light that the demand draft was encashed at Vijayawada and B. Kutumba Rao defaulted in payment of the loan amount and the first respondent could not locate the address of B. Kutumba Rao so he filed a suit against the guarantor T.M. Raju. THE said suit was decreed as prayed for on 23.10.2002. The learned Counsel for the appellant Bank filed a copy of the plaint, judgment and decree in O.S. No. 163/2000 to receive the same as additional documents. Since the suit was filed after the initiation of the complaint before the District Forum, we are inclined to allow FA. IA. No. 1761 of 2003 and admit these documents since they satisfy the requirements of Order IV Rule 27 of CPC. This clearly reinforces the case of the complainant and the deficiency in service on the part of the appellants/opposite parties. We are, therefore, of the view that there are absolutely no merits in this appeal.

The appeal, therefore, fails and is accordingly dismissed. No costs. Time for compliance six weeks. Appeal dismissed.