ALLAHABAD BANK vs SHIV SWAROOP SRIVASTAVA

THIS is an appeal under Section 15 of the Consumer Protection Act (hereinafter called the ''Act'') against the judgment and order dated 2.2.1998 passed by District Consumer Forum, Unnao in Complaint Case No. 435/1995.

INITIALLY a complaint was filed with the allegation that he invested a sum of Rs. 35,000/- with the appellant, Allahabad Bank, in the shape of an F.D.R. and in lieu of the deposited amount receipts were issued and when on maturity the same amount was claimed, the same was refused by the Bank on the ground that the F.D.R. was managed fraudulently by the respondent with the help of one Ram Gopal Srivastava, the then clerk of the Bank. The appellant Bank took the plea that with the connivance of Sri Ram Gopal Srivastava, the then employee of the Bank, the complainant got the fraudulent F.D.R. prepared and the bank was not under any obligation to make payment of the money so deposited, much less interest on it. The learned District Forum, after taking into account the averments made in the complaint as well as written statement and perusing the documents available on record, came to the conclusion that the claim of the complainant is genuine and ordered for the payment of Rs. 35,000/- along with interest as per terms and conditions of the F.D.R.

Aggrieved against the order of the learned District Forum, the opposite party, Allahabad Bank has come in appeal.

WE have heard the learned Counsel for the appellant Mr. Vinay Shankar and learned Counsel for the respondent Mr. R.K. Gupta. WE have also perused the material available on record. Mr. Vinay Shankar has vehemently submitted that in the instant case every alleged deposit was fraudulently done by the complainant with the connivance of Sri Ram Gopal Srivastava, who, it is said is an employee of Bank and in view of this the economic liability cannot be fastened on the appellant Bank. On the other hand Mr. R.K. Gupta argued that the amount in question was deposited in the Bank by the complainant and the Bank is responsible for the payment of the same along with interest.

IT is true that in the instant case an F.I.R. under Sections 120B, 409, 468, 471 and 477A of I.P.C. along with under Section 13(ii) read with Section 13(i)(c) of P.C. Act is pending against the said employee. In the F.I.R. itself the only mention of course is that the F.D.R. of Rs. 10,000/- was allegedly got made by him and not against Rs. 35,000/-. IT is only worth mentioning that the investigation is still going on and no investigation report has been submitted. The argument of Mr. Vinay Shankar is also that the learned District Forum has failed to consider the legal position and in this connection it was argued that when the criminal case was pending, it was not open for the District Forum to come to the conclusion that the Bank was under obligation to make payment of Rs. 35,000/- as per terms contained in the F.D.R. On the other hand Mr. R.K. Gupta contended that it will not take away the right of the consumer/complainant. A sum of Rs. 35,000/- was deposited whose receipts were available and the same were presented before the District Forum. In this view of the matter there is no escape from the economic liability of Rs. 35,000/- along with interest as per terms and conditions. We are not impressed with the argument raised by Mr. Vinay Shankar at Bar for the reason that the two Forums are different. Criminal proceedings are based on the F.I.R. and its truthfulness and correctness will be looked into and decided by the Criminal Court and investigating agency. Here it is a case of deficiency in service rendered by the Bank as in the instant case fixed deposit receipts have been filed showing that a sum of Rs. 35,000/- in two instalments were deposited with the Bank under F.D.R. scheme and the receipts were also obtained. The F.D.Rs. in question were presented for payment on its maturity. As soon as the F.D.Rs. which are documents of Bank are presented for encashment on maturity or before maturity, the Bank is under obligation to make payment of the sum so mentioned in the F.D.R. along with interest as per terms and conditions of the F.D.R. scheme. Thus the Bank cannot escape from the economic liability of payment of maturity amount. Thus this argument does not survive.

IT was then argued placing reliance of the case law of State Bank of India v. Smt. Shyama Devi, AIR 1978 Supreme Court 1263, that in transaction between the Bank and the customer, the liability cannot be fastened on the Bank. After giving out consideration over the matter and having a look on the ratio quoted, we are of the view that this view is against the appellant Bank. The case law cited is of a case of vicarious liability. Bank and its employees have the relationship between them inter se of employees i.e. master and servant and for any negligence done by the servant, the master is liable for his servant''s fraud perpetrated in the course of master''s business. The emphatic case of the Bank/appellant is that its ex-employee Ram Gopal Srivastava tried to manipulate the account and issued the FDRs in favour of the complainant. Obviously the act of alleged fraud of making certain entries was committed by the employees concerned during the course of his employment and thus in view of the ratio a master is liable for his servant''s fraud perpetrated in the course of master''s business, whether the fraud was committed for the master or not. That being so the impugned judgment and order does not need any interference. Contrary argument raised by Mr. Vinay Shankar is not acceptable. Thus the appeal is liable to be dismissed.

IT has been brought to the notice during the course of arguments that an F.D.R. for Rs. 35,000/- in terms of order passed by the State Commission on 23.7.1998 is lying with the District Forum concerned. IT will be available to the appellant to get the F.D.R. released from the District Forum for doing the needful for encashment as per terms and conditions. ORDER The appeal is dismissed and the judgment and order of the District Form is maintained. However, it is made clear that if after termination of the criminal proceedings it is held that the consumer was also a party to the fraud proceedings and in that case reimbursement of the whole amount paid by the Bank shall be made by the complainant. IT has been brought to the notice by the appellant as well as complainant that in pursuance of the order passed by this Commission in the year 1998 a sum of Rs. 35,000/- by way of security in the form of F.D.R. has been deposited by the appellant in which case the appellant Bank shall be at liberty to withdraw the same with the direction that it will make the full payment of Rs. 35,000/- shown in the F.D.Rs. along with interest payable. There will be no order as to the costs. Let copy as per rules be made available to the parties. Appeal dismissed.