BANK OF BARODA vs SMITABEN ARVINDLAL ENGINEER

THIS appeal arises from order dated 31st March, 1997 rendered by the learned Surat District Consumer Disputes Redressal Forum in Consumer Disputes Redressal Petition No. 107/1995. Impugned order reads as under : "The opponent No. 1-Bank is hereby ordered to pay Rs. 7,000/- to the applicant together with interest at the rate of 18 per cent per annum from 18.5.1992 till its realization and also Rs. 1,000/- as an additional compensation by way of costs of the proceedings, mental agony, inconvenience, harassment, hardships, etc."

IT was the complainant''s case that she applied for 700 units of Master Gain-1992 from the original opponent No. 2 on whose behalf the opponent No. 1, Bank of Baroda acted as the banker for rendition of the banking service to the consumer. The complainants presented the application on 18.5.1992 with the opponent No. 1 Bank. She also paid Rs. 7,000/- in cash for purchasing 700 units of Master Gain-1992. The amount was accepted by the employee of opponent No. 1 Bank. Inspite of such facts the complainant did not receive unit certificate or the refund order. On 22.4.1993 the complainant approached the Manager of the opponent No. 2 and on 7.6.1993 the complainant was informed that no application was received by the opponent No. 2 from opponent No. 1 Bank. The complainant, therefore, approached opponent No. 1 Bank and after several callings and reminders as also after serving notice there was no response from opponent No. 1 Bank. Had the opponent No. 1 Bank transmitted the unit application along with the amount paid by the complainant she would have received 700 units of Master Gain-1992 from opponent No. 2. She, therefore, prayed for return of the amount of Rs. 7,000/- with 24% interest from 18.5.1992 and compensation in the sum of Rs. 25,000/-. Opponent No. 1 Bank resisted the complaint inter alia on the ground that complainant did not deposit the amount, that 2171 applications were received on the same day and the amount of Rs. 1,11,66,000/- was transmitted to the Unit Trust of India under the Master Gain-1992 Scheme. The opponent Bank, therefore, requested the learned Forum for directing the complainant to produce the original receipt for inspection of the opponent No. 1 Bank. It was also alleged that Bank''s seal might have been misused either by the complainant or by any member of the staff. It had been asserted that complicated questions would arise in the matter requiring relegating the complainant to a Civil Court.

After considering the material placed on record and rival case the learned Forum came to the conclusion that the complainant established the fact that the applications with the amount of Rs. 7,000/- in cash came to be handed over to the opponent No. 1 Bank. Learned Forum, therefore, issued directions as aforesaid against the opponent No. 1 Bank. The opponent Bank, therefore, has come before this Commission in appeal under Section 15 of the Consumer Protection Act, 1986 (Act for short).

WHEN this appeal came up for hearing no one remained present on behalf of the appellant (original opponent No. 1 Bank). We have gone through the impugned order. We have also gone through the record and proceedings of the complaint. We have gone through the grounds taken in the memorandum of appeal. We have also heard the learned representative appearing for the original complainant (respondent No. 1 herein). It clearly appears that the original receipt of the Bank having accepted the application along with the cash amount of Rs. 7,000/- was given to the opponent No. 1 Bank for instructions. The learned Forum has observed about the original receipt. The said receipt contained the Bank''s seal and initial of the concerned employee by way of tick of such employee. The learned Forum, therefore, came to the conclusion that the opponent No. 1 Bank would be responsible to account for the amount received and even if the concerned employee of the Bank played fraud with the opponent No. 1 Bank, as per the principle of employer''s liability for the employee''s wrong, opponent No. 1 Bank would be liable. Learned Forum, therefore, passed the impugned order.

WE had an occasion to consider similar question in the case of Anilkant Gajendrarai Buch v. The General Manager, State Bank of India & Anr., in Appeal No. 211 of 1997 decided on March 3, 2001, and relying upon the decision of the Hon''ble Supreme Court in the case of State Bank of India v. Shyamadevi, AIR 1978 SC 1263, we came to the conclusion that while rendering banking service the Bank would be answerable to the consumers for wrongful and/or negligent acts and omissions of its employees, committed during the course of their employment. In the present case also the Bank would be liable to account for the money received from the consumer. Insofar as award of interest is concerned it was submitted on behalf of the complainant that considering the seriousness of the matter and considering the fact that the amount remained idle with the employee of the opponent Bank or with the opponent Bank the award of interest @ 18% would be justified. However, considering the recent trend in awarding interest ranging from 9% p.a. to 12% p.a. we propose to award interest @ 12%. We, however, propose to maintain the order for compensation of Rs. 1,000/-. Since the appeal fails on the main cause of action we propose to award cost of this appeal quantified at Rs. 500/-.

FOLLOWING order is, therefore, passed : Impugned order is modified to the extent of rate of interest which is altered from 18% to 12%. Rest of the impugned order is hereby maintained.

THIS appeal is accordingly partly allowed, however, directing the appellant to pay cost quantified at Rs. 500/- to the original complainant (respondent No. 1 herein). The amount as per the aforesaid order shall be paid by the opponent No. 1 Bank (appellant herein) within six weeks from the date of receipt of the copy of this order, if already not paid. In case any amount is paid the same shall be subject to account as per the aforesaid modified order. Appeal partly allowed.