Bisambhar Lal Saboo vs PUNJAB NATIONAL BANK

THIS appeal under Section 15 of the Consumer Protection Act, 1986, is directed against the order dated 4.2.2000, passed in Complaint No. 70/1999 by the District Consumer Disputes Redressal Forum, Raipur (hereinafter referred to as the District Forum for short) whereby the complaint was dismissed by the District Forum.

AGGRIEVED by the aforesaid order the complainant has preferred this appeal. Relevant facts necessary for disposal of this appeal are that the complainant has an account from the year 1996 with the opposite party Bank and has been availing cheque facility. It is averred in the complaint that while opening the aforesaid account the complainant had told the Bank authorities that the main purpose for opening the said account was that the amount could be easily transferred to the Head Office of the complainants proprietorship concern at Cuttack by getting the drafts prepared by the opposite party. It is further averred that the opposite party had assured the complainant that the draft will be prepared only in the name of the person whose name will be mentioned in the cheque and had further assured that only one draft will be prepared on the basis of one cheque. The complainant, taking necessary precautions as per the aforesaid assurance being given by the Bank, kept signed cheques in its Branch Office for being used from time to time. Some of the aforesaid cheques, as detailed in the complaint were presented before the opposite party, Bank, on different dates, after filling the date and the amount. However, the Bank acted against the assurance given to the complainant and had prepared two drafts against each of the said four cheques, one in the name of the complainant and the other in the name of some G.D. Jha, contrary to the instructions of the complainant. It is further averred that as per common banking rules the amount is to be given to the person mentioned on the cheque itself and accordingly the drafts were to be prepared in the name of the person mentioned on the cheque and none else. It is alleged that the Bank acted against the settled rules of practice thereby causing huge financial loss to the complainant and this act of the opposite party amounts to deficiency in service. On being contacted the opposite party failed to co -operate, hence the complaint was filed before the District Forum. The opposite party resisted the complaint and had denied all material allegations, including that of deficiency in service, made in the complaint. It was averred in the written version that the complainant should have taken action against his own agent/employee, G.D. Jha who used to look after the work of the Raipur Branch of the complainant but as the said person is absconding, the complainant has brought complaint against the Bank. It was further averred in the written version that the complainant kept few cheques duly filled in his own handwriting and signed by the proprietor to be used by his counter part at Raipur, namely G.D. Jha, as and when necessary. The matter inscribed on the cheque was ''Yourself'' also indicating'' Expo Steel Corporation. It is further averred in the written version that G.D. Jha used to come to the Bank to transact business on behalf of the complainant. The said G.D. Jha lodged the said cheques on different dates, for the amount mentioned in the cheques and required the Bank to prepare drafts separately by transfer from the current account of the complainant. Since the said person had always been coming to the Bank and used to represent the complainant with regard to filing the application for preparation of drafts the opposite party Bank had prepared the drafts as required by the representative/agent of the complainant. It was further averred that the Bank had no inkling that the said agent would play fraud as to dupe the complainant himself. The opposite party had also denied the allegations of deficiency in service and had also averred that, in view of the fact that being a case of fraud and cheating and criminal breach of trust and criminal misappropriation practised by the agent; the complaint is not maintainable before the District Forum.

BISAMBHAR Lal Sahoo had filed his affidavit in support of the complaint while Krishna Kumer Lal, Branch Manager and Smt. Usha Rao, Special Assistant had filed their affidavits in support of the written version besides placing photo copy of relevant cheques and draft application forms on record.

THE learned District Forum came to the conclusion that the facts of the case are complicated and would require detailed evidence hence it is not proper to adjudicate the same in summary proceedings before the Forum and had dismissed the complaint with liberty to approach the Civil Court. Aggrieved by the aforesaid order the complainant has preferred this appeal. Final arguments of the learned Counsel for both the parties heard and record perused.

DURING the course of final arguments learned Counsel for the appellant assailed the impugned order and urged that the learned District Forum failed to appreciate that payment of amount of crossed cheque to the persons other than the person named in the instrument amounts to deficiency in service. He further submitted that cheque being a bill of exchange payment could be made only on the order of the person singing the instrument as stipulated under Section 5(a) of the Negotiable Instruments Act. He further submitted that under the provisions of Section 7 of the Negotiable Instruments Act, only person entitled to receive the amount by cash or by draft is the complainant and payment of part of the amount of the cheque to another person is against the law and amounts to deficiency in service. He further submitted that draft is not issued for local payments, instead Bankers cheque is issued. It was also submitted that the impugned order is against the law propounded by the High Courts and State Commissions. The learned Counsel for the appellant prayed that the appeal and the complaint be allowed.

AS against this, the learned Counsel for respondent supported the impugned order and submitted that it is a complicated matter relating to fraud and misappropriation by the agent of the complainant and cannot be decided in summary jurisdiction and submitted that in the circumstances of the case the order of the District Forum is just and proper and as such there is no need for any interference with the same. Heard the learned Counsel and perused the record.

THE question to be considered is whether the Bank could prepare two drafts in different names when there was a specific endorsement on the cheque itself?

IT is evident from the copy of relevant cheques that the said cheques have been drawn in favour of the Bank and besides the words ''Yourself'' the words ''Expo Steel Corporation Cuttack'' is also mentioned in bracket. As per common practice such an endorsement connotes that the cheque has been issued in favour of the Bank for preparing a draft in favour of the endorsee. However, it is also undisputed that an application form is to be filled for preparation of draft. In the matter in hand, the agent of the complainant namely G.D. Jha used to represent the complainant before the Bank for getting the drafts prepared. However with regard to the cheques in question he filled two forms in connection with each cheque i.e., one in the name of the endorsee mentioned on the relevant cheque and the other in his own name. The learned Counsel for the Bank submitted that since the aforesaid G.D. Jha was an agent of the complainant and had filled the forms for preparation of drafts as mentioned in the form, the Bank was bound to follow his instructions and consequently drafts were prepared as per instructions of the said representative G.D. Jha. We are of the opinion that even under the circumstances that G.D. Jha was an agent or representative of the complainant, it is obvious that he had no authority to go against the instructions of the complainant given on the cheque itself. We are of the opinion that as submitted by the learned Counsel for the appellant/complainant, the very purpose behind leaving the signed cheques at Raipur Office/handing over to G.D. Jha was the convenience for transmission of amount to the Head Office. The agent had no authority to alter or amend the specific instructions given on the cheques by filling the application forms. We are also of the opinion that had the complainant wished or authorised the said person to get the drafts prepared as he wished, there was no point in leaving signed cheques with the name of the endorsee. In such case the complainant could have signed the cheques after simple endorsement of Yourself and the drafts could have been prepared simply on the basis of the application forms filled by G.D. Jha. In our opinion it was only to keep a track over the said person that he was given signed cheques with Yourself and Expo Steel Corporation Cuttack endorsement so that the same may not be misused.

IN the circumstances, when there was the name of the endorsee on the cheque itself and when there was discrepancy between the said endorsement and the name mentioned in the application form, it was obligatory for the Bank to seek clarification from the account holder. Failure to do so, has resulted in financial loss to the complainant. We are of the opinion that such failure on the part of Bank amounts to deficiency in service. Hence this appeal is allowed. Order of the District Forum is set aside.

IT is directed that the respondent Bank shall pay a total sum of Rs. 63,661/ - being Rs. 63,500/ - towards the aggregate amount of drafts prepared by the respondent Bank in favour of G.D. Jha and Rs. 161/ - charged by the Bank towards commission for preparation of the said drafts. The aforesaid amount shall be payable with interest @ 9% per annum calculated from the date of complaint. The aforesaid amount shall be payable within a period of 2 months from the date of this order. In case of failure to do so, interest shall be calculated @ 12% per annum from the date of default. Appeal allowed.