CENTRAL BANK OF INDIA vs Madanlal Saran

THIS revision petition has been filed by the Central Bank of India (hereinafter referred to as Petitioner) against the order dated 5.6.2007 of the Rajasthan State Consumer Disputes Redressal Commission, Jaipur (hereinafter referred to as the ''State Commission'') in appeal Nos. 396 of 2006 and 419 of 2006. Madan Lal Saran original complainant before the District Forum is the respondent in this revision petition.

IN his complaint before the District Forum, Respondent had submitted that he had a savings bank account with Central Bank of India, Dindori, Madhya Pradesh and that on 15.9.1994 he received a cheque for Rs. 4,05,673 from the Executive Engineer, District Water Supply Department, Dindori, M.P. which he deposited with the Petitioner bank. On 20.10.2004 Respondent requested the bank to transfer his account to Tank Road, Jaipur which was complied with. On 5.11.2004 respondent noted that there was no entry of deposit of Rs. 4,05,673 and immediately contacted the bank to enquire about the same. Petitioner did not respond and, therefore, Respondent made a complaint to the Banking Ombudsman which rejected the same. Apprehending that the Branch Manager of the Petitioner Bank, Dindori Branch in collusion with the Executive Engineer of the District Water Supply Department had misappropriated the cheque because neither was it honoured nor was the cheque returned to him so that he could take remedial measures, Respondent filed a complaint for deficiency in service before the District Forum and requested that the Petitioner be directed to pay Respondent a sum of Rs. 4,05,673 (i.e. the cheque amount) along with interest @ 12% p.a. from 15.9.2004 till the date of payment with interest @ 12% p.a., Rs. 15,000 as compensation for mental harassment and Rs. 2,000 as litigation costs.

THE Petitioner bank denied the above allegations and stated that the issuer of the said cheque which is a Government department had specifically requested the Petitioner Bank to stop payment till further orders. Bank therefore did not credit the due amount to the Respondent''s account and handed back the cheque to the said Government department. Therefore there was no deficiency in service and the Petitioner had only complied with the directions of the Government department which had issued the cheque to the Respondent.

DISTRICT Forum after hearing the parties and on the basis of evidence before it, allowed the complaint by observing as follows: "The opposite parties ought to have informed the complainant about the directions issued by the drawer department for not crediting the amount of the cheque for Rs. 4,05,673 and should have returned the cheque to him so that he could recover the amount of the said cheque by civil or other legal proceedings. Due to the conduct of the opposite parties, the complainant was deprived from taking any legal or other legal action and he could not recover Rs. 4,05,673, the amount of the said cheque."

DISTRICT Forum directed Petitioner to pay the Respondent a sum of Rs. 4,05,673 within two months from the date of order failing which the amount would carry interest @ 9%. Rs. 15,000 were awarded as compensation and Rs. 2,000 as costs.

BOTH parties preferred separate appeals before the State Commission which through a single order upheld the order of the District Forum. It ordered the return of the cheque amount to the Respondent with the stipulation that in case the Respondent has been paid the amount of cheque by the Government department, he cannot be given double benefit on account of the fault of the Bank. Therefore, it directed the Respondent to file an affidavit to the effect that he had not received any amount of the cheque and that he should also furnish an undertaking that in case he receives the amount of cheque or will receive it in future, he will deposit the same with the Forum.

AGGRIEVED by the order of the State Commission Petitioner Bank has filed the present revision petition. Counsel for both parties made oral submissions. Counsel for Petitioner pointed out that the Fora below erred in holding it guilty for deficiency in service because the Petitioner had acted in accordance with the instructions of a Government department which had specifically advised it to stop payment of the amount to the Respondent and further to return the cheque to the Government department which had issued it. In view of these specific instructions to stop payment, the cheque was duly returned. Counsel for Petitioner further pointed out that the State Commission erred in relying on certain judgments of the State Commission in directing payment of the cheque amount to the Petitioner. Since circumstances in the present case are quite different as they do not pertain to dishonouring of a cheque or its loss in transit.

COUNSEL for Respondent averred that the Fora below had, on the basis of credible evidence and as per law, rightly ruled in his favour. He stated that till date Respondent had not received payment for the said amount from the concerned Government department. Further, even if the bank had stopped the payment of the cheque as per directions of the Government department, it should have returned the cheque to Respondent so that he could have taken up the matter with the concerned Government department or sought redressal for the same under the relevant statute.

WE have heard learned Counsel for both parties and have gone through the evidence on record. Facts pertaining to the issue of the cheque by Government department in favour of the Respondent for Rs. 4,05,673 and that the payment was not made by Respondent to the Petitioner Bank on specific instructions of the concerned Government department are not in dispute. Therefore, the action taken by Petitioner Bank to stop payment of the cheque to Respondent could be justified for the above reasons. However, there was no justification for Petitioner Bank not to return the said cheque to Respondent and instead return it to the Government department. By doing so Petitioner Bank undoubtedly deprived Respondent of an opportunity to take up this matter immediately with the concerned Department or seek redressal through legal remedies. We, therefore, agree with the Fora below that Petitioner Bank was guilty of deficiency in service by not returning the cheque to Respondent. We note that the Fora below have for this deficiency in service directed Petitioner Bank to return the entire cheque amount of Rs. 4,05,673. State Commission has also relied on certain rulings of State Commission wherein it was held that in case a cheque is lost in transit or is dishonoured, the Bank is duty bound to return the cheque amount to the aggrieved person. We agree with Counsel for Petitioner Bank that the State Commission erred in relying on judgments of the State Commission which are not relevant in the present case because the facts and circumstances in those cases were quite different and were in respect of cheques that were either dishonoured or lost in transit.

ON the other hand, this Commission in State Bank of India v. Rajender Lal and Anr., IV (2003) CPJ 53 (NC), had ruled that while a bank on grounds of deficiency in service can be burdened with some compensation but it cannot be made to pay the entire cheque amount. The present case is squarely covered by the above decision of the National Commission and we, therefore, set aside the order of the fora below pertaining to refund of the cheque amount to Respondent. However, since there was deficiency in service on the part of Petitioner Bank in not returning cheque to the Respondent, we direct the Petitioner Bank to pay Respondent Rs. 50,000 as compensation for the same.

COUNSEL for Petitioner states that it has already deposited 50% of the amount awarded by State Commission. If that be so, we direct the State Commission to pay Rs. 50,000 along with accrued interest on the said amount to the Respondent/Complainant and the remaining amount to the Petitioner Bank with accrued interest.

RESPONDENT, if so advised, would be at liberty to seek relief from any other Forum along with an application under Section 14 of the Indian Limitation Act for condoning the delay for the time spent before the Consumer Fora, keeping in mind the observations made by Supreme Court in Laxmi Engineering Works v. PSG Industrial Institute, II (1995) CPJ 1 (SC)=(1995) 3 SCC 583. Revision Petition disposed of.