Debabrata Mukherjee vs ALLAHABAD BANK

THIS is a complaint under Section 17 of the Consumer Protection Act, 1986 filed by one Debabrata Mukherjee against the Allahabad Bank having its branch office at 69, Rash Behari Avenue, Calcutta-700026 alleging deficiency in service in respect of a joint account opened with the Bank. The grievances of the complainant, in short, are as follows:

IN December, 1976, a joint current overdraft Account was opened by the complainant alongwith Dr. Kalipada Mukerjee since deceased and Deba Dutta Mukherjee in the Ballygunge Branch of the erstwhile United INdustrial Bank Ltd. A number of duly discharged Fixed Deposit Receipts amounting to Rs. 22,000/- alongwith shares of various companies were lodged with the United INdustrial Bank Ltd. as security against the overdraft account. The shares lodged as security included 200 shares of ITC Ltd. registered in the name of Smt. Pratima Mukherjee. The United INdustrial Bank Ltd. was taken over by the Allahabad Bank in October, 1989. On 14.12.1989 the complainant received a letter from the Branch Manager, Allahabad Bank, Ballygunge Branch stating that the outstanding dues in his account were of Rs. 45,135.05 on 31.10.1989. On scrutiny of the account the complainant noted a number of errors and omissions which he brought to the notice of the Branch Manager of the Bank. The following were the main errors noted : (a) The Bank officials, although held discharged F.D. receipts of a total value of Rs. 22,000/- did not credit the matured value of the Fixed Deposit in the account which, if done, would have reduced the outstanding in the account. (b) The interests accrued to a number of F.D.S. were not credited in the account. (c) Interests charged into the account for the 1st quarter of 1985 and the last quarter of 1987 were incorrect. (d) There was a wrong debit of Rs. 1,000/- in the account on 25.4.1978 on the ground "Interest wrongly credited into the account on 21.4.1978".

(e) The method of interest calculated was in violation of R.B.I. directive. The complainant wrote quite a good number of letters drawing attention of the Bank to the above irregularities and soliciting correction of the accounting errors but all his requests were turned down. The Bank further threatened that if the outstanding dues were not paid the I.T.C. shares pleaded as security would be sold and actually 200 such shares registered in the name of Pratima Mukherjee were sold on 12.7.1991 for a consideration of Rs. 40,000/-.

The Branch Manager, Ballygunge Branch intimated the complainant by a letter dated 19.7.1991 that the outstanding dues in his account on 30.6.1991 were Rs. 30,276.17p. The complainant alleges that the account submitted by the Branch Manager covering the period from 31.12.1989 to 24.3.1992 does not show any credit of Rs. 40,000/- being the sale price of the I.T.C. shares. The complainant has alleged criminal negligence in all the aforesaid arbitrary and negligent activities of the Bank.

DR. Kalipada Mukherjee and Others filed a writ case in the original side of the High Court against the Allahabad Bank and Others which being registered as Matter No. 2163 of 1992 was disposed of by Justice Ajit Kumar Sen Gupta on 15.3.1994. In the said writ petition the present allegations of the complainant were placed before the Hon''ble Court in details. In the said writ case an interim order was passed restraining the Bank from transferring the securities pledged with the Bank. On 14th May, 1992 the Bank appeared before the Court and submitted that a sum of Rs. 301.60 p. was due and payable by the petitioners and if the amount was paid the Bank would release the securities. The Bank further submitted that none of the securities was sold by the Bank. Justice Sen Gupta had discussed the facts of the case in details and had also quoted a communication dated 25.9.1993 from the Reserve Bank of India drawing the attention of the Bank to certain irregularities, particularly the irregularity regarding the transfer of 200 I.T.C. shares. But this letter was not replied to.

RS. 301.60 p. claimed by the opposite party Bank in the proceeding before the High Court were deposited on 14.5.1992. The Bank proceeded to return the shares and the securities. The 200 I.T.C. shares, however, already stood transferred in the name of one Mahendra Nath Mukherjee. The writ petitioners refused to accept the transferred shares. There were consultations between the parties aiming at a compromise. But the same did not materialise. Matter No. 2163 of 1992 was disposed of with the following observations : "On the facts and in the circumstances of the case, it must be held that the petitioners were entitled to return of the shares and securities including the 200 shares of the I.T.C. Ltd. on 24th March, 1992 when the sum of Rs. 35,600/- was paid. On that day the sum of Rs. 30.60 p. was not due and payable as claimed by the Bank, but on the contrary, the subsequent facts showed that the petitioners were entitled to a refund of Rs. 1,699.15 p. on that date. Therefore, the right to get back the shares accrued to the petitioners on 24th March, 1992. If for such delay in return of the shares and securities the petitioners have suffered any loss, particularly in respect of 200 shares of I.T.C. Ltd. the petitioners should be at liberty to take appropriate action against the erring officers and or the Bank in accordance with law. In the light of the above findings and observations this application is disposed of. The petitioners will be entitled to costs assessed at 100 G.Ms."

There was an appeal against the aforesaid order dated 15.3.1994 before a Division Bench of the Chief Justice and Justice Mukul Gopal Mukherjee who by an order dated 14.7.1994 disposed of the appeal with the following observations : "........it appears to us that anything said against the Allahabad Bank which is in favour of the respondents about the claim of damages is not binding on any of the two parties. The party claiming damages will have right to file Civil Suit for recovery of the same. The observations made by the learned Single Judge are merely apriori findings and not binding or conclusive on the parties."

The complainant Debabrata Mukherjee has reiterated his charges against the Bank with more details. He has demanded a total claim of Rs. 8,59,326.24 p. including a compensation of Rs. 3,59,024.64 p. for damages of Rs. 5,00,000/-. The case is contested by the opposite party Bank by filing a written objection. The Bank at the first instance raised a preliminary point regarding the maintainability of the complaint before this Commission. Its contention was that the petitioner was not a consumer within the meaning of the Consumer Protection Act, 1986. The Bank also raised the defence that the complaint was bad for non-joinder of parties and that allegations raised in the complaint were fit to be adjudicated by Civil and Criminal Courts. All these points were heard by the Commission which by its order dated 19.2.1996 held that the petition of complaint was maintainable before the State Commission.

SUBSEQUENTLY the opposite party Bank filed other objections on merits. According to the Bank its contractual obligation is to return the securities pledged with it after repayment of the dues and in this case the Bank returned the securities immediately after an order was passed by the High Court to that effect. Until the outstanding dues were fully paid, the question of returning the securities did not arise. Moreover, the securities pledged with the Bank were in the name of Pratima Mukherjee and not in the name of the complainant. The complainant having not established his right to sell the securities is, according to the opposite party, not entitled to claim any damages on account of any alleged speculative loss. The question of paying any compensation would have arisen if any damage was caused to the securities. In this case a complication appears to have been created on account of an interim transfer of the same in the name of one Mahendra Nath Mukherjee, but for all that the Bank was willing to have it re- transfered in the name of any person to the advantage of the writ petitioner. The opposite party Bank emphatically states that the complainant having no right to sell the secured I.T.C. shares himself is not entitled to claim any loss on account of difference in price of the shares as has been shown in the petition of complaint.

THE point for consideration is, if there was any deficiency in Banking service on behalf of the opposite party Bank and if the complainant is entitled to any damages as claimed by him. DECISION We have stated in details the facts of the case and the respective contentions of the parties in relation to them. Material details have also been mentioned in the judgment of Justice Ajit Kumar Sen Gupta in the writ case referred to above. The Appellate Court''s judgment against the aforesaid Single Judge''s judgment which has also been quoted above purports to delete the reference to the possible right of the writ petitioners to claim damages for delayed release of the securities. In other words, the opinion of the Single Judge regarding the writ petitioner''s rights to claim damages shall not be binding on any of the parties. The Appellate Court has itself directed the writ petitioners to file a separate suit in the Civil Court for vindicating their right of damages.

As a matter of fact Justice Sen Gupta has not expressed any opinion as to whether the writ petitioners have acquired any positive right of compensation although his categorical finding is that the securities and mainly the I.T.C. shares were not returned when they ought to have been done.

FOR our present purpose the immediate point which requires consideration is, if the damages claimed on the basis of the facts developed before the High Court and closed there can be realised in this proceeding. We have already decided that the present proceeding is maintainable on the basis of a complaint of deficiency in banking service which is a service covered by the definition of "service" in the Consumer Protection Act, 1986. Admittedly a joint current overdraft account was opened by three persons including the present complainant. There are allegations supported by facts and figures that the dues recoverable from the account holders were not duly and contemporaneously entered. The Trial Court''s finding in Matter No. 2163 of 1992 also corroborates it. The petitioner pursued the matter with the Bank persistently pin-pointing his viewpoint but without any success. The matter was taken up with the Reserve Bank of India also but still without any result. So purely from the banking point of view there was deficiency in service on the part of Bank. But deficiency in sending banking accounts in time does not ipso facto entitle a consumer to compensation unless such compensation is proved objectively by cogent evidence. In the writ case before the High Court the accounting matter came to an end. The ultimate dues demanded by the Bank were paid and the securities were offered back. If there was any other demand the same ought to have been pointed out and necessary adjustments done. The payment of the demanded amount implies the question of waiver of the laches against the Bank. In our opinion the same cannot be reopened now.

BUT the matter obviously does not end there. There has been a complicated controversy over 200 ITC shares which belonged to Mrs. Pratima Mukherjee who expired on 8th November, 1990. The complainant''s allegation is that these shares were sold at a price of Rs. 40,000/-. The Bank denied it and offered to return the shares under orders of the High Court. It was, however, found that the shares were transferred in the name of one Mahendra Nath Mukherjee. The Bank''s version is that it was a transfer without consideration and hence it was not a sale. The Bank also offered to retransfer it in favour of the writ petitioners or of any person of their choice. The offer was rejected by the writ petitioners. In the above background the complainant''s allegation is that had the shares been released in time he could have made a handsome profit by selling the same at the price prevalent at that time. As against this allegation the opposite party Bank''s replies are as follows: (i) Shares were released only after the outstanding dues were liquidated and hence the question of making profit by the complainant by selling the shares does not arise. (ii) The shares belonged to Pratima Mukherjee who is now deceased. The complainant has produced no authority to sell the shares standing in her name. (iii) There was no actual sale of the shares which can still be re-transferred to any competent person entitled to the shares. (iv) Shares of the ITC Ltd. were the personal property of Pratima Mukherjee who had entered into an agreement with the United Industrial Bank Ltd. keeping the shares as security. The complainant had no right to sell those shares and so there is no question of sustaining any loss.

All the above contentions are weighty ones. Moreover, compensation affecting the security offered by joint holders of an account is different from a joint co-operator''s individual right of demanding accounts from the Bank. On a consideration of the entire matter we hold that the complainant''s claim for alleged loss for withholding the ITC shares is not tenable.

ANOTHER objection has been raised by the opposite party that the claim for compensation could be brought only in a Civil Court as directed by the Appellate Bench of the High Court. Our view is that compensation Simplicitor arising out of any breach of contract must be filed before a Civil Court. But if the compensation be for any deficiency in service covered by the Consumer Protection Act, 1986, it can be filed before a Consumer Court in view of Section 3 of the said Act. The case is, therefore, allowed in part. The complainant''s claim for compensation of Rs. 3,59,024.64 p. is disallowed. His claim for refund of Rs. 301.60 p. is allowed. As there has been deficiency in rendering proper account in time by the opposite party and as the securities have not been released at the earliest opportunity the complainant has suffered financially and mentally. He has also been harassed. So we award an amount of Rs. 10,000/- (Rupees ten thousand) only for harassment and mental suffering and Rs. 302/- as refund of overdrawn amount (Rs. 301.60 p. rounded to Rs. 302/-).

THE case is, therefore, allowed in part for Rs. 10,302/- (Rupees ten thousand three hundred two) only. THE opposite party shall also pay a cost of Rs. 5,000/- (Rupees five thousand) only. All the above amounts shall be paid within one month from the date of communication of this order failing which the complainant may realise the same by execution. Appeal partly allowed.