HCL LIMITED vs Bank of India

BRIEFLY the facts are that the complainant supplied to M/s. Dealwell Estate (P) Ltd. respondent No. 2 Computer System on rental basis. The payments were to be made by the said respondent to the complaint as detailed below: - (a) Down payment (OCT) Rs. 9,450/-. (b) Quarterly rental of Rs. 5,340/-. (c) Security deposit Rs. 68,500/-.

The rent was to be paid for a period of 60 months commencing from 1.8.86.

ON behalf of respondent No. 2, Bank of India respondent No. 1 issued a Bank Guarantee in favour of the complainant and undertook that in default of payment of rent by respondent No. 2 it Would make good payments to the complainant unconditionally on the first demand in writing, without protest or demur or proof upto an agreed limit of Rs. 59,000/-. The period of validity of the guarantee was upto midnight of 4th December'' 91. That the complainant vide letter dated 18.11.87 requested respondent No. 1 to remit the money as respondent No. 2 had defaulted in their payments. Thereafter they sent various reminders to respondent No. 1 for making the payment. However, it failed to do so. It is pleaded that an amount of Rs. 59,000/- and interest @ 18% is due to the complainant from respondent No. 1. Consequently it is prayed that the respondent be directed to pay an amount of Rs. 1,01,940/- with future interest till the date of payment. The complainant has also claimed an amount of Rs. 10,000/- on account of compensation for mental agony and pain.

Respondent No. 1 contested the petition and inter alia pleaded that the agreement was executed at Bombay where the defendants were carrying on business and therefore the State Commission at Delhi had no jurisdiction to try the complaint. It further pleaded that the claimant could not claim more than Rs. 59,000/- from the respondent and that amount had already been paid by them to the complainant. It has also been pleaded that mere were serious disputes between the complainant and respondent No. 2 and the latter vide letter dated 25.11.89 requested respondent No. 1 not pay the guarantee amount to the complainant. In the circumstances, it is alleged, the complainant was not entitled to the said amount of guarantee. The first contention of the learned Counsel for the respondent is that the State Commission has got no jurisdiction to entertain the complaint. The learned Counsel for the complainant has drawn our attention to the Bank Guarantee dated 8.12.86 wherein it is stated that the Bank would make the payment to the complainant at New Delhi. From the aforesaid condition it is evident that the Bank was liable to make the payment at New Delhi. Thus a part of the cause of action arises at New Delhi and therefore the Commission has got the jurisdiction to decide the complaint

THE second question that the arises for determination is, whether respondent No. 1 is liable to pay the amount of Rs. 59,000/-. We have perused the guarantee and find that according to the terms of the guarantee respondent No. 1 was liable to pay the amount of Rs. 59,000/-. THE Counsel for the respondent has brought to our notice Section 126 of the Contract Act and submitted that respondent No. 2 and the complain- ant entered into an agreement subsequently, ac- cording to which it was agreed that Rs. 50,000/- be paid by respondent No. 2 to the complainant in full and final settlement as price of the computer. He submits therefore the Bank was not liable to pay Rs. 59,000/-. We do not find any merit in the contention. THE respondent has already paid a sum of Rs. 59,000/- to the complainant and therefore this question does not survive. After the payment of the amount such objections shall be deemed to have been waived by respondent No. 1. THE learned Counsel for the respondent referred to a decision of Delhi High Court in Nangia Construction (India) Pvt. Ltd. v. National Building Construction Corporation Ltd., 41 (1990) Delhi Law Times 359. THE facts of the case are different from those of the present case and therefore the ratio in that case does not apply to it. Section 126 also does not apply to the present case. THErefore, we reject the contention of the Counsel for respondent No. 1. The third question that arises for determination is, whether the complainant is liable to pay interest and if so at what rate. It is not disputed that respondent No. 2 was required to pay rent @ Rs. 5,340.00 p. The said respondent failed to make the payment. Consequently the complainant served a notice, on respondent No. 1 to make the payment of the amount in terms of the guarantee. There- after several reminders were given by the com- plainant but the amount was not paid. The complainant filed the present complaint on 13.8.91. During the pendency of the complaint the respondent paid the amount of Rs. 59,000/- on 5.9.91. According to the terms of the guarantee the amount should have been paid when respondent No. 1 was called upon to do so. The com- plainant sent a notice dated 18.8.87 to respondent No. 1 to make the payment and it became the duty of the said respondent to make the payment of the amount within a reasonable period thereafter. However, it was done on 6th September, 1991. Thus the complainant was deprived from the use of the money for four years and 15 days. The respondent Bank during that period utilised the amount. It is common knowledge that the Bank are advancing money at a very high rate of interest. Therefore we hold that the Bank is liable to pay interest @ 16% p.a. to the complainant on the said amount for a period of four years and 15 days which comes to Rs. 38,153.00p.

THE last question that arises for determination is whether the complainant is entitled to any damages for mental pain and suffering. We have already granted interest to it by way of damages. We think that the complainant has been fully compensated. In the circumstances we reject this claim. For the aforesaid reasons we accept the complaint with cost and direct respondent No. 1 to make payment of Rs. 38,153.00p. on account of interest with future interest from 5.9.91 @ 16% p.a. till the date of payment within a period of two months. Costs Rs. 2,000/-. In case the payment is not made within the said period action will be taken against respondent No. 1 under Section 27 of the Consumer Protection Act. Complaint accepted.