J. BHAUMIK vs MANAGER, THE HONGKONG And SHANGHAI BANKING CORP. LTD.

THE petitioner is an account holder of the Hongkong and Shanghai Banking Corporation Limited, Shakespeare Sarani Branch, Calcutta-700 071, having a limited overdraft facility of Rs. 22,500/- for the period from September, 1990 to June, 1992 in his account being 25-599-606-06. THE Petitioner issued a cheque for Rs. 5,000/- dated 3rd October, 1991 in favour of one Mr. K.R. Singh of Bombay fully ensuring that there would be sufficient funds. THE said cheques was presented through the National clearing on 14.11.91 by the Bank of Baroda, Bombay and was honored although the O.P. Bank alleged that there was no sufficient fund in the account of the Petitioner on that day. THE mistake which was detected on 15.11.91 as per submission of the O.P. was due to the Computer link-failure with the main frame. Immediately on 16.11.92 the O.P. Bank wrote to the Manager of the Bank of Baroda at Bombay not to give credit to the beneficiary and returned the instrument. THEreafter, because of the inaction on the part of the Bank of Baroda the OP Bank could not know about the facts of the said cheque and based on the impression that Bank of Baroda had given credit to the beneficiary the OP Bank debited Rs. 5,000/- in favour of the Petitioner as his balance came within the overdraft limit of Rs. 22,500/- in view of the subsequent deposits. But when the Petitioner brought to the notice of the O.P. Bank that the beneficiary was not given credit by the Bank of Baroda, Bombay, the O.P. Bank admitted their mistake and acted promptly by way of giving credit in favour of the petitioner as follows : - (a) Rs. 262.21p. by the additional interest paid by the petitioner on Rs. 5,000/- for 163 days @ 12% per annum. (b) Rs. 100/- as cheque return charge on 1.1.92.

THE O.P. bank submits that it rectified the bona fide error immediately after the knowledge and as a result thereof compensated its customer. Further the petitioner can not take advantage of his own wrong which was well within his knowledge and as such there had been no deficiency in the service by the Bank either within the meaning of Section 2(i)(g) of the Act or Agreement. The Petitioner''s complaint is that the shortfall in funds at the time of presentation of the cheque was actually due to the gross negligence on the part of the O.P. Bank (Appendix ''A''). It may be noted that on Income Tax Refund Order drawn on RBI for Rs. 4,530/- was presented for payment to RBI by the O.P. Bank on 28th Sept''91. The same was returned by RBI under an inter-bank memorandum with the endorsement "Advise not received : Please present again." The petitioner alleges that the O.P. miserably failed in its obligation by failing to represent the Refund Order for payment to RBI although the petitioner is paying higher banking Charges to the O.P. Bank for the superlative standard of service. Had the bank done this, there would have ensured sufficient funds in the account of the Petitioner causing no further consequences or damage. Further, the memo was from RBI to Hongkong and Shangahi Bank. Therefore the onus and responsibility to represent the cheque for payment to RBI lay squarely with the addressee of the memo accompanying the Refund Order i.e. Hongkong And Shanghai Bank, Moreover, after having failed to represent the Refund Order for payment to RBI, the O.P. bank retained the same in its custody for 32 days against the Banking norms.

It is also noted that on detection of mistake the O.P. Bank returned the dishonoured cheque for Rs. 5,000/- which was destroyed on agreement between Mr. K.R. Singh and the Petitioner. Thereafter, after November, 1991, the cheque ceased, to exist and in that event the O.P. Bank cannot debit the account of the Petitioner without a valid cheque or instrument being presented. So, it is clear that on 24.12.91 the cheque in question was not only not presented to the O.P. Bank for payment, it did not even exist. Therefore, the petitioner cannot be held responsible/liable for inter bank misunderstanding. Moreover, the cheque having been returned, cancelled and destroyed, there can be no debit of Rs. 5,000/- from the A/c of the Petitioner.

IN para 5(vi) of the written objection the O.P. has solemnly affirmed that it debited Rs. 5,000/- from the account of the Petitioner as soon as the balance permitted. IN view of subsequent deposits. But from the scrutiny of the Bank Statement dated 7th January, 1992 (Annexure ) it is revealed that the Petitioner''s account balance permitted a debit of Rs. 5,000/- as early as November, 23, 1991 and not December 24, 1991 as solemnly affirmed by the O.P. Therefore, on perusal of the documents on record and the submissions made by both the parties, we are convinced of the loss and damage suffered by the Petitioner as a result of the series of acts or omissions amounting to gross negligence of the O.P. Mere return of the depositor''s own funds wrongfully deducted can in no way amount to a compensation paid by the Bank. The refund itself is a tacit admittance of fault by the Bank as it tantamounts to Bank''s confirmation and acceptance of the fact that it made a wrongful deduction from the depositor''s account. Not only that the O.P. Bank failed to detect and rectify error for nearly six months. Even after that it was left to the depositor''s intervention to detect and rectify the matter. Inspite of this unusual transactions between Nov 14, 1991 and Nov 16, 1991 the O.P. failed to reflect it in the Bank Statement or send any advice to the Petitioner. On the contrary, arbitrarily deducted Rs. 5,000/- from the depositor''s account without any authority. This sort of negligence or omission clearly demonstrates the bank''s high-handed and apathetic attitude towards its customer in total disregard to the complaint as a customer and consumer. Such conduct of a most reputed Bank like Hongkong and Shanghai Banking Corporation Limited meted out to its respectable customer is unthinkable. So, considering the facts and circumstances of the case, and for the inconvenience, loss of credibility and harassment meted out to the complainant we award a sum of Rs. 20,000/- (Rupees twenty thousand) only to be paid by the O.P. Bank to the Petitioner within a fortnight from the communication of this order. The case is therefore disposed of with a cost of Rs. 2,000/- (Rupees two thousand) only to be paid by the O.P. in the same manner alongwith the earlier award. Complaint allowed with costs.