KAPIL CHIT FUNDS PVT. LTD. vs ANDHRA BANK

AGGRIEVED by the dismissal of his complaint opposite party 580/95 by the District Forum, Karimnagar, the complainant preferred this appeal.

THE complainant is Kapil Chit Funds Private Ltd., and is having Secured Over Draft Account with the first opposite party i.e., Andhra Bank, Karimnagar branch. One Veeraswamy joined in a chit for Rs. 3 lakhs and became a prize bidder on 25.10.92. But the said Veeraswamy committed default of payment of instalments thereafter. When the complainant demanded payment of arrears of instalments, the said Veeraswamy directed the second opposite party K. Venugopal who was looking after his cinema theatre to issue a cheque to the complainant towards the amount due. Accordingly the second opposite party issued a cheque bearing No. 422538 dated 24.10.93 for Rs. 16114/- drawn on K.D.C.C. Bank, Choppadandi and the complainant deposited the said cheque in his account for realisation. THE Andhra Bank gave credit for the amount in the complainant''s account as the complainant is a old customer and is having Secured Over Draft facility and sent the cheque for clearance. But as the KDCC Bank at Choppadandi did not send the proceeds and also did not return the cheque inspite of the letters written by the Andhra Bank, the Andhra Bank debited the account of the complainant with the said amount and informed the same to the complainant. Alleging that the second opposite party replied that he had already given a cheque and he is not liable to pay again and that therefore the Andhra Bank has no right to debit the amount in his account after a period of more than one year without returning the cheque, the complaint was filed claiming payment of a sum of Rs. 16114/- with interest @ 12% p.a. from 24.10.93 and also a sum of towards penalty for negligent service by the first opposite party costs.

The first opposite party resisted the complaint on the ground that the cheque drawn on KDCC Bank, Choppadandi in favour of the complainant was purchased by the Andhra Bank as the complainant was having SOD facility and believing the credibility and also on the basis of familiarity with the complainant, the cheque was sent for realisation and as the complainant is a old customer having SOD facility, the proceeds were credited to his account even before the amount under the instrument was realised from KDCC Bank, Choppadandi. It is their case that inspite of several reminders to the KDCC Bank, Choppadandi, the said bank neither returned the cheque nor sent the sale proceeds. Hence the first opposite party rightly reversed the entry in the account of the complainant. It was also alleged that the above complaint was filed in colision with the second opposite party.

THE second opposite party admitted the issuance of the cheque dated 24.10.93 and contended that it was the duty of the complainant to get the cheque encashed and if the second opposite party had no balance with the KDCC Bank, Choppadandi, the said cheque would have been returned to the Andhra Bank which was not done. THErefore the second opposite party was under the impression that the cheque was honoured. The District Forum found that since the complainant was having regular account with the Andhra Bank and was having SOD facility, the Andhra Bank purchased the cheque and credited the amount to the account of the complainant even before the proceeds of the cheque was realised from KDCC Bank, Choppadandi as a part of customer service. When even after the considerable lapse of time, the proceeds were not realised, it sent a reminder on 30.10.93 by registered post to KDCC Bank, Choppadandi enquiring about the proceeds of the cheque sent for realisation and also the Andhra Bank wrote another letter on 8.9.94 to KDCC Bank, Choppadandi to inform about the fate of the cheque sent on 24.10.93 for realisation. Another letter was also written on 16.11.93 calling upon the Manager of KDCC Bank, Choppadandi for information regarding the fate of the cheque. As there was no response from KDCC Bank, the Andhra Bank reversed the entry in the account of the complainant and hence there is no deficiency of service on the part of the Andhra Bank. It further observed that if the cheque issued by the second opposite party had either bounced or could not be realised, it is open to the complainant to proceed against the said Veeraswamy or the second opposite party in the Court of competent jurisdiction. As there is no deficiency of service on the part of the opposite parties the complaint was dismissed.

AGGRIEVED by the said order, this appeal is preferred by the complainant. It is submitted by Sri V. Gourisankar Rao, the learned Counsel for the appellant that if the proceeds of the cheque was not realised, the first opposite party should have informed the complainant within a period of 10 days. He invited our attention to the depositor rights and Customer service in Banks under the heading delays in clearance, wherein it was stated that according to a RBI directive, if a cheque is drawn on any State Capital (except Eastern States) and is cleared beyond 10 days, the Bank has to give interest for the delayed period at Savings Bank rate (4.5% at present) and a penal interest 2% on top of it. If the cheque is on any other place, irrespective of the Bank on which it is drawn beyond 14 days, S.B. interest plus penal interest of 2% is payable." But in the instant case, since the Andhra Bank has already given credit to the account of the complainant, it did not immediately verify and there is also no necessity for the complainant to verify whether the proceeds were realised. As and when the Andhra Bank realised that the proceeds were not sent by KDCC Bank, Choppadandi it sent three letters enquiring about the fate of the cheque, and asking them to return the cheque or the proceeds of the cheque and when there was no response from KDCC Bank to the three registered letters, the Andhra Bank debited the amount in account of the complainant. It therefore cannot be said that there is any deficiency of service on the part of the Andhra Bank.

IN the result, the appeal fails and it is dismissed accordingly. There shall be no order as to costs in this appeal. Appeal dismissed.