KARNATAKA BANK LTD vs Sachiya Travellers Pvt Ltd

THIS appeal has been filed by the appellant under Section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as 1986 Act) against the order dated 27.9.2000 passed by the learned District Forum, Jaipur II, Jaipur, whereby the complaint of the complainant -respondent was allowed and the appellant was directed to pay a sum of Rs. 92,000/ - to the respondent, together with interest and cost of litigation.

THE brief facts giving rise to this appeal are that the complainant -respondent had opened a Bank account with the appellant. On 21.11.1998, the appellant checked his Bank account and found that an amount of Rs. 92,000/ - was withdrawn from it on 19.11.1998 by an unauthorised person on the basis of a forged cheque which was stolen from his office. The complainant -respondent has alleged that the appellant Bank did not take due care and caution which was deficiency of service on their part. The complainant -respondent accordingly submitted a complaint in the learned District Forum for recovering the amount from the appellant Bank together with damages on account of mental agony and cost of litigation. The appellant replied that the appellant had authorised his accountant Shri Ram Singh to take the amount from the bank and that the cheque in question was presented by the said Ram Singh which was paid by the appellant Bank after taking care and after following the Banking procedure. After this Shri Deepak Mehta, Director of the respondent came to the Bank and informed the Bank that the said Ram Singh had not deposited the amount with the appellant and the appellant Bank advised the respondent to lodge an FIR with the police. On this, the respondent lodged an FIR with the police. The appellant bank maintained that as the payment has been taken by the agent of the respondent, the Bank is not at fault.

THE respondent filed a rejoinder that he had not authorised Shri Ram Singh to have any dealings with the Bank.

AFTER hearing both the parties and perusing the material on record, including the evidence produced by the parties, the learned District Forum allowed the complaint holding that there is deficiency in service by the appellant and as such directed the appellant to pay to the respondent the amount of the cheque together with interest and cost of litigation. Aggrieved by this order of the learned District Forum, the appellants have come up before us in appeal. We have heard the arguments and submissions made by the learned Counsel of both the parties, perused the impugned order passed by the learned District Forum and considered the materials placed on record.

IN the present case, it is not disputed that the cheque was presented by one Shri Ram Singh who was an employee of the respondent. The learned Counsel for the appellant Bank has contended that as such the respondent who is principal is bound by the act of his agent. There is no dispute with the legal proposition that the master is bound by the acts of his agent. But the important question for consideration is whether the said Shri Ram Singh was the agent of the respondent.

IN this connection, the appellants have said that the said Shri Ram Singh was authorised by the respondent to conduct business with the Bank and all the transactions for and on behalf of the respondent were conducted by him. The respondent has denied this fact. Therefore, it was incumbent on the appellant Bank to produce the alleged authorisation, if any, in support of his case. The appellant Bank has, however, not produced any such evidence in the Forum below or even at the stage of appeal. The appellant Bank has not produced any evidence that the said Shri Ram Singh used to conduct business with the Bank for and on behalf of the respondent. Thus, the appellant has not been able to prove that the said Shri Ram Singh was an authorised agent of the respondent. On the other hand, the respondent has produced a cheque which is earlier in point of time from the cheque in question. The transaction in that cheque was not conducted by the said Shri Ram Singh. This also proves that the assertion of the appellant Bank is not correct. The other plea taken by the appellant Bank is that the respondent had lodged an FIR with the police that his employee Shri Ram Singh had taken the money and that should absolve the Bank of its liability towards the respondent. This contention is devoid of any force. In the present case, the FIR lodged by the respondent states that his employee has taken a leaf of cheque and after forging the signatures of the respondent, had taken money from the Bank. On this the police have registered a case under Section 420 of the I.P.C. In our considered opinion, action taken by the respondent against his employee for committing theft of the cheque and forging the document is a separate one and the respondent cannot be estopped from pursuing the remedy under criminal law. It, however, does not absolve the Bank from its civil liability. The learned Counsel for the respondent has submitted that his employee is still at large and has not been apprehended by the police.

IN the present case, the most important question for consideration is whether or not the appellant Bank has been negligent in paying the money on a cheque in question. The duty of a Banker to act without negligence relates to the whole transaction from the taking of the cheque to the receipt and disposition of the money. If the Bank has fallen short of its own requirements of care, it would go a long way to establish negligence. The onus is upon the Bank to show that it acted without negligence.

IN the present case, the appellant Bank had failed to consider that the cheque in question was considerably for a huge amount of Rs. 92,000/ - and cash payment was required by the drawer. It was a self cheque purported to be given by a company. This circumstance is certainly go out of the ordinary course that it ought to have aroused doubts in the Bankers mind and caused him to make inquiry. The appellant has not shown that it had made any inquiry. Besides this, the rule is well established that the banker on whom a cheque is drawn must not only ascertain the identity of the person who is a drawer of the cheque, but also the authority of the person receiving payment if he is acting as agent. As stated above, the Bank has not been able to prove that the person whom the payment was made by the Bank was an agent of the respondent.

AS far as the identity of the drawer is concerned, the appellant has not meticulously compared the signatures of the respondent with the specimen signatures which were in its record. The appellant Bank has said that the cheque was presented by the said Ram Singh in the last hour of the Bank. We feel that the Bank official cannot rush to clear the payment just on seeing the cheque and without comparing the signatures of the respondent. The signature of the respondent on the cheque in question has been held to be a forged one by the Forum below. Indeed, there is marked difference in the signature on the cheque and the specimen signature. If the signature on the cheque is not genuine, such cheque is no cheque at all, and as it is said the bank ought to know its customers signatures. The Banker cannot charge his customer with money paid away without his mandate or authority. As held by Their Lordships in Bhita Co -operative D. & C.M. Union v. Bank of Bihar, AIR 1967 S.C. 389, the question of any negligence on the part of the customer, such as leaving the cheque book carelessly so that a third party could easily get hold of it, would afford no defence to the Bank. It is not the case of the appellant Bank that the respondent is in league with the said Shri Ram Singh or is instrumental in deceiving the Bank.

THE appellant Bank has also not taken the trouble to get attestation of the signature of the said Shri Ram Singh which is alleged to be on the reverse of the cheque. It is clear from the above facts that there is deficiency in service. The Banker cannot debit the amount to his customer and if so debited, it must be refunded. As such, the appellant Bank is under an obligation to reimburse the consumer for the loss caused to him. True, the banker is entitled to recover the amount from the person to whom the amount has been paid and if such a person cannot be found, the money is lost to him.

IN the above circumstances, in our considered opinion, the discretion exercised by the learned District Forum, Jaipur -II, Jaipur cannot be said to be capricious, perverse or arbitrary and does not call for any interference by us. This appeal is, accordingly, dismissed. There shall be no order as to costs. Appeal dismissed. -