K.K. JAGIA vs Unit Trust of India

THE short question, which arises for our consideration in this appeal filed by the complainant against the impugned judgment and order dated 25.8.2004 passed by District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (for short hereinafter to be referred as District Forum) in Complaint Case No. 372 of 2002 is whether the maturity value of the units of the respondents - Unit Trust of India (for short hereinafter to be referred as U.T.I.) purchased by the appellant, maternal grandfather of Ms. Shivani Nanda who is settled in New York, U.S.A., sent by the respondents by means of account payee cheque delivered to the addressee, admittedly is a sufficient compliance of the liability of the respondents to pay the value of the units held by Ms. Shivani Nanda.

THE admitted facts may not be detailed except that the holder of the cheque Ms. Shivani Nanda after receiving the cheque at her address deposited the cheque with her banker for encashment. Something happened between the banker of the holder of the cheque and the concerned bank - SBI Overseas Branch, Calcutta. Mr. K.K. Jagia, authorised agent and an attorney of Ms. Shivani Nanda who had filed the complaint case for and on behalf of Ms. Shivani Nanda who has also filed this appeal contended that the mere sending of cheque, may be an account payee in the name of the holder of the cheque by the respondents - U.T.I., will not amount to payment of the said value of the units and it is the legal duty of the U.T.I. to ensure the actual payment of the amount to the holder of the cheque. He also contended that the common law principle ''Debtor seeks the creditor'' will apply in the case of the U.T.I.

Mr. B.J. Singh, Advocate appearing for the U.T.I., on the other hand, vehemently opposed the application of the common law principle ''Debtor seeks the creditor'' in this case and he has submitted that it is the well settled practice of the U.T.I. to discharge its liability of payment of the value of the shares to lakhs of holders of the units by means of an account payee cheque and the U.T.I. will not be held responsible if the said cheque, for one reason or the other and not due to the fault of the U.T.I. is not made and the same would not amount to deficiency in service on the part of U.T.I.

IN support of his contention, Mr. B.J. Singh, Advocate placed reliance on the judgment of the Hon''ble Supreme Court reported in the case of Hanuman Prasad Gupta v. Hiralal, AIR 1971 Supreme Court 206. The said case was under the INdian Companies Act, 1956. The payment of dividend by posting a cheque or a warrant or even in cash was held to be equivalent and the obligation to pay is discharged when either of these modes has been used. It was further held that once a mode of payment of dividend is agreed to, namely, by posting a cheque or a warrant, the place where such posting is to be done, is the place of performance and also the place of payment, as such performance in the manner agreed to is equivalent to payment and results in the discharge of the obligation. In paragraph No. 7 of the judgment, it was held by the Hon''ble Apex Court, inter alia, as under: "..... The question was looked at from the point of view whether there was any agreement by or obligation on the plaintiff to accept the dividend warrant as payment. If there was any such agreement, the principle laid down in Norman v. Bicketts, (1886) 3 TLR 182, would apply namely, that a bebtor or a creditor can agree to make and accept payment of the debt in some form other than cash and that when the creditor asks his debtor to send the amount by post, then if the debtor sends a cheque for the amount by post the risk of loss in transit falls on the creditor and the posting is equivalent to payment...."

IN paragraph No. 9 at page 210 of the judgment, the Hon''ble Apex Court held, inter alia, as under : "9. It is clear from Section 205(5) that the company could pay dividend either in cash or by posting a cheque or a warrant at the registered address of the respondent. Article 132 of the Articles of Association also authorises the company to pay dividend either in cash or by posting a cheque or a warrant to the share holder at his registered address. The effect of Article 132 is that when a dividend warrant is posted at the registered address. The effect of Article 132 is that when a dividend warrant is posted at the registered address of the share holder that would be equivalent to payment. Once a warrant is so posted the company is deemed to have paid and discharged its obligation...."

The District Forum after referring to the material placed on record held in paragraph No. 7, inter alia, as under : ".... The complainants admit that the complainant No. 1 had transmitted this cheque to complainant No. 2 at her USA address and the duplicate cheque had actually reached the hands of complainant No. 2 in the USA. It is after this point that the trouble for the complainants starts. They allege in the complaint that the complainant No. 2 in the USA made frantic efforts to collect the amount of the duplicate cheque through her foreign bankers, but it had drawn a blank and that even the cheque was misplaced in the process. Therefore, even as per the version of the complainants in the complaint if at all, it were the bankers of the complainant, who were negligent in causing the duplicate cheque to be misplaced. Those bankers of the complainant No. 2 were her agents and not those of the O.Ps. Therefore, the O.Ps. were not liable for the negligence of the bankers of the complainant No. 2 for which only she had to bear the burnt, or can sue them (her bankers)."

Referring to the letter dated 30.7.2004 sent by U.T.I. to the Branch Manager of Central Bank of India, Janpath, New Delhi on which Bank the duplicate cheque had been drawn, the District Forum observed in Paragraph No. 8, inter alia, as under : "... In this letter the O.Ps. made request to the said bank to report whether the duplicate cheque had been encashed. The manager of the said bank vide their letter dated 10.8.2004 has reported that the beneficiary had deposited the cheque at Mercantile Bank, St. Louis, USA who had sent this cheque to the Central Bank of India, Janpath, New Delhi and they had paid the money by means of their draft Sl. No. 54/5508, printed No. 83258 for Rs. 20,874.25 on 18.10.2000 payable at Calcutta. This letter of the Central Bank of India, Janpath, New Delhi clearly shows that the duplicate cheque issued by O.P.-2 in favour of complainant No. 2 had been duly encashed...."

FURTHER in the same paragraph, the District Forum observed, inter alia as under : "....By association even SBI (Overseas) Branch, Calcutta was also agent of the complainant No. 2. The money is proved to have reached this bank..."

ON the basis of these findings, the District Forum held that the complainants failed to prove that the O.Ps. committed any deficiency in service. The complaint case was accordingly dismissed. As mentioned above, the complainants felt aggrieved by the impugned judgment and order of the District Forum and filed this appeal. The material, which has been placed on record and which has been referred to by the District Forum clearly shows that the parties agreed to the mode of payment of the amount vide cheque. The U.T.I. also took the plea that the accepted mode of payment of the maturity value of the units was by issuing cheque at the registered address of the complainant. Even the complainants did not agree to the mode of payment by cheque than the request for issuing the duplicate cheque would not have been made.

After going through the material placed on record and appreciating the rival contentions and in view of the law laid down by the Hon''ble Supreme Court in the case of Hanuman Prasad Gupta (supra), we are of the considered opinion that the District Forum has rightly held that there is no deficiency in rendering service on the part of the respondents U.T.I. So far as the deficiency in service is concerned, we have already recorded a finding and have approved the finding of the District Forum that there is no deficiency in service. So far as the dispute regarding the actual payment of the maturity value of the units is concerned, the same is a civil dispute and the complainants/appellants, if so advised, may seek an appropriate remedy in this regard by filing an appropriate civil suit before a Civil Court of competent jurisdiction. Resultantly, the appeal is devoid of merit and the same is dismissed. The parties are left to bear their costs. Copies of this order be sent to the parties free of charge. Appeal dismissed.