State Bank of India vs JAIN IRRIGATION SYSTEM LTD.

THIS is an appeal against the order dated 13th November, 1992 passed by the State Consumer Disputes Redressal Commission, Maharashtra at Bombay in Complaint No. 129 of 1991 by which the complaint filed by the present respondent M/s. Jain Irrigation System Ltd. (for short the Company) was allowed and the present appellant-State Bank of India (for short the Bank) was directed to credit forthwith Rs.95,245/- with interest at the usual bank rate in the account of the Complainant. The interest was ordered to be calculated at the usual bank rate from 21st November, 1989 till realization

FEELING aggrieved of the order of the State Commission, the Opposite Party, i.e., the Bank has come before this Commission by way of this appeal. The facts are that the Complainant company approached the State Commission alleging that it was maintaining cash credit facility account with the Opposite Party''s branch at D.N. Road Bombay being account No. 4035 Now the said account had been transferred to the Industrial Finance Branch. On or around 2nd November, 1989 the Complainant drew an Account Payee Cheque bearing No. 397145 for Rs. 35,245/- upon the Opposite Party and in favour of the Rajashree Cement. The said cheque was crossed "Account Payee only" and the words'' or payee'' were struck out. The said cheque was sent to the Solapur Branch of Rajashree Cement by registered post. Sometime in the month of January, 1990 it was learnt that, instead of Rs. 35,245/- a larger amount of Rs. 95,245/- was debited from the account of the Complainant. According to the Complainant, it happened due to the negligence of the Opposite Party. Further enquiry made by the Complainant revealed that the said cheque was misplaced/ lost in transit and was forged and altered materially altering the figure of Rs. 35,245/- to Rs. 95,245/-. The name of the payee was also altered. After several personal meetings and correspondence of the Complainant to the Opposite Party, the latter disclaimed its liability and explained away its gross negligence by relying on the opinion of the handwriting expert that such cleverly forged cheques can be passed as genuine one in routine, rapid, limited, cursory examination which is usually followed by the passing officers in various banks in the country. According to the Complainant, the banker plays a very responsible role in society and performs specialised function for which he possesses the requisite skills and exercises a high standard of care and the alterations should have been noticed even on examination. In any event the payment in respect of a forged cheque is the liability of the Bank and it is liable to pay to the customer the amount withdrawn under a forged cheque. The Complainant further contended that by over looking and /or ignoring the apparent material alterations and honouring the said cheque, the Bank has been grossly negligent and has failed to perform its duty and maintain the requisite standard of care in its service.

The complaint was contested by the Bank and pleaded that Bank of India, Ma lad (West), Bombay Branch, which had collected and received the amount from the Bank had acted negligently in collecting the amount of the cheque and, therefore, it is a necessary or proper party. The Bank also disputed the jurisdiction of the State Commission and claimed that the matter pertains to the jurisdiction of Civil Courts. On merits it was pleaded that the said cheque was presented for payment through Bank of India, Malad (West) Bombay Branch with its clearing House Stamp duly affixed on the reverse thereof. The Bank was justified and was also bound to pay the amount of the said cheque to the Bank of India. The alterations in the cheque were not visible to the naked eye and before payment the, same was examined under a pathfinder and even then no alterations thereof were visible and thus the payment was made by the Bank in the usual course of business in good faith and without negligence.

THE State Commission held that the Complaint did not suffer from want of jurisdiction or for joining necessary parties. On merits it was held that after receiving a complaint from the Complainant, the Bank had got the cheque examined from its handwriting expert who confirmed physical alteration in the said cheque with the use of different microtip sketch pen having black colour ink physically erasing the letters in some of full words or the part of the words and sum of the figures, written in the date and column of the original writings written on the said cheque for the said Rs. 95,245/- with the aid of sharp surgical blade/ razor, safety blade or sharp pointed instrument. After becoming aware of this expert opinion, it was the duty of the Bank to make good the loss of the Complainant as the negligence was established on the part of the Bank. Accordingly, the complaint was allowed and as noticed earlier, the Bank was directed to credit Rs . 95,245/with interest at the usual bank rate in the account of the Complainant. Feeling aggrieved, the Bank has come before this Commission by way of this appeal. The main ground taken by the Bank was that the alleged alteration in the cheque was not visible to the naked eye and the Bank has exercised proper care after putting it through the pathfinder. At the time of payment, the Bank was not supposed to examine the cheque with ultra-modern equipments to find out if any forgery has been committed or not. We are, prima facie, of the opinion that if proper care had been taken, the Bank could have detected the forgery committed in the cheque. A Photostat copy of the cheque has been produced on the record by the Bank itself. The cheque contains small dots on the background. If forgery has been committed after physically erasing the letters in some of the full words and parts of the words and some of the figures with the aid of sharp surgical blade/razor, safety blade and sharp container, the bank officials who passed the cheque could have noticed such erasing While erasing the words or figures, the small dots must also have been erased. Moreover, a " look at the word ''Ninty'' in the photostat copy of the cheque clearly shows that something was written under the word ''N'' which has now been written. The letter R of the word thirty has been changed to ''N'' and the said ''N'' is different from all the other ''N''s occurring in the cheque. Similarly, the name of the payee is in different handwriting than the remaining writing on the cheque. Of course the name of the payee can be written by some person other than the person issuing a blank cheque but in our opinion nobody will issue a cheque for such a huge amount without writing the name of the payee.

IN the light of above discussions, we are of opinion that the Bank has been negligent in passing the cheque and has not exercised proper care and diligence. Accordingly, we dismiss the present appeal with cost which we assess at Rs. 1,000/-. Appeal dismissed.