STATE BANK OF INDIA vs R.S. Sukhija, Proprietor

APPELLANT Bank which was the Opposite Party before the State Commission has filed this Appeal against the judgment and order dated 20.08.07 passed by the State Consumer Disputes Redressal Commission, Delhi (in short, ''the State Commission '') in Complaint No. 178/97 wherein the State Commission partly allowing the complaint has directed the Appellant Bank to pay a lump sum compensation of Rs.50,000/- to the Respondent along with cost of Rs.10,000/-.

COMPLAINANT /Respondent was having a current account No. 3040 with the Appellant Bank since 01.06.89. Respondent received a purchase order of Rs.11,00,000/- for exports of garments from a buyer in USA. The buyer sent two cheques drawn on Great Western Bank amounting to $13375 and $4312 (Rs.5,53,072/- in Indian currency) towards the 50% payment of the entire order. Respondent deposited the said cheques with the Appellant Bank on 05.04.94 for realization. Appellant sent the cheques for collection through American Express Bank, New Delhi and provisionally credited the account of the Respondent with the amount of cheques equivalent to Indian currency on the basis of the credit advice dated 11.04.94 given by the American Express Bank. Respondent withdrew a sum of Rs.50,000/- from the said account after the credit entry was made by the Appellant Bank. The cheques were returned unpaid by the American Express Bank to the Appellant vide letter dated 21.04.94 and the Appellant debited the amount of the unpaid cheques in the Respondent ''s account. Appellant vide letter dated 16.05.94 informed the Respondent about the debit entry in his account and called upon the Respondent to deposit the amount withdrawn by it. According to the Appellant, a sum of Rs.57,650/- including interest calculated upto 20.07.97 was due and payable by the Respondent. Since the Respondent failed to pay the said amount, Appellant filed a civil suit No. 772/03 on 21.7.97 before the Civil Judge, Delhi for recovery of the amount. Complainant, being aggrieved, filed the complaint before the State Commission seeking refund of the amount of Rs.5,53,072/- along with interest @ 24% p.a. and compensation. Appellant, on being served, entered appearance and filed its written statement taking the preliminary objections; that the complaint was barred by limitation as the Respondent ''s account was debited on 28.04.94 whereas the complaint was filed in the year 1997; that the complaint was counter blast to the suit filed by the Appellant against the Respondent for recovery of outstanding amount; that the Respondent was not a ''consumer '' as the banking services were being used by the Respondent for commercial purposes. On merits, it was pleaded that the Appellant Bank was well within its right to reverse the credit entry in the Respondent ''s account as the two chques issued by the foreign buyer were returned unpaid by the American Express Bank; that the Respondent vide letter dated 3.06.94 had admitted his liability to pay the outstanding amount and sought one month time to pay the outstanding amount; that there was no deficiency in service on the part of the Appellant.

STATE Commission, after considering the facts available on record and going through the evidence led by the parties, came to the conclusion that there was limited deficiency in service on the part of the Appellant in giving wrong information to the Respondent about the credit of the amount of the cheques in his account. State Commission allowed the complaint and directed the Appellant Bank to pay a lump-sum compensation of Rs.50,000/- to the Respondent besides Rs.10,000/- towards cost of litigation. State Commission in its order observed as under:- "The respondent Bank has already redressed its grievance by getting the decree from the Civil Court but for the limited deficiency in service on the part of the respondent Bank in giving wrong information to the complainant about the credit of the amount of the cheques in his account which was subsequently rectified, we deem that lump-sum compensation of Rs.50,000/- besides Rs.10,000/- as cost of litigation would meet the ends of justice. "

Appellant, being aggrieved, has filed the present appeal.

RESPONDENT , on notices being issued, was duly served. He appeared in person on 04.02.10 and 07.04.10. On 07.04.10, case was adjourned 17.05.10 in his presence. Respondent did not appear on 17.05.10, 27.07.10, 22.09.10 and 29.10.10. Final hearing notice was sent to the Respondent on 01.02.13 for today ''s date. In terms of the provisions of Section 28 A of the Consumer Protection Act, 1986, Respondent would be deemed to have been served. Ordered to be proceeded ex-parte. We have heard the Ld. Counsel appearing for the Appellant at length. Ld. Counsel appearing for the Appellant contends that the complaint filed by the Respondent was clearly barred by the principle of Rs judicata; that the Appellant Bank filed a civil suit No.772/03 before the Ld. Civil Judge, Delhi against the Respondent for recovery of the outstanding amount; that the Respondent was duly served in the said summary suit and filed an application seeking leave to defend the said suit on the same grounds which were taken in the complaint by him; that the Ld. Civil Judge vide order dated 29.09.03 dismissed the said application and decreed the suit of the Appellant Bank for a sum of Rs.57,650/- along with pendent lite and future interest @ 9% p.a. along with costs; that the appeal filed by the Respondent against the said order was also dismissed by the Appellate Court; that there was no deficiency in service on the part of the Appellant Bank; that on receiving the two cheques, the Appellant Bank as per banking practice and procedure had credited the Respondent ''s account for the rupees equivalent of the two cheques on the basis of the credit advice dated 11.4.94 give by American Express Bank; that since the cheques were returned unpaid by the American Express Bank vide letter dated 21.04.94, the Appellant Bank reversing the credit entry debited the account of the Respondent and informed the Respondent accordingly vide letter dated 16.05.94; that as per banking practice, the Appellant Bank was well within its rights to debit the account of the Respondent once the two cheques were returned unpaid. The facts are not in dispute before us.

WE do not agree with the view taken by the State Commission that the Appellant Bank was deficient in service in giving wrong information to the Respondent about the credit of the amount of the cheques in his account. Appellant Bank provisionally credited the account of the Respondent to the rupees equivalent of the two cheques on the basis of credit advice dated 11.4.94 given by the American Express Bank subject to realization of the cheques. As the cheques were returned unpaid by the American Express Bank vide letter dated 21.04.94, the Appellant Bank rightly reversed the earlier entry and debited the Respondent ''s account. Apart from this, vide letter dated 03.06.94, Respondent has admitted his liability to pay the outstanding amount to the Appellant Bank. The relevant para 2 of the letter dated 3.6.94 written by the Respondent to the Appellant Bank reads as under:- "2.We have all noble intentions to pay back to you the Rs.50,000/- odd drawn from the Bank. It may be noted here that you had credited approx. Rs.5.50 lacs. If our intentions were not noble then we would have withdrawn the full amount instead. "

We are of the considered view that the amount of two cheques was credited provisionally in the account of the Respondent on receiving the advice from the American Express Bank subject to realization of the two cheques, but since the cheques were returned unpaid by the American Express Bank, the entry was reversed as per banking practice by the Appellant Bank.

FOR the reasons stated above, the appeal is accepted, impugned order of the State Commission is set aside and the complaint is ordered to be dismissed. No orders as to costs. Registry is directed to refund the sum of Rs.30,000/- deposited by the Appellant as statutory deposit along with accrued interest.