STATE BANK OF INDORE vs KUNJILAL

THIS appeal is directed against the order dated 30th August, 2002 passed in Case No. 129/2000 by the District Consumer Disputes Redressal Forum, Indore (for short the ''District Forum'') whereby the complaint for deficiency in service in not sending the cheque of M/s. Sharda Textiles, M.G. Road, Indore of Rs. 28,452/- dated 3.9.1999 of the Central Bank of India, Cloth Market Branch, Indore deposited in the appellant - Bank by the respondent No. 1 for collection and credit of the amount of the cheque in the account of the respondent No. 1, which was lost and was encashed by someone, was allowed with an order to pay the amount of Rs. 28,452/- with interest thereon at the rate of 9 per cent per annum from 5.9.1999 along with Rs. 500/- as costs of the proceedings.

THE case of the respondent No. 1 is that he deposited the cheque in the box with the deposit slip for its clearance and collection of the amount in the current account of the respondent No. 1 with the appellant of which on the counter slip he put the seal, but the cheque was lost and was not sent for clearance, hence, the amount was not credited in the account. He made enquiries. On this, the appellant''s concerned employee stated that no such cheque was deposited. On this, the respondent No. 1 shown the counter slip with seal of the Bank. THE concerned clerk told him to find out with the Bank of which the cheque was presented. THE respondent No. 1 made enquiry from the respondent No. 2, where he came to know that the cheque was given on the counter where in the "account payee" struck off and entry to pay bearer was made, which had seal of the firm and signatures of the issuing firm. After tallying the signatures of the account holder - M/s. Sharda Textiles, the amount of the cheque was paid in cash in ordinary course of the business of the Bank. On this, the respondent No. 1 filed the complaint, which was resisted. THE District Forum after appreciation of evidence on record held that as per practice, the respondent No. 1 deposited the cheque with the deposit receipt and keeping counterfoil with seal of the Bank on it dropped in the box as per practice of the appellant - Bank. THE defence of the appellant that the slip does not bear the signatures or initials of any officer of the Bank, except the seal of the Bank and that the cheque was not dropped in the box; as if the cheque would have been dropped in the box, entry of the same would have been made in the list of the cheques deposited for collection; was not accepted by the District Forum. THE District Forum held that as per practice, the cheque was dropped in the box after putting the seal on the deposit receipt and filing the particular of the cheque of which counterfoil was kept. From there, the cheque was stolen and after that "account payee" endorsement was struck off and bearer entry was made with seal and signatures of the account holder-Firm which was tallied by the Bank Officers. True, prima facie the seal and signatures are compared minutely, which show the difference between the original seal and signatures of the firm issuing the cheque. If, the cheque would not have been lost, the amount would not have been withdrawn. THE defence of the respondent No. 2, who was opposite party No. 3 before the District Forum, that the firm issuing cheque on earlier occasion has also acted in this manner as it first issued the account payee cheque to a party which was deposited for collection and thereafter the account payee entry was struck off and the amount was withdrawn by the issuing firm only making it bearer, was not accepted by the District Forum in the circumstances of the case. Hence, having found deficiency in service on the part of the appellant - Bank where the cheque was dropped in the box from where it was stolen, ordered to pay the amount of the cheque with interest. After hearing learned Counsel for the parties and on reappraisal of evidence on record, it is established that the cheque presented for encashment with the respondent No. 2 - the Central Bank of India, which had the seal and signatures of the account holder and on which alteration was not tallied, apparent payment was made in due course. Section 10 of the Negotiable Instruments Act, 1881 defines payment in due course means payment in accordance with the apparent tenor of the instrument in good faith and without negligence to any person in possession thereof under circumstances which do not afford a reasonable ground for believing that he is not entitled to receive payment of the amount therein mentioned.

Section 89 of the Negotiable Instruments Act, 1881 speaks of payment of instrument on which alteration is not apparent, which reads thus : "89. Payment of instrument on which alteration is not apparent.-Where a promissory note, bill of exchange or cheque has been materially altered but does not appear to have been so altered. or where a cheque is presented for payment which does not at the time of presentation appear to be crossed or to have had a crossing which has been obliterated. payment thereof by a person or banker liable to pay and paying the same according to the apparent tenor thereof at the time of payment and otherwise in due course, shall discharge such person or banker from all liability thereon; and such payment shall not be questioned by reason of the instrument having been altered, or the cheque crossed."

ON visual examination no sign of forgery with the writings on the cheque were detected. Therefore, the Bank made the payment from whom the amount was to be collected after presentation of the cheque for credit of the amount in the account of the respondent No. 1 with the appellant. Therefore, the Bank which made the payment of the bearer cheque was not held liable as it was the liability to honour the cheque and make payment, if it was otherwise in order in due course as provided in Section 10 of the Negotiable Instruments Act, 1881. See, the decision of the Supreme Court in case of Bank of Maharashtra v. M/s. Automative Engineering Co., (1993) 2 SCC 97. However, the District Forum held that as per practice in the appellant - Bank, the cheque was deposited after filing the deposit slip of which the counter slip was kept which bears the seal of the Bank, which was lost or taken away by some one, therefore, for that deficiency the appellant was made liable to pay the amount. However, from the record we find that if the cheque after seal and signatures would have been dropped in the box there ought to have been entry in the list of the cheques received during the business hours of the day. Admittedly, there was no such entry in the list. The seal on the counter slip also does not bear the signatures of the officer of the Bank as per practice after signatures the cheque was to be deposited or dropped in the box with the depotsit slip. It has also come on record that the Firm which issued the cheque at earlier occasion also has acted in the same manner, that is first it issued the account payee cheque to a party, thereafter, striking the entry of accounts payee and making entry of bearer over which seal and signatures were put, the account was withdrawn by the said account holder. In such circumstances, there is every possibility that the firm which issued the cheque must have taken back the cheque and after striking account payee by putting seal and signatures made the cheque bearer for encashment of the cheque. This shows or speaks of a fraud played by the account holder, which issued the cheque and for that inference of connivance of the respondent No. 1 with the firm cannot be ruled out, which is also evident from the fact that the respondent No. 1 did not implead M/s. Sharda Textiles which issue the cheque as party in the case.

IN such circumstances, even assuming for arguments sake that the respondent No. 1 dropped the cheque in the box which was never sent for collection by the Bank and for which no consideration was paid for hiring or rendering of service by the respondent No. 1 to the appellant, in our opinion, the District Forum for a calculated plan erred in directing the appellant to part with the public money after playing the role of expert by examining the two seals and signatures over the cheque, which was hazardous. IN such state of affairs, in fact the respondent No. 1 ought have been relegated to the Civil Court for Redressal of his grievance and for seeking the relief where a detailed enquiry would have been held on complex issues involved in the case. In view of the above, while setting aside the order of the District Forum, we leave the respondent No. 1 to take appropriate proceedings as may be available to him in accordance with law for recovery of the amount by instituting the civil suit in the Court of competent jurisdiction. If, the respondent No. 1 chooses to file a suit for the relief claimed in these proceedings, he can do so according to law and in such a case he can claim the benefit of Section 14 of the Limitation Act to exclude the period spent in prosecuting the proceedings under the Consumer Protection Act, while computing the period of limitation prescribed for such a suit. In the result, the appeal is allowed. The order of the District Forum is set-aside and the complaint is dismissed with no order as to costs. A copy of this of order be conveyed to the parties and a copy be sent to the District Forum along with the record of the case. Appeal allowed.