State Bank of Mysore vs N.G.RAMU

THIS appeal, by opposite party No.2, is directed against the order dated 17.5.1993, passed by the District Forum, Tumkur, in Complt. No. DCFT. 62/Complt./92, directing the appellant-O.P. No. 2, to pay a sum of Rs. 2,000/- as compensation to the complainant. The facts, briefly stated, are as follows: 1. The complainant-respondent No.1 herein, purchased a demand draft for a sum of Rs. 80,000/- from respondent No.2-Opposite Party No. 1, at Bikaner-Jaipur, Siyana, Rajasthan on 28.5.1992 and presented the said demand draft for payment to the appellant on 9.6.1992. The appellant did not make the payment of the said amount to the complaint stating that the said demand draft was not signed by two authorised signatories. The complainant wrote a letter to respondent No.2-Bank at Jaipur informing about the dishonour of the said demand draft made by the appellant. The complainant thereafter made a complaint on 11.6.1992, stating that the dishonour of the said demand draft was due to the negligence of the appellant-Bank in consequence of which he did suffer a loss and mental agony and sought compensation for the same.

WHILE the complaint was so pending, the complainant received a letter from respondent No.2-Bank, stating that the dishonour of the demand draft made by the appellant-Bank was not proper and it directed the appellant-Bank to pass the said demand draft of the complainant. The said letter of respondent No.2-Bank addressed to the appellant-Bank reads as under: "Our D.D. No. 913420 dated 25.5.92 for Rs. 80,000/- returned by you for want of second authorised signatory of the Bank. It is brought to our notice that the above DD is returned with the reason "D.D. not signed by two authorised signatory." This rule is applicable for those branches where more than two officers are posted. Siyana is a rural branch where the branch manager is the sole signatory. Our all the D.D. above Rs. 50,000/- are passed up till now. Please honour the D.D. if otherwise in order."

The appellant-Bank, thereafter made the payment of the amount of the draft to the complainant. The appellant-Bank admitted the fact that the complainant presented the demand draft on 9.6.92 and it did not honour the said demand draft as it did not contain signatures of 2 authorised persons as averred by the complainant.

The appellant-Bank further averred that the demand draft presented by the complainant was for a sum of Rs. 80,000/- and so as per the guidelines issued by the Reserve Bank of India, demand draft for a sum above Rs. 50,000/- was required to be signed by two authorised persons, and as it did contain only one signature it was not honoured by it and it denied negligence on its part.

THE District Forum, on consideration of this material held that the services rendered by the appellant-Bank was deficient in nature and it was only due to the negligence on the part of the appellant-Bank and in consequence of which the complainant was put to loss and strain and in that view awarded compensation in a sum of Rs. 2,000/- to the complainant. We have called for the records and received. We have heard the learned Counsel for the parties and also perused the material placed on record.

THE appellant-Bank has admitted that it did not honour the demand draft presented by the complainant on 9.6.92 as the demand draft over and above Rs. 50,000/- required signatures of two authorised persons. THE appellant-Bank, further averred that, as per the guidelines issued by the Reserve Bank of India, the demand draft over and above Rs. 50,000/- required the signatures of two authorised persons of the Bank. THE appellant has not placed any such material to show that the demand draft over and above Rs. 50,000/- required signatures of two authorised persons. The learned Counsel for the appellant has produced one letter dated 10.7.1989 of the Deputy Managing Director, State Bank of India, addressed to the Managing Director, State Bank of Mysore, Bangalore. The material part of it, reads as under: "RBI vide their letter No.DBOD/BP/392/ C/469(W) 87 dated 3.9.1987 have already allowed the Associate Banks to adopt the double signature system in instruments of the value of Rs. 50,000/- and above. You may, therefore, examine the practice prevailing in this regard in your Bank in the light of the procedure finalised in our Bank. In due course kindly advise us the action initiated at your end."

This would go to show that the State Bank of India requested the State Bank of Mysore to examine the practice to adopt the double signature system regarding instruments of the value of Rs. 50,000/- and above. Even this letter did not contain any direction of Reserve Bank of India to adopt the double signature system in instruments of the value of Rs. 50,000/- and above. That is also the letter written by the Bank of Bikaner and Jaipur, referred above. So the denial of payment of the demand draft on presentation on 9.6.92 is clearly negligent act on the part of the appellant-Bank. That is the finding recorded by the District Forum. The appellant presented the Demand Draft on 9.6.92, when it was not honoured wrote a letter to the Bank of Bikaner and Jaipur. They wrote a letter to the appellant-Bank directing the Bank to honour the demand draft, on 13.6.1992, and only thereafter the appellant-Bank made the payment of the said demand draft to the complainant. Having regard to these facts, necessarily the complainant had undergone certain mental tension for which the District Forum has granted a nominal compensation of Rs. 2,000/- to the complainant. Having regard to these facts and in the circumstances of the case, we do not find any justifiable ground to interfere in the order recorded by the District Forum. ORDER In the result, therefore, this appeal fails and it is dismissed. The appellant-Bank shall pay a sum of Rs. 500/- (Rupees five hundred only) to the complainant-respondent No. 1 herein towards costs in this appeal. Appeal dismissed.