SUPREME BUILDERS vs VEERSEVA URBAN CO-OP. BANK LTD.

THIS appeal is preferred against the order of the State Consumer Disputes Redressal Commission, Maharashtra, dated 1.12.1993 by which the complaint filed by the appellant was dismissed.

THE brief facts of the case are summarised below. THE appellant is a proprietor partnership concern. It had a current account with the opposite party, i.e. THE Veerseva Urban Co op. Bank Ltd. THE complainant has been dealing with the Bank for the last fifteen years. THE allegations of the complainant were regarding deficiency in service on the part of the opposite party for not honouring the commitments made by the previous management in respect of certain overdraft facilities to the complainant. THE grievance of the complainant was that by letter dated 21.5.1988, the complainant wanted to close its accounts by surrendering the fixed de posit receipts given to opposite party by way of collateral securities but the Bank failed to carry out the instructions. According to the complain ant the opposite party did not honour the cheque for Rs. 20,000/ and did not submit Bank statements in relation to its two accounts causing great financial loss to the complainant. It was also the case of the complainant that one of the partners of the complainant, namely, S.S. Emmimath, top executive of the opposite party till May, 1988 that due to failure on the part of the opposite party to honour the cheque of Rs. 20,000/ his reputation was considerably af fected in the field in which he was carrying on his business. In these circumstances, Rs. 5,00,000/ were claimed before the State Commission. Needless to say that the complaint was contested on behalf of the opposite party. In the written submissions filed, it was pleaded that the cause of action. if any, arose on 25.1."1988 and the complaint was filed on 3.8.1992 was barred by time. The overdraft facilities were provided to the complainant initially for Rs. 50,000/ which were later on increased to Rs. 85,000/ . It was also pleaded by the opposite party that in order to secure the repayment of dues, the complainant deposited with the opposite party 19 fixed deposit receipts. Those receipts were in different names and were to mature on different dates. The overdraft facility was over on 21.5.1988 and Rs. 79,776/ were due against complainant and as such the cheque for Rs. 20,000/ dated 21.5.1988 could not be honoured. It was also the case of the opposite party that before dishonouring the cheque of Rs. 20,000/ there were no instructions from the complainant to encash and adjust the amount covered by fixed deposit receipts in the account of the complainant. The complainant having realised the position got duly discharged the fixed deposit receipts and the amount was adjusted on 28.4.1990 towards the outstanding in the two accounts as per the directions of the complain ant. After adjustment of the amount of the FDRs Rs. 1,29,198/ remained due and payable by the complainant to the Bank and the complainant was called upon to pay the said amount. The District Deputy Registrar in an adjudication proceeding held that the complainant was a de faulter and that decision was confirmed by the Appellate Authority and a writ petition filed by Mr. S.S. Emmimath was pending before Bombay High Court.

After considering the relevant contentions of the parties and going through the records of the case, the State Commission returned the finding that there was no deficiency in service on the part of the opposite party and the complaint was dismissed.

AGGRIEVED by the order of the State Commission, the complainant has approached this Commission by filing this appeal. We have heard the learned Counsel for the parties and have perused the records of the case. Mr. H.S. Dandekar, Advocate appearing on behalf of the appellant contended that the State Commission wrongly observed that the complainant had exhausted his overdraft ac count and that the Bank was right in dishonouring the cheque for Rs. 20,000/ and, therefore, the complaint deserved to be dismissed. He further urged that the State Commission committed error in holding that there was no deficiency in service on the part of the opposite party. Despite various reminders the opposite party did not settle the account of the complainant and went on postponing the matter and they were using the amount unauthorisedly.

ON the other hand, Mr. Hansaria, learned Counsel appearing on behalf of the respondent contended that the order passed by the State Commission was fully justified. So far as the grievance of the complainant regarding dishonouring of the cheque for Rs. 20,000/ is concerned, we are of the view that there was no deficiency in service on the part of the Bank. From the record it appears that the complainant had already availed of overdraft facilities and there was no amount to meet the cheque amount of Rs. 20,000/ , when it was presented for payment. In these circumstances, we are of the view that there was no deficiency in service on the part of the Bank. The further grievance raised on behalf of the appellant was that the Bank did not close the account as per the direction given by the complainant on 21.5.1988 and did not submit the Bank statement in regard to the complainant''s account.

THE explanation given by the Bank was that the complainant had deposited with the Bank 19 fixed deposit receipts. Some of the fixed deposit receipts were in the name of third parties and one was in the name of minor and as such unless the said FDRs were discharged by making necessary endorsement thereon by the holders thereof, the Bank could not appropriate the proceeds of the FDRs towards the amount due under the overdraft facilities.

THE matter was brought to the notice of Emmimath and ultimately after about two years i.e. on 28.4.1990, Emmimath, as a proprietor of the company got discharged the said FDRs by making necessary endorsement to enable the respondent Bank to encash the said FDRs and adjust the amounts towards the overdraft accounts. On adjusting the proceeds under the said fixed deposits, a sum of Rs. 1,29,198.91 was found due and payable by the appellant to the respondent Bank. Mr. Hansaria further con tended that Mr. Emmimath had filed his nomination for contesting election as an office bearer of the Bank and his nomination was rejected by the returning officer on the ground that he was defaulter to the respondent Bank for a sum of Rs. 1,29,198.91. He filed an appeal under Section 152 A of the Maharasthra Co operative Societies Act, 1960 challenging the said rejection order on the ground that he was not a defaulter. THE Deputy Registrar investigated the facts and vide his order dated 29.10.1990 confirmed that at the foot of the said account as on 30.9.1990 a sum of Rs. 1,29,198.91 was due and payable by Emmimath being proprietor of the concern. It was observed by the authority while deciding the appeal that since the FDRs were not discharged, the respondent Bank was not obliged to adjust the amounts covered by the FDRs. We have given our thought to the matter. We find force in the contentions raised on behalf of the Bank. In the facts and circum stances of the case, the Bank was justified in not adjusting the amounts till the time the FDRs were not endorsed in favour of the Bank. Plea was not raised on behalf of the appellant, that the FDRs were duly discharged prior to 29.4.1990 and the Bank did not adjust the accounts. In view of the above discussion, we hold that there was no deficiency in service on the part of the Bank insofar as adjustment of the account was concerned. No other point was raised before us. In the result, we find no merit in the appeal and the same is dismissed. However, in the facts and circumstances of the case, we make no order as to costs. Appeal dismissed.