UPINDERJIT SINGH SEKHON vs STATE BANK OF PATIALA

DISTRICT Forum, Patiala on November 19,1997 dismissed the complaint filed by Upinderjit Singh against State Bank of Patiala and others. The complainant is therefore, in appeal challenging the aforesaid order.

THERE is no dispute on facts, which are otherwise brief. The complainant received dividend warrant for Rs. 60/- payable to him at par at all the Branches of Bank of Punjab Limited. The complainant had Saving Bank Account No. 135/32 with State Bank of Patiala, Chowk Fort, Patiala. He deposited the aforesaid dividend warrant with his banker, State bank of Patiala for collection and credit of the proceeds in his account. In turn State Bank of Patiala sent the dividend warrant for collection. Bank of Punjab, Leela Bhawan Branch, Patiala, opposite party No. 3 returned the dividend warrant uncashed with the endorsement "Payee Endorsement required". The State Bank of Patiala hence returned the aforesaid dividend warrant to the complainant. After serving a legal notice, Annexure C6, the complainant approached the District Forum. Bank of Punjab aforesaid submitted the version by way of affidavit of the Branch Manager, Baljit Singh. The stand taken up was that mere was necessity of endorsement on the dividend warrant. It was on that account that the same was not encashed. The complainant has produced his own affidavit in support of the allegations made. The stand taken up by the Bank of Punjab prevailed with the District Forum, hence the impugned order was passed. The complainant appeared in person and reiterated his stand that Bank of Punjab was deficient in rendering service in not encashing the dividend warrant more so when in writing endorsement had been made authorising State Bank of Patiala to collect the proceeds of the dividend warrant to credit it in his account. Learned Counsel for the Bank of Punjab, Mr. J.C. Batra supported the order of the District Forum that such an endorsement on the back of the cheque was required. Mr. Mohinder Singh, Advocate appearing on behalf of State Bank of Patiala argued that no separate endorsement on the back of the dividend warrant was required when the complainant had deposited the dividend warrant with State Bank of Patiala by filling the pay-in-slip authorising collection of the proceeds of the dividend warrant and crediting in the account of the complainant. After hearing Counsel for the parties, we are of the view that the approach of the District Forum is not correct and sustainable in law.

Section 85(1) of the Negotiable Instruments Act reads as under : "Cheque payable to order : (1) Where a cheque payable to order purports to be endorsed by or on behalf of the payee, the drawee is discharged by payment in due course."

A bare perusal of the provisions aforesaid would show that no separate endorsement was necessary on the back of the negotiable instrument to effect its transfer. Such endorsement in the form of pay-in-slip authorising the Bank to collect the proceeds of the negotiable instrument was sufficient. The Bank of Punjab was thus deficient in rendering service in not making payment of the cheque aforesaid and the complainant was deprived of the use of his money due on the cheque. For the reasons recorded above, this appeal is allowed. Order of the District Forum is set aside. Complaint is allowed. A direction is given to the Bank of Punjab, Leela Bhawan Branch, Patiala through its Manager to pay Rs. 60/-, the amount of the dividend warrant alongwith 18% p.a. interest w.e.f. April 18, 1997 till payment alongwith Rs. 500/- as costs of litigation to the complainant by issuing a Bank Draft of the aforesaid amount in the name of the complainant, Upinderjit Singh within one month from the receipt of copy of this order. Such Bank draft be either paid to the complainant directly or deposited in the office of District Forum, Patiala. Appeal allowed.