VIJAYA BANK vs Nector Beverages Pvt Ltd

THESE two revision petitions (R.P. No. 4201 of 2007 and R.P. No. 49 of 2008) have been filed by Vijaya Bank (hereinafter referred to as the "Petitioner No. 1 ") and Bank of Baroda (hereinafter referred to as the "Petitioner No. 2 ") respectively, being aggrieved by the order of the State Consumer Disputes Redressal Commission, Karnataka (hereinafter referred to as the "State Commission ") in Appeal No. 1515/2007 in favour of M/s. Nectar Beverages Pvt. Ltd., Respondent No. 1 herein, who was the original complainant before the District Forum.

THE facts of the case according to the Respondent No. 1 are that it had a unit for bottling aerated water and soft drinks and to sell its products in the market, it had appointed authorized agents and distributors one of whom is Respondent No. 2 (M/s. Sri Sai Ram Traders) at Bellary. Respondent No. 2 had issued a cheque No. 129473 to Respondent No. 1 for Rs. 1,80,000 drawn on Canara Bank, Bellary towards part payment of dues to Respondent No. l. Respondent No. 1 presented the said cheque to Petitioner No. 2 (Bank of Baroda) for collection since it had an account with that bank. However, Respondent No. l noted that the cheque amount had not been credited into its account and nor was the same returned to it, even though, Respondent No. 1 made several requests and also wrote a number of letters to Petitioner No. 2. Petitioner No. 2, however, took the plea that it had sent the instrument to Petitioner No. 1 (Vijaya Bank) at Bellary for collection but Petitioner No. 1 replied that they had not received the cheque and thereafter informed that it had been misplaced. Aggrieved by this, Respondent No. 1 filed a complaint before the District Forum on grounds of deficiency in service and causing loss and requested that Petitioner No. 2 (Bank of Baroda) and Respondent No. 2 (M/s. Sri Sai Ram Traders) be directed to pay Respondent No. 1, Rs. 1,80,000 along with interest @ 24% from the date of presentation of cheque and litigation costs.

PETITIONER No. 2 denied that there was any deficiency in service on its part and stated that on receipt of the cheque presented by Respondent No. 1, it was sent to Petitioner No. l (Vijaya Bank) at Bellary for collection but it was Petitioner No. 1 which neither released the cheque nor returned the same to Petitioner No. 2 on the ground that it was misplaced in the office of Petitioner No. 1 at Bellary and sought Petitioner No. 2 ''s help to obtain a duplicate instrument from its customer.

THE District Forum after hearing both parties allowed the complaint and directed Petitioner No. 2 to pay Rs. 1,80,000 to Respondent No. 1 with interest @ 9% per annum from the date of presentation of cheque till realization with cost of Rs. 100 within four weeks from the date of its order. The complaint against Respondent No. 2 was dismissed. Aggrieved by this order, Petitioner No. 2 filed an appeal before the State Commission which remanded the complaint back to the District Forum for impleadment of Vijaya Bank (Petitioner No. 1) as a necessary and proper party to the proceedings and decide the complaint afresh.

THE District Forum after re-hearing the case, directed Respondent No.2 (M/s. Sri Sai Ram Traders) to pay Respondent No. 1, Rs. 1,80,000 within one month from the date of order failing which the said amount will carry interest @ 8% from the date of complaint. Petitioner No. 1 (Vijaya Bank) was directed to pay Respondent No. 1, Rs. 10,000 as compensation for deficiency in service as also Rs. 10,000 as litigation cost. Complaint against Petitioner No. 2 (Bank of Baroda) was dismissed.

RESPONDENT No. l filed an appeal before the State Commission pressing the liability to pay the award as directed by the District Forum on all the three partiesi.e. Petitioner No. 1 (Vijaya Bank), Petitioner No. 2 (Bank of Baroda) and Respondent No. 2 (M/s. Sri Sai Ram Traders). The State Commission after hearing the parties and on the basis of evidence recorded by it, directed Petitioner Nos. 1, 2 and Respondent No. 2, to jointly and severally pay Rs. 1,80,000 to Respondent No. 1 within three months from the date of the order failing which interest @ 8% per annum on the said amount will be applicable from the date of filing of the complaint till realization. The operative part of the order of the State Commission reads as follows: "The complainant had presented a cheque issued by OP-1 to OP-2 for collection. OP-1 after receiving the cheque sent the same to OP3. The cheque was lost, at the end of OP-3. Consequently, the complainant was deprived of the amount covered under the cheque and it could not make use of the same for its business. Since all the OPs are equally responsible for the loss of the cheque, in our view, the District Forum should have directed all the OPs to jointly and severally pay Rs. 1,80,000 to the Complaint with interest. In the event if any of the OPs is made to pay or satisfy the direction, it is open for such of the OP to recover the same from other OPs. "

Hence, the present revision petitions. Since, the facts of the case in the two revision petitions arise from a single order of the State Commission, it is therefore, proposed to dispose of these revision petitions by a single order.

LEARNED Counsel for Petitioner Banks and Respondent No. 1 made oral submissions. Counsel for Petitioner No. 2 (Bank of Baroda) stated that there was no deficiency in service on its part and the deficiency, if any, is on the part of Petitioner No. 1 (Vijaya Bank) since it had admittedvide its letter dated 12.6.2004 that the said cheque has been misplaced in their Bellary Branch. On the other hand, Petitioner No. 2 on receipt of the cheque had fully discharged its duties by sending it immediately for collection to Petitioner No. 1.

COUNSEL for Petitioner No. 1 (Vijaya Bank) on the other hand stated that State Commission erred in holding it responsible for deficiency in service by not appreciating the fact that there was no privity of contract between Petitioner No. 1 and Respondent No. 1 and thus, Respondent No. 1 is not its consumer under Section 2(d) of the Consumer Protection Act, 1986 as no service charges were ever paid by Respondent No. 1 or received by Petitioner No. l for any service. In fact the dispute for the loss of the cheque is between Respondent No. 1 and its Bank (Petitioner No. 2) where it has its bank account. Further, State Commission erred in not appreciating the fact that Respondent No. 2, the issuer of the cheque, did not have the requisite balance in his account in Canara Bank and therefore, even otherwise the cheque would have been dishonoured. According to the Counsel for Petitioner No. 1, Respondent No. l should have instituted a civil recovery suit for the said cheque. Counsel for Respondent No. 1 reiterated the position as stated before the Fora below and contended that State Commission had rightly compensated it for the loss caused as result of the misplaced cheque. We have heard learned Counsel for the parties and have gone through the evidence on record. The fact that a cheque for Rs. l,80,000 was presented by Respondent No. 1 to Petitioner No. 2 and that it was sent for clearance to Petitioner No. 1 at Bellary is not in dispute. It is also an admitted fact that the said cheque was misplaced by Petitioner No. 1 and it had informed Petitioner No. 2 about this fact in writingvide its letter dated 12.6.2004. While this may be a fact, we find force in the contention of learned Counsel for Petitioner No. 1 that since there was no privity of contract or lien between Respondent No. 1 and Petitioner No. 1, Respondent No. 1 is not its consumer in terms of Section 2(1)(d) of the Consumer Protection Act, 1986, and therefore, the complaint against Petitioner No. 1 under this Act is not maintainable. Petitioner No. 2 however cannot take a similar plea since there is a clear privity of contract between it and Respondent No. l since the former was Respondent No. 1 ''s banker. Therefore, while the cheque may have been misplaced by Petitioner No. 1 (and Petitioner No. 2 can initiate, suitable action against that, bank), it cannot absolve itself of its deficiency as a service provider vis-a-vis Respondent No. 1. We, therefore, hold Petitioner No. 2 (Bank of Baroda) guilty of deficiency in service and absolve Petitioner No. 1 (Vijaya Bank) of the same for the reasons cited above. So far as Respondent No. 2 is concerned, the dispute if any between it and Respondent No. 1 is a civil suit for which the remedy does not lie in the consumer Courts. To sum-up, in the instant case we hold only Petitioner No. 2 (Bank of Baroda) guilty of deficiency in service. Regarding the compensation amount to be given for deficiency in service, we are unable to agree that the compensation amount should be the same as that mentioned in the chequei.e. Rs. 1,80,000. There are a number of judgments of this Commission including in Canara Bank v. Sudhir Ahuja, I (2007) CPJ 1 (NC), wherein this Commission has held that on grounds of deficiency in service, the bank can be ordered to pay the compensation and not the entire amount of the cheque. Following this precedent and since there was clear a deficiency in service on the part of Petitioner No. 2, we are of the view that Rs. 30,000 is adequate and equitable compensation and therefore, direct Petitioner No. 2 to pay Respondent No. 1 this amount within a period of six weeks from the date of receipt of this order failing which this amount would carry interest @ 6% per annum. R.P. No. 49/2008 filed by Bank of Baroda is disposed of accordingly. R.P. No. 4201/2007 is allowed and the complaint against Petitioner/Vijaya Bank is dismissed with no order as to costs. Revision Petition allowed.