Delhi

StateCommission

A/08/983

CORPORATION BANK - Complainant(s)

Versus

M/S A.K. ELECTRICALS - Opp.Party(s)

20 Feb 2020

ORDER

IN THE STATE COMMISSION : DELHI

(Constituted under Section 9 of the Consumer Protection Act, 1986)

Date of Arguments 20.02.2020

Date of Decision : 02.03.2020

FIRST APPEAL NO.983/2008

In the matter of:

 

Corporation Bank,

Block-II, Ground Floor,

CGO Complex, Phase-I,

New Delhi-110003.                                                                         …..Appellant

 

Versus

 

            M/s. A.K. Electricals,

7 Mehar Chand Market,

Lodhi Colony,

New Delhi.                                                                            ………Respondent

 

CORAM

Hon’ble Sh. O. P. Gupta, Member (Judicial)

1.     Whether reporters of local newspaper be allowed to see the judgment?                                                               Yes/No

2.      To be referred to the reporter or not?                                                                                                        Yes/No

Shri O.P. Gupta, Member (Judicial)

JUDGEMENT

1. Feeling dissatisfied with order dated 22.09.08 passed by District Forum allowing complaint no.42/06, OP-1 has come in the present appeal. The case of the respondent herein was that it was maintaining a CVPOD account with appellant to secure overdraft limit of Rs.16 lakhs. It received enquiry from overseas customer named M/s. Electronic World Trading Company, Kampla, Uganda over email on 19.05.05 requesting it to send price list. It sent the same and informed the overseas customer over email on 20.05.05 that on receipt of exact requirements it would send performa invoice and it would accept payment either by bank transfer or bankers cheque before dispatch. The overseas buyer sent order on email on 20.05.05 for supply of material worth US$ 24100. The overseas buyer informed complainant on email dated 06.06.05 that they sent a cheque worth USD 28000 for the order and towards the cost of freight and other shipment expenses. Complainant informed that it did not accept overseas cheque and asked for bank draft payable at New Delhi. The buyer sent letter dated 25.05.05 enclosing cheque dated 25.05.05 for US$ 28000 and the name of the maker of cheque was M/s. Hegner, Rigway and Jagson. The cheque was from personal account of Mr. Brain Murphy and was signed by said person.  The complainants deposited the cheque with the appellant bank on 09.06.05. Rs.12,18,000/- which was a equivalent amount of the cheque was credited in the account of respondent. Appellant deducted commission of Rs.3,356/- FIRC commission of Rs.100/- P&T charges of Rs.50/- The net amount credited was Rs.12,15,200/-. Appellant was requested to issue certificate of foreign inward remittance which it did on 11.07.05. Though the payment was received by the appellant (overseas branch on 18.06.05) but as per procedure of the bank, the amount was credited after 21 days.
2. Complainant started preparing the goods for export and the first consignment was sent on 12.08.05, second consignment was sent to 03.09.05, balance of US$ 3130 remained due to the buyer. Value of the same viz. Rs.1,40,000/- was sent to the buyer by bank by transaction dated 17.09.05. After all the goods were dispatched on 12.08.05 and 03.09.05 and refund of money on 17.09.05, appellant called Managing Director of respondent to the bank on 30.09.05 and verbally informed it that it was a defective cheque and complainant may have to reimburse the amount. Appellant debited respondent’s account with Rs.12,37,320/- and respondent was asked to regularise the loan  account and operate its account within the stipulated limit. Hence respondent filed a complaint for said amount.
3. Appellant filed WS pleading that on 30.09.05 it received instruments of US$ 28000/- from Wachovia Bank alongwith debit advice dated 19.09.05 mentioning reason “ALTERED 4 AMT.  CLT.29630.00 CCU CASE # WACPA0525910210” certificate dated  26.07.05 from notary public and affidavit for forgery and altered items  dated 20.07.05. On 05.10.05 account of respondent was debited by the appellant. The complainant itself asserted that “on a bare perusal of the chain of events anyone can safely conclude that the sender of the cheque, signatory of the cheque and the payee bank i..e Wachovia Bank, N.A. Pennsylvania were in connivance to the defraud the complainant”. But neither any attempt was made by the complainant to sort out the instant issue with the overseas buyer nor complainant made the said buyer as a party to the present proceedings. Said inaction on the part of complainant clearly stipulates that complainant is / may also be hand in glove with the aforesaid parties which can only be confirmed during investigation being done by police.
4. Both the parties filed evidence. They were heard and after going through the record, District Forum passed the impugned order. The District Forum observed that so far as forgery, is concerned it is for the police to investigate and verify and make a final report if the cheque is result of forgery or not or it is genuine cheque. The District Forum found that it was not considering  as to who had manipulated the cheque or whether there was any connivance of the complainant or the bank. It was only concerned about  the customer’s right. Rule of natural justice required that once payment had been credited in the account of complainant, the same could not be debited at the behest of the consignee, on the back of the complainant and without even information to the complainant.
5. I have gone through the material on record and heard the arguments. At the very outset I am constrained  to observe that the approach made by the District Forum is the most easiest way to dispose of the case. It did not take pain to find out as to who was at fault.
6. The counsel for appellant urged that District Forum has not decided its objection that matter was out of the purview of consumer court because the respondent had account in connection with business. She pointed out that preliminary objection no.2 of WS at page-39 of the bunch of appeal reveals that appellant took objection that complaint has been filed by a person who is not covered under the definition of ‘consumer’ provided under Section  2(d) Consumer Protection Act because the complainant is a proprietorship concern  which is engaged in commercial activities and as such the complaint is required to be dismissed at threshold. The fact of commercial activities is self evident from the facts alleged in the complaint which clearly shows that services of OP have been availed by the complainant solely for commercial purpose.
7. The counsel for the appellant seems to be correct to that extent. Order of the District Forum is totally silent as if no such plea was raised before it.
8. To buttrests her arguments in support of the objection that complainant was not a consumer, she relied upon the decision in the following cases:-

1. Gurjit Singh vs. Bank of Punjab IV (2008) CPJ 70 NC.
2. Ishwar Singh vs. Dakshin Haryana Vidyut Prasaran Nigam Ltd. II (2011) CPJ 18 NC.
3. Victory Electricals Ltd. vs. IDBI Bank ltd. I 92012) CPJ 55 NC.
4. Shushma Goel vs. Punjab National Bank II (2011) CPJ 270 NC.
5. Axis Bank vs. Punjab National Bank II (2015) BC 390 DB Delhi.

9. Counsel for the respondent refuted the above arguments by stating that in  a  celebrated judgement of Laxmi Engg. Works vs. PSG Industrial Institute AIR 1995 SC 1428 Hon’ble Supreme Court ruled that the person who buys goods and uses them himself, exclusively for purpose of earning his livelihood by means of self employment is a consumer within the meaning of Consumer Protection Act. It was further held that question whether purpose, for which  person has bought goods is a commercial purpose is a question of fact to be decided in facts and circumstances of each case. To that extent there can be no quarrel.
10. The counsel for the respondent went on to cite decision in Biratunga  S.C.S. Ltd. vs. Sangram Keshari Pati AIR 2006 Orissa 97 in which it was held that where a complaint claiming compensation for deficiency in banking service is filed, the State Commission has jurisdiction. The question involved in the said case was that banking service was a service as defined in Consumer Protection Act. The question whether it was commercial of not was not involved.  Rather the complainant had a saving account with the bank.
11. Counsel for respondent also submitted that remedy under Section 3 Consumer Protection Act is in addition to and not in derogation of provisions of any other law. I fail to understand as to what the respondent wants to make out of it.
12. Action Construction Equipment Ltd. vs. Bablu Mridha 4 (2012) CPJ 245 NC was a  dispute between the purchaser and vendor  Bank was not a party.
13. In C.P. Moosa vs. M/s. Chowgle Industries Ltd.  2001 (2) CPR 92 NC the question was whether goods purchased for commercial purpose would be covered under Consumer Protection Act, if warranty given in sale was unexpired. The same has nothing to do with the case in hand. To the same effect is the decision in Super Computer Centre vs. Globiz Investment Pvt. Ltd. III (2006) CPJ 265 NC.
14. In D. Sundarson Sen, Manager, Canara Bank vs.  R.K. Singhal 1994 (3) CPR 41 this Commission held that where a forged charge is cleared by them without verification, the bank is deficient in service. Investigation by police relates to criminality of an act whereas as complaint before Consumer Fora relates to negligent in service. It appears that in the said case the question was whether proceedings under Consumer Protection Act can go simultaneously with investigation by police.  The objection of transaction being commercial in nature was not raised.
15. L. Pirbhu Dayal vs. Jwala Bank AIR 1998 (sic it should be 1938) Allahabad 374 is insignificant. By that time  Consumer Protection Act has not been enacted even.
16. In N. Venkanna vs. Andhra Bank 1 (2006) CPOJ 132 the complainant was operating a saving bank account and the case pertained to withdrawal through withdrawal form on basis of forged signature. That has no relevance.
17. In Sun  Pharmaceutical Inds. Ltd. vs. State Bank of India O.P. no.157/1995 decided by NC on 23.05.07 the question was what is the effect of delay in communicating the discrepancies in documents to the complainant and not dealing with the documents promptly. That has no bearing in the present case.
18. Uma Shankar Bhatt vs. Punjab & Sind Bank  O.P. No.98/2002 decided by NC on 11.12.07 there was evidence of negligence of officers of the bank and also evidence of fraud being committed. The question whether commercial transactions would be covered was not raised.
19. CMD, Bank of Baroda vs. Dr. George John F.A. No.27/07 decided by NC on 05.08.08 the question was regarding operation of account opened in Chinganur Branch and pecuniary jurisdiction of District Forum. It was the case  of saving fund account. It is not relevant.
20. Canara Bank vs. Binay Kumar Jha R.P. no.3210/05 decided by NC on 14.10.08 was a case of transfer of loan amount to the account of the complainant.
21. In F.A. no.801/03 titled as Vijaya Bank vs. Pooja G. Joshi decided by NC on 23.10.08 thee was a deposit of Rs.5 lakhs in saving bank account which was not   processed. The objection of the bank was regarding limitation.
22. In V.S.A. Subramaniam vs. The General Manager, Intl. Banking Division, Vijaya Bank  CC no.1/93 decided by State Commission (name of State not decipherable) the question was loss of instrument deposited for collection.
23. In Vimal Chandra Grover vs. Bank of India 2002 (3) SCR 587 the question was as to when bank can dispose of pledged goods.  Another point was that banking was service within the meaning of Consumer Protection Act.
24. Text of judgement in Standard Chartered Bank Ltd. vs. Dr. B.N. Raman, Super Engg. Corporation vs. Sanjay Vinayak Pant 1992 CPJ (1)  95 NC and Bhupenda Triguna vs. Regional Manager II (1995) CPJ 139 have not been supplied. So I cannot decide what were the facts therein.
25. I do not feel that any of the judgement cited by counsel for respondent is of help to him in this case. As compared to it the decisions cited by counsel for appellant are more germane and direct to the point that commercial transactions are not covered under Consumer Protection Act.
26. In view of the above discussion I hold that complainant / respondent was not a consumer and the complaint was not maintainable.
27. Still I would like to deal with the merits also because it is already a very old matter and in order to avoid  any possibility of remanded on technical ground, I deem it proper to deal with the merits of the case also.
28. Complainant himself mentioned in para 18 of the complaint that on bare perusal  of the chain of the events anyone can safely conclude that the sender of the cheque, signatory of the cheque and the payee bank i..e Wachovia Bank, N.A. Pennsylvania were in connivance to the defraud the complainant. If the complainant had been informed about said discrepancy it would have stopped the consignment immediately. In other words it means that complainant could not detect the forgery in the cheque. If complainant who was the first person to receive the cheque could not detect the forgery, then how the appellant/ OP can be expected to have noticed the forgery. The employees of the appellant bank were ordinary person like complainant. They didn’t have any advance/ special knowledge in the field of comparison of writing.
29. I had tried to find out the copy of the cheque received by the complainant and deposited by him in the bank which is available at page-38 of bunch of complaint in the file of District Forum. The same does not give even an iota of suspicion that amount in the cheque is altered one.
30. I have also seen the affidavit for forged and altered items sent by a payee bank which is at page-41 of bunch of complaint in the file of District Forum. It shows in fourth column that amount item was written for (altered items only) was $ 578.00. Third column shows that the amount items (s) was paid for $ 28,000.00. It is apparent that the figure 57 has been tried to be shown as 2. Figure 8 has been left as it is. Three zeros have been added before .00. The same is accompanied by certificate from notary public which is at page-40 of bunch of complaint in the file of District Forum.
31. In these circumstances the appellant bank which was a collecting  bank is entitled to protection under Section 131 Negotiable Instrument Act. In bank of Maharastra vs. M/s. Automotive Engg. Company (1993) 2 SCC 97 it was held that on visible examination no infirmity found in the cheque – did not further scrutiny by using modern devices such as ultra violate ray lamp, same being not available in the branch though the branch was located at the outskirt of a metropolitan city where the case of forgery were higher. There was nothing to show that payment made by the bank was made otherwise than in good faith. Forgery detected later on, held bank not liable on ground for negligence merely because of its failure to scrutinise the cheque in ultra-violate ray lamp. In para-8 it was  observed that the standard of care of a banker in collecting cheque is not  that of an individual invited to purchase or cash such cheque for it is not  part of the business or ordinary practice of a bank to collect cheques/ It has been held  by Privy Council in Commissioner of Taxation vs. English Scotish and Australian Bank ltd AIR 1920 Prive Council 88 that to lay down that no cheque should be collected without a thorough  enquiry as to the history of cheque  would  render  banking business impossible and that the fact of a cheque being paid into the account, the next day after the  account was opened being  in no way unusual was not such as to  put the bank on enquiry and there was no negligence on the part of the bank in collecting for cheque.
32. The case in hand is squarely covered in the above preposition.
33. Complainant did not make overseas buyer as party to the case. So this Commission did not have privileged to have views of purchaser. There is no reason for not joining purchaser as party in the complaint case.
34. In United Commercial Bank vs. Mahindra Poptalal I (1995) CPJ 83 National Commission held that Bank does not employ high tech methods. Hence if signature on cheque has close similarities, there is no negligence on part of Bank. Similar view was taken in Prempreet Textiles vs. Bank of Baroda III (2006) CPJ 218.
35. Counsel for respondent submitted that appellant did not return the cheque despite repeated requests of the respondent. The counsel for appellant suitably replied that in 2008 the cheques were being sent in original to the payee bank. The practice of sending electronic image started much later. Hence the cheque is not available with the appellant. So it could not return the same.
36. I asked the counsel for respondent as to what happened to the  police case initiated by him. Initially he was reluctant to tell the same. Ultimately he took shelter of information received by him under RTI vide letter dated 02.08.13 which is annexed with application for stay of execution. It refers to complainant’s application dated 16.07.13 asking for information  and in reply it is mentioned that old record of complaint for the year   2005 has already been destroyed. Hence no information could be provided at that stage. It is from the office of Additional DCP cum PIO, South District, New Delhi.
37. I immediately asked the counsel for the respondent as to what the respondent was doing from 2005 to 2013. Why he was sleeping for long 8 years. Now to have a reply that the record has been destroyed is not sufficient. Complainant should have vigorously pursued his complaint and compel the police to find out as to when forgery has been done, by whom and whether it could be deciphered by an ordinary person like appellant bank.
38. I do not find that there was any negligence on the part of appellant bank in crediting the amount. Once the payee bank refused to dishonour the cheque, appellant bank was entitled to recover it from the complainant. There is nothing wrong on the part of the appellant in debiting the account of the complainant. The appeal is accepted, impugned order is set aside and complaint is dismissed.
39. Copy of the order be sent to both the parties free of cost.
40. One copy of the order be sent to District Forum for information.
41. File be consigned to record room.

 

(O.P. GUPTA)                                                      MEMBER (JUDICIAL)

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