PER SUBHASH CHANDRA

        This Appeal under Section 19 of the Consumer Protection Act, 1986 (for short “the Act”) challenges the order dated 08.08.2018 of the State Consumer Disputes Redressal Commission, Maharashtra (for short “the State Commission”) in Complaint No.95 of 2004 whereby the Appellant was held guilty of deficiency in service and the Complaint was partly allowed with directions to the Appellant to pay to the Respondent/Complainant ₹24,50,000/- with simple interest @ 12% p.a. from the date of respective payments till realization. 

2.     The brief facts of the case are that the Respondent-Complainant alleges that between 23.02.1999 and 17.04.2001, 23 cheques were presented for payment to the Appellant Bank on their behalf for various sums ranging from ₹50,000/- to ₹2,00,000/-.  These cheques were duly encashed.  The Respondent-Complainant subsequently noticed that there were certain discrepancies in the Bank Account amounting to ₹25,00,000/- and therefore, requested the Appellant Bank on 28.04.2001 to provide the original cheques or photocopies since they suspected misappropriation by one or more of their staff by way of unauthorized withdrawals.  A statement of account was being regularly provided by the Appellant Bank to the Respondent-Complainant to which there had not been any objection.  According to the Appellant, the complaint before the State Commission had been filed after expiry of the period of limitation under Section 24-A of the Act.  A complaint filed before the Bank Ombudsman on 12.04.2004 (Complaint No.44/UA/04-05) by the Respondent-Complainant had been dismissed on the ground that it had been filed beyond the period of one year from the date of cause of action prescribed.  The complaint was filed before the State Commission seeking reimbursement of ₹25,00,000/- with interest of ₹30,50,000/- @ 13.5% p.a. and further interest @ 15% till realization along with costs of ₹3,00,000/- for mental agony.  The complaint was allowed by the State Commission vide the impugned order, which failed to appreciate that the Complainant had the knowledge of the misappropriation in April 2001 or at least from 17.10.2001 when the Respondent-Complainant addressed a letter to the Assistant General Manager of the Appellant seeking reimbursement of ₹25,00,000/-.  Appellant stated that the complaint before the State Commission was filed on 24.08.2004 after a period of 3 years and 4 months and the State Commission erred in entertaining the same.  The Appellant submits that the Complainant did not allege any misappropriation or fraud for over three years during which period it had received the statements of account.  The Appellant has, therefore, prayed to set aside the impugned order and for any orders as may be deemed fit and proper.

3.     We have heard the learned Counsel for both the parties and perused the record.

4.     The impugned order allowing the complaint of the Respondent-Complainant arrived at the following finding:

“REASONS:-

As to point No.1:-

xxxxxxxxxxx we are of the opinion that the banking transaction so far as it relates to its account holder is a transaction between service provider and consumer and is within the scope of the Consumer Protection Act, 1986. We therefore hold that the instant complaint lies within the jurisdiction of the said Act and the Complainant is a consumer within the meaning of the said Act.

As to point No.2:-

xxxxxxxxxxxx Complainant filed complaint before the Bank Ombudsman but the same was rejected on ground of limitation vide order dtd.16/04/2004 after which the Complainant filed the instant complaint and thus, it is filed within two years of order of Ombudsman. We also find that the cause of action is continuous. We therefore, hold that the instant complaint is not barred by limitation. Hence, we answer this point in the negative.

As to point No.3:-

xxxxxxxxxxxx The contention of Opponent bank that the payments were made in routine course of banking business cannot be accepted. Thus, from the above discussion we hold that the Opponent bank had made payments without taking due care while verifying the signatures and had encashed those cheques although signatures on them were forged.”

5.     Learned Counsel for the Appellant argued that the claim of the Respondent-Complainant that the matter was under correspondence with the Appellant and therefore, the period of limitation should exclude this period, cannot be accepted in view of the judgment of the Hon’ble Supreme Court in Kandimall Raghavaiah & Company vs. National Insurance Company & Anr., (2009) 7 SCC 768 that the period of limitation for the purpose of Section 24-A cannot be considered to have been extended only on the basis of a reply to a legal notice refuting the claim.  According to the Appellant, the cause of action commences in April 2001 when the Complainant approached the Appellant with the allegation of fraud as already stated by them vide para 53 of its Complaint before the State Commission.  Reliance was also placed on State Bank of India vs. B. S. Agriculture Industries (I) (2009) 5 SCC 121 in which the Hon’ble Supreme Court has laid down that Section 24 A of the Act is a legislative command for the Consumer fora and that if a complaint is barred by time and the same is decided on merits, the fora would be committing an illegality and the aggrieved party would be entitled to have the said order set aside.  It is, therefore, argued that the State Commission erred in proceeding to decide the matter on merits when it was patently barred by limitation and should have been rejected at the stage of admission itself.

 6.    On behalf of the Respondent-Complainant, learned Counsel argued for upholding of the order of the State Commission which was detailed and had considered all aspects including that of limitation.  It was contended that the State Commission had rightly concluded that this was a matter of a continuing cause of action and therefore, proceeded to adjudicate in the matter on merits.

7.     The only point for consideration before this Commission in this Appeal is whether the State Commission was correct in deciding the matter on merits without considering the applicability of Section             24 A of the Act with regard to the limitation.  Admittedly, the matter of discrepancy in cheques encashed had come to the notice of the Respondent-Complainant in April 2001.  It had written to the Appellant Bank and there was exchange of some correspondence in this regard.  The fact that the Appellant had provided statements of account with respect to the concerned Bank Account to the Complainant is not denied.  It is also not in dispute that the Appeal before the State Commission was filed much later on 26.08.2004.  The delay from the date of detection of the alleged fraud/misappropriation by the Respondent-Complainant and the filing of the Complaint before the State Commission has not been explained specifically by it.  It is also manifest that in this period it had also approached the Banking Ombudsman who had turned down the complaint on the ground that it was filed beyond the period of one year of limitation for filing of such a complaint.  The Respondent-Complainant was therefore well aware and advised on the remedies available.  It is also a registered Company which conducts its business through an established organization structure.  It cannot therefore claim that it was not aware of procedures and/or the delay was condonable.  The State Commission has erred in not considering the fact that the Complaint before it was barred by limitation under Section 24 A of the Act, especially since                             no application for condonation of delay was filed before it by the Complainant explaining the reasons for the delay.

8.      In Ram Lal and Ors. vs. Rewa Coalfields Limited, AIR 1962 Supreme Court 361, the Hon’ble Supreme Court has observed as under:

“It is, however, necessary to emphasize that even after sufficient cause has been shown a party is not entitled to the condonation of delay in question as a matter of right. The proof of a sufficient cause is a discretionary jurisdiction vested in the Court by S.5. If sufficient cause is not proved nothing further has to be done; the application for condonation has to be dismissed on that ground alone. If sufficient cause is shown then the Court has to enquire whether in its discretion it should condone the delay. This aspect of the matter naturally introduces the consideration of all relevant facts and it is at this stage that diligence of the party or its bona fides may fall for consideration; but the scope of the enquiry while exercising the discretionary power after sufficient cause is shown would naturally be limited only to such facts as the Court may regard as relevant.”

9.      The Hon’ble Supreme Court in another case of R. B. Ramlingam vs. R. B. Bhavaneshwari, I (2009) CLT 188 (SC),  has stated that a court has to apply the basic test while dealing with the matters relating to condonation of delay, whether the Petitioner has acted with reasonable diligence or not.  The court has held as under:

"We hold that in each and every case the Court has to examine whether delay in filing the special appeal leave petitions stands properly explained. This is the basic test which needs to be applied. The true guide is whether the petitioner has acted with reasonable diligence in the prosecution of his appeal/petition.”

10.    While dealing with the matters under the Act, it has been held in the case of Anshul Aggarwal vs. New Okhla Industrial Development Authority, (2011) 14 SCC 578, by the Hon’ble Supreme Court that the special nature of the Act has to be kept in mind while dealing with the special period of limitation prescribed therein.  The court has held as under:

“It is also apposite to observe that while deciding an application filed in such cases for condonation of delay, the Court has to keep in mind that the special period of limitation has been prescribed under the Consumer Protection Act, 1986 for filing appeals and revisions in consumer matters and the object of expeditious adjudication of the consumer disputes will get defeated if this court was to entertain highly belated petitions filed against the orders of the consumer Fora."

11.     In view of the clear position of law, the impugned order is liable to be set aside on the ground of being barred by limitation. The First Appeal is accordingly allowed.  The impugned order is set aside and the Complaint No.95 of 2004 is dismissed being barred by limitation.

12.   Pending IAs, if any, stand disposed of with this order.