Smt K.Indira Kiran W/o G.Sreenivasa Rao
Aged 34 years, R/o MIG-47, APIIC Colony
IDA Jeedimetla Hyderabad.



1. State Bank of India
Jeedimetla Branch, Hyderabad
AP 500055, rep. by its Chief Manager

2. State Bank of India
Head Office, Koti, Hyderabad, A.P.
Rep. by its General Manager-Operations

3. State Bank of Hyderabad
Shapurnagar, Jeedimetla Branch
Hyderabad A.P.
Rep. by its Manager

4. State Bank of Hyderabad
Head Office, Gun Foundry
Hyderabad-500 001
Rep. by its General Manager (Operations)

5. Ms G.Pavani, LIG, 50
APII C Colony, IDA, Jeedimetla Hyd.
(No relief is claimed from OP No.5 but her
name is included as she is a necessary
party to the complaint)

Respondents/opposite parties

Counsel for the Appellant: Sri M.Hari Babu

Counsel for the Respondents No.1&2 Sri Mohd Ubedulla
Counsel for the Respondents No.3&4 Sri K.Sridhar Rao
Counsel for the Respondent No.5





Oral Order ( As per Sri R.Laxminarsimha Rao, Member)

This appeal is preferred against the orders of District Forum, Ranga Reddy District in C.D.No.90 of 2005.

The facts as averred in the complaint are that the appellant has her account A/c No.10200630826 with the respondent no.1 and presented the cheque bearing No.727361 dated 1.7.2001 drawn on respondent no.3 bank and issued by respondent no.5 for an amount of Rs.1,20,000/-. On being instructed by the clerk of the respondent no.1 bank, the appellant dropped the cheque along with pay-in-slip in the drop box and kept with her the counter foil and on 12.7.2005 the appellant came to know while getting updated the entries of her passbook that the amount of Rs.1,20,000/- covered under the cheque was not credited to her account. The Manager of respondent no.1 bank assured her that they will conduct enquiry and inform the appellant. On 15.7.2005 and on 19.7.2005 the appellant reminded the respondent no.1 bank about the amount under the cheque. In response, respondent no.1 addressed letter dated 16.7.2005 to the respondent no.3 to verify the factual position of the cheque. On being requested by the appellant, respondent no.5 sought clarification from respondent no.3 bank who through letter dated 20.7.2005 informed respondent no.5 that the cheque was paid in cash to its bearer across the counter on 4.7.2005. On the reverse of the cheque the name of one K.Indrakumar and dated 7.7.2005 was written while cash was paid on 4.7.2005. The staff of respondents no.1 to 3 caused pecuniary loss to the appellant to the extent of Rs.1,20,000/- When cheques above Rs.20,000/- are not accepted by the respondents no.1 to 4 for cash payment, they are to be enrooted through account credit and insisting upon PAN numbers of the persons drawing the amounts above Rs.50,000/- on wards, the respondent no.1 paid cash without taking such precautions.

On 3.8.2005 respondent no.1 addressed a letter to the appellant denying the deposit of cheque by the appellant in the drop box to which the appellant got issued a legal notice through her advocate on 18.8.2005 demanding respondent sno.1 to 4 to look into the matter and pay compensation in lieu of the cheque amount. The respondent no.4 through their letter dated 26.8.2005 informed the appellant that their zonal office would enquire into the matter. Respondent no.3 gave reply on 3.9.2005 denying their liability and respondent no.1 through their letter dated 15.9.2005 denied any deficiency in their service and reiterated that the appellant did not deposit the cheque in the drop box. It is further submitted that the appellant lodged a complaint with the police, Jeedimetla on 20.7.2005 and an FIR was registered in Cr.No.544/05.

The respondent no.1 challenged the claim. It was stated that the appellant was their customer. It was denied that the appellant deposited the cheque in the drop box. On 16.7.2005 respondent no.1 addressed a letter to the respondent no.3 on which bank the cheque was drawn in pursuance of representation made by the appellant on 15.7.2005 and it was further submitted that the contents of the complaint show that the appellant misplaced the cheque somewhere and the same was encashed by some miscreants or she herself might have got it encashed through her agents and made false complaints for wrongful gain. The cheque without being crossed, was dropped in the drop box is not believable.

The drop box system was established only to render public service and avoid delay. The appellant being a highly educated woman cannot be expected to deposit uncrossed cheque in the drop box. Respondent no.1 and 2 are not responsible for misplacement of the cheque by the appellant and encashment of the same by some third party. Immediately after the cheques are taken out from the drop box by responsible official of respondent no.1 bank, stamp would be affixed on all the instruments before they were sent for collection. The cheque in question does not bear any stamp of respondent no.1 bank and the outward clearing scrolls clearly show that the cheque was not deposited in the drop box. On the drop box it was permanently displayed that any cheque to be deposited must be crossed. Respondent no.5, the drawer of the cheque had been silent during the entire proceedings and she did not complain against any wrongly debited from her account in respect of the cheque in question.

Respondents no.3 and 4 in their counter submitted that a letter dated 20.7.2005 was submitted by respondent no.5 to respondent no.3 bank and a reply by them was sent enclosing Xerox copy of cheque and informing that the cheque was paid on 4.7.2005 across the counter and as such the appellant had not dropped the cheque in the drop box at respondent no.1 bank. When a bearer cheque was presented across the counter for payment, the payee bank is bound to honour the same and there is no need for any endorsement by the payee /appellant as the bearer cheque can be presented by any person for payment across the counter. It is denied that any cheque above Rs.20,000/- have to be enrouted through account only.

The cheque was paid across the counter as per procedure. The bank has statutory protection u/s 85(2) of Negotiable Instruments Act. Before making payment the respondent no.3 bank had taken all precautionary names as usual by obtaining the signature and address of the person who presented the cheque and also made enquiry as to how he was related to the appellant and he informed that he was the brother of the appellant and as there was no suspicious situation on 4.7.2005 the payment was made.

Respondent no.5 sent her version from USA stating that by the time summons were received from the District Forum, she was in the USA by 30.7.2005 for the purpose of her studies prosecuting her studies in MS. She had issued the cheque to the appellant drawn on her account with respondent no.3 bank and handed over the cheque to the appellant and she came to know that the cheque was presented for collection in the respondent no.1 bank and the proceeds were not credited to the account of the appellant. Respondent no.5 wrote a letter to the respondent no.3 bank confirming that she had issued the cheque to the appellant and sought for clarification. Respondent no.3 bank gave reply that the cheque was presented across the counter and the same was paid to the bearer of the cheque. Thereafter respondent no.5 could not follow up the matter further as she had gone to the USA.

Basing on the documentary evidence Exs.A1 to A18 and Exs.B1 to B6 and affidavit of the parties, the District Forum dismissed the complaint.

Aggrieved by the order of dismissal of the complaint, the complainant had preferred the appeal on the ground that there was negligence on the part of the respondents not paying the cheque amount to Indra Kumar though the cheque was drawn in the name of the appellant, Smt K.Indira Kiran.

The points for consideration are:

1. Whether there was any deficiency in service on the part of the respondents no.1 to 4?

2. To what relief?

POINTS No.1 The respondent no.5 issued cheque bearing NO.72736 dated 1.7.2005 for Rs.1,20,000/- in favour of the appellant. The amount covered under the cheque was withdrawn. The appellant disputes that the amount was not paid to her whereas the respondents state that the appellant deposited the cheque across the counter and the amount was paid to her representative who deposited the cheque. Therefore it is clear that the amount was paid and now it is to be seen to whom the amount covered under the cheque was paid and whether the respondents are at fault in making payment. The cheque was in the name of the appellant and on the back of the cheque signature of ‘K.Indra Kumar’ is mentioned and the date of payment is shown as 7.7.2005 and address of the payee is mentioned as Srinivasa Enclave, Shapurnagar. On 15.7.2005 the appellant had issued letter stating that she deposited two cheques bearing Nos. 727361 dated 1.7.2005 for Rs.1,20,000/-, cheque bearing No.387860 dated 31.5.2005 for Rs.987.50 in cheque drop box and on 12.7.2005 she verified her account and came to know that two cheques were not credited to her account. Immediately she contacted State Bank of Hyderabad, Shapurnagar Branch on which branch the first mentioned cheque was drawn and the bank informed her that the cheque was cleared on 4.7.2005 and the appellant addressed another letter dated 19.7.2005 which is a reminder of the earlier letter. However, in this letter the cheque bearing No.387860 is not mentioned and what happened to that cheque is not stated anywhere in the letter.

The appellant had stated that she lodged a complaint with the police in regard to the non-crediting of amount covered under Ex.A1 cheque. It is not known as to what happened to that case. It is the consistent version of the respondent no.3 that the appellant had not deposited the cheque in the drop box and she had presented the cheque through her cousin across the counter on making verification of his particulars, the amount was paid to him. Therefore it is a fact though the cheque was deposited with the respondent no.1 bank, the appellant had not come with evidence to show that she deposited the cheque in the drop box. The statement of respondents gains support from the silence accepted by the appellant in regard to the second mentioned cheque. She did not come-forward to state as to what happened to that cheque.

The respondents contended that usually a cheque for Rs.1,20,000/- cannot be a bearer cheque and it will be an A/c payee cheque and it is for the appellant to show as to why she had taken the risk for getting a bearer cheque than an A/c payee cheque. Section 8 of the N.I. Act, 1881 states that a holder in due course means any person who for consideration became the possessor of a promissory note, bill of exchange or cheque if payable to bearer or the payee or indorse thereof, if payable to order, before the amount mentioned in it became payable, and without having sufficient cause to believe that any defect existed in the title of the person from whom he derived his title.

There is a difference between a holder for collection and holder in due course. A holder in due course is entitled to claim better rights than the transferor. An A/c payee cheque is different from an ordinary cheque. It is entitled to protect the drawer against the theft or loss. It is in addition to crossing, but is a merely a direction to the receiving bank that the drawer desirous to pay the particular cheque into the bank which keeps the account of payee. Hence a bank cannot be found fault with unless amount covered under a cheque received by it is credited to the account of a person other than the payee or without any sufficient cause if it fails to honour the cheque. From 1.7.2005 on which date the cheque was said to have been deposited with the respondent no.1 till 12.7.2005 more than 10 days was lapsed and the appellant at the end chosen to complain on 12.7.2005 on which date she was said to have been acquainted with the fact of non-credit the amount covered under the cheque to her account.

Having received the cheque and having made enquiry of the person who deposited the cheque and being satisfied of the signature of the drawer of the cheque tallied with the signature of the account holder who issued the cheque, the respondent no.1 paid the amount and the cheque was transmitted to respondent no.3 for clearance. It is pertinent to note here that the second cheque about which there has been no dispute was issued by Margadarsi Finance and it being a A/c payee cheque, the amount covered under it was credited to the account of the appellant. The appellant’s silence over the remittance of the amount covered under this cheque to her account making as dispute her version of deposited the cheque in cheque drop box. The appellant’s suspicion that the staff of the respondent no.1 had played fraud on her and got the cheque encashed, cannot be looked into at this stage as the criminal case is pending before the court as what we are concerned here is to the extent of deficiency if any on the part of the respondent no.1 in receiving the cheque and paying the proceeds in respect of the cheque to the bearer. As aforesaid, the respondent tno.1 had not shown any negligence either in receiving the cheque from the bearer having conducted the enquiry thereof and making the payment of the amount thereunder. In the circumstances, we find no deficiency in service on the part of the respondent’s no.1 to 5. The appellant is at liberty to raise her plea of fraud played by respondent no.1 bank on her in an appropriate forum.

POINT NO.2 In the result this appeal fails and is accordingly dismissed. No costs.