Punjab

Faridkot

CC/15/153

Sham Sunder - Complainant(s)

Versus

Axis Bank - Opp.Party(s)

Vipin Kumar Tayal

15 Mar 2016

ORDER

      DISTRICT  CONSUMER  DISPUTES  REDRESSAL  FORUM,  FARIDKOT

 

Complaint No. :        153

Date of Institution :  2.11.2015

Date of Decision :    15.03.2016

 

1. Sham Sunder sole Proprietor of business firm M/s Sh Guru Nanak Agro Industries situated at Old Factory Road, Kotkapura, Tehsil Kotkapura, Distt Faridkot.

2. Sh Guru Nanak Agro Industries situated at Old Factory Road, Kotkapura, Tehsil Kotkapura, Distt Faridkot through its Proprietor Sham Sunder.

    

                                                    .....Complainant

                      Versus

3. Axis BanK Ltd situated at Circular Road, Branch Faridkot through its Branch Manager/Authorised Signatory.

4. Axis Bank Ltd registered office ‘Trishul’, 3^rd Floor Opposite Samartheswar Temple, Near Law Garden Eilisbridge Ahmadabad.

                                         ....Opposite Parties

    

   Complaint under Section 12 of the

   Consumer Protection Act, 1986.

    

   Quorum : Sh Ajit Aggarwal, President.

                   Smt Parampal Kaur, Member.

                   Sh P Singla, Member.

 

 

Present: Sh Vipan Tayal, Ld Counsel for complainant,

              Sh Sandeep Tayal, Ld Counsel for OPs.

 

 

ORDER

(Ajit Aggarwal, President)

 

                                                      Complainant has filed the present complaint under Section 12 of the Consumer Protection Act, 1986 against OPs seeking directions to OPs to pay Rs.5,61,974/- falsely claimed by Kakkar Enterprises from complainant and for further directing OPs to pay Rs 1,00,000/- as compensation on account of mental tension, harassment and inconvenience besides Rs.33,000/-as cost of litigation.

 2                                       Briefly stated, the case of the complainant is that complainant is having current account bearing no.910020031306887 with OP-1 and OP-2 is its Head Office. Complainant firm started purchasing khal, feed and grocery goods from M/s Kakkar Enterprises Firm, Faridkot at whole sale price from 10.05.2013 to 20.03.2014 on different dates and paid the amount to said firm by way of cash, cheque and through NEFT system and prior to the month of March, 2014, complainant firm handed over three cheques bearing no. 057760, 057794 and 056795 of Axis Bank Branch, Faridkot to M/s Kakkar Enterprises, Faridkot for security purpose. It is contended that on cheque bearing no. 057760 of Axis Bank was never filled up the date, amount in words and in figures at the time of handing over to M/s Kakkar Enterprises. There arose a dispute between complainant firm and Kakkar Enterprises and having apprehension that Sachin Kakkar Proprietor of M/s Kakkar Enterprises firm may misuse the cheque no. 057760 of Axis Bank only signed by complainant, on 18.03.2014, complainant gave instructions to OP-1 for stopping the payment of said cheque, which was accepted by OP-1 and they issued receipt by getting charges. Separate intimation regarding this was also given to M/s Kakkar Enterprises through On Dot Courier and complainant firm also issued legal notice dt 21.04.2014 and 12.06.2014 to Kakkar Enterprises to return the cheques bearing no. 057760, 057794 and 057795 of Axis Bank Branch Faridkot to complainant but to no effect. On 30.10.2014, Kakkar Enterprises malafidely presented the cheque bearing no. 057760 dt 30.09.2014 for encashment through his bank and sent the same for collection to OP-1 and OP-1 in connivance with Kakkar Enterprises dishonoured the same with endorsement “insufficient funds”. Op-1 has full knowledge regarding instructions dt 18.03.2014 given by complainant for stopping the payment, but they did not obey the instructions and issued memo dt 30.10.2014 showing insufficient funds in the account of complainant, which amounts to deficiency in service and trade mal practice and due to this act of Ops, M/s Kakkar Enterprises issued wrong legal notice dt 28.11.2014 for illegal demand of cheque amount, failing which, threatened complainant to take action under Section 138 of Negotiable Instrument Act. Complainant moved an application against M/s Kakkar Enterprises and employees of OP-1 for police action against them for committing forgery and cheating against complainant. Thereafter, in the month of September, 2015 M/s Kakkar Enterprise filed complaint against complainant u/s 138 of Negotiable Instrument Act on the basis of cheque no.057760, which was shown insufficient funds by OP-1. It is further contended that now, complainant is on bail and is facing trial under Section 138 of N. I. Act for Rs 5,61,974/- before the ld Trial Court at Faridkot due to collusiveness and negligent conduct of OP-1 and due to all this complainant has suffered great harassment. Complainant has made many requests to OPs to compensate the complainant but all in vain. All this act of OPs amounts to deficiency in service and trade mal practice, which has caused great harassment and mental tension to complainant for which he has prayed for seeking directions to Ops to pay compensation and litigation expenses besides the main relief. Hence, the present complaint.

3                                        The Counsel for complainant was heard with regard to admission of the complaint and vide order dated 6.11.2015, complaint was admitted and notice was ordered to be issued to the opposite party.

  4                                      On receipt of the notice, the opposite party filed written statement taking preliminary objections that present complaint is not maintainable as complainant is not their consumer and it is liable to be dismissed. It is averred that complaint involves complex questions of law and facts and this Forum has no jurisdiction to try and hear the present complaint. It is further averred that complainant has concealed the material facts from this Forum and has not come to the Forum with clean hands, rather true facts of the complaint are that earlier on 30.09.2014, the cheque was presented for encashment, but same was returned alongwith memo Payment Stopped by the drawer and again the same was presented for encashment on 30.10.2014, but inadvertently, the cheque was returned alongwith memo ‘Funds Insufficient’ instead of ‘Payment Stopped’ and when this mistake was brought into the notice of answering OPs, they immediately sent a letter to the Central Bank of India and also felt sorry for this, but complainant has filed this complaint only to harass the OPs and to extract money from them. It is further averred that when the cheque was present, there was no money in the account of complainant and inadvertently, the memo was issued for insufficient funds. Moreover, complainant has not impleaded Central Bank of India and M/s Kakkar Enterprises, which are necessary parties to the present complaint and therefore, complaint is liable to be dismissed. However, on merits, OPs have denied all the allegations levelled by complainant being wrong and incorrect and reiterated that there is no deficiency in service on the part of OPs. All other allegations and allegation with regard to relief sought too were refuted with a prayer that complaint may be dismissed with costs against the answering opposite party.

   5                                             Parties wanted to lead evidence to prove their respective pleadings and proper opportunity was given to them.  The complainant tendered in evidence his affidavit Ex.C-1 and documents Ex C-2 to C-12 and then, closed the evidence.

6                                             In order to rebut the evidence of the complainant, Counsel for OPs tendered in evidence affidavit of Manish Aggarwal, Branch Manager as Ex. OP-1, and documents Ex OP-2 to Ex OP-4 and then, closed the evidence.

7                                          Ld Counsel for complainant argued that complainant is doing the business under name and style of Shree Guru Nanak Agro Industries and is having a current account with OP Bank at their Faridkot branch. Complainant firm had business transactions with one M/s Kakkar Enterprises from 10.05.2013 to 20.03.2014. Complainant purchased goods from said firm on different dates and paid price to them. During the business transactions, complainant handed over three cheques bearing numbers 057760, 057794 and 056795 of OP Bank to them as security. Out of these cheques, cheque bearing no. 057760 was blank only signed by complainant. There arose some dispute between complainant and said firm and complainant having apprehension that said firm may misuse the blank cheque of complainant, complainant gave instructions to OP Bank to stop payment of these cheques, which was duly accepted by OP and issued a receipt regarding it. Copy of the receipt is Ex C-2. Complainant duly informed regarding the same to Kakkar Enterprises. He also issued legal notice to said firm to return these cheques on 21.04.2014 and 12.06.2014. copies of the notice are Ex C-8 and Ex C-9, but Kakkar Enterprises have not returned these cheques. On 30.10.2014, proprietor of Kakkar Enterprises present cheque no. 057760 after filling it dated 30.09.2014 for encashment through his banker and same was sent to OP-1 for collection. OP-1 dishonoured the cheque with endorsement of ‘insufficient funds’ in the account of complainant instead of endorsement of ‘stop payment’ as per instructions of complainant. The Ops had full knowledge regarding the instructions of stop payment but in connivance with Kakkar Enterprise, they wrongly issued memo with ‘insufficient funds’, which is a clear cut deficiency in service and negligence in service on the part of Ops. Due to this act of Ops, Kakkar Enterprises issued a notice dt 28.11.2014 under Section 138 of Negotiable Instrument Act demanding illegally the cheque amount from complainant. Complainant duly replied to the notice. Complainant also moved application against proprietor of Kakkar Enterprises and employees of Ops to Police for taking action against them for committing cheating and forgery. Copy of cheque is Ex C-3. Memo is Ex C-4. Copy of the complaint to Police is Ex C-5 and 11. Kakkar Enterprises filed a false complaint under Section 138 of Negotiable Instrument Act against complainant on the basis of that cheque in Judicial Courts, Faridkot. Complainant appeared in that case and is now on bail. Copy of complaint is Ex C-7. Complainant has faced mental harassment, wastage of time and loss of reputation by this act of Ops in making endorsement of ‘insufficient funds’ instead of ‘stop payment’ despite instructions given by complainant of stop payment to the Ops. Kakkar Enterprises have illegally demanded amount of Rs 5,61,974/-from complainant on the basis of that endorsement by OPs. Complainant requested Ops to compensate the complainant but to no effect.  All these acts of Ops amount to deficiency in service and trade mal practice on their part. Counsel for complainant has prayed for accepting the complaint and Ops may be directed to pay the cheque amount of Rs5,61,974/- to complainant, which is  falsely claimed by Kakkar Enterprises from them alongwith compensation and litigation expenses.

8                                     To controvert the arguments of complainant, ld counsel for Ops argue that complainant is not their consumer and there is no deficiency in service and trade mal practice on their part. The complainant has concealed the material facts from this Forum. The true facts are that earlier on 30.09.2014, a cheque was presented for encashment but the same was returned alongwith memo ‘payment stopped by the drawee’ and again the same cheque was presented for encashment on 30.10.2014, but this time, inadvertently and by over sightedness, the cheque was returned alongwith memo ‘insufficient funds’ instead of ‘payment stop’. It is correct that complainant gave instructions regarding stop payment of cheque in dispute. It is pertinent to mention here neither on 30.09.2014 and nor on 30.10.2014, there was sufficient fund in the account of complainant so, Ops correctly made endorsement of ‘insufficient funds’ in the account of complainant. However, they should have to make endorsement of stop payment alongwith endorsement of insufficient funds on the memo while returning the cheque but due to over sightedness, endorsement of stop payment could not be made on the memo and when this fact came to the notice of Ops, they immediately sent letter to Central Bank of India, who sent the cheque for encashment to Ops. Copy of letter to Central Bank of India is                       Ex OP-3 and statement of account of complainant showing insufficient funds in his account is Ex Op-4. There is no deficiency in service on the part of Ops. Complainant has filed the present complaint only to harass the Ops and to extract money from them. The present complaint is liable to be dismissed with costs.

9.                                     We have heard the ld counsel for parties and have carefully gone through the evidence and documents placed on record and pleadings made by respective parties.

10                                         The case of complainant is that he is carrying the business and is having a current account with Ops bank. He had business transactions with one Kakkar Enterprises and he gave blank cheques to them as security. There arose some dispute between complainant and Kakkar Enterprises and therefore, complainant gave instructions to Ops bank for stop payment of the cheques, which was duly accepted by the Ops. The proprietor Kakkar Enterprises malafidely presented the cheque for encashment after filling the same, but the Ops Bank dishonoured the said cheque with endorsement of ‘insufficient funds’ instead of endorsement of ‘stop payment’ as instructed by complainant and on the basis of this endorsement on returned cheque, Kakkar Enterprises filed complaint under Section 138 of Negotiable Instrument Act against complainant demanding illegally the amount filled by them in the cheque, which is a deficiency in service on the part of Ops and he demanded that cheque amount filled by Kakkar Enterprises may be given /awarded to him from Ops. In reply, Ops admitted that complainant had an account in their bank. They further admitted that complainant gave instructions to them for stop payment of cheque. They argued that first of all on 30.09.2014 the cheque was present with them for encashment, but they returned the same with endorsement of ‘stop payment’ and again the same cheque was presented for encashment on 30.10.2014, but due to over sightedness, the cheque was returned with endorsement of ‘insufficient funds’ instead of ‘stop payment’. They argued that at the time of returning the cheque, there was no fund in the account of complainant, so, they returned the same with endorsement of insufficient funds. They should have made the endorsement of stop payment but by over sightedness, the employee of Ops did not make the endorsement of stop payment on the cheque. Fact that there was no sufficient fund in the account of complainant is clear from the statement of account Ex OP-4. They argued that due to this act of Ops, complainant has not faced any financial loss as the cheque was not honoured. In case, the cheque was encashed, only in that case, the complainant would have suffered financial loss and Ops could be held liable for the same, but as the cheque was not encashed, therefore, complainant has not suffered any financial loss due to this act of Ops and he is not entitled to recover the alleged cheque amount from Ops. In support, he has placed reliance on the citation IV(2005) CPJ 180(NC) titled as Dena Bank Vs H V Patel, wherein our National Consumer Disputes Redressal Commission, New Delhi has held that Consumer Protection Act 1986-Section 21-Banking Services-Cheque honoured against stopped payment instructions- Receipt of payment admitted by drawee before Civil Court, no loss suffered by complainant-Cheque amount not payable-Deficiency in service on the part of bank officials proved-Compensation granted with interest. He further argued that since the complaint under Section 138 of Negotiable Instrument Act is still pending in the criminal court and is to be decided on merits. So, complainant cannot demand the cheque amount from Ops.

11                                  It is admitted case of the parties that complainant gave instructions for stop payment of the cheque in dispute to the OP Bank and inspite of these instructions, the OP dishonoured the cheque with endorsement of ‘insufficient funds’ instead of ‘stop payment’. However, it is also admitted case that at the time of returning the cheque, there was no sufficient fund in the account of complainant to honour the cheque, so, in these circumstances, bank should have made endorsement on the cheque of stop payment alongwith endorsement of ‘insufficient funds’. The act of OP in not making endorsement of stop payment alongwith insufficient funds at the time of returning the cheque amounts to deficiency in service and negligence on their part. However, the complainant is not entitled to recover the alleged amount from OP Bank as Bank did not make payment of this amount from the account of complainant and complainant has not suffered any financial loss due to this negligence of OP Bank and complaint filed on the basis of said cheque under Section 138 of Negotiation Instrument Act is still pending in the criminal court and is to be decided on merits. Therefore, complaint in hand is hereby allowed. Bank is ordered to pay Rs 5000/- to complainant on account of compensation for harassment and mental agony and Rs 2000/-for litigation expenses. OP Bank is directed to comply with the order within one month from the date of receipt of the copy of the order, failing which, complainant is entitled to proceed against OP Bank under Section 25 and 27 of the Consumer Protection Act. Copy of the order be supplied to parties free of cost as per law. File be consigned to the record room.

Announced in open Forum:

Dated: 15.03.2016

 

        Member                  Member              President     

                (Parampal Kaur)     (P Singla)          (Ajit Aggarwal)