2. The Branch Manager,

    The Guntur District Co-operative

      Central Bank Limited,                                                           2/13 Brodipet, Guntur.                                      …opposite party

        This Complaint coming up before us for hearing on 17-03-11 in the presence of Sri R.K.S. Murthy, advocate for complainant and of                 Sri D. Luther Babu, advocate for 1^st opposite party and of Sri N. Venkateswarlu, advocate for 2^nd opposite party, upon perusing the material on record and after hearing both sides and having stood over till this day for consideration this Forum made the following:-

O R D E R

Per Sri A. Hazarath Rao, President:-

        The complainant filed this complaint U/S 12 of Consumer Protection Act, 1986 seeking value of pay orders i.e, Rs.70,000/- with interest @24% p.a., from 17-01-10, Rs.1,00,000/- as compensation for mental pain and suffering and for costs.

2.     In brief the averments of the complaint are these:

        The complainant filed OS 201 of 2009 against the 1^st opposite party on the file of Principle Senior Civil Judge for recovery of amount due.   The complainant also filed CC 255 of 2008 and 262 of 2008 on the file of V AMMC, Guntur against the 1^st opposite party for the offence U/S 138 of NI Act.    All the above matters were referred to Lok Adalat for settlement on 18-01-10.    After mutual hearing               1^st opposite party purchased two payment orders dated 17-01-10 from OP2 for Rs.40,000/- and Rs.30,000/- drawn on Axis Bank, Guntur to the complainant.   The complainant presented those pay orders through Axis Bank, Guntur.   The complainant was shocked to know that both the pay orders were bounced.   OP1 thus cheated not only the complainant but also played fraud on the Courts and Lok Adalat.    The opposite party 2 did not choose to care and consider the request of the complainant for honoring of DDs.   As per banking rules, a bank issuing a draft cannot refuse to pay the amount thereof unless there was some doubt.  The complainant was put to mental agony and suffering by the attitude of the 2^nd opposite party.   The 2^nd opposite party committed deficiency of service.  

3.     The contention of the 1^st opposite party in brief is hereunder:

                    During compromise the 1^st opposite party agreed to give pay orders for a sum of Rs.70,000/-.   At the same time the complainant agreed to return all the documents of the 1^st opposite party including bank pass books, ATM cards and title deeds and one promissory note and empty papers containing the signatures of                     1^st opposite party on the revenue stamp.  The complainant received pay orders from the 1^st opposite party on 18-01-10 before entering into Lok Adalat.  After completion of compromise the complainant failed to fulfill his promise with regard to return of documents belonging to the 1^st opposite party.   The complainant did so with an evil intention.   Thereafter the 1^st opposite party informed the attitude of the complainant to his father.   Father of the 1^st opposite party filed an application before Manager of the 2^nd opposite party to stop the payment of pay orders without the knowledge of the 1^st opposite party.    Basing on the letter given by the father of the 1^st opposite party payment of Rs.70,000/- was stopped by the 2^nd opposite party.   The 1^st opposite party had no knowledge regarding the application filed by his father regarding stop payment.   The complaint therefore be dismissed.        

4.     The contention of the 2^nd opposite party in nutshell is hereunder:

          One Billa Rama Rao approached the 2^nd opposite party  and obtained two demand drafts on 17-01-10 for RS.30,000/- plus Rs.40,000/- respectively from the 2^nd opposite party which were drawn on Axis Bank Limited, Guntur in the name of the complainant.   The 2^nd opposite party was not aware of the purpose for which the said Rama Rao purchased those Demand Drafts.   On 19-01-10 the said Rama Rao in writing reported that he lost two demand drafts and required the second opposite party to stop the payment if they come to collection.   As per banking law and practice it is the duty of the banker to act according to the directions given by the customer.   The said Billa Rama Rao played mischief against the 2^nd opposite party by giving wrong representation.   The complainant miserably failed to make the said Billa Rama Rao as a party to the suit.   A third party has no right to claim money deposited with a banker by giving notice to him.   Such a notice does not create a liability on the part of the banker.   The 2^nd opposite party is neither a proper and necessary party to the complaint.  The complaint therefore be dismissed. 

5.     Exs.A-1 to A-11 on behalf of the complainant and Exs.B-1 to B-6 on behalf of the opposite party were marked.

6.      Now the points that arose for consideration in this case are:

1. Who committed deficiency of service?
2. Whether the complainant is entitled for compensation?
3. To what relief?

7.     POINTS 1&2:-    The complainant and 1^st opposite party settling their disputes in Lok Adalat on 18-01-10 in respect of OS.201 of 2009 on the file of Principle Senior Civil Judge, Guntur and CC 255 of 2008 and CC 262 of 2008 on the file of the V AMMC, Guntur and Lok Adalat passing an award (Ex.A-2) on 18-01-10 was not in dispute.      Ex.A-1 award reads as follows:

        “As per the settlement the plaintiff agreed to receive an amount       of Rs.70,000/- towards full and final settlement of all the claims    i.e, for OS.No.201/09 for CC.No.255/08 and for CC.No.262/08”.

8.     In Ex.A-1 award it was mentioned that the complainant herein had no other documents i.e., promissory notes, cheques, signed papers, etc., of the defendant.   Under those circumstances, the contention of the 1^st opposite party about the promise of the complainant for return of documents i.e., bank pass book, ATM card, pronote, blank forms containing the signatures of the 1^st opposite party cannot be believed. 

9.     The complainant presented those demand drafts/pay orders through Axis Bank, Guntur and they were bounced with an endorsement, “payment stopped by the drawers”.       

10.   The 1^st opposite party filed the letter dated 12-07-10 said to have been executed by the complainant in favour of father of the               1^st opposite party and it was marked as Ex.B-1.   The same did not find place in the version filed by the 1^st opposite party regarding such settlement covered by Ex.B-1.  Under those circumstances, no reliance can be placed on Ex.B-1.  

11.   In Punjab and Sindh Bank vs. Vinkar Sahakari Bank Limited & others in 2001 DCR 40 it was held that Section 138 of NI Act was attracted in case of dishonour of pay order issued by a bank payable to another Bank.  

12.   In Birbham Central Co-operative Bank Limited vs. Pioneer Bank Limited in AIR 1956 Cal. 615 it was held,

        “It is well settled that a banker’s draft is a bill of exchange and as such it is a negotiable instrument.   The issue of a draft is regarded in banking practice as a matter of purchase and ordinarily the relationship between the holder of a Demand Draft and the bank issuing it is that of debtor and creditor.  The holder of the draft is a creditor and his remedy is on the draft”.

13.   In matter of Palai Central Bank Limited AIR 1962 Kerala 210 it was held,

                “However that might be, there is no denying that a demand draft is nothing more or less than a negotiable instrument governed by the provisions of the Negotiable Instruments Act; and on the face of it, the obligations it creates are nothing more than ordinary debts”. 

14.   It can therefore be said that the pay orders/demand drafts issued by 2^nd opposite party in favour of the complainant amounted to negotiable instrument.  

15.   In General Manager, United Bank of India & others vs. Surinder Nath Sharma II (2003) CPJ 406,

          “The bank should have gone into this aspect of the matter and should not have refused the payment simply because the purchaser of the draft had written a letter for non payment and particularly when in the same letter it was written that the bank draft was purchased in the name of the complainant; and the draft had been produced by the complainant for the purpose of payment and particularly when it was an account payee draft.   There was no question of misappropriation of the amount of the draft as the complainant had presented the draft in his account No.7693 at State Bank of India, Jalandhar.   No explanation has been furnished by the opposite parties to the effect that the draft had been lost.    If it was lost then how it came into the hands of the complainant in whose favour it was issued by the appropriate bank.  If the draft had been misplaced or lost, FIR was bound to be lodged by the concerned party obviously FIR was not lodged as a matter of fact the draft was not lost at all”.      

16.   It is not the case of the 2^nd opposite party that the purchaser of DDs/pay orders lodged FIR, regarding loss of DDs.   The 2^nd opposite party ought to have taken minimum care when it received DDs through another bank instead of simply relying on the representation of the father of 1^st opposite party.    The 2^nd opposite party did not bring any circular or notice that it can refuse pay orders/DDs when once the purchaser of those DDs require it to stop payment.   In our considered opinion the 2^nd opposite party did not act prudently.   The conduct of the 2^nd opposite party in not honouring those DDs of the complainant sent through another bank undoubtedly amounted to deficiency of service.   If really aggrieved by mis-representation/fraud perpetrated by Billa Rama Rao i.e., father of the 1^st opposite party it is always open to the 2^nd opposite party to take suitable action. 

17.    The complainant claimed interest @24% p.a., on those DDs.   Awarding a interest @9% p.a., from 21-01-10 will meet ends of justice.

18.   The complainant claimed a sum of Rs.1,00,000/- towards mental agony and suffering.   Certainly the conduct of the 2^nd opposite party in getting bounced those DDs/pay orders should have caused some harassment.   Awarding a sum of Rs.5,000/- on this head will meet the ends of justice.    

19.   The 1^st opposite party has nothing to do with the dishonour of those cheques given under Ex.A-1 settlement.   Hence, claim against 1^st opposite party is not maintainable and as such is dismissed.   

20.   The  contention of the 2^nd opposite party abut adding of Billa Rama Rao is devoid of merit as he has nothing to do with settlement of cases covered byEX.A-1.   For the above mentioned discussion this point is answered in favour of complainant accordingly.

21.    POINT No.3:-    In view of the above findings, in the result the complaint is partly allowed as indicated below:

1. The 2^nd opposite party is directed to pay RS.70,000/- together with interest @9% pa., from 21-01-10 till payment.
2. The 2^nd opposite party is directed to pay Rs.5,000/- towards deficiency of service and Rs.1,000/- towards costs.
3. The claim against 1^st opposite party is dismissed wihotu costs.

                Typed to my dictation by Junior Steno, corrected by me and pronounced in the open Forum dated this the 31st day of              March, 2011.

MEMBER                                             MEMBER                                             PRESIDENT

APPENDIX OF EVIDENCE

DOCUMENTS MARKED

For Complainant:

For 1st opposite party :  

For 2^nd opposite party:

                                                                                                                PRESIDENT