1.       This is a Revision Petition filed by the Petitioner – Jammu & Kashmir Bank Ltd. (in short, “J & K Bank”) / Opposite Party No. 2 against the Order of the Punjab State Consumer Disputes Redressal Commission (in short, the “State Commission”) dated 31.08.2010, directing the Petitioner to pay an amount of Rs. 65,744/- with interest @ 7.5% to the Respondent No. 2 / Complainant No. 1. The State Commission also directed the Respondent No. 1 / Central Bank of India / Opposite Party No. 1 to pay an amount of Rs. 10,000/- to the Respondent No. 2 and Respondent No. 3 /Complainant no. 2.

2.       Nobody appeared for the Respondents Nos. 2 and 3.

3.       The brief facts of the case are that the Respondent No. 3 had issued a cheque drawn on J&K Bank to the Respondent No. 2 for an amount of Rs. 65,744/-. The Respondent No. 2 presumably deposited this cheque with Central Bank of India, but no amount was credited in the account of the Respondent No. 2. In the meantime, the said cheque was got encashed by somebody from J&K Bank, but who took the money is not known. The Respondents Nos. 2 and 3 have filed a Complaint before the District Consumer Disputes Redressal Forum, Amritsar (in short, the “District Forum”) for payment of the cheque amount to the Respondent No. 2 / Complainant No. 1 by both J&K Bank as well as the Central bank of India. The District Forum dismissed the Complaint on grounds of allegations of fraud and forgery giving liberty to both Respondents Nos. 2 and 3 (Complainants Nos. 1 and 2) to seek remedy before the appropriate Civil / Criminal courts of law. On an appeal filed by the Complainants, the State Commission, however, went into the merits of the case and found that there was deficiency of service on the part of the Petitioner / J&K Bank. The relevant portion of the Order of the State Commission is as under:

“13. The appellants had tendered into evidence an affidavit of Sh. Suresh Kumar, Partner of M/s Jagan Nath and Co., Moti Bazar, Amritsar as Ex. CW-2/A and said Suresh Kumar pleaded in his affidavit that his firm had also account with respondent No. 1 i.e. Central Bank of India, Kt. Ahluwalia, Amritsar and maintaining its business transactions with the said bank regularly and used to deposit the cheque received from other concerns for crediting the same into its account and the bank used to issue counter slips which usually bears only the stamp of the bank without the signatures of its officials and also produced two photocopies of the counter-slip Ex. CW-2/1 and CW-2/2, which bears only the stamp of the bank and do not bear the signatures of any official of the bank. So from the perusal of the affidavit of Suresh Kumar and the counter slips of the vouchers, we are of the view that the version of Respondent No. 1 that appellant No. 1 had never deposited the cheque in dispute with respondent No. 1 is not correct and was deficient in rendering the services.

14. On the other hand, respondent No. 2 had admitted that payment of the cheque in dispute of Rs. 65,744/- was made to one Harbans Lal, Proprietor of M/s Harbans Lal Rakesh Kumar on behalf of appellant No. 1 as there was not a single unauthorized cutting on the cheque and the cutting on the cheque in dispute was duly signed by Ms. Jyoti, who issued the cheque on behalf of appellant No. 2 firm in favour of M/s Harbans Lal Rakesh Kumar. Signatures of Mr. Harbans Lal, who received the cash payment as partner of appellant No. 1 firm in whose favour the cheque was issued was also obtained on the back of cheque in dispute. But the version of respondent No. 2 is not correct and respondent No. 2 had illegally made the payment to alleged Harbans Lal when Smt. Rama Rani was the only proprietor of the firm M/s Harbans Lal Rakesh Kumar in whose favour the cheque in dispute was issued by appellant No. 2.

15. We have perused the cheque which was issued by appellant No. 2 in favour of appellant No. 1 as an account payee cheque. The status of the cheque from account payee to pay in cash was changed and the payment of the same was made to Harbans Lal in cash, without verifying regarding the change incorporated in the account payee status of the cheque from Ms. Jyoti, who had issued the same on behalf of the firm in favour of appellant No. 1 when the office of appellant No. 2 was situated in the same building on the ground floor where the office of respondent No. 2 was situated. The complaint was also filed by Ms. Jyoti, Proprietor of M/s Ram Fabrics situated at Shastri Market, Amritsar alleging that she had not cancelled any crossing on the cheque and the cheque was account payee. Respondent No. 2 had not followed the rules and regulations at the time of making the payment of the said cheque to Harbans Lal, who was not the partner of the firm. Said Harbans Lal husband of Mrs. Rama Rani, Proprietor of the appellant No. 1 firm had already died 2-1% years ago prior to the issuance of the cheque in dispute.

16. So from the above discussion, it is proved beyond doubt that respondent No. 2 had made the payment illegally with the connivance of their officials to some fraudulent person only to grab the amount of cheque ie. Rs. 65,744/- and there was glaring deficiency in service by respondent No. 2. We are of the affirmed view that respondent No. 2 is liable to make the payment of Rs 65,744/- with interest @ 7.5% to appellant No. 1 from the date of its payment to Harbans Lal on the basis of the cheque in dispute with liberty to recover the same from the official/officials, who had made the payment illegally/wrongly to said Harbans Lal.”

4.       The learned Counsel for the Respondent No. 1 / Central Bank of India submitted that no cheque was deposited in his Bank and, therefore, the question of deficiency of service on its part does not arise.

5.       I have gone through the record and heard the arguments of both the learned Counsel for the Petitioner and the Respondent No. 1.

6.       On careful examination of the cheque issued by the Respondent No. 3 to the Respondent No. 2, which has been placed as an evidence on file, it is clear that the Petitioner Bank has accepted an account payee cheque in favour of Respondent No. 2, a proprietary firm, which was mutilated by overwriting and cash has been paid when such cheque is an Account Payee cheque as the cheque has been crossed. Evidently, making a payment in cash to whosoever it has been paid to, by honouring such kind of defective cheque is a deficiency of service on the part of the J&K Bank. 

7.       The argument of the learned Counsel for the Petitioner that the matter involves the question of fraud is not relevant as it is not denied that a mutilated Account Payee cheque has been honoured and instead of depositing money in the account of the Payee, which is Respondent No. 2, cash was given to somebody, whose identity is not known. The concerned Bank official should have taken due care in entertaining such defective cheque and, therefore, is liable for disciplinary action by the Petitioner Bank. I consider this act on the part of the Petitioner as deficiency of service and, therefore, I do not see any reason to interfere with the Order of the State Commission, which is well reasoned and there is no illegality or material irregularity in its Order.

8.       In view of the aforesaid, the Revision Petition is dismissed and the Order of the State Commission is partly upheld, modifying it to the extent that the rate of interest payable shall be 4% instead of 7.5% and that no payment is required to be paid by the Respondent No. 1 / Central Bank of India. This payment needs to be made within eight weeks of this Order, failing which, the rate of interest shall increase to 6% per annum for the same period.