IN THE STATE COMMISSION : DELHI
(Constituted under Section 9 of the Consumer Protection Act, 1986)
Date of Arguments : 11.07.2018
Date of Decision : 18.07.2018
COMPLAINT NO.204/2009
In the matter of:
M/s. Shashi Singh Enterprises Ltd.,
B-8 Magnum House-1,
Commercial Complex Karampura,
New Delhi.
Through its Director Shri P.N. Singh .........Complainant
Versus
- Citi Bank N.A.,
Through its registered office in India,
C.P., New Delhi. .....Opposite Party No.1
- Reserve Bank of India,
Parliament Street,
New Delhi. . ….....Opposite Party No.2
CORAM
Hon’ble Sh. O. P. Gupta, Member (Judicial)
Hon’ble Sh. Anil Srivastava, Member
1. Whether reporters of local newspaper be allowed to see the judgment? Yes/No
2. To be referred to the reporter or not? Yes/No
Shri O.P. Gupta, Member (Judicial)
JUDGEMENT
In brief the case on the complainant is that it is engaged in manufacturing and export of garments, earning valuable Foreign Currency for the country by their sheer hard work. OP No.1 was a foreign bank operating in India with the permission of Finance Ministry and under the control and supervision of RBI. So RBI had been arrayed as performa OP No.2.
One Fort laudedale Inc. Florida had been negotiating with the complainant for placing orders for export of garments with complainant. Complainant received purchase orders no.1302 and 1303 on 02.06.2007 for certain specific clothes. The complainant forwarded performa advice mentioning the prices and quantity ordered alongwith payment terms. The complainant received 25% of the amount through bankwise transfer. The total consignment was for the value of 11860 US$ and delivery was to be made by the complainant till 05.07.2007. Representatives of Sun Merchandising Services gave a copy of banker’s cheque of City Bank N.A. of Florida Branch but informed the complainant that out of the said payment, an excess amount of Rs.1492.62 needed to be refunded to them before they hand over the delivery of bank draft to complainant. Complainant paid Rs.61,332/- towards excess amount, Rs.20,968 being 5% commission to them. Thereafter representative of Sun Merchandising Services on behalf of SFI Florida handed over the bank draft for 8462.04 US$ bearing no.103883 dated 13.08.2007 drawn on City Bank, N.A., New York towards full and final settlement. The consignment was taken over by representative of Sun Merchandising Services. The complainant deposited said banker’s draft in his bank namely Syndicate Bank, Chandni Chowk Branch. His bank immediately credited the amount of banker’s cheque as per prevailing exchange rate.
The complainant was shocked to receive a letter from its Syndicate Bank on 18.09.2007 informing that banker’s cheque deposited by the complainant’s company in its account has been returned unpaid by the City Bank with endorsement that City Bank had stopped payment of the said bank draft. Thereafter complainant contacted City Bank officials in India and also in New York and as to why they have ordered to stop payment. As per banking codified rules all over world, bank had no right to stop payment of banker’s cheque. The complainant filed criminal complaint no.54011 of 2006 in the court of CMM Delhi in which FIR no.16 at P.S. Kotwali was registered on 23.01.2008. Hence this complaint for awarding compensation to the tune of Rs.1 crore against OP-1 bank for deficiency in service and unfair trade practice in stopping the payment of banker’s cheque.
OP-I filed reply stating that the benefit of the service that has been allowed to the complainant by City Bank was for commercial purpose. On 21.08.2007 the buyers submitted a stop payment request with the answering OP stating that reason for the stop payment was loss of instrument in transit. Based on the same the answering OP proceeded to stop payment. It took preliminary objection that complainant does not fall under the definition of consumer. In Para-M it is stated that the value of the draft amounts to Rs.3,89,253.84 paise @45 for US$. The said amount was below pecuniary jurisdiction of this Commission. The complainant does not provide any evidence of the loss/ damages it suffered as a deficit service of the City Bank. It took the same defence on merits.
Complainant filed rejoinder and evidence by affidavit.
On the other hand OP filed affidavit of Shri Jagdish Salwan, AR. The OP-I has filed written arguments. We have gone through the material on record and heard the arguments. On 29.03.2016 statement of Shri Gimmy Joseph, Branch Manager, Syndicate Bank, Chandni Chock was recorded to show that as per practice prevailing in his bank, general by payment of the draft is not stopped by the issuing bank as it is paid instruments. He did not know about the practice prevailing in City Bank. His cross examination was deferred at the request of counsel for OP. Thereafter he never appeared for cross examination. Thus his statement cannot be read in evidence. Any how the case of the complainant is based on documentary evidence. Issuing of pay order by the purchaser in favour of complainant, deposit of the same with OP-1 bank, dishonour due to stop payment by the buyer is all admitted. The question which remains to be decided is whether payment of a banker cheque can be stopped. In this regard we have the privelege of going through the judgement in Raghuvinder Singh Vs. State Bank of India AIR 1992 MP 148 where it was held that no request for not making payment to the payee can be made in respect of a pay order.
Even on merits we do not find any justification in the request of the buyer to stop the payment. The reason for stopping payment is that the pay order has been stolen in transit. It can not be. Pay order copy of which is at page 761 of the bunch of complaint contains the name of the complainant as payee. When a pay order in favour of complainant has been received by complainant, there is no question of theft. This plea could have been understood had the pay order fallen in the hands of a person other than the complainant.
The counsel for OP-1 strongly argued that complainant himself has mentioned that it is a company engaged in business of export of readymade garments. So, it is not a consumer. We are unable to accept the submission. It has been held by Hon’ble Supreme Court in Karnataka Power Transmission Corporation Vs. Ashok Iron Work Pvt. Ltd. AIR (2009) Supreme Court 1905 that company is a person within definition under General Clauses Act. Thus it can file a consumer complaint.
The counsel for OP-1 tried to twist the argument by submitting that nature of transaction was commercial. The argument is aimed at confusing the mind of the court. The commercial nature of transaction was between complainant and his purchaser. It is not so between the complainant and OP-1 banker. OP-1 bank simply rendered the services of collection of the amount of pay order issued by its foreign branch in New York. Services rendered by a bank to its customer is definitely service covered under Consumer Protection Act.
The counsel for OP-1 submitted that the Power of Attorney filed by the complainant speak of filing a suit. It does not cover complaint under Consumer Protection Act. We are unable to appreciate the argument. It has been held by the Hon’ble Supreme Court in Patel Roadways vs. Birla Yamaha Ltd. I (2000) CPJ 42 that suit is generic which include all proceedings for realizing right. Proceedings under Consumer Protection Act come within meaning of suit.
The last argument of the counsel for OP-1 is that amount of the pay order being around Rs.4 lakhs, this Commission has no pecuniary jurisdiction. The arguments are fallacious. It is not the value of instrument which is to be seen. Rather it is the aggregate value of the relief claimed which is to be seen for the purpose of pecuniary jurisdiction. Viewed from that angle the complainant has claimed relief of compensation to the tune of Rs.1 core which is within the pecuniary jurisdiction of this Commission.
As a upshot of the above discussion, we direct the OP-1 bank to pay value equivalent to 8462.04 US$ at the rate prevailing in August 2007 alongwith interest @10% per annum from the date of deposit of the pay order by the complainant in his account i.e. 13.08.2007 till date of payment. Complainant has been made to litigate for 11 years from 2007 till 2018. OP-1 should compensate the complainant to the tune of Rs.1 lakh for harassment and mental agony.
Copy of the order be sent to both the parties free of cost.
File be consigned to record room.
(ANIL SRIVASTAVA) (O.P. GUPTA)
MEMBER MEMBER (JUDICIAL)
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