Tamil Nadu

StateCommission

CC/78/2003

Mahalakshmi Real Estate & Investments Pvt. Ltd., Rep. by its Attorney Umesh S.Nagpal - Complainant(s)

Versus

HDFC Bank Ltd., Rep. by its Chief Manager & anr. - Opp.Party(s)

George Cheriyan,

16 May 2022

ORDER

IN THE TAMIL NADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

 

Present: Hon’ble Thiru Justice R.SUBBIAH       ... PRESIDENT

             Thiru.R.VENKATESAPERUMAL      … MEMBER

 

C.C. No.78 of 2003

                                                    

                                   Orders pronounced on: 16.05.2022

 

Mahalaxmi Real Estate &

     Investments Pvt. Ltd.,

Flat No.1F, Tuscany Apartments,

No.22, College Road,

Chennai 600 006,

rep. by its Attorney Umesh S.Nagpal.                                                                                                      … Complainant

 

vs.

 

HDFC Bank,

No.759, ITC Centre,

Anna Salai, Chennai 600 002,

rep. by its Chief Manager.

(substituted by orders, dated

08.10.2012, passed in MP No.67

of 2012 for Original OPs-1 & 2)                                                                                                         … Opposite Party.

 

             For Complainant      :  M/s.George Cheriyan

             For Opposite Party   :  M/s.Benjamin George

This Complaint came up for final hearing on 12.04.2022 and, after hearing the arguments of the counsel for the parties and perusing the materials on record and having stood over for consideration till this day, this Commission passes the following:-

 

O R D E R

R.Subbiah, J. – President.

The present complaint of the year 2003 was originally filed against Lord Krishna Bank Ltd. (in short LKB) rep. by its Deputy Managing Director at Kochi and the Deputy General Manager at Teynampet, Chennai, ranked as OP Nos.1 and 2 respectively and, since LKB was amalgamated with the HDFC Bank, by orders, dated 08.10.2012, passed in MP No.67 of 2012, the original OPs came to be substituted by the present OP viz., HDFC Bank, Chennai-2. 

             The complainant, by alleging deficiency in service against the OP/Bank, seeks this commission to direct them to pay him Rs.98,50,000/- as compensation with  interest @ 24% p.a. from 23.08.2003 till the date of realization, besides costs.

 

             2. In brief, the case of the complainant as projected in the Complaint is as follows:-

            The complainant had maintained Current Account No.4849 with the Bank (original 2^nd OP at Teynamept)  which issued Pay Order No.007035, dated 22.09.1997, for a sum of Rs.35 lakh, in favour of the complainant.  The said Pay Order was misplaced by the complainant and, immediately after relocating the same, by letter, dated 11.10.2001, they addressed the 2^nd OP for revalidating the same, however, there was no response.  Thereupon, the complainant sent a letter, dated 21.11.2001, to the Bank (original 1^st OP) and reiterated his request for revalidation, by drawing their attention to his previous letter, dated 11.10.2001, yet, no reply was received, whereupon, he once again addressed a letter, dated 19.02.2002, soliciting a proper reply from the Bank. Thereafter, by letter, dated 26.02.2002, the Bank, by informing that they suspect fraud in the transaction and therefore, they are referring the matter brought to their notice for further investigation by the police, expressed their inability to accede to the request of the complainant.  In the said circumstances, the complainant issued a legal notice, dated 22.03.2002, seeking the Bank to credit the amount of the Pay Order along with the accrued interest, and by reply notice, dated 27.03.2002, it was stated that revalidation sought after a period of five years for a huge sum cannot be done in a mechanical manner without proper scrutiny of records and verifying the genuineness of the document of demand.  By further stating therein that the original Pay Order was not produced, the complainant was advised to approach the Bank with the original instrument, enabling the Bank to take appropriate steps in the matter.  Accordingly, the complainant met the Chief Manager of the Bank on 02.04.2002 and satisfied him of the genuineness of the Pay Order by producing the original thereof; however, it was only assured that they would soon sort out the issue.  Thereafter, as there was no progress in the matter, the complainant sent another legal notice, dated 15.04.2002, wherein, by narrating the sequence of events including the compliance on their part in satisfying the Bank about the  genuineness of the Pay Order by production of the original thereof, he called upon the Bank to pay the complainant a sum of Rs.35 lakh within 7 days of receipt of the notice, for which, by reply, dated 29.04.2002, it was stated that the Bank had lodged a complaint with the Joint Commissioner, Special Crime Branch, Chennai, to investigate the matter and that payment against the Pay Order to the complainant would be decided after the outcome of the police investigation.  Thereafter, no effective steps were taken by the Bank which prompted the complainant to send one more legal notice, dated 16.06.2003 to the Bank with copy marked to the RBI, for which, a reply notice, dated 17.07.2003, was sent by the Bank stating that, after verification by them, it was found that the Pay Order in question was fraudulently obtained without consideration.  Non-payment of the value against the genuine Pay Order issued by the Bank is a clear act of deficiency in service; hence, the complainant seeks to allow the complaint by granting the relief sought for by him, as mentioned supra.

 

       3. The Bank resisted the claim of the complainant  by filing a written version, wherein, among other things, it is stated thus:-

             The facts of the case are such that the adjudication requires a wholesome trial to deal and decide upon complicated issues of law and facts, hence, the complainant ought to have filed a suit before appropriate civil court  and not the complaint before this Commission, which has no jurisdiction to entertain the same.   The complainant is not a Consumer as defined in the Consumer Protection Act, since no service of the OP was availed of by the complainant.   The complaint is filed in the name of a Private Ltd. Company claimed to be represented by its Attorney Mr.Umesh S.Nagpal.   A power of attorney, dated 23.11.1995, said to be executed jointly by 3 individuals in favour of the said Nagpal, is filed along with the complaint, but, the said power of attorney is not the one issued by the company named Mahalakshmi Real Estates and Investments Private Limited in whose name the complaint has been filed. As such, the said Power of Attorney does not confer any right upon Nagpal to represent the company.  Therefore, the complaint is liable to be rejected.

             The original 2^nd OP/Bank had no legal authority to issue an instrument in the form in which the Pay Order stands, which is now filed as item No.2, along with the complaint.  The complainant, at no point of time, had acquired any right whatsoever to claim payment for a sum of Rs.35 lakh under the instrument in question. The instrument based on which the complaint has been filed is purported to have been drawn payable to bearer on demand and if the same is not presented for payment within 6 months, it would become stale and lose its validity.  While so, for the instrument of the year 1997, the complainant made the claim only on 11.10.2001, that is, nearly 4 years and 7 ½ months after the date of the instrument, that too, admittedly, without any proper revalidation there-for. As the instrument is one payable ‘on demand’, any claim based thereon after 22.02.1999 i.e., two years from the date which the instrument bears as the date of issue, is barred by limitation.  The averment in the complaint to the effect that the instrument was issued by the original 2^nd OP in favour of the complainant is untrue and misleading. The then Chief Manager (Madras) of the Original 2^nd OP/Bank whose alleged signature the instrument in question bears as drawer had no legal authority vested in him to draw and issue the same and even if really, he had issued the instrument based on which the complainant makes the claim, the same is not legally binding on the OP/Bank.  A Pay Order just like a Banker’s Demand Draft is a Negotiable Instrument issued by a Bank on the written application of a party containing particulars of the amount for which the instrument is to be issued and the person who is intended to be shown as the payee in the instrument.  While a Demand Draft would show the name of another Branch of the Bank that issues it or another Bank as drawee, a Pay Order would show the name of the issuing Bank as the drawee.  Both Demand Drafts and Pay Orders cannot, in law, be drawn and made payable to a bearer.  In any event, here, the complainant is not the purchaser of the instrument, on the basis of which, the complaint is now filed.  Further, it was discovered by the Bank that, when one Mr.M.S.N.Murthy was the Chief Manager of the original 2^nd OP during 1995-97, in collusion and conspiracy with certain persons viz., Mr.L.Parthasarathy of a company called Southern Township Private Limited, and Mr.M.T.Rangarajan, Proprietor of a concern called Mahalakshmi Investments and Services and others, he allowed to open several current accounts by unknown parties in various concern names.  The said Mr.M.S.N.Murthy along with Assistant Manager/Mr.Rajagopal Prabhu, in collusion and conspiracy with the aforesaid individuals, had allowed operations of the above said current accounts and discounting of local cheques for large sums, permitting withdrawals of money from the accounts before even realization of the discounted cheques many of which were returned unpaid, thereby, they caused heavy monetary loss to the Bank, whereupon, both the said officials were charge-sheeted and dismissed from the Bank’s service.  It came to surface that unauthorized transactions like opening of fraudulent current accounts in the name of different parties, siphoning off sums and fraudulent/unauthorized issuance of pay orders for very huge sums had taken place at the original 2^nd OP/Bank that necessitated lodging of a complaint, dated 12.04.2002, with the Commissioner of Police and the matter is pending investigation by the police.  Thus, the complainant is not entitled to seek any relief and hence, the complaint being highly speculative and laid on the basis of a void/fabricated instrument is liable to be dismissed in limini.

 

      4. To substantiate their claim, the complainant has filed proof affidavit and marked 13 documents as Exs.A1 to A13.  On the side of the OP, apart from filing proof affidavit, 14 documents have been marked as Exs.B1 to B14.

 

       5. Heard the submissions of the counsels appearing on either side and perused the materials available on record.

            It is stated on the side of the complainant that it is a Private Limited Company that maintained Current Account No.4849 with the original 2^nd OP, that was subsequently merged with the present OP/HDFC Bank. One Southern Township Promoters Pvt. Ltd. (in short STPL), who maintained Current Account No.24 with the LKB, had approached the complainant for a loan and a sum of Rs.26,50,000/- plus Rs.8,50,000/-, totally Rs.35,00,000/- was lent by the complainant through Pay Orders from Standard Chartered Bank, Madras, on 15.11.1996 and the sum was duly credited to the above said current account of STPL operated with LKB . After some time, the complainant wanted the loan back and accordingly, STPL took the Pay Order in question, dated  22.02.1997, from LKB and sent it to the complainant and it was received by the Company’s Power Agent Umesh Nagpal.    The pay order so received was taken by Nagpal to the Office at Bombay where there was a big fire accident in the adjacent building and in the melee, the pay order got mixed up with other papers and could not be traced immediately.  After relocating the instrument, they had requested the LKB for revalidation of the pay order, but, they refused compliance, suspecting fraud. 

 

             6. But here, we intend to point out that various details now projected on the side of the complainant during the course of arguments are completely absent in the pleadings.  Only now, the complainant has made the new details on the aspect as to how the pay order had been lost and came to be re-located subsequently.   Even if we are to take into account the said narration now presented by the complainant, there is no explanation forthcoming from their side as to why they took about 5 year time to seek for revalidation.  Such a long time gap would definitely cast a genuine doubt in the mind of the Banker, who not only denies the whole case of the complainant but also suspects high degree of fraud in the transaction at various levels.  Among other things, it is the specific defence of the Bank that the complainant is an offshoot of corporate impersonation; that the fabricated instrument came into existence by playing fraud on the Bank; that no document has ever been produced to prove payment of consideration towards the instrument in question; that, as per Section 138(A) of the Negotiable Instruments Act, the validity of the instrument being 6 months, at the time of making the request for revalidation after a long passage of time, the claim under the instrument was clearly barred by limitation; that STPL which allegedly paid the consideration has not even been made a party to the complaint, thus, the same is bad in law for non-joinder of necessary party; that no Board Resolution authorizing the person/Nagpal, who signed the complaint, is available, hence, he has no authority to file the complaint; and that the complaint in the name of ‘M/s.Mahalakshmi Real Estate and Investments Private Limited” – Registered at ROC Mumbai, has been filed through a power of Attorney holder, however, such power of attorney has been granted by the Directors of some other company ie., “M/s.Mahalaxmi Real Estate and Investments Private Limited” – Registered at ROC Bangalore, thus, it sufficiently demonstrates the element of fraud.   It is also the emphatic stand and claim of the OP that the Pay Order in question was a result of fraud between two officers of the erstwhile Bank/LKB and group of companies promoted by certain outside individuals; that no consideration at all was passed to issue the instrument in question; that the account of STPL shows that it was not even debited to draw the Pay Order, instead, the account of Mahalakshmi Real Estate & Investments Pvt Ltd. shows debit and reversal entries; that the Banking Procedure does not permit issue of Pay Order for ‘self’; and that criminal complaint was lodged and the officers concerned of the Bank were dismissed from service.  Thus, according to the OP, inasmuch as the facts surrounding every single segment connected with the alleged Pay Order being so complex and contentious, the same cannot be gone into or decided in summary proceedings before the consumer forum.  In fact, both sides relied upon plethora of decisions in support of their respective claims, but, we are of the opinion that there cannot be any quarrel over the legal proposition laid down therein, however, each case has to be tested and decided based on its own facts and circumstances cum merits thereof. On a perusal of the records, as rightly pointed out by the other side, we find that there are so many disputed facts over genuineness of the instrument/attorney holder/firm in whose favor the instrument was issued, collusion and conspiracy theories against the top-level officials of the erstwhile Bank, inordinate delay in seeking revalidation, absence of debit entries in the account of the STPL & contrarily, reversal entries  in the account of the complainant, etc. which cannot be delved into or decided with mere averments & pleadings made by the parties and the scanty materials adduced by them.  Even at this stage, it is not made known as to what happened to the criminal action taken for the alleged fraud behind the issuance of the instrument.  In such circumstances, only to depict the existence of seriously disputed facts and complexity surrounding the transactions, to the extent possible, we summarized the facts and arguments and, at any rate, since the same cannot be gone into or decided by this Forum in summary proceedings, we have no other option but to dismiss the case.

 

             7. In the result, the complaint is dismissed. No costs.

 

    

R.VENKATESAPERUMAL                                                                                                                                    R.SUBBIAH, J.

MEMBER                                                                                                                                                              PRESIDENT.

 

LIST OF DOCUMENTS MARKED ON THE SIDE OF THE COMPLAINANT.

•    Date        Description of Documents

Ex.A1                                              Power of Attorney

Ex.A2              22.02.1997           Pay Order No.007035, dated 22.02.1997

Ex.A3              11.10.2001           Letter from complainant to 2^nd OP with postal ack. card

Ex.A4              21.11.2011           Letter from complainant to Executive Director of the 1^st OP with Ack. Card

Ex.A5              19.02.2002           Letter from complainant to Executive Director of the 1^st OP with Certificate of Posting

Ex.A6              26.02.2002           Letter from the 2^nd OP to the complainant

Ex.A7              22.03.2002           Legal Notice by the complainant to the 2^nd OP

Ex.A8              27.03.2002           Reply Notice by the 2^nd OP to the complainant

Ex.A9              15.04.2002           Letter by the complainant’s counsel to the OP’s counsel

Ex.A10            29.04.2002           Reply from the OPs counsel to the complainant’s counsel

Ex.A11            16.06.2003           Letter from complainant’s counsel to the 2^nd OP with postal ack.

Ex.A12            26.06.2003           Letter from the RBI to the complainant’s counsel

Ex.A13            17.07.2003           Reply Notice by the OP counsel to the complainant’s counsel.

 

LIST OF DOCUMENTS MARKED ON THE SIDE OF THE OPs

•    Date        Description of Documents

Ex.B1                                               Application by the complainant to open current account.

Ex.B2               30.01.1996           Letter of undertaking

Ex.B3               30.01.1996 to

                          31.03.2003           Statement of A/c. of the complainant with the OPs

Ex.B4               29.11.1995 to

                          31.03.1997           Statement of A/c. of STPL with the OPs

Ex.B5               22.02.1997           Voucher for issuance of  pay order for Rs.35 lakh

Ex.B6               22.02.1997           Voucher for issuance of pay order for Rs.8.5 lakh

Ex.B7                                               Certified copy of certificate of registration of the complainant,

                                                          by the Registrar of companies, Maharashtra.

Ex.B8               12.04.2002           Complaint by OPs to the Commissioner of Police, Egmore.

Ex.B9               03.07.2004           Search Report

Ex.B10            23.07.2004           Letter /V.Laxman & Co. Mumbai, to the OPs.

Ex.B11            22.08.2004           Articles of Association of Mahalaxmi Real Estate & Investments

                                                          P. Ltd. Doc. Bearing No.30826 of 2004

Ex.B12            22.08.2004           Memorandum and Articles of Association of Mahalaxmi Real

                                                          Estate and Investments P Ltd., Doc. Bearing No.17709

Ex.B13            22.09.2004           Memorandum of Association of M/s.Mahalakshmi Real Estate

                                                          and Investment P. Ltd.

Ex.B14            29.06.1983           Articles of Assn. of M/s.Mahalaxmi Real Estate & Investments P. Ltd.

 

                                                         

 

R.VENKATESAPERUMAL                                                                                                                        R.SUBBIAH, J.

MEMBER                                                                                                                                                       PRESIDENT

 

 

 

ISM/TNSCDRC/Chennai/Orders/MAY/2022.