This revision is directed against the order of the Maharashtra State Consumer Disputes Redressal Commission, Mumbai (in short, “the State Commission) dated 1.4.2014 in first appeal No.A/15/1033.

2.       Briefly stated facts relevant for the disposal of the revision petition are that the petitioner filed the consumer complaint before the concerned District Forum alleging that the complainant was in need of Rs.3 lakhs to be deposited in the hospital for the treatment of his ailing mother. The complainant, therefor, requested his nephew Chirag Natvarlal Sheth for money. Chirag Natvarlal Sheth issued a bearer cheque in favour of the complainant drawn on his saving account No.12011000039411 with the opposite party bank. As a matter of caution Chirag Natvarlal Sheth also signed at the back of the cheque. The complainant presented the cheque for encashment on 7.5.2010 at about 12.00 pm. The cashier Mr. Deshu at the cash counter asked him to come back at 4.00 pm because of insufficiency of funds. The complainant again visited the bank at 3.40 pm. The cashier asked him to put his signatures at the back of the cheque which he did. The cashier thereafter asked him to produce his photo ID in original and submitted an attested true copy. As the complainant was not carrying the photo ID he suggested the cashier to contact the account holder and verify about the issuance of cheque. The cashier then took out the phone number of the account holder Shri Chirag Natvarlal Sheth from the bank record and dialed mobile number of Shri Chirag Natvarlal Sheth to seek verification of issuance of bearer cheque. Mr. Chirag Natvarlal Sheth confirmed that he had issued the cheque but the cashier declined to honour the cheque. Thereafter, the complainant was taken by the cashier to the cabin of the Branch Manager. The Branch Manager again rang up the account holder Shri Chirag Natvarlal Sheth, who confirmed having issued said bearer cheque. Despite that the Branch Manager insisted that Mr. Chirag Natvarlal Sheth should come to the bank. Mr. Chirag Natvarlal Sheth showed inability to visit the branch. The Branch Manager then refused to encash the cheque. Claiming this to be deficiency in service the complainant raised the consumer dispute by filing a complaint in the in the Consumer Forum, South Mumbai District seeking compensation to the tune of rupees one lakh towards mental agony and physical harassment. The complainant also sought direction to the opposite party bank to stop such wrong practice.

3.       The opposite party on being served with the notice filed the written version claiming that subject cheque was rightly dishonoured. Respondent bank contested the complaint. It was pleaded that because of failure of the complainant to produce ID proof bank was justified in refusing to honour the cheque in terms of RBI guidelines as it was a high denomination cheque.

4.       The District Forum on consideration of evidence adduced by the parties dismissed the complaint on the technical ground that the complainant not being the account holder, is not a consumer.

5.       Being aggrieved of the order of the District Forum the complainant approached the State Commission, Maharashtra in appeal. The State Commission instead of giving a clear finding whether or not the appellant/complainant is a consumer, went on to decide the complaint on merits and dismissed the complaint holding that since value of the cheque was more than Rs.50,000/-, in view of the guidelines issued by RBI,  the bank was justified in refusing to honour the bearer cheque because of suspicion. The appeal was consequently dismissed with liberty to the appellant/complainant to pursue his remedy under Negotiable Instruments Act.

6.       Learned Shri D. Vardarajan, Advocate for the petitioner has contended that although the State Commission has not given a clear finding as to whether or not the complainant is a consumer, the sum and substance of the impugned order is that according to the State Commission the complainant is a consumer. Learned counsel has taken us through the definition of consumer and submitted that the consumer qua a service provider is not only the person who hires or avails the services of the service provider but the beneficiary also. It is argued that once the account holder had issued a cheque in favour of someone, he automatically becomes the beneficiary qua said bank and therefore he is a consumer, if there is any deficiency in service.

7.       Ms. Pallavi Deepika, Advocate on the contrary has argued that the complainant does not fall within the realm of even the beneficiary because it was a bearer cheque and not a cheque in favour of the complainant. Thus, the complainant cannot be termed as a consumer and the District Forum had rightly dismissed the consumer complaint.

8.       We have carefully considered the rival contentions and perused the record. From the affidavits of Shri Chirag Natvarlal Sheth and the complainant, it is amply proved that the bank telephonically contacted Chirag Natvarlal Sheth twice to verify whether or not he has given bearer cheque to the complainant and the account holder Shri Chirag Natvarlal Sheth confirmed the said fact. From the above, it is clear that the bank officials were categorically informed by the account holder that he had issued the cheque and given it to the complainant. Therefore, the complainant, in our view, was the beneficiary of the cheque and as such he is covered under the definition of consumer which includes the beneficiary of the service hired/availed. Thus, the complaint is maintained.

9.       Coming to the merits of the case, the stand of the opposite party is that the cheque in question was not honoured because the bank officials were suspicious about the issuance of the cheque to the complainant and the complainant had failed to furnish his photo ID. Learned counsel for the opposite party in support of this contention has drawn our attention to the response given by the RBI to the RTI application dated 11.5.2010 submitted by the complainant. The relevant response of RBI is reproduced as under: -

“No specific guidelines have been issued to banks with regard to bearer cheques. However, in terms of our guidelines contained in para 2 of DBOD. No.BP.BC.114/C.469(8.1)-91 dated April 19, 1991 (copy enclosed) on ‘Misuse of banking channels for violation of fiscal laws and evasion of taxes-issued and payments of demand drafts for Rs.50000/- and above, banks are advised that payments for Rs.50,000/- and above should be made through banking channels and not in cash.

Further, in terms of RBI Guidelines contained in para 3 (ii) of the circular DBOD.AML,BS.No.68/14.01.001/2009-10 dated January 12, 2010 (copy enclosed), banks have been advised that ‘in case of transactions carried out by a non-account based customer, that is a walk-in customer, where the amount of transaction is equal to or exceeds rupees fifty thousand, whether conducted as single transaction or several transactions that appear to be connected, the customer’s identity and address should be verified.’

Similarly, we have issued Master Circular DBOD. No.Leg.BC.9/09.07.006/2009-10 dated July 1, 2009 (copy available on our website www.rbi.org.in) on customer service to all scheduled commercial banks, consolidating all the important instructions on customer service, paragraph 5.3(vii) of the circular is detailed below:

(vii) The banks should not ordinarily insist on the presence of account holder for making cash withdrawals in case of ‘self’ or ‘bearer’ cheques unless the circumstances so warrant. The banks should pay ‘self’ or ‘bearer’ cheques taking usual precautions.”

10.     On reading of the above, it appears that as per the RBI guidelines the advisory was that “in case of transactions carried out by a non-account based customer, that is walk-in customer, where the amount of transaction is equal to or exceeds rupees fifty thousand, the customer’s identity and address should be verified. Later part of the response to RTI application states that the bank should not ordinarily insist on the presence of account holder for making cash withdrawals in case of ‘self’ or ‘bearer’ cheques unless the circumstances so warrant. The banks should pay self or bearer cheques taking usual precautions. From this it is evident that Reserve Bank of India has cautioned the banks in the country to be careful while encashing the bearer cheques if the amount exceeds Rs.50,000/- and insist on the verification of ID as also the address. No doubt the complainant had not furnished his ID but the fact remains that admittedly not only the cashier but also the Bank Manager separately rang up the account holder on his mobile number who verified having issued the subject cheque and gave clearance for encashment. The bank officials, however, declined to encash the cheque. This, in our view is a clear deficiency in service.

11.     Learned counsel for the opposite party has drawn our attention to Ext.-B dealing with due diligence while processing cash payments particularly the following portion: -

“In the event the individual tendering the instrument is not carrying the identity, and there is a urgency to pay, the transaction to be referred to the Branch Manager. The Branch Manager shall maker appropriate enquiries as deemed fit & shall use his discretion to allow the transaction. Such discretion to be used judiciously as strict one off cases, only upon satisfactory confirmation of the bonafides of the transactions.”

12.     It is submitted that as per the aforesaid instructions the bank officials because of suspicion of identity of the complainant, were justified in refusing to honour the cheque. We do not find merit in this contention, particularly when the bank officials verified about the issuance of bearer cheque from the account holder on telephone. In view of the discussion above, we are of the opinion that this is a clear case of deficiency in service on the part of the opposite party. Revision petition is, therefore, allowed Orders of the Foras below are set aside.

13.     Now, the question arises as to what should be the compensation in this case. The complainant has not been able to show any specific loss caused to him. This is only a case of unnecessary harassment and humiliation, therefore, looking into the amount of cheque and the facts and circumstances of the case, we direct the opposite party to pay a sum of Rs.10,000/- as compensation to the complainant within 30 days from the date of this order, failing which the petitioner shall be entitled to file execution petition.