Tamil Nadu

StateCommission

FA/153/2014

N.B.FINANCE CORPORATION, PROPRIETOR - Complainant(s)

Versus

INDIAN OVERSEAS BANK, THE BRANCH MANAGER - Opp.Party(s)

MAHESWARAIAH

11 Feb 2022

ORDER

IN THE TAMILNADU STATE CONSUMER DISPUTES REDRESSAL COMMISSION, CHENNAI.

 

Present:   Hon’ble THIRU. JUSTICE. R. SUBBIAH                     :     PRESIDENT

                 Tmt. Dr. S.M. LATHA MAHESWARI                          :      MEMBER

 

F.A. No. 153 of 2014

(Against the order passed in C.C. No.96 of 2012 dated 14.02.2014 on the file of the D.C.D.R.F., Chennai (North)

 

Friday, the 11^th day of February 2022

 

M/s.N.B. Finance Corporation

Rep. by its Proprietor

Mr. S. Nagin

13, Erulappan Street

Sowcarpet, Chennai-600 079.                                  .. Appellant/ Complainant

 

 

- Vs -

1.  The Branch Manager

     Indian Overseas Bank

     Walltax Road Branch

     Chennai – 600 079.

 

2.  The Chairman and Managing Director

     Indian Overseas Bank

     No.763, Anna Salai

     Chennai – 600 002.                                          .. Respondent/ Opposite Parties

 

 

    Counsel for Appellant / Complainant                 : M/s. Maheshwaraiah

    Counsel for the Respondent / Opposite Party    : M/s. K. Balaji

                                                                             ( No representation )

                                                                    

 

This appeal is coming before us for final hearing on 29.01.2022 and on hearing the arguments of the counsel for the appellant and on perusing the material records, this Commission made the following :-

 

O R D E R

R.SUBBIAH J, PRESIDENT

1.        This appeal has been filed by the Appellant / Complainant under Section 15 of the Consumer Protection Act, 1986 as against the order dated 14.02.2014 passed in C.C. No.96 of 2012 on the file of District Consumer Disputes Redressal Forum, Chennai (North), dismissing the complaint filed by the appellant herein.

 

2.       The factual background culminating this appeal is as follows:   The case of the complainant, a Finance Company represented by its Proprietor              Mr. S. Nagin, is that the complainant concern is having Current Account No.034802000003745 with the first opposite party Bank.  During the course of the complainant’s business, the complainant concern issued two cheques drawn on the first opposite party Bank in the individual name of Mr.Nagin, one bearing No.331944 dt. 22.10.2010 for Rs.52,600/- and another bearing No.331945 dt. 22.10.2010 for Rs.13,800/-.  Both the cheques were issued for depositing the same in the Savings Bank Account of Mr.S.Nagin in United Bank of India, Madras Main Branch, Armenian Street, Chennai -600 001 for due transfer from the Savings Bank Account to his personal Housing Loan Accounts in the said branch.  On the date of deposit of the said cheques, namely, 22.10.2010, the complainant was having a balance of Rs.73,386/- in the account of first opposite party Bank, which is more than the required funds to honour both the cheques in his account.  But to the shock and surprise of the complainant, the cheques were returned by the first opposite party on the reasoning “funds insufficient”.  Though sufficient funds were available in his account to honour both the cheques, due to negligent attitude of the first opposite party, the cheques were dishonoured, thereby transfer to housing loan accounts with United Bank of India could not be honoured in due time, as per the schedule for repayment of loans.  The complainant issued the cheques together for Rs.66,400/- only.  The first opposite party has negligently handled the transaction and returned the cheques stating ‘funds insufficient’.  The statement of accounts given by the first opposite party from 01.10.2010 to 31.10.2010 would show that the complainant was having more than the amount required to honour the cheques, on 22.10.2010.  The negligent conduct of the first opposite party caused irreparable injury and disrepute to the complainant, ultimately leading to unbearable mental strain, for no fault of the complainant.  The dishonour of the cheques by the first opposite party resulted in spoiling the complainant’s and the drawee’s name and reputation.  Therefore, there is clear deficiency of service on the part of the first opposite party.  Hence, the complainant sent a notice on 30.11.2010 to the first opposite party by RPAD.  But, there was no reply from the first opposite party.  Again on 20.01.2011 the complainant sent a letter by speed post to the second opposite party, referring to its letter dated 30.11.2010 and mentioning its grievance.  On receipt of the said letter, the second opposite party sent his reply dated 29.01.2011, to the complainant stating that the matter has been taken up with the concerned Regional Office and the Branch, for early redressal.  Thereafter, there was no reply from the opposite parties.  Again the complainant sent a letter on 09.06.2011 to the second opposite party by speed post, referring the earlier letters.  Since there is no redressal from the opposite parties, he has come forward with the present complaint for the following reliefs:-

1. To pay a sum of Rs.5,00,000/- towards damages, compensation for mental agony on account of negligence and deficiency in service; and
2. To pay a sum of Rs.10,000/- towards cost.

 

3.  Opposing the complaint, the opposite parties have filed a version, stating that in the two cheques issued by the complainant, the seal of the complainant was not affixed. Though sufficient balance was available in the account, the first opposite party returned the cheques on 23.10.2010 only for the reason that Proprietor seal was not affixed.  The said fact is mentioned in the ledger of the first opposite party, but in the return memo, the reason is stated as “Funds insufficient”.   It is the duty of the drawer of the cheque to give the particulars such as date, drawee’s name, affixing seal of the company, in the cheque before issuing the same.  Seal of the Proprietary Concern is very significant and if any legal instrument does not bear the seal, it does not have any binding effect on the concern.  The complainant had negligently issued the said cheques without affixing the seal.  It is the duty of the first opposite party to verify the particulars of the cheques, before honouring the same.  The first opposite party had returned the cheque only due to non-affixing of the seal of Proprietory concern on the cheque.  Due to inadvertence by the first opposite party, in the return memo the reasoning has been mentioned as “funds insufficient” instead of “Proprietary seal not marked” but it has been correctly mentioned in the ledger by the first opposite party.  Since the drawer of the cheque and the payee are one and the same, there is no loss of reputation for the complainant.  As soon as the letter dated 30.11.2010 was received from the complainant, the first opposite party noted the inadvertent mistake made in the return memo and so met the complainant and informed him that the cheques were returned only for the reason “proprietary seal not marked” and not for “funds insufficient”.  However, the complainant had issued a notice dated 20.01.2011, for which the customer service department of the second opposite party replied by letter dated 29.01.2011 that the matter has been taken up with the Regional Office and will be resolved shortly.  Thereafter, the first opposite party had discussed with the complainant who was convinced and the said issue was settled amicably.  While that being so, the opposite parties received another letter dated 09.06.2011 from the complainant with regard to the same issue, after a period of five months from the date of return of the cheques.  The said letter was issued only with an intention to create cause of action and to save the limitation for filing the present case, before the District Forum.  Thus, the opposite parties emphatically deny the case and stated that there was no deficiency of service on their part. 

 

4.   In order to prove the case, on the side of the complainant along with proof affidavit 7 documents were marked as Ex.A1 to Ex.A7.  On the side of the opposite parties proof affidavit has been filed but no documents were marked. 

 

5.  The District Consumer Redressal Forum after analyzing the evidence has come to a conclusion that the cheques were returned only due to the fault of the complainant in not affixing the seal of the company.  Therefore, there is no deficiency of service on the part of the opposite party and thus dismissed the complaint.  Aggrieved by the same, the present appeal is filed. 

 

6.  Heard the submission of the counsel for the appellant and perused the material on record. There is no representation for the respondents.

 

7.   Though very many contentions were raised by both sides, we are going to deal with only those facts which are necessary to decide the issue. 

 

8.  It is the submission of the counsel for the appellant that sufficient funds were available in the Savings Bank Account of the appellant/ complainant with the opposite party.  But, they have returned the cheques on the ground of “funds insufficient”.  Hence, the transfer of funds to the housing loan account with United Bank of India, could not be honoured in due time, as per the schedule for repayment of loans.  The first opposite party admits that sufficient funds were available in the Savings Bank Account.  However, according to the first opposite party the cheques were returned since the complainant failed to affix the proprietary seal in the cheque.  They have also stated in the ledger maintained by them “proprietary seal not marked” but due to oversight in the return memo, the reason for dishonouring has been mentioned as “funds insufficient”.  Therefore, there is no negligence on their part. 

 

9.  In my considered opinion, when it is an assertive statement that in the ledger maintained by them they have noted “proprietary seal not marked”, the opposite party ought to have produced the extract of the relevant pages of the ledger, as document before the District Forum.  But, they have not produced any documents.   Only at the time of filing the version before the District Forum, for the first time they have come forward with the stand that the cheques do not contain the proprietary seal.  Hence, we feel that the said statement is only an after-thought and it has been made only to cover up their lapses.  It is the submission of the counsel for the appellant that both the cheques were issued by the complainant as a Proprietor of the concern and the payee was Mr.Nagin being the Joint Account Holder in United Bank of India, who was under a contractual obligation to clear his installment dues towards his housing loan.  On account of the cheques being returned, the complainant suffered huge loss of reputation and untold mental agony as the commitment of his housing loan was not met in time, which had caused humiliation and mental agony to him.  We find some force in the submission of the complainant.  Therefore, we find that there is negligence on the part of the opposite party and so the complainant is entitled for compensation. 

 

10.    In the result, the appeal is allowed.   Considering the factual position of the case, Rs.5000/- is awarded as compensation to the appellant/ complainant towards mental agony, along with Rs.2000/- towards cost for litigation.  The opposite parties are directed to comply with the order within a period of two months from the date of receipt of copy of this order, failing which the amounts mentioned above shall carry interest at the rate of 7.5% per annum from the date of default till the date of realization.  Consequently, the order dated 14.02.2014 passed in C.C. No.96 of 2012 by the District Consumer Disputes Redressal Forum, Chennai (North) is set aside.

 

 

S.M.LATHA MAHESWARI                                                           R.SUBBIAH

         MEMBER                                                                          PRESIDENT

 

 

 

Index :  Yes/ No

AVR/SCDRC/Chennai/Orders/February /2022