BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION : HYDERABAD
C.D.No.35/2006
Between:
M/s.Action for Community Services Society,
Rep. by its President G.Dasaratha Reddy,
3-13-3, behind Government Hospital ,
V. Kota, Chittoor District . …. Complainant
And
1.The Senior Manager,
Indian Overseas Bank,
Naidu Building, Chittoor,
Chittoor District.
2. The Chief Regional Manager,
Indian Overseas Bank,
Regional Office, 40-9-27,
Ring Road, 1st and 2nd floor,
Benj Circle, Vijayawada,
Krishna District.
3. The Chief Managing Director,
Indian Overseas Bank, Central Office,
763, Annasalai,
Chennai. … opposite parties
Counsel for the complainant : Sri Gowrisankar Rao
Counsel for the opp.parties : Sri K.Suryanarayana
CORAM:THE HON’BLE JUSTICE SRI D.APPA RAO, PRESIDENT,
AND
SMT. M.SHREESHA, HON’BLE MEMBER
THURSDAY THE NINTH DAY OF JULY
TWO THOUSAND NINE.
Oral Order : (Per Smt.M.Shreesha, Hon’ble Member)
****
The brief facts as set out in the complaint are that the complainant is an NGO and the President for ‘Action for Community Services Society’ which is registered under the Societies Act, XXI of 1860. The complainant submits that they have more than 20 branches over Andhra Pradesh, Karnataka and Tamilnadu and that this society is formed with an objective of lending loans to the Members who hail from rural areas who are economically and socially background by way of micro finance. Their Chittoor branch has 23 employees with 8000 people as its Members and has lent loans of more than Rs.8 crores. This Society is having S.B. Account no.11313 in the opposite party bank and is being operated under the joint signatures of Sri.G.Dasaratha Reddy, President and any one of the two Executive Members namely V.Lakshmi or N.Shakunthala. Complainant submits that the Society has authorized its Accounts Manager and Cashier to look after the work of making deposits and withdrawals from the Bank. Their bank transactions were being managed from August 2005 onwards by B.Bhaskara Reddy, Accounts Manager and K.Srinivasulu, Cashier who used to come to the bank in person for withdrawal of amounts from the bank with cheques duly signed by the complainant along with any one of the Executive Members of the Society. The complainant submits that as the transactions are huge in nature, the opposite party bank was informed on several occasions to release the amounts only to the employees of the society who were looking after the work of deposits and withdrawals in the opposite party’s bank .
The complainant submits that on verification it was found that on 20.10.2005 an unknown person by name G.Karthik by forging the signature of G.Dasaratha Reddy has presented two cheques bearing no.214784 for an amount of Rs.20 lakhs and cheque No.214796 for an amount of Rs.22 lakhs respectively and fraudulently withdrew the amounts from the bank and the signature on the cheque is different from that of the specimen signature and bank officers did not take proper care and diligence in verifying the signatures and paid the amounts to unknown persons even when there was spelling mistake of ‘Twenty’ being written as ‘Twentey’. The bank officials also did not notice that there is a vide difference in the numbers of cheque as one cheque is bearing no. 214784 and another cheque is bearing no.214796 and that the bank committed deficiency in service without properly identifying the person and releasing the amounts negligently. The complainant got issued a letter on 25.10.2005 to opposite party no.1 to compensate the money lost and opp.party made a complaint on 27.10.2005 to Chittoor I Town Police Station and an FIR was registered. Another letter was addressed by the complainant on 7.11.2005 for adjustment of Rs.42 lakhs in the complainant’s account but there was no response. The opposite party bank has taken the stand in their reply notice that there was no negligence on their part and that the amounts were paid after due verification which the complainant submits that if contrary to their stand taken in FIR on 27.10.2005 wherein the opposite party bank requested the police to trace the culprit. Vexed with the attitude of the bank in not making the good amounts lost, complainant filed complaint to direct the opposite party bank to deposit Rs.42,00,000/- with interest at 18% , compensation and costs.
Opposite party no.1 filed counter and opposite parties 2 and 3 filed memo adopting counter of opposite party no.1. Opposite party no.1 submitted in their counter that they have preliminary objections as to the jurisdiction of the Commission in maintaining this complaint since the dispute in question is of complicated nature and requires voluminous documentary and oral evidence and therefore this case is to be adjudicated by Civil Court. Opposite party admitted that the complainant Society opened a savings bank account no.11313, the account being operated under joint signatures of the President of the Society namely Mr.G.Dasaratha Reddy along with any of two executive members V.Lakshmi or N.Sakunthala . This account was opened on 31.5.2004 and opposite party denies for want of knowledge that the complainant society has authorized their Accounts Manager and Cashier to look after work of making deposits and withdrawals from the bank. They also denied that the complainant society informed the opposite party on several occasions to release the amounts only to the employees of the society who look after the work of the withdrawals and deposits of the opposite party bank . They contend that said two cheques are bearers cheques issued by complainant society to one Mr.G.Karthik and the said two cheques contain the genuine signatures of the President of the Society as well as V.Lakshmi with the designation of EC Member affixing the rubber stamp which tallies with the specimen signatures as given to the Bank by the complainant society. The signature on the cheque is same as that of specimen signature and only after proper verification of the same with the specimen signature and after obtaining the signature of bearer and also his address on the reverse of both cheques, the amount was paid to the said bearer. The opposite party further contend that the complainant’s letter dt. 25.10.2005 does not allege that the signature on the cheque is different from that of the specimen signature. These disputed cheques are genuine cheque leaves within the cheque book issued to the complainant society and this opposite party cannot be blamed for any connivance played by the staff of the complainant society. They submit that the contention of the complainant that there were 11 cheques between 214784 and 214796 cannot be a ground to allege deficiency in service. Both these cheques were not presented at the same time but at the interval of time moreover the opposite party contends that it is not for the bank to dictate as to how the complainant runs its affairs. The amount was paid to the person who has presented the said cheques only after making due enquiry about his identity and the legal notice got issued by the complainant on 14.12.2005 was replied by the opposite party through their counsel on 7.1.06. The opposite party also contends that there is no negligence or deficiency in service on their behalf and there are several issues of complicated nature involved in the matter and investigation has commenced by the police before the Criminal Court and therefore this issue cannot be decided before this Commission and has to be relegated to Civil Court.
The brief point that falls for consideration is whether there is any deficiency in service on behalf of the opposite parties and the complainant is entitled to the relief sought for?
The complainant filed evidence affidavit and Exs.A1 to A10 documents . Opposite party also filed evidence affidavit together with their written arguments.
The facts not in dispute are that the complainant is an NGO Society and has opened Savings Bank Account with the opposite party bearing no. 11313 and the amount is operated under joint signatures of the President of the Society namely G.Dasarath Reddy along with any of the two executive members namely V.Lakshmi or N.Sakunthala. It is also not in dispute that the said account was opened on 31.5.2004. It is the case of the complainant that on 20.10.05 two cheques for an amount of Rs.20 lakhs and Rs.22 lakhs vide cheque nos. 214784 and 214796 respectively, were fraudulently withdrawn by one Mr.G.Karthik who has forged the signatures of the complainant and the staff of the opposite party bank, without verifying the specimen signatures or identity of the person has allowed the said Mr.Karthik to withdraw the amounts. It is the further contention of the complainant that the word ‘Twenty’ was misspelt as ‘Twentey’ and that there is a vide difference in the cheque numbers and there are 11 missing cheques between 214784 and 214796. It is also the contention of the complainant that whenever large transactions are involved the Bank was informed that only the employees of the bank who are responsible for withdrawal of the amounts from the bank and deposits and for doing bank transactions should be paid the money. A Letter was sent to the Bank on 25.10.2005 (Ex.A1) stating that the responsibility of showing to the bearer to receive the cash lies with the paying cashier and officer and the burden does not lie on the complainant. Ex.A2 is the complaint given by the opposite party bank on 26.10.2005 to the Police stating that the cheques were issued in the name of Sri G.Karthik and requested to trace the culprit. Ex.A3 is the FIR dt 27.10.2005 lodged by the opposite party with the said Inspector of Police in which it is stated as follows:
“The account is operated under the joint signature of President Shri G.Dasaratha Reddy along with any one of the two executive members i.e. V.Lakshmi or N.Sakunthala. The society has issued the following two bearer cheques on 20.10.2005 purportedly signed by the President Shri G.Dasaratha Redpdy and one Executive Member V.Lakshmi 1 Chq. No:214796 dt:20.10.05 for Rs.22,00,000.00 favouring G.Karthik,2.Ch.No:214784 Dt:20.10.05 for Rs.20,00,000.00 favouring G.Karthik. The cheques were issued in the name of Shri G.Karthik, bearer and was presented across the counter for payment. After the verification of the signatures the above cheques were passed and payment made in due course on 20.10.05 and cash was paid to G.Karthik. On 25.10.2005, the President of the Society has sent a letter to the branch stating that he has not signed the cheques and his signatures were forged. Hence, we request you to file a complaint and trace the culprit Shri Karthik”
Exs.A4 and A5 are letters dt. 7.11.05 written by the complainant to the opposite party bank directing the bank to credit their account with Rs.42 lakhs which they have lost on account of the negligence of the Bank. Ex.A6 is legal notice got issued by the complainant to the Bank once again with the same prayer. Ex.A7 is a reply notice got issued by the bank, Exs.A9 & A10 are copies of cheques which were presented by the G.Karthik to the Bank on 20.10.2005 .
The contention of the opposite parties that prima-facie this case cannot be adjudicated by this Commission since it was involves complicated issues of fact and law is un sustainable in view of the judgement of Apex Court Fair Engineers Pvt. Ltd., Vs. N. K. Modi reported in 1996 (6) SCC 385 wherein it was held as follows:
The Legislature intended to provide a remedy in addition to the consentient arbitration which could be enforced under the Arbitration Act or the civil action in a suit under the provisions of the Code of Civil Procedure. Thereby, as seen, Section 34 of the Act does not confer an automatic right nor create an automatic embargo on the exercise of the power by the judicial authority under the Act. It is a matter of discretion. Considered from this perspective, we hold that though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof, we are of the considered view that it would be appropriate that these Forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. The reason is that the Act intends to relieve the consumers of the cumbersome arbitration proceedings or civil action unless the forums on their own and on the peculiar facts and circumstances of a particular case, come to the conclusion that the appropriate Forum for adjudication of the disputes would be otherwise those given in the Act.
Having concluded that this Commission has jurisdiction to entertain the complaint we now address ourselves to the question of deficiency in service, if any, on behalf of the bank. A perusal of the cheques show the rubber stamps of the President and Executive members duly signed and it is not in dispute that both these cheques were part of the cheque book issued to the complainant. It is pertinent to note that the complainant had never stated anywhere in his complaint as to how these two cheques which originated from the cheque book issued to them, have come into the hands of the said Mr.G.Karthik. If the signed cheque leaves are kept in the office and they were misused by their own staff members, the Bank cannot be made liable for any negligence of the complainant herein. The contention of the complainant that the cheques in question are not in serial numbers and there is vide difference in the 11 cheques in numbers between cheque nos. 214784 and 214796 is irrelevant since it is for the complainant to state that as to whom he has issued the 11 cheques during the course of his business transaction . As to the arguments of the complainant that the opposite party was informed that only employees of the society dealing with the banking transactions should be paid, is not supported by any documentary evidence like a letter issued to the bank or any sort of communication between the complainant society and the bank, which has been filed herein. Neither in the complaint nor in the affidavit, there is any explanation as to how genuine cheque leaves from the cheque book issued to the complainant society have been taken by the said Mr.G.Karthik. The authorization of one Mr.Sri Bhaskar Reddy, Accounts Manager and Sri Srinivasulu Cashier being charged for withdrawal of the amounts from the bank has not been filed before this Commission nor has any intimation been given to the Bank as seen from the documentary evidence filed before this Commission. Therefore we find force in the contention of the opposite parties that the amount was paid to the bearer of the cheque after duly enquiring about his identity and also taking his signature on the reverse of the cheque. The complainant, while alleging that their signatures were forged did not take any steps before this Commission to refer the disputed cheques to hand writing expert for comparing signatures and hence in the light of absence of any evidence on record to state that the bank has been negligent in payment of the money, when admittedly the said cheques are part of the 50 leaves cheque book issued to the complainant society, we are of the considered view that the complainant could not establish by any documentary evidence that there was deficiency in service on behalf of the opposite party . Hence this complaint is liable to be dismissed.
In the result this complaint is dismissed . No costs.
PRESIDENT
MEMBER
Dt.9.7.2009
APPENDIX OF EVIDENCE
Witnesses examined
For the complainant : Nil For the opp.parties : Nil
Exhibits marked on behalf of the complainant :
Ex.A1 : Lr. Dt. 25.10.2005 from complt. to opp.party
Ex.A2:Complaint lr. Dt. 26.10.2005 from Opp.party to Sub-Inspector
Of Police , Chittoor I town.
Ex.A3 : First Information Report dt. 27.10.2005 .
Ex.A4: Lr.dt. 7.11.05 from complt. to opp.party .
Ex.A5 : Reminder letter from complt. to opp.party
Ex.A6 : Legal notice issued bythe complt. to the opp.parties
Ex.A7 : Reply legal notice dt 2.1.2006 from opp.parties .
Ex.A8 : Reply legalnotice dt. 7.1.2006 from opp.parties
Ex.A9 & A10 : Cheques for 20 lakhs and 22 lakhs dt. 20.10.05
Exhibits marked on behalf of the opp.parties : Nil
PRESIDENT
MEMBER
9.7.2009
Pm*
