Per Shri P.N. Kashalkar, Hon’ble Presiding Judicial Member

          This is an appeal filed by org. opponent No.5 against the judgement and award passed by District Consumer Disputes Redressal Forum, Pune in consumer complaint No.76/2001 decided on 21/09/2006.  While allowing the complaint partly, District Consumer Forum directed under its award to Mr.Rajendra Dnyaneshwar Kumbhar, opponent No.2 and State Bank of India, opponent No.5 to jointly and severally pay a sum of `1 Lakh along with interest @ 12% p.a. and also directed to pay `1,000/- as costs to the complainants within two months.  As such, org. opponent No.5/State Bank of India has come up in appeal before us.

          The facts to the extent material to dispose of this appeal may be stated as under :-

          Complainants had filed consumer complaint against five opponents inclusive of opponent No.1/Mr.Sudhakar Ramdayal Behede, opponent No.2/Mr.Rajendra Dnyaneshwar Kumbhar & opponent No.3/Mrs.Vijaya Sudhakar Behede, partners of M/s.Behede Brothers.   They also impleaded opponent No.4/M/s.Behede Brothers and State Bank of India as opponent No.5.  Complaint of the complainants was for recovery of possession of flat or alternatively for refund of consideration paid with interest together with cost and compensation for deficiency in service and for unfair trade practice.  According to the complainants (Mr.& Mrs.Pawar), they had booked a flat No.6 in ‘A’ Wing building to be constructed as ‘Behede Towers’ for total consideration of `4,18,800/-.  Agreement for sale was executed between complainants on the one hand and M/s.Behede Brothers, partnership firm on the other hand.  According to the complainants, initially, the agreement executed on stamp paper of `100/-, but at the time of execution of agreement of sale, opponent No.2 represented them that he was partner of firm known as ‘M/s.Behede Brothers’ having 98% interest therein.  He also stated that the partnership deed was executed between opponent Nos.1to4.  Opponent No.5/State Bank of India, Main Branch, Pune sanctioned loan to the complainants for purchase of said flat.  Loan of `3,25,000/- was sanctioned and out of which only `1 Lakh amount was disbursed to M/s.Behede Brothers by issuing a cheque to that effect.  It was the contention of the complainants that they had instructed opponent No.5 to issue a cheque of `1 Lakh in favour of the firm i.e. M/s.Behede Brothers, but against their instructions, Bank had issued a cheque to opponent No.2, one of the partners of M/s.Behede Brothers and opponent No.2 had no exclusive authority to sell the flat.  As such on cancellation of the alleged Sale Deed, opponent No.1 returned the amount to the complainants except `1 Lakh which the opponent No.4/firm asserted that it had not received the said amount.  According to the complainants, opponent Nos.1to5 indulged in fraudulent act and thereby deceived them and thus, indulged in unfair trade practice and therefore, they filed a consumer complaint for refund of `1 Lakh with interest @ 18% p.a. and alternatively for possession of the flat.

          Along with the complaint, the complainants filed about 30 documents which included receipts, development agreement, agreement for sale, partnership deed dated 15/03/1999 and office copies of notices exchanged between the parties.  They had also enclosed copy of cheque of `1 Lakh given by the Bank in the name of M/s.Behede Brothers on behalf of the complainants. 

Opponent No.2 did not put in appearance.  Notice was not claimed and District Consumer Forum was pleased to proceed ex-parte against opponent No.2.  Opponent No.3 expired during the course of hearing of the complaint and her legal heirs were brought on record.  Opponent No.1,3&4 filed written version and resisted the claim.  They challenged the maintainability of the complaint on the ground of limitation.  They also pleaded that the opponent No.2 had no exclusive right to execute any document with the complainants.  Since, they had returned the entire amount received from the complainants, complaint against them is not tenable in law and to this effect Mr.Sudhakar Behede has filed affidavit in support of written version on behalf of opponent Nos.1, 3&4. 

Opponent No.5/State Bank of India contested the matter by filing written version.  In the written version, it denied that there was any deficiency in service as alleged and it being guilty of unfair trade practice.  The State Bank of India pleaded that cheque of `1 Lakh was handed over to opponent No.2 as per the understanding between complainants and opponents and acting on the letter given on 30/09/1999 by the complainants.  It denied any liability to pay to the complainants.  It pleaded that it was not guilty of any irregularities committed in the transaction.  It pleaded that as per the directions of the complainants, it had issued cheque of `1 Lakh to M/s.Behede Brothers/partnership firm.  It was an account payee cheque and the fact that it was later on found to have been misused by opponent No.2 would not mean that they are guilty of any unfair trade practice as alleged by the complainants.  The Deputy Manager of State Bank of India Mr.Vilas D. Shinde filed affidavit in support of written version and also filed certain documents concerning the case.

Upon considering the affidavits and documents placed on record, District Consumer Forum was of the view that the partnership agreement on record clearly stipulated that the firm would not have any other account except in the bank of Janaseva Sahakari Bank Ltd., Headquarter Branch, Pune.  In that Bank, firm had opened the account.  All the payments received from the purchasers were to be credited in the account which has been in the name of M/s.Behede Brothers.  District Consumer Forum noted that Poolgate Branch of opponent No.5 had allowed M/s.Behede Brothers to open another account in its branch and that account was exclusively operated by opponent No.2.  This was not permissible as per the terms and conditions of the partnership deed.  District Consumer Forum was of the view that Poolgate branch of the State Bank of India overlooked the express directions mentioned in the partnership deed and thereby it colluded with opponent No.2 and deprived the complainants as well as M/s.Behede Brothers of the amount of `1 Lakh and therefore, District Consumer Forum passed the award only against opponent No.2/Mr.Rajendra Kumbhar, partner of M/s.Behede Brothers and also against opponent No.5/State Bank of India, Main Branch, Pune and directed both of them jointly and severally to refund amount of `1 Lakh with interest @ 12% p.a. and also directed to pay `1,000/- as costs.  As such State Bank of India has filed this appeal.

We heard Ms.Lalita Panchakshari, Advocate for the appellant, Respondent No.1 for himself and for respondent No.2, Mr.B.V. Kulkarni, Advocate for respondent Nos.3,5&6.  None was present for respondent No.4.

We are finding that the order passed by the District Consumer Forum, Pune is per se bad in law and cannot be allowed to sustain in law.  What is pertinent to note is to observe that the complainants were sanctioned loan of `3,25,000/- by the State Bank of India, Main Branch, Pune.  First installment of `1 Lakh was payable to M/s.Behede Brothers.  Accordingly, one of the complainants himself made written request to the appellant that he was satisfied about the construction of his flat being made by the builder till that date and he requested the Bank to release an amount of `1 Lakh through cheque in favour of M/s.Behede Brothers out of `3,25,000/- sanctioned to them by its Branch.  Acting upon this letter of the complainants dated 30/09/1999, the Bank issued a cheque of `1 Lakh in favour of M/s.Behede Brothers dated 04/10/1999.  The fact that this cheque was misappropriated or misutilised by opponent No.2 is aside the issue.  What we have to see to arrive at a finding of deficiency in service or unfair trade practice by the State Bank of India is whether it had given cheque of `1 Lakh to M/s.Behede Brothers and it had so issued the cheque in the name of M/s.Behede Brothers on the express written request made by one of the two complainants.  Once such cheque had been issued in the name of M/s.Behede Brothers, a partnership firm as per the mandate given by the complainant himself, he cannot be heard to say that said cheque was wrongly given to Mr.Rajendra Kumbhar, because on the day the cheque was handed over to Mr.Rajendra Kumbhar, Mr.Rajendra Kumbhar was very much partner of M/s.Behede Brothers/partnership firm, who was builder and developer.  So, the Bank had not been guilty of deficiency in service or unfair trade practice in issuing cheque of `1 Lakh in the name of M/s.Behede Brothers, because it was issued on the mandate or written request made by Mr.J.G. Pawar, one of the complainants.  When this is so, Bank cannot be held responsible if the partner of the firm had misappropriated that amount by opening a different account in the name of same firm in the different branch of State Bank of India.  That was the fraudulent act on the part of opponent No.2/respondent No.4 herein.  It was criminal action or action in breach of trust on the part of Mr.Rajendra Kumbhar, who against the terms and conditions of the partnership deed had clandestinely opened another bank account in the name of M/s.Behede Brothers, collected the cheque from the State Bank of India, Main Branch, Pune and deposited it in the newly opened account of M/s.Behede Brothers which he operated himself.  So, fraud if any, misappropriation if any, of the amount of `1 Lakh belonging to the complainants was committed exclusively by respondent No.4 herein and not in collusion with him by the appellant herein.  Appellant had issued a cheque in the name of M/s.Behede Brothers only not knowing that Mr.Rajednra Kumbhar/respondent No.4 had opened another account in the name of M/s.Behede Brothers in another branch of State Bank of India.  In this view of the matter, we are of the view that the District Consumer Forum erred in law in fastening liability on the State Bank of India for the amount misappropriated by partner of M/s.Behede Brothers against the mandate of partnership deed between the parties.

What is pertinent to note is the fact that the partnership deed was executed on 15/03/1999 and in the partnership deed, partners shown are Mr.Sudhakar Ramdayal Behede, Mr.Rajendra Dnyaneshwar Kumbhar, Mrs.Vijaya Sudhakar Behede.  So, one of the partner of the partnership firm was given cheque of `1 Lakh on behalf of the complainants as first installment of home loan sanctioned to the complainants by the State Bank of India/appellant herein and that cheque was issued not in the name of Mr.Rajendra Kumbhar, partner of M/s.Behede Brothers, but it was issued in the name of M/s.Behede Brothers itself.  So, at the end of the State Bank of India, there was no misappropriation of funds.  The cheque was given by the Bank in the name of M/s.Behede Brothers and that too after the complainants had made request in writing to the Bank that the cheque should be issued in the name of M/s.Behede Brothers.  In the circumstances, we are of the view that the District Consumer Forum returned the erroneous findings as against the Bank.  The guilt if any was of respondent No.4 who had in breach of partnership agreement opened exclusively for himself a separate account in the name of M/s.Behede Brothers with Poolgate Branch of the State Bank of India and committed mischief.  The State Bank of India, Main Branch, Pune cannot be held responsible for the defalcation of moneys made by respondent No.4/Mr.Rajendra Kumbhar though the said act of respondent No.4 deprived the complainants of `1 Lakh and ultimately, they had to forgo on the claim of flat.  But, then, they had entered into the cancellation agreement with the said builder and had put an end to the said dispute.  In the circumstances, we are finding that the award passed by the District Consumer Forum as against the State Bank of India is appearing to be erroneous, bad in law and cannot be allowed to sustain in law.  The Bank is not supposed to go through each and every documents submitted by the complainants, particularly, partnership deed of M/s.Behede Brothers-builders.  The Bank exercised due diligence by looking to the partnership deed and on being satisfied that one of the partner of M/s.Behede Brothers was in fact Mr.Rajendra Kumbhar/respondent No.4 herein, the Bank had given the cheque of `1 Lakh in the hands of said respondent No.4 as such partner of M/s.Behede Brothers.  In the circumstances, we pass the following order :-

                   -: ORDER :-

1.     Appeal is allowed.  The impugned judgement and award dated 21/09/2006 passed by District Consumer Forum, Pune is quashed and set aside as against this appellant only.  Consumer complaint No.76/2001 stands dismissed as against this appellant only.  We make it clear that the award stands as against respondent No.4/Mr.Rajendra Kumbhar.

2.     No order as to costs.

3.     Copies of the order be furnished to the parties.