F.A.No.239 OF 2009 AGAINST C.C.No.97 OF 2008; DISTRICT FORUM NIZAMABAD.

Between:

Canara Bank,

Shivajinagar Branch, Nizamabad

Rep.by its Branch Manager
                                                                Appellant/opposite party no.1

                A N D

1      R.Ganga Prasad s/o Chandraiah,

Age 46 years, Practicing Lawyer, R/o of Flat No.101,

Mathruchaya Block, Mahan Apartments, Vinayak Nagar,

Nizamabad.

                                                        Rerspondent/complainant

2.     Primary Agricultural Cooperative Society,

Thimmapur Village,Morthad Mandal,

Nizamabad District rep.by its Secretary.

                                                        Respondent/opposite party no.2

Counsel for the Appellants                    Sri Deepak Bhattacharjee

Counsel for the Respondent  No.1          Sri Y.S.Yella Nand Gupta

        QUORUM:   SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER

                                                AND

SRI THOTA ASHOK KUMAR, HON’BLE MEMBER

TUESDAY THE FIFTH DAY OF DECEMBER

                                TWO THOUSAND ELEVEN

Oral Order (As per Sri R.Lakshminarasimha Rao, Hon’ble Member

                                        ***

1.     Canara Bank, the opposite party no.1 in C.C.No. 97 of 2008 before the District Forum is the appellant. The appeal is filed challenging the legality of the order directing the Bank to pay the amount covered under the cheque deposited by its account holder, the complainant.

2.     The first respondent is the account holder of the appellant bank with savings bank account bearing number 7277. On 17-04-2008 the first respondent deposited cheque bearing number 000370 dated 14-04-2008 for `23,000/-  drawn on the second respondent bank. The first respondent stated to have requested the appellant bank and the second respondent bank to let him know the status of the cheque and he had submitted representation dated 20-06-2008 which was said to have been received by both the banks and thereafter alleging deficiency in service and unfair trade practice on the part of the both the banks, he had filed the complaint .

3.     The appellant bank and the respondent no.2 bank had not chosen to contest the claim. They were proceeded exparte.

4.     The first respondent, in support of his claim, filed his affidavit and three documents marked as ExA1 to A3.

5.     The District Forum allowed the complaint on the premise that the opposite parties had not chosen to resist the claim giving rise to inference that they had committed deficiency in service.

6.     Aggrieved by the order of the District Forum, the opposite party no.1 bank has filed appeal contending that the payee bank is situate at Thimmapur outside the limits of the clearing house of the appellant bank and as such the cheque was sent through registered post and as there was no response from the second respondent, reminder was sent on 10-07-2008 consequently to which the cheque was returned with endorsement ”funds not available in the account”. It is submitted that the returned cheque was sent to the first respondent by registered post on 16-08-2008 who is entitled to initiate proceedings against the drawer of the cheque under Section 138 of the Negotiable Instruments Act in addition to other civil remedies available.

7.     It is contended that the first respondent re-presented the cheque on 20-09-2008 and it was sent on the same day through registered post to the second respondent bank. As there was no response from the second respondent, reminder was sent on 8-11-2008 and on 18-11-2008 the cheque was returned on the ground that funds were not available. The appellant bank has received the cheque on 2-12-2008 and sent it to the first respondenton11-12-2008 by registered post since he has not collected the cheque.

8.     The point for consideration is whether there is deficiency in service on the part of the appellant bank?

9.     The first respondent holding account bearing number 7277 and his presenting the cheque bearing number 000370 dated 14-04-2008 for `23,000/-  drawn on the second respondent bank, on 17-04-2008 with the appellant bank is not disputed. The appellant bank contends that as the clearing house is located outside Nizamabad, , it has sent the cheque through registered post to the second respondent bank. The appellant bank does not state as to on which date it had sent the cheque to the respondent no.2 bank. There is no correspondence said to have taken place except the reminder dated 10-07-2008 issued by the appellant bank.  The cheque being bounced with the endorsement that the drawer of the cheque had no sufficient funds in his account is not disputed. The appellant bank has sent the returned cheque to the first respondent through registered post obliviously for the reason the first respondent had not shown interest to take the cheque back.

10.    The first respondent re-presented the cheque again on 20-09-2008 with the appellant bank. He has not mentioned in his complaint about the cheque being returned unpaid and the same cheque being presented again with the appellate bank. On the same day it was presented with the appellant bank, the cheque was sent through registered post to the second respondent bank and this time too the second respondent bank had not responded promptly compelling the appellant bank to send reminder on 8-11-2008 and responding to the query made under the reminder, the second respondent bank returned the cheque on 18-11-2008 stating that the amount in the account of the drawer of the cheque is not sufficient to honour the cheque. The appellant bank returned the cheque on 11-12-2008 through registered post to the first respondent.

11.    The first respondent before attributing any deficiency in service to the appellant bank and the second respondent bank, has to show what steps he had taken when the cheque was returned on account of insufficient funds in the account of its drawer. The first respondent has not taken any steps against the drawer of the cheque. At least it is not stated that after the cheque was returned unpaid, he had contacted the drawer of the cheque and explained the position and on his request to represent the cheque with the promise that it would be honoured, he had again deposited the cheque with the appellant bank. The first respondent has not stated any of these facts to draw inference that the cheque was presented again on the support of the promise from its drawer. In such circumstances, the first respondent attempts to find fault with the banks.

12.    The appellant bank has sent the cheque on 20-09-2008 to the second respondent bank and the second respondent bank did neither send the proceeds of the cheque nor did it return the cheque till 18-11-2008 till the appellant bank had sent reminder on 8-11-2008. The appellant bank had not stated as to how long did it keep the cheque with it when the cheque was presented at the first instance. All the three parties are guilty of negligence in the matter of performance of their obligations.

13.    The District Forum awarded the amount covered under the cheque which by any standard can not be approved. The  first respondent had not presented the cheque  on 14-04-2008 and till 20-06-2008 he had not made any enquiry as to whether the proceeds of the cheque were realized or the cheque was returned unpaid. The cheque was returned to him on 16-08-2008 by the appellant bank and he did not take any steps against the drawer of the cheque. The first respondent had not resubmitted the cheque till 20-09-2008. Considering the date of issue and validity period of the cheque as the cheque was issued on 17-04-2008 and its validity period expires by the month of October,2008, the first respondent had not cared for the expired period of validity of the cheque nor he had shown any interest to resubmit it immediately after the appellant bank had returned it to him. Therefore, taking into consideration of the negligence of the parties, the mental tension the first respondent suffered and the amount covered under the cheque, the option left to the first respondent to proceed against the drawer of the cheque etc, compensation has to be awarded in favour of the first respondent which we quantify at Rs.3,000/- against the second respondent bank.

14.    In “Manoj KHurana vs Rajender Banchar and another” I(2007)CPj 234, the National Commission held that where the validity period of cheque presented by the drawee is expired due to negligence of the Bank, the bank can be fastened with the liability to pay compensation for the deficiency in service and under no circumstances the bank can be saddled with the liability to pay the amount covered under the cheque.

15.    In “Hari Ram Garg vs State Bank of Patiala and another” I(2011)CPJ 30 (NC), the National Commission held that :

“There is no gainsaying the fact that in case of loss of cheque presented with Bank, the person presenting it, unless it is shown that the amount had been debited to the account fo the person who had issued the cheque, was not entitled to compensation or claim the amount of the loss of cheque”.

16.    The District Forum misdirected itself in awarding the amount covered under the cheque without there being any evidence to show that there were sufficient funds in the account of the drawer of the cheque in question and without there being any evidence brought on record by the first respondent as to the considerable negligence of the appellant bank. Hence, the order of the District Forum is liable to be modified.

17.    In the result the appeal is allowed. The order of the District Forum is modified. The respondent no.2/opposite party no.2 is directed to pay an amount of `3,000/- together with costs of `1,000/- to the first respondent/complainant. The complaint against the appellant bank/the opposite party no.1 is dismissed. The parties shall bear their own costs in the appeal. Time for compliance four weeks.

MEMBER

                                                                        MEMBER

                                                                    Dt.05.12.2011

KMK*