F.A.No.121/2008  against C.C.No.159/2007, Dist.Forum,Prakasam Dist. at Ongole.             

Between:

Kotha Srinivasa Rao,

S/o.Somasundara Rao,

aged about 40 years, Hindu,

Occ:Business, R/o.Munthavari Center,

Chirala, Prakasam District.                               …. Appellant/

                                                                       Complainant

        And

Andhra Bank, rep. by its Branch Manager,

Chirala , Prakasam District.                               … Respondent/

                                                                       Opp.party     

Counsel for the Appellant       :        Mr.A.Rama Krishna       

Counsel for the Respondent   :        Mr.K.Sridhar Rao

CORAM:SMT. M.SHREESHA, HON’BLE MEMBER

And

SRI. K.SATYANAND , HON’BLE  MEMBER.

TUESDAY, THE  SIXTH DAY OF APRIL.

TWO THOUSAND TEN.

Oral Order :(Per  Smt M.Shreesha, Hon’ble Member)

****

                 Aggrieved by the order in C.C.No.159/2007   on the file of District Forum,  Prakasam Dist  at Ongole, the  complainant preferred this appeal. 

        The brief facts as set out in the  complaint are that the complainant  holds a Savings  Bank A/c.no.23615  and on 31.10.2006 the complainant purchased an account payee demand draft bearing no.174634  for an amount of  Rs.27,486/-  from the opposite party bank drawn on Hyderabad Branch in  favour of  Vardhaman Textiles Ltd.   The complainant sent the said demand draft to Vardhaman Textiles Ltd., Hyderabad through the  City Courier Service, Chirala  on the same day  but it was not delivered to the addressee. On 16.11.2006   the complainant addressed a letter to the  opposite party  informing  that the DD sent by the courier was lost   and  to immediately stop the payment of the said  draft  and requested the bank to issue duplicate demand draft.  The opposite party issued duplicate demand draft on 5.12.2006 on execution of an indemnity bond in favour of the opposite party undertaking to make good  the loss  that may be sustained by the opposite party  if there is any encashment.    The opposite party honoured the duplicate demand draft.    On 5.1.2007   the opposite party bank Branch Manager called the complainant  and stated that the original Demand Draft was encashed by somebody through H.D.F.C. bank  forging the signatures of the bank authorities.    The opposite party debited an amount of Rs.27,486/-  from the complainant’s savings account on the same day by obtaining  the signatures of the complainant  on withdrawal form  representing  that it was a mere formality as per the opposite party  bank rules and that the said amount would be credited to the complainant’s account within a week.   Thereafter a week days expired   by 12.1.2007   but the opposite party did not credit the amount to the complainant’s bank account. Hence the complaint seeking direction to the opposite party to  the opposite party  to reimburse an amount of Rs.27,486/-  to the complainant , to pay interest @ 18% p.a.  from 5.1.2007   together with compensation of Rs.20,000/- and  to pay costs

        Opposite party filed counter affidavit stating that the complainant purchased a demand draft on 31.10.2006   and on `16.112006 they received a letter to stop payment  and on 18.11.2006   the service centre informed to the opposite party bank about receipt of the letter dt.16.11.2006 and issued acknowledgement notice.  On  28.11.2006  indemnity bond was executed  by the complainant   undertaking that if the   draft is encashed    he has to pay the amount.  The draft was encashed  with the knowledge of the  complainant  and the complainant himself voluntarily came to the bank and issued  withdrawal form  and obtained payment advise.   The complainant did not implead courier  service or HDFC  bank and it is only the  collusion   of the complainant with the person who presented the draft and there is no deficiency in service on their behalf. 

        The District Forum based on the evidence adduced i.e. Exs.A1 to A6   and B1 and  B2    dismissed the complaint on the ground that the complainant failed to establish that there is any deficiency in service  on behalf of the bank authorities in collecting  the amount from complainant’s savings account .

        Aggrieved by the said order the complainant preferred this appeal.  Both sides filed written arguments . 

        The facts not in dispute are that the appellant/complainant holds savings bank account in respondent bank   with S.B.A/c.no.23615 and on 31.10.2006  he purchased an account payee demand draft bearing  no.174634  for an amount of Rs.27,486/-  and on the same day he sent the DD through City Courier Service   to Vardhaman Textiles Ltd., Hyderabad.  It is also not in dispute that the DD was not delivered to the addressee  and the appellant herein addressed a letter to the respondent bank  on 16.11.2006  to stop the payment of said D.D. and  not to honour it.  It is also an admitted fact that the bank has received this letter dt.16.11.2006 and issued a duplicate DD to the appellant complainant on 5.12.2006   on execution of an indemnity bond.   The respondent/opposite party honoured the duplicate DD and on 5.1.2007   the Bank Manager of the opposite party bank called the appellant/complainant stating that the original demand draft was encashed by somebody   through H.D.F.C. bank  at Thirupathi Branch  and debited an amount of Rs.27,486/- from the appellant/complainant’s savings account on the same day by obtaining signatures on the withdrawal  form representing that  it is  customary as per their rules.  It is the case of the appellant/complainant that the Branch Manager  had informed him that in a week’s time the amount would be credited back to his account.  When  this did not happen the appellant/complainant got issued a legal notice to the respondent/opp.party  bank to reimburse an amount of Rs.27,486/-   with interest. Though the notices were served there was no reply from the opposite party.  It is the contention of the respondent bank that on 28.11.2006 the appellant/complainant had executed an indemnity bond undertaking that if the demand draft  was  encashed he had agreed to pay the amount. It is also the contention of the respondent bank that  the complaint is bad for non joinder of Courier Company and also  the collecting bank  i.e. HDFC bank.   We observe from the record that the complainant filed petition vide I.A.No.250/2007  seeking direction to summon the Branch Manager  for production of original documents/copies and also the forged instrument  which was encashed fraudulently from the HDFC bank  and it is  the contention of the appellant/complainant that without considering this I.A. the Forum had passed the order in the main complaint.  When it is an admitted fact that the complainant had informed the respondent bank on 16.11.2006  requesting  to stop payment and that the DD was lost as evidenced under Ex.A2, the respondent bank ought to have taken steps to give necessary instructions to stop payment of the said DD.  When the collecting bank had sent  the DD for collection at that point of time this respondent bank has to instruct the collecting bank not to honour the original DD since it had already got instructions of ‘stop payment’ from the appellant/complainant while the respondent bank in the instant case did not taken such necessary steps.   The contention of the respondent bank   that HDFC bank has not been made a  party  is unsustainable, since the privity of contract is only between the appellant/complainant and the respondent herein.  It was also open to the  opposite party bank to take necessary steps to implead the collecting banks but it did not choose to do so.   On 5.12.2006  a duplicate demand draft (Ex.A3)  was issued by  the opposite party  and on 8.12.2006   this duplicate demand draft was honoured by  ICICI Bank  and on 5.1.2007   vide Ex.A4  debit  advice  was issued by opposite party bank to the complainant acknowledging their  debit of Rs.27,486/-   from his savings account.   Keeping in view that the complainant had admittedly through Ex.A2 informed   opposite party bank to stop payment and the duplicate demand draft was also issued by the opposite  party, we are of the considered view that the respondent bank has committed an act of deficiency in service in not informing the collecting bank not to honour the original DD.

        For the reasons afore mentioned, the order of the District Forum is set aside and  this appeal is allowed directing the respondent bank to credit the DD amount back to the savings bank account of the complainant together with compensation of Rs.3000/-  and costs of Rs.2000/- within four weeks.   The opposite party is at liberty  to seek appropriate  remedy against the collecting bank.      

        In the result this appeal is allowed and the order of the District Forum is set aside directing the respondent bank to credit the DD amount of Rs.27,486/- to the complainant’s savings account and also pay compensation of  Rs.3000/-  and costs of Rs.2000/- within four weeks from the date of receipt of this order. 

Sd./MEMBER

                                                                                                                Sd./MEMBER

                                                                                                                Dt.6.4.2010