BEFORE THE DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II, U.T. CHANDIGARH

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Complaint  Case No: 184 of 2010

Date   of  Institution :    22.3.2010

Date  of   Decision   :  25.05.2011

Hardeep Singh Bedi s/o Late Sh.Kartar Singh Bedi, R/o H.No.1337, Sector 44-B, Chandigarh.

….…Complainant

                                       V E R S U S

1]       M/s Citibank, Car Loan Division, through its Managing Director c/o M/s Varsal Credit Consultants Pvt. Ltd., SCO No.124-125, 2^nd Floor, Sector 34-A, Chandigarh.

2]       M/s Varsal Credit Consultants Pvt. Ltd. through its Managing Director, C/o SCO No.124-125, 2^nd floor, Sector 34-A, Chandigarh.

          ..…Opposite Parties

CORAM:          SH.LAKSHMAN SHARMA                         PRESIDENT

SH.ASHOK RAJ BHANDARI            MEMBER

MRS.MADHU MUTNEJA                        MEMBER

Argued by:     Sh.Dineh Madra, Adv. for the complainant along with Complainant

Sh.Nitish Massey, Advocate for the OPs.

PER ASHOK RAJ BHANDARI, MEMBER

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1]             The brief facts of the case are as under:-

                That the complainant took a vehicle loan of Rs.4,65,680/- from OPs repayable in 59 monthly installments of Rs.9,875/- w.e.f. Feb., 2005 onwards. The complainant gave them 60 cheques [Sr.No.408501 to 408540 (40) and 700121 to 700140 (20)] to the OPs duly signed and filled in with the installment amount pertaining to his account maintained with P.N.B. Sector, 22, Chandigarh.  It is averred that none of the cheques of the complainant was ever dishonoured for want of funds.  The cheques were dishonoured because of the fault of the OP as they failed to put in 16 digit correct account number on those cheques as the 16 digit account number was rightly mentioned in the first cheque (Ann.C-1) but the OPs did not do so subsequently and let the other cheques dishonoured for that purpose.  However, every time the cheque was dishonoured, the OPs received the installments in cash against the dishonoured cheques from the complainant. Though the OPs were collecting the installments in cash through their agents (OP-2) for the dishonoured cheques, but they never told that the complainant that they are also levying penal charges for the dishonouring of cheques and also did not ever ask him to issue new cheques in lieu of old cheques.  The complainant brought this fact to the notice of OPs vide e-mail dated 19.12.2008 and 19.2.2009 and  requested them to collect fresh cheques and return the old ones. Though the OPs vide reply dated 20.12.2008 had promised to return the old cheques and collect the new ones, but they never did so and rather the old cheques, which were not to be presented, were being regularly presented and dishonoured for the same reason.  Not only that, later on  the OPs inspite of collecting the new cheques from the complainant vide receipt (Ann.C-3A), dated 26.2.2009, did not return the old cheques and even presented the old cheque once again, which was obviously dishonoured for want of 16 digit account numbers in that.  The matter was also explained to the OPs through e-mail but to no avail.  Inspite of all that, the OPs sent him a legal notice dated 7.11.2009 leveling baseless allegations and threatened the complainant to repossess the vehicle.  The notice was replied but nothing positive was done by the OPs to remedy the situation to  redress the grievance of the complainant.  It is further averred that the first two cheques bearing No.408501 and 408502, which were taken by the OPs from the complainant to be credited in the loan account of the complainant have no doubt been debited to the savings account of complainant on 1.1.2005 and 17.1.2005 but instead were actually credited in the Bank Account of some other organization i.e. “Instant Financial Corporation”, with whom the complainant has no contract or dealing, as the installments of loan were to commence for payment w.e.f. Feb., 2005 only.  The complainant noticed that against the total 59 installments, 50 installments were made through cheques and 7 installments were paid through cash and accordingly out of 59 installments only two installments, if at all, still not paid so far, are payable as on date and for that the OPs have already got advance cheques available with them issued by the complainant.  As already stated that first two installments have not been credited in the proper loan account of the complainant though these were duly paid by the complainant through his bank account. The same were fraudulently got encashed by the OPs in favour of some “Instant Financial Corporation” while charging penal interest and other charges from the complainant showing him as a defaulter on account of those two installments.  Alleging the above acts of OPs as gross deficiency in service, the present complaint has been filed.

2]             OPs filed joint reply and admitted the factual matrix of the case.  It is admitted that complainant delivered 60 cheques for repayment of loan installments.  It is stated that eight Cheque with Nos.701124 to 700131 were refused/dishonoured by the said banker of the complainant for want of 16 digit account number        , which was to be added before the account number of the complainant either by the complainant himself or the said banker of the complainant.  The complainant was intimated about the levying of Rs.1398/- as penal charges for the dishonouring of cheques and non-receipt of EMI for Nov., 2008 to Jan., 2009.  It is admitted that OP received five fresh post dated cheques from the complainant in March, 2009.  It is submitted that complainant was intimated vide mail dated 10.12.2010 that OP-1 has not received any EMI from August, 2009 and penal charges of Rs.4658/- has been levied.   It is asserted that 8 post-dated cheques of the complainant issued in favour of OP-1 were dishonoured on account of “No Such Account/Title of the Account Required/Payment stopped by the drawer/Account Closed.”  It is also asserted that as on 8^th July, 2010 there was an outstanding balance of Rs.44,172.96 against the complainant (Ann.R-2). Pleading no deficiency in service or unfair trade practice and denying rest of allegations of the complainant, OPs have prayed for dismissal of the complaint.         

3]               Parties led evidence in support of their contentions.

4]             We have heard the ld.Counsel for the parties and have perused the entire record.

5]             The basic facts of the case have already been incorporated in the foregoing paragraphs.

6]             The main case of the complainant against the OPs is that he had availed vehicle loan of Rs.4,65,680/- from the OPs, repayable in 59 equated monthly installments of Rs.9875/- starting with Feb., 2005 and continuing onwards and for that purpose, the complainant gave 60 cheques to the OPs bearing No.406501 to 408540 (40 cheques) and No.700121 to 700140 (20 cheques) all duly signed and filled-in with the installment amount pertaining to his saving bank account maintained with Punjab National Bank, Sector 22, Chandigarh.  The complainant claims that none of the cheques issued by him was ever dishonoured because of his fault and on account of insufficient funds in his account.  Some of the cheques, which have been dishonoured by the paying bank were on account of wrong filling or non-filling of 16 digit correct savings bank account number on those cheques.  The first cheque was dishonoured (Ann.C-1) on 1.8.2008 in which the OP bank had not filled-in the correct 16 digit account number and instead filled-in only last 6 digits.  Against this dishonoured cheque, the agent of the OP-1 i.e. OP-2 collected Rs.9875/- in cash from the complainant on 28.8.2008.  On the same lines, OP-1 continued to present the cheques with incomplete and defective account number every time and the cheques were dishonoured by the paying bank raising certain objections every time i.e. title of account required/title of account wrong/incomplete.  The complainant brought this fact to the notice of the OPs through e-mail on 19.12.2008 and 19.2.2009 and requested the OP-1 not to present the old and defective cheques and to collect fresh cheques from him and also return the old one’s to him immediately.  The OPs vide their reply dated 20.12.2008 had promised to return the old cheques but never did so.  At the same time, they continued to present the old cheques with wrong account number and the same were rightly dishonoured by the paying bank of the complainant.  On a subsequent date i.e. 26.2.2009 the OPs collected Nine (09) new cheques with the numbers 273668 to 273676 each for Rs.9875/- with the same account number for paying the balance nine installments with the promise that the remaining old unpaid cheques shall be returned to the complainant and that only the new cheques shall henceforth be presented.  As per the complainant, this was never done by the OPs.  Even after 26.2.2009 the OPs presented three more old cheques with the wrong account number i.e. Cheques bearing No.700134, dated 1.5.2009, No.700136, dated 1.7.2009 and No.700135, dated 1.6.2009. 

7]             All these three cheques were from old series of cheques issued by the complainant to the OPs, which were not supposed to be presented by the OP-1 after they had already received 9 new cheques on 26.2.2009.  Not only that, the first two cheques issued by the complainant dated 1.1.2005 and 17.1.2005 bearing No.408501 and 408502,  each for Rs.9875/- were credited by the OPs in the account of some “Instant Financial Corporation” while the complainant had no privity of contract or any relationship with that Company.  The OP-1 has not been able to explain the disposal of these two cheques as to how and why instead of crediting the loan amount of the complainant against these two cheques of Rs.9875/- each Total Rs.19,750/- has not been credited in the loan account of the complainant and instead the same was allowed to be credited in some other account. 

8]             Another major point which has come to our notice while perusing all the documents and papers on record is that when the first cheque was dishonoured on 1.8.2008 (Ann.C-7) by the paying bank i.e. Punjab National Bank, Sector 22, Chandigarh with the reason that 16 digit account number was required to be written on that, why did the OP-1 continue to present the remaining cheques with the defective/incomplete account number.  The OP-1 should have immediately contacted the complainant to sort out the matter so that no further cheques with the defective/incomplete account number should have been presented with a view to avoid unnecessary dishonouring the same due to one reason or the other and resulting in levying of excessive charges in the loan account of the complainant. 

9]             The contention of the complainant is that he has given all cheques by signing the same and also writing the amount whereas the remaining particulars i.e. the dates and account number etc. were to be filled-in by the OPs.  The only reason for dishonouring of cheques was the wrong mentioning of 16 digit account number.

                Even granting for a moment that the complainant himself had filled the wrong account number or incomplete account number in the cheque, even then it was the duty of the OP Bank to bring this fact to the notice of the complainant for getting the correction made after the first cheque was dishonoured on 1.8.2008.  It is also the case of the complainant that 40 cheques from the first series of the cheques bearing No.408501 to 408540 were duly honoured by the paying bank and that there was no problem whatsoever.  However, the problem arose only with the second series of cheques, which carried Nos.700121 to 700140.  Further from the second series of cheques, cheques bearing No.700121, dated 2.4.2008, No.700122, dated 2.5.2008, No.700123, 2.6.2008 and No.700132, dated 3.3.2009 each for Rs.9875/- were duly presented by the OPs with correct 16 digit account numbers and were passed by the paying bank in favour of OPs.  The problem arose only in respect of the remaining cheques which were not carrying the 16 digit account number and the same were still lying with the OP Bank and were not presented to the paying bank.  Every time the cheque issued by the complainant was dishonoured, instead of rectifying the emergent situation there & then, the OPs were levying penalty and interest charges and this amount continued to increase with the bouncing of each cheque for no fault of the complainant.  Finally the complainant got a legal notice from OPs on 7.11.2009 (C-21) in which he was asked to pay a sum of Rs.34,419.49 as due and outstanding amount in his loan account No.A4K7756999161 with the OP-1.  Finally in July, 2010 the OPs again demanded a sum of Rs.44,172.96 as the outstanding amount in his loan account whereas according to the complainant, after taking into account all the installments paid by him into his loan account which comes to 57 out of total 59 installments, the only pending installments till date, as per the complainant, are only two for a sum of Rs.9875/- each i.e. a total sum of Rs.19750/- whereas the OPs are claiming the amount of Rs.44,172.96.  Even against these two pending installments, the OPs are still holding some of the new cheques issued by the complainant which carried correct account numbers but the same have not been presented by the OP Bank despite the fact that the complainant is maintaining sufficient balance for the encashment of these two cheques.  Therefore, inspite of the two pending installments still remaining unpaid, the entire fault lies with the OPs and not with the complainant as they have not presented the cheques for payment.

10]            The OPs have rebutted all the allegations made by the complainant against them saying that cheques bearing No.700124 to 700131 (08 cheques) were refused/dishonoured by the paying bank of the complainant for want of 16 digit account numbers, which was to be added before the account number of the complainant either by the complainant himself or by the said banker of the complainant.  The pleadings of the OPs simply fall flat as the OPs themselves took no steps when the first cheque was dishonoured and they have also not been able to prove that it was the duty of the complainant to fill the complete account number of 16 digit.  Even if it was the duty of the complainant to fill-in the complete 16 digit account number, the OP bank should not have accepted such cheques from the complainant at the time of granting loan and at least they should not have presented these defective cheques for payment if the same were not carrying the correct or complete 16 digit account number.  When the first cheque was presented by the OPs and the same was dishonoured, the OP-1 should have stopped presentation of such cheques immediately and should have informed the complainant for doing the needful, but this was not done by the OPs for a very long time.  It is also admitted by the OPs that they had received fresh post dated cheques from the complainant in Feb./March, 2009 but ironically still continued to present the old cheques with the defective account numbers resulting in dishonour of the same each time for no fault of the complainant.

11]            Another allegation made by the OPs against the complainant is that some of the cheques issued by the complainant were returned unpaid due to the reason “No such account/Title of the account required/Payment stopped by the drawer/Account closed.”  On close scrutiny of the said cheques, which were returned by the complainant’s bank, it is found that all these cheques belonged to the old series and not to the fresh cheques issued by the complainant.  It is quite obvious that that after the complainant had handed over 9 fresh cheques to the OPs with the correct 16 digit account number, he had to give instructions to his bank to stop the payment of the old cheques.  We do not find anything wrong with the conduct of the complainant as also his paying bank in not paying the old and defective cheques, especially when the OPs had already received the fresh and new cheques from the complainant and were still not prepared to present the same for payment.

12]            There is no specific relief asked for by the complainant against OP-2 and more so this OP-2 is only a collecting agent of OP-1 and whatever amount it had collected from the complainant in lieu of the dishonoured cheques, the same has been duly and properly deposited by it with OP-1 as per instructions of its principal (OP-1).  Hence, there is no fault or deficiency in service or unfair trade practice on the part of the OP-2.  Therefore, the present complaint is hereby dismissed qua OP-2. 

13]            From the above detailed analysis of the entire case, we do not find any merit in the pleadings/averments/arguments made by the OP No.1-Citibank in respect of their case.  The OP No.1 has been grossly deficient in service and has also indulged in unfair trade practice due to which the complainant has suffered not only financial losses but also a lot of physical harassment, mental agony and pain.  The present complaint has a lot of weight, merit and substance in favour of the complainant and against the OP No.1 – Citibank, Car Loan Division.  We therefore allow this complaint in favour of the complainant and against OP-1 (Citibank, Car Loan Division).

14]            We pass the following directions to OP No.1:-

i)         OP No.1 shall waive their demand for the excess amount of Rs.24,423/- (44173 – 19750 = Rs.24423/-) from the complainant and may present two fresh cheques already issued by the complainant for Rs.9875/- each in their favour. On encashment  of these two cheques, the OP-1 shall square the loan account of the complainant by showing outstanding balance as Zero with no further claim to any further charges under whatever name and title.

ii)        OP-1 shall issue a proper No Due Certificate in favour of the complainant after crediting the amount of two pending installments in the loan account of the complainant.

iii)        OP-1 shall also pay Rs.50,000/- to the complainant as compensation for causing mental agony and physical harassment to him on account of non-settlement of his loan account for a long time and also due to their deficiency in service and unfair trade practice. 

iv)      Rs.7000/- shall be paid by OP-1 towards cost of litigation to the complainant. 

                The aforesaid order be complied with by the OP No.1, within a period of 30 days from the receipt of its certified copy, failing which the OP No.1 shall pay the amount of Rs.50,000/- as compensation along with interest @18% per annum from the date of filing this complaint i.e. 22.3.2010 till the date of actual payment besides paying Rs.7000/- as cost of litigation and also comply with the rest of the order as at Para 14 (i & ii) in the foregoings.

15]            Certified copy of this order be communicated to the parties, free of charge. After compliance, the file be consigned to the record room.

Announced

25.5.2011

(LAKSHMAN SHARMA)

PRESIDENT

                                                           (ASHOK RAJ BHANDARI)

MEMBER

(MADHU MUTNEJA)MEMBER