For the Appellant         Mr O P Gaggar, Advocate (Through VC)         

For the Respondent      Mr Attibuddin Quazi, Advocate (Through VC)                  

ORDER

PER MR SUBHASH CHANDRA

1.      This appeal under section 14 of the Consumer Protection Act, 1986 (in short, the ‘Act’) seeks a review of the order dated 24.09.2018 of the State Consumer Dispute Redressal Commission, Maharashtra, Circuit Bench, Nagpur (in short, the ‘State Commission’) in complaint case no.CC/14/39 allowing the complaint and directing the appellant/opposite party to refund the amount of Rs 18 lakhs with compensation of Rs 10 lakhs for mental and physical harassment with interest @ 9% from the date of the complaint till realization along with litigation costs of Rs 25,000/- within 90 days of the order failing which the entire amount would carry 12% p.a. rate of interest. This order is challenged by the appellant praying for the impugned order to be set aside.  

2.      Heard the learned counsels for the parties and perused the records. In the interest of justice, the delay of 51 days in preferring FA no.381 of 2019 is condoned.

3.     The facts of the case, in brief, are that the respondent/complainant had a current bank account with the appellant bank. Two ‘self’ cheques for Rs 9,00,000/- each in the name of the respondent were encashed by the bank on 05.05.2012 and 07.05.2012 by debiting the account of the respondent. The cheques are, however, stated by the respondent to have been stolen from it and presented with forged signatures. An FIR was lodged at Sadar Bazar Police Station, Nagpur which is pending. The respondent filed a consumer complaint no. CC/14/39 before the State Commission alleging deficiency in service which came to be decided by way of the impugned order with the State Commission holding that:

6.  ………       precautions in the present case were not taken by the opposite party. In the result, the complainant suffered not only monetary loss, which he claimed, but also suffered on account of mental and physical harassment due to somebody has succeeded to forge document and to siphon off hard earned money meant for livelihood of the complainant as proprietor of the Amrita Hotel. Credentials of the third person who presented self-drawn cheques ought to have been examined by the bank as mentioned above.

7.       That being so, we are of the opinion that this is the case of gross deficiency in service on the part of the opposite party as it had failed to take adequate precautions. It ought to have deposited the amount of Rs 18 lakhs in the current account of the complainant on the same date when the grievance was made when complainant came to know about the forgery and bogus instruments presented to the opposite party.

8.       We therefore, allow the complaint since, in our opinion, the opposite party ought to have taken adequate precautions to check credentials of presenter of cheques before honouring the cheques in the huge sum of Rs 9 lakhs each before making payment which admittedly presented by one Mr P Kubwe, a third person other than the complainant.

4.      Learned counsel for the appellant argued that (i) the appellant had not been served notice in the proceedings before the State Commission and it had only recently come to its notice that one Mr Tembhurne, Advocate had entered appearance on 22.07.2014 although he had not been engaged by the bank and was not on its panel. The said Sanjay Tembhurne’s Memo of Appearance dated 22.07.2014 before the State Commission along with Mr Nishant Vilas Potdar, who is a panel advocate of the Bank, had not been on instructions as per affidavit filed vide IA 9840 of 2021 and the appellant was erroneously proceeded against ex-parte by the State Commission; (ii) the complainant was not a ‘consumer’ under section 2(1)(d) of the Act since he had hired the services of the bank for commercial purpose as he was operating a current account in the name of M/s Amrita Hotel and therefore this complaint was not maintainable; (iii) there was no deficiency of service since the signatures were tallying on the cheques leaves which were issued by the bank and the bank operated on the mandate of the customer in respect of ‘self’ cheques; and (iv) the instant matter involved forgery and fabrication of false documents which was under investigation by the Police and the Hon’ble Supreme Court and this Commission in a plethora of judgments had held that in cases of forgery and cheating, consumer courts are not the appropriate remedy. Reliance was placed on this Commission’s judgment in Bright Transport Co. Vs. Sangli Sahakari Bank Ltd. in CC No. 286 & 287 of 2011 dated 12.01.2012, II (2012) CPJ 1151 (NC). 

5.      Per contra, learned counsel for the respondent, while admitting that the bank account was maintained with respect to his Hotel Amrita, contended that the bank had failed to adhere to and observe the guidelines of the Reserve Bank of India (RBI) and permitted encashment of two cheques without verifying the specimen signatures and without seeking an identification document when the cheques for Rs 9 lakhs were presented. The respondent was unable to also provide CCTV footage to the police to enable identification of the culprit. It was contended that the appellant was represented before the State Commission since appearance was entered on its behalf by Mr Tembhurne on 22.07.2014 along with the name of Prashant Potdar, Advocate. It was submitted that the order sheet of the State Commission revealed that a copy of the complaint was delivered to Mr Tembhurne. It is contended that the delay of 50 days in the filing of the instant First Appeal had not been condoned. Respondent averred that notice of the impugned order was served upon the appellant bank on 26.10.2018 and a copy of the impugned order was also sent on 10.12.2018 by post. Therefore, it cannot seek condonation at this stage. During the proceedings before the State Commission, service of notice was permitted which was done as per postal receipt and acknowledgment on record. As per the additional affidavit filed by the respondent on 28.09.2021, the appellant had confirmed that Mr Nishant V. Potdar was an empanelled advocate of the appellant bank. The affidavit of Nishant Potdar is therefore, not admissible according to the respondent. Reliance was placed on the following judgments of the Hon’ble Supreme Court and this Commission:

(i)     Canara Bank vs Canara Sales Corporation of Others AIR 1987 (SC) 1603 decided on 22.04.1987

(ii)    Abdul Razak & Anr., vs South Indian Bank Ltd., III (2003) CPJ 20 (NC) dated 20.11.2002

(iii)    N Venkanna vs Andhra Bank 2006 (1) CPC (NC) 463 dated 11.01.2005

(iv)   Bank of Mahatrashtra vs M/s Automotive Engineering Co., 1992 Supreme (SC) 898 decided on 08.12.1992

(v)    CCI Chambers Co. Op. HSG Society Ltd., vs Development Credit Bank Ltd., III 2003 CPJ 9 (SC) decided on 09.08.2003.

6.      The preliminary issue of limitation is addressed at the outset. The impugned order is admittedly ex-parte. It is apparent from the record that the appellant could not present its case due to lack of notice. The State Commission, unfortunately, failed to ensure that the appearance by Mr Tembhurne, to whom a copy of the complaint was also provided, was indeed authorized by the appellant bank. The issue is one of larger public interest since funds of a Public Sector Bank are involved which has manifold ramifications. It would not be appropriate to non-suit the respondent on the grounds of delay under the provisions of Section 24A only on the ground that appearance had been put in by an advocate.  What is material is that this counsel was not instructed or authorized by the appellant to appear on its behalf. In view of the fact that this appearance was not authorized by the appellant in the first place, the placing of the appellant ex-parte is not in order. The delay in filing of the instant appeal is therefore liable to be condoned. Accordingly, the delay is condoned.

7.      On merits, the issue is essentially whether the appellant bank was deficient in service in the encashment of the cheques. As regards the contention of the appellant that the respondent was not a ‘consumer’ under section 2(1)(d) of the Act, it is not in dispute that the bank account was a current account in the name of Amrita Hotel which is a commercial entity. The appellant has averred that for this reason the respondent the was not a ‘consumer’ under the Act and therefore the complaint is not maintainable. In Kavita Ahuja Vs. Shipra Estate Ltd. & Jai Krishna Estate Developers Pvt. Ltd. in CC 137 of 2010 dated 12.02.2015 it has been held by this Commission that “a complainant can be said to be a 'consumer' within the meaning of Section 2(1)(d) of the Consumer Protection Act if it can be proved that the 'consumer', which means any person, who hires or avails any services for a consideration but does not include a person who avails of such services for any commercial purpose”.

8.     The contention of the respondent is that the Bank acted contrary to RBI guidelines in respect to verification of identity of drawees of high value cheques and therefore was deficient in service. The case of the appellant is, however, that it acted in good faith as per the mandate for ‘self’ cheques and that the issue of forgery and impersonation is before the police as per the FIR filed.

9.     It is also manifest in the instant case that the cheques issued to the respondent were required to be kept safeguarded and secure. As held in Rosali vs Syndicate Bank  (2018 (1) CTC 441 as well as in Prempreet Textile Industries Ltd., vs Bank of Baroda and Ors., III (2006) CPJ 218 (NC) by the Hon’ble Supreme Court/this Commission, the bank cannot be held responsible for cheques presented unless there are clear instructions to the contrary from the account holder.  As regards the contention of the respondent that the Bank/appellant failed to follow guidelines regarding checking identity of the drawee, it is apposite to note that no such guidelines have been produced.  The Bank, on the other hand, contends that it acted as per the respondent’s mandate for ‘self’ cheques.

10.   In M/s Safe Home Developers and Contractors vs Samata Sahakri Bank Ltd., (CC no.140 of 2009) decided on 16.10.2012  it has been held by this Commission that a consumer fora proceedings being summary proceedings cannot go into complicated questions of law, such as those involving forgery and impersonation.

11.   The appeal is accordingly dismissed with liberty to the appellant to approach this Commission as and when the issue of criminal liability is settled.

12.   Pending IAs, if any, stand disposed of with this order.