(Per Shri S.R.Khanzode, Hon’ble Presiding Judicial Member)

(1)               This consumer complaint relates to alleged deficiency in service on the part of the opponent, State Bank of India, Mahim Branch, Mumbai (hereinafter referred as ‘the bank’) by exhibiting negligence while honouring the cheques, either fraudulent or tampered, which were drawn on the cash credit/term loan account of the complainant opened in his trade names i.e. M/s.Chattel Inc. and M/s.Impressions.

(2)               It is the case of the complainant that he is proprietor of two firms, namely, M/s.Chattel Inc. having its present factory at Sion-Mahim Link Road, Mumbai-400 017 and M/s. Impression having its factory at 101, Padma Gopal Vilas Compound, Dharavi, Mumbai.  For his business, he had opened two cash credit accounts with the bank in the year 2006, bearing Nos.10893068003 (M/s.Chattel Inc.) and 30129400091 (M/s.Impressions).  Both these accounts were operated and handled through the complainant’s accountant, Mr.Bipinkumar Jha.  Said accountant used to maintain books of accounts, collecting cash & cheques from customers, and was handling all the bank business with the bank, such as depositing cheques, submitting cheques issued by the complainant for cash withdrawal etc.  The complainant used to leave cheque book with the accountant, Mr.Jha, as it was essential in the course of the business for maintaining the account books and for writing out the account books the use of the cheque book was necessary. 

(3)               In the month of November 2007, the complainant observed shortage of funds in the business and hence he instituted an internal audit of the books of accounts.  The internal auditor informed that there are many wrong entries in the account books which are against the policy of the company.  On a thorough check of the accounts and cheque books, the complainant shocked to discover that the accountant had made alterations in the cheques issued by the complainant and forged the complainant’s signature on the cheques on numerous occasions withdrawing money and committing fraud.  On thorough investigation, the said auditor confirmed that the fraud and embezzlement of the funds of the complainant’s business was continuing for over a year.  Therefore, the complainant went to the bank, met the Branch Manager and carried out his further investigation.  It was noticed that using the signed cheques of the complainant, the accountant before presenting them to the bank was altering the amount in the signed cheques (e.g.altering the original amount of `5,000 to `15,000/25,000 or `7,000 to `17,000/27,000) and kept extra amount for himself.  Said accountant also forged the signatures of the complainant on the cheques and encashed considerable sums of money.  The accountant on the basis of forged cheque withdrawals which were issued in his own name got credited those amount in his personal account with HSBC Banck.  The total amount of embezzled money is calculated up to `34,37,955/- (`32,80,605/- from the account of M/s.Chattel Inc. and `1,57,350/- from the account of M/s.Impressions). The First Information Report was lodged against the accountant, Mr.Jha and thereafter alleging deficiency in service on the part of the bank for negligence shown by the officials of the bank to honour those cheques which were interpolated or bears fraudulent signatures, filed this consumer complaint interalia claiming reliefs as under :

“It is therefore most respectfully prayed that the Hon’ble Commission may kindly be pleased to;

(i) direct the opposite party to pay to the Complainant `34,37,955/- towards the compensation for the loss and damage suffered by the complainant due to improperly honouring of the forged and altered cheques; `15,00,000/- towards the loss of business due to unavailability of funds attributable to the negligence of the opponent party.

(ii)direct the opposite party to pay `10,00,000/- to the complainant for the mental trauma and harassment caused due to the gross negligence on the part of the opposite party.

(iii)direct the opposite party not to charge any interest on the fraudulently withdrawn amounts from the said two CC accounts bearing account number 10893068003 and 30129400091 and to reverse the interest charged on the embezzled money of `34,37,955/- pending the hearing and final disposal of the complaint.    

(4)               The opponent bank resisted the consumer complaint by filing their written version dated 30/01/2010, denying in toto all the adverse allegations attributing negligence on the part of their officials in respect of honouring cheques on various occasions.  It is categorically submitted on its behalf that the present complaint is liable to be dismissed as it is misconceived, malafied and bad in law.  It is also stated that the present dispute is in respect of alleged forgery by the accountant of the complainant and since the accountant is not party as well as since the controversy involved recording of lengthy documentary evidence, the present consumer dispute (which is supposed to be settled in a summary procedure) should not be entertained by this Commission.  It further categorically denied that the complaint is an outcome of gloving in hands for oblique motives by the complainant and his accountant.  The complainant also has not submitted documents to prove that the complainant has issued cheques for particular amount but the more amounts were withdrawn.  It is also submitted on behalf of the opponent bank that their officials did not fail in any way in carrying out their professional obligations and cheques were passed after verifying signatures on the cheques with the specimen signature and its officials always carried out their obliglations to exercising ordinary prudence & skill.  It categorically denied that its officials were over friendly with accountant of the complainant.  It is also denied that the alleged forged signatures are quite identifiable to be fake, visible to naked eye on comparison with the signature with the signature of complainant.  It is also further submitted that even after receipt of periodical statements of accounts; the complainant never doubted correctness of statements.  If there was any fraud, the complainant ought to have noticed the same from the statement of accounts submitted.  On the contrary, the complainant okayed those statements.

(5)               In support of his contentions, the complainant Lalit Seth has sworn his own affidavit dated 15/11/2010 and also relied upon the affidavit of hand writing expert, Navdeep Gupta dated 09/02/2011 who carried examination of the Xerox copies of disputed cheques which were made available for comparison.  On the other side, the bank relied upon affidavits of its Branch Manager, S.R.Jalanapure dated 30/04/2010 and 15/11/2010 and also relied upon the balance of confirmation given by the complainant on 31/12/2008 and further relied on the affidavit of hand writing expert, Anil Kumar Mathur dated 22/03/2011.  It may be pointed out that both these hand writing experts opined contrary to each other or in other words, their reports are in conflict with each other. 

(6)               In addition to it, the complainant also relies upon the compilation of documents collected under Right of Information Act, 2005 from the bank.  It may point out that the documents of said compilations are not tendered in evidence as per provisions of Sec.13(4) of Consumer Protection Act, 1986 (hereinafter referred to as ‘the Act’ for brevity).  These documents particularly contents thereof are not per se admitted by the bank and the bank was never asked either to admit or deny these documents as per Sec. 13 (4)(ii) & (iii) of the Act. The affidavit of the complainant, Lalit Seth will not prove these documents since he is  not the author thereof.  Those documents cannot be relied as an admission of embezzlement or fraud, as alleged.   Furthermore, whatever may be the outcome of in-house enquiry carried out by the bank, per se, is not admissible in evidence without proper proof thereof.

(7)               Undoubtedly, to establish negligence on the part of the bank particularly in case of fraudulent signatures, supra, it is for the complainant to establish the same.  The complainant failed to do so.  The report of experts, since are in conflict with each other, are of no use or could be relied to establish the fact about the fraudulent signatures of the complainant on some cheques or alleged tampering on some other cheques.  It is also case of the complainant that his accountant used his signed cheques and those cheques cannot be a case of containing his fraudulent signature.  The best possible evidence, in the case of tampering of the cheques, and use thereof to withdraw excess amounts and appropriating the same could be in favour of relevant account book entries.  In fact, said objection is taken by the bank in its written version, but there is no evidence led by the complainant on these lines.  Same is the case in respect of withdrawals using fraudulent signature cheques i.e. making fraudulent signatures on the cheques or drawing the cheques and getting them credited in his account maintained by the accountant.  A useful reference on the point could be made to -Corporation Bank & Anr. Vs. M/s. Filmalaya Pvt. Ltd. - II (1992) CPJ 482 (NC).

(8)               The bank has also taken objection that considering nature of controversy involved since it required detailed evidence on the fraud alleged to have been committed by the accountant and dispute raised referring to circumstance indicating gloving hands with each other by the complainant and his accountant to file such consumer dispute; this dispute cannot be settled in summary proceedings before the Commission.  On the basis of the material placed before us since we could deal with the controversy within the four corners of the Act, particularly considering its provisions of Section 13 (4) and 14, we prefer to ignore this objection in the background of this particular case. 

(9)               It may be further pointed out that in the complaint; the complainant averted that after suspecting fraud the complainant got examined the accounts through internal auditor in the month of November, 2007.  However, observations and findings of said auditor are not before us.  Furthermore, in his First Information Report lodged with the police station dated 31/12/2007, the complainant comes up with different story wherein he claimed that he himself had inspected the account books and cheques.  He does not mention anything about the internal audit carried out through the internal auditor.  Furthermore, in the said FIR, which is lodged by him, it is mentioned by the complainant that he himself had checked the account books, cheque books and other relevant account documents and named only 15 instances representing alleged the embezzlement to the extent of `4,45,700/- only.  This information is materially different than what is tried to be alleged in the consumer complaint. 

(10)             The other important aspect which needs consideration about status of the complainant as a consumer.  Inviting attention of both the parties to this aspect that their submissions are heard covering the issue as to whether complainant could be a consumer within the meaning of Sec.2(1)(d)(ii) of the Act, since the services of the bank are admittedly availed for the commercial purpose.  For this purpose, a useful reference also can be made to the decision of Apex Court in the matter of Economic Transport Organization Vs. Charan Spinning Mills (P) Ltd. & Anr., 2010 CTJ 361 (SC) (CP) and as well as to the decision of the National Consumer Disputes Redressal Commission, New Delhi in the matter of - Victory Electrical Ltd. through its Managing Director Vs. IDBI Bank Ltd., (New Delhi Main Branch) & Ors., - 2012 (I) CPR 51 (NC).

(12)             In the instant case, two cash credit accounts, supra, were opened with the bank by the complainant for his business purpose, obviously to make available running capital for his business.  Therefore, opening of such accounts and availing banking services of the bank for that purpose is certainly availing the services of the bank for commercial purpose.  These accounts are opened and operated as a part of his business activity by the complainant.  Under the circumstances, seeing magnitude of his business, certainly he is not a consumer within the meaning of Sec.2(1)(d)(ii) of the Act.  Therefore, the present consumer complaint is not a consumer dispute. 

(13)             For the reasons stated above, we hold accordingly and pass the following order. 

ORDER

          Consumer complaint stands dismissed.

          In the given circumstances, both the parties to bear their own costs.

Pronounced on 29th March, 2012.