IN THE CONSUMER DISPUTES REDRESSAL COMMISSION, ALAPPUZHA
Friday the 25th day of September, 2020
Filed on 19. 08. 2016
Present
1. Sri.S.Santhosh Kumar, Bsc.LLB(President)
2. Smt. C.K.Lekhamma LLB(Member)
In
CC/No.272/2016
Between
Complainant:- Opposite parties:-
Sri. Shaji.A 1. The Branch Manager
Proprietor Indian Overseas Bank Ltd.
Shaji Steels VSV Subbash Iyer Building
West of Vazhichery Junction CCNB Road, Alappuzha
Sea View Ward Pin-688 001
Alappuzha
(Adv.K.Najeeb) 2. The Regional Manager
Indian Overseas Bank Ltd Vettukattil Building Jose Junction M.G. Road, Ernakulam-682016
(Adv.P.Binny Joseph)
O R D E R
SRI. S. SANTHOSH KUMAR (PRESIDENT)
Complaint filed under Sec.12 of the Consumer Protection Act, 1986.
Material averments briefly discussed are as follows:-
The complainant is the proprietor of M/s Shaji Steels, Alappuzha. They are having an account with the first opposite party bank at Alappuzha branch vide current account No.000402000007259 for the past several years. Complainant is having business transaction with M/s Metco roof Pvt.Ltd., Chennai. On 26.06.2014 complainant purchased iron steel corrugated sheets for an amount of Rs.12,50,617/- from the said company as per invoice No.71. Prior to the date ie, on 07.06.2014 the said company had obtained two blank signed cheques bearing Nos.919354 and 919588 drawn from Indian Overseas Bank, Alappuzha branch as security for the purchase.
2. At the time when the said loads were unloaded it was noticed that 80% of the items were defective. The cost of the damaged items comes to Rs.10,25,545/- and it was brought to the notice of one Shibu, sales officer of the said company. The company had undertaken that the said items will be replaced soon. Complainant purchased other goods for an amount of Rs.7,56,884/- as per voucher No.76 dated 08.07.2014. Complainant paid an amount of Rs.27,00,000/- in different occasions through bank including these transactions. There was only a balance of Rs.5,80,305/- due to the company. Complainant was entitled to get the amount of Rs.10,25,545/- towards the cost of rejected materials. On 19.06.2015 as per letter dated 09.07.2015 it was informed by the company that only an amount of Rs.5,90,322/- is due.
3. On 14.03.2016 the company fraudulently filled cheque No.919354 of Indian Overseas Bank, Alappuzha branch and withdrew an amount of Rs.7,67,466/- from the account of the complainant.
4. Since there was dispute the complainant intimated a stop payment to the 1st opposite party bank on 03.07.2015 with respect to cheque no. 919354 and 919588. It was affected on 04.07.2015 and a charge of Rs.244/- was debited in the account of the complainant. The opposite parties are legally and morally bound to repay an amount of Rs.7,67,466/- to the complainant. Though on 30.03.2016 a lawyers notice was issued there was no response. Hence the complaint is filed for realizing an amount of Rs.7,67,466/- plus interest at the rate of 12% and Rs.5,00,000/- as cost.
5. Opposite parties 1 and 2 filed an objection mainly contenting as follows:-
These opposite parties are not aware regarding the supply of damaged goods worth Rs.10,25,545/-. The averment that on 14.03.2016 the company fraudulently filled the blank cheque No.919354 of Indian Overseas Bank and caused to withdrawal an amount of Rs.7,67,466/- is false. It is understood that there are lot of litigations between the complainant and the said metco roof Pvt.Ltd., Chennai. The cheques become stale in 3 months from the issuance. Stop payment was affected on 04.07.2015 and Rs.244/- also debited in the account. The stop payment will be affected in the system for a maximum of 6 months. There is no ill motivated acts on the part of the opposite parties and they are not legally and morally bound to repay Rs.7,67,466/-. The complainant is not a consumer defined under the Consumer Protection Act. The complaint is filed with untrue facts and hence it may be dismissed with costs.
6. On the above pleadings following points were raised for consideration.
- Whether there is deficiency of service from the part of the opposite parties?
- Whether the complainant is entitled to realize an amount of Rs.7,67,466/- along with interest from the opposite parties 1 and 2 ?
- Whether the complainant is entitled to realize an amount of Rs.5,00,000/- as monitory compensation from the opposite party?
- Reliefs and costs?
7. Evidence in this case consists of the oral evidence of PW1 and Exts.A1 to A5 from the side of the complainant and the oral evidence of RW1 from the side of the opposite parties.
8. Points No.1 to 3
For the sake of convenience these points are considered together. PW1 is the complainant in this case. He filed an affidavit in tune with the complaint and marked an Ext.A1 to A5. RW1 is the Chief Manager of Indian Overseas Bank Alappuzha branch. He filed an affidavit in tune with the version.
PW1, complainant in this case is the proprietor of M/s Shaji Steels, Alappuzha. They are having business transactions with M/s Mecto roof Pvt. Ltd. Chennai. PW1 is having a current account with the 1st opposite party bank as No.000402000007259. While dealing with M/s Metco Roof Pvt. Ltd. they used to issue cheques drawn from the account maintained by them with the 1st opposite party bank. While so one of the consignment which was purchased from M/s Metco Roof Pvt. Ltd was found damaged. Before purchase complainant had issued two cheques having Nos. 919354 and 919588 drawn from 1st opposite party bank to M/s Metco Roof Pvt. Ltd. as security. Complainant was entitled to get some amount from M/s Metco Roof Pvt. Ltd. as security. Since two blank cheques were with them, on 3/7/2015 complainant issued a stop memo to the 1st opposite party bank with regard to the two cheques mentioned above. The stop payment was affected on 4/7/2015 and Rs.244/- being charges was also debited from his account. While so on 14/3/2016 M/s Metco Roof Pvt. Ltd. fraudulently filled up cheque No.919354 and withdrew an amount of Rs. 7,67,466/- from the account of the complainant. Though a notice was issued on 30/3/2016 claiming the amount there was no response and hence the complaint is filed for realizing an amount of Rs. 7,67,466/- along with interest and Rs.5,00,000/- as compensation. The claim was resisted by opposite parties 1 and 2 by filing a joint version. The main contention raised in the version is that stop memo was issued on 4/7/2015 and it has got a validity of six months. The said cheque was presented on 14/3/2016. The cheque was honoured and amount was debited. Another contention raised is that the complainant is not a consumer defined under the Consumer Protection Act. On the part of the complainant he got examined as PW1 and marked Ext. A1 to A5. The chief manager of 1st opposite party bank was examined as RW1.
The fact that PW1 is having current account with 1st opposite party bank is not in dispute. It is also an admitted fact that complainant issued Ext.A4 stop memo on 4/7/2015 with respect to two cheques bearing No. 919354 and 919588. From Ext.A5 Statement of Account it is seen that an amount of Rs. 244/- was debited on 5/7/2015 being the charges for the stop payment memo. From Ext.A5 it is also seen that on 14/3/2016 an amount of Rs.7,67,466/- was debited from the account of the complainant being the amount issued to M/s Metco Roof Pvt. Ltd. as per cheque No.919354. As discussed earlier the 1st contention raised by the opposite party in the version as well as while giving evidence as RW1 is that the stop memo was issued on 5/7/2015 and the cheque was honoured on 14/3/2016. The stop payment memo is only having a validity of six months. Since the said cheque was presented after six months the bank is not liable it was contended. It is true that Ext.A4 stop payment memo was issued on 4/7/2015 and it was recorded in Ext.a5 statement of account on 5/7/2015. But it is to be noted that as per the wordings of Ext.A4 some blank cheques were issued having Nos.919354 and 919588. The name of M/s Metco Roof Pvt. Ltd. is also mentioned in Ext.A4 stop payment memo. So the contents of Ext.A4 will show that the cheques issued to M/s Metco Roof Pvt. Ltd. were undated. So the contention of the opposite party bank that it is only having a validity of six months from 5/7/2015 appears to be not correct. It is a common practice that cheques are issued as security for transactions. The said cheques normally will be undated and it is specifically mentioned in Ext.A4 stop payment memo. So the contention of the 1st opposite party that the stop memo was having only a validity of six months from 4/7/2015 appears to be not correct. In the version it is contented that the system will keep the stop payment memo only for six months. It is the duty of the opposite party bank to adjust the system to make the stop payment memo permanently valid and not for six months. The cross examination of RW1 is relevant in this case. He stated that when the cheque came for collection they did not verify whether there was stop payment instructions. According to them it was a fresh cheque and so there was no necessity for it. In other words RW1 admitted that there was dereliction of duty from the part of the bank officials and the cheque for which stop payment memo was issued happened to be honoured. Definitely this will amount to deficiency in service.
Without taking a contention in the version and the chief affidavit a contention is taken in the argument note filed by the counsel for the opposite parties that the complaint is bad for non jointer of necessary parties. It is contented that M/s Metco Roof Pvt. Ltd. Chennai is not made a party. First of all if opposite parties had such a genuine grievance they ought to have taken such a contention in the version. Even no evidence was also adduced with regard to such a contention and so such a contention raised in the argument note at a later stage is without any bonafidies. Moreover M/s Metco Roof Pvt. Ltd.,Chennai is not a necessary party since the complaint is regarding honouring a cheque for which stop memo was issued. The drawee of the cheque M/s Metco Roof Pvt. Ltd.,Chennai is not a necessary party since the dispute is between opposite party bank and its customer. Another contention raised is that complainant is doing business and so since it was a commercial transaction he is not a consumer. Not much discussion is required about this contention. By umpteen number of decisions the Hon’ble Apex court and the Hon’ble National Consumer Disputes Redressal Commission had made clear that account holder of a bank is a consumer. In this context I am also enlightened by the decision dtd. 9/5/2019 of National Consumer Disputes Redressal Commission in M/s V and S International (P) Ltd. Vs. Axis Bank. On a perusal of the decision it is seen that it is squarely applicable in this case. It was also with regard to honouring cheques for which stop memo was issued. It was decided that account holder of a bank is a consumer and that if a cheque is honoured for which stop memo was issued bank is liable to credit the amount in the complainants account.
In the light of the above discussion it can be safely concluded that complainant is entitled to realize an amount of Rs. 7,76,466/- along with interest from the date of honouring of the cheque till realization. Complainant is claiming an amount of Rs.5,00,000/- as monitory compensation from the opposite parties. It is to be noted that the amount involved in this case is Rs. 7,67,466/-. Complainant is doing business and so if that amount was in his credit he will be able to do more business. It is to be remembered that the cheque was honoured on 14/3/2016 and we are now in September 2020. However considering entire circumstances we are of the opinion that complainant is entitled for an amount of Rs.1,00,000/- as compensation.
Opposite party in this case the Indian Overseas Bank is a nationalized bank. The amount involved is public money. As discussed earlier the cheque was honoured due to the dereliction of duty by then staff members of the bank. In said circumstances the bank will credit the amount in the account of the complainant and they will take necessary action to realize the amount from the persons involved in this case. We cannot allow public money to be wasted. These points are found accordingly.
Point No.4
In the result complaint is allowed in part.
A) Complainant is allowed to realize an amount of Rs.7,67,466/- along with interest at the rate of 9% per annum from 14/3/2016 till realization from the 1st opposite party bank.
B) Complainant is allowed to realize an amount of Rs. 1,00,000/- as monitory compensation from the 1st opposite party bank.
C) Complainant is allowed to realize an amount of Rs.5000/- as cost from the opposite parties.
D) 1st opposite party bank will credit the amount in the account of the complainant and will take necessary steps to realize the amount from the persons responsible.
The order shall be complied within one month from the date of the receipt of copy of this order.
Dictated to the Confidential Assistant, transcribed by him correct by me and pronounced in open Forum on this the 25th day of September, 2020.
Sd/-Sri.S.Santhosh Kumar(President)
Sd/-Smt. C.K.Lekhamma(Member)
Appendix:-Evidence of the complainant:-
PW1 - Shaji.A(Complainant)
Ext.A1 - Registered Notice with A/D
Ext.A2 - Postal receipts
Ext.A3 - A/D cards
Ext.A4 - Copy of Stop payment of cheque
Ext.A5 - Copy of Statement of Account
Evidence of the opposite parties:-
RW1 - N. Krishnakumar(Witness)
// True Copy //
To
Complainant/Oppo. party/S.F.
By Order
Senior Superintendent
Typed by:- Br/-
Compared by:-
