DISTRICT CONSUMER DISPUTES REDRESSAL COMMISSION, KOZHIKODE
PRESENT: Sri. P.C. PAULACHEN, M.Com, LLB : PRESIDENT
Smt. PRIYA.S, BAL, LLB, MBA (HRM) : MEMBER
Sri.V. BALAKRISHNAN, M Tech, MBA, LL.B, FIE: MEMBER
Wednesday the 23rd day of August 2023
C.C.244/2015
Complainant
K.P.Chandradasan
S/o. (Late) apputty,
Civil Engineering Contractor,
Vishwa Hindu Bhavan,
Chalappuram –P.O,
Kozhikode.
(By Adv. Sri.S.K.Krishna Kumar & Adv.Sri.Nelson Jose.K)
Opposite Party
The Federal Bank Ltd
Registered Office,
Federal Towers,
Aluva – 683 101.
(By Adv. Vinod Singh Cheriyan & Adv. Sri. P.K.Venugopalan Nambiar)
ORDER
By Sri. P.C. PAULACHEN – PRESIDENT
This is a complaint filed under Section 12 of the Consumer Protection Act, 1986.
2. The case of the complainant, in brief, is as follows:
The complainant is self employed as a civil engineering contractor and is wholly depending on the income derived from his avocation for his livelihood. In response to a notice inviting tenders from qualified civil engineering contractors for construction of laboratory building for the Centre For Water Resources Development And Management (CWRDM), Kozhikode at its campus at Kottamparamba, M/s Apex Constructions, a partnership firm engaged in carrying out civil engineering works, had submitted a tender for execution of the works. It was accepted by CWRDM. Pursuant thereto, a selection notice was issued to M/s Apex Constructions intimating about the acceptance of the tender and further requesting to remit an amount of Rs.1,00,000/- as security deposit for the due execution of the work.
Accordingly, a works contract was executed by and in between CWRDM and M/s Apex Constructions on 01-01-2005. The works contracts stipulated completion of the works within a period of one year. Thereafter M/s Apex Constructions deposited an amount of Rs.1,00,000/- with the Nadakkavu West branch of the opposite party bank as security deposit for the due execution of the works. The amount deposited was to carry interest at the applicable rates. On deposit of the amount, the bank had issued a security deposit receipt endorsing the same in favour of CWRDM. The original of the said security deposit receipt was handed over by M/s Apex Constructions to CWRDM for retention in their custody.
- M/s Apex constructions, with the knowledge and consent of CWRDM, had orally assigned the works contract in favour of the complainant. On 23-03-2005 M/s Apex Constructions had executed a power of attorney constituting the complainant as its power of attorney in accordance with clause 48 of the conditions of contract. As per the said power of attorney, all money payable by CWRDM for carrying out the works was payable to the complainant. Further, other payments like security amount, retention amount, earnest money deposit etc due and payable to M/s Apex Constructions as per the terms of the works contract was made payable to the complainant.
5. By the end of November 2005, the complainant had completed the construction work well within the period stipulated for its completion and CWRDM had disbursed the earnest money deposit and retention amount etc to the complainant. After the expiry of the defect liability period, the complainant demanded refund of the security deposit of Rs.1,00,000/-. He was told by CWRDM that no documents were available with it to show that M/s Apex Constructions had deposited an amount of Rs.1,00,000/- as security. Then the complainant filed complaint No.1500/2014 against CWRDM before the Hon’ble Lok Ayuktha. During the pendency of the said complaint, the dispute was amicably settled and the complaint was disposed of by the Hon’ble Lok Ayuktha recording the settlement. As per the terms of the settlement, the Registrar, CWRDM had released the security deposit in favour of the complainant and had made an endorsement to that effect on the reverse of the security deposit receipt.
- Immediately thereafter, on 07-01-2015, the complainant had sent a letter to the Manager of Nadakkavu West branch of the opposite party requesting to release the security deposit to him. Along with the said letter he had enclosed a copy of the security deposit receipt dated 07-01-2005 issued by the opposite party. In response thereto, the opposite party had sent a letter to the complainant informing him that his request had been forwarded to higher authorities of the opposite party and that it was under consideration. Even then, nothing transpired. Noticing inaction on the part of the opposite party, on 31-01-2015 the complainant had sent another letter to the bank. On 02-02-2015 the opposite party had sent a reply informing the complainant that the security deposit amount had already been released to M/s Apex Constructions and hence it was not in a position to accede to his request. Then complainant had issued another letter to the opposite party on 05-02-2015 setting forth the true facts and further demanding payment of the security deposit. Though the opposite party had received the said letter, neither did it comply with the same nor issue any reply.
- When an endorsement is made by a banker on a security deposit receipt or any other deposit receipt in favour of a third party, it is bound to note that lien in its records. Hence the payment of security deposit amount by the opposite party to the depositor can only be due to its omission to note the lien or neglect to verify its records before payment, if the lien had been noted. Either way, the incident happened solely due to the deficiency in service on the part of the opposite party.
As a result of the deficient service of the opposite party, the complainant had lost the amount, to which he alone is entitled. As on 16-03-2015, an amount of Rs.2,79,057.70/- is due and payable by the opposite party under the security deposit receipt, which is inclusive of interest. Further the opposite party is liable to pay interest on that amount at the rate of 11.25% per annum, payable by banks for similar deposits. Apart from the monetary losses due to the wrongful acts of the opposite party, the complainant was put to considerable mental agony and pain. Hence the opposite party is also liable to pay an amount of Rs.1,00,000/- as compensation for the mental agony and pain suffered by the complainant. Hence the complaint.
The opposite party has filed written version denying all the allegations and claims made against them in the complaint. According to the opposite party, the complaint is not maintainable on the ground that the complainant does not fall within the purview of section 2(1) (d) of the Consumer Protection Act. The opposite party has no relationship with the complainant as a consumer. The complainant, who is a stranger to the opposite party with regard to the fixed deposit in question, has no locus standi to file a complaint of this nature. The execution of the power of attorney has not been brought to the knowledge of the opposite party either by M/s Apex Constructions or by the complainant. The complaint is bad for non-joinder of necessary parties. CWRDM as well as M/s Apex constructions are necessary parties to the proceedings.
It is true that M/s Apex Constructions had deposited Rs.1,00,000/- with the Nadakkavu West branch of the opposite party bank - vide security deposit receipt No.A843316 dated 07-01-2005 (Account No.FD7614) for the period of 15 months repayable on 07-04-2006, which was discharged to the Executive Director/Registrarof the CWRDM as securitydeposit pertaining to the work of construction of laboratory building. The deposit was afterwards renewed as FD 8826 with subsequent change in the number as 13000400088261 dated 07-04-2006.
11. The power of attorney dated 23-03-2005 is also not properly executed and is not in terms of the contract M/s Apex Constructions had entered in to with CWRDM. Similarly the assignment of work by M/s Apex constructions to the complainant was also not brought to the knowledge of the opposite party either by M/s Apex constructions or by the complainant.
The complainant will get rights over the FD receipt only if there is a valid assignment of the same by the depositor in his favour and in this case, there is no such assignment and therefore the bank is not under any liability to pay the deposit proceeds to a third party (Complainant) without a valid assignment. It is admitted that the complainant had made request to the opposite party for the refund of the security deposit of Rs.1,00,000/- vide letter dated 07-01-2015 accompanied by the FD receipt No.A843316 and the power of attorney dated 23-03-2005. The FD receipt was seen released to the complainant by the Registrar, CWRDM. While processing the request for refund of the Fixed deposit in question by the opposite party, it could be seen that on being represented the loss of the original fixed deposit receipt in respect of FD No.7614 [revised as FD 8826 (13000400088261) a duplicate receipt No.310833 was issued to M/s Apex Constructions on 10-11-2011, which was closed effecting payment on 11-11-2011 and credited to the current account No.13000200003106 of M/s Apex Constructions maintained with the opposite party bank. The letter dated 07-01-2015 of the complainant was the 1st letter received by the opposite party demanding refund of the fixed/security deposit in question. Vide letter dated 07-01-2015 itself the opposite party had referred the matter to their higher office and informed the same to the complainant - vide letter dated 08-01-2015.
The dispute regarding the refund of the security deposit between the complainant and CWRDM and the lodging of the complaint No.1500/2014 before the Hon’ble Lok Ayuktha and the amicable settlement between the complainant and the CWRDM are not within the knowledge of the opposite party. As the FD amount in question was received from and deposited in the name of M/s Apex constructions, the Registrar of CWRDM could not have endorsed the fixed deposit amount to anybody other than M/s Apex Constructions.
14. It is admitted that the letter dated 31-01-2015 was received by the opposite party to which a reply was send on 02-02-2015, informing that the proceeds of the fixed deposit had already been discharged and paid to the original depositor M/s Apex Constructions at their request. It is also admitted that the letter dated 05-02-2015 was also received demanding payment of the security deposit amount in question. In fact, the fixed/security deposit amount in question was already discharged and paid to the original depositor which was already communicated to the complainant - vide letter dated02-02-2015. The complainant, being a total stranger, having no customer relationship with the opposite party in respect of the fixed deposit in question, the opposite party was not duly bound to disclose any information regarding the amount and the interest paid to the original depositor while closing the fixed deposit, which is to be kept confidential complying with the banking rules/practices. However, the registered letter dated 28-02-2015 of the opposite party was issued to the complainant informing the position, with the request to desist from unnecessary legal proceedings.
15. The endorsement of the fixed deposit was made by the opposite party to CWRDM on the insistence of the original depositor M/s Apex Constructions, which the complainant has no locus standi to question, being a stranger. As the fixed deposit was released and refunded to the original depositor on request, the complainant has no locus standi to allege any deficiency of service on the part of the opposite party. As there was no deficiency of service on the part of the opposite party, none of the reliefs is allowable. The complainant has no cause of action to file a complaint of this nature. With the above contentions, the opposite party prays for dismissal of the complaint with costs.
16. The points that arise for determination in this complaint are:
- Whether the complaint is maintainable?
- Whether there was any deficiency of service on the part of the opposite party, as alleged?
- Whether the claim for the amount or compensation from the opposite party is allowable?
- Reliefs and costs.
Evidence consists of the oral evidence of PW1 and Exts A1 to A7 on the side of the complainant. RW1 was examined and Exts B1 to B7 were marked on the side of the opposite party.
18. Heard both sides.
- Point No.1:– The issue of maintainability was considered by our learned- predecessors in- office as per IA No.271/2015 filed by the opposite party and – vide order dated 30-12-2016 held that the complaint is maintainable. The order is extracted below;
“ IA is for hearing the issue of maintainability. Heard both sides. Petition is not allowed. Dismissed. Original petition maintainable.”
The said order is not seen challenged by the opposite party and it has become final. So this point does not arise for consideration.
Points 2 and 3 :- These points can be considered together for the sake of convenience. The complainant has approached this Commission alleging deficiency of service on the part of the opposite party bank. The specific allegation is that the payment of security deposit by the bank to the depositor due to its omission to note the lien or the neglect to verify records before payment of the amount constitutes gross deficiency of service. The prayer is for realization of an amount of Rs.2,79,057.70/- with interest along with compensation of Rs.1,00,000/- for the mental agony and pain suffered by him due to the alleged deficient service of the opposite party.
21. The complainant has got himself examined as PW1, who has filed proof affidavit and deposed in terms of the averments in the complaint and in support of the claim. Ext A1 is the copy of the security deposit receipt dated 07-01-2005 for Rs.1,00,000/-, Ext A2 is the copy of the power of attorney dated 23-03-2005, Ext A3 is the copy of the letter dated 07-01-2015 issued by the complainant to the Manager of Nadakkavu branch of the opposite party, Ext A4 is the copy of the letter dated 08-01-2015 issued by the Chief Manager of Nadakkavu West brach of the opposite party, Ext A5 is the copy of the letter dated 31-01-2015 issued by the complainant to the Mananger of Nakakkavu West branch of the opposite party, Ext A6 is the copy of the letter dated 02-02-2015 issued by the Chief Manager of Nadakkavu branch to the complainant and Ext A7 is the copy of the letter dated 05-02-2015 issued by the complainant to the Manager, Nadakkavu branch of the opposite party.
The Assistant Vice President and Branch Head of the Nadakkavu West branch of the opposite party was examined as RW1. RW1 has filed proof affidavit and deposed supporting and reiterating the contentions in the written version. Ext.B1 is the copy of the settlement agreement of complaint No.1500/14 B in the Hon’ble Lok Ayuktha, Ext B2 is the copy of bank statement of M/s Apex Constructions, Ext B3 is the copy of the letter dated 07-01-2015, Ext B4 is the copy of the letter dated 08-01-2015, Ext B5 is the copy of the letter dated 31-01-2015, Ext B6 is the copy of the letter dated 02-02-2015 and Ext B7 is the copy of the letter dated 28-02-2015.
23. The learned counsel for the complainant has argued that the release of the amount to M/s Apex constructions despite the lien endorsed on Ext A1 amounts to gross deficiency of service of the opposite party. It was pointed out that as a result of the deficient service of the bank, the complainant had suffered huge monetary loss besides mental agony. It was submitted that the complainant has proved his case through the testimony of PW1 and the documents produced and marked as Ext A1 to A7 on his side. Per contra, the learned counsel for the opposite party has vehemently argued that the complainant is a total stranger to the bank with regard to the fixed deposit in question and Ext.A1, being a fixed deposit, CWRDM could not have endorsed the same to anybody other than M/s Apex Constructions. The learned counsel further argued that the complaint must fail for the sole reason that M/s Apex Constructions and CWRDM are not in the party array. It was pointed out that the execution of the power of attorney or the assignment of the of the works contract to the complainant was not brought to the knowledge of the bank either by the complainant or by M/s Apex constructions and that no relief as prayed for can be granted against the opposite party and that the remedy, if any, available to the complainant is against M/s Apex Constructions and CWRDM, who are not impleaded in the present complaint in spite of the specific contention of non-joinder of necessary parties raised in the written version.
24. A works contract was executed by and in between CWRDM and M/s Apex Constructions on 01-01-2005 for construction of laboratory building at the campus of CWRDM. On 07-01-2005 M/s Apex Constructions deposited an amount of Rs.1,00,000/- with the Nadakkavu West branch of the opposite party bank as security deposit for the due execution of the works, as per Ext A1. The deposit was for a period of 15 months. It is endorsed by the bank on the reverse of Ext A1 that the deposit would be payable only as per the instructions of CWRDM. The original of the security deposit receipt was handed over by M/s Apex constructions to CWRDM and was kept in their custody. There is no serious dispute on the above aspects.
The evidence in hand reveals that subsequently, M/s Apex Constructions had orally assigned the said works contract in favour of the complainant and on 23-03-2005 executed Ext A2 power of attorney constituting the complainant as its power of attorney. A perusal of Ext A2 shows that by virtue of clause 3, the complainant herein was authorized receive cheques/bill amounts and other payments like security amount, retention amount, EMD or any other amount due to M/s Apex Constructions in connection with the said work.The specific contention of the opposite party is that they were not informed about the assignment of the works contract to the complainant or the execution of Ext A2 power of attorney either by the complainant or by M/s Apex Constructions. There is nothing in evidence indicating that such assignment of the contract in favour of the complainant or the execution of Ext A2 had been brought to the knowledge of the opposite party bank. The complainant also has no case that the same was intimated to the opposite party at any point of time before 07-01-2015 when he had issued Ext.A3 letter demanding release of the amount covered by Ext A1.
- It is not disputed that the amount covered by Ext A1 was paid to M/s Apex Constructions by the opposite party by crediting the closure proceeds to his current account on 11-11-2011. This is further evidenced by Ext B2 bank statement. RW1 has given evidence that on being represented the loss of the original fixed deposit receipt in respect of FD No.7614 which was revised as FD 8826, a duplicate receipt was issued to M/s Apex Constructions on 10-11-2011, which was closed and effected payment on 11-11-2011 as evidenced by Ext B2. When an endorsement is made by the bank on Ext A1 security deposit receipt in favour of CWRDM, the bank authorities were duty bound to note the endorsement/lien in the relevant records. As long as there was such an endorsement/lien, the bank should not have released the amount to the depositor without the instruction of CWRDM. The payment of the amount by the bank to M/s Apex Constructions could only be due the omission on the part of the bank authorities to note the lien or failure to verify the records before payment, as rightly submitted by the learned counsel for the complainant. But at the same time, it may be noted that the complainant is a stranger to the bank with regard to security deposit in question. The depositor is M/s Apex Constructions and the endorsement made therein by the bank is in favour of CWRDM. As already stated, it is an admitted fact that the oral assignment of the contract or the execution of Ext A2 power of attorney by M/s Apex Constructions favouring the complainant was not brought to the knowledge of the bank either by the complainant or by M/s Apex Constructions. The complainant cannot question the liability of the opposite party with the original depositor or the CWRDM. Ext A1 is not a negotiable instrument and therefore it is not transferable. The fact that it is not-transferable is clearly endorsed on Ext A1. The endorsee of such a non-transferable fixed deposit receipt cannot complain about non-payment of money covered by that document to him by the bank. On this ground also, the complainant cannot question the non-payment of the amount to him.
27. The opposite party has contended that the complaint is bad for non-joinder of necessary parties since CWRDM and M/s Apex Constructions are not in the party array. We find much force in the contention. The works contract was executed between CWRDM and M/s Apex Constructions. The security amount as per Ext.A1 was deposited by the M/s Apex Constructions. The endorsement on Ext A1 was in favour of CWRDM. Ext A2 power of Attorney was executed by M/s Apex Constructions in favour of the complainant. In the nature of the allegations and the reliefs sought for in the complaint, CWRDM as well as M/s Apex Constructions are necessary parties to settle the dispute raised in the complaint. The opposite party has taken a definite contention in the written version regarding non-joinder of necessary parties. But the complainant has not taken any steps to implead CWRDM and M/s Apex Constructions in the complaint.
- From the above discussion, what emerges is that no deficiency of service can be attributed against the opposite party as far as the complainant is concerned and consequently the complaint must fail. As rightly pointed out by the learned counsel for the opposite party, the remedy, if any, available to the complainant appears to be against M/s Apex Constructions or CWRDM.
29. Point No.4:In view of the finding on the above points, the complainant is not entitled to claim and get any relief.
In the result, the complaint is dismissed. However, no order as to costs.
Pronounced in open Commission on this the 23rd day of August 2023.
Date of Filing: 05-05-2015.
Sd/- Sd/- Sd/-
PRESIDENT MEMBER MEMBER
APPENDIX
Exhibits for the Complainant :
Ext A1 - Copy of the security deposit receipt dated 07-01-2005 for Rs.1,00,000/-.
Ext A2 - Copy of the power of attorney dated 23-03-2005.
Ext A3 -Copy of the letter dated 07-01-2015 issued by the complainant to the Manager of Nadakkavu branch of the opposite party.
Ext A4 - Copy of the letter dated 08-01-2015 issued by the Chief Manager of Nadakkavu West brach of the opposite party.
Ext A5 - Copy of the letter dated 31-01-2015 issued by the complainant to the Mananger of Nakakkavu West branch of the opposite party.
Ext A6 - Copy of the letter dated 02-02-2015 issued by the Chief Manager of Nadakkavu branch to the complainant.
Ext A7 - Copy of the letter dated 05-02-2015 issued by the complainant to the Manager, Nadakkavu branch of the opposite party.
Exhibits for the Opposite Party:
Ext.B1 -Copy of the settlement agreement of complaint No.1500/14 B in the Hon’ble Lok Ayuktha.
Ext B2 - Copy of bank statement of M/s Apex Constructions.
Ext B3 - Copy of the letter dated 07-01-2015.
Ext B4 - Copy of the letter dated 08-01-2015.
Ext B5 - Copy of the letter dated 31-01-2015.
Ext B6 - Copy of the letter dated 02-02-2015.
Ext B7 - Copy of the letter dated 28-02-2015.
Witnesses for the Complainant:
PW1 -Chandradasan (Complainant)
Witnesses for the opposite party:
RW1 –Rajashri Devi.
Sd/- Sd/- Sd/-
PRESIDENT MEMBER MEMBER
True Copy,
Sd/-
Assistant Registrar.
