STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

Kotak Mahindra Bank Limited, through Unit Manager, SCO No. 153-154-155, Sector 9-C, Madhya Marg, Chandigarh.

….…Appellant

V E R S U S

Yogesh Goyal c/o Goyal Enterprises, S.C.O. No. 839, N.A.C. Manimajra, Chandigarh, R/o House No. 57, Sector 7, Panchkula.

                                        ..…Respondent

Appeal U/s 15 of Consumer Protection Act, 1986

BEFORE:    MR. JUSTICE SHAM SUNDER, PRESIDENT.

                 MRS. NEENA SANDHU, MEMBER.

                 SH.JAGROOP SINGH MAHAL, MEMBER

Argued by: Sh.K.B.Singh, Advocate for the applicant/appellant.

                 Ms.Kavita Sharma, Advocate for the respondent.

PER MR. JUSTICE SHAM SUNDER, PRESIDENT

1.               This appeal is directed against the order dated 08.02.2011, passed by the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (hereinafter to be called as the District Forum only), vide which, it accepted the complaint, in the following manner:-

“(i)   The OP shall issue a proper “No Due Certificate” to the Complainant, certifying therein that there are no outstanding dues towards the Complainant against the Credit Card No. 4166451 40005 6666 account in the name of the Complainant.

(ii)     The OP shall pay a sum of Rs.20,000/- as compensation for causing unnecessary and wholly avoidable physical harassment, pain and agony to the Complainant, on account of making an unjustified and illegal claim of Rs.20,473.49/- with the Complainant; whereas, nothing was required to be paid by the Complainant to the OP, on account of full and final settlement of all outstanding dues after making payment of Rs.8,200/- on 4.4.2009.

(iii)    The OPs shall pay a sum of Rs.7,000/- as litigation costs to the Complainants.

The aforesaid order be complied with by the OP, within a period of 30 days from the receipt of its certified copy, failing which OP shall pay Rs.20,000/-, along with interest @18% per annum from 04.04.2009 i.e. the date on which the Complainant had paid all outstanding dues to OP, till the date of realization, besides paying the costs of litigation of Rs.7,000/- and also complying with the order as at (i) in the foregoings”.

2.               The facts, in brief, are that the complainant, had been using the Credit Card, issued by the Kotak Mahindra Bank Ltd., (OP Bank). He deposited a sum of Rs.8,200/-, through Cheque No. 634294, drawn on ICICI Bank, Chandigarh, with M/s Eminent Enterprises, Chandigarh, an authorized agent of the OP Bank, which accepted the same, towards full & final payment, of the Credit Card account on 4.4.2009. The said agent, issued a receipt bearing No. 0059314, in favour of the Complainant. It was stated that despite this, the OP Bank demanded another sum of Rs.20,473.49/-, towards the outstanding amount and had also charged interest thereon. A legal notice was also served upon the Complainant by the OP, to pay the aforesaid amount, failing which, he was threatened, that  his name shall be put, as a defaulter, on the list of other financial institutions, thereby putting his reputation at stake. The OP was many a time asked, not to do so, but to no avail. It was further stated that the aforesaid acts of the OP, amounted to deficiency, in rendering service, and indulgence into unfair trade practice.

3.               When the grievance of the complainant, was not redressed, left with no other alternative, a Complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, claiming compensation of Rs..1.00 lakh alongwith interest @ 18% p.a. calculated from 4.4.2009 till its actual payment, for causing mental and financial hardships to him, besides costs of litigation.

4.               The OP, in its written reply, admitted the factual matrix of the case. It was stated that the complainant was using its credit card and purchased the goods, on the basis of the said credit card. It was admitted that the amount of Rs.8200/-, was deposited by the complainant with M/s Eminent Enterprises, Chandigarh, an authorized agent of the OP Bank, which inadvertently issued the full and final payment receipt in favour of the complainant. It was further stated that the OPs was not bound by the said receipt. It was further stated that, since, the amount of Rs.20,473.49/-, was still outstanding against the credit card account of the complainant, after the payment of the aforesaid amount of Rs.8,200/-,  he was asked to pay the same. It was denied that the OP was deficient, in rendering service, or, it indulged into unfair trade practice. All other allegations, were denied, being wrong.

5.               The Parties led evidence, in support of their case.

6.               Since, no duly authorized representative, appeared on behalf of the OP Bank on 04.02.2011, the District Forum, proceeded to dispose of the complaint, on merits, under Rule 4(8) of the Chandigarh Consumer Protection Rules, 1987 read with Section 13(2) of the Consumer Protection Act, 1986 (as amended upto date), in its  absence.

7.               After hearing the Counsel for the complainant, and, on going through the evidence and record of the case, the District Forum, accepted the complaint, in the manner, referred to, in the opening para of the instant order. 

8.               Feeling aggrieved, the instant appeal, was filed by the Appellant/OP Bank. 

9.               We have heard the Counsel for the parties, and have gone through the evidence and record of the case, carefully. 

10.            The Counsel for the appellant, submitted that no doubt, M/s Eminent Enterprises, was the duly authorized agent of the appellant, to collect the amount, due from the complainant, yet, if the said agent, on account of negligence, or inadvertence, issued the receipt C1, regarding the full and final payment of the amount due, after receipt of Rs.8,200/-, from him  (complainant), that did not bind the appellant, in any manner. The submission of the Counsel for the appellant, in this regard, does not appear to be correct. Since, M/s Eminent Enterprises,  was the duly authorized agent of the appellant Bank, it after checking the account, received a sum of Rs.8,200/-, which was due against the complainant, to the appellant,  and  issued  receipt C-1, in full and final settlement of the claim/payment, the appellant is bound by the same. There is nothing, on the record, that any fraud was played by the complainant on M/s Eminent Enterprises, agent of the appellant, as a result whereof, C-1 document, with regard to the full and final settlement, was issued by it. There is also nothing, on record, to establish that the Proprietor of the said agent, was under coercion or duress, as a result whereof, it issued C-1. Once an agent of the appellant, which was the principal, issued C-1, after receipt of Rs.8,200/-, showing that the amount received was in full and final settlement of the claim, it (appellant), is estopped from challenging the same. The principal is liable for the actions of its agent. If the agent acted beyond the authority, given to it, by the principal, then the latter can proceed against it (agent) but not against the third party. In State Bank of India Vs. Shyama Devi, AIR 1978 SC 1263, the principle of law, laid down, was to the effect, that a master is liable for his servant’s fraud, perpetrated, in the course of master’s business, whether the fraud was for the master’s benefit or not, if it was committed by the servant, in the course of his employment. There is no difference in the liability of a master for wrong, whether for fraud or otherwise, committed by a servant, in the course of his employment. The District Forum, was, thus right in holding that the OP Bank was bound by the acts of M/s Eminent Enterprises, its authorized agent. The District Forum, was also right, in holding that the OP Bank was bound by C-1, the receipt issued by its agent M/s Eminent Enterprises, after receipt of Rs.8,200/-, in full and final settlement of the claim. The District Forum, was also right, in holding that without any reason, a sum of Rs. 20,473.49/-, was illegally demanded by the OP Bank, from the complainant. The District Forum, was also right, in holding that by demanding the amount of Rs.20,473.49/-, illegally and without any justification, the OP Bank, indulged into unfair trade practice. The findings of the District Forum, in this regard, being correct, are affirmed.

11.            It was next submitted by the Counsel for the appellant, that compensation, in the sum of Rs.20,000/-, granted by the District Forum, was, on the higher side. It may be stated here, that the complainant had made the payment of amount, which was due against him, to the OP Bank, through its agent and it had issued receipt C-1, in full and final settlement of the claim, but the OP Bank, continued threatening regarding the recovery of Rs.20,473.49/-, as a result whereof, a lot of physical harassment and mental agony, was caused to the complainant. No doubt, the compensation should be reasonable and  fair. In the instant case, it could not be expected of a Bank like the OP, to claim a sum of Rs. 20,473.49/-, from the complainant,  especially, when receipt C-1, regarding the full and final settlement/payment, had been issued, by its agent, to him. Keeping in view the totality of facts and circumstances of the case, in our considered opinion, the District Forum, was right, in coming to the conclusion, that compensation of Rs.20,000/-, if granted, would be reasonable, and just. We do not find any illegality, in the order of the District Forum, granting compensation to the tune of Rs.20,000/-. The submission of the Counsel for the appellant, in this regard, therefore, being, without merit, must fail, and the same stands rejected.

12.            It was next submitted by the Counsel for the appellant, that the District Forum, granted penal interest @18% per annum, from 04.04.2009, i.e. the date, on which the Complainant had paid all outstanding dues to the OP, till the date of realization of Rs.20,000/-, as compensation. He further submitted that the interest awarded, was on the higher side. The submission of the Counsel for the appellant, appears to be correct. The District Forum was required to grant the penal interest, at a reasonable rate. Even, on the fixed deposits, now a days, the interest ranges between 8% per annum to 10% per annum. Had the penal interest, at a rate somewhat higher than` that been granted by the District Forum, the same would have been said to be reasonable and fair. We are of the considered opinion, that the penal interest @12% p.a., if awarded, shall not only be reasonable and fair, but also meet the ends of justice. The order of the District Forum requires modification, in this regard.

13.            No other point, was urged, by the Counsel for the parties.

14.            For the reasons recorded above, the appeal is partly accepted, with no order as to costs, with the modification, in the following manner:-

(a)      The appellant/OP Bank shall pay penal interest @12% p.a., instead of 18% p.a., granted by the District Forum.

(b)      The other directions given by the District Forum, shall remain unaltered.

15.            Certified Copies of this order be sent to the parties, free of charge.

16.            The file be consigned to record room.

Pronounced.

09.09.2011.                                                                                                                                                            Sd/-

 [JUSTICE SHAM SUNDER]

          PRESIDENT

          Sd/-

[NEENA SANDHU]

                                                                             MEMBER

Sd/-

[JAGROOP SINGH MAHAL]

MEMBER

Rg