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KARNATAKA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, BANGALORE
Hon’ble Mr. Justice Chandrashekaraiah, President;
Mr. J.N. Srinivasa Murthy & Mrs. Rama Ananth, Members
STANDARD CHARTERED GRINDLAYS BANK—Appellant
versus
RAJESH SILK FABRICS—Respondent
Appeal No. 826 of 2003—Decided on 9.11.2005
Counsel for the Parties :
For the Appellant :Mr. Rangarajan, Advocate.
For the Respondent:Mr. R. Chandrasekaran, Advocate.
The court established that the O.P. Bank's negligence in verifying the nature of the crossing and the person who presented the cheque constituted deficiency in service, leading to the court's decision to dismiss the appeal.
Headnote:
Negotiable Instruments Act - Jurisdiction - Section 123, Section 124, Section 126
Fact of the Case:
The complainant, a business concern, did not receive a crossed cheque issued by M/s. Arihant Fabrics and drawn on the O.P. Bank. The District Forum found the O.P. Bank negligent and directed it to pay the complainant the sum of Rs. 1,38,017 with interest.
Finding of the Court:
The District Forum was justified in allowing the complaint as it had jurisdiction to entertain the complaint due to the cheque being payable to the complainant at Bangalore. The O.P. Bank was found to be negligent in verifying the nature of the crossing and the person who presented the cheque, resulting in payment to a wrong person.
Issues: Jurisdiction of the District Forum, Negligence of the O.P. Bank, Allegations of fraud and cheat
Ratio Decidendi: The O.P. Bank's negligence in verifying the nature of the crossing and the person who presented the cheque constituted deficiency in service. The Consumer Forum had jurisdiction to resolve the dispute, and the O.P. Bank failed to establish that the amount had been paid to the complainant.
Final Decision: The appeal was dismissed, and the O.P. was ordered to pay a cost of Rs. 10,000 to the complainant.
Mr. Justice Chandrashekaraiah, President—The parties are referred to in this appeal as they are arrayed in the complaint before the District Forum.
2. This appeal is by the opposite party (for short the “O.P.”) challenging the order dated 12.7.2003 passed in Complaint No. 264/2002 on the file of the Consumer Disputes Redressal Forum, Bangalore Urban District, allowing the complaint of the complaint.
3. The case of the complainant is as follows:
The complainant is a Division of M/s. Biswanath Himatsinghka and others, which is a Hindu Undivided Family and is a business concern and M/s. Arihant Fabrics at Calcutta, a business associate of the complainant. M/s. Arihant Fabrics sent a cheque bearing No. 362300 dated 19.3.2001 drawn on the Calcutta Branch of the O.P. Bank in favour of the complainant for a sum of Rs. 1,38,070 which is due to the complainant in respect of the business transaction. As the complainant did not receive the said cheque, it enquired with M/s. Arihant Fabrics regarding non-receipt of the above cheque. On inquiry the complainant was informed that the cheque has already been encashed and this has been reflected in the Statement of Accounts of M/s. Arihant Fabrics. Thereafter, the complainant obtained a copy of the said cheque from the Bangalore Branch of the O.P. Bank, which revealed certain irregularities.
4. According to the complainant, the irregularities disclose “deficiency in service” on the part of the O.P.
5. The O.P. on receipt of the notice issued by the District Forum on the complaint filed by the complainant filed its version stating that the District Forum at Bangalore has no jurisdiction to entertain the complaint, since the alleged cheque was drawn on the O.P. Bank at Calcutta and, therefore, complaint, if any, could have been filed at Calcutta and not at Bangalore. The further case of the O.P. is that the averments made in the complaint are not sufficient to establish any deficiency in service on the part of the O.P. It is further averred in the version that since the complainant disputes its signature found on the cheque, it is for the complainant to establish the same. One other contention raised by the O.P. in its version is that the complainant has filed this complaint in collusion with M/s. Arihant Fabrics in order to attempt to make unlawful gain.
6. After considering the evidence adduced by the parties and the documents produced by them, the District Forum allowed the complaint directing the O.P. to pay a sum of Rs. 1,38,017 with interest at 10% per annum from 31.3.2001 till payment.
7. This order is under challenge by the O.P. in this appeal.
8. The point that now arises for consideration is:
Whether the District Forum is justified in allowing the complaint of the complainant?
9. The District Forum has rightly held that it has jurisdiction to entertain the complaint because the cheque drawn by the O.P. Bank is payable to the complainant at Bangalore.
10. The cheque bearing No. 362300 dated 19.3.2001 drawn on the Calcutta Branch of the O.P. Bank in favour of the complainant for a sum of Rs. 1,38,017 was a “crossed cheque”. When there is a crossed cheque drawn in the name of the firm of the complainant, the payment of the said cheque should be only credited to the account of the firm and it should not be paid by cash. The District Forum directed the O.P. to produce the original cheque in question before it. But the O.P. did not produce the original cheque before the District Forum. The complainant has produced a copy of the crossed cheque issued by the Bangalore Branch of the O.P. Bank. Since the said cheque has not been disputed by the O.P., the District Forum considered the said cheque to resolve the dispute between the parties. This Commission after hearing for some time directed the O.P. Bank to produce the original cheque in question. Pursuant to the said direction, the O.P. Bank has produced the said cheque before this Commission along with a memo.
11. It is seen that the crossing made by
