IMPORTANT POINT
If cheque sent for encashment is lost in transit or not honoured, there could not be a liability on collecting bank for cheque amount and liability if any could be limited to its deficiency in service.

Ashok Bhan, President —Complainant-petitioner being aggrieved by the Order dated 23.11.2004 passed by the Karnataka State Consumer Disputes Redressal Commission, Bangalore (hereinafter referred to as ‘the State Commission’ for short) has filed the present revision petition. By the impugned Order, the State Commission has set aside the Order passed by the Kodagu District Consumer Disputes Redressal Forum, Madikeri (hereinafter referred to as ‘the District Forum’ for short) and dismissed the complaint.

2. Petitioner deposited two cheques, one for a sum of Rs. 5,693 and the other cheque bearing No. 673844 for Rs. 21,000 with the respondent Bank for encashment. The cheques were drawn on Citi Bank, Chembur, Mumbai (hereinafter referred to as ‘Citi Bank’ for short) .The respondent informed the complainant that the cheques have been sent for collection to the Citi Bank. The cheque for Rs. 5,693 was encashed but the petitioner did not receive payment for the cheque of Rs. 21,000. The cheque of Rs. 21,000 was issued by the Premier Automobile.

3. The defense of the respondent is that it corresponded with the Citi Bank on 20.10.2000 and, thereafter, on 31.10.2000, 28.11.2000, 28.01.2000 (by e-mail) and on 5.3.2001 but all the said correspondences did not result in getting the amount of the complainant.

4. As the complainant did not receive the sum of Rs. 21,000 from the respondent, he issued a legal notice on 19.9.2001 to the respondent to make the payment with interest @ 18% p.a. w.e.f. 4.3.2000 till its payment. The respondent sent his reply through his Advocate denying its liability to pay and also the allegation of deficiency in service. The petitioner, thereafter, filed the complaint before the District Forum alleging deficiency of service on the part of the respondent and seeking the compensation of Rs. 21,000 @ 18% p.a. He also prayed for compensation for deficiency of service.

5. The District Forum by its Judgment and Order dated 3.10.2002, allowed the complaint and directed the respondent to pay a sum of Rs. 21,000 along with interest @ 12% p.a.. from 4.4.2000 till the payment is received by the complainant. Rs. 2,000 were awarded for undue harassment and Rs. 500 as costs.

6. Aggrieved by the aforesaid Judgment and Order, the respondent filed the appeal before the State Commission, which was accepted. State Commission set aside the Order of the District Forum and it was held that there was no deficiency of service on the part of the respondent. Deficiency, if any, was on the part of the Citi Bank.

7. It is not disputed before us that the cheque of Rs. 21,000 deposited by the petitioner has not been encashed. The cheque was lost in transit somewhere and was not traced. If the cheque sent for encashment is not traced or not honoured, there cannot be any liability on the respondent for the cheque amount. The liability, if any, can be limited to the deficiency in service. The petitioner had failed to produce any material to show that the cheque sent by the respondent to the Citi Bank was misused of encashed. Respondent being the banker of the complainant acting as his agent, sent the cheque to the Citi Bank for collection. It was liable to pay credit the amount to the petitioner’s account only after its realization from the Citi Bank. The same could not be realized as unfortunately the cheque had been lost somewhere in transit. Under the circumstances, the respondent Bank could not be held liable to make good the cheque amount to the petitioner specially when the cheque issued was neither misused or encashed.

8. The petitioner in normal circumstances should have gone to his borrower for issue of a duplicate cheque, which the petitioner did not do. It is for the petitioner to approach the Premier Automobile to issue a fresh/duplicate cheque in his favour. Citi Bank was not impleaded as party respondent. The Citi Bank was impleaded as party respondent under the Orders of this Commission. Citi Bank on appearance has filed a affidavit t