Back
2009(2) CPR 420 (NC)
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION,
NEW DELHI
R.C. Jain, Presiding Member and S.K. Naik, Member
Allahabad Bank –Petitioner
versus
M/s. Metal Pack Industries
& Anr. –Respondents
Revision Petition No.1234 of 2004
Decided on 23-2-2009
For the Petitioners:Sh. C. Mukund, Mr. P. Jain, Mr. Amit Kasera, Advocates.
For the Respondents:Sh. Prabodh Kumar, Sh. S.K. Bharti, Ms. Rani Kishan, Sh. Laxmi Narain, Sh. Manoj Gorkela, Advocates.
IMPORTANT POINT
Bank cannot return the cheque unpaid for reason that amount mentioned in figure and words differed.
Headnote:Consumer Protection Act, 1986—Sections 12 and 17—Negotiable Instruments Act, 1881—Sections 18 and 31—Dishonour of cheque by bank because of discrepancy in the amount written in words and figure—Cheque was drawn in favour of insurance company towards premium for policy and in absence of payment of premium policy did not come into existence—In an incident of burglary goods were stolen—Fora below exonerated insurance company but held bank liable to indemnify loss as it was deficient in service in not honouring the cheque—Revision—Whether bank was deficient in not honouring the cheque? Yes—Whether bank was liable to compensate for the loss in burglary? No.
Held: A conjoint reading of the above provisions would lead to the conclusion that the petitioner-Bank ought to have paid the amount of cheque despite the so called difference in figures and words of the amount of cheque. To that limited extent, the Bank can be said to be deficient in service. However, the ultimate question is as to whether this limited deficiency on the part of the Bank has resulted into any loss to respondent No.1 and if so to what extent it is liable to be compensated. Going by the material placed on record, more particularly the letter dated 07.01.91 issued by the insurance company to the respondent No.1 with copy to the petitioner-Bank informing the respondent about its dishonour and affording an opportunity to pay the amount of the premium in cash within seven days from the receipt of the said letter and the fact that no action was taken by the respondent No.1 on the said letter, the petitioner-bank cannot be held liable for the entire loss claimed to have been suffered by respondent No.1 due to non indemnification of the loss by the insurance company on account of their being no valid insurance cover for the relevant period as no premium was paid for the relevant period. In any case there is ample material on record which would show that the loss claimed by the respondent No.1 on account of the alleged burglary was not established by means of any cogent evidence, and therefore, respondent No.1 was not entitled to be indemnified by the insurance company even if the insurance policy had been in vogue after making the payment of the insurance premium.
For the above stated reason, we are of the opinion that impugned order passed by the State Commission cannot be sustained and is liable to be set aside. However, in the facts and circumstances of the case and the limited deficiency which has been found on the part of the petitioner-Bank, we consider that a token compensation of Rs.10,000/- would adequately meet the ends of justice. (Paras 8 & 9)
Result: Revision allowed partly.
R.C. Jain, Presiding Member— “Whether in view of the provisions of Section 18 of the Negotiable Instruments Act, 1881, it is obligatory on the part of the bank to honour a cheque where the figures denoting the amount of the cheque differ in words and figures and whether the Bank can be held guilty of deficiency in service for returning such a cheque unpaid”?, is the important question which needs determination in the present case.
2. The facts and circumstances leading to the present revision petition are that M/s Metal Pack Industries (respondent No.1) was availing Cash Credit Hypothecation limit from the Allahabad Bank to the tune of Rs.4.60 lacs against the stocks of raw material, work in stocks, finished goods, plant and machinery. One of the condition of the said loan was that respondent No.1 shall keep the goods insured at all times during the period of loan from an insurance company. To that end, respondent No.1 had issued a cheque bearing No.290121 dated 24.11.90 in the sum of Rs.1663/- towards insurance premium for the period 24.11.90 to 23.11.91. The said cheque was presented to the petitioner-bank, who in turn returned the check unpaid to the insurance company for the reason “words and figure differ”. Insurance company returned the cheque to respondent No.1 vide their communication dated 07.01.91 calling upon respondent no.1 to deposit the amount of premium with cash within seven days from the receipt of the said letter with the stipulation that if the amount is not paid as above, the Insurance Company would not be responsible for any compensation or damages during the said period. According to respondent No.1, there was a burglary at his factory F-23, Surajpur B (Industrial Area) Surajpur, Ghaziabad on the night of 26.04.91 when certain miscreants numbering 3-4 including one Nawab Thekedar r/o Loni had entered the factory premises and removed tin plates weighing about 8-10 tones from the store, though a guard was present at the factory. A police report was lodged with the concerned police station which after investigation submitted a final report in the matter concluding that no crime as reported was found to have been committed during the course of investigation. Insurance company being informed appointed a Surveyor-cum Investigator V.K. Anand who based on the fact finding inquiry and the report filed by the police also expressed great deal of doubt in regard to the burglary at the premises of respondent No.1 on the alleged date, time and place. Insurance Company declined to indemnify respondent No.1 for the alleged loss on that ground as well on the ground that there was no effective insurance during the relevant period, respondent No.1 having failed to remit the amount of premium. Respondent No.1 filed complaint against the Bank as well as against the respondent No.2- insurance company, alleging deficiency in service on their part. It was alleged that the Bank failed to honour the cheque unjustifiably, that there was difference in words and figures in the amount appearing in the cheque Consequence of which was that the Insurance Company took the plea that there was no insurance during the relevant time of alleged peril. The complaint was resisted by the Bank and the insurance company. The Bank taking the plea that it has committed no deficiency in service by returning the cheque because they acted strictly in consonance with the guidelines issues by the Reserve Bank of India. Insurance Company of-course taking the plea that insurance policy did not become effective due to non payment of requisite insurance premium. In the first instance, the District Forum dismissed the said complaint vide order dated 29.03.95 with the following observations:
“Further, we have carefully gone through a very detailed report paper No.16/C/3 to 16 prepared by Sh. V.K. Anand, Surveyor and Loss Assessor. A perusal of this report would raise some doubts upon the genuineness of the factum of burglary. There was contradictory vers
