The main legal point established is that a bank's error in dishonoring a cheque can constitute deficiency in service under the Consumer Protection Act, leading to liability for compensation.

JUDGMENT :

B.N. Mahapatra, J. - In the present writ petition challenge has been made to the order of the State Consumer Disputes Redressal Commission, Orissa, Cuttack dated 16.09.2010 passed under Annexure-5 in CD. Case No.91 of 2001 by which the Commission has dismissed the complaint of the petitioner holding that since the bank has already realized its mistake and has expressed sincere regrets, there is no deficiency on its part.

2. Bereft of unnecessary details, the facts and circumstances giving rise to the present writ petition are that the petitioner-Company was maintaining Current Account No. 1295 with opp. party-Dena Bank, Cuttack. It had issued a cheque for Rs.10,000/- on 13.10.1999 drawn on opp. party-Bank in favour of their auditors, M/s Tibrewal Chand and Co. towards their professional fees. On presentation of the said cheque, the same was dishonoured by the O.P.-Bank on the ground of insufficiency of fund. Due to dishonour of the cheque, the auditors refused to hand over the audited balance sheet for which the petitioner could not submit the annual return and the balance sheet before the Registrar of Companies in time. For non-submission of annual return and balance sheet in time, the petitioner was penalized. According to the petitioner, there was sufficient fund as per its own account on the date its cheque was dishonoured. On coming to know of the fact of dishonour of cheque, the petitioner issued letter dated 14.10.1999 to O.P.No.1 complaining about the negligence in honouring the cheque on the same date. O.P. No.1 vide its letter dated 14.10.1999, informed the petitioner that its cheque was rightly dishonoured as it had only Rs.6,530.89 in its bank account. Being dissatisfied with the said letter, the petitioner vide its letter dated 16.10.1999 informed O.P. Nos.1 and 2 that as per its record, balance should be Rs.11,555.89 and that the cheque has been willfully dishonoured by the Bank. On the basis of the statement of accounts obtained from O.P. No.1, petitioner again informed O.P. No.1 vide his letter dated 26.10.1999 that two debit entries were made in the petitioner's account being (a) funds insufficient Rs.5,000/-, and (b) Cheque returning charges Rs.25/- on 26.10.1999 which are incorrect. On 15.11.1999, O.P. No.1 finally admitted its erroneous act of debiting the account of the petitioner and apologized to the petitioner. Since after admitting its erroneous act, O.P. No.1 did not credit the said amount of Rs.5,025/- to the petitioner's account which had been illegally and erroneously debited to its account, the petitioner filed a complaint before the State Consumer Disputes Redressal Commission, Orissa, Cuttack u/s 17 of the Consumer Protection Act, 1986 against opp. parties 1 and 2 for deficiency in service and adopting unfair trade practice. Before the Commission, opp. parties 1 and 2 took a stand that no illegality has been committed by the Bank in dishonouring the cheque of the petitioner as there was insufficient of funds in its account. So there was no deficiency in service. Before the State Consumer Disputes Redressal Commission a further stand was taken by O.P.-Bank that on 25.08.1999 the complainant had deposited a cheque for Rs.5,000/- and instant credit was given to A/c No. 1243. Thereafter, when the cheque returned back, debit entry was made and also Rs.25/- was deducted towards cheque clearing charges from A/c No. 1295. The learned State Commission dismissed the complaint with the following observation:-

Heard the Learned counsel for the parties.

It is evident from the reference letter No.AKM/786/99 dt. 15.11.1999 of O.P. Bank that a cheque for Rs.5000/- pertaining to complainant's account was erroneously debited. O.P. Bank regretted for such an erroneous act and for inconvenience caused to complainant. Since the Bank has already realized the mistake and expressed sincere regrets, we are of the opinion that there is no deficiency on its part.

In the aforementioned circumstances, we find no merit