State Consumer Disputes Redressal Commission
Hdfc Bank Limited, vs Satish Kumar S/O Sh. Hans Raj, on 11 April, 2013
2nd Addl. Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB
DAKSHIN MARG, SECTOR 37-A, CHANDIGARH
First Appeal No. 1425 of 2008
Date of institution: 10.12.2008
Date of decision : 11.4.2013
1. HDFC Bank Limited, a Banking Company Registered under the
Companies Act, 1956 having its Head Office at HDFC Bank
House, Senapati Bapat Marg, Lower Parele, West Mumbai
(Maharashtra) and having one of its Branch Offices near Post
Office Mandi Gobindgarh Distt. Fatehgarh Sahib through its
Branch Manager.
2. HDFC Bank Limited, Central Processing Unit, Lufthansa Building,
3rd Floor, 169-A, Anna Salai, Chennai - 600 002 through its M.D.
.....Appellants
Versus
1. Satish Kumar s/o Sh. Hans Raj, resident of Karshni Niwas, Near
Gali No. 7, Main Gulmohar Road, Khanna, Tehsil Khanna, District
Ludhiana, Punjab.
2. Investment Manager, SBI Fund Management Private Ltd., 191,
Maker Towers "E" Cuffe Parade, Mumbai.
3. State Bank of Patiala, Branch Guru Ki Nagri, Mandi Gobindgarh,
District Fatehgarh Sahib through its Manager.
.....Respondent
nd
2 Appeal
First Appeal No. 1436 of 2008
Date of Institution :- 12.12.2008
SBI Funds Management Pvt. Ltd., 191, Maker Towers 'E', Cuffe Parade,
Mumbai.
...Appellant
Versus
1. Satish Kumar s/o Hans Raj, r/o Karshni Niwas, Near Gali No. 7,
Main Gulmohar Road, Khanna, Tehsil Khanna, District Ludhiana,
Punjab.
2. HDFC Bank Ltd., Branch Near Main Post Office, Mandi
Gobindgarh, District Fatehgarh Sahib through its Branch
Manager.
3. HDFC Bank Ltd., Central Processing Unit, Lufthansa Building, 3rd
Floor, 169-A, Anna Salai, Chennai - 600 002, through its M.D.
4. State Bank of Patiala, Branch Guru Ki Nagri, Mandi Gobindgarh
District Fatehgarh Sahib through its Manager.
...Respondents
First Appeal against the order dated
16.10.2008 passed by the District Consumer
Disputes Redressal Forum, Fatehgarh Sahib.
First Appeal No. 1425 of 2008 2
Before:-
Shri Piare Lal Garg, Presiding Member
Shri Jasbir Singh Gill, Member Present in F.A. No. 1425 of 2008:-
For the appellants : Sh. R.S. Bhatia, Advocate
For respondent No.1 : Sh. Y.S. Turka, Advocate
For respondent No.2 : None.
For respondent No.3 : None.
PIARE LAL GARG, PRESIDING MEMBER
This order will dispose of two appeals i.e. First Appeal No. 1425 of 2008(HDFC Bank Limited & Anr. Vs. Satish Kumar & Others) and First Appeal No. 1436 of 2008 (SBI Funds ManagementPvt. Ltd. Vs. Satish Kumar and others). Both appeals are filed against the same order dated 16.10.2008 passed by the District Consumer Disputes Redressal Forum, Fatehgarh Sahib(in short the "District Forum") and the same are disposed off in a single order. The facts are taken from 'First Appeal No. 1425 of 2008' and the parties would be referred by their status in this appeal.
2. Brief facts of the case are that respondent No. 1 had applied for allotment of SBI's Mutual Fund, namely, SBI One India Fund by taking the services of respondent No. 3. Application No. A-3851884 was submitted and paid Rs. 20,000/- vide draft No. 078504 dated 22.12.2006. The grouse of respondent No. 1 was that till today neither any policy document was issued to him nor the appellants and respondents No. 2 & 3 disclosed the status of the policy. Respondent No. 1 approached on several occasions to the appellants as well as respondents No. 2 & 3. Legal notice was also served by respondent No. 1 upon the appellants and respondents No. 2 & 3 but of no effect. Only respondent No. 3 had replied the same denying its liability. Complaint was filed by respondent No. 1 with the prayer that the appellants and respondents No. 2 & 3 may be directed to pay the value of the Funds/Policy, which was at the time of filing the First Appeal No. 1425 of 2008 3 complaint alongwith interest @ 24% p.a. alongwith Rs. 1 lac as compensation and damages and litigation expenses were also prayed.
3. Upon notice, reply filed by appellant No. 1, which was also adopted by appellant No. 2. Respondent No. 3 was proceeded against ex- parte vide interim order dated 23.4.2008.
4. Appellant No. 1 had taken the preliminary objections that the complaint was not maintainable, there was no relationship of customer or banker between respondent No. 1 and appellants, there was no cause of action and locus-standi to file the complaint, respondent No. 1 had not approached the District Forum with clean hands and the complaint was false, frivolous, fictitious as well as time barred and based upon mis- conceived facts. On merits, it was admitted that respondent No. 1 had applied for allotment of SBI One India Fund of SBI Mutual Fund. Respondent No. 3 was authorized to supply/issue application forms and appellant No. 1 was authorized to collect the application forms alongwith cheques/drafts etc. from the applicants of SBI Mutual Funds. The application form No. 3851884 alongwith Banker's cheque No. 078504 dated 22.12.2006 of Rs. 20,000/- drawn on State Bank of Patiala Branch, Guru Ki Nagri, Mandi Gobindgarh was deposited by respondent No. 1 with appellant No. 1. Appellant No. 1 presented the cheque in the clearing house for encashment but the same was returned 'unpaid' with the remarks "Not Drawn on Us". Appellant No. 1 on 9.1.2007 through its POD No. 293527391 sent banker's cheque in dispute and memo to its BTI Department situated at Mumbai. The application form and instrument/Banker's cheque submitted by respondent No. 1 was returned by its BTI Department to the Registrar of SBI Funds Management Pvt. Ltd.. The role of appellant No. 1 was only to collect the application form alongwith cheques/drafts etc. on behalf of SBI Fund Management and sent the same to the SBI Funds Management. It was the duty and responsibility First Appeal No. 1425 of 2008 4 of the SBI Funds Management to issue One India SBI Mutual Funds to the applicants, who were eligible and to return the drafts, who were found not eligible for the issuance of the Mutual Funds. The status of the application could be disclosed only by respondent No. 2 and not by the appellants. Respondent No. 1 was not entitled for any relief qua the appellants as there was no deficiency or fault in service on the part of the appellants. On merits, the same pleas were taken by the appellants, which were taken in preliminary objection. No notice dated 14.1.2008 was served upon the appellants. Dismissal of the complaint was prayed.
5. Respondent No. 3 also taken the preliminary objections that the complaint was not maintainable, it was mis-use and abuse of process of law, false, frivolous and vexatious complaint was filed by respondent No. 1, not approached the District Forum with clean hands. On merits, it was averred that the answering respondent was authorized to supply the application forms by respondent No. 2, who were interested to purchase SBI One India Funds, which scheme was launched by SBI Funds Management. It was admitted that application Form No. A3851884 was obtained by respondent No. 1 and also got issued a Banker's cheque No. 078504 dated 22.12.2006. Appellant No. 1 was authorized by respondent No. 2 to collect the application forms with Banker's cheque from the applicants then it was the responsibility of respondent No. 2 to issue SBI Mutual Funds to the applicants. There was no role of the answering respondent for the issuance of the Mutual Funds. It was also denied that any written request was made to the answering respondent vide letter dated 15.12.2007 by respondent No. 1. It was admitted that legal notice was served by respondent No. 1 upon the answering respondent which was replied through Sh. K. K. Garg Advocate on 6.2.2008. The dismissal of the complaint was prayed.
First Appeal No. 1425 of 2008 5
6. The District Forum after hearing the learned counsel for the parties and going through the record, accepted the complaint and directed appellant No. 1 and respondent No. 2 to issue SBI One India Funds of SBI Mutual Funds to respondent No. 1 within one month from the receipt of the copy of the order operative from 22.1.2006, failing which appellant No. 1 and respondent No. 2 were directed to pay Rs. 20,000/- amount of the disputed banker's cheque jointly and severally with interest @ 9% per annum w.e.f. 20.12.2006 till its payment. Appellant No. 1 and respondent No. 2 were also directed to pay Rs. 50,000/- as compensation and Rs. 500/- as litigation costs jointly and severally to respondent No.1.
7. Aggrieved from the order of the District Forum, appellants filed the present appeal on the grounds that the District Forum has failed to appreciate the facts of the case and mis-read the entire facts. The District Forum failed to appreciate that the role of the appellants was only to collect the applications and cheques/drafts and sent the same to respondent No. 2. The order of the District Forum is without any reasons and evidence on record, as such, the same is liable to be set-aside.
8. First Appeal No. 1436 of 2008 was filed by the appellant(respondent No. 2) against the order of the District Forum on the grounds that there was no deficiency in service on the part of the appellant(respondent No. 2) to respondent No. 1 as no amount was received by the appellant(respondent No. 2) for the issuance of SBI Mutual Funds from respondent No. 1. There was no evidence available before the District Forum to accept the complaint of respondent No. 1 qua the appellant. Respondent No. 1 also does not fall under the definition of 'consumer' as no consideration was received by the appellant(respondent No.2) from respondent No. 1 for the issuance of SBI One India Mutual Funds, as such, the order of the District Forum is liable to be set-aside. First Appeal No. 1425 of 2008 6
9. We have gone through the pleadings of the parties, grounds of appeal, perused the record of the learned District Forum and heard the arguments of the learned counsel for the appellants and respondents No. 1 & 2.
10. There is no dispute between the parties that respondent No. 2 launched a scheme known as 'SBI One India Funds' duly approved by SEBI. There is also no dispute that respondent No. 3 was authorized to issue the application forms to the interested applicants and appellant No. 1 was authorized to collect the application form alongwith Banker's cheque/draft from the desired applicants.
11. There is also no dispute that respondent No. 1 took the application form No. A-3851884 and also got a bank draft No. 078504 dated 22.12.2006 for an amount of Rs.20,000/- from respondent No. 3 and deposited the same with appellant No. 1. But no SBI Mutual Fund Certificate was issued by respondent No. 2. Even the draft alongwith application was not returned to respondent No. 1. No information regarding the fate of the application as well as bank draft was provided/supplied to respondent No. 1 by the appellants and respondent No. 2.
12. The pleaded case of the appellants is that the draft was presented by appellant No. 1 in the clearing house but the same was received back as "Un-paid" from respondent No. 3 and the same was sent with an application as well as memo to the BTI Department at Mumbai Office and the draft application form and memo were sent by its BTI Department to the Registrar of SBI Mutual Fund Management Pvt. Ltd.. Respondent No. 2 also admitted this fact in para No. 4 of its grounds of appeal and it is pleaded by respondent No. 2 that respondent No. 2 sent back the said instrument which was not drawn in favour of respondent No. 2 to respondent No. 1 by post through its Registrar and Transfer Agent First Appeal No. 1425 of 2008 7 appointed for this purpose on 20.3.2007 alongwith a letter stating the reasons for the same.
13. Registered notice was sent by the District Forum to respondent No. 2 on 19.3.2008 but respondent No. 2 did not care to appear and pursue and to rebut the version of respondent No. 1, respondent No. 2 was proceeded against ex-parte by the District Forum vide its interim order dated 23.4.2008.
14. It is admitted case of respondent No. 2 that application form alongwith bank draft of Rs. 20,000/- which was not encashed was received by respondent No. 2 from appellant No. 1 but the same was returned by respondent No. 2 to respondent No. 1 through its Registrar and Transfer Agent on 20.3.2007 alongwith letter stating the reasons but no postal receipt or copy of despatch register annexed by respondent No. 2 with its appeal to prove its version that the draft in dispute was returned by respondent No. 2 to respondent No. 1.
15. No affidavit of the Registrar-cum-Transfer Agent is also annexed by respondent No. 2 with its appeal No. 1436 of 2008 regarding the return of the draft of Rs. 20,000/- with application in dispute to respondent No. 1 by him. Even the name of the Registrar-cum-Transfer Agent is also not disclosed by respondent No. 2/appellant in F.A. No. 1436 of 2008.
16. No evidence was produced by respondent No. 2(appellant in F.A. No. 1436 of 2008) or by appellant No. 1 that bank draft was not encashed on its presentation in the clearing house by appellant No. 1. No copy of the memo was also produced by appellant No. 1 to prove its version that bank draft was not encashed and respondent No. 2 also not annexed the copy of the memo or bank draft with the grounds of appeal to prove that the draft was not encashed and the same was returned by respondent No. 3 to appellant No. 1. Respondent No. 1 has submitted the First Appeal No. 1425 of 2008 8 bank draft alongwith the application to appellant No. 1 and there was no possibility for non-encashment of the draft as it was not cheque. Respondent No. 3 also filed reply to the complaint before the District Forum and there was no plea of respondent No. 3 in the reply that the bank draft was not encashed.
17. So from the reply filed by respondent No. 3 it is also proved that the version of appellant No. 1 and respondent No. 2 is not correct that the bank draft of respondent No. 1 was not encashed and this version of appellant No. 1 and respondent No. 2 is only an afterthought version to save its skin. There is no iota of evidence produced by the appellants as well as no evidence/document annexed by respondent No. 2 with its F.A. No. 1436 of 2008 in support of its version.
18. As respondent No. 2 has admitted in its grounds of appeal that application and bank draft was received from appellant No. 1, as such, we are of the view that there was no deficiency in service on the part of the appellants.
19. It is admitted case of respondent No. 2/appellant in F.A. No. 1436 of 2008 that the draft and application was received from appellant No. 1 and the same were returned to respondent No. 1 on 20.3.2007. Respondent No. 2 failed to prove return of the draft and application form with covering letter as alleged by respondent No. 2 in its appeal No. 1436 of 2008 to respondent No. 1, as such, we are of the view that respondent No. 2 is deficient in service and liable to pay the amount of the draft with interest, compensation as well as litigation expenses as directed by the District Forum alone.
20. In view of the above discussion, the order of the District Forum is modified to the extent that respondent No. 2 i.e. SBI Funds Management Pvt. Ltd., 191, Maker Towers E, Cuffe Parade, Mumbai i.e. appellant in F.A. No. 1436 of 2008 will comply with the order of the District Forum First Appeal No. 1425 of 2008 9 under appeal and there is no liability of HDFC Bank Limited(appellants in F.A. No. 1425 of 2008) in paying the amount.
21. First Appeal No. 1425 of 2008 is accepted and the order of the District Forum qua the appellants is set-aside. First Appeal No. 1436 of 2008
22. The appellant had not filed any reply before the District Forum to rebut the version of respondent No. 1/complainant and also not annexed any documents with its appeal to controvert the version of respondent No. 2 that he has not received any Draft, Application Form or Letter from the appellant(respondent No.1)-Satish Kumar. The First Appeal No. 1436 of 2008 of the appellant-SBI Funds Management Pvt. Ltd. Is meritless, as such, the same is dismissed with costs of Rs. 10,000/-, to be paid to respondent No. 1 by SBI Funds Management Pvt. Ltd.(appellant in F.A. No. 1436 of 2008) within one month from the receipt of copy of the order.
23. The arguments in these appeals were heard on 1.4.2013 and the orders were reserved. Now the orders be communicated to the parties.
24. The appellants in F.A. No. 1425 of 2008 had deposited an amount of Rs. 25,000/- with this Commission at the time of filing the appeal. This amount of Rs. 25,000/- with interest accrued thereon, if any, be remitted by the registry to appellant No. 1 by way of a crossed cheque/demand draft after the expiry of 45 days.
25. The appellant in F.A. No. 1436 of 2008 had deposited an amount of Rs. 25,000/- with this Commission at the time of filing the appeal. This amount of Rs. 25,000/- with interest accrued thereon, if any, be remitted by the registry to respondent No. 1 by way of a crossed cheque/demand draft after the expiry of 45 days under intimation to the learned District Forum and to the appellant. Remaining amount shall be paid by the appellant to respondent No. 1 within 30 days from the receipt of the copy of the order.
First Appeal No. 1425 of 2008 10
26. The appeals could not be decided within the statutory period due to heavy pendency of Court cases.
(Piare Lal Garg)
Presiding Member
April 11, 2013. (Jasbir Singh Gill)
as Member