State Consumer Disputes Redressal Commission
Canara Bank, Shillong vs Shri. Gopal Chandra Das on 11 December, 2010
Daily Order
First Appeal No. 3/2002
(Arisen out of order dated 05/08/2002 in Case No. of District East Khasi Hills )
1. CHIEF MANAGER CANARA BANK
G.S.ROAD SHILLONG
....Appellant
Versus
1. GOPAL CHANDRA DAS
PYNTHOR UMKHRAH SHILLONG
....Respondent
1. GOPAL CHANDRA DAS
PYNTHOR UMKHRAH SHILLONG
....Respondent
BEFORE :
HONABLE MR. JUSTICE B. Lamare
, PRESIDENT
Ramesh Bawri
, MEMBER
PRESENT:
A.PAUL, Advocate for the Appellant 1 L.R.DAS, Advocate for the Respondent 1 *JUDGEMENT/ORDER per Shri ramesh bawri, Senior member: heard the learned counsels for the Appellant and the Respondent perused the records.
2. At the outset we point out that there has been a long delay in disposal of this appeal by this Commission. Upon conclusion of the hearing of the Appeal Ld. Counsel for Appellant sought time for filing written arguments which was allowed on several occasions. The written arguments were however not filed. Thereafter one of the Ld. members who has heard the Appeal retired whereupon the matter has to be re-heard afresh. Further, owing to the large number of documents to be studied in the case and in the absence of the written arguments we regret the delay in pronouncing the order.
3. The facts of the case, in brief, are that the Respondent/Complainant (hereinafter 'the Complainant'), Shri Gopal Chandra Das, has a Savings bank Account No 3355 with Appellant /OP, canara Bank, Shillong (hereinafter the 'Bank') which he opened on 23.3.1988. He did not opt for the cheque book facility system but used to withdraw money from his account by using withdrawal slips only. On 23.8.1997 the Complainant found from the entries in his pass book, that Rs.80,000/- had been withdrawn from his account on 4.8.1997. When he went with his complaint to the Branch Manager of the Appellant Bank he was told that the said sum of Rs.80,000/- was withdrawn on 4.8.1997 through a cheque and that a cheque book and a duplicate pass book had been issued on the basis of an application that the Complainant had made. The complainant denied that he ever applied for a cheque book or for a duplicate pass book nor did he issue any cheque or withdraw the money. He asked the Branch Manager to show him the application said to have been made, but the Bank could not trace or supply him a copy thereof.
4. The Complainant ultimately filed Consumer Complaint No.26(S) 1997 befor the Ld. District Forum under the provisions of the Consumer protection Act, 1986 charging the Bank with negligence and deficiency in service because of which the fradulent drawal of Rs.80,000/- from the Complainant's account took place.
5. According to the OP bank, on 4.8.1997 a cheque book containing cheque leaves bearing serials 7097901 to 709910 was issue dto the Complainant and the signatur e of Shri Gopal Ch das acknowledging receipt in the Cheque Book Issue Register (CBIR) tallied with that on the Banks specimen signature card dated 23.3.1998. Further, when a cheque (No.7097901 dated 4.8.1997) for Rs. 80,000/- was presented on 4.8.1997 payment was made as the signature tallied with that on the Complainant's specimen signature card and as sufficient balance was available in the account. Accordin gto the complainant he never withdrew the sum of Rs.80,000/- nor did he ever apply for a cheque book and he had never operated the Account since 4.4.1994.
6. In responce to notices issued, the Chief manager of OP bank admitted that initially no cheque book facility was made available and that teh Complainant uised to withdrew Rs.1,800/- on 11.9.1989 Rs.3,000/- on 20.2.2990 and Rs.2,00,000/- on 11.3.1992 through withdrawal slips.
7. Both sides lodged FIR's with the police. In his FIR dated 8.9.1997 lodged with the Shillong Police Station the complainant inter alia laid his suspicion on the employees of the Bank. In the other FIR dated 5.9.1997 the Chief Manager of the OP Bank narrated the incident and requested the Superintendent of Police that the entire matter be investigated. It appears that police investigation was initiated and some documents were seized and sent for expert opinion.
8. having dealt with the matter at length, the Ld District Forum held that there had been negligence and deficiency in service on the part of the OP bank towards the Complainant and , based on its findings ordered as follows, vide its impunged order dated 25.6.2002.
"The OP Bank shall make good the sum of Rs.80,000/- to the Complainant together with interest at teh rate of 12 percent calculated from 4.8.1997 till the date the sum is so paid. The OP Bank shall also pay Rs.10,000/- as compensation and danmages to the Complainant and Rs.6,00/- as costs of the proceedings. The amount as above shall be made good and paid within thirty days from the date of this judgmentand Order failing which interest at teh rate of 18 percent on the entire amount so becoming due shall also be payable from the thirty-first day until it is paid."
9. It is against the said order dated 25.6.2002 that Canara Bank has come in Appeal before this Commission.
10. Ms. A.Paul, Ld. Counsel appearing for the Appellant bank has, at the very outset, submitted that Ld. District Forum had no jurisdiction to entertain the Complaint as it is related to an alleged criminal act which was still underinvestigation by teh Police and as it involved complicated questions.This argument is stoutly resisted by Shri L.C. Das, Ld. Counsel for the Respondent.
11. The Appellant's counsel further relied on the case reported in 1993 (2) SCC 97 (Bank of Maharashtra vs Automative Engineering Co.) and argued that in view of this decision the Ld. District Forum ought not to be have taken up the complaint which is based on alleged forgery of a Cheque. The issue was therein was whether failure of a bank to scrutinize a cheque through an ultra vioplet lamp in order to verify its authenticity amounted to negligence on the part of the Bank and the Hon'ble Supreme Court held that such failure did not amount to negligence. Non-use of an ultra violetlamp is not the contention of the Complainant/Respondent before us. As such, this decision has no bearing at all on the case at hand.
12. these arguments had earlier been raised before the Ld.District Forum too but were rejected in the following words:-
"We are aware of the jurisdiction that a Diostrict Consumer Court has under the provisions of the Consumer Protection Act. The scope for adjudication by this Forum relates to cases of negligence, unfair trade practice and deficiency in service and the disputes that may arise from any of those short comings. While any criminal aspect stands apart, this Forum can still look into whether any negligence or deficiency on the part of the OP bank was ther due to which the criminal act was possible."
13. On this ground we are ij full agreement with the Ld. District Forum. Investigation by the Police relates to the criminality of an act whereas a Complaint before the Consumer Fora relates to negligence in service where the Complaint is more interested in recovering his money. Section 3 of the C.P. ACt clearly states that the provisions of the Act are in addition to and not in derogation of the provisions of any other law.
14. Further, in the instant case, several yers have elapsed since the Complaint was filed. Evidence has been led from botyh sides and the complaint has been heard and disposed by the learned District Forum. As such, in view of the judgment of the Hon'ble Supreme Court reported in AIR 2004 SC 184 (CCI Chambers Co-Op. Hsg. Society Ltd. vs development Credit Bank Ltd) which is a complete answer to the issue, we find no merit in this objection and reject the same.
The relavant paragraphs of the aforementioned judgment of the Hon'ble Supreme Court are quoted below:
"It cannot be denied that at the National Level, the State level and at the District level have been constituted under the Act with the avowed object of providing summary and speedy remedy in conformity with the principles of natural justice, taking care of such grievances as are amenable to the jurisdiction of teh established under the Act. These have been established and conferred with jurisdiction in addition to the conventional courts. The principal objects sought to be achieved by establishing such fora is to relieve the conventional courts of their burden which is ever-ince=reasing with the mounting arrears and whereat the disposal is delayed because of the complicated and detailed procedure which at times is accompanied by technicalities.Merely because recording of evidence is required, or some questions of fact and law arise which would need to be investigated and determined, cannot be a ground for dhutting the doors of any forum under the Act of the person aggrieved.
In the Indian Medical Association case (supra) this court noticed the powers conferred on the several fora under the Act, the procedure applicable (including the exercise of some powers of the civil court under the code of Civil procedure having been made available to the fora under the act) and held that the nature of averments made in the complaint is not by itself enough to arrive at a conclusion that the complaint raises such complicated questions as cannot be determined by the NCDRC. It is only when the dispute arising for adjudication is such as would require recording of lengthy evidence not permissible within the scope of a summary enquiry that a forum under the Act may ask the complainant to approach the Civil Court. The fora made available under the Act are in addition to , and not in derogation of the provisions of any other law for the time being in force and the jurisdiction of the conventional courts over such matters as are now cognizable under the Act has not been taken away. A three-Judge Bench of this Court recently in Dr.J.J.Merchant and Ors's case (Supra) specifically dealt with the issue as to the guidelines which would determine the matter being appropriately dealt with by a forum under the Act or being left to be heard and decided by a Civil Court. This court noticed that the Fora under the Act are specifically empowered to follow such procedure which may not require more time or delay the proceedings. A Forum under the Act is entitled, and would be justified, in evolving a procedure of its own and also by effectively controlling the proceedings so as to do away with the need of a detailed and complicated trial and arrive at a just decision of the case by resorting to the principles of natural justice and following the procedure consistent with the principles thereof, also making use of such of the powers, of Civil Court as are conferred on it. The decisive test is not the complicated nature of the questions of fact and law arising for decision. The anvil on which entertainibility of a complaint by a forum under the Act is to be determined is whether the questions, though complicated they may be, are capable of being determined by summary enquiry i.e.,by doing away with the need of a detailed and complicated method of recording evidence. It has to be eremember that the Fora under the Act at every level are headed by experienced persons. The National Commission is headed by a person who is or has been a judge of the Supreme Court. The State Commission is headed by a person who is or has been a judge of the High Court. Each District Forum is headed by a person who is or has been or is qualified to be a District Judge. we do not think that mere complication either of facts or of law can be ground for the denial of hearing by a Forum under the Act. In Svnco-Industries case (supra) this Court upheld the order of NCDRC holding the complaint before it not a fit case to be tried under the Act and allowing liberty to the Complainant to approach the Civil Court because this Court agreed with the opinion formed by the Commission that "very detailed evidence would have to be let, both to prove the claim and thereafter to prove the damages and expenses". The Court concluded that in any event it was "not an appropriate case to be heard and disposed of in a summary fashion".
8. In Amar Jwala Paper Mills (India) and Anr's case (supra) this court set aside the order of NCDRC relegating a complainant to a Civil Court in spite of the complexity of the matter because the hearing had almost concluded before the Commision.
9. In Dr. J.J. Merchant and Ors.'s case (supra) this Court dealing with the contention that complicated questions of facts cannot be decided in summary proceedings held - "this submission also requires to be rejected because under the Act, for summary or sppedy trial, exhaustive proceedure in conformity with the principles of natural justice is provided. Therefore, merely because it is mentioned that the Commission or Forum is required to have summary trial would hardly be a ground for directing the Consumer to approach the Civil Court. For the trial to be just and reasonable, a long-drawn delayed procedure, giving ample opportunity to the litigant to harass the aggrieved other side, is not necessary. It should be kept in mind that the legislature has provided an alternative, efficacious, simple, inexpensive and speedy remedy to the consumers and that should not be curtailed on such ground. It would also be a totally wrong assumption that because summary trial is provided, justice cannot be done when some questions of fact are required to be dealt with or decided. The Act provides sufficient safeguards."
15. On the merits of the case, Ms.Paul strongly urges that the factum of forgery of the signature on the cheque used for withdrawal of the sum of Rs.80,000/- is yet to be established and as such the findings of the Ld. District Forum are erroneous both in law and on facts. The Appellants have stated in Ground (IX) if their memo of Appeal that the "Honble District Forum did not take into consideration the fact that the Handwriting Expert Shri R.K. Marak who who was examined as C.W.3 did not come to any clear finding regarding the questioned signature and could not establish the authorship of the same........."
16. Upon careful examination of the records of the Ld. District Forum which are before us, we find that the first part of the above-mentioned assertion which is most critical and relevant part of the case i.e., "that the handwriting expert did not come to any clear finding regarding the questioned signature" is not borne out by facts.
17. In his letter dated 15.5.1998 addressed to the Chief Judicial Magistrate, Shillong in connection with the Shillong Sadar PS case No. 136 (9) / 97 the Sr. Scientific Officer cum Govt. Examiner of Questioned Documents of the meghalaya Forensic Science Laboratory has given a definite and uneqivocal finding upon through examination of the relevant documents and stated that "The person who wrote the blue enclosed writings and signatures stamped and marked S1, S2 and A1 did NOT write the red enclosed signatures similarly stamped and marked Q1 and Q2". It was, however, also stated that on the basis of comparison with the materials at hand it had not been possible to fix the authorship of the signatures stamped and marked Q1 and Q2.
18. Records show that S1 and S2 are specimens of the Complaint's handwriting; A1 is his Specimen Signature on the bank's records, Q1 is the signature on the cheque used for withdrawing the money and Q2 is the signature on the cheque Book Issue Register (CBIR).
19. These statements were re-confirmed by the Sr. Scientific Officer of the Meghalaya Forensic Science Laboratory upon being examined by the Ld. District Forum. The clear evidence from his deposition therefore is that the specimen handwriting of the Complainant did not tally either with the signature o the body of the withdrawal cheque in question nor with the signature on the CBIR. The authoriship of the signatures on the cheque and the CBIR appearing as "Gopika Chandra Das" could not however be fixed on the basis of materials available with him.
20. The Appellants have nowhere challenged these findings of the handwriting Expert and these have no reason to doubt their validity, more so in view of the surrounding circumstances of the matter which we shall soon discuss. before that, it needs to be made clear that it was a well high impossibility for the handwriting expert to establish the authorship of the signatures on the cheque used for withdrawal of the money and on the CBIR as he couls compare them only with handwriting specimens provided to him whereas the forger could have been anyone. Moreopver, non-establishment of such authorship has absolutely no bearing on the issue. The sole question is -Were the signatures on the CBIR and, even more in particularly, on the cheque used to withdraw the money, that of the Account Holder or not? If the answer is 'Yes' then the Complaint has filed a false claim and the Appellant succeeds. If the answer is 'No' then the Appellant's case has no legs to stand on. The answer given by the handwriting expert is clearly 'No'.
21. The circumstances surrounding the case are also quite telling. The Complainant last operated his account on 4.4.1994. Sri K.S.R. Shastry, an officer of the Bank, deposited on cross examination that according to the bank Manual, if an account is not operated for a period of over two years the account will be treated as inoperative and is segregated and that there are procedures to be followed like addressing letters to the holder to inform him about the status of his account and that cheques for withdrawals from an inoperative account are passed for payment only by the Manager as an additional care.
22. As seen above the sum of Rs.80,000/- was withdrawn on 4.8.1997 i.e., more than three years it was last operated by the complainant. It was therefore clearly an inoperative account, as also admitted by Shri. K.S.R. Sastry.
23. Now, para 16.18 of the Bank Manual prescribes that "Whereever withdrawals of Rs.5,000/- and above are made from inoperative account, an intimation of the same should be sent to the account holder under Regd. Post". para 16.19 further states that "While issuing cheque books/loose cheque leaves to inoperative account holders, it should be insured that the account holder is properly identified. The issue of cheque book/loose cheque leaf should be authenticated by the Officer/ Manager/ Senior Manager". The records do not show that any of these acts were performed by the Bank as required by the Bank Manual.
24. Shri. K.S.R. Sastry, Officer of the bank has further deposed that -"whenever customers report about laws or destruction of a pass book they make written request to the bank for issue of a duplicate pass book. After verifying the signature of the account holder a duplicate P.B. is issued to the customer after collecting service charges. We maintain a file for keeping such letters of request for issue of duplicate pass books.
Customers not having cheque facilities and intending to avail cheque book facilities make a formal request to the bank for issue of a cheque book. After verifying the signature of the account holder, cheque book is issued after getting his signatuire in the cheque book issue register also which contains details like date of issue , name of accout holder, account number and the serial numbers of cheques issued to him.
The request letters for allowing cheque facility are also preserved in our bank by the cashier along with the cash paid cheques".
25. The records however, show that the bank could not produce either the formal letter requesting for a duplicate pass book or for a cheque book, duly signed by the complainant, and yet both were issued by the bank to persons unknown.
26. Stressing that the payment by the bank did not constitute an act of negligence, the appellant relied on AIR 1920 PC 88 (Commissioners of Taxation Vs English Scottish and Australian Bank Ltd.) to argue that negligence is a question of fact. There is no dispute about this well-settled principle and it is only on facts that the Ld. District Forum came to its finding of negligence on the part of the bank.
27. Ld. Counsel for the appellant bank has also relied on the decision of the Tamil Nadu SCDRC reported in 1998 (1) CPR 645 (Pratibha Bulla Vs State bank of India) where it was held as follows ; "One thing that has to be kept in mind is that if the forgery is apparent on the face of the records and still the bank has honored the cheque forged then it will amount to deficiency in service and if the forgery is not so apparent and the cheques were honored, then it will not amount to deficiency in service. This point can be decided by the District Forum. In these circumstances, it is not correct to say that the District Forum cannot decide the case since forgery is alleged".
28. In the case before us, on the one hand, we find that the decision of the Ld. District Forum is based on the records and not otherwise and, on the other hand, decisions of the National Commission, the Apex Court and various High Courts, have clearly held that payment made by a Bank on a forged cheque is a clear case of negligence. We respectfully differ with the view of the Hon'ble Tamil Nadu SCDRC that any distinction can be made between forgery apparent on the face of the record or otherwise. If such was the case, any expert could forge a cheque, draw the money and leave the person who has deposited his hard earned money in the Bank on good faith, to suffer a loss without any fault on his part. It is upto the Bank to activate its machinery to ensure that no loss is cost to the depositor on account of proven forgery, whether apparent or not, and to compensate the depositor in case of fraudulent withdrawal from his account for any reason.
29. On the other hand, in AIR 1987 SC 1603 (Canara Bank - vs - Canara Sales Corporation and Ors) @ para 24 the Hon'ble Supreme Court has unequivocally held that -
" The realationship between the customer of a bank and the Bank is that of a creditor and debtor. When a cheque which presented for encashment contains a forged signature the bank has no authority to make payment against such a cheque. The Bank would be acting against law in debiting the customer with the amount covered by such cheques. When the customer demands payment for the amount covered by such cheques, the Bank would be liable to pay the amount to the Customer. The bank can succeed in denying payment only when it establishes that the customer is disentitled to make a claim either on account of adoption, estoppel or ratification. The principle of law regarding this aspect is as follows:
When a cheque duly signed by a customer is presented before a Bank with whom he has an account there is a mandate on the bank to pay the amount covered by the cheque. However, if the signature on the cheque is not genuine, there is no mandate on the bank to pay. The bank , when it makes payment on such a cheque, cannot resist the claim of the customer with the defence of negligence on his part such as leaving the cheque book carelessly so that third party would easily get hold of it. This is because a document in cheque form, on which the customer's name as drawer is forged is a mere nullity. The bank can succeed only when it establishes adoption or estoppels ".
30. In Bhagwan Das vs Creet (1903) 31 Cal.249 it was held: " The bankers obligation is to honour his customer's cheque. To that end he is bound to know his customers handwriting. If in any way he is deceived without the instrumentality of his customer, he must himself abide the loss".
31. In the case of L. Pirbhu Dayal vs Jwala Bank, AIR 1958 AII 374, where the money was paid by the Bank on presentation of a forged cheque, the Bank was held liable to pay for the loss suffered.
32. In D Sundarson, Senior Manager, Canara Bank and Anr. vs R.K. Singhal 1994 (3) CPR 40 (SCDRC-Delhi) a cheque bearing forged signature of the complainant was cleared by the bank without proper verification of the signature of the complainant. The District Forum held that the act of the Bank constituted deficiency of service within the meaning of Section 2 (1) (o) of the Consumer Protection Act. The State Commission concurred with the views of District Forum and relying on the observations of the Allahabad High Court (AIR 1938 Allahabad 374) dismissed the appeal of the Bank with costs.
33. In HP State Cooperative Bank Ltd., vs. Smti. Nisha Raj 1997 (3) CPR 410 (SCDRC-HP) the District Forum held that the bank has been deficient in rendering service to its customers by allowing withdrawal from the account of the complainant without the complainant having actually withdrawn the money, allegedly on a forged cheque. The State Commission confirmed the order and dismissed the appeal.
34. The case of Citizen Cooperative Bank Ltd. Vs. Ritesh Mittal-2004 CTJ 211 (J & K High Court) was regarding a claim for loss suffered by the complainant by the Bank clearing for forged cheques for payment. The claim was allowed by the State Consumer Dispute Redressal Commission and the bank was directed to pay the withdrawn sum with interest. On appeal by the bank, the High Court of Jammu and Kashmir confirmed the order holding that the bank was liable for repayment.
35. The National Commission has held that payment on forged cheque by a bank would amount to deficiency of service in N.Venkanna vs. Andhra Bank - 2005 (2) CPR 75 (NC).
36. Another matter of deep significance is that all along - in its FIR, in its official's deposition and in its Memo of Appeal, the bank has only asserted that the signature on the withdrawal cheque is APPARENTLY that of the Complainant. The bank is obviously itself not sure that the cheque was signed by the complainant.
37. Ms. Paul has also raised issues like the purchase of a car by the complainant subsequent to the withdrawal of the money, the presence of his relatives in the bank during the time of withdrawal etc. but, in our view, these are irrelevant issues as far as disposal of the Appeal is concerned, once it is established that neither the Cheque Book was not obtained by the complainant nor the withdrawal cheque signed by him. It is therein that lies the crux of the matter.
38. In view of the decision above, we find no infirmity in the impugned order dated 25.6.2002 passed by the Ld. District Forum and we see no reason to interfere with the said order which is hereby affirmed. The Appeal therefore stands dismissed and disposed of. Parties shall bear their own cost incurred before this Commission.
Pronounced Dated the 11 December 2010 [HONABLE MR. JUSTICE B. Lamare] PRESIDENT [ Ramesh Bawri] MEMBER