State Consumer Disputes Redressal Commission
Sunshine Travels (India), vs Abn Amro Bank, Nv on 6 December, 2007
IN THE STATE COMMISSION : DELHI IN THE STATE COMMISSION : DELHI (Constituted under Section 9 clause (b)of the Consumer Protection Act, 1986 ) Date of Decision: 06-12-2007 Complaint Case No. C-260/1998 Sunshine Travels (India), Complainant Private Limited, Through M-13, Connaught Place, Mr. Sujoy Kumar, New Delhi-110001. Advocate. Versus 1. ABN Amro Bank, NV, Opposite Party No.1 Vijzelstraat 32, Through Amsterdam, Mr. B.B. Sawhney, The Netherlands. Sr. Advocate with Ms. Yasmin Zafar, Advocate. Also at 11th Floor, 335, Madison Avenue, New York City, N.Y. 17, USA & DLF Centre, Sansad Marg, New Delhi-110001. CORAM : Justice J.D. Kapoor- President Ms. Rumnita Mittal - Member
1. Whether reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
JUSTICE J.D. KAPOOR, PRESIDENT (ORAL) Complainant Company has claimed compensation of US $ 13.434 dollars on account of wrongly dishonouring of bank draft of USS8180 issued by OP Bank in favour of the complainant.
2. Facts, in brief, are that the complainant is engaged in the business of travel agents including handling of inbound tours to India from various foreign countries. The OP issued a bank draft dated 07.03.1996 bearing No.0543237 and reference No.BU070387005040 for US$8,180/- in favour of the complainant. The complainant deposited the said bank draft with its bank i.e. Bank of India Cannaught Circus Branch, New Delhi. The said draft was returned dishonoured and unpaid by the bank with the remarks payment stopped. The said payment is via bank draft issued by the OP and therefore the payment there under could not have been stopped once the draft was issued in favour of the complainant. Dishonouring of the bankers draft clearly amounted to deficiency in rendering services on the part of the OP. The OP has clearly and evidently been negligent in dishonouring the bankers cheque. It was the sole and exclusive liability and responsibility of the OP to make payment in respect of the said cheque being a bank draft. The complainant has suffered losses and/or damages to the tune of the cheque amount i.e. US$ 8180 as also interest thereon @ 24% per annum.
3. While denying any deficiency in service on its part OP-Bank has come up with the following version/objections:-
(i) The Consumer Protection Act, 1986 cannot have extra-territorial operation beyond the territory of India. The OP is a bank having its Head Office At Amsterdam Netherlands. In the present case, the bank draft was issued abroad by the Amsterdam Branch of the bank, stop payment instruction was received there and acting upon the instructions of New York branch of the bank, which thereafter returned the bank draft unpaid. The transaction relating to the demand draft would be governed by the laws of the Netherlands and the New York State (where it was payable and not by Consumer Protection Act,1986.
(ii) That the New Delhi branch of the OP was not involved or connected in any way with the acts of commission or omission alleged in the complaint. The complainant did not hire or avail of any service from the OP for consideration nor was the service availed with approval of the purchaser of the bank draft. Though the bank draft was made out in favour of the complainant, the same should have been sent to the purchaser thereof as per uniform banking practice but came to be sent by oversight direct to the complainant.
There was thus a cloud over the complainants title and possession of the draft being unauthorized and /or irregular, the complainant is clearly barred by limitation having been filed well beyond 2 years from the alleged cause of action.
(iii) That Solidays B.V. requested the Amsterdam branch of the OP to issue a bank draft in favour of the complainant. The same was made out on 07-03-1996 drawn on New York branch. It should have been sent to Solidays B.V. However, by some oversight it happened to have been sent direct to the complainant. By another letter/communication dated 18-03-1996, Solidays B.V. protested against the draft having been sent direct to the complainant and further pointed out that the address was incomplete and ordered stop payment. The OP was accordingly constrained to instruct the New York branch and the draft was, therefore, returned unpaid.
(iv) That the payment could not have been stopped except only upon instruction of the complainant is too simplistic to hold good.
It is well settled that a bank draft or bankers cheque may be returned unpaid/dishonoured in certain situations/circumstances such as doubt as to identity or legitimate title or authority of holder or as to its possession being rightful and duly authorized. It is further denied that the acts were not in conformity with banking norms or were illegal, wrongful, unjust or unfair, as contended. It is incorrect and denied that the OP acted in collusion or connivance with the orderer.
(v) OP denied that there was deficiency, imperfection or shortcoming in rendering of services by the OP to the complainant.
The privity was only between the OP and complainant, the bank draft should have been supplied to the order.
Despatch thereof direct to the complainant was not authorized. Possession of the complainant would have been legitimate and authorized only if the draft had been made over by the orderer to the complainant.
4. While refuting aforesaid objections/contentions raised by the OP, the learned counsel for the complainant has referred to the documents Annexure R-1 i.e. instructions dated 06-03-1996 given by the Solidays B.V. to the OP for preparation of bank draft wherein it is specifically mentioned on the left side Ordering customer Account No. are to be noted. But no such instructions have been noted in this claim. Rather on the right side name of the beneficiary of the demand draft address is that of the complainant which clearly demonstrates that there was no error in respect of these instructions.
5. As regards territorial jurisdiction, the Bank of the complainant is Bank of India situated in Delhi where he presented the draft.
Therefore payment should have been released from Bank of India and credited in the account of the complainant and stop payment instruction from Bank of India branch, Connaught Place makes it amply clear that part cause of action has arisen in Delhi. It is common knowledge that all the multi-national banks have international banking facilities and services and therefore branch office operate all over the world in view of globalization of economy.
Even if we assume for the sake of argument that every branch is a separate entity still the relationship between debtor and creditor is to be applied with great caution as it involves the obligation to find the creditor and to pay him at the place where he is when the money is payable where no other place for payment is fixed by the contract expressly or impliedly. If argument of the counsel that every branch is a separate and distinct entity is accepted then nothing would prevent to fasten the liability of that branch of the bank vis--vis the consumer who is availing the service of such a branch in his own country.
6. There is also distinction between payment by way of cheques and drafts. Ordinarily when the drafts are prepared the payment can be stopped at the initial stage but when it reaches the hands of the consumer and is presented in the bank, the bank cannot stop the payment even if it receives instructions subsequently from the person from whom he has no contract or any relationship. If such practice is allowed then every foreign buyers after sending or depositing draft or payment which is due from it to the exporter in India or for that purpose in any other country would not make any payment of the goods received by him by sending instructions for stopping payment of the draft.
7. In the instant case the buyer vide his communication dated 06-03-1996 i.e. Solidays B.V. requested Amsterdam branch of the OP to issue bank draft in favour of the complainant. The same was made out on 07-03-1996 and drawn on the New York branch.
Since the documents prepared by the OP itself show that no instructions were sent to the OP for sending draft back to Solidays B.V., the OP rightly sent the draft directly to the complainant.
8. The contention of the counsel for the OP that due to inadvertence the draft was sent to the beneficiary whereas it should have been sent to Solidays B.V. does not hold water. It was only on 18-03-1996 that Solidays B.V. i.e. the buyer protested against the draft having been sent direct to the complainant and further pointed out that address was incomplete and ordered for stop payment. If address was incomplete the question of having sent the draft to the complainant which reached his hand and who presented it to his banker (Bank of India) for encashment would not have arisen. Thus if any mistake or inadvertence has taken place it has taken place at the hands of the OP.
9. As to the objection that the complaint is barred by limitation the learned counsel for the OP has contended that the draft was sent back on 27-03-1996 with stop payment endorsement and was again received back by the complainant in April 1996 and the legal notice was given by the complainant on 14-05-1998 and the complaint was filed in August 1998 i.e. four months beyond the prescribed period of two years and there is no application for condonation of delay.
10. Consumer disputes and the grievance of the consumer in such type of cases are of subsisting nature and cause of action continues till the grievances are redressed. If the service provider does not redress the grievance it is the last communication between the parties or legal notice served by the consumer that gives rise to last cause of action. In the instant case legal notice was given in 1998 and the complaint was filed in 1998 itself. It is settled law that cause of action continues and should be at the most determined either from the date of legal notice or from the date of last communication sent by the service provider or from the date of reply to the legal notice.
11. Reliance placed by counsel on the following judgments is misplaced as facts of each case are not akin to each other and question of limitation is to be determined on the facts of each and every case:-
(i) Ragho Singh Vs. Mohan Singh and Others (2001) 9 SCC 717;
(ii) Kerala Agro Machinery Corporation Ltd. Vs. Bijoy Kumar Roy and Others (2002) 3 SCC 165
12. Foregoing reasons persuade us to allow the complaint with the following directions:-
(i) OP is directed to pay the equivalent amount of the bank draft US $ 8180 in Indian rupees prevalent at the rate at the relevant time.
(ii) OP shall also pay Rs. 20,000/- as compensation, which shall include cost of litigation also.
13. Payment shall be made within one month from the date of receipt of this order.
14. Complaint is disposed of in aforesaid terms.
15. A copy of the order as per the statutory requirements be forwarded to the parties free of charge and thereafter the file be consigned to Record Room.
16. Announced on the 6th December, 2007.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member jj