Bombay High Court
Mr. Prakash V. Nichani & Others vs The Jai Hind Co-Operative Bank Ltd. on 6 August, 1999
Equivalent citations: 2000(3)BOMCR518
ORDER
Mr. A.A. Halbe, President
1. These complaints are filed by Mr. Prakash V. Nichani, Haresh V. Nichani, Mrs. Madhuri V. Nichani against the Jai Hind Co-operative Bank Ltd. The complainants are the Account-holders and they have current accounts since last about 5 years. They have been operating these accounts in order to make payments against their own ac-
counts with the Bank. The complainants have contended that the complainants more particularly Mr. Prakash Nichani who has filed Complaint Nos. 295, 296, 297 & also 299/97 had applied for the loan on 7-7-97. The loan amount was Rs. 25 lakhs. We cannot lose sight of the another important fact that his brother Ghanshyam Nichani had also similarly applied for the loan of Rs. 10 lakhs on the same date but the same was rejected. The complainant Prakash Nichani had mortgaged his properties situated at Sion valued at around Rs. 60 lakhs. The necessary documents were executed after the loan was sanctioned on 19-7-97. The story of the complainant is that the disbursement of loan had taken place on 23-7-97. Initially, the complainant sought for the loan of Rs. 20,70,900/- to meet his loan obligations to other constituents. However, he availed of full Rs. 25 lakhs loan facility and the Account No. 840 of complainant Prakash Nichani who is the Proprietor of Prakash Impex, was credited with by this amount. The allegation of the complainant is that this transaction of crediting the amount took place on 23-7-97 at the close of the Banking hours or rather at about 5.30 p.m. on that day. The Bank issued the loan of the above loan amount and the complainants have contended that Rs. 30.60 lakhs were transferred from current account No. 840 of Prakash Nichani to the account of Madhuri Nichani being Account No. 1465. This was in contravention of any written instructions. In Complaint No. 297/97, the allegation is that Rs. 13.60 lakhs were transferred to Account No. 1465 of Madhuri Nichani without any oral instructions and C.N. 294/97 filed by Madhuri Nichani with allegation that 2 cheques of Rs. 13.60 lakhs was issued in favour of M/s. K. Ram Exports of which Mrs. Shivdasani is the Proprietor and another cheque of Rs. 4 lakhs was issued in the name of Mr. S.K. Shivdasani with whom the complainants have financial dealings. The undisputed facts are that at this time, substantial amount was outstanding against the complainants and that Shivdasani and his wife Mrs. Sangeeta Shivdasani were possibly pressing for this payment.
2. The complainants have contended that these cheques although presented after the Banking hours i.e. after 5.30 p.m., they were cleared on the same day as the amounts were thus credited to the account of Mrs. Sangeeta Shivdasani who is the Proprietor of Ram Exports and also in the account of Mr. Shivdasani. This was contrary to the existing rules and practice and this was the deficiency on the part of the Bankers. It is further alleged that soon after the cheques were presented, the complainants had issued telegram and had adopted other means of communication with the Bank informing the Bank in very positive terms that these cheques should not be cleared. The letters and the telegrams were latest received by the bank on 24-7-97 and despite these facts, the bank in breach of the rules, credited the amount of cheques into the account of Mrs. Sangeeta Shivdasani and Mr. S.K. Shivdasani. The complainants contend that they are given wrongful debits in their respective accounts. These are the actions of the bank which has caused grievous loss to the complainants and that the same should be restored or compensated by directing the bank to recredit these amounts to the accounts of the complainants.
3. Now in Complaint No. 295/97, the allegation is that the cheque for Rs. 1.85 lakhs was issued in favour of S.K. Shivdasani by the complainant Prakash Nichani from Account No. 840. But the said cheque was cleared after 5.30 p.m. inspite of specific instructions of the complainants Prakash Nichani not to clear them, the Bank in collusion with Mr. Shivdasani has committed this serious deficiency.
4. In Complaint No. 296/97, the allegation is that Rs. 3.75 lakhs was transferred to the account of Haresh Nichani in Account No. 714 only on the alleged verbal instructions and Haresh Nichani issued cheque for Rs. 3.75 lakhs in favour of S.K. Shivdasani which was also cleared after the Banking hours i.e. 5.30 p.m. These transactions have taken place contrary to the rules and practice. These transactions have taken place inspite of specific instructions of the complainants not to transfer these amounts. It is unfathomable that these transfers have taken place without anything in writing from the complainants and such transfers, therefore, smack of suspicion and are wholly censurable.
5. In Complaint No. 299/97, the allegation is that the bearer cheque was issued in favour of S.K. Shivdasani from Account No. 1549 of Shri Saiprasad Fin. Co. Ltd. which the complainants have interest. The stop payment instructions were received by the bank and despite this stop payment instructions, the payment was made.
6. In all these complaints, the main allegation is that huge sums were transferred from one account to another without any specific instructions from the complainants. The complainants never authorised the bank in writing to transfer such amounts. On the other hand, when the cheques were set in motion, a serious attempt was made by the complainants to see that those payments are withheld under the stop payment instructions. These transactions took place beyond the banking hours and they are, therefore, contrary to the Negotiable Instruments Act. They are also contrary to the established rules and orders which require that the payment across the counter should take place during the banking hours. These banking hours are of stipulated timings. But, in this case, all the transactions have taken place on 23-7-97 after 5.30 p.m. This action on the part of the bank has caused huge loss to the complainants which this Commission should order to compensate the complainants while directing the bank to recredit their amount to the extent of the amounts indicated above. It is, therefore, contended that the amount of atleast Rs. 20 lakhs should be given to the complainants. We find that in these complaints, compensation ranging from 6 lakhs to 15 lakhs have been claimed and the total of this amount comes to Rs. 50 lakhs.
7. We may traverse through the contention raised by the bank and the bank has raised initial question of jurisdiction more particularly pecuniary jurisdiction. It is claimed that the claim is by the same complainants. The claim is made by the same family members. The claim is against the same bank and the aggregate claim of Rs. 51 lakhs should be construed as one and single claim and this amount is, therefore, clearly beyond the pecuniary jurisdiction of the State Commission.
8. The other point which have been raised by the opponents is that this is the dispute to be tried under the Maharashtra Co-operative Societies Act. The mandatory notice is not received as per provisions of the said Act. The matter should be referred to the competent authority appointed under sec-
tion 91 of the said Act and these two preliminary grounds viz. pecuniary jurisdiction and the competency of the State Commission to entertain these complaints should be treated as preliminary issues. This was indeed opposed by the complainants. But all the same, we feel that we are under obligation to consider these issues as preliminary issues. Now, so far as the pecuniary jurisdiction is concerned, we find that the plea raised by the Bank is not sustainable. The cheques of various amounts have been cleared beyond the banking hours and this has been alleged to be the deficiency in service of the Bank. None of the cheques is of the amount more than the amount of Rs. 5 lakhs. We, therefore, feel that the plea of pecuniary jurisdiction is not maintainable. We may recall that through mistake, it is stated that the cheque is beyond Rs. 5 lakhs which we hereby rectify and state that no cheque is for the amount of more than Rs. 20 lakhs. A separate cause of action arises in respect of each case and they have been cleared contrary to the specific instructions by the complainants and, therefore, we feel that the question of pecuniary jurisdiction call for no deliberations and it is answered in the negative so far as the Bank is concerned.
9. Now, so far as the consumer dispute is concerned, we feel that this is a dispute between the constituent of the Bank in regard to the current account operated by the complainants. Operating the current accounts or the Saving Bank Account is held to be the consumer dispute in the various decisions of the National Commission and, we feel that we need not dilate on this aspect when it is settled law that such a dispute in regard to the savings and current accounts tantamount to consumer dispute. In the various decisions of the National Commission, and State Commission, National Commission and the State Commission have held that this is the service rendered by the Bank in regard to the operation of the accounts which relate to the deposits and withdrawal of the amount from the account by the account holder. We, therefore, decline to consider this aspect and go to the root of the matter. We, therefore, revert back to the main complaint. The complainants claim that the loan was sanctioned to the extent of Rs. 25 lakhs in favour of Prakash Nichani although loan of Rs. 10 lakhs was rejected so far as Ghanshyam Nichani was concerned. We find that the applications were made some where around 7-7-97 and with recommendation of Mr. Shivdasani, the loans were sanctioned on 23-7-97. It does not seem to be in dispute that the family members of Mr. Prakash Nichani visited the Bank in order to receive the loan and that was at about 3.30 p.m. on 23-7-97. This is also said to be the case of the complainant who has further made out a case that clearance of the cheques was after 5.30 p.m. The documents were executed and the loan was credited to the Account No. 840 of the complainant. This may be at 5.30 p.m. There also does not seem to be in dispute that the cheques were for Rs. 9 lakhs, another for Rs. 4 lakhs were issued by Mrs. Madhuri Nichani in C. No. 294/97 in favour of wife of Mr. Shivdasani, Proprietor of Ram Exports and Rs. 4 lakhs in favour of Mr. S.K. Shivdasani in this regard, the undisputed facts are that the complainant Prakash Nichani and his sister-in-law Mrs. Madhuri Nichani have been owing some amount to Mr. Shivdasani. In order to meet this obligation, these 2 cheques were issued and it seems that even, according to the complainants, although the cheques were issued, the credi-
tor Mr. S.K. Shivdasani was not satisfied on the question of interest therefore, the stop payment instructions were issued. According to the complainants, the stop payment instructions were delivered to the Bank on 24-7-97. All the same, the Bank cleared this payment in favour of respective parties. We further find that the Bank has tendered the pay-in-slip written by Mr. Ghanshyam Nichani and the amount have been credited to Ram Export and Mr. S.K. Shivdasani. The account numbers have already been incorporated of Ram Exports and Shivdasani and in that light of the matter, we feel that all these transactions were within the full knowledge of the complainants. We may here observe that Mrs. Madhuri Nichani could not have issued the 2 cheques unless Mr. Prakash Nichani has instructed that transfer of this amount from his account to the account of Mrs. Madhuri Nichani being Account No. 1465. It is no where the case of the complainants that Mrs. Madhuri Nichani had enough balance to the tune of more than Rs. 14 lakhs in her accounts. These cheques were issued only after the instructions issued by Prakash Nichani. We may observe that Madhuri Nichani could never have issued the cheque unless her account was credited by this amount from the current account of the complainant where in the loan was credited to the extent of Rs. 25 lakhs. We are, therefore, unable to uphold the case of the complainants that no instructions was issued. The conduct of Mrs. Madhuri Nichani clearly spells out that she issued the cheque only after the full knowledge that the amount was credited to her account from the account of Prakash Nichani being the Account No. 840. She could not have issued the cheque unless there was enough credit balance and that was only possible after the transfer of the amount from the current Account No. 840 to Account No. 1465. This cannot happen unless the complainant must have specifically instructed the Bank to do the needful in this matter. The complainants cannot be heard to say that no such verbal instructions were given. It is unfathomable that Mrs. Madhuri Nichani could act in isolation and beyond the knowledge of the complainant Mr. Prakash Nichani. Mrs. Madhuri Nichani must have acted in collusion with Mr. Prakash Nichani and that is how, she came to issue the cheque. The main dispute is as to when the stop payment instructions were issued. It is clear that when the cheques were issued to Mr. Shivdasani and his wife, there were talks of settlement. The payment was sequel to the talks of settlement and there was, therefore, no fraud or any other coercion to show that Mr. Shivdasani obtained those cheques under duress and got them cleared with the connivance of the Bank. On the other hand, the pay in slip filled by Mr. Ghanshyam Nichani in regard to these cheques in favour of Mrs. Sangeeta Shivdasani and Mr. Shivdasani go a long way to show that all these payments were made with the full knowledge of the complainants and they tried to back out from the payment by putting forth the story of communication of no-payment instructions. Possibly, Mr. Shivdasani refused to yield on the point of interest and in order to defeat his claim such a story is being created against the Bank. The entire transaction has taken place in presence of all the complainants. We cannot entertain the story that injustice has been done to the complainants.
10. So far as the cheque of Rs. 1.8 lakhs is concerned in C. No. 295/97, it is clear that the cheque was issued by Prakash Nichani. This was also towards the payment to Mrs. Shivdasani and it is the story that this cheque was also cleared after 5.30 p.m. This was the debt obligation of Mr. Prakash Nichani to Mrs. Shivdasani and the same was cleared on the same day. The same reasons can be attributed to this payment and we do not smell any collusion on the part of the Bank with Shivdasani. It is amply clear that the complainants Mr. Prakash Nichani & Mrs. Madhuri Nichani were owing huge amounts to Mrs. Sangeeta Shivdasani and her husband Mr. S.K. Shivdasani. The Loan amount was credited towards the loan amount merely enabling the complainants to make payments to Mr. Shivdasani. Similarly, in respect of amount of Rs. 3,15,000/- transferred to Account No. 714 Haresh Nichani, Haresh Nichani issuing cheque for the said amount in favour of Mr. Shivdasani can also be looked from this angle. The transactions were cleared within the knowledge of all the parties and it would not be proper to say that the Bank acted in collusion with Mr. Shivdasani and committed deficiency. We further find that the amounts have been paid within the knowledge of the complainants. The Bank served the purpose of crediting the amount of Shivdasani and we further find that section 65 of the Negotiable Instruments Act cannot be a bar if the Bank chooses to serve the constituent. The fact of the issue of non-payment instruction is seriously under dispute. The Bank does not concede that this payment was made before the receipt of no-payment instructions. We further find that nothing legally prevented the Bank from paying or transferring the amount within the knowledge of both the parties and in this case, the same thing has happened. We are, therefore, rejecting the allegation of deficiency on the part of the Bank. The parties have produced ample case laws. But in this peculiar case, the serious dispute is with regard to the time when the stop payment instructions is received. Merely because the Bank cleared the cheques after the Banking hours, we cannot say that the Bank committed deficiency in service. All these transactions took place within the knowledge of the parties and in the same branch of the Bank and if that be so, we are unable to uphold that the Bank committed the deficiency in service as alleged by the complainants. We find that the complainants have tried to utilise this Forum to secure the amount back from Mr. Shivdasani when they found that Mr. Shivdasani was not agreeable to relaxing the interest. However, this cannot be allowed to be done. These are the facts which are seriously in dispute. The loan amount in favour of Mr. Shivdasani is also the matter of controversy between the parties. The time of issue of no-payment instructions is also a matter of dispute. We cannot lose sight of the important fact that the complainant has agitated over this issue and at the same time he has chosen to remain silent about issue of cheques. This is one of the factors which dissuade us in holding that the Bank acted in collusion with Mr. Shivdasani. We do not read any deficiency and, therefore, feel that the complainants should adopt the proper forum to redress their grievance. The number of facts are in dispute, the time of presentation, the time of grant of the loan, etc. are in dispute. On the other hand, several facts which have been discussed above, cast to grave suspicion about the claim of the complainants. We, therefore, feel that such a complaint which involves complicated questions of facts and law cannot be entertained. We have indicated that alt the preliminary issues of jurisdiction and competence of this Forum to entertain the complaint cannot be entertained. But all the same, the facts which are in dispute are rather indicative of the fact that the complaints cannot be tried by the State Commission. The parties may choose the proper Forum to ventilate their grievance and secure the relief. But so far as the State Commission is concerned, the dispute cannot be entertained under the Consumer Protection Act. The deficiency in service on the part of the Bank is not well borne out. The Bank has cited some resolutions of the Reserve Bank of India which require that the Bank should work over time. The Bank can undertake transfer transactions from one account to another, even beyond the Banking hours and this is so in these cases and if that be so, the allegation of the complainants in that behalf, cannot be entertained, We are of the view that the complaints deserve to be dismissed. We cannot be oblivious of the fact that even the complainants feel that they could not have received the loan as they were the defaulters of the previous loan. We are also aware that the complainants were rather fully aware that the debts they had to discharge debts towards Mr. Shivdasani and in order to meet those obligations, he got the loans sanctioned from the O.P. Bank on the recommendation of Mr. Shivdasani. All said and done, we read nothing collusion between the parties. We further read that the Bank is made instrumental to the discharge of this pre-planned transaction between the parties and, therefore, claim against the Bank is really not sustainable. It is unfortunate that the responsible parties should indulge in such claim and approach this Forum or State Commission for this purpose when the facts are otherwise. We, therefore, pass the following order:
ORDER "All the complaints are dismissed. The complainants are at liberty to choose proper Forum to secure the relief sought for by them in these complaints. In these terms, we dispose of these complaints."
11. Complaints dismissed.