State Consumer Disputes Redressal Commission
I.S.D. Infotech Pvt. Ltd., Hyderabad vs Canara Bank And Another Hyderabad on 30 March, 2009
A BEFORE THE A.P. STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD. C.D. No. 61/1998 Between: I.S.D. Infotech Pvt. Ltd., 605-A, Maitrivanam HUDA Complex, Sanjeeva Reddy Nagar Hyderabad-500 038. Rep. by its Managing Director Col. P.A.R. Chowdary. *** Complainant And 1) Canara Bank Rep. by is Branch Manager Kundanbagh Branch Hyderabad. 2) M/s. Parity Systems Pvt. Ltd., Secunderabad. *** Opposite Parties Counsel for the Complainant: Smt. K. Sesharajyam Counsel for the Ops M/s. Deepak Bhattacharjee (R1) M/s. S. Harsh Vardhan Lal (R2) CORAM: HONBLE SRI JUSTICE D. APPA RAO, PRESIDENT & SRI SYED ABDULLAH, MEMBER
MONDAY, THIS THE THIRTIETH DAY OF MARCH TWO THOUSAND NINE Oral Order: (Per Honble Justice D. Appa Rao, President) *** This is a complaint filed against Canara Bank for realization of amount covered under the two cheques.
2) The case of the complainant in brief is that it is a company registered under Companies Act. It had current account bearing No. 1074 with the opposite party bank since 1991. The Managing Director and Dr. Subba Rao were the authorised signatories for issuance of cheques on behalf of the company. In December, 1997 when the Managing Director went to USA Dr. Subba Rao and Sri Anil Kumar Mathur, Vice President were authorized to sign the cheques. In the first week of February, 1998 Sri Anil Kumar Mathur also left to USA and returned in the month of March, 1998.
During the said period Sri Virender Prasad, Chartered Accountant and Financial Advisor while going through the bank statement noticed two debit entries one for Rs. 3,00,000/- vide cheque No. 880280 and another for Rs. 3,13,520/- vide cheque bearing No. 880285 both dated 26.2.1998. On that he contacted Dr. Subba Rao as well as Sri Anil Kumar Mathur but they denied having issued the cheques. On verification it was found that the signatures do not belong to Sri Anil Kumar Mathur. It was forged. In April, 1998 the Managing Director of the company returned from USA. Thereupon he questioned the employees of the bank as to how they could honour the cheques for which they replied stating that they passed them in usual course. The bank was negligent in not comparing the signatures with that of the specimen signature and signatures available with them before honouring the cheques which constitutes deficiency in service due to which the company had suffered loss to a tune of Rs. 6,13,520/-. Therefore it claimed the said amount besides damages of Rs. 5 lakhs towards loss of business and costs.
3) The bank resisted the case. While admitting that the complainant was having a current account with its Kundanbagh Branch and that Dr. Subba Rao and Sri Anil Kumar Mathur were authorised to sign the cheques on behalf of the company in the absence of Managing Director, it denied that there were no transactions from 1.2.1998. The statement of account reveals that number of transactions including the transactions in question involving the big amounts were made. The cheque bearing No. 880280 for Rs. 3 lakhs was encashed while the other cheque bearing No. 880285 for Rs. 3,13,520/-
was issued for issuance of demand draft in favour of M/s. Parity Systems Pvt. Ltd., Secunderabad. Sri Virendra Prasad, Chartered Accountant of the complainant never informed the bank that the authorised signatory did not sign the said cheques. A perusal of the signatures would undoubtedly disclose that it was signed by Anil Kumar Mathur. There were no signs of forgery. There was no negligence on their part nor deficiency in service. They did not state as to how the cheques in their custody were lost from their office. Srinivas Prasad and Yadagiri employees of the company used to visit the bank to transact the business. It did not take any action against them. It failed to secure the cheque book from unauthorised use. The signatures of Sri Anil Kumar Mathur in the earlier transactions supports that there were no dissimilarities in the disputed signatures. There was no deficiency in service on its part and therefore prayed that the complaint be dismissed with costs.
4) The complainant in proof of its case filed the affidavit evidence of the Managing Director of the company as well as Dr. Subba Rao and got Exs. A1 to A6 marked, while the bank filed the affidavit evidence of Branch Manager and got Exs.
B1 to B4 marked.
5) Earlier my learned predecessor by order Dt. 8. 8. 2003 allowed the complaint directing the bank to pay the amount covered under the cheques with interest @ 12% p.a., from the date of complaint.
6) Aggrieved by the said order, the bank preferred an appeal F.A. 757/2003 before the National Commission which in turn by its order Dt. 25.7.2007 set-aside the order and remanded the matter to this Commission with the following directions:
The appellant shall produce the documents with the two cheques and the account opening form bearing signature of Anil Kumar Mathur, in original, before the State Commission within four weeks.
Anil Kumar Mathur shall file his affidavit explaining whether M/s. Parity Systems Pvt. Ltd., were required to be paid any amount in ordinary course of business on the date of issuance of the cheque as per their records and whether he had signed the two cheques or not, within four weeks.
The State Commission, in case of necessity, may make M/s. Parity Systems Pvt. Ltd., a party.
The State Commission may also seek opinion of hand writing expert at the cost of the Canra Bank, in case of need.
The State Commission on filing of the original account opening form bearing signature of Anil Kumar and the two cheques as well as affidavit of Anil Kumar, may proceed to decide the matter afresh, in accordance with law.
7) Pursuant to the remand order the Canara Bank produced the two cheques and account opening form bearing the signature of Anil Kumar Mathur. The complainant did not file the affidavit evidence of Anil Kumar Mathur refuting his signatures on the cheques or the circumstances under which those cheques were lost. The complainant filed memo alleging that Anil Kumar Mathur has left the organization in 1998.
It equally did not state if any amount is required to be paid to M/s Parity System on the record evidencing the transaction between them.
8) M/s. Parity Systems Pvt. Ltd., Secunderabad was made as a party. It has filed its counter alleging that it is a new body. It has taken over the earlier company on 3.7.2000. It had no knowledge nor record to allege anything about the alleged transactions. The records were not available in regard to the transactions that took place about 10 years ago.
The demand draft must have been issued for supply of material during the course of its business. It has 17 years standing and a partner in the business of Wipro products besides the products of IBM, DELL and Godrej. No motive could be attributed to it, and therefore prayed for dismissal of the complaint.
9) The disputed cheques were sent to Government Examiner, Directorate of Forensic Science, Ramanthapur, Hyderabad along with specimen signature card of Anil Kumar Mathur marked as Exs. A7 to A9 corresponding to Ex. A3 & A4. When it was sent to Government Examiner he was of the opinion that there were basic and fundamental differences between the questioned and the standard signatures and of different authorship.
10) In the light of directions of the National Commission that the matter is to be determined on filing of the original account opening form as well the cheques and the affidavit of Anil Kumar Mathur. As we have already pointed out that the affidavit of Anil Kumar Mathur was not filed.
11) In the light of pleadings the points that arise for consideration are :
a) Whether the complainant is entitled to the amount covered under the two cheques on the ground that they were not issued by Anil Kumar Mathur and it was a forgery?
b) Whether the complainant is entitled to the amount claimed in the complaint?
c) If so, to what amount?
12) It is not in dispute that the complainant was maintaining a current account with the bank and Anil Kumar Mathur was authorised to sign the cheques evidenced under specimen signature card Ex. A9.
13) It is also not in dispute that two cheque leaves provided by the bank were issued under Ex. A7 bearing cheque No. 880 280 Dt. 25.2.1998 for Rs. 3 lakhs and Ex. A8 another cheque bearing No. 880 285 Dt. 25.2.1998 for Rs.
3,13,520/- for issuing a demand draft in favour of M/s. Parity Systems Pvt. Ltd., Secunderabad. One cheque for Rs. 3 lakhs was encashed, and the other cheque for Rs. 3,13,520/- was for issuing a demand draft in favour of M/s. Partity Systems Pvt. Ltd., Secunderabad. We may state herein that the complainant did not dispute that a demand draft was issued in favour of M/s. Partity Systems Pvt. Ltd. basing on the signature of Anil Kumar Mathur. M/s. Parity Systems Pvt. Ltd. (R2) had categorically stated that it must have been issued for supply of material during the course of business. The complainant company could not contradict or let in any evidence to show that it need not pay any amount to M/s. Parity Systems Pvt. Ltd. It is not the case even that Anil Kumar Mathur had anything to do with M/s. Parity Systems Pvt. Ltd nor its staff has misused the amount covered under the demand draft.
14) The complainant filed the affidavit evidence of the Managing Director and that of Dr. Subba Rao who were in no way concerned with the issuance of cheques or knew the circumstances under which cheques were issued. They routinely alleged that the Managing Director went to USA and in their absence Anil Kumar Mathur issued the cheques. At the cost of repetition, we may state that no affidavit evidence of Anil Kumar Mathur was filed. It did not even file the affidavit evidence of Sri Virender Prasad, Chartered Account , who said to be the Financial Advisor of the company to state that he could know after verification of statement of account that these two cheques were issued and he had suspected fraud. Importantly, the complainant could not prove as to how when the cheque book which was in its custody, two leaves from out of the cheque book could be removed. If at all such cheques were removed it could be by its staff or the person who was in custody of the cheque book. Necessarily it has to file the affidavit evidence of the concerned to state as to the various circumstances leading to the loss of these two cheques. The complainant has to necessarily prove as to the circumstances under which the cheque leaves were missing and who was responsible for such acts and who presented those cheques and the person who encashed it. If really the person who presented the cheques had encashed the same with the collusion of the bank officials, one of the cheques could not have been issued in favour of M/s. Parity Systems Pvt.
Ltd., for issuing a demand draft. They could have as well encashed the same benefiting themselves. When the cheque was issued in order to discharge its liability to M/s. Parity Systems Pvt. Ltd. for purchase of material, and when M/s Parity Systems did not issue any notice demanding to pay the amount, it must be deemed that it had received it. It is not the case of M/s. Parity Systems Pvt. Ltd. It did not receive DD. On the other hand in its counter it asserted that it had received it towards the material supplied by it. Therefore it cannot be said that the said cheque was not genuine. The complainant did not dispute its liability to it. It did not file its accounts to explain the transactions with M/s Parity Systems.
15) It is not known why the complainant had not filed the affidavit evidence of Anil Kumar Mathur who said to have signed the cheques Ex. A7 & A8. Unless the person who issued the cheques deny or controvert the signatures on disputed cheques, it cannot be said that they were forged. The burden of proof could not have been discharged by simply filing a memo stating that he left their organization. It ought to have enquired as to the whereabouts of Anil Kumar Mathur and obtained his affidavit and filed before the Court. The complainant had stated that Anil Kumar Mathur had left the organization in the year 1998. If really he left the organization in 1998 there was no reason why it could not file the affidavit evidence of Anil Kumar Mathur, when the matter was pending before the State Commission in the first instance. The said fact could have been intimated to the National Commission mentioning that it is impossible for them to obtain the affidavit evidence of Anil Kumar Mathur when the complainant was directed to file his affidavit.
16) The bank on its part has undoubtedly issued charge sheet against employees evidenced under Ex. A5. Though the complainant has given a complaint evidenced under Ex. A6 basing on which FIR Ex. B5 was registered, it is not known as to the outcome of the investigation.
17) For the offence that said to have taken place on 26.2.1998 the complainant gave a report on 9.4.1998 basing on which FIR No. 190/1998 Ex. B5 was registered u/s 420, 468 IPC. As we have pointed out earlier, it is not known as to the outcome of the proceedings. Curiously, a perusal of FIR shows that report was given by R. Virendra Prasad, Chartered Accountant alleging that on seeing the bank statement of account he found two debit entries one for Rs. 3,00,000/- vide cheque No. 880280 and the other for Rs. 3,13,520/- vide cheque No. 880285 both dated 26.2.1998. He found that six cheque leaves 880280 to 880285 were missing and that these two cheques were part of them, and that they were taken away from the last pages of the cheque book. He immediately intimated Anil Kumar Mathur and Dr. Subba Rao on phone and suspected that some fraud had taken place. Immediately he went to the bank verified the signatures and was of the opinion that the signatures were forged. At the same time, he admits that writing and entries on the cheques in issue were issued by their former employee Mr. Srinivas Prasad, Accounts Executive who used to deal all the bank transactions. He did not mention as to the action taken against him. Instead he questioned the bank officials who said to have simply brushed it off as it was not their problem. FIR was registered against Mr. Srinivas Prasad. It is not known as to what happened subsequently pertaining to the criminal case. Instead of filing the affidavit evidence of the concerned they filed the affidavit of Dr. Subba Rao and Managing Director of the company. Except stating the facts in the complaint and disowning the signatures of Anil Kumar Mathur, they did not place any evidence as to the various circumstances pointed out earlier. They did not file the accounts as to what happened to the amounts covered under the cheques. On the other hand they threw the blame against the bank officials stating that they did not verify the signatures properly. There is no reason why the complainant did not file the affidavit of R. Virendra Prasad, Chartered Accountant who is an important witnesses to unravel the dispute. Curiously R. Virendra Prasad did not verify their account book in order to see that that the demand drat issued in favour of M/s. Parity Systems Pvt. Ltd., Secunderabad was in fact sent to M/s. Parity Systems and the amount payable to it was collected.
18) Learned counsel for the complainant solely relying on the opinion of the handwriting expert contended that they were forged and therefore the bank was liable. At the outset we may state that the bank has filed these two cheques besides that of Ex. A9 specimen signature card. It only contains Anil Kumar Mathur signature and not that of others Dr. Subba Rao and the Managing Director, who were authorised to sign the cheques. Only in their absence, according to them, Anil Kumar Mathur has signed. A perusal of signatures on these cheques with that of specimen signature shows that they resemble even by close visual scrutiny. Therefore, it cannot be said that he did not sign them.
19) The hand writing expert in a perfunctory manner by using clich ridden words observed: the questioned signatures show consciousness on the part of writer as indicated by careful joining, slow and drawn in execution. There are basic and fundamental difference between the questioned and the standard signatures. Both the standard and questioned signatures disagree in general writing habits such as skill, slant, speed, spacing, alignment, movement, line quality, relative size and proportion of various characters. He also found dissimilarities in minute and inconspicuous details of various characters occurring between the questioned and the standard signatures.
They are beyond the range of natural variation and when considered it led to different authorship.
20) The Opinion of an expert is relevant under section 45 of the Indian Evidence Act. It is an accepted principle of law that the science of hand writing is not exact or an accurate one like that of a thumb impression and there is likelihood of errors creeping in. When a handwriting expert gives his opinion it is opinionated, and therefore, such evidence should be received with caution. What is the evidentiary value of a handwriting expert and whether or not in conjunction with the other evidence available, the evidence of the expert supports the case of the complainant are matters for decision by the court. It is clear that placing reliance on the hand writing experts opinion alone may lead to miscarriage of justice as the hand writing experts opinion could not be the conclusive proof to manifest the forgery.
21) Under Order XIX, Rule 3, CPC it is incumbent upon the deponent to disclose the nature and source of his knowledge with sufficient particularity. We may state the allegations in the complaint are therefore, not supported by an affidavit as required by law. Naturally the court would be justified in refusing to carry out investigation into allegations of forgery or malafides if necessary particulars of the charge making out prima facie case are not given in the complaint. The burden of establishing mala fides lies very heavily on the person who alleges it. The affidavits of the persons filed before the court had no knowledge or any of the facts. They are away to USA by then. It was in the knowledge of Anil Kumar Mathur and R. Virendra Prasad, Chartered Accountant. The affidavits of those persons were not filed in order to constitute as evidence. When the National Commission directed that the affidavit of Anil Kumar Mathur to be filed in order to prove the point in question. Adverse inference has to be drawn for non filing of the same. Equally, it did not file the crucial affidavit of R. Virendra Prasad, Chartered Accountant who could have stated as to what happened to the other cheque issued for obtaining a DD in favour of M/s. Parity Systems Private Ltd., more so when the liability was not denied.
Since in the complaint an averment was made that the cheques were forged and they were not within the knowledge of deponents of the persons who filed affidavits and non-filing of the affidavits of those persons i.e., Anil Kumar Mathur and R. Virendra Prasad, Chartered Account necessarily lead to the conclusion that they could not prove forgery. We are of the opinion that the complainant could not establish that cheques were not issued by Anil Kumar Mathur, more so, when one of the cheques was admittedly given, in order to discharge the liability to M/s. Parity Systems Pvt. Ltd.,
22) The bank by filing the affidavit evidence of concerned official had cogently refuted the allegations in the complaint and in fact the complainant had discharged the amount due to M/s. Parity Systems Pvt. Ltd., by encashing the cheque by way of draft. Neither the circumstances nor the evidence was let in prove that the cheques were forged.
23) Learned counsel for the bank relied a decision in United Commercial Bank Vs. Mahendra Popatlal reported in I (1995) CPR 242 (NC) wherein it was held:
In the case on hand, the evidence is to the effect that the concerned employees of the bank had carefully scrutinized the two cheques visually and they made payments only after they felt satisfied that no defects could be noticed in the instruments. The law imposes the duty on the bank only to exercise in good faith such care and diligence as it reasonably possible under ordinary circumstances, when a cheque is presented for payment, and we are clearly of the opinion that this duty had been duly performed in the present case by the officials of the appellant bank. Having regard to practical realities and the facilities available in the bank in our country we must hold that the officials of the bank did not employ any high tech methods such as comparison of the signature under ultraviolet ray lamp or they did not send the instruments for opinion of a hand writing expert would not constitute negligence on their part in the eye of law.
The dicta laid down therein equally applies in all fours to the facts of the case.
24) To sum up, the complainant could not prove that two cheques were stolen from its custody. The said fact was not brought to the notice of the bank within reasonable period. It is not known as to the status of the police investigation in this behalf.
The complainant did not file the affidavit evidence of Anil Kumar Mathur or that of R. Virendra Kumar, Chartered Accountant. in order to refute the signatures on the cheques. As we have stated earlier that the signatures on the cheques matched with the specimen signature. No allegation of fraud was made against the bank. Since the cheque was issued from the custody of the complainant and one of the cheques were issued in the name of M/s. Parity Systems Pvt. Ltd., which did not dispute receipt of amount covered under the demand draft, we do not have evidence to hold that the cheques were forged. It did not let in any circumstances to prove that cheques were forged. It did not file accounts to prove that cheques encashed were not utilised by the company and somebody has misappropriated it. The complainant had utterly failed to prove its case.
25) We do not see any merits in the complaint. In the result the complaint is dismissed with costs computed at Rs. 10,000/-.
PRESIDENT MALE MEMBER APPENDIX OF EVIDENCE WITNESSES EXAMINED FOR COMPLAINANT OPPOSITE PARTIES None None DOCUMENTS MARKED FOR COMPLAINANT:
Ex. A1; 01.08.1990 Xerox copy of certificate of Incorporation of the complainant.
Ex. A2; 26.03.1998 Statement of account for the period from 1.1.1998 to 25.3.1998 Ex. A3; 15.05.1996 Xerox copy of specimen signature card.
Ex. A4; 25.02.1998 Xerox copies of the cheques.
Ex. A5; 26.07.1999 Xerox copy of charge sheet against Y. Sivanageswara Rao, Officer, Canara Bank Ex. A6; 24.04.1999 Xerox copy of letter from Inspector of Police PS, S.R. Nagar, Hyderabad to the complainant.
Ex. A7; 25.02.1998 Original cheque bearing No. 880 280 for Rs. 3 lakhs Ex. A8; 25.02.1998 Original cheque bearing No. 880 285 for Rs.
3,13,520/- issued for issuing DD in favour of Parity Systems Pvt. Ltd., Secbad.
Ex. A9; 15.05.1996 Original Specimen signature card of Anil Kumar Mathur.
DOCUMENTS MARKED FOR OPPOSITE PARTY No.
1. Ex. B1; 31.03.1998 Statement of account Ex. B2; 31.01.1998 X/c of cheque for Rs. 28,500/-
Ex. B3; 31. 01.1998 X/c of cheque for Rs. 2,411/-
Ex. B4; 31.01.1998 X/c of cheque for Rs. 7,845/-
Ex. B5; 09.04.1998 X/c of the FIR Ex. B6; 09.04.1998 X/c of complaint given by R. Virender Prasad To the Inspector of Police, SR Nagar, PS, Hyderabad.
PRESIDENT MALE MEMBER Dt. 30. 03. 2009.