State Consumer Disputes Redressal Commission
The Manager, H.D.F.C. Bank Ltd. vs Tara Singh Gill & Ors. on 27 April, 2016
First Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, DAKSHIN MARG, SECTOR 37-A, CHANDIGARH.
First Appeal No.543 of 2014
Date of institution : 09.05.2014
Date of decision : 27.04.2016
The Manager, H.D.F.C. Bank Ltd., S.C.O. No.78-79, Sector-8 C,
Madhya Marg, Chandigarh through its Branch Manager.
.......Appellant/Opposite Party No.2
Versus
1. Sh.Tara Singh Gill, Advocate, son of Banta Singh Gill resident of
107, Phase II, Preet Nagar, Ferozepur City, Tehsil and District
Ferozepur (Punjab).
........Respondent/Complainant
2. Punjab & Sind Bank, 65, The Mall, Jhoke Road, Ferozepur Cantt.,
through its Branch Manager.
3. Chawla Publication Private Limited, through its M.D., S.C.O. 117-
118, Ground Floor, Sector-17 B, Chandigarh.
........Respondents/Opposite Party No.1 & 3
First Appeal against order dated
03.01.2014 passed by the District
Consumer Disputes Redressal
Forum, Ferozepur.
Quorum:-
Mr. J. S. Klar, Presiding Judicial Member
Mr. Harcharan Singh Guram, Member Present:-
For the appellant : Sh.Sunil Narang, Advocate For respondent No.1 : Sh.N.K.Manchanda, Advocate For respondent No.2&3 : Ex-parte F.A.No.543 of 2014 2 HARCHARAN SINGH GURAM, MEMBER:-
This appeal has been filed by the appellant(Opposite party No.2 in the complaint), assailing order dated 03.01.2014 passed by the District Consumer Disputes Redressal Forum Ferozepur, (in short 'District Forum'), vide which, the complaint filed by the complainant was allowed by directing OP No.2 to pay a sum of Rs.1,00,000/- as lump-sum compensation for humiliation, mental harassment and loss of reputation suffered by the complainant at the hands of OP No.2. However, complaint against OP No.1 & 3 stands dismissed.
2. Brief facts of the case are that complainant has been practicing as an Advocate at District Court, Ferozepur and had purchased books, from Chawla Publications Pvt. Ltd. Chandigarh and in lieu of purchase of books he gave a Cheque No.141867 for a sum of Rs.5,000/- in favour of Chawla Publications Pvt. Ltd. Chandigarh dated 30.04.2013. OP No.3-Chawla Publications Pvt. Ltd. Chandigarh deposited this cheque with their banker i.e. OP No.2. However, it was alleged that OP No.2 issued memo dated 07.05.2013 and returned the said cheque with reason as insufficient funds, vide their cheque returned memo dated 07.05.2013. It was submitted that the complainant was maintaining a balance of Rs.3,13,190/- on the day of issuance of memo dated 07.05.2013 in his account. He issued a registered notice on 18.06.2013 to HDFC Bank, which was posted through registered post on 01.07.2013. It was submitted that HDFC Bank wrongly issued a cheque return memo with insufficient funds and this act of issuance of cheque return memo affected his reputation, as he was having good reputation in F.A.No.543 of 2014 3 District Court Ferozepur. Due to this act of OP No.2, his reputation was destroyed. It was submitted that OP No.2 was required to send the said cheque for collection and it was not having any right to issue cheque return memo on the reason of 'insufficient funds'. This act of the OPs amounted to deficiency in service. He did not receive any reply from the HDFC Bank on his legal notice, which was sent to them. On failure to receive any reply from the OPs he filed his complaint in the District Forum and prayed for issuance of directions to the OPs i. to pay Rs.2,00,000/- as damages and compensation on account of deficiency in service.
ii. to pay Rs.20,000/- as litigation costs alongwith interest @ 18% per annum from the date of complaint till realization.
3. Upon notice, OP No.1 filed its written reply and took preliminary objections that District Forum Ferozepur did not have jurisdiction to entertain the present complaint. The cheque in question was not presented for payment at Ferozepur, nor it was dishonoured at Ferozepur. It was further submitted that complaint was not maintainable as the complainant did not fall under the definition of Consumer as defined under the Consumer Protection Act, 1986 and there was no disputes between them. It was admitted that complainant did maintain a balance in his savings bank account as Rs.3,18,197/- as on 07.05.2013 in his account at their branch i.e. OP No.1. It denied all other averments made in the complaint for want of knowledge. It was admitted that complainant was a consumer of OP No.1 as he was maintaining his savings account with it. It was submitted that OP No.1, was not having any concern with OP No.3 or F.A.No.543 of 2014 4 with dealings of OP No.2. As such, there was no deficiency in service on its part and no relief can be granted against it and prayed for dismissal of the complaint.
4. District Forum sent registered AD notice to OP No.3. AD received back duly signed by OP No.3. But no one was present on behalf of OP No.3. As such, OP No.3 was proceeded against ex- parte on 07.10.2013. Sh. Vipan Gupta, Advocate filed memo of appearance on behalf of OP No.1. Sh.Manik Dhinjha, Representative appeared on behalf of OP No.2. The next date was fixed for 17.10.2013 for filing power of attorney on behalf of OP No.1 and authority letter on behalf of OP no.2.
5. On 17.10.2013 Sh.Vipan Gupta, Advocate filed power of attorney on behalf of OP No.1. No authority letter alongiwth reply was filed on behalf of OP No.2 and no one appeared on behalf of OP No.2. The matter was posted for 22.10.2013. On 22.10.2013, neither reply was filed nor any one appeared on behalf of OP No.2. Nobody was present on behalf of OP No.2 on the last date of hearing. As such the defence of OP No.2 was struck off, vide order dated 22.10.2013.
6. District Forum allowed the parties to lead evidence in support of their averments.
7. Complainant tendered in evidence his affidavit Ex.C-1 alongwith documents Ex.C-2 to Ex.C-6 and closed the evidence. On the other hand OP No.1 tendered into evidence affidavit Ex.OP1/1 alongwith document Ex.OP1/2 and closed the evidence.
8. District Forum heard the argument of counsels for the parties and perused the record placed on the file and allowed the F.A.No.543 of 2014 5 complaint of the complainant, vide its aforesaid order.
9. Aggrieved by the impugned order, OP No.2 has filed the instant appeal in this Commission. Counsel on behalf of the respondent No.1 appeared on 18.07.2014. Notice to respondents No.2&3 was issued for their appearance on 29.01.2015. When the case was taken up on 29.01.2015 Advocate on behalf of the respondent No.2 filed his power of attorney. However, notice was sent to respondent No.3 on 22.12.2014. Neither AD duly served nor the registered covered AD received back. Statutory period of 30 days expired. Hence, presumption was made that same was delivered to the respondent No.3. None was present on behalf of respondent No.3 despite repeated calls. Hence, the respondent No.3 was proceeded against ex-parte.
10. We have heard the counsels for the parties and perused the record of the District Forum which was called at the stage of admission.
11. Counsel for the appellant argued that as per the Reserve Bank of India system primarily knows as Cheque Truncation System, no physical cheque is being required to be sent to different branches. As per this system, the photocopy of the cheque is taken and the same is transmitted through the Cheque Truncation System. A grid is maintained at New Delhi under the aegis of National Payments Corporation of India. Reserve Bank of India has successfully implemented Pilot Project for Cheque Truncation System (CTS) in the National Capital Region, w.e.f. 01.07.2009, CTS had replaced the MICR clearing in the New Delhi Banker' Clearing House. As per Cheque Truncation System the eligibility criteria for banks to F.A.No.543 of 2014 6 participate in CTS are of 4 types of participants members banks of the Cheque Truncation System and they would require submission of data and images of the cheque to be sent for grid clearing. As per CTS, the responsibility of the presenting bank i.e. the Bank of Beneficiary as under:-
"As the payment processing is done on the basis of images, the onus of due diligence shifts to the Presenting Bank, as provided under explanation II to Section 131 of Negotiable Instruments Act."
12. He further argued that as per CTS there will be no change in the clearing process for the customers for outward cheques. However, cheque returns received by presenting banks are based only on electronic data sent by the drawee bank. The presenting bank prints the return memo for its customers. However, there is a provision under CTS that the drawee bank can send request for physical instrument, in case of any doubt or suspicion of the nature of the instrument. The drawee bank can also request presenting bank for physical instrument, in case, the image it has received for processing is not clear. The customer of the presenting bank would benefit from Cheque Trunction System on account of faster realization and credit in its account. Reduction in geographical dependence and quick realization of outstation cheques in a single day is to be achieved without physical movement of the instrument as per above system. The appellant was required to present only an image of cheque to the grid centre maintained by National Payment Corporation of India at Delhi. The image received by the grid centre of National Payments Corporation of India, Delhi is uploaded to the participating bank branch of the drawee bank and the drawee bank F.A.No.543 of 2014 7 on receiving the images received from grid offices downloads the data and passes the information of instruments to its branches for debiting the amount from the accounts of its customers. It downloads the image of the cheque as per system available in their regional centre then passes the cheques on the basis of the images pertaining to different branches. After passing the cheques; the remaining cheques which were not passed at their end due to various reasons would be sent back to the grid centre so that the grid offices of the National Payments Corporation of India would uphold the images to different presenting banks stating the reasons for non-payment of cheques. Thus, clearing the settlement of claim on account of cheques drawn under grid system duly notified by the Reserve Bank of India. Counsel for the appellant prayed that in view of the above system, no physical movement of cheque is being followed and there was no deficiency on its part to issue a memo to its customers showing the failure of the payment of cheques. The memo was generated on the feedback received from the grid centre which was sent by the drawee bank's representative being a member of the grid centre at New Delhi. The presenting bank has only downloaded the image received from grid centre and generated the memo and returned the cheques to its customers. Counsel for the appellant further argued that District Forum wrongly allowed the complaint of the complainant without consideration of the fact that the bank of OP No.1 tendered the wrong reply in the District Forum by alleging that the cheque was not presented in their branch. If their contention is to be believed as true, if no cheque was presented in their branch, then the District Forum was required to look into the bank statement F.A.No.543 of 2014 8 Ex.OP1/2 from which it would be cleared that cheque returned charges were debited from the account of the complainant on 07.05.2013. However, the District Forum was required to be aware of CTS banking system prevalent at the time of presentation of cheque. Moreover, the complainant's branch was under CTS/CBS networking and this fact was not looked into by the District Forum. District Forum wrongly dismissed the complaint against OP No.1 without going through the statement of account Ex.OP1/2 where third entry from the top reflects inward clearing cheque returned charges debited by OP No.1 to the extent of Rs.50/-. Further, he argued that this aspect was not looked into by the District Forum while dismissing the complaint against OP no.1 rather it fastened wrong liability on it. He further argued that the case was not decided on merits and needs to be remanded back and an opportunity be given to the appellant to place on record the relevant CTS system by imposing some costs against it.
13. On the other hand, counsel for respondent No.1 argued that since nobody had appeared in the District Forum on behalf of the appellant bank and their evidence was struck off. As such, no evidence as appended pertaining to Cheque Trunction System can be looked into by the Commission during the hearing of this appeal and argued that order passed by the District Forum is well-reasoned order and needs to be affirmed.
14. We have perused the record of District Forum and find that present appellant was proceeded against ex-parte, on its failure to file the authority letter and its reply.
15. In order to decide the controversy in hand to the effect F.A.No.543 of 2014 9 that whether clearing cheque was presented on OP No.1 or not? We have examined Ex.OP1/2 wherefrom it is apparent that the cheque was presented on Punjab and Sind Bank and the same was dishonored and cheque returned charges were debited by the bank alongwith service charges of Rs.7/- from the account of the complainant on 07.05.2013.
16. Under such circumstances, we are of the view that District Forum had allowed the complaint of the complainant solely on the basis of complainant's evidence and also on the basis of OP No.1's evidence that the said cheque was not presented at their branch. However, as per Ex.OP1/2 , it is clear that OP No.1 i.e. Punjab and Sind Bank took a contradictory stand viz-a-viz the documentary evidence on record.
17. Accordingly, we allow the appeal of the appellant and set aside the order of the District Forum. However, the case is remanded to the District Forum, on payment of costs by the appellant to the extent of Rs.15,000/- to the complainant/respondent No.1. We direct the District Forum to provide two opportunities to the parties to enable them to place on record their evidence so, as to enable it to decide the case afresh on merits. The parties are directed to appear before the District Forum Ferozepur on 04.07.2016.
18. The appellant had deposited a sum of Rs.25,000/- at the time of filing this appeal in this commission. The registry is hereby directed to remit Rs.15,000/- in favour of the appellant No.1 and the remaining amount of Rs.10,000/- alongwith interest, if any accrued on the deposited amount, to the appellant by way of a crossed F.A.No.543 of 2014 10 cheque/demand draft after the expiry of 45 days from the date of this order.
19. Arguments in this appeal were heard on 20.04.2016 and the order was reserved. Now, the order be communicated to the parties as per rules
20. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
21. The registry is directed to send back the file of District Forum immediately as to enable it to hear the complaint again.
(J.S. Klar) Presiding Judicial Member (Harcharan Singh Guram) Member April 27 , 2016 RK 2