State Consumer Disputes Redressal Commission
Uco Bank vs Jagdish Singh on 25 April, 2017
2nd Additional Bench
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB
First Appeal No.666 of 2016
Date of Institution: 05.09.2016
Date of Decision : 25.04.2017
The Manager, UCO Bank, Branch Talwara Road, Mukerian, Tehsil
Mukerian, District Hoshiarpur.
......Appellant/Opposite party
Versus
Jagdish Singh aged about 42 years, S/o Sh.Piara Singh, R/o Village
Hayatpur, Tehsil Mukerian, District Hoshiarpur.
....Respondent/Complainant
First Appeal against the order dated
05.08.2016 of the District Consumer
Disputes Redressal Forum, Hoshiarpur.
Quorum:-
Hon'ble Mr. Justice Paramjeet Singh Dhaliwal, President
Mr. Harcharan Singh Guram, Member
Present:-
For the appellant : Sh.Shekhar Verma, Advocate
For the respondent : Sh.Rohiteshwar Singh, Advocate
HARCHARAN SINGH GURAM, MEMBER
The appellant/opposite party (hereinafter referred as opposite party) has filed the present appeal against the order dated 05.08.2016 passed by the District Consumer Disputes Redressal Forum, Hoshiarpur (hereinafter referred as District Forum) in consumer complaint No.14 of 2016 dated 12.01.2016, vide which the complaint filed by the respondent/complainant (hereinafter referred as complainant) was partly allowed with the direction to opposite party to make the payment of `1,01,113.24 P. which was required to be paid by the complainant to M/s SREI Equipment Finance Limited as a due First Appeal No.666 of 2016 2 loan amount and the opposite party was further directed to pay `10,000/- as compensation and `5,000/- as litigation expenses to the complainant within one month from the receipt of copy of the order, otherwise, the complainant would be entitled to get interest at the rate of 9% per annum on the above said whole amount from the date of filing the complaint till its actual realization.
2. Brief facts of the case are that consumer complaint was filed by the complainant under the Consumer Protection Act, 1986 (hereinafter referred as 'the Act') against the opposite party-Bank. The complainant Jagdish Singh S/o Sh.Piara Singh is having a Savings Bank Account No.21610110011430 with the opposite party- Bank, having its Branch Office at Talwara Road, Mukerian, District Hoshiarpur. He used to issue cheques for withdrawal of the amount from his account. It was pleaded by him that he purchased one L&T 770 Backhoe Loader and got it financed from M/s SREI Equipment Finance Limited. The loan amount was to be paid in monthly instalment of `43,000/- in 29 instalments. The said loan was availed by the complainant from M/s SREI Equipment Finance Limited vide Account No.24214. As per loan contract dated 15.08.2011, it was to be paid by 15.01.2014. The 29th instalment being the last instalment of `43,000/- was to be paid by him on 15.01.2014. It was averred that the instalments were paid by him by cheques issued by him to be paid from his savings account maintained with opposite party-Bank. He pleaded that as per the terms and conditions of Finance Company he issued cheque No.628490 dated 15.01.2014 for `43,000/- in favour of M/s SREI Equipment Finance Limited. The said Finance Company deposited the said cheque for encashment with its bankers First Appeal No.666 of 2016 3 i.e. Hong Kong Shanghai Banking Corporation Bank Ltd. It was averred that the collecting Bank of Finance Company presented the cheque No.628490 dated 15.01.2014 in clearing house where opposite party-Bank was also a member. The said cheque was cleared from his account on 15.01.2014. It was pleaded that inspite of encashment of the said cheque of `43,000/- from his account even then, opposite party-Bank returned the above said cheque alongwith Bank Memo dated 18.01.2014 with remarks "Insufficient Funds". It was pleaded that the cheque issued in favour of M/s SREI Equipment Finance Limited was dishonoured but the opposite party-Bank misutilized the said amount of `43,000/- which was shown withdrawn from his account on 15.01.2014.
3. The complainant was under the impression that his loan account with the Finance Company stands cleared and there was no dues towards him. It was pleaded that on the one side opposite party-Bank encashed his cheque No.628490 dated 15.01.2014 for a sum of `43,000/- by debiting cheque amount from his account as is evident from his passbook entries on 15.01.2014. However, the opposite party-Bank dishonoured the said cheque vide its memo dated 18.01.2014. The Finance Company namely M/s SREI Equipment Finance Limited issued a legal notice under Section 138 of Negotiable Instrument Act regarding dishonouring of cheque No.628490 dated 15.01.2014. On receipt of the said notice under Section 138 of Negotiable Instrument Act from the Finance Company, the complainant approached the Bank several times and requested them to apprise him why his cheque was dishonoured even though the said cheque stands already debited from his account. On First Appeal No.666 of 2016 4 account of dishonouring of the cheque by the opposite party-Bank he suffered mental agony and financial loss and loss of his goodwill as the Finance Company did not issue him 'No Objection Certificate' due to negligence of opposite party-Bank. A legal notice was served upon opposite party-Bank and request was made therein to enquire about the said cheque which was already stands debited from his account. He asked from the Bank to explain the reason as to why the said cheque was dishonoured and returned to Finance Company. He received the reply from the Opposite party-Bank on 20.08.2015 and a false plea was taken in order to save the skin of its employees and demanded some documents from him. The demanded documents were sent by him to the opposite parties through Registered Cover on 04.09.2015. The Finance Company namely M/s SREI Equipment Finance Limited demanded Rs.96,166.06 till 31.10.2015 as overdue charges from him. Overdue charges alongwith penal interest at the rate of `2,473.59 per month was demanded by the Finance Company i.e. amounting to `1,01,113.24 P. On failure to get any relief from the opposite party - Bank, why his cheque was dishonoured, he filed his consumer complaint in the District Forum. He prayed that direction be issued against the opposite party to pay `1,01,113.24 towards overdue charges; to pay `1,00,000/- towards harassment, mental torture and loss of good will and to pay `30,000/- towards litigation expenses.
4. Upon notice, opposite party-Bank filed its reply and contested the complaint by taking preliminary objections that the complaint was not maintainable in the present form. He did not have any cause of action against it. It was averred that the complaint filed First Appeal No.666 of 2016 5 by the complainant was an abuse of process of law and he was estopped from filing the complaint on account of his own act and conduct. The said complaint filed by the complainant was bad for non-joinder of necessary party being the Finance Company M/s SREI Equipment Finance Limited. The said Finance Company was not impleaded by him as it was a necessary party. It admitted the factum of honouring the cheque issued by the complainant from his account by the opposite party-Bank. However, it denied the averment of the complainant categorically and submitted that the accounts maintained by the computer by way of on-line system and as soon as a cheque is presented in clearing for collection the cheques are debited from the accounts and entries are made by system of the Bank. It was pleaded that the cheque being Non-CTS was presented for collection. The said entry was made in the account of complainant by another Branch. This cheque was presented somewhere else. It was averred that there is a Clearing House for the interse Bank transactions in big cities which deals with the payments of CTS cheques and are being processed on day to day basis. It was averred that the cheque being a non-CTS cheque was returned due to system failure of the Bank. The matter of returning of the cheque by their system came to its notice when a legal notice was received from Sh.S.S.Minhas, Advocate on behalf of the complainant on 15.08.2015. On receipt of the legal notice, the Branch took up the matter with the Service Branch of UCO Bank situated at Mumbai. The Service Branch of UCO Bank informed that the cheque in question being a non-CTS cheque was returned on 18.01.2014 due to technical snag in computer. It was averred that many cheques were wrongly returned First Appeal No.666 of 2016 6 along with this cheque. It was agitated that on taking up the matter with the Service Branch by the opposite party-Bank, the said amount was returned by the Service Branch for the credit in the account of the complainant on 15.10.2014. The complainant was advised to get a CTS cheque book issued from the Bank in order to pay his interse banking liabilities and stated that no fault had occurred at their end and prayed that the complaint filed by the complainant be dismissed.
5. The District Forum allowed the parties to lead their evidence in support of their averments. The District Forum heard the arguments of learned counsel for the complainant as well as of opposite party and partly allowed the complaint vide aforesaid order.
6. Aggrieved with impugned order the appellant/opposite party has filed the present appeal in this Commission.
7. We have heard the learned counsel for the parties and perused the record of the District Forum which was called at the stage of admission.
8. Learned counsel for the appellant/opposite party argued that the District Forum illegally allowed the amount of `1,01,113.24/- as compensation in favour of the complainant and did not look into its contentions that they have credited the cheque amount of `43,000/- in the complainant/respondent account. He argued that the complainant was also negligent in informing them at a later stage and he did not inform the District Forum that he had received a sum of `46,419/- alongwith interest of `3,419/- on the amount of `43,000/-. The amount credited by the bank in the account of the respondent/complainant was not looked into while issuing the directions by the District Forum. He further argued that as per the First Appeal No.666 of 2016 7 passbook entries there was an outstanding amount of `11689.15P in the account of the complainant maintained by the Finance Company. That said amount was also ignored while directing the appellant to pay the amount of `1,01,113.24 P thus it would amount to unjust enrichment and profiteering to the complainant. He argued that the complainant was served with a legal notice by his Finance Company on 16.06.2014. The notice was issued to the complainant on receiving the information by the Finance Company from its Bank on 27.05.2014. It was argued that the complainant came to know about the dishonouring of the cheque on 16.06.2014 but he did not come forward to find out why his cheque was dishonoured and remained silent. He argued that after almost 14 months, the respondent / complainant served a legal notice upon the Bank and inquired about the reasons of dishonouring of the cheque. He argued that the complainant provided the documents to it and an inquiry was conducted. On inquiry it was found that the cheque in question was a Non-CTS cheque and the said cheque was returned due to some technical defect in their computer. On completion of the inquiry, the appellant/ opposite party re-credited the amount of `43,000/- alongwith interest `3,419/- in his account. He further argued that complainant did not intentionally implead Finance Company as a party in the complaint filed by him. He argued that as per the statement of account appended on the record issued by the Financer in favour of the complainant an amount of Rs.54,176.85 P. was payable by the respondent / complainant to the Finance Company before 15.01.2014. If the instalment amount of `43,000/- which would have been cleared on 15.01.2014 and if got First Appeal No.666 of 2016 8 credited in the account of Finance Company even then the amount of `11689.15P was still outstanding against the respondent/complainant in the Finance Company's account. He argued that outstanding amount of `11,689.15 P. was required to be deducted from the amount of `1,01,113.24P as awarded by the District Forum. He agitated that an amount of `34,630/- being monthly overdue charges at the rate of Rs.2473.59 for 14 months was required to be reduced from the awarded amount. Thus, the total amount, if the transactions are to be looked into then only an amount of `8375.09P was payable to the respondent/complainant. This fact was not looked into by the District Forum. Thus, prayed that the appeal filed by the appellant be allowed and the order of the District Forum be modified or set aside.
9. In order to decide the controversy in hand whether the order passed by the District Forum requires modification or the same is required to be set aside? We have minutely examined the records of the District Forum, contents of the complaint and written statement filed by the opposite party, on record.
10. From the perusal of record, it is admitted by the appellant/opposite party that the cheque being the Non-CTS was cleared in UCO Bank Service Branch situated at Mumbai on 15.01.2014. However, the said cheque was shown as dishonoured due to computer snag of the Service Branch and returned the cheque alongwith a cheque return memo by stating the return reason as "Insufficient Funds". On receipt of the cheque from HSBC Bank, by the Finance Company, it issued a notice under Section 138 of Negotiable Instrument Act to complainant/respondent. First Appeal No.666 of 2016 9
11. We find that the respondent/complainant was unnecessarily put into a problem, due to the problem of the computer of the Service Branch of the UCO Bank situated at Mumbai. The Finance Company charged interest at the rate of `2473.59 per month from the complainant for 16 months and charged `39,232.67P as overdue penal charges. This amount could not have been paid by the complainant to the Finance Company if the cheque was honoured. The complainant was forced to pay an amount of `1,01,113.24 to the Financer on account of dishonouring of his last instalment. The complainant's goodwill in the business circle got diminished due to dishonouring of his cheque. These aspects were not looked into by the counsel at the time of arguing his case while submitting that the order passed by the District Forum needs modification.
12. We are of the opinion that the contention raised by the counsel that an amount of `43,000/- was credited in the account of the complainant on 15.10.2015, after an investigation conducted by the appellant-Bank was not done at its own initiative but the mistake was rectified only after the receipt of legal notice from the Advocate of the complainant.
13. We have gone through the written statement filed by the appellant/opposite party in the District Forum, wherein it is stated that due to technical problem on 18.01.2014 many cheques were returned by the Service Branch of UCO Bank situated at Mumbai. If that was the reason the Bank was required to look into all the cheques returned by the said Service Branch due to computer snag of their own. However, the Bank woke up only when the legal notice was First Appeal No.666 of 2016 10 issued to it by the complainant for returning his cheque No.628490 dated 15.01.2014. The Bank directed the respondent/complainant to provide them the documents in order to investigate the matter. However, the Bank admitted its mistake in the written reply filed before the District Forum. The Bank was required to look into the reasons for technical problem in its computer and it should have checked all the cheques returned by it on that date of its own.
14. Accordingly, we do not agree to the contentions of the counsel of the appellant that the amount charged for penal charges amounting to `34,630/- was required to be reversed from the amount directed by the District Forum. These, monthly overdue charges were paid by the complainant to the Finance Company for the delay of 22 months in correcting their own error and the said amount was paid by the complainant to the Finance Company.
15. However, overdue charges as collected by the Finance Company from the complainant was to the tune of `39,232.67P. He was burdened with cheque bouncing charges of `1123.60. He was also burdened with a sum of `679.78 as recovery charges on account of dishonouring of his cheque of `43,000/-. Thus, if we add overdue charges of `39,232.67P; Cheque Bouncing Charges `1123.60P and Recovery expenses `679.78, which when added comes to `41,036.05 which was paid by the complainant on account of dishonouring of his cheque issued in favour of Finance Company. The counsel of the appellant argued that the overdue amount to the extent of `34,630/- needed to be deducted from the directed amount, as per District Forum's order. We find that the amount of overdue charges plus the Cheque Bouncing Charges and Recovery expenses First Appeal No.666 of 2016 11 if totaled then it would come to `41,036.05, which was paid by the complainant due to the mistake on the part of the opposite party.
16. Learned counsel for the appellant argued that the amount of `34,630/- charged in the account of complainant/respondent by the Finance Company was included in the amount of ` 1,01,113.24P. However, we have gone through the statement of account and find that the complainant paid a sum of ` 41,036.05 instead of ` 34,630/-. Thus, the contention raised by the counsel for the appellant that the amount of `11,689.15P was also required to be reduced from the amount awarded by the District Forum is not tenable due to the fact that the difference between the amount as contested by the counsel for the appellant to the extent of `34,630/- is much more which the complainant had paid from the contested amount of `34,630/-to the Finance Company. It does not amount to unjustified enrichment of the complainant. Rather he had paid a sum of `6406.05 over and above the contested amount of `34,630/-. He also paid an amount of `1123.60 as Cheque Bouncing Charges and `679.78 as Recovery Expenses.
17. In view of the above, we are not agreeable with the contentions raised by the counsel for the appellant that the amount of `11,689.15P was required to be reduced from the amount i.e. `1,01,113.24P, as awarded by District Forum.
18. When any negligent act occurs on the part of any Bank, the Bank authorities are required to look into the problem. But we find that the Bank slept over the matter thinking that their actions of dishonouring the cheque of the complainant was in the right direction. However, we are inclined to accept their contention that the amount First Appeal No.666 of 2016 12 of cheque of `43,000/- reversed by them in the account of complainant was required to be deducted from the awarded amount of `1,01,113.24P by the District Forum.
19. Sequel to the above, we are of the opinion that the order of the District Forum needs modification on account of crediting back the amount of dishonoured the cheque in the account of the computer on 15.10.2015. Thus, the order of the District Forum is modified by reducing the amount of `43,000/- from the directed amount of `1,01,113.24P and the appeal filed by the present appellant / opposite party is partly allowed.
20. The appellant has deposited an amount of `25,000/- at the time of filing of the appeal. It deposited another amount of `25,000/- vide Receipt No.77764 dated 05.10.2016 as per the directions of this Commission. The registry is hereby directed to remit both these amounts alongwith interest accrued, if any, in favour of the respondent/complainant by way of cheque/demand draft after 45 days of sending of certified copies of the order to the parties. The opposite party is further directed to pay the remaining amount to the respondent / complainant as per directions of the District Forum.
21. The appeal could not be decided within the statutory period due to heavy pendency of court cases.
(JUSTICE PARAMJEET SINGH DHALIWAL) PRESIDENT (HARCHARAN SINGH GURAM) MEMBER April, 25, 2017 parmod