State Consumer Disputes Redressal Commission
Nirmal Urban Co.Op. Bank vs Devakinadan P. Khemani on 12 March, 2014
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, MAHARASHTRA, CIRCUIT BENCH AT NAGPUR STATE CONSUMER DISPUTES REDRESSAL COMMISSION, MAHARASHTRA, CIRCUIT BENCH AT NAGPUR 5th Floor, Administrative Building No. 1 Civil Lines, Nagpur-440 001 RBT No. A/05/1995 (Arisen out of Order Dated 20/09/2005 in Case No. CC/04/42 of Addl.D.F.Nagpur) Nirmal Urban Co.Op. Bank Nandanvan Main Road Nagpur Through Its General Manager Shri Haribhau Adkuji Sapate R/o C/o Nirmal Urban Co.op. Bank Nandanwan Main Road, Nagpur. ...........Appellant(s) Versus Devakinadan P. Khemani Proprietor of M/s Maheshwari Iron Trading Company At Ghas Bazar, Sataranjipura Bhandara Road, Itwari Nagpur ...........Respondent(s) BEFORE: Hon'ble Mr B A Shaikh, Presiding Member Hon'ble Smt.Jayshree Yengal, Member PRESENT: Adv. Mr A Khalatkar ......for the Appellant Adv.Mr Phadnaik ......for the Respondent ORDER
(Passed on 12.03.2014) Per Mr B A Shaikh, Honble Presiding Member
1. This appeal is preferred against order dated 20.09.2005 passed by Addl. District Forum, Nagpur in consumer complaint bearing No. CC/04/44 by which the complaint has been partly allowed.
2. The case of the complainant as set out in the complaint in brief is that he is a businessman and the opposite party (for short the O.P.) is a co-operative Bank. He opened cash-credit account bearing No.175/01 with the O.P. However, on 10.07.2000 he (complainant) found that Rs.2.5 Lacs have been withdrawn from his said account by some unknown person. He also found that the O.P. issued new cheque book containing blank cheque foils bearing Nos. 019576 to 019600 on 07.07.2000 to an unknown person who forged his (complainant) signature on one of the cheque bearing No.019582 and thereby he has withdrawn Rs.2.5 Lacs from his account. Therefore, he made complaint to the O.P. and also to Reserve Bank of India in this regard. He also lodged report with the Police about the said forgery and cheating. He then served legal notice dated 04.02.2002 to the O.P. but of no use. Therefore, he made a complaint to the Forum praying that O.P. may be directed to refund him Rs.2.5 Lacs with interest of Rs.86,400/-, loss of Rs.1.25 Lac in business profit, Rs.25,000/- towards mental shock and Rs.10,000/- towards litigation expenses, total amounting to Rs.4.96.400/- with interest, from the date of complaint till its payment.
3. The O.P. resisted that complaint by filing Written Version. It admitted that the complainant opened cash-credit account with it. It is admitted that it issued a cheque book containing blank cheques on 07.07.2010. However, it is the case of the O.P. in brief that the said cheque book was issued by it to the complainant, who by using one of its cheque has withdrawn Rs.2.5 Lacs from his account. It is thus, denied that some unknown person forged signature of the complainant on that cheque and has withdrawn Rs.2.5 Lacs from the account of the complainant, maintained by it. It admitted that the complainant lodged report with the Police. It raised preliminary objection that the District Forum has no jurisdiction in view of Section 163 of Maharashtra State Co-operative Societies Act, 1960 and that as no notice under Section 164 of the said Act, the complaint is not maintainable. It is therefore prayed that the complaint may be dismissed.
4. The Forum below after hearing advocates of both parties and considering evidence brought on record came to the conclusion that the complainant is a consumer in view of the decision given by Honble Supreme Court in the case of Vimalchandra Grover Vs. Bank of India, (2002) 110 Comp. Case 499 (SC). It is further observed by the Forum below that the complaint is maintainable in view of provisions of Section 3 of Consumer Protection Act. The Forum below also relied upon the report of handwriting expert which shows that the signatures appearing on the disputed cheque and requisition slip are not of the complainant who put the specimen signature for opening of the loan account. The Forum below also found that the original O.P. was not vigilant and careful while issuing cheque book to unknown person and accepting the cheque bearing forged signature from unknown person and paying Rs.2.5 Lacs to him. The Forum below also found that the complaint is not barred by limitation. Hence, the Forum directed the original O.P. to refund Rs.2.5 Lacs with interest @ 6% p.a. from 07.07.2000 till its payment to the complainant and also to pay Rs.5,000/- to him as compensation towards mental agony and Rs.1,000/- towards cost of complaint.
5. The original O.P. feeling aggrieved by the said order, filed present appeal. We have heard advocates of both parties and perused Written Notes of Arguments and other documents filed by them.
6. The learned advocate of the appellant made submission which is given in brief, point wise as follows.
i.
The Forum below erred in holding that it has got jurisdiction to decide the complaint. The complaint is not maintainable in view of the provisions of Maharashtra State Co-operative Societies Act, 1960.
ii.
The report of the handwriting expert is weak type of evidence and it cannot be relied upon without corroborative evidence and there is no such corroborative evidence to prove that the signatures appearing on the cheque and the requisition slip are not of the complainant. Protection is available to the appellant bank by virtue of the provisions of Sections 85 & 89 of Negotiable Instruments Act, 1881, in this case, which is not considered by the Forum below.
iii.
The Forum is ill-equipped to deal with such complex matter which needed oral and documentary evidence and in the absence of such evidence; it was unsafe to decide the dispute against the appellant.
iv.
The learned advocate of the appellant has drawn our attention to the opinion of the handwriting expert and relied upon the decisions in the case of S Gopal Reddy Vs. State of Andhra Pradesh, AIR 1996 Supreme Court 2184. It was a original case filed for the offences punishable under Section 4 of Dowry (Prohibition) Act 1961 and under Section 420 of IPC. It is held by Honble Supreme Court in that case that expert evidence is weak type of evidence and Courts do not consider it as conclusive and therefore, it is not safe to rely upon it without seeking independent reliable corroboration.
Thus it is submitted by the learned advocate of the appellant that the impugned order is passed without proper consideration of law and facts and hence, it is illegal and it may be set aside.
7. On the other hand, the learned advocate of the respondent herein / original complainant submitted that there is no merit in the appeal and hence, it may be dismissed. He relied upon observations made in the following cases.
i.
Prakash R Shenai Vs. Syndicate Bank, III-1994 (I) CPR 583 (SCDRC, Maharashtra). In that case Rs.1,44,000/- were withdrawn by five forged cheques from the account of the complainant. The bank tried to justify the passing of cheques after verification. It is held that it was the duty of the Bank to re-verify the signatures and refer the matter to the handwriting expert and the bank is liable to pay compensation for loss for deficiency in service.
ii.
Central Bank of India & Anr. Vs. Kishanlal, III(2000) CPJ-23 (MPSCDRC, Bhopal.) In that case, there was forgery and cheating by way of withdrawing of amount from Bank unauthorisedly. The criminal case was pending. The duplicate passbook was issued without tallying and verification of signatures of person impersonating himself to be account holder. The amount was withdrawn by filing withdrawal form within a span of two days. It is held that deficiency in service is proved and the bank is liable to return the amount alongwith interest.
iii.
State Bank of India Vs. Amarkumar Prem, I(2005) CPJ 5 (SCDRC, Delhi). In that case, there was fraudulent withdrawal of money from the account of bank as officials were not vigilant and careful in verifying signatures by way of comparison.
Hence, it is held that deficiency in service is proved and complaint was allowed for compensation.
iv.
Abdul Razak & Anr. Vs. South Indian Bank Ltd., III(2003) CPJ-20 (NC). In that case, the Bank failed twice to correctly verify the signatures on the cheques with specimen signatures of the complainant. Therefore, it is held that deficiency in service is proved and complaint was therefore allowed.
v.
Citizen Co-operative Bank Ltd. Vs. Ritesh Mittal, I(2004) CPJ-33 (DB) (J & K High Court). In that case, cheques were stolen from the cheque book and they were encahsed by committing forgery. It is held that bank must take all precautions, apply high-tech methods to cheque forgery regarding signatures and therefore, the complainant is entitled to get encashed amount with interest @ 6% p.a. vi.
Vimalchandra Grover Vs. Bank of India, (2002) 110 Comp. Case 499 (SC). It is held by Honble Supreme Court that the person getting overdraft facility from the Bank is a consumer and therefore, the Consumer Forum has jurisdiction to entertain the complaint.
vii.
Secretary, Thirumurugan Co-operative Agricultural Credit Society Vs. M Lalitha (Dead) through LRs & Ors., 2004(2) Mh.LJ 581.
The Honble Supreme Court held that the dispute in between member and co-operative society does not oust the jurisdiction of the Consumer Forum under Consumer Protection Act, 1986 to adjudicate such dispute.
8. It is, thus, not disputed that the respondent herein had opened cash-credit account with the appellant. Therefore, in view of the aforesaid decisions of Honble Supreme Court in the case of Vimalchandra Grover Vs. Bank of India, (2002) 110 Comp. Case 499 (SC), the complainant / respondent herein is the consumer as defined under Section 2(1)(d)(ii) of Consumer Protection Act.
9. Moreover, we also find that in view of the aforesaid decision in the case of Secretary, Thirumurugan Co-operative Agricultural Credit Society Vs. M Lalitha (Dead) through LRs & Ors., 2004(2) Mh.LJ 581 the complaint is maintainable before the District Forum.
10. It is also not disputed that the appellant issued new cheque book containing cheques, bearing Nos.019576 to 019600 on receiving requisition slip on 07.07.2000 and then on the same date the appellant paid Rs.2.50 Lacs to a person on the basis of bearer cheque No.019582 which was taken out from the aforesaid cheque book. The complainant found about withdrawal of Rs.2.50 Lacs from his said account on 10.10.2000 and therefore, he lodged complaints with the appellant, Reserve Bank of India and Police, raising a grievance that the aforesaid requisition slip dated 07.07.2000 and the cheque dated 07.07.2000 for Rs.2.50 Lacs do not bear his signature and some unknown person committed forgery of his signature and obtained the cheque book from appellant bank and has withdrawn Rs.2.50 from his account maintained that appellant bank. The appellant therefore referred the said documents bearing disputed signatures and other documents bearing specimen signatures of the complainants / respondent herein to handwriting expert for his opinion. The handwriting expert after due verification of the same, gave his report concluding that the disputed signatures are not made by the person who made the comparative / admitted signatures.
11. However, the learned advocate of the appellant relied upon further opinion of the handwriting expert given in his report to the effect that prima-facie the disputed signatures do not appear suspicious and as such it would be very difficult for the bank officers to detect the signs of forgery and differences in the disputed and comparative signatures during normal banking transactions. The learned advocate of appellant has also relied upon the provisions of Section 85 & 89 of Negotiable Instruments Act, 1881, in support of his submission that in such a case, appellant cant be held responsible.
12. However, we find that the appellant must be vigilant and careful in comparison of the signatures appearing on cheque and requisition slip and the specimen signatures of respondent No.1 available with it and the appellant must take all precautions and must apply all high-tech methods to detect the forgery regarding signatures. The appellant cannot take plea that it was very difficult for it to detect the said forgery. Thus, the appellant cannot run away from its liability if the amount is withdrawn from the account of any person, maintained by it, by playing any such fraud and forgery. The provisions of Section 85 & 89 of Negotiable Instruments Act, 1881 are of no help to the appellant since they do not contain any provision to save the appellant bank from its liability when it paid the amount from account of respondent herein, to an unknown person with the help of forged signature appearing on the cheque.
13. So far as the reliability of the handwriting expert opinion is concerned in present case, we find that the said can be relied upon since the said opinion is obtained by the appellant itself and its veracity is not challenged by it in the present case. The facts & circumstances of the present case as discussed above, are totally different from those of the aforesaid case of S Gopal Reddy Vs. State of Andhra Pradesh, AIR 1996 Supreme Court 2184 relied upon by learned advocate of the appellant and hence, it is not applicable to the present case.
14. We, thus, hold that as the appellant paid Rs.2.50 Lacs to unknown person from the account of respondent No.1 herein, on the basis of the forgery committed by unknown person by forging the signature of the respondent No.1 on the cheque and therefore, the deficiency in service on its part is proved. The Forum below has thus properly considered the evidence brought on record and rightly passed the impugned order. There is no merit in the appeal and hence it deserves to be dismissed.
ORDER i.
The appeal is dismissed.
ii.
No order as to cost in this appeal.
iii.
Copy of this order be supplied to the parties free of cost.
[ B A SHAIKH ] PRESIDING MEMBER [ SMT.JAYSHREE YENGAL] MEMBER sj