State Consumer Disputes Redressal Commission
G.Madhukar Reddy, Banjara Hills, ... vs Canara Bank,Opp. Shanti Theatre , ... on 24 November, 2011
BEFORE THE A BEFORE THE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD. F.A.No.1290/2010 against C.C.No.260/2010, District Forum-III, Hyderabad . Between G.Madhukar Reddy, S/o.G.Veera Reddy, Aged 42 years, Occ:Business, R/o.Flat No.5B, Maruthi Heights, Banjara Hills, Hyderabad. Appellant/ Complainant And Canara Bank, Having its Office at 3-5-168-1234, Narayanaguda Branch, YMCA Circle, Opp. Shanti Theatre , Hyderabad. Rep. by its Manager. Respondent/ Opp.party Counsel for the Appellant : M/s.A.Venkatesh Counsel for the respondent : Mr.Srinivas Survi QUORUM: THE HONBLE JUSTICE SRI D.APPA RAO, PRESIDENT, AND SMT.M.SHREESHA, HONBLE MEMBER
THURSDAY, THE TWENTY FOURTH DAY OF NOVEMBER, TWO THOUSAND ELEVEN.
(Typed to dictation of Smt.M.Shreesha, Honble Member) **** Aggrieved by the order in C.C.No.260/2010 on the file of District Forum-III, Hyderabad , the complainant preferred this appeal.
The brief facts as set out in the complaint are that the complainant is a Business Man and is the Chairman and Managing Director of the retail pharmacy being run under the name and style of Medplus.
The complainant opened an account with opp.party vide S.B.Account no.0649101040972 and he was issued a Cheque Book facility and he has been personally operating the bank account. On 23.12.2008 he noticed in the statement of account issued by the Bank that there were three illegal withdrawals from his account, the details of which are given hereunder:
a).Rs.5,10,000/-withdrawn vide Cheque No.041225 on 15.6.2007
b).Rs.6,30,000/- withdrawn vide Cheque No.041233 on 16.6.2007
c).Rs.7,50,000/- withdrawn vide cheque no.041234 on 18.6.2007 .
The complainant immediately informed the opposite party orally. The officials of the opp.party verified the details and showed the complainant the cheques under which the above amounts were withdrawn. The complainant found that the said cheques were not issued by him and the signature on the cheques were forged. On enquiry, the complainant found that the Cheque Book with series no.041220 was never issued to him and it was found that the opp.party issued the said Cheque Book to some third party on a purported request made by some stranger on 14.6.2007 without verifying either signature on the letter or ascertaining identity and authority of the person . The complainant never gave requisition letter for issuance of fresh Cheque Book and even the signature on the requisition letter was forged. The opp.party without following the procedure and in gross violation of rules and practice given the Cheque Book to the stranger on the basis of requisition letter given on white paper with forged signature. The complainant lodged a complaint with opp.party on 26.12.08 and thereafter on request of bank officials lodged a complaint with Narayanaguda Police and a case was registered vide Crime No.541/2008 on 31.12.08. The complainant came to know that the police sent cheques as well as requisition letter to the Forensic Laboratory for ascertaining the genuineness of the signature of the complainant. Forensic Laboratory had given a report stating that the signature on the cheques and letter are forged. The complainant submits that the Bank officials in collusion with third parties have fabricated the records and by forging the signature of the complainant have illegally withdrawn an amount of Rs.18,90,000/- from his account. The complainant further submits that on previous occasions such huge amounts were never withdrawn by him and it is mandatory and obligatory on the part of the bank officials to notify the account holder in the event of any unusual withdrawal from the account. The Banker is obligated to safeguard the amount of its account holders/customers and it is their duty to scrutinize all the instruments, letters being received by them from strangers in respect of the amounts of account holders lying in their banks.
The complainant got issued notice on 19.8.09 calling upon the opp.party to remit back/credit the amount of Rs.18,90,000/-
into his account within 15 days for which the opp.party issued a reply notice dt.9.9.09 with all false and baseless allegations. Hence the complaint seeking direction to the opp.party to repay/remit back/credit an amount of Rs.18,90,000/- together with interest as per the normal and prevailing banking interest, to award compensation of Rs.50,000/- and to award costs of the complaint.
Opp.party filed counter admitting that the complainant is the customer of opposite party Bank with S.B.Account no.0649101040972 but the Bank is not aware of his Chairmanship and MD position of Medplus Company. The company always endorsed his signature over the cheque and only his agent and colleague would generally come to the Bank to withdraw the amounts. Opposite party submits that when the cheque requisition letter is lost, a letter can be issued to the Bank with a request seeking for issuance of a fresh Cheque Book. The signature on the requisition letter issued by the complainant tallies with that of his specimen signature and the complainant himself received the Cheque Book as observed from the cheque book issuance register maintained with the Bank and as such no illegality committed by the Bank. The complainant gave complaint to the police with respect to the alleged withdrawals of the amounts but this was done by his agent G.V.Ramama who has actually resigned from his office on 31.8.07 mentioning his occupation address etc. The amount withdrawn is Rs.18 lakhs and the complainant ought to have sought remedy against the said G.V.Ramana instead of lodging a complaint against the Bank. It is the duty of the complainant to keep the Cheque Books in his safe custody and once the cheque is properly issued it is the duty of the Bank to honour the same. Opposite party submits that there were earlier withdrawals on 13.6.06, 14.11.06 and 20.12.06 by the same G.V.Ramana and therefore no deficiency of service can be attributed to the Bank.
The Dist.Forum based on the evidence adduced i.e. Exs.A1 to A8 and B1 to B9 dismissed the complaint as not maintainable.
Aggrieved by the said order the complainant preferred this appeal.
As against the observation of the District Forum that the complaint is not maintainable and should be relegated to a Civil Court, we rely on the decision of the National Commission reported in III (2002) CPJ 8 (SC) DR. MERCHANT & ORS.vs.SHRINATH CHATURVEDI wherein it is held as follows:
It has to be remembered that the Fora under the Act at every level are headed by experienced persons. The National Commission is headed by a person who is or has been a Judge of the Supreme Court. The State Commission is headed by a person who is or has been a Judge of a High Court. Each District Forum is headed by a person who is, or has been, or is qualified to be a District Judge. We do not think that mere complication either of facts or of law can be a ground for the denial of hearing by a Forum under the Act.
In view of the said judgement and on perusal of the facts in this case we are of the considered view that they do not involve such complicated facts and issues necessitating relegation to a Civil Court.
Now we address ourselves to the merits of the case. The facts not in dispute are that the complainant has S.B.Account no.0649101040972 with the opposite party and he has been issued a Cheque Book facility. On 23.12.08 he noticed that there are three illegal withdrawals the details of which are as follows:
a).Rs.5,10,000/-withdrawn vide Cheque No.041225 on 15.6.2007
b).Rs.6,30,000/- withdrawn vide Cheque No.041233 on 16.6.2007
c).Rs.7,50,000/- withdrawn vide cheque no.041234 on 18.6.2007 .
On verification with the Bank he found that the cheques were not issued by him and that the signatures were forged. The Cheque Book with series no.041220 was never issued to him and without verifying the signature on the letter dt.14.6.07, the Bank issued a fresh Cheque Book, without following the procedure of a cheque requisition form. The complainant registered a case vide Crime no.541/08 (Ex.A4). It is the complainants case that the bank officials in collusion with the third parties forged the signatures and illegally withdrew 18,90,000/- from his S.B.Account. The police sent requisition letter to Forensic Laboratory to ascertain the genuineness of the report and the Forensic Laboratory gave the report that the signatures on the cheques and letter are forged. It is the case of the complainant that the Bank had fraudulently allowed some stranger to withdraw Rs.18,90,000/- .
It is the opp.partys case that a fresh cheque book can be issued even in the absence of requisition form and on the basis of a letter. We find this defense unsustainable on the ground that if the Bank issues a fresh Cheque Book in the absence of the requisition form but on the basis of a personal letter, it is the duty of the Banker to ascertain whether the signature on the letter is tallying with that of the Account Holder. The opp.party is relying on the letter dt.14.6.07 evidenced under Ex.A2 wherein the cheque book no.41221-240 is endorsed. Ex.A7 is the copy of the final report of the police in Crime no.541/08 and Ex.A8 is the opinion of A.P.Forensic Science Laboratory dt.26.10.09 in which it is reported that there are no fundamental similarities between the signatures on the letter, cheques and the specimen signatures . Therefore Ex.A8 establishes that the signature on Ex.A2 does not tally with the specimen signature of the account holder and therefore the Bank without verifying the signature has issued the cheque book to a third party.
It is the complainants case that the Cheque Book was given to one G.V.Ramana who has resigned from his office on 31.8.07 . It is the duty of the opp.party to have verified the signature before issuance of Cheque Book to some third party. Cheque nos.041225, 04123 and 041234 were not signed by the appellant/complainant and the bank officials allowed a third party to withdraw the amounts. The appellant denies that he personally collected the Cheque Book from the Bank. It is also pertinent to note that the three cheques whose signatures have been established to be forged as per Ex.A8 Forensic Report have been withdrawn by the said G.V.Ramana as the Bank has failed to verify the signatures on the cheques with those of the specimen signatures.
The learned counsel for the appellant/complainant relies on the judgement of the Apex Court in CANARA BANK vs. CANARA SALES CORPORATION AND OTHERS reported in AIR 1987 SC 1603 in which the Apex court held that there is no duty for a customer to inform the Bank a fraud committed on him, of which he was unaware nor can inaction for a reasonably long time in not discovering the fraud or irregularities be made a defense to defeat a customer in an action for loss. In the instant case the Bank had taken a defense that the withdrawals took place between 15.6.07 and 18.6.07 whereas it was brought to the notice of the Bank only on 26.12.08 and therefore it is a belated complaint. The aforementioned judgement clearly holds that such a defense cannot be a ground to defeat a claim as the fraud was committed without the knowledge of the appellant/complainant. We also rely on the judgement of the High Court of Calcutta in BABULAL AGARWALLA vs. STATE BANK OF BIKANER AND JAIPUR in which the High Court held that when it is established by the complainant that the signatures on cheques were forged, the Bank cannot avoid the liability of paying the cost of the suit but no interest as it was a current account.
The learned counsel for the opposite party Bank contended that even if forgery is proved the complainant had to recover the amount from the said G.V.Ramana who is responsible to compensate him and not the Bank.
It is a concluded preposition that having passed the cheques without even verifying the genuineness of the signatures, they cannot turn round and contend that the complainant had to recover the amount from G.V.Ramana who, according to the Bank had taken the amount. Despite the fact that the Forensic Laboratory opined that the signatures on these cheques as well as the requisition letter who issued the letter were all forged, the Bank did not initiate any action against the erring employees or G.V.Ramana who is said to have withdrawn the amount by forging the signatures of the complainant. The contention that the complainant had to keep the Cheque Book in a safe custody in no way detracts the caution that had to be taken by the Bank in scrutinizing the signatures on the cheques. Exfacie there is negligence on behalf of the Bank authorities in not verifying these cheques and paying the amount to a third party. Necessarily by virtue of these acts the complainant has sustained a loss of Rs.18,90,000/- which the Bank had to reimburse. But by their passing these cheques the complainant suffered monetary loss of Rs.18,90,000/- which is the amount covered under the cheques. As negligence by the Bank is proved beyond reasonable doubt, necessarily the Bank has to reimburse these amounts to the complainant. The complainant was denied interest over these amounts for all this period causing mental anguish for initiating various complaints to the police as well as before the Dist Forum. Therefore we are of the opinion that the Bank has to refund Rs.18,90,000/- together with interest at 9% p.a. from the date of complaint till the date of realization. We also see it a fit case to award a compensation of Rs.25,000/- towards damages for the mental agony that the complainant had to undergo.
In the result this appeal is allowed and order of the District Forum is set aside directing the opp.party to pay an amount of Rs.18,90,000/- together with interest at 9% p.a. from the date of filing of the complaint till the date of realization together with compensation of Rs.25,000/- and costs of Rs.5000/- .
PRESIDENT MEMBER Pm* Dt. 24.11.2011