State Consumer Disputes Redressal Commission
Shree Shree Anandamayee Sangha vs Indian Overseas Bank on 12 May, 2014
STATE CONSUMER DISPUTES REDRESSAL COMMISSION, UTTARAKHAND, DEHRADUN
CONSUMER COMPLAINT NO. 02 / 2006
Shree Shree Anandamayee Sangha
Through its Authorized Signatory Swami Jyotirmoyananda
Assistant General Secretary
Daksh Road, PO Kankhal, Haridwar
.......Complainant
Versus
Indian Overseas Bank
Through its Branch Manager
Branch Kankhal, Haridwar
......Opposite Party
Mr. Kanwaljit Singh, Learned Counsel for the Complainant
Mr. Atul Virmani, Learned Counsel for the Opposite Party
Coram: Hon'ble Mr. Justice B.C. Kandpal, President
Mr. C.C. Pant, Member
Dated: 12/05/2014
ORDER
(Per: Mr. C.C. Pant, Member):
Shree Shree Anandamayee Sangha, Daksh Road, P.O. Kankhal, Haridwar has filed this consumer complaint through its Assistant General Secretary Swami Jyotirmoyananda, (hereinafter referred as "complainant") under Section 18 read with Section 12 of the Consumer Protection Act, 1986 against Indian Overseas Bank through its Branch Manager, Branch Kankhal, Haridwar (hereinafter referred as "opposite party"), alleging therein gross negligence and deficiency in service on the part of the opposite party and praying for the following reliefs:-
(a) The opposite party be directed to offset the loss occasioned to the complainant amounting to Rs. 33,91,035/- in wrongfully encashing the cheques mentioned in the consumer complaint.2
(b) The opposite party be directed to pay an amount of Rs. 15,00,000/- towards damages suffered by the complainant.
(c) The opposite party be directed to pay a sum of Rs. 50,000/- towards litigations expenses.
(d) Any other relief that this Commission thinks fit to be granted under the facts and circumstances of the case.
2. In brief, the facts of the case as stated by the complainant in its consumer complaint are that the complainant is a Society registered under Societies Registration Act XXI of 1860. The complainant has nine saving bank accounts with the opposite party bearing account numbers as 2750, 8957, 11386, 9250, 4680, 3864, 11608, 6007 and 3304. For the operation of these accounts, the opposite party was instructed that the accounts shall be operated with the signatures of at least two authorized signatories. The complainant has alleged that the opposite party encashed the following cheques issued by the complainant in contravention of the aforesaid instructions given to the opposite party:-
Sl. No. Cheque No. Dated Amount Saving A/c No.
1 169962 17.04.2003 3,00,000/- 11608
2 715767 01.07.2003 75,000/- 6007
3 169963 01.07.2003 25,000/- 11608
4 813518 02.06.2003 1,00,000/- 8957
5 912338 15.10.2003 2,00,000/- 3864
6 912314 25.09.2003 1,25,000/- 3864
7 813498 11.01.2003 1,00,000/- 2750
8 872722 21.02.2003 3,02,000/- 2750
9 715790 05.08.2002 5,00,000 9250
10 488144 01.07.2002 1,00,000/- 8957
11 099090 01.07.2002 50,000/- 2750
12 099085 11.05.2002 1,50,000/- 2750
13 099080 13.05.2002 5,00,000/- 2750
14 099094 10.07.2002 1,20,000/- 2750
15 099082 29.04.2002 2,00,000/- 2750
16 431321 10.07.2002 75,000/- 11386
17 782156 31.10.2002 4,19,035/- 4680
18 813473 19.10.2002 50,000/- 2750
3. The alleged negligence committed by the opposite party came to the knowledge of the complainant in the month of July, 2005, when it came to 3 know that some of its fixed deposit receipts were fake and it got it's account audited. The audit report revealed that certain other amounts pertaining to the above mentioned cheques were also withdrawn without proper authorization. The complainant has alleged that the cheques from Sl. Nos. 1 to 8 were issued in favour of "yourself" to the opposite party for the purpose of making drafts for fixed deposit receipts. However, a cutting was made in the cheques by someone on the word "Your" and made the word only "self". The opposite party, without noticing the fact that the said cutting was not duly attested by the authorized signatories and it was not endorsed for payment by the authorized signatories on the reverse side of the cheques and stamp of the complainant was also not affixed thereon, encashed these cheques. Cheques from Sl. Nos. 9 to 12 were issued for "self" and the opposite party encashed these cheques without noticing that these were not endorsed by the authorized signatories on the reverse side of the cheques and the stamp of the complainant was also not affixed. On the cheques from Sl. Nos. 13 to 16, some extra entries/words were added by someone on the face of cheques, but these were not attested by the authorized signatories. The cheque were also issued for "self", but there was no endorsement by the authorized signatories alongwith the seal of the complainant with regard to authorization to receive the payment. Inspite of this, the opposite party encashed these cheques. The cheques mentioned at Sl. Nos. 17 and 18 were in the name of the Society, i.e., complainant, but these were also encashed by the opposite party without any endorsement on their reverse in respect of authorization by the authorized signatories and without the stamp of the complainant. The complainant has alleged that inspite of making several requests, the opposite party appeared declined to make the loss good and did not take any action. Therefore, the complainant has filed this consumer complaint before this Commission under Section 18 read with Section 12 of the Consumer Protection Act, 1986 against the opposite party, alleging gross deficiency in service on the part of opposite party and praying for the reliefs, as stated above.
44. The opposite party filed its written statement (Paper Nos. 49 to 63), wherein the opposite party has pleaded that the opposite party has not permitted the withdrawal of money negligently or without the signatures of the authorized representatives of the complainant and the complainant suffered the loss not due to any negligence or laches made by the opposite party's employees. It has also been stated by the opposite party in respect of cheques from Sl. Nos. 1 to 8, which were issued to "yourself", that it was necessary for the complainant in case of "yourself" cheques / instrument to give directions to the Bank on its reverse as to how the cheque's amount was to be utilized. All the eighteen cheques mentioned in the consumer complaint are bearer cheques. The cheques from Sl. Nos. 9 to 12 were also bearer cheques and there were no instructions given by the complainant on their reverse side. Further, the opposite party has also stated that the person submitting the cheques drawing the amount was one of the authorized representatives of the complainant and, as such, there was no need of any stamp on the reverse side of the cheques. All the cheques were duly signed by the authorized signatories of the complainant and were presented by one of its authorized representatives before the opposite party. At no point of time, the bank is under any obligation to contact the complainant before encashment of any cheque, when the cheques were being presented by its authorized representatives.
5. The complainant has adduced the following evidence in support of its allegations made against the opposite party:-
(1) Renewal certificate of the Society's registration (Paper No. 9) (2) Memorandum of Association AND Rules and Regulations (Paper Nos. 10 to 26) (3) Letter dated 12.07.2005 and 18.08.2005 sent by MCS Limited in respect of fake fixed deposit receipts. (Paper Nos. 27 to 30) (4) Internal audit observations dated 10.02.2006 made by M/s Bansal Sinha & Co. (Paper Nos. 31 & 32) 5 (5) Photocopies of the cheques as referred in consumer complaint (Paper Nos. 33 to 45) (6) Affidavit dated 15.04.2006 of Swami Jyotirmayananda (Paper No.
46)
6. The opposite party has led its evidence in the form of affidavit dated 07.06.2006 (Paper No. 64) of Sh. Vinod Rana, General Attorney of opposite party.
7. The learned counsel for the complainant submitted the written arguments which are at Paper Nos. 239 to 243. The learned counsel for the opposite party also submitted the written arguments which are at Paper Nos. 233 to 238. The learned counsel for the parties also placed their oral arguments. We heard them and perused the material placed on record.
8. The learned counsel for the complainant submitted that the opposite party has allowed 18 cheques amounting to Rs. 33,91,035/- to be encashed without due authorization. The said cheques were issued in the name of society for making FDR's in the name of Society and could not have been allowed to be encashed to bearer of the cheques. The opposite party failed to ensure that the cuttings or tampering on the cheques were not duly attested by two authorized signatories and, thus, gross negligence and deficiency in service made by the opposite party is well proved. If the cutting is attested by only one of the authorized signatories, then it should be treated as an "invalid" cheque.
9. The learned counsel for the opposite party submitted that the opposite party has not committed any deficiency in service and it has never been negligent, as alleged by the complainant. All the 18 cheques were bearer cheques and there were no specific instructions given to the Bank on the reverse side of the cheques with regard to utilization of the amount. If the complainant's authorized signatories did not take necessary precaution while issuing the bearer cheques and did not make any endorsement on the reverse 6 side of the cheques, then the opposite party cannot be held negligent or deficient in service if it had made the payment of the cheques to the bearer, who was one of the authorized representatives of the complainant. If the authorized representative, who had got the cheques encashed, had embezzled the money, then it cannot be concluded that it was done in collusion with the opposite party. The learned counsel also submitted that a civil suit is pending before the Civil Court (Civil Judge Senior Division, Haldwani) against the culprits and, therefore, the consumer complaint is liable to be dismissed. The dispute is inter-se between the complainant and its employees.
10. We considered the submissions raised by the learned counsel for the parties. The opposite party has raised an objection with regard to maintainability of the consumer complaint on the ground of limitation. In this regard, we are of the view that the opposite party should have raised this point at the time of admission of the case. However, the record reveals that the complainant could know in the month of July-August, 2005 that some irregularities and fraud had been committed by some persons in its accounts and then it got its accounts audited by reputed Chartered Accountants. So the cause of action arose in the month of July-August, 2005 and accordingly the consumer complaint was filed within the limitation period of two years. The opposite party had also raised a dispute on the ground that for the same cause of action, a civil suit has also been filed and the complainant has sought similar relief in the said suit also. Therefore, the consumer complaint was not maintainable. This point was also decided by this Commission vide order dated 30.09.2010, holding that the proceedings under the Consumer Protection Act, 1986 and in a Civil Court can simultaneously go on even if the issues involved in the two proceedings are substantially similar. Now coming to the facts of this case, we observed that all the 18 cheques in question were bearer cheques and were duly signed by the two authorized signatories. These were presented to the opposite party by the authorized representatives of the complainant. Therefore, the said cheques being bearer cheques, the opposite party had encashed them and made the payment to the bearer. It is also 7 pertinent that if the cheques' amount was to be utilized for some specific purpose, then either an endorsement to this effect should have been made by the authorized signatories on the reverse of the cheques with their signatures or they should have made an application. No such evidence has been adduced by the complainant. The "yourself" cheques should also be crossed. So far as cutting and tampering is concerned, one of the authorized signatories of the complainant has attested the same. The authorized signatory, who has attested the cutting, has not been made a party to the dispute. Since all these cheques were bearer cheques, the opposite party cannot be held liable for any negligence or deficiency in service. Rather it appears that the laches and negligence were on the part of the authorized signatories of the complainant while issuing these cheques.
11. The Memorandum of Association AND Rules and Regulations provide that the accounts should be audited every year. If the accounts of the society would have been audited every year, then the irregularities and fraud should have come into light within time. This shows that the accounting and audit system was either very weak or the persons managing it, were also involved in the whole episode. There is no evidence that any employee of the opposite party was involved in the embezzlement or the opposite party had withheld any amount. The money so embezzled appears to be either with the complainant- Society or the persons managing it's accounting and audit system. Therefore, this consumer complaint has no force and is liable to be dismissed.
12. The consumer complaint is dismissed. Both the parties shall bear their own cost of litigation.
(C.C. PANT) (JUSTICE B.C. KANDPAL)