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Consumer Case Laws Series-4

CASE LAWS ONBANKING

S .K. S H A R M A

S U S H I L A N A R A N G

Department of Consumer Affairs, Government of India

in association with

Indian Institute of Public Administration, New Delhi

Case Laws on Banking

S.K. SharmaSenior Advocate

Supreme Court of IndiaNew Delhi

and

Sushila NarangAdvocate

New Delhi

logo

Indian Institute of Public AdministrationNew Delhi

ii

Published under aegis of consultancy assignment. Promoting Involvement ofResearch Institutions/Universities/Colleges, etc., in Consumer Protection andConsumer Welfare

Sponsored by : The Department of Consumer Affairs, Ministry of Consumer Affairs,

Food and Public Distribution, Government of India.

Published by Indian Institute of Public Administration, New Delhi and Printed at

New United Process, A-26, Naraina Industrial Area, Ph-II, New Delhi, Ph. 25709125

© Indian Institute of Public Administration, New Delhi 2008

Price Rs. 100

Consumer Case Laws Series-4Consumer Case Laws Series-4Consumer Case Laws Series-4Consumer Case Laws Series-4Consumer Case Laws Series-4

Series Editors : S.S. SinghRakesh GuptaSapna Chadah

PREPREPREPREPREFFFFFAAAAACECECECECE

Banking is the backbone of economy—trade, commerce and business cannotsurvive without extensive banking facilities. In a world driven by the market forcesand governed by the vicissitudes of trade and commerce, banking as an institution,has assured unprecedented importance. In the era of liberalisation, privatisationand globalisation, the banking sector has started gearing up to face new challenges.Several measures have been taken and new and latest services have been started inthe Indian Banking industry to meet the new challenges which include e-banking,phone banking, plastic money, entry of banks into mutual funds and insurancesector and many new kind of services. Banking is no longer confined to themetropolitan cities and larger towns but has spread into the remotest corners ofthe country. The switchover from the class banking to the mass banking has on theother side created several problems—there is a steady increase in the frauds anddeterioration in banking services and efficiency.

Consumer Protection Act is one of the beneficial legislations enacted by theParliament with a view to provide better protection to the consumers. Section 2(1)(g) of the Act defines deficiency in the service and the concept of service is definedunder Section 2(1 )(o) of the Act. Banking Service is one of the services covered underthe Consumer Protection Act. It may include receiving deposits in various accountsand schemes, lending money, providing agency services e.g. payment of premiumagainst insurance policy, locker services, debit and credit cards, bank guarantees,bank drafts etc. Deficiency in respect of any service provided by the Bank may bebrought before the Consumer Forums / Commissions.

Grievances of consumers from banking services are piling up in DistrictConsumer Forums, State Consumer Disputes Redressal Commissions and NationalConsumer Disputes Redressal Commission. Redressal of these grievances has alsobrought to fore several original and innovative perspectives on benchmarks andstandards for banking services.

The cases included in this compilation are those adjudicated by the SupremeCourt of India and National Consumer Disputes Redressal Commission between2000-2007. This brings a summary of almost all the leading consumer cases of thisimportant banking service and reflects the expectations of courts as well asconsumers from the banking sector and is meant for the benefit of the consumerand information of others concerned, including service providers, consumer activistsand legal practitioners.

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We are indeed grateful to the Department of Consumer Affairs (Governmentof India) particularly Shri Yashwant Bhave, Secretary for his abiding trust andconfidence in IIPA. We are also thankful to Shri Rakesh Kacker, Additional Secretaryand Shri Sanjay Singh, Joint Secretary for their valuable suggestions andencouragement. We are indeed grateful to Shri G.N. Sreekumaran, Director (CWF)for his active support, help and advice. We also express our sincere thanks to otherofficers of the Department and other members of the Evaluation Committee andMonitoring Committee under the project respectively.

We express heartfelt thanks to the management of IIPA especially Shri T.N.Chaturvedi, former Governor of Karnataka and Chairman, Executive Council, Dr.Yogendra Narain, Chairman Standing Committee for their keen interest,encouragement and constructive suggestions. Shri B.S. Baswan, Director IIPA hasalways been supportive and helping. We are indeed thankful to him. We are alsothankful to Shri Sunil Dutt, Publication Officer for his keen interest in the publicationof the series.

Before concluding, a word of sincere gratitude towards the Project DirectorProf. S.S. Singh whose profound passion for the consumer movement is a source ofinspiration for the whole team. Shri Rakesh Gupta, Associate Project Director andMs Sapna Chadah, Assistant Professor were actively associated and involved withthis compilation and rendered valuable suggestions for making the workcomprehensive.

S. K. Sharma

Sushila Narang

LIST OF CASESLIST OF CASESLIST OF CASESLIST OF CASESLIST OF CASESPages

Preface iii

S.No. Name of Cases Case Volume Number

1. Canara Bank v. K.S. Seetharama III (2007) CPJ 68 (NC) 1

2. State Bank of India v. Anand Prakash III (2007) CPJ 95 (NC) 3

3. Kamlesh Kumar (NRI) v. Allahabad Bank II (2007) CPJ 45 (NC) 4

4. Union Bank of India & Anr. v. State Bank of II (2007) CPJ 60 (NC) 5India & Ors.

5. Jhunjhunu Primary Land Development II (2007) CPJ 261(NC) 6Bank & Anr. v. Ganpat Ram & Ors.

6. Allahabad Bank v. Ravindra Flour Mills Pvt. Ltd. I (2007) CPJ 60 (NC) 8

7. Bihar State Sugar Corp. Ltd. v. State Bank of I (2007) CPJ 91 (NC) 9India & Ors.

8. Neelkantha Jute Dealers v. Central Bank of I (2007) CPJ 117 (NC) 11India & Anr.

9. Central Bank of India v. Om Sons Wires Pvt. Ltd. I (2007) CPJ 151 (NC) 13

10. Allahabad Bank v. Shiv Swarup Srivastav I (2007) CPJ 221(NC) 15

11. Allahabad Bank v. JDS Electric Company I (2007) CPJ 270 (NC) 17

12. Canara Bank v. New India Assurance Co. Ltd. & Anr. IV (2006) CPJ 56 (NC) 18

13. Shanti Devi v. Bhojpur Rohtas Gramin Bank IV (2006) CPJ 83 (NC) 20

14. American Express Bank Ltd. v. Narender Kumar Rai IV (2006) CPJ 161 (NC) 21

15. Punjab National Bank v. Lt. Col. D.R. Aggarwal IV (2006) CPJ 165 (NC) 23

16. Mahender Singh Siwaeh & Anr. v. Punjab & IV (2006) CPJ 231 (NC) 24Sind Bank & Anr.

17. P.S. Sawhney v. Canara Bank & Anr. IV (2006) CPJ 278 (NC) 26

18. Jason Links (India) Ltd. v. State Bank of India & Anr. IV (2006) CPJ 328 (NC) 28

19. Standard Chartered Bank v. Dr. B.N. Raman III (2006) CPJ 1 (SC) 30

20. Bank of India & Ors. v. Chinmay Barik & Ors. III (2006) CPJ 29 (NC) 32

21. Ashok Kumar Kalra v. Allahabad Bank III (2006) CPJ 34 (NC) 33

22. Tirupati Agencies v. HSBC Bank & Ors. III (2006) CPJ 37 (NC) 34

23. HDFC Bank Ltd. v. Kishore R. Worah III (2006) CPJ 40 (NC) 36

24. Om Prakash v. Allahabad Bank, Daliganj Branch, III (2006) CPJ 418 (NC) 38Lucknow

25. Debabrata Mukherjee v. Allahabad Bank & Ors. III (2006) CPJ 423 (NC) 39

vi

26. Canara Bank v. Agnes D’mello I (2006) CPJ 8 (NC) 41

27. Mahad Co-operative Urban Bank v. United India I (2006) CPJ 44 (NC) 43Insurance

28. Allahabad Bank, Bhopal v. Ranbir Sing Shadoriya I (2006) CPJ 94 (NC) 44

29. ING Voyage Bank Ltd. v. V. Y.G. SreeRam Setty I (2006) CPJ 182 (NC) 45

30. Allahabad Bank v. Chandigarh Construction IV (2005) CPJ 126(NC) 47Co. Pvt. Ltd.

31. C.L. Khanna v. Dena Bank IV (2005) CPJ 139(NC) 48

32. Central Bank of India & Anr. v. Heera Soni & Ors. III (2005) CPJ 25(NC) 50

33. Deep Chand Jain v. Bank of Baroda & Ors. III (2005) CPJ 51(NC) 52

34. Col. D.S. Sachar (Retd.) v. Punjab & Sind Bank II (2005) CPJ 130(NC) 53

35. Zila Sahkari Bank Ltd. v. U.P. Police Avas Nigam Ltd. I (2005) CPJ 89(NC) 54

36. Anumati v. Punjab National Bank IV (2004) CPJ 21(SC) 56

37. Punjab & Sind Bank v. SukhRaj Bajwa & Anr. III (2004) CPJ 1(NC) 59

38. Prem Baboo v. Branch Manager, Farakhabad III (2004) CPJ 18(NC) 60Gramin Bank & Ors.

39. Swadeshi Polytex Ltd. v. Central Bank of III (2004) CPJ 47(NC) 62India & Ors.

40. Ratnachand Morakar v. Bank of Maharashtra, II (2004) CPJ 25(NC) 64Bombay

41. Thiruchirapalli Multipurpose Social Service II (2004) CPJ 62(NC) 66Society v. Canara Bank

42. ABN Amro Bank v. Sangeet Srivastava II (2004) CPJ 289(NC) 68

43. Standard Chartered Grindlays Bank Ltd. v. I (2004) CPJ 13(NC) 70H.B. Impex Pvt. Ltd.

44. Smt. Manorama v. Chairman, Punjab National Bank I (2004) CPJ 56(NC) 72

45. India Export Corporation & Ors. v. Chairman-cum IV (2003) CPJ 45(NC) 73 Managing Director, Syndicate Bank & Ors.

46. State Bank of Patiala v. Rajender Lal & Anr. IV (2003) CPJ 53(NC) 75

47. CCI Chambers Co-op. Housing Society Ltd. v. III (2003) CPJ 9 (SC) 77Development Credit Bank

48. Abdul Razak & Anr. v. South Indian Bank III (2003) CPJ 20(NC) 79

49. Poppeys Valley Hotel Pvt. Ltd. v. Citi Bank III (2003) CPJ 133(NC) 81

50. Archana M. Kamath v. Canara Bank & Anr. II (2003) CPJ 7(NC) 83

51. Om Prakash Sahni v. State Bank of India & Ors. II (2003) CPJ 100(NC) 8552. K. RamaIyer & Ors. v. Indian Overseas Bank II (2003) CPJ 143(NC) 86

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53. Principal, Guru Nanak Girls College I (2003) CPJ 171(NC) 88v. Punjab & Sindh Bank

54. DOSON Chemical Pvt. Ltd. I (2003) CPJ 214(NC) 89 v. United Bank of India & Ors

55. Memon Co-op. Bank Ltd. v. Anwar D. Ahmedabadi I (2003) CPJ 285(NC) 91

56. Canara Bank v. Naresh Kumar Jain & Anr. III (2002) CPJ 13(NC) 9357. Andhra Bank v. Vishwapriya Financial Service & III (2002) CPJ 21(NC) 94

Securities Ltd.

58. M.P. Minerals Ltd. v. Bank of India & Ors. III (2002) CPJ 25(NC) 96

59. Aryan Agro Spice (P) Ltd. v. III (2002) CPJ 41(NC) 97Saraswat Co-op. Bank. Ltd. & Anr.

60. Indian Overseas Bank v. Klebert Pierre III (2002) CPJ 77(NC) 98

61. Indo Steels v. Central Bank of India III (2002) CPJ 152(NC) 99

62. Commander Rakesh Sharma III (2002) CPJ 165(NC) 100 v. Punjab National Bank

63. Hanuman Hosiery v. Canara Bank III (2002) CPJ 253(NC) 101

64. State Bank of India v. Ugam Singh III (2002) CPJ 267(NC) 102

65. State Bank of India v. Mohinder Sing & Ors. III (2002) CPJ 275(NC) 104

66. Virender Narang v. M/s Syndicate Banks Ors III (2002) CPJ 279(NC) 105

67. Mrs. Anumati v. Punjab National Bank III (2002) CPJ 280(NC) 106

68. United Commercial Bank v. Smt. Anita Airan III (2002) CPJ 371(NC) 107

69. Topline Shoes Ltd. v. Corporation Bank II (2002) CPJ 7 (SC) 109

70. Canara Bank v. C.D. Patel II (2001) CPJ 19 (NC) 111

71. D.K. Lalwani v. The President, Indian Bank II (2002) CPJ 20 (NC) 113Mutual Fund & Another

72. Mihir Kumar Mukherjee II (2002) CPJ 38 (NC) 114 v. Branch Manager, United Bank of India

73. Patna Co-operative Bank Ltd. v III (2002) CPJ 23(NC) 116Hasmukh B. Shah

74. Arvind Sahni v. Punjab & Sind Bank III (2000) CPJ 8(SC) 118

75. Vimal Chandra Grover v. Bank of India II (2000) CPJ 11 (SC) 119

76. Bade Krishnaveni v. Canara Bank III (2000) CPJ 35(NC) 121

77. American Express Bank Ltd. T.R.S. I (2000) CPJ 1 (NC) 122 v. Rajesh Gupta & Ors.

78. Corporation Bank v. Navin J. Shah 1(2000) CPJ 13(SC) 124

Annexure 126

Case Laws on Banking 1

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III (200III (200III (200III (200III (2007) CP7) CP7) CP7) CP7) CPJ 6J 6J 6J 6J 68 (N8 (N8 (N8 (N8 (NC)C)C)C)C)

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Complainant, owner of Coffee estate, secured a loan from the Petitioner Bank,Suntikoppa Branch under Kisan Credit Card Scheme. The complainant alsoborrowed Plantation Development Loan from the Petitioner Bank. The totalamount due with interest in the account of complainant was Rs.1,79,698/- on28.10.2002 in KCCS and Rs.4,96,113/- in PDL account. Petitioner Bank depositedRs.6,75,811/- to the loan account of the complainant with an intention to avail thebenefit of the special coffee Term Loan Scheme announced by the Governmentnotification. As per this notification the parties who would pay interest on orbefore June 2005 are entitled to rebate of 2/3 portion of the interest. Thecomplainant paid Rs.2,65,642/- towards interest which accrued for the period from1.4.2000 to 31.3.2005 in order to avail the package of relief. The Petitioner Bankdenied rebate to the complainant and stated that complainant is not entitled tosuch a rebate. Therefore, complainant filed complaint before the District forumclaiming Rs.88,547/- from the bank and the Coffee Board. Before the District forumpetitioner bank contended that the scheme by the government is applicable tospecial Coffee Term Loan account and since the complainant repaid his entire loanon 3.4.2005 prior to the announcement of the scheme he is not entitled for thesame. The District forum allowed the complaint. On appeal, the State Commissiondismissed the appeal, confirming the order passed by the District forum. Againstthe order of the State Commission, Petitioner bank filed Revision Petition beforethe National Commission.

IssuesIssuesIssuesIssuesIssues

Whether Bank is liable to refund the excess amount of interest paid by thecomplainant in view of the scheme announced by the Government of India for thebenefit of coffee growers?

HeldHeldHeldHeldHeld

The National Commission rejected the submission advanced by the Counselfor the Revision Petitioner that as per the scheme the borrowers were to pay 1/3rd ofthe interest due to the creditor bank, remaining 2/3rd interest burden was to beshared equally by the revision petitioner bank and the Government of India. Further,that the government scheme was with prospective effect from the date of

2 Case Laws on Banking

announcement and is applicable only to loanee farmers/planters whereasrespondent had already repaid his full loan and hence he was not the loanee farmer.The National Commission held that scheme announced by the Government of Indiais a welfare scheme for the benefit of the Coffee growers wherein the grower, thebank and the Coffee Board have to share equally the total interest burden andtherefore, liable to refund the sum of Rs. 86,547/-.

Revision Petition dismissed.Revision Petition dismissed.Revision Petition dismissed.Revision Petition dismissed.Revision Petition dismissed.


State Bank of India vs. Anand PrakashState Bank of India vs. Anand PrakashState Bank of India vs. Anand PrakashState Bank of India vs. Anand PrakashState Bank of India vs. Anand Prakash

III (200III (200III (200III (200III (2007) CP7) CP7) CP7) CP7) CPJ 95 (NJ 95 (NJ 95 (NJ 95 (NJ 95 (NC)C)C)C)C)


Complainant was maintaining an account with Petitioner Bank. Complainantdeposited one payee account cheque in his account bearing No. 807777 forRs. 1,47,500/- drawn on Matunga Bazar Branch at Mumbai for collection. As the saidcheque was not credited in his account complainant made various applications tothe Petitioner Bank. Complainant when got no response he filed a complaint beforeDistrict forum. The matter was contested by the Petitioner Bank taking defence thatthe cheque in question was sent on 10.4.1999 it self by the Petitioner to its serviceBranch at Mumbai through Madhur Courier Service. Service Branch of Petitionersent the cheque to the Branch for collection and the credit of the amount of chequecould be given only after receipt of credit issued. Petitioner further submitted thatthey had been taking matter constantly with service branch, respondent No.2 andsince the cheque was lost by Respondent No.2, the Petitioner cannot be held liable forpayment thereof. The District forum rejecting the submission of the Petitioner Bankallowed the complaint. Against the order of District forum Petitioner Bank approachedthe State Commission, which disposed the appeal by reducing the rate of interestfrom 18 per cent to 12 per cent. Against this order of the State Commission PetitionerBank filed Revision Petition before the National Commission.

IssueIssueIssueIssueIssue

Whether the drawee Bank can shift its liability for loss of cheque and paymentof amount thereof on the Bank on which it was drawn?


Petitioner has not adduced any evidence to show that the cheque in questionwas forwarded by its Service Branch at Mumbai to Respondent No.2. In absence ofany such evidence and the stand taken by the Respondent No.2 in letter dated 20.2.98,Petitioner cannot shift liability for loss of cheque and payment of the amount thereofon Respondent No.2. Since the cheque was handed over for collection by RespondentNo.1, complainant to the Petitioner Bank it cannot evade liability for paymentthereof with interest. Respondent No.1, complainant was never informed in writingof the loss of cheque by the Petitioner Bank.

Revision Petition dismissed with cost.Revision Petition dismissed with cost.Revision Petition dismissed with cost.Revision Petition dismissed with cost.Revision Petition dismissed with cost.


Kamlesh Kumar (NRI) vs. Allahabad BankKamlesh Kumar (NRI) vs. Allahabad BankKamlesh Kumar (NRI) vs. Allahabad BankKamlesh Kumar (NRI) vs. Allahabad BankKamlesh Kumar (NRI) vs. Allahabad Bank

II (200II (200II (200II (200II (2007) CP7) CP7) CP7) CP7) CPJ 45 (NJ 45 (NJ 45 (NJ 45 (NJ 45 (NC)C)C)C)C)


Complainant, a NRI deposited $3124.05 on 21.11.92 with the respondent Bank@10% p.a. interest for two years and maturity value of deposit was $3797.28.Complainant further deposited $10,000/- on 19.4.93 on an interest of 8% p.a. for 3years. He further deposited $10,000/- with the respondent Bank @8% p.a. interest for2 years. Maturity value of these two deposits was $11,716.59 each. Complainant wasmade short payment of $118.53 in respect of earlier deposit maturing on 21.11.94 andshort payment of $371.18 was made by respondent bank on remaining two deposits.Complaint was filed by complainant alleging deficiency in service against therespondent Bank. The District forum allowed the complaint. The State Commissiondisposed of appeal with a direction to the respondent Bank to calculate rate ofinterest at the rate prescribed by RBI from the date when the branch office receivedthe circular and not at the prior point of time. Against this order complainant filedRevision Petition before the National Commission.


Whether Bank is liable to pay interest rate expressed in receipts though thesame are in contravention to RBI instructions issued from time to time?


Before the National Commission it was submitted by Petitioner that respondentbank is liable to pay contractual rate of interest as mentioned in 3 FDRs for all thetime whereas respondent bank submitted that Petitioner is not entitled to interestover and above the rate(s) fixed by RBI. The National Commission after hearingboth the parties held that in all the three FDRs towards right hand side it is printedthat interest rate expressed in receipts is subject to RBI instructions that may beissued from time to time. This condition is binding on Petitioner. Therefore, despitehigher rate of interest and maturity value of deposits having been indicated in 3FDRs, the petitioner is entitled to interest on the deposit maturing on [email protected]% as against 10 per cent and @7.25 per cent instead of eight per cent p.a. inrespect of remaining two deposits. There was no deficiency in service on the part ofthe respondent Bank.



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Late Mr. Rajnish Awasthi with a view to help Respondent No.3 made a draft ofRs.25,000/- from SBI, Dharamshala payable at SBI, New Delhi. This draft was sent byregistered post by Late Mr. Rajnish Awasthi to Mr. Naresh Sharma but it was neverdelivered. On approaching Postal authorities Late Mr. Ranjnish was asked to makean application for grant of compensation. Late Mr. Rajnish made on applicationbut of no avail. Thus, a complaint was filed before the District forum. The Districtforum passed the order of compensation against both the respondents namely,bank and postal department. Both Postal department and Bank filed appeals. TheState Commission dismissed both the appeals. Against dismissal order postaldepartment filed present Revision Petition before the National Commission.


Whether Postal department, in view of Sec.6 of Indian Post Office Act, 1898, canbe held liable for deficiency in service?


The National Commission accepted argument of petitioner that under Section6 of the Indian Post Office Act, 1898, they cannot be held liable unless a willfulnegligence is alleged by the complainants. Since there was no allegation of willfulnegligence in the complaint therefore Petitioner cannot be held liable for any loss/non-delivery.

Revision Petition allowed.Revision Petition allowed.Revision Petition allowed.Revision Petition allowed.Revision Petition allowed.


Jhunjhunu Primary Land Development Bank &Jhunjhunu Primary Land Development Bank &Jhunjhunu Primary Land Development Bank &Jhunjhunu Primary Land Development Bank &Jhunjhunu Primary Land Development Bank &AnrAnrAnrAnrAnr..... vvvvvsssss..... G G G G Ganpanpanpanpanpaaaaattttt R R R R Ram & Orsam & Orsam & Orsam & Orsam & Ors.....

II (200II (200II (200II (200II (2007) CP7) CP7) CP7) CP7) CPJ 26J 26J 26J 26J 261(N1(N1(N1(N1(NC)C)C)C)C)


Complainants belonging to scheduled castes, with a view to buy a tractor,obtained a loan from the Petitioner bank to the extent of Rs.1,60,000/-. The PetitionerBank made payment of loan amount to the dealer of the Swaraj Tractor and rest ofthe payment of the tractor was made by the complainants. Despite making ofpayment the dealer did not make the delivery of the tractor to the complainants.Complainants brought the matter to the knowledge of the Petitioner bank butwhen the same was not resolved, complainant filed complaint before the Districtforum alleging deficiency in service against the Petitioner Bank and others on theground that despite making payment, the delivery of tractor was not given to them,instead possession of the tractor was delivered to some other person belonging toJat Caste by making a forged bill in the name of the complainants. The Districtforum after hearing parties allowed the complaint, directing the petitioner banknot to recover any amount of loan from the complainants as they did not receivethe possession of the tractor and further to pay Rs.61655/- to the complainant whichwas deposited by the complainants with Petitioner Bank. Aggrieved by this order,two separate appeals were filed before the State Commission by Petitioner Bankand Respondent No.4 which were dismissed by the State Commission. Against thisdismissal order Petitioner Bank filed Revision Petition before the NationalCommission.


Whether the bank is liable for deficiency in service for not ensuring the deliveryof the funded goods to the beneficiary?

Whether the Bank is liable to reimburse the complainants to the extent ofRs.61,655/-?


The National Commission disposed of Revision Petition filed by the Petitionerbank by modifying order passed by lower fora holding that since the complainantswho belong to scheduled castes community, have very little knowledge/literacylevels. In such circumstances, the onus lies on the bank to ensure that the goods


being funded by them are delivered to the beneficiary. When the complainantsbelong to a special community and not known to be knowledgeable in this regard.In view of above, there is no merit in the revision Petition.

However, the National Commission reduced the liability of the Petitioner Bank.The National Commission held that the liability of the Petitioner bank would belimited to an amount of Rs.49,005/- only and not Rs.61,655/- as Rs.12,650/- was theshare money given by the complainants to become members of the bank whichthey continue to be till today and are getting the return as a share holder.

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I (200I (200I (200I (200I (2007) CP7) CP7) CP7) CP7) CPJ 60 (NJ 60 (NJ 60 (NJ 60 (NJ 60 (NC)C)C)C)C)


Complainant obtained cash credit limit of Rs.60 lacs in 1999 from PetitionerBank. Complainant repaid due amount in the account on 9.3.2000 and asked thePetitioner to issue ‘No Dues Certificate’. The Petitioner Bank charged Rs.19,713/-towards Penal interest @ two per cent from the complainant. Complainant filedcomplaint seeking refund of penal interest charged. The District forum allowedthe complaint. Appeal of the Petitioner Bank was dismissed by the StateCommission. Against this dismissal order Petitioner Bank filed Revision Petitionbefore the National Commission.


Whether Bank is liable for deficiency in service for charging penal interest @2per cent on the basis of instructions contained in circular No.3229 dated 9.12.1999?


The National Commission rejected the contention of the petitioner bankwhereby it contended that the penal interest was charged on the basis of instructioncontained in circular No.3229 dated 9.12.1999 and hold that no copy of said circularwas supplied to the respondent neither any notice was sent to the respondentsdrawing their attention to the circular. In absence of supplying copy of said circularor drawing attention of respondents through notice/letter thereto the PetitionerBank was not legally entitled to charge Penal interest at the said rate from therespondent.



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I (200I (200I (200I (200I (2007) CP7) CP7) CP7) CP7) CPJ 91 (NJ 91 (NJ 91 (NJ 91 (NJ 91 (NC)C)C)C)C)


Complainant corporation wholly owned by the State of Bihar, decided to takean insurance policy for the assets of Lauriya Sugar Factory vide its letter dated10.12.1996 from the Oriental Insurance Co Ltd. who were earlier also insuring theassets of the complainant corporation for over a decade on year to year basis. TheOriental Insurance Co. issued insurance policies dated 28.03.1997 w.e.f. 23.3.1997. On17.4.1997 at about 8.00 am molasses tank No.2 of Lauriya unit got burst accidentallyresulting into loss of molasses and also affected the Sugar products stored adjacentand nearby places. Complainant Corporation lodged its claim with insurancecompany on 11.4.1997. On 6.5.1997 complainant got telephonic information that thecheque issued for premium was returned by Bettiah branch of respondent Bank onthe ground that there was no balance at Lauriya account. The cheque wasdishonoured despite sufficient fund in the account due to blunder of officer ofrespondent Bank. Since there was no payment of premium insurance companyrepudiated the claim of complainant on the ground that there was no subsistingpolicy. Complainant corporation filed the present complaint before the NationalCommission alleging that cheque was wrongly and negligently dishonoured by therespondent bank and the complainant is entitled to the loss with interest.


Whether complainant is allowed to recover damages from the Bank for nothonouring the cheque despite having sufficient amount?


Respondent bank, before the National Commission, admitted that the chequewas dishonoured despite there being sufficient funds in the account of complainantenabling bank to honour the cheque and for payment to be made. However, it issubmitted that the policy for which the cheque was issued was not covering thedamage with regard to explosion of molasses tanks. The National Commission onquestion that whether the complainant is entitled to the reimbursement as claimedheld that since for the loss suffered by the complainant, there was no insurancecoverage. So dishonour of cheque by the bank has not resulted on loss ofreimbursement from the Insurance Company. Therefore, it would be difficult to


arrive at the conclusion that complainant is entitled to recover the damages sufferedby it from the Bank which has negligently dishonoured the cheque despite sufficientfunds in the account of the complainant. Even if the Insurance policy covers thedamage to molasses and if the cheque for premium is dishonoured the InsuranceCompany would not be liable to reimburse the complainant. That means a wrongfuldishonour of the cheque would result in loss to Petitioners for more than Rs.25 lacs.It is, therefore, just and reasonable to award punitive damages for a sum of Rs. fivelacs, so that the banks in general would keep in mind the statutory norms of verifyingproperly, before dishonouring the cheque particularly cheque of reputed bodies,including the Government and semi-government bodies. In present case, it wasknown to the officers of the State bank the cheque was issued by the corporationowned by the State Government. Before dishonouring the same, minimum careought to have been taken not only by the concerned clerk but also by higher officers.Compensation granted.

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NNNNNeeeeeeeeeelllllkkkkkantantantantantha ha ha ha ha JJJJJute Deute Deute Deute Deute Dealalalalalers ers ers ers ers vvvvvsssss..... C C C C Centententententrrrrral Bal Bal Bal Bal Bankankankankank of of of of of In In In In Indddddia & ia & ia & ia & ia & AnrAnrAnrAnrAnr.....

I (200I (200I (200I (200I (2007) CP7) CP7) CP7) CP7) CPJ 11J 11J 11J 11J 117 (N7 (N7 (N7 (N7 (NC)C)C)C)C)


Respondent Bank issued a letter of credit on 1.1.1992 for a sum of Rs.6,50,000/- tomake payment of invoices of jute to be supplied to Respondent No.2. The last dateof presentation of documents was fixed for 24.3.1992 and thereafter extended to24.6.1992. The complainant invoked the letter of credit and the bills were submittedon 22.9.1992. Out of eight bills, only one bill was paid and seven bills were returned byletter dated 21.10.1992 which was received on 29.10.1992. These seven bills werereturned on the ground of cuttings and overwritings within 24 hrs of receipt of theletter, complainant submitted fresh bill receipts and requested for payment but therespondent bank refused to honour the same on the ground that letter of credithad already been expired on 24.9.1992. Complainant filed complaint before the StateCommission. By majority of two members, the State Commission held that therewas no deficiency as undisputed documents were honoured but alteration in thebill created doubt and thus, dismissed the complaint, whereas the President of theState Commission took the view that on the basis of documents filed, it was notpossible to decide the point of deficiency in an effective manner and rejected thecomplaint taking view that the matter could be dealt by civil court. Feeling aggrievedby the dismissal of the complaint, complainant filed present appeal before theNational Commission.

IssuedIssuedIssuedIssuedIssued

Whether a Bank can be held liable for deficiency for not following the terms ofUCPDC?


The National Commission held that if the respondent Bank suspected thegenuineness of the invoices only on the basis of suspicion, it could not have rejectedin terms of the judgment of Supreme Court. If the documents sent on 17.9.1992 &22.9.1992 were received by the Central Bank of India, the documents were presentedin stipulated time i.e. before 24.9.1992 and if all the parties were at Calcutta, theycould have been easily contacted on phone or on fax etc. instead of waiting fornearly a month before sending the letter of credit and rejecting the documents on21.10.1992. The State Bank of Bikaner and Jaipur had its office at 14 NS Road, Calcutta


to which the letter dated 21.10.1992 was addressed. There was definitely deficiencyin the aforesaid circumstances. The bank could not be allowed to take advantageof its own wrong that had not followed the terms of UCPDC particularly clause (d)Regulation 16 as per which a Bank is supposed to act on the documents whichappear on their face to be in accordance with the terms and conditions of a credit.The Central Bank of India was surely deficient in rendering service for not followingSection 16(d) of UCPDC and delaying the matter unnecessarily by rejecting the claim,not on account of fraud, but on unreasonable and irrelevant grounds, not germaneto Section 16(d) of UCPDC. Further, seeing the nature of the transaction coupledwith extensions of time twice and clearance of one of the eight bills, it becomesevident that for all practical purposes the time was not taken to be essence of thecontract. Supposing, the Central Bank Manager had any doubt, it is not its case thatthe Bank contacted the Ganges Mfg. Co. Ltd. or the complainant on phone or bysending fax, etc., as was expected from the Bank. Thus, there was deficiency inrendering banking service by showing utter lack of promptness in this regard, leadingto subsequent problems.

Appeal allowed.Appeal allowed.Appeal allowed.Appeal allowed.Appeal allowed.


CCCCCentententententrrrrral Bal Bal Bal Bal Bankankankankank of of of of of In In In In Indddddia ia ia ia ia vvvvvsssss..... Om S Om S Om S Om S Om Sooooons ns ns ns ns WWWWWiririririreeeees Ps Ps Ps Ps Pvvvvvttttt..... Ltd. Ltd. Ltd. Ltd. Ltd.



Respondent No.2, Modi Bandhu purchased ferrous and non-ferrous metal andopened inland letter of credit with Central Bank of India in favour of complainantM/s Om Sons Wire Industries Pvt. Ltd. to supply the said metal. Complainant suppliedthe aforesaid goods which were received by Modi Bandhu and an endorsement tothat effect was made by it on the Challan as well as on the Invoice. Complainanthanded over the documents alongwith letter of credit to its banker, namely OrientalBank of Commerce for negotiation and encashment of the letter of credit on20.10.1993. On 23.10.1993, the appellant Bank refused to honour letter of credit on theground that complainant did not have complied with any of the instruction of thesaid inland letter of credit. In order to avoid unnecessary litigation, the complainant-respondent instructed its Bank to represent the document again. Accordingly,negotiating bank again presented the documents alongwith its letter dated 1.12.1993but the appellant Bank again refused to honour the letter of credit and returnedthe documents with letter dated 21.12.1993 on the ground that the documentscontain many discrepancies and informed the complainant that they can handlebill of the complainant on collection basis. Complainant filed complaint before theState Commission. The State Commission directed the appellant Bank to payRs.4,92,208/- with interest 18 per cent p.a. Against this order, appellant bank filedappeal before the National Commission.


Whether complainant is a ‘consumer’ within the meaning of Sec.2 (i) (d) ofConsumer Protection Act, 1986;

Whether the Act of Bank in not honouring L/C without any justified reasonamounts to deficiency in service?


Appellant Bank assailed the order of the State Commission on the ground thatthe documents were not submitted as per terms of credit and also that complainantwas neither a ‘Consumer’ nor there was any privity of contract between the parties.

The National Commission rejecting the contention of the appellant Bank heldthat insofar as exclusion on the ground of availing banking services for commercial


purpose is concerned, since the consumer would include beneficiary of such servicesother than the person, who hired or availed of the services for a consideration paidor promised and thus he was consumer and was entitled to file the complaint.

Further, explanation to sub-clause (ii) of Clause (d) of Sec.2 (i) of the Act clarifiedthat exclusion on the ground of commercial purpose, would be applicable only togoods and not to Services. After amendment-dated 15.03.2003 the position is changedwhereby it does not include a person who availed to such services for any commercialpurpose, but the same could not be applied with retrospective effect. Present matterwas filed before amendment and therefore could not be rejected by the ConsumerFora on this ground.

It was held further that in cases of Letter of credit, Bank could not refusepayment by taking vague pleas. The payment could be refused only if it would beestablished case of fraud. Contentions raised in response to letter are insufficient torefuse to make payment in terms of letter of credit.

Documents, plea taken by the bank and letter exchanged between the partiesindicate that official of Central Bank of India declined to honour the L/C unlesspayment was received from Modi Bandhu and this would amount to deficiency inservice. Since the bank failed to pay amount and retained the amount ofRs.4,92,428/- the Central Bank was liable to pay interest @12 per cent p.a.

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Allahabad Bank vs. Shiv Swarup SrivastavAllahabad Bank vs. Shiv Swarup SrivastavAllahabad Bank vs. Shiv Swarup SrivastavAllahabad Bank vs. Shiv Swarup SrivastavAllahabad Bank vs. Shiv Swarup Srivastav

I (200I (200I (200I (200I (2007) CP7) CP7) CP7) CP7) CPJ 2J 2J 2J 2J 221(N21(N21(N21(N21(NC)C)C)C)C)


Complainant invested Rs.35,000/- in a fixed deposit for a period of one year on11.11.1992 with the Petitioner bank. After maturity period the Petitioner Bank refusedto pay the maturity amount. Complainant filed complaint before the District forumpraying for refund of maturity amount alongwith interest. Before the Districtforum petitioner Bank submitted that complainant was also holding a savingaccount with petitioner bank. Amount of Rs.20,000/- on 16.5.1991 and Rs.10,000/- on10.2.1992 were not actually deposited in that account and the enteries made in passbook and ledger book in regard to deposit of these two amounts were fabricatedwith the help of one of its employee Sh. Ram Gopal Srivastava. Though he was notauthorized to receive or deposit money in cash but complainant in collusion withsaid employee got the enteries of deposit of Rs.20,000/- & Rs.10,000/- made in the passbook and ledger book and issued FDR of Rs.35,000/-. The said employee found to beguilty and sentenced to undergo imprisonment in a criminal case. As on 11.11.1992an amount of Rs.35,614.10 was lying in credit in the said account including the saidamounts and FDR of Rs.35,000/- was issued after transferring money from the savingaccount. Thus, the liability to pay the amount denied as the transfer of moneyfrom saving account was without consideration and the enteries of the said twoaccounts made in the pass book and ledger book were fictious and the bank cannotbe held liable for the fraud committed by the employee and made to pay the awardedamount. The District forum rejected the contention of Petitioner bank and heldliable for deficiency in service. On appeal, the State Commission dismissed the appeal.Against dismissal order Petitioner bank filed the present Revision Petition beforethe National Commission.


Whether Bank is liable to pay the amount of the fixed deposit with interestdespite the fact that the fraud was committed by complainant in collusion with itsown employee?


The National Commission held that in absence of evidence to the effect thatcomplainant got the fictious enteries of two amounts of Rs.20, 000/- and Rs.10,000/- made in the pass book and ledger book and issued FDR of Rs.35,000/- in collusion


with said Ram Gopal Srivastava and the respondent not being a co-accused in thecriminal case 4609/94, the Petitioner Bank must be held to have failed to prove thesaid assertion of collusion. Admission by Petitioner bank that Ram Gopal Srivastavawas working as a clerk on 16.5.1991 and 10.2.1992 and the period during which enterieswere made in the Pass book and ledger book maintained by the bank. He was alsoworking on the date when the FDR of Rs.35,000/- was issued. Receipt of amount ofRs.30,000/- from respondent was admitted by Ram Gopal Srivastava as may be seenfrom the judgment dated 12.7.1995. Thus, loss of Rs.30,000/- to the bank was causedby Ram Gopal Srivastava by misappropriating that amount within the scope ofcourse of employment. After applying the ratio of Shyama Devi’s case which rathersupports the respondent, the Petitioner Bank is vicariously liable to pay the amountof the fixed deposit in question together with interest.



Allahabad Bank vs. JDS Electric CompanyAllahabad Bank vs. JDS Electric CompanyAllahabad Bank vs. JDS Electric CompanyAllahabad Bank vs. JDS Electric CompanyAllahabad Bank vs. JDS Electric Company



Complainant was sanctioned with cash credit facility of Rs.2,00,000/- on14.2.1997 which was increased to Rs.3,50,000/- on 25.11.1998 by the petitioner bank.To secure that facility complainant hypothecated the stocks of finished goods, semi-finished goods, raw material, goods in process, plant and machinery/equipment,etc. with Petitioner Bank. The Petitioner Bank from the very inception getting thestocks and equipment, etc. insured and debiting the premium amount in theaccount of respondent. Due to fire in the premises of the complainant, he sufferedloss of more than four lacs. Complainant filed complaint against the Petitionerbank alleging deficiency in service as the Petitioner bank failed to insure the stockand equipments of the complainant. Petitioner Bank contested the matter on theground that under hypothecation agreement it was the responsibility of thecomplainant to take insurance of the hypothecated goods and after takinginsurance supply copy of policy to the bank. District forum allowed the complaint.On appeal the State Commission dismissed the appeal. Against dismissal orderAllahabad Bank filed Revision Petition before the National Commission.


Whether the Bank is liable for deficiency in service in the circumstances whenunder the hypothecation agreement loanee himself is required to take insuranceon hypothecated goods and supply the copy of policy to Bank?


The National Commission after hearing both the parties came to theconclusion that for preceding two years the stock and equipment, etc. were gotinsured by the Petitioner Bank and premium amount debited in the account ofrespondent. No notice was given calling upon the respondent to get thehypothecated stocks and equipment, etc. insured directly for the subsequent yearin which occurrence took place. No illegality or jurisdictional error in the orderspassed by fora below holding petitioner bank to be deficient in service on ground ofits not having got insured the hypothecated stocks and equipments, etc.



CanarCanarCanarCanarCanara Ba Ba Ba Ba Bankankankankank vvvvvsssss..... N N N N Neeeeewwwww In In In In Indddddia ia ia ia ia AAAAAssssssursursursursuranananananccccce Ce Ce Ce Ce Cooooo..... Ltd. Ltd. Ltd. Ltd. Ltd. & & & & & AnrAnrAnrAnrAnr.....

IVIVIVIVIV (2006) CP (2006) CP (2006) CP (2006) CP (2006) CPJ 5J 5J 5J 5J 56 (N6 (N6 (N6 (N6 (NC)C)C)C)C)


Complainant was having a saving account with cheque facility with SindriBranch of the Petitioner Bank. Complainant issued a cheque of Rs.4916/- in favourof Insurance Company towards premium for renewal of the policy for car on29.4.2002. On 1.5.2002 Car of the complainant met with an accident. Complainantlodged his claim with Insurance Company which was repudiated on the ground ofnon-payment of premium. Complainant filed complaint before the District forumalleging Deficiency in service against bank. Before District forum Petitioner Bankcontested the matter. The Bank submitted that on 29.4.2002 only a balance of Rs.2/- was lying in the account of the complainant. Complainant deposited an amountof Rs.4,916/- with the said branch of Bank on 2.5.2002. Cheque was presented to thebranch for payment/through clearance on 7.5.2002. After debiting an amount ofRs.10/- towards service charges for violation of non-maintenance of minimumbalance, the balance in the saving account of the complainant was Rs.4,908/- andtherefore the said cheque was returned unpaid for insufficient fund. The Districtforum while allowing the complaint directed the Petitioner Bank to payRs.1,08,896/- to meet the repair cost of the damaged car and Rs. 60,000/- to meet themedical treatment. On appeal, the State Commission Partly allowed the appeal.Against that order Petitioner bank filed Revision Petition before the NationalCommission.


Whether the act of bank in dishonouring the cheque issued by the customerfor not having maintaining minimum balance in his account amounts to deficiencyin service?


The National Commission held that since the minimum balance was notmaintained in the account, amounts of Rs.10/- were debited on 31.01.2002, and againRs.10/- on 28.2.2002 and again Rs.10/- on 30.2.2002 thereby leaving the credit balanceof Rs.2/-. Further, an amount of Rs.4,916/- was deposited in cash on 2.5.2002 and afterdebiting Rs.10/- towards service charges for not maintaining the minimum balanceon 2.5.2002 the balance lying in account was Rs. 4908/- obviously debiting the saidamounts as service charges by the bank was in conformity with instruction at


Sl.No.12.5.5 of the Manual. Thus, the stand taken by the bank that the balance on7.5.2002 was Rs.4908/- has to be accepted. Therefore, bank cannot be held deficientin service in not honouring the cheque dated 29.4.2002.

Revision Petition allowed.Revision Petition allowed.Revision Petition allowed.Revision Petition allowed.Revision Petition allowed.


Shanti Devi vs. Bhojpur Rohtas Gramin BankShanti Devi vs. Bhojpur Rohtas Gramin BankShanti Devi vs. Bhojpur Rohtas Gramin BankShanti Devi vs. Bhojpur Rohtas Gramin BankShanti Devi vs. Bhojpur Rohtas Gramin Bank

IVIVIVIVIV (2006) CP (2006) CP (2006) CP (2006) CP (2006) CPJ 83 (NJ 83 (NJ 83 (NJ 83 (NJ 83 (NC)C)C)C)C)


The husband of the complainant opened one Bank account on 12.11.1997 in hisown name with the Respondent Bank. After few days, complainant was also joinedas an account holder with the mandate ‘either or survivor’. After some time due tofamily dispute, both of them withdrew the mandate of ‘either or survivor’. After thedeath of the husband of the complainant Bank asked for succession certificate inorder to allow operation of the account. Complainant filed complaint before theDistrict forum on the ground that the complainant could operate the accountalone being a survivor or being a joint account holder and the respondent bankshould not ask for succession certificate. The District forum directed the respondentBank to allow complainant to operate the account. Against the order of the Districtforum respondent Bank filed appeal before the State Commission. The StateCommission allowed the appeal. Aggrieved by the order of the State Commission,complainant filed Revision Petition before the National Commission.


Whether a Bank can be hold liable for deficiency in service in safeguarding itsown interest and asking the complainant for succession certificate?


The National Commission upheld the view of the State Commission and heldthat the State Commission was justified in holding that the Bank could not allowoperation of the account by one of the account holders alone without there beingsuccession certificate and in case the Bank would do so, it may face litigation lateron which may be initiated by the other legal heirs of the deceased. However, asolution-cum-justice oriented approach is need of the hour. If other heirs of thedeceased give consent on an affidavit on due identification and have no objection,then the Bank should release the amount in favour of the complainant along withother heirs or should allow the complainant Petitioner to withdraw 50 per centamount from the Bank account after taking an indemnity Bond from her tosafeguard the interest of the Bank, as well as other legal heirs.

Revision Petition disposed of.Revision Petition disposed of.Revision Petition disposed of.Revision Petition disposed of.Revision Petition disposed of.


American Express Bank Ltd. vs. Narender Kumar RaiAmerican Express Bank Ltd. vs. Narender Kumar RaiAmerican Express Bank Ltd. vs. Narender Kumar RaiAmerican Express Bank Ltd. vs. Narender Kumar RaiAmerican Express Bank Ltd. vs. Narender Kumar Rai



Complainant purchased traveller cheques amounting to 10,000 USD on 9.6.2001and again of 2,000 USD on 9.7.2001 at Novosibrisk City of Russia, while he wasreturning from Russia to his home country India. After reaching India, while thecomplainant was coming to Patna from Delhi through Rajdhani Express, he lost hishand bag containing traveller cheques alongwith other valuable documentsincluding passport, etc. Complainant lodged complaint at Patna on very next dayand also immediately informed the Traveller Cheque Related Service about the lossof the Travellers cheques and filed claim in the office of appellant Bank. Despitecompleting the claim format, sent by appellant Bank, appellant Bank disapprovedthe claim of the complainant without assigning any reason. Complainant filedcomplaint before the State Commission. The State Commission directed theappellant Bank to issue duplicate traveller cheques of 12,000 USD in lieu of lostcheque with interest. Feeling dissatisfied by the order of the State Commission,appellant Bank filed appeal before the National Commission.


Whether the State Commission, Patna has jurisdiction to entertain thecomplaint?

Whether the bank is liable for deficiency in service for repudiating the claim ofits customer in respect of loss of traveller cheques?


The National Commission held that if bag was lost at Patna station, the causeof action had arisen at Patna and within the jurisdiction of the State Commission,Patna. It cannot be said that the State Consumer Disputes Redressal Commission,Patna has no jurisdiction.

In order to deny the claim, the opposite parties are trying to find unnecessaryfaults. It is not a case of isolated loss of traveller cheques alone, the complainanthad also lost his passport and valuable articles kept in the bag. It is not a case thatall reasonable information was not included in the FIR and in the report sent. Thereis no dispute in the fact that the complaint was immediately lodged with the RailwayPolice and in the claim form with affidavit, he mentioned that no amount of traveller


cheques has been encashed by him. The bag was lost at Patna. No investigationreport has been filed to doubt that there was some clout about the version of thecomplainant.

It is not the case of the appellant that these cheques were presented forencashment and they have paid after comparing the signatures of the complainanton those cheques. When the cheques were not utlised and were lost consumer/complainant/purchaser is entitled to get back the money. Otherwise, the personwho issued these traveller cheques would make an unjust enrichment and thepurchaser would be unnecessarily made to suffer the loss. The appellant couldhave verified these facts with the help of all the facilities of computerization andmodern techniques.

Appeal dismissed.Appeal dismissed.Appeal dismissed.Appeal dismissed.Appeal dismissed.


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Complainant raised two loans from the New Bank of India which was latermerged into Petitioner Bank. One loan was for Rs.24,300/- for one acre on 10.11.1986and another for Rs.18,225/- for 3/4th acre on 15.5.1987. The complainant intended toset up a holiday tourist resort on his farm land. A tripartite agreement was executedbetween the Petitioner Bank and Respondent No.2 M/s D.R. Sondhi Farms who ownedabout 200-300 acres of farm land. As per this agreement the bank undertook anobligation of not only granting loan for purchasing land for the purpose of plantationbut also the maintenance of Eucalyptus tree per acre in 6 years and as per thisagreement the entire plantation of trees was hypothecated with the New Bank ofIndia. The plants were got insured by the Complainant at its own cost. Complainantfiled complaint before the District forum against the Petitioner Bank allegingdeficiency in service for breaching the terms/obligations created under theagreement. Dissatisfied with the order of the District forum, complainant filedappeal before the State Commission. The State Commission allowed appeal directingthe Petitioner Bank to pay compensation for the non-observance of the terms ofthe agreement. Aggrieved by the order of State Commission, complainant filedRevision Petition before the National Commission.


Whether the Bank is liable for deficiency in service for not observing theobligations created under the agreement and is also liable to pay compensation?


The National Commission upheld the order of the State Commission and heldthat in view of the tripartite agreement it could not be said that the Bank was underno obligation to inspect and to ensure that the sale proceeds are recovered to clearthe loan for in terms of the tripartite agreement that amount was to be adjustedtowards the account of the complainant. Since on account of failure of the Bank toensure the sale of the Eucalyptus trees in term of Clauses 11 & 12 and failure to dischargeother obligations under other Clauses of the agreement about the adjustment of theamount in accounts books, loss suffered by the complainant/respondent due to breachof obligation arising out of the agreement, are required to be compensated.



MahenMahenMahenMahenMahendddddererererer Sing Sing Sing Sing Singh Siwh Siwh Siwh Siwh Siwaaaaaeh & eh & eh & eh & eh & AnrAnrAnrAnrAnr..... vvvvvsssss..... P P P P Punununununjab & Sinjab & Sinjab & Sinjab & Sinjab & Sindddddh Bh Bh Bh Bh Bankankankankank & & & & & AnrAnrAnrAnrAnr.....



Complainant were allotted locker no.131 and allocated key no. 143 in theRespondent Bank, Begumpul Branch, Meerut. Complainants were paying rentalcharges regularly since 1979. The complainants last operated their locker, whereinall valuables of the complainant were kept, in April, 1997. On 10th March 1998,Complainants visited the Bank and tried to open the locker with their key but it didnot open. The manager of the Bank called a locksmith to open the locker and onthe revelation of the locksmith, it came to light that the said locker had alreadybeen opened earlier by breaking its lock at the instance of previous allottee of thelocker. The bank officials confirmed that the previous allottee had removed all thecontents of the locker. Complainant immediately made a complaint to the policeon coming to know about removal of the jewellery from the locker and disclosed allthe items of jewellery. Complainants issued a legal notice to the Manager of theRespondent Bank alleging fraud, default and misconduct on the part of branchmanager. In reply to the legal notice it was stated that it was a case of mistake/negligence on the part of their staff and further stated in the notice that as no listof inventory is being made by the Bank when a customer of locker placed his articlesin it, so when claim of your client will be vetted by any legal authority/competentcourt of law, my client will compensate your client. Police arrested the previousallottee of the locker who admitted fraud/theft and also surrendered to the bank asum of Rs.1,01,800/- in cash and melted gold and coins weighing 289.980 gms. Thebank, in turn, handed over the said amount and the gold to the complainants.Complainants filed complaint against respondent Bank before the NationalCommission.


Whether Bank is liable for deficiency in service for allowing previous allotteeto operate the locker who had already surrendered the locker 18 yrs before andpermitting him to take away gold jewellery as if he has kept the articles in thelocker.


The National Commission held that the procedure laid down by RBI guidelineshas been completely flouted by the opposite party by not maintaining the locker


register, locker key register, non-payment of rent dues and lastly, the procedure thatshould be adopted for breaking open a locker, etc. and also in view of the statementsby the complainants, admission of theft by previous allottee, admission of the bankofficials that it was an inadvertent mistake, there is clear deficiency in service andgross negligence on the part of the bank. When the complainants are paying rentfor the locker and entrusting their valuable articles in the safe locker and showtheir trust in the bank, it is the duty of the bank to protect the valuables of theclients and maintain proper records of opening/closing of lockers, entry ledgers, etc.Bank should have taken necessary action on their own against its employees insteadof accusing and disregarding the report and affidavits of the complainants as tothe value of the contents kept in the locker. The assurance of the Bank that theywill provide complete security becomes a myth when the Bank takes a consistentstand of finding fault with the consumer.

Complaint allowed.Complaint allowed.Complaint allowed.Complaint allowed.Complaint allowed.


PPPPP.S.S.S.S.S..... S S S S Saaaaawhnewhnewhnewhnewhneyyyyy vvvvvsssss..... Canar Canar Canar Canar Canara Ba Ba Ba Ba Bankankankankank & & & & & AnrAnrAnrAnrAnr.....



Complainant being an artist of Chandigarh visited Delhi with his arte-facts fordisplay in IITF. Complainant issued cheque of Rs.1,000/- to M/s Ram Kumar GlassSuppliers for supplying the glass plate and the etching of art work on it. As thecomplainant had to present his art work to some VVIP he contacted to the engagedglass supplier, the complainant came personally to Delhi for collecting the same.On reaching there he found the job to be incomplete. The Glass supplier returnedthe cheque of Rs.1,000/- issued by complainant informing him that the cheque wasdishonoured by the respondent Bank and hence, refused to carry out the work. Onenquiry, it come out on surface that the respondent Bank sent the cheque forcollection to Punjab National Bank, New Delhi, instead of Punjab National Bank,Chandigarh. Aggrieved by the action of Canara Bank/respondent Bank, complainantfiled a complaint before the District forum. The District forum dismissed thecomplaint on ground that complainant is not a consumer as the complainant hadnot hired the services of the respondent Bank. However, of the District forumgranted compensation to the supplier. Dissatisfied with the order of the Districtforum complainant filed appeal before the State Commission which confirmedthe order of the District forum and therefore, complainant filed Revision Petitionbefore the National Commission.


Whether complainant can institute proceedings against the bank fordeficiency in service despite the fact that it did not hire the services of the bank?


Before the National Commission, Petitioner submitted that the cheque inquestion was presented by respondent Bank to a wrong branch of the PunjabNational Bank, and this per se is deficiency in service whereas the respondent Banksubmitted that as the concerned cheque was inadvertently sent to the New DelhiBranch of the Punjab National Bank and thus there is no deficiency in service andfurther submitted that the Glass supplier should have sent it to the Punjab NationalBank, Chandigarh and got the money. Further, it was submitted that since thePetitioner was not having any account with the respondent Bank and therefore, hecannot be said to be a consumer.


The National Commission held that the Petitioner would be the beneficiary ofthe services, which were required to be rendered by the Canara Bank. Because ofwrong handling of cheque by the opposite party No.1 by presenting the cheque forencashment at Punjab National Bank, Delhi, Petitioner suffered a loss. Petitionerwas the beneficiary of the services, which were required to be rendered by the CanaraBank to the opposite party No.2. Hence, the complaint, in our view, was maintainable.

Further, the order passed by the State Commission directing the O.P. No.2 to payRs.10,000/- as compensation cannot be justified. Because, there was no fault on hispart in presenting the cheque to the Canara Bank. However, Canara Bank wasdirected to pay compensation to the Petitioner.

Revision Petition partly allowed.Revision Petition partly allowed.Revision Petition partly allowed.Revision Petition partly allowed.Revision Petition partly allowed.


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IVIVIVIVIV (2006) CP (2006) CP (2006) CP (2006) CP (2006) CPJ 32J 32J 32J 32J 3288888


Complainant a NRI, started his projects in India and baggaged a number ofgood contracts. For executing the contracts, the appellant/complainant availed ofcredit facilities in terms of mutual agreement with the respondent Bank. In theyear 1986 respondent Bank sanctioned small credit facility of Rs.3 lacs which waslater in 1993 enhanced to the sum of Rs.38 lacs. The appellant/complainant, on5.12.1992 requested the respondent Bank for issuance of earnest money Bankgurantee in favour of MTNL which was refused by the Bank and on 7.1.1993 therespondent Bank confirmed continuation of the credit facilities for a further periodof 6 months. On 17.2.1993 the complainant requested for extension of bank guranteefor Rs.22,53,255/- in favour of silver oak co-operative Group Housing Society Ltd. for afurther period of 6 months w.e.f. 23.3.1993 to 22.9.1993. The existing Bank guranteein favour of M/s Silver oak co-operative Group Housing Society Ltd. was to expire on23.3.1993. Despite request for renewal of the Bank gurantee respondent Bank failedto do so which inflicted serious blow to the financial health of appellant companyas the silver oak society withheld the payments due and also the payments whichwould have become due to the appellant company. Complainant filed complaintbefore the State Commission. Dissatisfied with the order of the State Commission,complainant filed appeal before the National Commission.


Whether deduction in credit limit and the act of not renewing the existingBank gurantee despite request amounts to deficiency in service?


The National Commission held that Respondent Bank vide its letter dated30.3.1993 renewed the credit facilities subject to certain conditions and requestedthe complainant to make arrangements to file fresh charge as whenever any termand condition of loan, etc. is modified fresh documentation is necessary but theappellant till 20.11.1993 did not comply with the condition. Thus, whenever anyBank or financial institution does not feel it safe on account of the questionableconduct of a borrower, it could, rather should, reduce the credit limit. Credit limitdepends on flow of money in the Bank account. It depends also on the conduct ofthe borrower not to take money surreptitiously. If in these circumstances specific


charge is asked to be created by executing a mortgage and it is delayed for nearly sixmonths then the Bank cannot be said to be deficient in rendering service, in case ofreduction of the credit limit and non-issuance of the Bank gurantees sought for.Nor it could be said that the respondent was deficient in rendering appropriatebanking services.

Appeal dismissed.


SSSSStttttananananandddddararararard Cd Cd Cd Cd Charharharharhartertertertertereeeeed Bd Bd Bd Bd Bankankankankank vvvvvsssss..... Dr Dr Dr Dr Dr..... B B B B B.N.N.N.N.N..... R R R R Ramamamamamananananan

III (2006) CPIII (2006) CPIII (2006) CPIII (2006) CPIII (2006) CPJ 1 (SJ 1 (SJ 1 (SJ 1 (SJ 1 (SC)C)C)C)C)


Complainant, a NRI employed as a Prof. of Medical Physiology in the Universityof Libya, placed with the appellant bank US$5000/- in the FCNR account for 63 months@9% per annum. The deposit was made by the draft drawn on New York Bank. Thedeposit was to be matured on 17.11.1984. In 1984, RBI allowed the banks to keep FCNRfor six years and interest was increased from nine per cent to 13 per cent.Complainant in June 1984, intimated the appellant bank to re-invest the entireamount in FCNR account on maturity for a further period of six years @13 per centper annum. While visiting India, the branch office of bank assured the complainantthat US$ 7939.56 were lying in the FCNR account which has been re-invested at 13per cent p.a. for six years maturing on 7.11.1990. In September 1990, complainantrequested the appellant bank to re-invest the entire amount in his FCNR accountfor a further period of three years after maturity. In January 1992, after comingback to India, complainant enquired about the status of his deposit for which he didnot get any response. He made a complaint in writing on 5.1.1992, 14.1.1992.Complainant received a letter from the appellant bank dated 15.10.1992 stating thatthe said deposit was pre-maturely drawn on 22.11.1979. Complainant madecomplaint to the RBI and also before the State Commission. The complaint beforethe State Commission was resisted by appellant bank on the ground of limitation.The State Commission allowed the complaint. Against the order of the StateCommission, appellant bank filed an appeal before the National Commission. TheNational Commission confirmed the order of the State Commission and dismissedthe appeal. The appellant bank filed Civil Appeal before the Supreme Court.


Whether the activities relating to non-sovereign powers of statutory bodiesare within the purview of the Act?


The Supreme Court held that National Commission, State Commission andDistrict forum are remedial agencies. Their functions are quasi-judicial. The purposeof these agencies is to decide Consumer disputes. Activities relating to non-sovereignpowers of statutory bodies are within the purview of the Act. The functions of suchstatutory bodies come under the term ‘service’ under section 2(1) (o) of the Act.


In the case of Forasol v. Oil & Natural Gas Commission, AIR 1984 SC 241, Supremecourt observed that in an action to recover an amount payable in a foreign currencythe court has to select a date which puts the plaintiff in the same position in whichhe would have been, had the defendant discharged his obligation when he ought tohave done, bearing in mind that the rate of exchange is a fluctuating factor. Toselect the date when the amount became due, the court has to act in a just, fair andequitable manner because in a case where the rate of exchange has gone theopponent escapes by paying a lesser sum than what he was bound to and thus hegains by default while in the converse case where the rate of exchange has goneagainst the opponent, the opponent would be subjected to a greater burden thanwhat it should be. The agencies under the Consumer Protection Act, 1986 shouldalso keep in mind the economic situation of the country. Encashment of dollardenominated deposits have certain economic implications. In cases of this type, theburden is on the complainant to show the rate of exchange prevalent on theaforesaid dates in order to assist the court to arrive at the indicative prices. This hasnot been done in the present case. Neither the State Commission nor the NationalCommission has examined this question regarding selection of the appropriatedate, the appropriate rate of exchange on that particular date as also the rate ofinterest, which the appellant was required to pay. The claim of the respondent formoney decree with interest at the rate of 18 per cent p.a. till realization appears tobe on the higher side and inflative. The rate of exchange, which is indicative of priceand which constantly varies from time to time, has not been examined.

Result: Appeal partly allowed; matter remanded to the State Commission forfresh consideration.

Appeal partly allowed.


Bank of India & Ors. vs. Chinmay Barik & Ors.Bank of India & Ors. vs. Chinmay Barik & Ors.Bank of India & Ors. vs. Chinmay Barik & Ors.Bank of India & Ors. vs. Chinmay Barik & Ors.Bank of India & Ors. vs. Chinmay Barik & Ors.

III (2006) CPIII (2006) CPIII (2006) CPIII (2006) CPIII (2006) CPJ 2J 2J 2J 2J 29 (N9 (N9 (N9 (N9 (NC)C)C)C)C)


Complainant with a view to start an oil processing unit, obtained a term loanfrom Orissa State Financial Corporation and also got sanctioned ‘working-capital’limit of Rs.1,00,000/- from the appellant Bank. The bank released Rs.10,000/- as loanto the complainant on 13.6.1988 and the same was repaid on 3.2.1989 & 12.4.1990 butthe bank failed to release ‘working-capital-limit’ of Rs.1,00,000/- to the complainantdue to which his unit became sick and the complainant filed complaint before theState Commission. The State Commission hold the appellant bank deficient inservice and allowed the complaint with compensation of Rs.10,000/-. Feelingaggrieved by this order appellant bank filed appeal before the National Commission.


Whether the act of Bank in not honouring its commitment of releasing balanceloan amount to the complainant amounts to deficiency in service?


The appellant bank submitted that no deficiency in rendering service could befastened on them as they were not expected to advance loan to a unit which wasclosed. The complainant repaid his earlier loans and since the unit was closed andtherefore, they did not release any further instalment of loan to the complainant.

The National Commission held that in the meeting held on 16.11.1998 the Dy.GM of the appellant Bank committed to release Rs.10,000/- to the unit and thesubsequent instalments were to be released after verification of stock. Nothonouring this commitment would amount to deficiency in service on the part ofthe appellant. Further, if they had any reservation that the unit was closed orelectricity was not there, then all these points should have been raised in the meetingwhere all concerned parties were present including the District Industrial Centre,Orissa State Financial Corporation Bank and Ors. The assurance in this meetingwas categorical on the part of the appellant that the instalment would be releasedand not honouring this would be a case of deficiency in service.

Appeal dismissed.


Ashok Kumar Kalra vs. Allahabad BankAshok Kumar Kalra vs. Allahabad BankAshok Kumar Kalra vs. Allahabad BankAshok Kumar Kalra vs. Allahabad BankAshok Kumar Kalra vs. Allahabad Bank



Complainant took loan of Rs.1,50,000/- for purchasing a tractor and mortgagedone land measuring 74 kanals for the purpose of securing loan. As per Hypothecationagreement dated 7.1.1996 the Insurance premium of the tractor was to be paid bythe respondent bank and debited into the account of the complainant. Thecomplainant’s tractor on 5.9.1997 met with an accident wherein one person diedand the complainant had to pay Rs.69,000/- by way of compensation to the fatherof the deceased before MACT. On lodging claim before Insurance company, it wasrepudiated by Insurance Company on the ground of non-payment of premium.Complainant filed complaint before the District forum alleging deficiency in serviceagainst respondent Bank. Before the District forum, Respondent bank took pleathat under Para IX of hypothecation agreement it was the duty of the Petitioner topay the premium and not the duty of the respondent bank to get the tractor insuredand pay premium. The District forum accepted the complaint with a direction tothe respondent bank to pay Rs.69,000/- with interest @10 per cent p.a. RespondentBank filed appeal before the State Commission which allowed the appeal. Againstthe order of the State Commission, complainant filed Revision Petition before theNational Commission.


Whether Bank can be held liable for negligence for not getting the tractorinsured?


The complainant/petitioner before the National Commission submitted thaton the asking of petitioner the respondent bank had earlier paid premium to theInsurance Company. The National Commission rejected the submission of thePetitioner and held that bare reading of Hypothecation agreement it was primarilythe obligation of the Petitioner to have got the tractor insured and premium paid.The Petitioner did not issue any instruction to the bank to obtain insurance of thetractor for the relevant period and debit the premium amount in his account.

Revision Petition dismissed.


Tirupati Agencies vs. HSBC Bank & Ors.Tirupati Agencies vs. HSBC Bank & Ors.Tirupati Agencies vs. HSBC Bank & Ors.Tirupati Agencies vs. HSBC Bank & Ors.Tirupati Agencies vs. HSBC Bank & Ors.

III (2006) CPIII (2006) CPIII (2006) CPIII (2006) CPIII (2006) CPJ 37 (NJ 37 (NJ 37 (NJ 37 (NJ 37 (NC)C)C)C)C)


Complainant was awarded with an overseas contract for consignment of 2300dozen of goods of children garments in Jeddah, Saudi Arabia. Foreign buyer obtaineda documentary credit no. DCBJD 100149 dated 22.1.2001 for USD 37,300.00 issued bySaudi British Bank, Saudi Arabia in favour of the complainant. The documentarycredit in their favour was in accordance with the terms of Article 7(A) of UCP 500which was received by Respondent Bank on 23.1.2001. Respondent Bank entrustedthe job of delivery of the said letter of credit to their agent, an authorized courier M/s First Flight Courier Ltd. for onward delivery of letter of credit to the complainanton 24.1.2001. Inspite of all the correct details given regarding the particulars of theoffice address, Courier Company returned the said envelope containing the L/C tothe Respondent Bank with the remark that party shifted to unknown place. Basedon report of the courier company, Respondent Bank informed the foreign buyerthat the complainant is unreachable. The respondent bank did so withoutascertaining from the complainant. On receiving such report foreign buyer becomesuspicious about the very existence of the firm and cancelled the L/C immediately.Complainant filed complaint before the National Commission claiming paymentof an amount of Rs.17,35,000/- for loss arising out of loosing foreign consignmenttransaction.


Whether Bank can be held liable for deficiency in service when the conduct ofthe complainant itself dubious in not sending consignment within scheduled timedespite having knowledge that L/C cannot be cancelled unilaterally by the Bank.


Respondent bank before National Commission submitted that the letter ofcredit was received on 23.1.2001 and they delivered the same to the complainant atthe address mentioned in the letter of credit but courier company was unable todeliver the said letter of credit to the complainant as complainant was not presentat the said address. Courier company made various efforts to deliver the said L/C tothe complainant and finally returned the same to the respondent bank on 5.2.2001and thus, constrained to inform the issuing Bank i.e. Saudi British Bank on 6.2.2001about the non-delivery of the L/C under the bona-fide belief that the complainant


must have moved away from that address to an unknown address.

Further, L/C was duly received by the complainant on 26.2.2001. The issuingbank of the L/C gave a message on 28.2.2001 asking for cancellation of the said L/C.Complainant was informed on 19.3.01 that Saudi British Bank (SBB) had asked themto return the L/C for cancellation with the consent of beneficiary i.e., thecomplainant but the same remained unreplied.

National Commission agreeing with the submissions of the Respondent Bankheld that respondent Bank on 4.5.2001 sent a letter to the complainant explainingthat once L/C is issued and received by the beneficiary, it cannot be cancelled by theissuing bank, without the consent of the beneficiary but the same remainedunreplied. The said L/C was received by the complainant on 26.2.2001. He had ampletime to supply the garments before the expiry of the last date and shipment i.e.21.4.2001 and then SBB was legally bound to honour the L/C. Hence, for reasons bestknown to the complainant he preferred not to supply garments and hence, he isresponsible and liable for the loss, if any.

It is an admitted position that as per law once the L/C reached the beneficiarythe issuer cannot unilaterally cancel the same. Respondent bank rightly informedthe same by a reminder to the complainant and the complainant did not bother tosend the consignment within the time frame of L/C nor did he reply to the letterswritten by O.P.No.1 complainant at a later stage cannot take a view that O.P.No.1 hadhurriedly sent a message to the issuing bank. In the light of the complainant’s ownconduct, the so-called intention to export seems questionable. The consequentialdamages he has claimed cannot be awarded as there is no deficiency in service byO.P.No.1.

Complaint dismissed.


HDHDHDHDHDFFFFFC BC BC BC BC Bankankankankank Ltd. Ltd. Ltd. Ltd. Ltd. vvvvvsssss..... K K K K Kiiiiissssshohohohohorrrrre Re Re Re Re R..... WWWWWooooorrrrrahahahahah



Complainant obtained loan of Rs.5,00,000/- against shares from Petitioner Bank,Chembur Branch. The drawing power granted to the extent of 65 per cent of thevalue of shares. On 21.9.2001 complainant was asked to pay Rs.38,325.17 within twodays and in case of failure to make payment complainant was threatened to sellthe pledged shares. The complainant paid Rs.5,000/- on the very next day, leavingthe balance of Rs.3,315.17 and inspite of payment of said amount the Petitionerbank sold the shares worth Rs.1,40,481/- on 26.9.2001 which were deposited with theBank as security. The complainant filed complaint before the District forum allegingdeficiency in service on account that Petitioner bank arbitrarily reduced the drawingpower from 65 per cent to 60 per cent without obtaining approval from thecomplainant and the said sale of shares is in excess of their demand made by thePetitioner bank on 23.9.2001 and is in breach of agreement/contract entered intobetween the parties. The District forum allowed the complaint directing thePetitioner bank to purchase 300 shares of Colgate Ltd. and 562 shares of ACC in thename of the complainant at their own cost within a period of one month andretain the same as security for the over drawing facilities granted to the complainantif he is availing the facility and in case not availing the facilities then to hand overthe said shares to the complainant. On appeal, the State Commission dismissed theappeal filed by Petitioner bank holding that the bank without waiting for expiry of7 days from the date of intimation sold the shares and thus, acted in contraventionof the terms and conditions of the agreement which amounts to deficiency inservice. Aggrieved by the order of the State Commission Petitioner bank filed RevisionPetition before the National Commission.


Whether the action of the Bank in selling a part of the pledged shares to makegood the deficit in borrowing power and the margin when the borrower hadoverdrawn in excess of the eligible limits, amounts to deficiency in service?


Before the National Commission, Revision Petitioner submitted that theComplainant / respondent had to maintain 40 per cent margin at all times forhaving taken over draft facility against the shares and the amount required to


make good the deficit 21/2 times the overdrawn amount. Repeated letters by bankasking complainant to make good the deficit did not yield any positive responsefrom the complainant despite having more than seven days notice. On the otherhand complainant submitted that telegram issued by Petitioner bank was dated21.9.01 calling upon the complainant to make good the deficit in overdraft accountand they sold the shares on 26.9.2001 without waiting for the expiration of sevendays notice which amounts to deficiency in service.

The National Commission rejected submission of the complainant and heldthat the telegram dated 21.9.2001 was the last reminder. Letters were sent earlier tohim by giving more than seven days time to make good the loss in deficit. The firstnotice dated 28.4.2001 mentions about the details of excess overdrawal and thestatement of value of shares pledged. Vide another letter dated 14.5.2001 complainantwas requested to regularize the account by funding or pledging additional shareswithin 10 days. The next notice dated 26.5.2000 also mentions the same thing. Inresponse to the deficit to the tune of Rs.27,252/-, Rs.2,252/-, Rs.19,252/-, Rs.20,252/-,Rs.31,290/- and Rs.18,290/- the respondent had deposited only Rs.10,000/-, Rs.5,000/-,Rs.5,000/-, Rs.5,000/-, Rs.5000/- and Rs.5,000/-, on 9.5.2001, 4.6.2001, 11.6.2001, 13.7.2001and 26.7.2001, respectively as per the bank statement submitted by the respondentwhich is clearly indicative of the fact that the respondent did not make good thedeficit and hence, the notices were issued to him in the form of letters. Throughthese letters the bank had given more than seven days notice. As a final reminderthe telegram was sent. This generous act cannot be termed as deficiency of service.The bank had given him adequate notice before they sold his shares.

The bank has exercised with due caution and circumspection and has actedwithin the ambit of powers occurring to bank as a result of the contract i.e. loanagreement-cum-guarantee signed by the borrower.

Revision Petition allowed.


Om Prakash vs. Allahabad Bank, Daliganj Branch, LucknowOm Prakash vs. Allahabad Bank, Daliganj Branch, LucknowOm Prakash vs. Allahabad Bank, Daliganj Branch, LucknowOm Prakash vs. Allahabad Bank, Daliganj Branch, LucknowOm Prakash vs. Allahabad Bank, Daliganj Branch, Lucknow



Complainant approached the respondent Bank on 8.8.2004 for the renewal ofFDRs though the date of maturity was in the year 1995 and 1997. Complainant filedcomplaint before the District forum with a prayer to direct the respondent Bank topay interest prevailing in the year 1995 and 1997. The District forum vide its orderdated 30.6.2004 directed the respondent Bank to pay the amounts of 3 FDRs withinterest prevailing at the relevant period for saving bank accounts. Complainantand the Respondent Bank preferred appeals before the State Commission. TheState Commission dismissed the appeal of the complainant relying on the circulardated 7.6.2001 issued by RBI binding on all banks in India as per which renewal ofoverdue term deposit at the rate of interest prevailing on the date of maturity beallowed only for an overdue period of 14 days. In case, the overdue period exceeds 14days if the depositor places entire amount of overdue deposit or a portion thereof asa fresh term deposit, banks may prescribe their own interest rate for the overdueperiod on the amount so placed as a fresh deposit. Banks, however, have to informthe depositors in advance of their policy for renewal of overdue deposits. Againstthis dismissal order complainant filed Revision Petition before the NationalCommission.


Whether Bank can be held liable for deficiency in service for not granting rateof interest on the renewal of overdue FDR prevailing on the date of maturity?


The National Commission relying on circular dated 7.6.2001 held that renewalof overdue term deposit at the rate of interest prevailing on date of maturity, can beallowed only for overdue period of 14 days and thereafter interest rate is to becalculated for 15 days on date of presentation of FDRs for renewal. Petitioner, thuscould not have been allowed interest prevailing in 1995-1997.



Debabrata MukherjeeDebabrata MukherjeeDebabrata MukherjeeDebabrata MukherjeeDebabrata Mukherjee vs. vs. vs. vs. vs. Allahabad Bank & Ors.Allahabad Bank & Ors.Allahabad Bank & Ors.Allahabad Bank & Ors.Allahabad Bank & Ors.



Complainant alongwith two others opened a joint current ‘over Draft’ A/c anda FDR of Rs.22,000/- and 208 shares of ITC Ltd. in the name of one Ms. PratimaMukherjee was given as security to the United Industrial Bank Ltd. The UnitedIndustrial Bank Ltd. was taken over by the respondent Bank. On 31.10.1989 thecomplainant received a letter showing an outstanding amount of Rs.45,135/- afteradjusting amount of FDR for which no information was given to the complainant.Complainant pointed out to the respondent bank that amount of interest calculatedon FDR was not taken into account on the other hand respondent bank threatenedto sell the pledged shares and actually sold on 12.7.1991 and this amount was notshown as ‘credit’ in favour of the complainant. Complainant filed appeal before theState Commission. The State Commission directed the appellant Bank to refundRs.302 shown as excess in favour of the complainant alongwith compensation ofRs.10,000/-. Aggrieved by the order both complainant as well as Allahabad Bankfiled two separate appeals before the National Commission.


Whether the Bank can be held liable for deficiency in service for not informingthe complainant about adjustment of the amount of FDR in his account and raisingfurther demands?


The National Commission held that the State Commission rightly held thatthe shares were held in the name of Pratima Mukherjee (since expired) and thecomplainant had no right to sell the shares even if they were to be released in hisfavour. Since the complainant had no authority to sell the shares standing in thename of the deceased, hence it cannot be held that the complainant under wentany loss in view of non-sale of the shares. Shares were kept as security on over draftobtained by the complainant and they were returned after the outstanding dueswere liquidated, hence rightly held by the State Commission on this account nodeficiency can be fastened on the part of the bank.

Further, the very fact that the Bank did not inform the complainant aboutadjustment of the amount of FDR in the name of the complainant, along with


interest and its adjustment against the over draft outstanding amount and withoutdoing so, went on to raise the demands which were later found to be not in ordersand finally, refund order of Rs.302 show that the Bank was partially deficient inrendering service.

Appeals dismissed.


Canara Bank Canara Bank Canara Bank Canara Bank Canara Bank vvvvvs. Agnes D’mellos. Agnes D’mellos. Agnes D’mellos. Agnes D’mellos. Agnes D’mello

I (2006) CPI (2006) CPI (2006) CPI (2006) CPI (2006) CPJ 8 (NJ 8 (NJ 8 (NJ 8 (NJ 8 (NC)C)C)C)C)


Appellant Bank provided locker No.37 to the Complainant on 7.5.1987. On12.5.1987, the complainant alongwith her sister-in-law went to the bank anddeposited jewellery in the said locker and locked the locker. After assuring themselvesthat the locker was properly locked and further after verifying that the lock of thelocker was properly locked and then went home. On 11.6.1987 the complainantwent to Muscat. The Manager of the Bank vide letter dated 13.8.1987 informed hersister-in-law that the locker was found opened and the jewellery kept in the lockerwas found missing. She filed FIR with the Police. The complainant sent letters tobank but the bank did not properly respond to it. Ultimately after coming fromMuscat on 9.5.1988, complainant surrendered locker’s key to the bank and also filedcomplaint before the State Commission. The State Commission directed theappellant bank to pay Rs.1,12,500/- for the loss of ornaments kept in the locker with18 per cent p.a. interest. Against the order of the State Commission, Petitioner Bankfiled appeal before the National Bank.


Whether the Bank is liable to compensate the customer the loss of ornaments?


The National Commission held that insofar as the question of deficiency inservice is concerned, a person who provides a locker just virtually undertakes toensure safety of the valuables kept in the locker. Without master key the lockercould not be opened. After it is locked the person who looks after the locker issupposed to see before leaving the office that all the lockers are properly locked.Room of the locker is also supposed to be properly locked to ensure safety. If thelocker Manager fails to discharge his duty to ensure safety of the locker room andlockers containing articles and valuables kept therein then the locker Manager andthe concerned bank cannot be absolved until and unless a robbery or dacoity takesplace at gun point by breaking open the locker. In view of the statement of officialof the Godrej Co. the key of the consumer could not be taken out without lockingthe locker. There is undisputed evidence that the locker was locked and it wasverified by the complainant and her sister-in-law, in view of the statement of thecomplainants, for the sake of argument it is taken for granted that it might have


not been properly locked, then it had to be believed that the locker Manager eitherdid not check that all the lockers have been properly locked on that very day or hewas negligent and deficient in performing his duty to act in good faith by takingdue care and caution. The fact that information of the locker was allegedly foundopen much later on 8.8.1987 could make it evident in such circumstances thatdeficiency was writ large and the bank could not be absolved from its liability tocompensate the respondent.



Mahad Co-operative Urban Bank Ltd. vs.Mahad Co-operative Urban Bank Ltd. vs.Mahad Co-operative Urban Bank Ltd. vs.Mahad Co-operative Urban Bank Ltd. vs.Mahad Co-operative Urban Bank Ltd. vs.UUUUUnitenitenitenitenited Ind Ind Ind Ind Indddddia Insuria Insuria Insuria Insuria Insuranananananccccce Ce Ce Ce Ce Cooooo..... Ltd. Ltd. Ltd. Ltd. Ltd. & & & & & AnrAnrAnrAnrAnr.....

I (2006) CPI (2006) CPI (2006) CPI (2006) CPI (2006) CPJ 4J 4J 4J 4J 44 (N4 (N4 (N4 (N4 (NC)C)C)C)C)


M/s Ibrahim Ahmed Taj & Co./Akil Ibrahim Taj was engaged in purchase andsale of dry fishes at Mahad, Maharashtra. Storing their goods in three stores/godownsand took three insurance policies from Respondent Insurance Co. covering riskagainst flood of Rs.30 lacs, 10 lacs & 15 lacs w.e.f. 25.3.1987 to 25.3.1988. Due to heavyflood & rain on early hours of 19.8.1987 dry fishes being sensitive to water startedstriking. Under the direction and supervision of the officials of Mahad MunicipalCouncil, dry fishes stored in three godowns were removed and thrown into river.The surveyor appointed by Insurance company assessed loss at Rs.52 lacs, however,Insurance company repudiated the claim. On the other hand, Sangli Bank Ltd.through its Mahad branch instituted various proceedings for recovery of loanamount against the complainant. Under a Tripartite agreement dated 9.6.1992between Sangli Bank Ltd. and complainant and the Akil Ibrahim Taj, complainantpaid an amount of Rs.48 lacs to the Sangli Bank Ltd and the O.P.No.2 M/s Akil IbrahimTaj transferred all its actionable claims in favour of complainant Bank. In complaintby Ibrahim Taj against repudiation, the National Commission directed insurancecompany to pay compensation of Rs.18 lacs in full and final settlement. The SupremeCourt dismissed the appeal on the ground that LRs of Ibrahim Taj not pursuing thematter before the National Commission. Mahad Co-operative Urban Bank Ltd. filedfresh complaint before the National Commission based on the same three policies.


Whether a fresh complaint filed by bank based on same three policies could bemaintainable despite the fact that the earlier complaint based on these same threepolicies was disposed of by the National Commission?


The National Commission held that earlier complaint based on three policiesof Rs.30 lacs, 10 lacs and 15 lacs disposed of by this commission by order dated 8.9.2000awarding compensation of Rs.13 lacs in full and final settlement to O.P. No.2. Appealfiled by O.P.No.2 against that order was dismissed by the Supreme Court. Againbased on same three policies, a fresh complaint would not be maintainable andthus deserves to be dismissed.



Allahabad Bank, Bhopal vs. Ranbir Singh BhadoriyaAllahabad Bank, Bhopal vs. Ranbir Singh BhadoriyaAllahabad Bank, Bhopal vs. Ranbir Singh BhadoriyaAllahabad Bank, Bhopal vs. Ranbir Singh BhadoriyaAllahabad Bank, Bhopal vs. Ranbir Singh Bhadoriya



Complainant was availing locker facility on hire with Petitioner Bank bearingNo.138. On 18.5.1998 when the complainant visited the Petitioner Bank to operatethe locker, Mohan Lal Verma, officer of the bank went inside the locker roomalongwith the complainant. While the complainant was trying to open the locker,he noticed that it was broken and empty and all ornaments kept therein weremissing. Immediately an FIR was lodged with Habibganj Police Station. When thePetitioner bank did not settle the claim of the complainant of total cost ofornaments amounting to Rs.4,35,260/- complainant filed complaint allegingdeficiency in service against Petitioner Bank. The District forum allowed thecomplaint, which was affirmed by State Commission on appeal. Against this orderof the State Commission Petitioner Bank filed Revision Petition before the NationalCommission.


Whether Bank is deficient in service for not taking immediate steps as perinstructions No.6.3, 9.1 & 9.2 in chapter 16 of the Mannual of Instructions governingoperation lockers?


The National Commission the contentions of Petitioner Bank which submittedthat complainant mischievously removed the four bolts of the locker from insideremained, removed the contents thereof and went away closing the locker withoutkey on 18.1.1997 and held that if the locker was closed without key after removingthe contents thereof by the respondent/complainant, the Petitioner bank shouldhave detected that fact on inspection of the locker immediately after it was used bythe respondent as also on physical verification of locker at the end of day on 18.1.1997as required by instructions dated 6.3, 9.1 & 9.2 in chapter 16 of the Mannual ofInstructions governing operation of lockers. Respondent operated the locker aftera gap of 16 months. In case the respondent wanted to falsely make out a case oftheft of jewellery from locker, he would not have waited for the said period afteroperating locker on 18.1.1997.



ININININING G G G G VVVVVoooooyyyyyagagagagage Be Be Be Be Bankankankankank Ltd. Ltd. Ltd. Ltd. Ltd. vvvvvsssss..... VVVVV.Y.Y.Y.Y.Y.G..G..G..G..G. S S S S SrrrrreeeeeeReReReReRam Sam Sam Sam Sam Seeeeettttttttttyyyyy



Complainant was a guarantor for an advance of Rs.80,000/- made by theRespondent Bank of Jayanagar Branch to one M/s Gautam Enterprises, Bangalore,during the year 1983-84. Complainant also deposited Rs.20,000/- on 3.12.1986 andRs.30,000/- on 6.12.1986 under the Akshaya Deposit Certificate Scheme of the sameBank of Fraser Town Branch. Under the scheme, on maturity the Bank was liable topay a sum of Rs.40,490/- and Rs.60,735/- to the complainant. On maturity thePetitioner bank returned both the receipts as there was no amount lying in thedeposits to the credit of the complainant. The Bank also did not reply to the legalnotice dated 2.11.1993 of the complainant. Therefore, the complainant approachedthe District forum by filing complaint. The District forum relying upon Sec.171 ofthe contract Act, dismissed the complaint with cost. Complainant preferred appealbefore the State Commission. The State Commission allowed appeal by holdingthat the FDRs held by the Bank were not pledged with the Bank. The complainanthad fixed deposits in Fraser Town Branch, whereas M/s Gutam Enterprises hadobtained loan from the Jayanagar Branch of the Bank and further held that onebranch of the Bank has no jurisdiction to exercise its powers on the other branch ofthe same bank under the provisions of Sec.171 of the contract Act to have generallien. Against this order, Petitioner bank preferred present Revision Petition beforethe National Commission.


Whether a banker in exercise of its lien under Sec.171 of the contract Act, straightaway appropriate the money deposited by a guarantor in FDR, without any bailmentand without informing the guarantor?


Counsel for Petitioner bank submitted before the National Commission that‘general lien of the banker’ is to the effect that the Bank can retain as security forgeneral balance of accounts on any goods bailed to them. Section 171 specificallyprovides in the absence of a contract to the contrary, the Bank can retain as asecurity for general balance of accounts any goods bailed to them. The NationalCommission held that the complainant has not bailed any goods’ to the Bank. TheFDRs were also not pledged with the Bank against the loan taken by M/s Gautam


Enterprises. The amount was deposited with the Bank after more than one year ofthe loan given to M/s Gautam Enterprises. The wording of the section are to theeffect that the bankers would have general lien only on any goods bailed to them. Ifgoods are not bailed, Bank cannot go and take away any goods, wherever they arelying into their custody and contend that they have lien over the same.



AlAlAlAlAllllllahabahabahabahabahabad Bad Bad Bad Bad Bankankankankank vvvvv..... C C C C Chanhanhanhanhandddddiiiiigggggarh Carh Carh Carh Carh Cooooonstnstnstnstnstrrrrruuuuuccccctttttiiiiiooooon Cn Cn Cn Cn Cooooo..... P P P P Pvvvvvttttt..... Ltd. Ltd. Ltd. Ltd. Ltd.

IVIVIVIVIV (2005) CP (2005) CP (2005) CP (2005) CP (2005) CPJ 1J 1J 1J 1J 126(N26(N26(N26(N26(NC)C)C)C)C)


Complainant got a bank guarantee issued from the Petitioner Bank for a sumof Rs.1,52,000/- against security in the shape of FDRs worth Rs.1,50,000/-. The validityperiod of the bank guarantee was upto 28.09.1990. Since the Bank did not releasethe FDRs to the complainant even after the expiry of the bank guarantee, thecomplainant approached the District forum for a direction to Petitioner Bank torelease the FDRs. District forum allowed the complaint. On Appeal the StateCommission confirmed the order passed by the District forum whereby Bank wasdirected to pay the value of FDRs with interest @18 per cent p.a. from 1.10.1990 tillpayment. Against this order Petitioner Bank filed the Present Revision Petitionbefore the National Commission.


Whether the bank was justified in withholding the FDRs even though thebank guarantee invocation letter was not received and also that the District forumpassed the order to release the same?


The National Commission held that there was no justifiable reason for theBank to retain the FDR after the District forum passed order dated 16.11.1993 forreleasing the same. Even thereafter the FDRs were not returned but were returnedonly when this Commission passed the order on 8.5.2003. Further apart from thebank guarantee invocation letter dated 25.9.1990 which was received by the Petitionerbank on 1.10.1990, after the expiry of bank guarantee, the relevant terms of the bankguarantee leave no doubt that the bank guarantee was required to be invoked onor before 28th September 1990 and that stood cancelled automatically. Despite allthese facts, the officers of the Bank remained adament and refused to release theFDRs. There was no justifiable reason for the Bank to withhold the same after May,1991. In this view of the matter, the order passed by the State Commission confirmingthe order of the District forum cannot be said to be in any way illegal or erroneous.The order holding that there is deficiency on the part of the officers of the Petitionerstands confirmed.

Revision Petition partly allowed.


C.L. Khanna vs. Dena BankC.L. Khanna vs. Dena BankC.L. Khanna vs. Dena BankC.L. Khanna vs. Dena BankC.L. Khanna vs. Dena Bank

IVIVIVIVIV (2005) CP (2005) CP (2005) CP (2005) CP (2005) CPJ 13J 13J 13J 13J 139(N9(N9(N9(N9(NC)C)C)C)C)


Complainant, proprietor of Apee Industries, started small scale unit formanufacturing LPG stoves in February 1973. For financial assistance complainantapproached the respondent Bank to provide facility of(i) Term Loan and (ii) Loan onhypothecation for day to day expenses. The limit sanctioned in the term loan A/Cwas Rs.75,000/- out of which complainant availed of Rs.44,000/- against the collateralsecurity of the property bearing No.52-A Okhla Industrial Estate, New Delhi and forthis purpose complainant pledged registered gift deed as simple mortgage dulyacknowledged by the bank vide its letter dt. 19.01.1973. Complainant was also providedwith overdraft facility of Rs.25,000/- in the Hypothecation A/c against the machineryand stock. The Bank was charging interest as per the term loan A/c. In 1978, thebank on an audit objection asked the complainant to furnish additional security.The complainant deposited title deed of his other residential property bearing No.11,Abdul Fazal Road, New Delhi. The outstanding amount in both the accounts ofcomplainant in the year 1985 was approximately Rs.1,00,000/-. The complainantwas prepared to pay the said amount on release of aforesaid title deeds. Since thetitle deeds were not returned, the loan continued and complainant continued tomake regular payments towards the liquidation of his liability. In spite of repeatedrequests title documents pledged with the Bank were not returned. Complainantcould not clear the outstanding and was forced to maintain the loan account andthus paid the interest and instalments. Despite this, complainant was asked to payRs.1,48,534.90 on 9.5.1995 which included Rs.1,29,158/- towards the interest fromJanuary 1985 to March 1993. Complainant on 23.11.1998 requested the bank to settlethe matter without any further delay. However, in the year 2001 under the RBIguidelines the Bank offered one time settlement, the complainant insisted that hisoriginal deeds should be returned but of no avail. Complainant approached Bankombudsman and also filed a complaint for deficiency in service before the NationalCommission.


Whether the complaint filed is barred by limitation?

Whether the Bank is liable for deficiency in service?



Before the National Commission complainant contended that non-availabilityor loss of original title deed of the free hold property had resulted in reduced marketprice of the property due to the deficiency in service by the Bank. Whereas the Bankresisted the complaint on the ground that complaint is time barred and thecomplainant, in collusion with advocate, Sh. R.M. Gupta took back the original titledeeds in fraudulent manner. Since the return of original title deed is beyond thecontrol of the Bank and therefore do not constitute deficiency in service.

The National Commission after hearing the parties arrived at conclusion thatat no point of time the bank had denied its liability to return the title deeds deliveredby the complainant. Therefore, it would be difficult to arrive at a conclusion thatthe complaint is time barred. The Bank never informed the complainant that asthe title deed was lost, therefore, they would not deliver it to the complainant.

Further, it is clear that upto 1989 complainant was in financial crisis. He wascompelled to handover title deed property No.11, Abdul Fazal Rd, New Delhi, eventhough he had handed over title deed of property No.52A, Okhla Industrial Area, NewDelhi. Because the title deed of property No.11 Abdul Fazal Rd, New Delhi was deliveredto the bank it would not mean that the complainant had waived off his right to getback the title deed of his factory premises at 52-A, Okhla Industrial Area, New Delhi.In this view of the matter, it is apparent that there is clear deficiency on the part ofthe Bank in not returning the title deeds. The title deeds were given to the Bank ingood faith and considering the Bank would be the safest place for keeping suchdeeds.

Complaint allowed.


CCCCCentententententrrrrral Bal Bal Bal Bal Bankankankankank of of of of of In In In In Indddddia & ia & ia & ia & ia & AnrAnrAnrAnrAnr..... vvvvvsssss..... H H H H Heeeeeererererera Sa Sa Sa Sa Soooooni & Orsni & Orsni & Orsni & Orsni & Ors.....

III (2005) CPIII (2005) CPIII (2005) CPIII (2005) CPIII (2005) CPJ 2J 2J 2J 2J 25(N5(N5(N5(N5(NC)C)C)C)C)


Central Bank of India introduced a Group Insurance Master Policy No.GSLI/601073 for its employees on 20.11.1990. On the death of one of the employee of thePetitioner Bank, his legal heirs pressed the claim for Rs.1,20,000/- from LIC. Theclaim was not settled despite notice to the LIC as well as to the Central bank of India.The legal heir of the deceased filed a complaint before the District forum. LIC beforethe District forum contended that since the Central Bank of India did not pay thepremium, the policy lapsed and therefore LIC is not liable to pay the amount ofclaim whereas the Petitioner Bank contended that since the bank did not chargeany fee from its employees and the claim regarding payment payable after thedeath of an employee was not maintainable. District forum rejecting thecontentions allowed the complaint. On appeal by LIC, the State Commission heldthat since the policy lapsed LIC was not liable to pay any amount and the bank isliable for deficiency in service and thus, directed to pay Rs.1,20,000/- alongwithinterest. Against this order of the State Commission Petitioner Bank, filed RevisionPetition before the National Commission.


Whether Policy could have been said to have been lapsed, to hold that the LIC isnot liable?


The National Commission held that if contributions are paid by the employeesthemselves in full and the employer just acts only as a co-ordinator and monthlycontributions from the salaries of the employees and are required to be remitted toLIC every month, failure of the co-ordinator would not and ought not absolve theLife Insurance Corporation of its responsibility. It is not policy of an individual andaffect hundreds of employees for none of their faults.

Accordingly, National Commission held that the Central Bank of India wasacting as an agent having implied authority of the LIC for collecting the Insurancepremium from employees. The moment the amount was deducted from the salaryof the employees by the Central Bank, it would be deemed to have been paid to theLife Insurance Corporation. Failure on the part of the agent having an implied


authority to receive premium on receipt by deduction from the salary coupled withfailure to deposit the same with LIC could not lead to lapse of the policy by anystretch of imagination.

Revision Petition disposed of accordingly.


Deep Chand Jain vs. Bank of Baroda & Ors.Deep Chand Jain vs. Bank of Baroda & Ors.Deep Chand Jain vs. Bank of Baroda & Ors.Deep Chand Jain vs. Bank of Baroda & Ors.Deep Chand Jain vs. Bank of Baroda & Ors.



Complainant/Petitioner purchased certain shares and same were sent fortransfer in the name of the complainant which required the verification of thesignature of the third opposite party, for which the complainant approached therespondent No.2, verification of the second respondent related to the ‘signature,name, address and seal’ of attesting officer. While ‘signature and seal’ put in but thename and address’ of attesting officer was not entered. Petitioner sent thesedocuments to the share broker at Bhopal for transfer but same were received backin August 1997 with the observation that the signatures of the seller are not properlyattested. As the complainant/petitioner was keen to sell the shares but due todeficiency on the part of Respondent Bank lot of time elapsed within which theprices of share fell to Rs.50/- from Rs.160/- per share. Complainant filed complaintbefore the District forum alleging deficiency in service after long protractedcorrespondence. The District Forum dismissed the complaint. The StateCommission, on appeal, partly allowed the complaint. Not satisfied with the reliefgranted, complainant filed Revision Petition before the National Commission.


Whether Bank can be held liable for deficiency in service for doing an act out ofgoodwill?


The National Commission, confirming the view of the State Commission heldthat there indeed was deficiency on the part of the bank by not mentioning ‘nameand address’ in the attestation form of the transfer certificate, but it is not the Bankalone who should be held responsible. Equal responsibility also rests on petitionerwho should have been vigilant and should have observed the deficiency when hereceived the attestation form from the respondent Bank. This is not a statutoryduty cast upon the bank to attest the signature, they were doing it out of goodwill.If all the claims in the attestation form were not complete then the petitionershould have taken care at the time of receiving the form that it is complete in allrespects. The plea that complainant suffered loss on account of delay resultingfrom the incomplete attestation, does not withstand scrutiny and the bank couldbe faulted at was for being partly deficient in service.



CCCCCoooool.l.l.l.l. D D D D D.S.S.S.S.S..... S S S S Sacacacacacharharharharhar (R (R (R (R (Reeeeetd.) td.) td.) td.) td.) vvvvvsssss..... P P P P Punununununjab & Sinjab & Sinjab & Sinjab & Sinjab & Sind Bd Bd Bd Bd Bankankankankank

II (2005) CPII (2005) CPII (2005) CPII (2005) CPII (2005) CPJ 130(NJ 130(NJ 130(NJ 130(NJ 130(NC)C)C)C)C)


Complainant/Petitioner was having current account with respondent Bankat Phase V, SAS Nagar, Mohali on 6.4.1999, Complainant along with his wife visitedthe said branch to deposit Rs.45,000/- in the said current account. At about 1.45 p.m.when the complainant was at the counter, someone snatched the money from hishand and despite raising loud alarm and chasing, the snatcher fled away on a scooterstanding outside the premises of Bank with engine on. Complainant filed complaintbefore the District forum alleging deficiency in service on the part of RespondentBank as at the time of incident, there was no security guard/gunman present at theentry/exit gate of the Bank. Collapsible doors of the main gate were not chainedand the bank was under duty to sound the siren alarm. The District forum dismissedthe complaint. On appeal, the State Commission also dismissed the appeal. Againstdismissal order of the State Commission, Complainant filed Revision Petition beforethe National Commission.


Whether liability for payment of money can be legally fastened on respondentBank on ground of it being deficient in service under section 2(i) (o) of ConsumerProtection Act, 1986?


The National Commission held that in our view, ensuring safety of the moneyto be deposited and/or withdrawn inside the Bank premises is impliedly part ofservice rendered by a Bank to its consumer. The respondent Bank being deficient inservice cannot escape liability for payment of said money by way of compensationto the petitioner, a consumer with interest.

Revision allowed.


ZZZZZililililila Sa Sa Sa Sa Sahkahkahkahkahkararararari Bi Bi Bi Bi Bankankankankank Ltd. Ltd. Ltd. Ltd. Ltd. vvvvvsssss..... U U U U U.P.P.P.P.P..... P P P P Pooooolililililiccccce e e e e AAAAAvvvvvaaaaas Ns Ns Ns Ns Niiiiigggggam Ltd.am Ltd.am Ltd.am Ltd.am Ltd.

I (2005) CPI (2005) CPI (2005) CPI (2005) CPI (2005) CPJ 89(NJ 89(NJ 89(NJ 89(NJ 89(NC)C)C)C)C)


Complainant, U.P. Police Awas Nigam Ltd. in response to an advertisementdeposited a sum of Rs.2,01,38,800/- in the year 1988 with the appellant Bank. Onmaturity of the call deposits, the appellant Bank did not pay the maturity amounton the ground that as per instructions of NABARD, the rate of interest of only 4.5 percent and 3.5 per cent p.a. was payable on the call deposits of 61 days and 16 days. Witha view to get the blocked money released from the appellant Bank, the complainantaccepted the offer made by the Bank for converting the balance call deposits intofixed deposits. The Bank violated all contractual norms and did not pay even therevised lower rate of interest. While on one deposit interest was paid @3.5 per centinstead of 9.5 and in respect of another deposit the interest was paid @3.5 per cent.When the appellant Bank did not respond to many of the letters of the complainant,he filed complaint before the State Commission. Appellant Bank contested thematter on the ground that inadvertently in advertisement the rate of interest oncall deposits with 61 and 16 days notice were shown at 12 per cent and 10.5 per centwithout incorporating clause “Applicable to Non-borrowing Co-operativeInstitutions”. As per RBI’s directions on rate of interest dated 16.8.1974 and 3.4.1983,these rates should have been at 4.5 per cent and 3.5 per cent respectively. NABARDraised an objection on the rate of interest allowed by the appellant Bank @12 percent and 10.5 per cent on the all call deposits and the appellant Bank informed thecomplainant vide their letter dated 22.7.1989. The matter was reconciled with thecomplainant and on agreement all the outstanding call deposits were convertedinto FDRs. On maturity two FDR Nos.3375 and 3377 were paid by the Bank alongwithinterest applicable. The appellant Bank prior to making the final payment of FDRNo.3376 withheld the same as the appellant Bank sought advice of NABARD andpayment of interest @3.5 per cent was made. Thus, mistake in respect of issuance ofcall deposit at higher rates and also conversion thereof into FDR’s from retrospectiveeffect was done inadvertently and any contract made in contravention of StatuteRules and directives cannot be enforced. The State Commission directed theappellant Bank to make the payment of interest @9.5 per cent in view of concludedcontract in respect of call deposit of 16 days and 10.5 per cent in respect of calldeposit of 61 days and thereafter conversion into FDR @9.5 per cent. Against thisorder of the State Commission appellant Bank filed present appeal before theNational Commission.



Whether Bank is liable for compensating the other party for deficiency inservice for violating the norms of the contract?


The National Commission was in agreement with the contention of theappellant Bank that the contract was prohibited by a Statute Rule, etc. and contractof commission of illegal act would not be enforceable. Further it held that thedepositing amount in fixed deposit was not a gratuitous act on the part of theopposite party/Bank. Bank has enjoyed the benefit of the deposit and in some casessuch deposits had been regularized subsequently. Even if the Branch Manager hasexceeded to his authority, then also, the Bank is supposed to adequately compensatethe opposite party for an obligation resembling those created by contract.Consequently, the respondent Bank was under an obligation in terms of secondpart of section 73 of the contract Act which has not been discharged. Any personinjured by the failure to discharge such an obligation is entitled to receive somecompensation from the party in default, as if such person had contracted.

Further, in view of the representation made by way of advertisement invitingcall deposits for 61 days and 16 days and thereafter converting it into FDR @9.5 percent without having any authority in terms of instructions of the RBI and NABARD,etc. the officials of the Bank are certainly deficient in rendering service and led thecomplainant on a garden path.

Appeal dismissed.


Anumati vs. Punjab National BankAnumati vs. Punjab National BankAnumati vs. Punjab National BankAnumati vs. Punjab National BankAnumati vs. Punjab National Bank

IVIVIVIVIV (200 (200 (200 (200 (2004) CP4) CP4) CP4) CP4) CPJ 21 (SJ 21 (SJ 21 (SJ 21 (SJ 21 (SC)C)C)C)C)


Complainant and her husband made a joint fixed deposit of Rs.20,000/- withrespondent Bank on 31st May 1988 for a period of 84 months (7years) which was to bematured on 31.5.1995 and the amount payable on maturity was Rs.39,930/-. On 24th

June 1988, a loan was taken by one Khem Chand for his sole proprietary business ofM/s Verma Agro Industries. In 1991 the respondent Bank filed a suit against M/sVerma Agro Industries, Khem Chand and against Complainant’s husband. It waspleaded in the suit that Khem Chand and complainant’s husband had secured theloan amount by creating a mortgage in respect of immovable property consistingof agricultural land. The respondent Bank in suit prayed for a decree forRs.2,57,625/- together with additional interest and for enforcement of the claimagainst the hypothecated and the mortgaged properties with a further prayer thatif the aforesaid securities were found insufficient for realization of the amountpayable under the decree, it may be given liberty to recover the balance from theproperties of complainant’s husband and one other Nanak Chand who executedguarantee agreement on 24th June 1988. While the suit was pending complainantand her husband sent a legal notice to the respondent Bank asking for prematureencashment of the fixed deposit receipt. Respondent Bank did not respond to thenotice and thereafter second notice was issued through an advocate on 26.5.1995again demanding the amount payable on maturity of the fixed deposit statingthat the original FDR receipt had been lost by the complainant and her husband.Respondent Bank did not answer to this notice too. The respondent Bank on 3rd

July 1995 filed an application before the court where the suit was pending informingthe court that the fixed deposit receipt had been mortgaged “as security towardsthe disputed loan, complainant’s husband filed an objection to the Bank’s applicationstating that he had never given any such guarantee and that the FDR had neverbeen mortgaged to the Bank. The trial court allowed the application of theRespondent Bank and held that the amount of fixed deposit account had rightlybeen adjusted in the account of the disputed loan. Complainant’s husband challengedthis order of the Trial court by way of Revision application. Revisional court dismissedthe application holding that same is not maintainable under section 115 CPC asamended by UP Act No.31/1978. It further held that complainant and her husbandcan initiate legal actions/proceedings for the recovery of the amount depositedagainst the Bank. The Revisional Court found as a fact that the fixed deposit receipt


did not bear the thumb impression of the complainant and the only thumbimpression appearing thereon was of complainant’s husband. It further held thatsince the FDR was not mortgaged as guarantee for the loan taken by M/s VermaAgro Industries or Khem Chand, the dispute regarding the FDR was not in issue inthe suit filed by the Bank therefore, the trial court did not pass any order regardingthe right of the Bank to adjust the amount of the fixed deposit towards the recoveryof the loan alleged to have taken by M/s Verma Agro Industries and Khem Chand.Complainant then filed a complaint before the District forum contending deficiencyin service against the respondent Bank. Before District forum respondent Bankcontended that both trial court as well as Revisional court had held that the fixeddeposit receipt had been mortgaged by complainant’s husband as security for theloan granted by the respondent Bank to M/s Verma Agro Industries and thecomplainant’s husband was entitled to do so because the FDR had specified that itwas payable to “either or survivor”. The District forum held that complainant wasentitled to recover half of the amount of the FDR i.e. Rs.19,965/- together with interestfrom 1.6.1995 because complainant never mortgaged her share of the FDR in favourof any party. It further held that since the receipt was in joint name of complainantand her husband, the respondent bank should not have accepted any pledge of theaccount without ifnforming the complainant and getting her consent. Since theBank accepted the same without consent of the complainant, Bank is deficient inrendering services. Against the order of the District forum respondent Bank filedappeal before the State Commission. The State Commission held that since the FDRwas payable to “either or survivor” it showed that the Bank could have got dischargeby making payment to either of the account holders. The State Commission allowedthe appeal holding that when payment could have been made to a single individualin terms of the directions of the depositors then the Bank was at Liberty to acceptmortgage of the FDR on behalf of one of the depositors and the consent of the otherdepositor was not necessary. Complainant, against the order of the StateCommission, filed Revision Petition before the National Commission. The NationalCommission confirmed the order of the State Commission and also held thatfinancial institutions had every right to protect their interest by taking “consciousdecision”. Since the Bank had taken “conscious decision” in this case, it could not befaulted and there was no deficiency in service. Against the order of the NationalCommission complainant approached Supreme Court by way of civil appeal.


Whether the Bank has any right to adjust the amount of the FDR when therewas no claim with regard thereto and when the liability of the defendants in the


suit was yet to be quantified?


The Supreme Court held that the contract in respect of the joint account wasbetween the Respondent bank and the husband and wife. The FDR was not a debtdue by the bank to Complainant’s husband alone which could be set off by the bankagainst any claim that the bank may have had against Mamchand (Complainant’shusband). Besides the right of Mamchand was to receive the money deposited onlyafter it matured, if he survived and in case of death of complainant’s husband beforematurity of FDR, the only person entitled to get money would be the appellant(complainant). This right of the appellant could not have taken away without herconsent. It further held that the State and National Commission both erred inproceeding on the basis that the civil court’s decision was that the FDR had, in factbeen pledged by Mamchand to the Bank. In such circumstances, the Bank had noright to refuse payment of the amount deposited to the appellant. The refusal asdisclosed to this court, was contrary to banking norms. The District forum wascorrect in accepting and the State Commission and National Commission erred inrejecting the appellant’s complaint.

Appeal allowed order of the State Commission and National Commission setaside.


PPPPPunununununjab & Sinjab & Sinjab & Sinjab & Sinjab & Sind Bd Bd Bd Bd Bankankankankank vvvvvsssss..... Suk Suk Suk Suk SukhRhRhRhRhRaaaaaj Bj Bj Bj Bj Baaaaajwjwjwjwjwa & a & a & a & a & AnrAnrAnrAnrAnr.....

III (200III (200III (200III (200III (2004) CP4) CP4) CP4) CP4) CPJ 1(NJ 1(NJ 1(NJ 1(NJ 1(NC)C)C)C)C)


Complainant obtained one FDR for Rs.2.40 lacs on 6.2.1987 which was due on6.8.1992 for Rs.5,13,419.99. Rs.7,28,848/- was again put in fixed deposit on 18.6.1996. Onmaturity after 3years the amount was to become Rs.12,71,995/-. The Petitioner Bankon being pointed out by the Local Audit that the higher rates of interest was givenfor the interregnum period, reduced the face value of fixed deposit to Rs.5,78,822/-giving an interest @5 per cent and not 13 per cent p.a. on the mentioned amount ofRs.5,13,419. 1990 resulting in short payment of Rs.2,61,828/- as on 18.6.1999.Complainant filed complaint before the District forum alleging deficiency in serviceon the part of Petitioner Bank. District forum after hearing both the parties directedthe Petitioner Bank to pay Rs.2,61,828/- along with 12 per cent interest from 18.6.1999.Aggrieved by the order of the District forum both the parties filed two separateappeals before the State Commission. State Commission by common order dismissedboth the appeals. Against this dismissal order of the State Commission both partiesfiled Revision Petition before the National Commission.


Whether Petitioner Bank is liable to pay interest to the complainant at therate granted by bank inadvertently to the complainant beyond the permissible rateprescribed by the RBI?


Before the National Commission Bank admitted their mistake and stated thatit was on account of inadvertence on the part of the bank that the rate of interesti.e. 13 per cent was given for the period.

The National Commission held that no Bank can go beyond the guidelinesissued by RBI especially in regard to NRI accounts. Whatever might have been theterms of the contract, i.e. in FDR, RBI guidelines have to prevail. If the contract abinitio is against the authority on the subject then the contract loses its value tothat extent and cannot be enforced.

The deficiency albeit on account of inadvertence in giving interest @13 per cent hasbeen admitted by the bank causing loss and agony to the complainant. Bank is directedto pay Rs.50,000/- as compensation for the deficiency on the part of Petitioner Bank.

Revision Petition of complainant dismissed.


PPPPPrrrrrem Bem Bem Bem Bem Babababababoooooooooo vvvvvsssss..... Br Br Br Br Branananananccccch Managh Managh Managh Managh Managererererer,,,,,FFFFFarararararakakakakakhabhabhabhabhabad Gad Gad Gad Gad Grrrrramin Bamin Bamin Bamin Bamin Bankankankankank & Ors & Ors & Ors & Ors & Ors.....

III (200III (200III (200III (200III (2004) CP4) CP4) CP4) CP4) CPJ 1J 1J 1J 1J 18(N8(N8(N8(N8(NC)C)C)C)C)


Complainant obtained a loan of Rs.2,000/- from the respondent Gramin bankFarkhabad and when this amount was not getting repaid, the first respondentinitiated recovery of the amount with interest by way of revenue recovery. TheRevenue Authorities in pursuit of this case made efforts to recover amount fromthe complainant. Complainant paid Rs.1100/- on two separate dates in the year 1987and 1988 to the Ameen, Surender Singh, receipt of which was given to thecomplainant. He also paid Rs.2000/- to the said Ameen for which no receipt wasavailable on record. Complainant filed complaint before the District forum allegingdeficiency in service on the part of respondent bank for not issuing a ‘No DuesCertificate’ as he paid due amount to the Ameen. District forum after hearingparties directed the respondent bank to recover the paid out amount from theRevenue Authorities and only the remaining amount, if any, to be recovered fromthe complainant. Respondent Bank filed appeal before the State Commission whichset aside the order passed by the District forum and allowed the appeal. Against thisorder of the State Commission complainant filed Revision Petition before theNational Commission.


Whether Bank can recover an amount twice once under process of law andother by initiating the authority?


The National Commission held that once the recovery proceedings under theRevenue code of the State had been initiated by the Bank and unrebutted avermentsof the complainant that the money was paid to the Ameen who is the collecting/Enforcement Agency of the Tehsildar, the complainant cannot be faulted for non-payment. Ameen is the functionary in the functional hierarchy of the RevenueAdministration in State which was acting under law as provided in the Revenuecode. Hence, whatever payments were made and if they were not deposited by theAmeen is favour of the bank, the Petitioner/complainant cannot be faulted for this.Matter is now between the Bank and the Revenue Hierarchy and since in this case


the amounts are reported to have been paid and the contention to this effect remainunrebutted, the conclusion is that these amounts were paid by the petitioner to theAmeen under a process of law to be paid back to the Bank. Any agency cannotexpect to recover twice from the poor farmer – one under process of law and theother by initiating authority in this case the Bank. It is for the Bank to get thedetails from the Revenue Authorities as to what has been done as a follow up to therecovery / proceedings initiated on behest of the Bank. Having failed to do so andhaving been brought on record that amounts have been paid by the complainantto the Bank through Ameen, the Bank is not entitled to double recovery of thisamount from the Petitioner/complainant.

Revision Petition allowed, order passed by the State Commission set aside.


Swadeshi Polytex Ltd. vs. Central Bank of India & Ors.Swadeshi Polytex Ltd. vs. Central Bank of India & Ors.Swadeshi Polytex Ltd. vs. Central Bank of India & Ors.Swadeshi Polytex Ltd. vs. Central Bank of India & Ors.Swadeshi Polytex Ltd. vs. Central Bank of India & Ors.



Complainant company was carrying on business of manufacturing andmarketing polyester staple fiber and same was sold under the trademark ‘Jailene’.Complainant received an order by telex on 30.12.1994 from opposite party No.4 – ShriMinakshi Mills Ltd. for supply of Jailene PSP. On 21.1.1995 opposite Party No.4confirmed the order after accepting the terms and conditions put forward by thecomplainant where in it was written that the term of payment would be sight L.C.and opened on 19.4.1995, an irrevocable without recource at sight letter of credit infavour of the complainant through Central Bank of India, Madurai Branch, oppositeParty No.2 for Rs.66 lacs Subsequently, this L.C. was amended on 7.6.1995 as per whichcomplainant was required to submit certain documents to opposite Party No.2 i.e.bank for claiming payment. The complainant submitted documents as per theterms & conditions of the amended LC. through its Bank–Opposite Party No.3 whichwere forwarded by them to the Central Bank between 17.6.1995 & 10.7.1995 before thedate of expiry of validity of LC which was up to 15.7.1995. When the complainant didnot receive payment despite submitting of documents complainant and its bankertook up the matter with Central Bank of India opposite Party No.2. Central Bank ofIndia intimated the complainant through telex message dated 27.6.1995 about somediscrepancies in the documents submitted by the complainant and a letter dated18.7.1995 to the opposite Party No.4 (Shri Mirakshi Mills Ltd.) pointing out saiddiscrepancies in the documents which were waived out by them and requested videits letter dated 21.7.1995 to the bank to accept the documents and effect paymentsof the bills. Despite various correspondence between the parties and re-submissionof documents as required Central Bank of India did not release the payments to thecomplainant and again returned the documents along with covering letter dated9.10.1995 advising the complainant to take up the matter directly with the orderingcompany. Aggrieved by the actions of opposite party–Central Bank of India,complainant filed complaint before the National Commission alleging deficiencyin service.


Whether the bank is liable for deficiency in service for refusing to honour theletter of credit despite having received intimation regarding waiving off all thediscrepancies by the ordering party?


HHHHHeldeldeldeldeld

Before the National Commission it was contended by the counsel for the bankthat some cutting was required to be authenticated by the complainant and asauthentication was not done by the complainant during the currency of letter ofcredit despite being pointed out, the bank was well within its right not to honourthe letter of credit. The National Commission rejecting the contention of the bankheld that the said cutting was not required to be authenticated and even if it was so,it was not such a discrepancy on the basis whereof, bank could have refused tohonour the letter of credit thereby denying payment to the complainant who actingon the LC had made delivery of Jailene PSF of the value of more then Rs.64,00,000/-to the opposite Party No.4. There was gross deficiency in service on part of bank inwithholding payment of the value of the consignments for which said letter ofcredit was issued by it.

Complaint party allowed.


Ratnachand Morakar vs. Ratnachand Morakar vs. Ratnachand Morakar vs. Ratnachand Morakar vs. Ratnachand Morakar vs. Bank of Maharashtra, BombayBank of Maharashtra, BombayBank of Maharashtra, BombayBank of Maharashtra, BombayBank of Maharashtra, Bombay



Complainant on 10.8.1990 deposited Rs.1,50,000/- & Rs.1,20,000/- with therespondent Bank for the issuance of pay order and a demand draft to be issued infavour of M/s Pratap Rajasthan Special Steel Ltd., Jaipur and M/s Indian Enterprises.Subsequently, the pay order of Rs.1,20,000/- was cancelled by the respondent bankand issued in favour of one M/s J.K. Industries for which complainant did notauthroise to any one i.e. neither for canceling the pay order and than for the issuanceof in favour of M/s J.K. Industries. Complainant was making regular enquiry withregard to encashment of the said pay order. Respondent Bank vide its letter dated4.11.1991 issued a certificate that pay order was issued in favour of M/s Keshri steelLtd., Bombay. On enquiry from M/s Keshri Steel Ltd., it was found that it had notreceived the pay order. Complainant kept on making enquiries but bank gave noresponse, then complainant vide its letter dated 7.4.1993 following with reminderdated 26.4.1993 asked the respondent bank to resolve the matter by either issuingfresh pay order or to credit Rs.1,20,000/- in his favour. Thereafter, Respondent bankdisclosed to the complainant that the said pay order was cancelled on 30.11.1990 anda new pay order for the said amount was issued is favour of one M/s J.K. Industries.Complainant filed complaint before the State Commission against respondent bankfor deficiency in service. The State Commission, dismissed the complaint and arrivedat conclusion that on the instructions of the manager of the bank, the payment infavour of Keshri Steel Ltd. was withheld and fresh pay order was issued in favour ofM/s J.K. Industries. Complainant challenged the order of the State Commissionbefore the National Commission by way of present appeal.


Whether Bank is deficient in service for canceling the pay order and thanissuing it in favour of other party?


Before the National Commission respondent Bank submitted that complainant(a partnership firm) was having their current account with the Bank and he hadauthorized their representative Ms. Lalit Seth to deal with same account. It is therepresentative of the complainant who approached the respondent bank forissuance of the pay order by filling in the request form on 10.8.90 in favour of M/s


Keshri Steel Ltd., Bombay. Thereafter, one authorized representative of thecomplainant wrote a letter dated 20.10.1990 addressed to the Manager, Bank ofMaharashtra to cancel the pay order and issue a fresh pay order for the said amountin favour of M/s J.K. Industries. Along with the said letter, he also produced the payorder dated 10.8.1990. On the basis of said letter, Respondent Bank cancelled the payorder dated 10.8.1990 and issued fresh pay order in favour of M/s J.K .Industries, asrequested, the National Commission considering the submission of the respondentBank held that the action of the Bank was in good faith on the basis of the instructionof the authroised representative and in any case if authroised representative haddone something wrong complainant should take action against AuthroisedRepresentative and not against the Bank.

Appeal dismissed.


TTTTThirhirhirhirhiruuuuuccccchirhirhirhirhirapapapapapalalalalalli Mli Mli Mli Mli Multultultultultipuripuripuripuripurpppppooooossssse Se Se Se Se Sooooocial Scial Scial Scial Scial Sererererervvvvviiiiiccccce Se Se Se Se Sooooocicicicicieeeeetttttyyyyy vvvvvsssss.....Canara BankCanara BankCanara BankCanara BankCanara Bank

II (200II (200II (200II (200II (2004) CP4) CP4) CP4) CP4) CPJ 62(NJ 62(NJ 62(NJ 62(NJ 62(NC)C)C)C)C)


Thiruchirapalli Multipurpose Social Service Society, registered under societiesRegistration Act deposited various funds in FDR with the respondent Bank and inall deposited Rs.62,08,745.05 for a term of 5 yeas which were due for maturity in theyear 2000. Complainant received a letter dated 5.2.1996 from the respondent bankthat the bank was marking a general lien on fixed deposits to cover the DIR loanssanctioned by them from 1986 to individuals on the recommendations of thecomplainant. Complainant filed complaint before the National Commission againstrespondent bank alleging deficiency in service as bank acted arbitrarily in illegallymarking general lien on said deposits because the DIR scheme never provided forany gurantee by the complainant.


Whether it is a fit case to be decided under the Consumer Protection Act, 1986and to invoke the jurisdiction of this commission?


The National Commission after hearing both the parties decided against thecomplainant. It is submitted by the complainant that there was no gurantee givenby the complainant for repayment of the loan by the loaners to whom the benefitwas given under the Differential Interest Scheme framed by the Central Governmentand therefore, bank was not entitled to have any lien on the fixed deposits of thecomplainant, whereas it was submitted on behalf of respondent bank that theamount deposited by the complainant was ‘seed money’ on the basis of which bankgave loan to the persons recommended by the complainant. Furthermore,transaction between the complainant and the respondent bank is commercial innature being a joint venture and the voluminous evidence is required to beconsidered and therefore is not a fit case for exercise of jurisdiction under theConsumer Protection Act, 1986.

It is further submitted that a project was started in collaboration with thecomplainant in lending financial assistance for the upliftment of the down troddenand the complainant provided seed money capital for the same. Respondent Bank


agreed to participate in lending programme to the beneficiaries sponsored by thecomplainant, the programme continued and complainant kept on depositing theseed capital money. The seed amount was not fixed deposit as understood in usualsense and therefore, bank has rightly marked its general lien on the “seed capital”.

After hearing both the parties the National Commission held that prima facie,it was a joint commercial venture between complainant and the bank to give loanas per ‘Differential Interest Rate” Scheme and therefore, the complainant cannot besaid to be a consumer and would not be a fit case for deciding under the ConsumerProtection Act and requires to be dismissed.



ABN Amro Bank vs. Sangeeta SrivastavaABN Amro Bank vs. Sangeeta SrivastavaABN Amro Bank vs. Sangeeta SrivastavaABN Amro Bank vs. Sangeeta SrivastavaABN Amro Bank vs. Sangeeta Srivastava



Complainant purchased a Tata Indica Car after taking loan from the PetitionerBank. Loan amount was to be repaid in equal monthly instalments of Rs. 7427/-.Complainant due to financial difficulty could not make payment of instalmentsfor three consecutive months amounting to Rs.21,741/-. Due to default PetitionerBank forcibly took possession of the car despite the fact that the complainant wasready to pay the amount due on her account. Complainant sent a notice on 25.11.2002to the Petitioner bank which was replied back by letter dated 2.12.2002 by thePetitioner bank with false averments. Complainant in such circumstances filedcomplaint before the District forum against the Petitioner bank. Petitioner bankwas proceeded ex-parte as it failed to put in appearance despite service of notice.District forum in its ex-parte order directed the Petitioner bank to refundRs.65,223/- (margin money) to the complainant. Petitioner bank filed an appealbefore the State Commission. The State Commission dismissed the appeal of thePetitioner Bank. Against the dismissal order passed by the State CommissionPetitioner Bank filed Revision Petition before the National Commission on the groundthat complainant is not entitled to the refund of margin money amount.


Whether the District forum rightly proceeded ex-parte against the PetitionerBank?

Whether Bank is liable to refund the margin money to the complainant?


The National Commission on the issue of non-service of notice held that courtfile shows that notice was sent by post to the Petitioner on 1.5.2003 and an entry tothat effect was made at serial No.2447 in the Despatch Register for postal dak. Noticewas sent on the address of the Petitioner Bank shown in the cause title of thecomplaint. It is not the case of the Petitioner that the said address is incorrect.Thus, under Indian Evidence Act, 1872 it has to be presumed that the notice for15.7.2003 was sent by the District forum and received by the Petitioner Bank. Thoughissue of non-service of notice was not considered by State Commission still theNational Commission held that Petitioner bank was served with notice for 15.7.2003


and the District forum rightly proceeded the Petitioner Bank ex-parte as no bodyput in appearance on its behalf.

On the issue of refund of margin money, the National Commission held thatamount of Rs.65,223/- was contributed by the complainant towards margin moneyfor purchase of the car which was re-possessed and sold by the Petitioner Bank.Order for refund of margin money was passed by the District forum considering theaverments made in complaint and unrebutted affidavit filed in support there to bythe complainant and is therefore, devoid of merit.



SSSSStttttananananandddddararararard Cd Cd Cd Cd Charharharharhartertertertertereeeeed Gd Gd Gd Gd Grrrrrininininindddddlllllaaaaayyyyys Bs Bs Bs Bs Bankankankankank Ltd. Ltd. Ltd. Ltd. Ltd. vvvvvsssss..... H.B H.B H.B H.B H.B..... Imp Imp Imp Imp Impeeeeexxxxx P P P P Pvvvvvttttt.Ltd..Ltd..Ltd..Ltd..Ltd.

I (200I (200I (200I (200I (2004) CP4) CP4) CP4) CP4) CPJ 13(NJ 13(NJ 13(NJ 13(NJ 13(NC)C)C)C)C)


Complainant, a merchant exporter, was having an account with the appellantBank. One company M/s B. Motiram placed two orders on the complainant on 4.5.1995and 3.6.1995 valuing respectively US$17000.00 and US$1,27,160.00 which were to becompleted by the complainant by 15.9.1995 and the time for the shipment was theessence of the contract. In order to execute the order complainant in turn placedorder with M/s Peetex/Phundipalle Textile Mills, Solapur for the manufacture ofthose goods. It was settled between the complainant and the manufacturer thatthe manufactured goods were to be dispatched to the complainant by 25.8.1995and the complainant agreed to pay a sum of Rs.1,40,000/-. Accordingly, complainantinstructed its banker to issue a bank draft for Rs.1,40,000/- in favour of manufactureron charging usual commission. The appellant Bank charged its usual commissionfor issuing the draft and also prepared the draft for Rs.1,40,000/- but it preparedinvalid draft in favour of the manufacturer with the result that when themanufacturer deposited the bank draft with its bankers it was returned to themanufacturer with the remarks ‘authorised signatory’s signatures’ required andthe Bank draft was not honoured by the Indian Bank, Solapur. The manufacturerreturned the invalid draft to the complainant blaming the complainant for such abogus/defective draft. Due to issue of defective Bank draft delay was caused in thesupply of the goods by the manufacturer to the complainant which resulted in theshipment being delayed and cancellation of order for supply. Complainant claimedcompensation before the State Commission alleging deficiency in service againstthe appellant Bank. State Commission allowed the complaint holding appellantBank liable for deficiency in service. Aggrieved by order passed by the StateCommission appellant Bank filed appeal before the National Commission.


Whether cancellation of order was the direct result of delayed shipment ofearlier orders and was on account of the negligence of the Bank who prepared theinvalid Bank draft which amounted to deficiency in service?


The National Commission held that where a consumer sues for damages, theloss he suffered as a result of breach of contract, must not be too remote.


Complainant is in the export business and is having account with the bank for thelast many years. It could be said that if there was any cancellation of the order of4.5.1995 and 3.6.1995 this would be within the contemplation of the bank at thetime it prepared Bank draft. It is difficult to accept the proposition that cancellationof the subsequent order of US$96000.00 was ever in the contemplation of the parties.Any loss arising out of cancellation of the subsequent order would be too remote toattract compensation. There is no circumstance to hold from where it could besaid that the alleged loss arising out of cancellation of subsequent order could beconsidered to arise in the usual course of dealings between the parties and thereforebank cannot be held liable for cancellation of the order of US$96000.00 placed byM/s B. Motiram on the complainant because of defective Bank draft for Rs.1,40,000/-.



SSSSSmtmtmtmtmt..... Man Man Man Man Manooooorrrrramamamamama a a a a vvvvvsssss..... C C C C Chairhairhairhairhairmmmmman,an,an,an,an, P P P P Punununununjab Njab Njab Njab Njab Naaaaatttttiiiiiooooonal Bnal Bnal Bnal Bnal Bankankankankank



Complainant made a term deposit of Rs.14,718.39 for the period of 4 months atinterest rate of 3.75 per cent p.a. After its maturity on 9.6.1959, next time complainantapproaches the Bank is only in the year 1987 and only on 25.11.1988 asked in writingfor payment of FDR amount with interest. Complainant did not receive any responsefrom the respondent Bank and therefore, filed complaint before the District forum.The District forum held that the FDR could not be renewed on account of lapse onthe part of the complainant itself therefore, he is not entitled to get any interest till25.11.1988. However, complainant is entitled for interest at the rate of savings interestw.e.f.25.11.1988 till the filing of the complaint and thereafter of prevalent rateregarding FDR 10 per cent p.a. Complainant, against the order of the District Forum,filed appeal before the State Commission. The State Commission dismissed theappeal. Therefore, complainant filed Revision Petition before the NationalCommission.


Whether the complainant/consumer is entitled to get interest for the period9.6.1959 to 25.11.1988 i.e. interest between date of maturity and date of applicationfor payment?


The National Commission held that it is not in dispute that the money wasavailable with the Bank which he would have utilized for its purpose. After maturity,at best it became a ‘deposit account’. Bank has enjoyed this money ever since itsmaturity and complainant is thus, entitled to interest for the period that moneywas with the Bank. The complainant is entitled to the interest at the prevailingrates on a savings account from time to time worked on simple interest basis from10.6.1959 till the date of payment.



Indian Export Corporation & Ors. vs. Chairman-cum ManagingIndian Export Corporation & Ors. vs. Chairman-cum ManagingIndian Export Corporation & Ors. vs. Chairman-cum ManagingIndian Export Corporation & Ors. vs. Chairman-cum ManagingIndian Export Corporation & Ors. vs. Chairman-cum ManagingDirDirDirDirDireeeeeccccctototototorrrrr,,,,, S S S S Syyyyynnnnndddddiiiiicccccaaaaate Bte Bte Bte Bte Bankankankankank & Ors & Ors & Ors & Ors & Ors.....

IVIVIVIVIV (200 (200 (200 (200 (2003) CP3) CP3) CP3) CP3) CPJ 45(NJ 45(NJ 45(NJ 45(NJ 45(NC)C)C)C)C)


Complainant for starting the business of rice approached the respondent Bankfor grant of loan of Rs.9,50,000/- by way of overdraft facility. Sanction for ODMSLimit in the said sum was conveyed to the complainants vide letter dated 18.8.2000which was to be expire on 31.8.2001. Respondent Bank vide its letter dated 27.9.2000informed the complainants about the extension of period of limit upto 31.10.2002.Complainant on the basis of extended period limit of overdraft facility placed ordersfor purchase of rice. Twenty five per cent of the ordered value of rice was paid to thebroker in advance and 75 per cent was to be paid at the time of lifting the stockswhich was to be lifted within 60 days and in case the stock was not lifted within 60days, the money paid by way of advance was to be forfeited. The complainants paidtotal sum of Rs.3.9 lacs to the broker out of which Rs.1.20 lacs were drawn from thesaid account. Respondent Bank vide its letter dated 2.3.2001/14.3.2001 communicatedtheir decision to the complainants about unilateral withdrawal of sanctionedoverdraft facility without giving any prior notice. As a result of that action,complainants suffered loss and thus, filed complaint before the State Commissionagainst the respondent bank alleging deficiency in service for unilateral withdrawalof OD facility without any prior notice. The State Commission dismissed thecomplaint with liberty reserved to the complainants to pursue remedy that may beavailable to them under any other law. Against this dismissal order complainantsfiled appeal before the National Commission.


Whether the State Commission was justified in dismissing the complaint onthe ground that the alleged deficiency in service on the part of bank was connectedwith commercial purpose?


The National Commission placing reliance on the decision of Supreme Courtin Cheema Engineering Services v. Rajan Singh held that engaging a technical personfor quality control, seven persons for loading and unloading gunny bags, peon andreceptionist for the office as alleged in the complaint would show that alleged


deficiency in service was connected with commercial activities which has beenexcluded from the purview of the Act by amending the definition of ‘Consumer’w.e.f. 15.3.2002. Ratio in ‘Cheema Engineering Services’ case supports the conclusion.The complaint was rightly dismissed by the State Commission without calling uponthe respondent Bank to file their written version.

Appeal dismissed.


SSSSStttttaaaaate Bte Bte Bte Bte Bankankankankank of of of of of P P P P Paaaaatttttialialialialiala a a a a vvvvvsssss..... R R R R Raaaaajjjjjenenenenendddddererererer L L L L Lal & al & al & al & al & AnrAnrAnrAnrAnr.....

IVIVIVIVIV (200 (200 (200 (200 (2003) CP3) CP3) CP3) CP3) CPJ 5J 5J 5J 5J 53(N3(N3(N3(N3(NC)C)C)C)C)


Complainant deposited one cheque for collection on 12.5.1999 issued by Mr. V.K.Arora of M/s V.K. Industrial Corporation, Ludhiana for Rs.75,000/- dated 1.5.1999, drawnon Bank of Maharashtra Service Branch, Ludhiana, in his saving account maintainedwith the Petitioner Bank. On some of the visits to the branch of the Petitioner Bankcomplainant was informed that neither the cheque nor the amount thereof hadbeen received. Complainant made a complaint in writing to the Petitioner Bank toknow the fate of the said cheque on 13.7.1999 then the complainant was informed inwriting that Petitioner had not received any intimation about the cheque from theBank of Maharashtra. Complainant filed complaint before the District forumalleging deficiency in service on the part of the Petitioner Bank. District forumallowed the complaint ex-parte against the Bank of Maharashtra and the PetitionerBank, State Bank of Patiala. Petitioner Bank filed appeal before the State Commission.The State Commission dismissed the appeal and affirm the order of the Districtforum whereby Petitioner was directed to pay the amount of cheque with interest.Against this order of the State Commission Petitioner Bank filed present RevisionPetition before the National Commission.


Whether the Bank is liable for deficiency in service?


The Petitioner Bank admitted the fact that the complainant deposited thecheque for collection on 12.5.1999 which was sent by the Petitioner Bank at LudhianaBranch for the purpose of collection and Ludhiana Branch presented the chequefor clearing on 19.5.1999 by Bank of Maharashtra, Bank of Maharashtra returnedthe cheque same day with Memo insufficient fund, and the cheque alongwith thatmemo was sent by the branch at Ludhiana to the Chandigarh branch by post but itwas lost in transit and therefore could not be returned to the complainant. TheNational Commission on this submission of the Petitioner held petitioner Bank tobe liable for deficiency in service in not informing the complainant about dishonourof cheque on 19.5.1999 and its having lost in transit because on coming to knowabout the dishonour of cheque complainant could have initiated civil/criminalaction based on the said cheque against the drawer thereof. In this backdrop, the


Petitioner Bank could not have been made to pay Rs.75000/- being the entire amountof the cheque with interest by the District forum and the State Commission. Butthe Petitioner Bank cannot escape liability for payment of reasonable compensationto the complainant which was assessed by the National Commission to be Rs.15,000/-.



CCCCCCI CCI CCI CCI CCI Chambhambhambhambhambers Cers Cers Cers Cers Co-oo-oo-oo-oo-oppppp..... H H H H Housing Sousing Sousing Sousing Sousing Sooooocicicicicieeeeetttttyyyyy Ltd. Ltd. Ltd. Ltd. Ltd. vvvvvsssss..... De De De De DevvvvveeeeelllllooooopmentpmentpmentpmentpmentCredit BankCredit BankCredit BankCredit BankCredit Bank

III (200III (200III (200III (200III (2003) CP3) CP3) CP3) CP3) CPJ 9 (SJ 9 (SJ 9 (SJ 9 (SJ 9 (SC)C)C)C)C)


Complainant was maintaining a saving account with the respondent bank.The respondent bank honoured 72 cheques amounting to Rs.75,70,352/- and debitedthe same in the account of the complainant. Complainant filed complaint beforethe National Commission alleging deficiency in service against the respondent Bankin honouring 72 cheques amounting to Rs.75,70,352/- as all of them bore forgedsignatures of the complainant and in some of the cheques the figures had beenaltered. The National Commission held that numerous documents would berequired to be proved including about 150 cheques. Service of the expert will have tobe requisitioned for proof of the signatures and writings wherein the figures incheques have been altered. Under the Consumer Protection Act, 1986 this commissionis expected to decide the matter within a set frame of time. Relying on the decisionof Supreme Court is Bharthi Knitting Co. v. DHL Worldwide held that present caseinvolves an acute dispute of facts and therefore, the complaint is being returned tothe complainant for knocking the door of civil court. Against this order of theNational Commission, Complainant filed civil appeal before the Supreme Court.


Whether the approach of National Commission, shutting the case on theground that the question of fact and law arises which need to be investigated anddetermined, is within its jurisdiction as conferred on it by Consumer ProtectionAct?


The Supreme Court held that it cannot be denied that Fora at the Nationallevel, the State level and at the District level have been constituted under the Actwith the vowed object of providing summary and speedy remedy in conformitywith the principles of natural justice, taking care of such grievances as are amendableto the jurisdiction of Fora established under the Act. The principal object sought tobe achieved by establishing such Fora is to relieve the conventional courts of theirburden which is ever increasing with the mounting arrears and whereas the disposalis delayed because of the complicated and detailed procedure which at times is


accompanied by technicalities. Merely because recording of evidence is required, orsome questions of fact and law arise which would need to be investigated anddetermined, cannot be a ground for shutting the doors of any forum under the Actto the person aggrieved.

Further Supreme Court held that the decision arrived at by the NationalCommission is premature. The Commission ought to have issued notice to therespondent and taken its pleadings on record. Only when the pleadings for bothparties were available the commission should have formed an opinion as to thenature and scope of inquiry, i.e., whether the questions arising for decision in thelight of the pleadings of the parties required a detailed and complicated investigationinto the facts which was incapable of being undertaken in a summary and speedymanner. Then the commission could have justifiably formed an opinion on theneed of driving away the complainant to the civil court. Mere complicated natureof the facts and law arising for decision would not be decisive.

Appeal allowed matter remanded back for fresh hearing.


AAAAAbbbbbdddddul Rul Rul Rul Rul Razazazazazakakakakak & & & & & AnrAnrAnrAnrAnr..... vvvvvsssss..... S S S S Soutoutoutoutouth Inh Inh Inh Inh Indddddian Bian Bian Bian Bian Bankankankankank



Some imposter requisitioned new cheque books for the accounts of thecomplainants and obtained them from the respondent bank. This imposterfraudulently withdrew the large amount from complainants account. Upon comingto know of negligible balance on presentation of cheques by the complainants theycame to know of the fact of withdrawal(s) based on cheque books which they neverobtained nor did they sign the cheques withdrawing the amounts. Complainantscomplained the matter to the respondent Bank and upon not getting any properresponse/relief they filed two separate complaints before the District forum. TheDistrict forum allowed the complaints and directed the respondent Bank to payback fraudulently withdrawn amount with interest. Respondent Bank against theorder of the District forum filed appeal before the State Commission. The StateCommission allowed the appeal and set aside the order passed by the District forumand dismissed the complaint. Aggrieved by the order of the State Commissioncomplainants filed Revision Petitions before the National Commission.


Whether there has been any deficiency on the part of the Bank in issuingcheque books to imposters and honouring the cheque of large amounts withoutverifying the signatures?


The National Commission held the respondent Bank is liable for deficiency inservice for not verifying and comparing the signatures and encashing the chequesof large amount twice. The National Commission rejected the contention of therespondent Bank that they performed their duties in good faith when they issuedthe cheque books and encashed the cheques. The National Commission held thatthe State Commission did not go into the question that it is the duty of the Bank tocompare the signatures of the account holder before issuing of an instrument orencashing the cheques. When the National Commission saw the signatures on theAccount opening form of both the complainants and compared them with thesignatures on the cheque requisition application and the cheques, then even withoutaid from any handwriting expert it became clear that the respondent bank failednot once but twice to correctly verify/compare the signatures on these instruments


and the specimen signatures with them on record. One at the time of issue ofcheque book and again at the time of encashing cheques. The National Commissionheld it to be the case of double default on the part of respondent Bank. Bank’scashiers are professionals and trained to read the difference between the signatures.Deficiency in service is writ large on the face of it by the respondent bank by notcomparing the signatures on the documents/instruments presented to them.

Revision Petition allowed and the orders passed by District forum are restoredand set aside the orders of the State Commission.


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Complainant, a private limited company owning a hotel in Tirupur and becamea member of the respondent establishment Citibank card centre and was givencode No.44151960. In the usual course of business, complainant forwarded the chargeslip signed by one Mr. Sayed Doha, Visa Card No.4121741329556679 for Rs.39,690/- onDecember 2, 1995 to Respondent Bank. The respondent Bank instead of giving creditin the account of the complainant returned the charge slip on the ground that thesaid card is in the warning bulletin which was issued on 29.11.1995 to all themerchants and that the card holder’s account was closed as the customer was adefaulter. The complainant intimated the respondent Bank that they were notjustified in returning the charge slip because the said warning bulletin dated29.11.1995 was received only after 10-15 days from the date of issue, i.e. 10 to 15 daysafter the charge slip of defaulter customer was collected by him. Complainantissued legal notice dated 8.4.1996 calling upon respondent bank to pay a sum ofRs.39,990/- with interest but of no avail. Thereafter, complainant filed complaintbefore the District forum alleging deficiency in service on the part of respondentbank. The District forum dismissed the complaint without giving notice to theopposite party holding that the complainant cannot be construed as a consumerand does not fall within the purview of the Consumer Protection Act, 1986. Onappeal the State Commission also expressed the similar view and dismissed appealafter giving notice to the Respondent Bank. Against this dismissal order passed bythe State Commission complainant filed Revision Petition before the NationalCommission.


Whether complainant can be construed as a consumer falling within thepurview of the Consumer Protection Act, 1986?

Whether there has been any deficiency in service on the part of Bank in notgiving credit to the complainant for the charge slip of a defaulter customer?


The National Commission on the point that whether complainant is aconsumer held that since the relationship between the bank and the complainant


entail rendition of service and reimbursing the members establishment and thebill, the bank is directing the charges which constitute the consideration of suchservices and therefore, it cannot be said that the Member establishment is not aconsumer.

Further, the National Commission, on merits of the case, held that there hasnot been any deficiency on the part of respondent bank as the complainant/MemberEstablishment exceeded their limit without prior authorization by the bank.Complainant was not very careful in accepting without obtaining priorauthorization of respondent bank when the amount exceeded lower limit. Thebank has a right to refuse the payment or grant or refuse authorization whichshall be binding and final on the merchant establishment and cannot be faultedfor their conduct. No case of deficiency in service is made out against the respondentBank.

Revision Petition dismissed, complaint dismissed.


ArArArArArccccchana Mhana Mhana Mhana Mhana M..... K K K K Kamamamamamaaaaattttth h h h h vvvvvsssss..... Canar Canar Canar Canar Canara Ba Ba Ba Ba Bankankankankank & & & & & AnrAnrAnrAnrAnr.....

II (200II (200II (200II (200II (2003) CP3) CP3) CP3) CP3) CPJ 7(NJ 7(NJ 7(NJ 7(NJ 7(NC)C)C)C)C)


Complainant was having a current account with respondent Bank.Respondent Bank charged Rs.50/- for issuance of 50 leaves of MICR cheques whichwere not being charged from the complainant previously but this time chargedunilaterally without any information and consent of the complainant. Aggrievedwith this unilateral action of the respondent Bank complainant filed complaintagainst respondent Bank on the ground that this amount had not been chargedearlier for issuance of cheque book and same has been introduced unilaterallywithout any prior information and consent. The District Forum allowed thecomplaint holding that Bank was not justified in recovering the charges for supplyof leaf of cheque as it could not be done unilaterally without the consent of thecustomer. Further District Forum held that Respondent Bank also did not provideany data indicating cost it incur in obtaining such cheque books. Respondent Bankagainst the order of the District Forum approached the State Commission. TheState Commission upheld the order of the District Forum observing that there wasa direction of the Reserve Bank of India to the Banks providing that the Bankswould not be charging for clearing of the cheques. Being aggrieved by the order ofthe State Commission, Respondent Bank approached the National Commission.The National Commission held that the charges which the Bank chose to levy, forproviding their services by supply of MICR cheques, fell in the realm of pricing and itis on account of consideration for providing banking services. Hence, it was notwithin the jurisdiction of the forums to go into that question relating to pricing tosuch services. Thereby the National Commission allowed the Revision Petition filedby Respondent Bank. Against the order of the National Commission complainantfiled present civil appeal before the Supreme Court.


Whether the National Commission was right in holding that the amountcharged by the Bank relates to pricing of services rendered by the Bank?


The Supreme Court rejecting the submissions of complainant that the chargehas been unilateral, without consent and against the directives of the Reserve Bankof India held that introduction of MICR facilitates the clearance of the cheques and


avoids unduly long time consuming process in cheque clearance. Such small chargesnecessitated due to general modernization of its functioning and services, thequestion of it being unilateral, does not arise nor the question of consent of eachcustomer. Further Banks charging any amount for issuing MICR cheques to theircustomers or for the better services rendered for clearance of cheques by introducingany modern and new methods, are not against the directives of the RBI. The SupremeCourt held that the order passed by the National Commission setting aside theorders passed by the District Forum and the State Commission calls for nointerference.

Appeal dismissed.


Om Prakash Sahni vs. State Bank of India & Ors.Om Prakash Sahni vs. State Bank of India & Ors.Om Prakash Sahni vs. State Bank of India & Ors.Om Prakash Sahni vs. State Bank of India & Ors.Om Prakash Sahni vs. State Bank of India & Ors.



Respondent Bank invited applications for allotment of equity shares of Rs.10/-at a premium of Rs.90/- in response to the capital issue float. Complainant appliedfor allotment of 100 shares each but failed to receive any allotment advice. Sincethere was no response from the State Bank of India, Complainant approached theDistrict forum alleging deficiency in service on the part of respondent Bank. Beforethe District forum respondent Bank did not appear and the District forum on thebasis of record available held that the complainants were prospective investors andhence, could not be deemed to be consumers, dismissed the complaint. Againstdismissal order complainant approached the State Commission. The StateCommission placing reliance on the decision of the Supreme Court in the case ofMorgan Stanley Mutual Fund v. Kartik Das affirmed the order of the District forumand held further that the complainants have no case before the fora constitutedunder the Consumer Protection Act and can approach civil court and dismissed theappeal. Complainants approached the National Commission invoking its revisionaljurisdiction.


Whether the complainants are Consumers under the Fora constituted underConsumer Protection Act.


The National Commission held that complainants are not consumers, butthey are only prospective investors, and remedy, if any, lies in civil court. The NationalCommission dismissed the revision Petition without prejudice to their right toapproach civil court for appropriate remedy.



KKKKK..... R R R R Ramamamamama Iya Iya Iya Iya Iyererererer & Ors & Ors & Ors & Ors & Ors..... vvvvvsssss..... In In In In Indddddian Oian Oian Oian Oian Ovvvvverserserserserseeeeeaaaaas Bs Bs Bs Bs Bankankankankank



Complainants for the improvement of their hotel business approached andavailed a term loan of Rs.10 lacs in the month of March 1986 from the Bank of TamilNadu, which later on merged with the respondent Bank, Indian Overseas Bank.Again in August 1986 they further availed a loan of Rs.2,75,000/-. Complainants weregoing to repay the loan amount. On ‘daily payment system’. For further improvementof their business complainants again approached the Bank of Tamil Nadu for thesanctioning of Rs.15 lacs under the IDBI Scheme which was sanctioned by the Bankbut before the disbursement of the loan, the Govt. of India imposed moratorium inAugust 1989 and formulated the Scheme for the merger of the bank of Tamil Naduwith the Indian Overseas Bank. After the moratorium lifted by Government ofIndia complainant contacted the Respondent Bank for the release of the sanctionedloan amount of Rs.15 lacs. The complainants were asked to submit a freshapplication as a matter of formality which complainant did on 16.3.1990 but theRespondent Bank even then did not release the loan amount which was alreadysanctioned. Respondent Bank, in the meantime, called on the complainants on23.3.1992 to repay the earlier sanctioned loan amount on the representation of thecomplainants the respondent Bank granted a concession to write off Rs.52,381/-and called upon the complainant to pay the balance amount of Rs.56,360/- withinterest. Complainant protested against the recovery of interest as claimed by theRespondent Bank being over and above the guidelines issued by the Reserve Bank ofIndia as they have already paid Rs.6,68,904/- in full and final settlement.Complainants filed complaint before the State Commission against the respondentBank alleging deficiency in service in failure to close the loan account and returningthe documents. Respondent Bank contested the complaint before the StateCommission on the ground that complaint is not maintainable matter being sub-judice before civil court and that after the amalgamation of the erstwhile Bank ofTamil Nadu with the Indian Overseas Bank the amount in this non-operative accountwas credited towards the loan account and hence, there was no deficiency on thepart of the Bank. The State Commission rejecting the contentions of the RespondentBank held that in view of the provisions of section 3 of Consumer Protection Act,matter being sub-judice in civil court, is no bar to remedy and hence complaint ismaintainable. Further, it held that after taking over all the assets and lialilites ofBank of Tamil Nadu by the respondent Bank they cannot turn around and say that


they are not bound by the order of Bank of Tamil Nadu and are not liable to disbursethe loan amount and therefore, there has been gross deficiency in service on thepart of the respondent Bank in not releasing the sanctioned loan amount (sanctionedby Bank of Tamil Nadu) and allowed the complaint partly. Against this order bothparties filed appeal before the National Commission.


Whether the Bank is liable for deficiency in service in not releasing alreadysanctioned loan amount which was sanctioned by Bank of Tamil Nadu before itsmerger with Respondent Bank?


The National Commission during the course of argument specifically askedthe complainant to show any document sanctioning the loan amount of Rs.15 lacsby the Bank of Tamil Nadu which he failed to do so. Neither the loan document norany correspondence emanating from the said Bank of Tamil Nadu have beenproduced on record. In absence of any document or examination of the said loan/additional loan, it cannot be accepted that any loan/additional loan had beensanctioned. Oral information by the chairman of the Bank of Tamil Nadu is nothingmore than a hear say and cannot be accepted as evidence.



Principal, Guru Nanak Girls College vs. Punjab & Sind BankPrincipal, Guru Nanak Girls College vs. Punjab & Sind BankPrincipal, Guru Nanak Girls College vs. Punjab & Sind BankPrincipal, Guru Nanak Girls College vs. Punjab & Sind BankPrincipal, Guru Nanak Girls College vs. Punjab & Sind Bank



Complainant was the Principal of Guru Nanak Girls College, Ludhiana whichwas being run by a trust and under different resolutions of the Trust there wereseven separate accounts opened in the Respondent Bank which were operated onlyby the Principal. Respondent Bank stopped the operation of all the accounts on acomplaint received from some rival body of the Trust managing the college. Thiscaused great loss to the principal and therefore she filed complaint before the StateCommission and sought compensation. The State Commission dismissed thecomplaint. Against dismissal order complainant filed appeal before the NationalCommission.


Whether Bank is deficient in service for stopping the operation of accountsopened in the name of the principal by just receiving a communication from rivalgroup?


The National Commission while agreeing the reasoning of the StateCommission that the Bank acted on the advice of one group of the trustees heldthat prima facie, Bank was wrong in stopping the operation of the accounts operatedby the principal. It was certainly a mistake on the part of the Bank and must havecaused a great deal of anguish and harassment to the principal but then Bank wasunder a bona fide belief that it could stop the operation of the Bank accounts butthen every mistake cannot be necessary stated to be deficiency in service.

Appeal dismissed.


DDDDDOOOOOSOSOSOSOSON CN CN CN CN Chemihemihemihemihemicccccal Pal Pal Pal Pal Pvvvvvttttt..... Ltd. Ltd. Ltd. Ltd. Ltd. vvvvvsssss..... U U U U Unitenitenitenitenited Bd Bd Bd Bd Bankankankankank of of of of of In In In In Indddddia & Orsia & Orsia & Orsia & Orsia & Ors.....



Complainants were having a cash credit facility to the tune of Rs.10 lacs fromthe respondent Bank. Title documents relating to immovable property weredeposited with respondent Bank by way of security. In the course of time,complainants approached the respondent Bank for release of the title deeds of theimmovable property and offered other securities in lieu of immovable property asthe Federal Bank offered to provide loan over Rs.20 lacs for completing the buildingon that immovable property. Since the complainants were in urgent need to getthe loan from the Federal Bank, once again requested the Respondent Bank to closeits account and for this gave a cheque on 22.9.1998 for Rs.9,63,895/- towards thebalance in the account and also offered to make payment of balance amount ofinterest in cash and requested the bank to return all the documents of title within30 days but the bank did not return the title deeds etc. relating to immovable propertyeven after several reminders and therefore, complainant filed complaint before theState Commission against the respondent bank for not handing over the documentsof title. After filing of the complaint Petitioner bank returned the documents oftitle in March 1999 Bank did not file written version despite two adjournments andthe State Commission dismissed the complaint treating it as infructuous andholding the bank to be liable for deficiency in service and did not grant anycompensation observing that since complainant had not suffered any loss onaccount of delay in returning the document he is not entitled. Against this dismissalorder complainant filed appeal before the National Commission.


Whether the State Commission was proper in exercising its jurisdiction vestedby law when it held that Bank was deficient in service but did not grant anycompensation to the complainant?


The National Commission held that the State Commission failed to exercisejurisdiction vested in it by law. It further held that once having held that there wasdeficiency in service on the part of respondent Bank, complainant should have beencompensated even though complainants did not suffer any loss. There being nowritten version from the Bank it could not be assumed that the complainant did


not suffer any loss. The State Commission should have examined the matter inmore pragmatic manner after holding Bank to be deficient in service than rush todismiss the complaint. Complainants were trying hard the get their documents oftitle back for availing loan from the Federal bank to Complete their building complex.They even refunded whole of the amount to the Bank standing in their cash creditaccount. Delay in construction escalated the cost.

On the face, there was gross deficiency in service on the part of the Bank afterhaving received the whole amount from the complainants there was no reason forthe Bank to hold on to the title deeds for such a long period. Bank failed in its dutyto return the documents within reasonable time.

Order of State Commission, set aside, complaint allowedcomplaint allowedcomplaint allowedcomplaint allowedcomplaint allowed. Compensation of Rs.50,000/- alongwith 12 per cent from the order of State Commission granted.


MemoMemoMemoMemoMemon Cn Cn Cn Cn Co-oo-oo-oo-oo-oppppp..... B B B B Bankankankankank Ltd. Ltd. Ltd. Ltd. Ltd. vvvvvsssss..... AnAnAnAnAnwwwwwararararar D D D D D..... AhmeAhmeAhmeAhmeAhmedddddabababababadadadadadiiiii



Consumer/Complainant was having a saving account with appellant No.2.Complainant issued a cheque dated 28.3.1994 in favour of appellant No.2 for Rs.3 lacsto be invested in a fixed deposit. Appellant No.2 received a notice from CBI on 29.3.1994under section 102 Cr.P.C. requiring it to stop operation of accounts/lockers, etc. asdetailed therein standing in the names of Mohd. Dawood Ahmedabadi and hisrelatives. Acting on said notice appellant No.2 returned the cheque dated 28.3.1994to the complainant alongwith a covering letter dated 29.3.94 referring to said noticefrom CBI as complainant was the brother of Mohd. Dawood Ahmedabadi.Subsequently, on instructions from CBI, appellant No.2 sent a letter dated 22.7.1995to the complainant informing him that he may operate his saving account.Complainant sent a legal notice to the appellant No.2 to which appellant No.2 repliedback on 22.7.1997. Thereafter, complainant filed complaint against appellant No.2and its head office alleging deficiency in service in not making fixed deposit beforethe State Commission. The State Commission directed appellant No.2, Bank to payinterest @12 per cent p.a. on the amount of Rs. three lacs from 1.4.94 to 14.5.1996.Against this order appellant No.1 & 2, Banks filed appeal before the NationalCommission. Another complaint was filed by Smt. Sufia M. Ahmedabadi on identicalallegations. She was intimated regarding operation of her account on receipt ofcommunication from CBI vide letter dated 15.5.1996. Whereas complaint was filedon 13.10.1997. The State Commission in this matter also granted the same relief.Appellant No.2 Bank filed appeal against this order also.


Whether Bank is deficient in not making the fixed deposit despite havingreceived the cheque for the same?

Whether complaint is barred by limitation?


Before the National Commission appellants made twofold submissions i.e.complaints barred by limitation and secondly that there is no deficiency in servicein view of notice u/s102, Cr.P.C. dated 29.3.1994 Sent By CBI. The National Commissionon the point of limitation held that cause of action to file complaints against the


appellants had accrued to the respondents on 29.3.1994 when appellant no.2. Bankdid not convert the amount of 2 cheques for Rs.3 lacs each in view of notice u/s 102,Cr.P.C. received from CBI on 29.3.1994. Taking that date as starting point of limitation,the complaints filed beyond the period of two years on 25.9.1997 and 13.10.1997 andwere barred by time. Even if date of 22.7.1995, the date of intimation regardingpermission to operate saving account, is taken for computation of limitation thenalso the complaint filed by complainant Anwar D. Ahmedabadi was time barredand in case of Smt. Sufia M. Ahmedabadi since the intimation was sent on 15.5.1996same is within limitation. But date of 15.5.1996 cannot be taken as starting pointfor limitation in both complaints. In complaint filed by Anwara Ahmedabadi15.5.1996 could not have been taken for computation of limitation for filingcomplaint as the cause of action had accrued on 29.3.1994.

Further, on the point of deficiency in service, the National Commission heldthat Bank stamps appearing on both the cheques in question as also covering lettersconclusively point out that the cheques were delivered to appellant no.2 Bank on29.3.1994 instead of 28.3.1994.

Further, National Commission held that in view of aforesaid notice undersection 102, Cr.P.C. dated 29.3.1994, the appellant No.2 was well within its rights not toconvert the amounts of 2 cheques into fixed deposits and return them torespondents. Appellant Bank followed the decision of Supereme Court in State Bankof Maharashtra v. Tapas D. Neogy, (1999) 7 SCC 685 wherein it was held by SupremeCourt that bank account of an accused or any of his relative is ‘property’ within themeaning of section 102, Cr.P.C. and a police officer in the course of investigation canseize or prohibit the operation of the bank account if such assets have direct linkswith the commission of offence which the police officer is investigating into.

Appeals accepted; order passed by State Commission set aside.


CanarCanarCanarCanarCanara Ba Ba Ba Ba Bankankankankank vvvvvsssss..... N N N N Nararararareeeeesssssh Kh Kh Kh Kh Kumumumumumararararar JJJJJain & ain & ain & ain & ain & AnrAnrAnrAnrAnr.....



Complainant obtained cash credit limit of Rs.30,000/- against goods stored inthe shop and godown. Petitioner Bank took insurance policy in respect of shop ofthe complainant at the cost of complainant. Complainant also took insurance policyfor his shop and godown but same was surrendered on 6.7.1994. Loss on account ofheavy rain was reported on 7.7.1994. Complainant filed claim with insurancecompany which was rejected by the insurance company because the loss occurredwas not covered by insurance policy. Complainant filed complaint before the DistrictForum alleging Deficiency in service on the part of Bank & Insurance Company. TheDistrict Forum exonerated the insurance company and held Bank liable fordeficiency in service for not taking policy for goods in the godowns. Petitioner Bankagainst the order of the District Forum filed Appeal which was dismissed by theState Commission. Petitioner Bank filed Revision Petition before the NationalCommission taking plea that it is the primary duty of the complainant to takeinsurance policy for the hypothecated goods.


Whether the Bank is liable for deficiency in service for not taking insurancepolicy in respect of hypothecated goods lying in godown?


The National Commission considering the plea of the Petitioner Bank heldthat the Petitioner Bank was under no obligation to take an insurance policy afterrecall of loan by the petitioner and after having filed a suit against the complainant/respondent. Onus lays clearly on the respondent to have a valid policy cover all thetime which he did obtain and surrendered only to claim loss the next day. It is theduty of the complainant to ensure that his goods are covered by insurance policy allthe time and it is complainant who failed to do so, therefore Petitioner Bank cannotbe held liable for lapses on his part.

Revision Petition allowed, order of the State Commission and the District Forumset aside.


Andhra Bank vs. Vishwapriya Financial Service & Securities Ltd.Andhra Bank vs. Vishwapriya Financial Service & Securities Ltd.Andhra Bank vs. Vishwapriya Financial Service & Securities Ltd.Andhra Bank vs. Vishwapriya Financial Service & Securities Ltd.Andhra Bank vs. Vishwapriya Financial Service & Securities Ltd.



One concern M/s Shree Ganesh approached the respondent for discountingbills of exchange raised by it on M/s S.T.R. laboratories, Hyderabad and produced aBank Gurantee issued by appellant Bank, Juntapalli Branch, Andhra Pradesh for asum of Rs.5.5 lacs alongwith a letter from the appellant confirming the issuance ofBank Gurantee. Respondent believing the said Bank Gurantee discounted the billsof exchanged raised by M/s Shree Ganesh. When the respondent sent itsrepresentative for presentation of bills, no one was found at the given address andthus respondent invoked the Bank Gurantee given by appellant Bank vide its letterdated 30.8.1993. In response appellant Bank asked about the particulars of the BankGurantee which was furnished to the respondent as no such Bank gurantee wasnoted in their record and referring the matter to higher authorities and ultimatelyinformed the respondent that the appellant Bank has not issued any such Bankgurantee to M/s Shree Ganesh. Respondents referred the matter to RBI but withoutany progress. Respondents filed complaint before the State Commission againstthe appellant Bank for not honouring the Bank gurantee. The State Commissionrejected the plea of appellant Bank that Bank gurantee could be invoked only afterexhausting all other remedies and directed the appellant Bank to honour the Bankgurantee holding that since the Bank gurantee was actually issued by the branchof the appellant and if the Manager of the appellant did not act bonafide then itcannot absolve the appellant Bank from its liability under the letter of gurantee.Against this order appellant Bank filed appeal before the National Commission.


Whether the Bank is deficient in services for not honouring the Bank guranteeissued by it?


The National Commission after referring various judgments held that it iswell settled principle of law that if the act is done in course of employment which isauthorized, then the master is liable for the acts of its servant. The NationalCommission further held that the evidence on record well establishes that theBranch Manager acted within the normal course of his duties when he issued theBank gurantee and the plea raised by the appellant Bank that the customer should


have exhausted its remedies against the principal debtor before invoking Bankgurantee is without any merit. The liability of the surety/guarantor ariseimmediately on the contingency mentioned in the Bank gurantee occurring i.e. thedishonour of bills of exchange. The failure of appellant Bank in not honouring theletter of gurantee issued by its branch manager amounted to grave deficiency inservice.

Appeal dismissed and the order of the State Commission affirmed.


MMMMM.P.P.P.P.P..... M M M M Minerinerinerinerinerals Ltd.als Ltd.als Ltd.als Ltd.als Ltd. vvvvvsssss..... B B B B Bankankankankank of of of of of In In In In Indddddia & Orsia & Orsia & Orsia & Orsia & Ors.....



Present complaint is against the respondent bank alleging deficiency in service ontheir part in not paying the amount of the Bank gurantee on demand being obligationon the part of Bank requiring it to pay under the Bank guarantee. The respondent bankexecuted a bank gurantee on behalf of its customer, M/s Searsole Chemical Ltd. in favourof the complainant. In the bank gurantee dated 6.7.1993 the respondent bank undertookto pay to the complainant an amount not exceeding Rs.20 lacs by reason of any breachmade by the said customer M/s Searsole Chemical Ltd. of any of the condition containedin the agreement dated 7.6.1993 being executed between the complainant and M/sSearsole Chemical Ltd.. The said bank gurantee was extended by the respondent bankvide its letter dated 5th September 1999 for one year i.e. from 20.5.1994 to 19th May 1995.The complainant called upon the respondent bank invoking the gurantee dated 6.7.1993.When the respondent bank did not pay the said bank gurantee complainant filed thepresent complaint before the National Commission.


Whether Bank is liable for deficiency in service for not paying the amount ofbank gurantee on demand especially, when the demand was not made in accordancewith the terms of the gurantee?


The National Commission while accepting the plea of the respondent bank thatthe demand in the manner it has been made is not in accordance with the terms ofthe gurantee and as such it is not obliged to pay, held that it is a condition of the Bankgurantee that demand certifying that breach of terms of agreement has occurredsupported by proof of supply of material and acceptance of the same by the companyand non-payment, therefore, no payment could be made. Complainant did not sentrequisite documents proving the delivery of the consignments in respect whereof themoney is being claimed. There are certain conditions that are provided in the guranteeitself which have to be fulfilled before the Bank can make payment under the guranteeand the complainant failed to fulfill those conditions. As the documents which wererequired to accompany the demand were not sent. Therefore, the Bank was withinits right not to honour such demand under the gurantee.



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Complainant exported fruits, chilly, pickles and other items to Dubai andinstructed Respondent Bank to realize the export proceeds. Respondent Bank failedto realize export proceeds and thus the complainant filed complaint before theNational Commission.


Whether the National Commission under its summary jurisdiction canentertain a complaint wherein complicated questions/issues of facts and law isinvolved?


The National Commission considering the submission of the Bank that thoughpacking credit limit was sanctioned to the complainant it was not utilized by thecomplainant for exporting goods to Dubai complainant exported goods to M/s DasFoodstuffs Trading, Dubai though it took packing limit for M/s Mipco Ltd. And usedthe letter of credit for exporting goods to M/s Das Foodstuff without any intimationto the respondent Bank and ultimately held that the complaint cannot be decidedin the summary jurisdiction of a Consumer Forum. Such type of cases should not bedealt with by the forum under the CP Act, in a summary fashion.



Indian Overseas Bank vs. Klebert PierreIndian Overseas Bank vs. Klebert PierreIndian Overseas Bank vs. Klebert PierreIndian Overseas Bank vs. Klebert PierreIndian Overseas Bank vs. Klebert Pierre



Complainant deposited US$36, 701.33 on 16.7.1990 with Petitioner Bank for aperiod of 18 months @9.5 per cent interest. Later same was renewed on [email protected] per cent rate of interest, on 19.7.1993 @10.5 per cent on 17.1.1994 @4.5 per cent andon 18.1.1995 @6.5 per cent rate of interest. During audit inspection the PetitionerBank found that the rate of interest on FCNR Account in 1992 was 6.75 per cent andnot 10.5 per cent. This error was brought to the notice of the complainant andrequested the complainant to forward the deposit receipt for necessary correctionand re-transmission, which was refused by the complainant. The Petitioner Bankpaid US$52,786.36 to the complainant after deducting excess amount paid due toclerical mistake. Aggrieved by such deduction complainant filed complaint beforethe District forum. The District forum allowed the complaint and directed thePetitioner Bank to pay deducted excess amount with interest. Petitioner Bank filedappeal before the State Commission. The State Commission affirmed the order ofDistrict forum. The Petitioner Bank filed Revision Petition before the NationalCommission.


Whether excess amount deducted by the Petitioner Bank amounts to deficiencyin service?


The National Commission relying on the decisions of Supreme Court and itsprevious decisions held that the depositor could not be paid interest at the ratehigher than the maximum prescribed by the RBI which in the present case is 10.5per cent plus one per cent i.e. 11.5 per cent and the Bank could not be faulted forreducing the rate of interest to the extent of interest prescribed by the RBI andapplicable at the time of acceptance of FDRs.

Revision Petition allowed; orders of both the fora below are set aside.


Indo Steels vs. Central Bank of IndiaIndo Steels vs. Central Bank of IndiaIndo Steels vs. Central Bank of IndiaIndo Steels vs. Central Bank of IndiaIndo Steels vs. Central Bank of India



Complainant is carrying on business of iron and steal and enjoying an overdraftfacility with respondent Bank since 1986. While the facilities were being enjoyed bythe complainant respondent bank locked the premises of the firm. Complainantfiled complaint before the State Commission alleging deficiency in service on thepart of respondent Bank on account of locking the premises of the firm, thereputation of the complainant suffered substantial damage. The State Commissiondismissed the complaint. Against the dismissal order of the State Commission,Complainant filed Appeal before the National Commission.


Whether the Bank is liable for deficiency in service for protecting its owninterest by locking the premises of the Loanee?


The National Commission rejected the contention of the complainant that itsuffered loss of reputation due to the action of the Respondent Bank which lockedthe premises of the firm without any notice to the appellant and accepted thesubmission of respondent Bank that the overdraft facility provided to thecomplainant by the respondent bank was subject to the condition that he wouldmaintain adequate stocks to cover the dues and he was also required to submit itsperiodic stock statement for the reason that the complainant was overdrawing hisaccount leading to a huge balance of Rs.40 lacs outstanding and therefore therespondent Bank insisted for adequate security and asked the complainant toregularize his accounts but when the surprise inspection conducted by the officersof respondent, the stock in the premises were hardly worth of Rs.15 lacs. Therefore,the respondent Bank, with a view to secure Bank’s interests the Bank converted thehypothecation of all movable stocks into pledge as per the terms of hypothecationagreement. After considering the terms & conditions of hypothecation agreementand the contention of the respondent Bank, The National Commission held that inview of huge outstanding which remained uncleared the action of the Bank intaking possession of the securities to protect its interests cannot be assailed.

Appeal dismissed.


Commander Rakesh Sharma vs. Punjab National BankCommander Rakesh Sharma vs. Punjab National BankCommander Rakesh Sharma vs. Punjab National BankCommander Rakesh Sharma vs. Punjab National BankCommander Rakesh Sharma vs. Punjab National Bank



Complainant, holder of a saving Account with Respondent Bank issued twocheques one for Rs.60,350/- dated 10th May 1991 & other for Rs.20,000/- dated 13th May1991. To ensure the availability of necessary balance in his account he deposited twocheques in his account on 12th May 1991 drawn on Nankpura Branch of PNB for Rs.10,000/- and another drawn on Bank of India, Parliament Street for Rs.6,000/-. The RespondentBank sent the cheque drawn on Bank of India on the very next working day i.e. 13th

May 1991. The cheque was cleared and credited to the account of complainant on 15th

May 1991 while the other cheque could not be sent for clearing even on 14th May 1991being an off day for Nankpura Branch & also for Motibagh Branch. The said chequewas sent for realization only on 15th May 1991 and till 16th May 1991 was not cleared.Meanwhile, both the cheques issued by complainant in favour of Air Force NavalHousing Board were presented in the account of complainant on 15th May 1991. TheBank on its own decided to clear the cheque for smaller amount i.e. for Rs.10,000/- andreferred the other cheque to the drawer on account of ‘insufficient funds’. Aggrievedby this complainant filed complaint before the District forum alleging deficiency inservice against the Respondent bank as the complainant was made to pay penalty ofRs.1,508.85 and had to suffer humiliation as the Air Force Naval Housing Board refusedto accept cheques from the complainant in future. The District forum dismissed thecomplaint. Complainant filed appeal before the State Commission. The StateCommission also rejected the argument of the complainant that the Bank shouldhave returned the cheque with the remarks ‘effects not cleared’ and not on withremark ‘refers to drawer’ and dismissed the Appeal. Against this dismissal ordercomplainant filed Revision Petition before the National Commission.


Whether there is any illegality or jurisdictional error in the judgement passedby fora below for not holding Bank deficient in service?


The National Commission affirmed the order of Fora below and held that thereappears to be no element of neglect or deficiency in service nor is any ground whichcould lead to the inference of any illegality or jurisdictional error in the judgment below.



Hanuman Hosiery vs. Canara BankHanuman Hosiery vs. Canara BankHanuman Hosiery vs. Canara BankHanuman Hosiery vs. Canara BankHanuman Hosiery vs. Canara Bank



Complainant, a partnership firm applied for a loan of Rs. two lacs from therespondent Bank. Respondent Bank released Rs.75,000/- only out of Rs. two lacs tothe Complainant and gave assurance to sanction further amount but did notsanction the same. Complainant filed complaint before the National Commissionalleging deficiency in service on the part of Respondent Bank for not releasing Loanamount of Rs.12,5000/- out of Rs. two lacs which was promised to be given to theComplainant.


Whether Bank is liable for deficiency in service for not releasing loan amountof Rs.1,25,000/- out of Rs. two lacs which was promised by respondent Bank to bereleased to the complainant.


The National Commission dismissed the complaint holding that when thecomplainant did not submit detail of estimates, requirement of working capital,proof of present overdues with Bihar State Financial Corporation, sources of rawmaterial and arrangements for sale of finished goods, sources of margin, stockstatement, etc. Therefore, there was no question of sanctioning of any further loan.An amount of over Rs.47.50 lacs claimed by the complainant towards compensationis an abuse of the process of Consumer Forum under the Consumer Protection Act.



State Bank of India vs. Ugam SinghState Bank of India vs. Ugam SinghState Bank of India vs. Ugam SinghState Bank of India vs. Ugam SinghState Bank of India vs. Ugam Singh



Complainants had a locker facility with the respondent Bank. Complainantoperated his locker last on 5.12.1990 and while he came next time to operate hislocker and was completing formalities for the same, he heard the Bank Managerquarrying a staff member “if this was the very person Ugam Singh whose locker wasopened”. Thereafter when the complainant went into the strong room to operatehis locker, he found the locker already opened and no ornaments were there. Thecomplainant lodged an F.I.R. and also filed complaint before the State Commissionfor compensation from the Petitioner Bank. The State Commission held theappellant Bank liable for deficiency in service. According to the State Commission,non-production of locker ‘register’ furthered the cause of the complainant anddirected the appellant Bank to pay the cost of the jewellery. Complainant filedappeal for the enhancement of the compensation and the appellant Bank filedappeal before the National Commission for setting aside the order of the StateCommission.


Whether Bank is liable for deficiency in service when the locker found to beopened?


The National Commission allowed the appeal filed by the bank. It is submittedby the bank that it is well established fact that locker can be operated by two keys,one of which is with the individual and the other is kept by the bank. Once thecomplainant says that he had locked the locker, then who and how the locker couldbe opened without the locker operator’s key? Whereas it is argued on behalf of thecomplainant that the bank has been deficient in providing service. Bank take lockercharges for rendering services. As soon as locker was opened and finding the jewellerymissing, complainant reported to the Bank Manager, lodged FIR with the Police butBank did not initiate any departmental action which was must for the Bank.

The National Commission after hearing arguments advanced by both theparties held that complainant is a literate and sensible person. It cannot be believedthat he lent his key to close his locker and then re-opened it. It is not disputed that


the customer’s key was always with the complainant, then how could a duplicatekey be made which is one of its kind and specific to that lock. It will be furtherdifficult to believe that duplicate key holders connived with Bank to open the lockerand left the locker open.

Further, there is no question of any probe especially when police went into thematter and found nothing wrong and filed FIR. Enteries in a locker register are notdisputed. In such circumstances, complainant failed to prove his case that lockerwas already open when he went to operate it on 5.01.1990 and the State Commission’sdeduction is not based on any evidence or proof.

Appeal of Petitioner Bank allowed and Appeal of Complainant dismissed.


State Bank of India vs. Mohinder Sing & Ors.State Bank of India vs. Mohinder Sing & Ors.State Bank of India vs. Mohinder Sing & Ors.State Bank of India vs. Mohinder Sing & Ors.State Bank of India vs. Mohinder Sing & Ors.



Complainant took a loan from the Petitioner Bank for the purchase of a truckin 1981, repayment of which was to be made in 50 equal instalments. Due toirregularity in repayment of instalments, the Petitioner Bank filed a civil suit torecover the outstanding amount. Complainant requested for NOC from thePetitioner Bank at the time of renewal of route permit for the truck i.e. in February,1992, whereas the same was issued in the month of November 1992. Complainantfile complaint before the District forum alleging deficiency in service on the part ofpetitioner bank and sought damages for non-issue of NOC for the period February1992 to November 1992. The District forum held Petitioner Bank to be deficient inrendering services and awarded damages. Petitioner Bank filed Appeal before theSate Commission which was dismissed. Petitioner Bank against this dismissal orderfiled Revision Petition before the National Commission.


Whether the order passed by lower Fora holding Bank to be deficient inrendering services is correct?


The National Commission while allowing the Revision Petition held that theconduct of the complainant speaks for itself. Outstanding stretched for six years.Bank cannot be faulted for non-issue of NOC when such a huge amount wasoutstanding. It is the complainant who was a defaulter and could not claim theright to NOC. Complainant continue to make money by plying the truck and yetnot paying the instalments, takes away his right to any help, goodwill from theBank. Both the lower forums did not appreciate the importance of non-paying ofinstalments and therefore, order passed by lower forums cannot be sustained anddonot find any deficiency in service rendered by the Bank.

Revision Petition allowed, order passed by lower forums set aside.


Virender Narang vs. M/s Syndicate Banks OrsVirender Narang vs. M/s Syndicate Banks OrsVirender Narang vs. M/s Syndicate Banks OrsVirender Narang vs. M/s Syndicate Banks OrsVirender Narang vs. M/s Syndicate Banks Ors



Complainant, being a businessman, was availing overdraft facilities from therespondent Bank since 1995. He started availing the overdraft limit of Rs.50,000/-which was later enhanced to Rs.3.25 lacs. The complainant applied for furtherenhancement of the facilities from Rs.3.25 lacs to Rs.5.50 lacs. The complainant wasinformally informed that the enhanced limit has been sanctioned and can operatehis account. On receiving such informal information complainant booked its sales ofproportionately increased quantum. Later on, it transpired that the enhanced limithas not been sanctioned and received a letter from the respondent bank requiringimposition of further pre-conditions for release of the enhanced overdraft facility.Complainant filed complaint before the State Commission against the respondentbank alleging deficiency in service on account of non-granting of additional overdraftlimit, he suffered serious prejudice and losses in business. The State Commissiondismissed the complaint exonerating the respondent bank. Complainant against thedismissal order filed present appeal before the National Commission.


Whether the bank acted unreasonably in not sanctioning the overdraft facilityto the complainant, making itself liable to deficiency in service?


The National Commission after perusing the material on record relying on itsprecedents held that since the letter of sanction of additional facilities clearly sets outthat enhancement was subject to the appellant offering some collateral security.Apart from that respondent Bank also asked the complainant to complete theformalities and execute all necessary documents. The respondent Bank furthercomplained to the complainant that he had been diverting the sale proceeds to someother account which was in breach of the agreement for overdraft. The Bank have toexercise their discretion and act in accordance with their best judgment after takinginto account various relevant factors and hence, mere failure to provide financialfacility cannot be said to constitute “deficiency in service”. In the peculiar facts andcircumstances of the present case, it cannot be said that the respondent Bank hadacted unreasonably.

Appeal dismissed with costs.


Mrs. Anumati vs. Punjab National BankMrs. Anumati vs. Punjab National BankMrs. Anumati vs. Punjab National BankMrs. Anumati vs. Punjab National BankMrs. Anumati vs. Punjab National Bank



Complainant jointly with her husband put Rs.20,000/- in Fixed Deposit for aperiod of 84 months with Respondent Bank. Despite maturity of the FDR respondentBank did not credit the FDR and adjusted the same, same being mortgaged, againstthe loan taken by M/s Verma Agro industries, by the husband of complainant.Complainant filed complaint before the District forum contending that therespondent has no right to adjust her half share in the fixed deposit as she is thejoint holder of the fixed deposit. The District forum accepting the contention of thecomplainant allowed the complaint. Respondent Bank filed appeal against theorder of the District forum on the ground that the husband of the complainantalone was competent to pledge the fixed deposit receipt against the loan takenfrom the respondent Bank and no consent of the complainant was required for thesame. The State Commission referring to the form filled for fixed deposit receiptreached to the conclusion that the mode of payment was “either or survivor” whichshows that on maturity payment could have been made by the respondent Bankeither to the complainant or to her husband and it was not necessary that the fixeddeposit should have been encashed by both the depositors and when the paymentcould have been made to a single individual then the Bank was at Liberty to acceptthe mortgage of the fixed deposit receipt on behalf of one of the depositors. Againstthis order of the State Commission complainant filed Revision Petition before theNational Commission.


Whether Bank is deficient in service for adjusting the maturity amount ofFDR on joint name against loan, same being mortgaged by one of them without theknowledge/consent of other?


The National Commission affirming the order of the State Commission heldthat the financial institutions have every right to protect their interests by takingconscious decisions. When a respondent Bank took a conscious decision it cannotbe faulted for deficiency in service.

Revision Petition dismissed, order of the State Commission affirmed.


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Present case is about deficiency in service rendered by Bank and the InsuranceCompany. The complaint is filed by the wife of the deceased insured. Deceased tookJanta Personal Accident Insurance Policy from the National Insurance Company forRs.50 lacs. Deceased gave a cheque of Rs.1800/- bearing No. 0882491 dated 25.3.1996drawn on Bank of Baroda towards Premium at the time of Proposal. The Insurancecompany issued the insurance policy on the following day. Insurance Company sentthe cheque to its Banker, UCO Bank for collection on 26.3.1996, which was sent by UCOBank vide its letter dated 4.4.1996 to the Bank of Rajasthan which was acting as aclearing house and received the cheque only on 9.4.1996. Bank of Rajasthan sent thecheque to the Bank of Baroda on same day which was returned by the bank despitehaving money in his account on the ground that the account holder had since expired.Since, the deceased insured died on 2.4.1996 in a car accident. His wife made a claimbefore Insurance Company which was repudiated on the ground that the premiumon the policy of her deceased husband remained unpaid and thus there was no policy.Wife of the deceased offered to pay the amount of premium in cash but it was declined.Therefore, wife of deceased filed complaint before the District forum allegingdeficiency in service against the Insurance company and the UCO Bank. The Districtforum allowed the complaint and held both insurance company and the UCO Bankdeficient in service and also liable to make payment of Insurance claim. Both Insurancecompany and the UCO Bank filed separate appeals before the State Commission. TheState Commission dismissed, both the appeals with cost. Being aggrieved by dismissalorder passed by the State Commission both Insurance company and the UCO Bankfiled Revision Petitions before the National Commission. The National Commissionwhile considering whether Insurance company or the Bank is liable for deficiency inservice by interim order directed the Insurance company to pay 50 per cent of theinsurance amount. Insurance company against this interim order filed a specialleave Petition before the Supreme Court. The Supreme Court though stayed the interimorder of the National Commission, however, subsequently, directed both the Insurancecompany and the bank to pay Rs.1.00 lac each to the wife of the deceased insured, butdid not deal with the controversy involved in the matter and dispose of the Petitionwith a direction that the deposits so made would abide by the order of the commission.


Whether Insurance Company or the Bank is liable for the deficiency in service?



Insurance company took a plea before the National Commission that Section60VB of the Insurance Act provides that no risk be assumed unless premium isreceived in advance whereas Bank took stand that it could not be accused of anydeficiency in service as at best it was the agent of the Insurance company. Neitherthe insured nor his widow was consumer of the Bank. National Commission whilerejecting the pleas of both Insurance company and the bank held that the bank isextremely negligent and could be accused of extreme deficiency in service in relationto the Insurance company. The Bank sent the cheque for collection on 4.4.1996 butappeared to have sent later than this date as it was received by the Bank of Rajasthanon 9.4.1996. If the Bank had been prompt in sending the cheque for collectingpayment could have received prior to 4.4.1996 when the deceased insured met withhis unfortunate death in car accident on 2.4.1996 Bank was certainly deficient inservice in not sending the cheque for collection in reasonable time as has been sorightly held by the Forums below.

Further, it is usual for the Insurance company to accept the amount of premiumby cheque. Payment by cheque is as good as payment in cash provided it is honoured.Payment by cheque in fact relates back to the date of cheque or to the time when itwas given and it is not material when cheque was encashed. If the cheque had beenpresented for payment in time, it could have been encashed. The cheque was receivedon 25.3.1996 and sent for collection on 9.4.1996. It may be on account of the fault ofthe UCO Bank and that Bank acted as an agent of the Insurance company anddeficiency in service by the agent, as far as complainant is concerned, is attributableto the Insurance company itself. For the complainant it is the Insurance companywhich sent the cheque for collection when it was presented on 9.4.1996 after receivingthe same on 25.3.1996. No explanation could be acceptable as to why the chequecould not be presented immediately for collection at least within a reasonable period.In these circumstances of the case, provisions of sec.64VB are not of any help to theInsurance company. It is the Insurance company which has been deficient in serviceand has to bear consequences. Both the District forum and the State Commissionhave correctly arrived at the conclusion that there has been deficiency in service onthe part of the Insurance company but at the same time holding deficiency inservice on the part of UCO Bank as well. However, UCO Bank as an agent of theInsurance Company cannot be held liable so far complainant is concerned.

Revision Petition filed by UCO Bank allowed, Revision Petition filed by InsuranceCompany dismissed with cost.


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II (200II (200II (200II (200II (2002) CP2) CP2) CP2) CP2) CPJ 7 (SJ 7 (SJ 7 (SJ 7 (SJ 7 (SC)C)C)C)C)


The controversy involved in the present case is whether or not the StateCommission could grant time to the respondent to file reply, beyond a total periodof 45 days in view of sec.13(2)(a) of the Consumer Protection Act. The complainantfiled complaint before the State Commission, Gujarat claiming compensationagainst the respondent Bank as the respondent Bank failed to advance loan timelydespite furnishing of security for the same. Though the Respondent Bank receivedthe notice on 22.2.2000 for the date of hearing as 4.4.2000 failed to file reply on dateof hearing and sought adjournment on date fixed i.e. on 4.4.2000 and also soughttime to file reply. The State Commission, Gujarat granted time to the respondentBank for filing reply and adjourned the matter for 4.5.2000. The complainant on24.7.2000 filed an application before the State Commission contending that thereply filed by the respondent Bank should not be taken on record as the same hasbeen filed after the expiry of 30 days initially admissible for filing reply and alsobeyond a further period of 15 days as could be extended for the purpose and thusprayed that the reply of the respondent Bank may not be taken on record andrejoinder filed by the appellant may be returned to it. The State Commission, Gujaratdismissed the application of the complainant and also imposed a cost of Rs.500/-upon the respondent Bank for late filing of the reply. The complainants preferredRevision before the National Commission which was also dismissed on the groundthat no ground was made out to interfere in exercise of its Revisional Jurisdiction.The complainants filed civil appeal before the Supreme Court.


Whether the State Commission, could grant time to the respondent to file hisreply, beyond a total period of 45 days, in view of section 13(2) of the ConsumerProtection Act, 1986.


The Supreme Court held that the provisions as contained under clause (a) ofsub-sec (2) of section 13 is procedural in nature. It is also clear that with a view toachieve the object of the enactment, that there may be speedy disposal of suchcases, that it has been provided that reply is to be filed within 30 days and theextension of time may not exceed 15 days. No penal consequences have, however,


been provided in case extension of time exceeds 15 days. Therefore, it could not besaid that any substantive right accrued in favour of the appellant or there was anykind of bar of limitation in filing of reply within extended time though beyond 45days in all. The reply is not necessarily to be rejected. All facts and circumstances ofthe case must be taken into account. The statement of objects and reasons of theAct also provide that principles of natural justice have also to be kept in mind.

Further, the provision says that the extended time may not exceed 15 days isdirectory in nature. It does not mean that orders extending the time to file replymay be passed repeatedly unmindful of and totally ignoring the provision that theextension may not exceed 15 days.

So far, the facts of the present case are concerned we find that at the firstinstance the commission itself had fixed the date beyond 30 days and the respondentBank sought further time which prayer was accepted and 4.5.2000 was fixed. Therespondent Bank filed his reply on the date fixed. In such circumstances there wasno occasion to contend that the reply of the respondent should be rejected.

Appeal dismissed.


CanarCanarCanarCanarCanara Ba Ba Ba Ba Bankankankankank vvvvvsssss..... C C C C C.D.D.D.D.D..... P P P P Paaaaatetetetetelllll

II (2001) CPII (2001) CPII (2001) CPII (2001) CPII (2001) CPJ 1J 1J 1J 1J 19 (N9 (N9 (N9 (N9 (NC)C)C)C)C)


Complainant who was a Non-Resident Indian deposited 15000 pounds assecurity for the loan of Rs. two lacs for the period of two years. This amount was tobe kept in a FCNR Fixed Deposit Account for the same period. On the strength ofsecurity of two lacs Bank provided overdraft facility to the company M/s SuncrushFruits Pvt. Ltd. While availing overdraft facility no relation of complainant andM/s Suncrush Fruits Pvt. Ltd. was disclosed. On the maturity of the Fixed DepositComplainant further get it renewed alongwith the accrued interest. The FixedDeposit was allowed to continue beyond two years without the knowledge andconsent of the complainant. The complainant demanded the return of the entireamount with accrued interest standing to his credit in the FCNR fixed depositaccount which was seized by the appellant Bank against the Loan/overdraft facilityavailed by the company M/s Suncrush Fruits Pvt. Ltd.. Complainant filed complaintagainst the Petitioner Bank alleging deficiency in service.


Whether a substantial shareholder is liable for the debts of the company?

Whether a Bank can exercise its power of general lien?


The National Commission held that it is trite law that a shareholder is notliable for the debts of the company. The company is clothed with a juristicpersonality, which is quite different and separate from its shareholders. Theshareholders cannot be made liable for the debts of the company.

There are however situations where for the sake equity, corporate veil is pierced,particularly, once winding up proceedings start, the company’s corporate veil canbe lifted to find out the reality. In the instant case, we are not aware of the status ofthe company except that it is financial straits. Its assets have been seized by financialinstitution. Patel who had opened a fixed deposit account and given its security fortwo years but had allowed it to continue for nearly eight years for the benefit of thecompany and has now come up with a complaint that the fixed deposit which wasdue to mature on 28.10.1994 should not be extended any further and must bereturned with accrued interest.


The particulars of the nature and the degree of involvement of Patel in theaffairs of the company have not been disclosed and we shall not presume anyequitable consideration in favour of the complainant while deciding the case strictlyin accordance with law.

Further, we are of the view, having regard to facts and circumstances of thiscase that a general lien in favour of the Bank was created. The security was availableagainst “the said overdraft/loan guarantee limit or other liability from time-to-time…” There is another clause in the deed of pledge by which Patel made thesecurity available for all credit facilities given to the company.

“which & renewals whereof please hold as a continuing security for all loans,advances, overdrafts and Bank guarantees issued/to be issued and all other creditfacilities of whatsoever kind made/to be made to the borrower on whatsoeveraccount from time to time.”

The Bank is entitled to adjust the disputed fixed deposit account against duesfrom the various loans/oversrafts taken by M/s Suncrush Fruits Pvt. Ltd.

Appeal allowed, complaint alongwith cross appeal of the complainantdismissed.


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Present case is against the Bank for its deficiency in not splitting the units forsale in marketable lots timely. Complainant bought certain IND Ratna units (Shares)in their joint names and were in the custody of the respondent Bank as the samewere pledged against the loan advanced to the complainants. Complainants filedcomplaint before the District Forum as the Respondent Bank failed to split theunits timely for sale in marketable lots. The District forum dismissed the complaint.The State Commission also dismissed the appeal of complainants. Against thedismissal order complainants filed the Revision Petition before the NationalCommission.


Whether there is any ground to interfere in the matter under revisional powerof this Commission when the subject matter did not fall within the provisions ofConsumer Protection Act?


The National Commission in present case held that while the units were in thecustody of the Bank as the same were pledged against the loan advanced to thecomplainants, no attempt was made by the complainants to repay the amount.Assuming that there was delay in not splitting units in time for sale in marketablelots, complainants were not entitled to the return of the units as these were pledgedas securities with the Respondent Bank and the Bank was not bound to return thesame to the Complainants. It is rightly held by the State Commission that therewas relationship of creditor and debtor between the complainant and therespondent bank.



MMMMMihirihirihirihirihir K K K K Kumumumumumararararar M M M M Mukukukukukherherherherherjjjjjeeeeee e e e e vvvvvsssss..... Br Br Br Br Branananananccccch Managh Managh Managh Managh Managererererer,,,,,United Bank of IndiaUnited Bank of IndiaUnited Bank of IndiaUnited Bank of IndiaUnited Bank of India

II (200II (200II (200II (200II (2002) CP2) CP2) CP2) CP2) CPJ 3J 3J 3J 3J 38 (N8 (N8 (N8 (N8 (NC)C)C)C)C)


The Present case is complaint against the Respondent Bank alleging deficiencyin service which hiked the price of locker rent and were being deducted from thesaving account of the complainant without his information/consent. Complainantrented a locker as a licensee from the Respondent Bank, New Alipore Branch, Calcuttain the year 1995. It was agreed that the complainant would pay the rent of thelocker annually. Respondent Bank increased the rent of the locker gradually andperiodically and was communicated to all the branches vide their circular dated30.4.1999. The Respondent Bank deducted hiked locker rent annually from the savingaccount of the complainant. The complainant protested against the price hikeand asked for refund of excess amount and filed a complaint before the Districtforum Bank alleging deficiencies in service. The District forum partly allowed thecomplaint directing Respondent Bank to issue the receipt for the locker rentalamount of Rs.450/- deducted from the saving account of the complainant.Complainant filed appeal before the State Commission, west Bengal against theorder of the District forum. The State Commission dismissed the appeal.Complainant filed Revision Petition before the National Commission.


Whether the Respondent Bank is deficient in service and is liable for unfairTrade Practices for not explaining cause of increase in locker rent without increasingany of its services?


The National Commission held that Bank has not entered into any suchagreement with hirer of lockers that they can enjoy the locker indefinitely withoutany increase in rent. Admittedly, the Petitioner accepted earlier rent hike in theyears 1985, 1993 and 1996 without any protest. The Petitioner is at liberty to continuethe locker facility or to withdraw the same when there was an increase in thelocker rent on 7.1.1995. Under the Rule 18 attached to the memorandum “It is herebyagreed that the relation of the hirer (s) and the Bank in this connection is that oflicensor or Licensee and not that of Banker and customer and/or of Bailor and


Bailee” clearly indicates it is on hire basis the locker was granted to the Petitioner.

We do not see any deficiency in service or unfair Trade Practice in the conductof the Respondent in increasing rent as it is necessitated due to increase in cost ofmaintenance, salary of the staff and other incidental expenses like rent of theaccommodation etc and it is not increased only for the Petitioner but to one and all.

Further more, the petitioner also authorized vide letter dated 15.101998 to theBank to deduct Rs.300/- from his saving account No.1244 on 20th day of November ofevery year as locker rent so long he occupy the locker till further notice from thepetitioner. This letter by petitioner enables the Bank to adjust and do not attributeany negligence by the Bank.

Revision Petition dismissed, affirming the order of the State Commission.


Patna Co-operative Bank Ltd. vs. Hasmukh B. ShahPatna Co-operative Bank Ltd. vs. Hasmukh B. ShahPatna Co-operative Bank Ltd. vs. Hasmukh B. ShahPatna Co-operative Bank Ltd. vs. Hasmukh B. ShahPatna Co-operative Bank Ltd. vs. Hasmukh B. Shah



Navinchandra B. Shah placed five fixed deposits with the Petitioner Bank whichwere to be matured on 13.10.1989. These Fixed Deposit receipts were having printedterms at the back of each Fixed Deposit Receipt providing that: “Receipt nottransferable by a endorsement. Payment to third party must be sanctioned by aletter of authority accompanied by the Receipts duly discharged.”

The State Bank of India presented said five receipts on 25.6.1987 for paymentbefore their maturity dates. At the back of these receipts, depositor had dischargedby an endorsement which read as under: “I hereby authorize you to prematurely paythese Fixed Deposit Receipts to Echbee Corporation.”

On receiving the same Petitioner Bank asked the original depositor for hisconfirmation about the said endorsement. The original depositor vide its letterdated 29.6.1987 instructed the Petitioner Bank not to pay the same as the depositswere not matured. In view of the same Petitioner Bank returned the said receiptsexpressing its inability to encash the same. On the very next day Petitioner Bankwas served with a notice of attachment under section 132(3) of Income Tax Actattaching the amounts covered by the said Fixed Deposit Receipts. The Bank wasagain served with another notice from the Income Tax Officer, K-IV ward, Bombay,requiring the Petitioner Bank to pay to the Reserve Bank of India, the proceeds ofthe said Fixed Deposit Receipts towards income tax payable by the original depositor.It was in pursuant to the order from the Income Tax Office, the Petitioner Bankdeposited the amount in the Reserve Bank of India. The complainant in October,1993 presented the FDRs for encashment but Bank failed to encash the same. Thecomplainant lodged a police report which was failed. It is after a lapse of almostseven years from the date of first presentation on the return of the Fixed DepositReceipts and a lapse of little less then five years from the date of maturity of FixedDeposit Receipts, a complaint was filed before the District forum which dismissedthe complaint. The State Commission, in appeal, reversed the order of the Districtforum on point of limitation and condone the delay and allowed the appeal directingPetitioner Bank to pay amount of Fixed Deposit Receipts together with 15 per centinterest till the date of payment. Against this order Petitioner Bank filed RevisionPetition before the National Commission.



Whether the order passed by the State Commission condoning the delay issustainable, if not, whether the Bank is deficient in not honouring the original FDRspresented for enchashment?


The National Commission set aside the order passed by the State Commissionand held that when no grievance was made by the respondent for a period of oversix years of such payment and in 1993 when the FDRs were presented for encashmentthere was no question of those being encashed because the Bank had already paidthe proceeds of the FDRs to the Reserve Bank of India in compliance with the ordersof the Income Tax Authorities and in law such a payment afforded the Bank a validdischarge. No grievance of such payment is made by the original depositor, nor wasany grievance made by the respondent in whose favour the endorsement at theback of the FDRs existed for more than six years and now the complaint before theDistrict forum was filed after a lapse of over seven years. With the lapse of such timeboth the fora below should have considered the question of condonation of delaymore seriously.

Further, the National Commission held that even if the complaint had beenentertained or appeal had been entertained the question which fells fordetermination is whether there was any deficiency in not honouring the originalFDRs which were presented for encashment in October, 1993. The answer to thiscannot be but in the negative, because, there was no money lying with the Bankwhich was covered by the said FDRs as the Bank had already paid it into the accountof income tax authorities. An FDR is not a negotiable instrument, particularly whenits being not transferable, is printed on the face of it and a special mode of transferis printed on the reverse of it which is not followed. No challenge has been made tothe validity of the payment by the Bank to the Income Tax Authorities. Claim coveredby the complaint in the present case was stale and barred by limitation and there isno explanation forthcoming for condonation of delay.

The National Commission set aside the order passed by the State Commissionand upheld the order passed by the District forum.


Arvind Sahni vs. Punjab & Sind BankArvind Sahni vs. Punjab & Sind BankArvind Sahni vs. Punjab & Sind BankArvind Sahni vs. Punjab & Sind BankArvind Sahni vs. Punjab & Sind Bank

III (2000) CPIII (2000) CPIII (2000) CPIII (2000) CPIII (2000) CPJ 8(SJ 8(SJ 8(SJ 8(SJ 8(SC)C)C)C)C)


Complainant/Appellant filed complaint before the State Commission,Chandigarh against the Respondent Bank for deficiency in service as the RespondentBank wrongly honoured the cheque of Rs.30,000/- from the account of thecomplainant without verifying the sigunatures on the cheque. Since the chequefor Rs.30,000/- did not bear signature of complainant/appellant the StateCommission, Chandigarh held the Bank to be deficient in service and passed a decreefor Rs.34,000/-. Respondent Bank challenged the order of State Commission,Chandigarh before the National Commission. The National Commission affirmedthe fact that the signatures on the cheque were not that of the appellant.Respondent Bank submitted that the amount involved has already been paid to theappellant/complainant, The National Commission directed the appellant to furnishindemnity Bond. Appellant/Complainant challenged the order before the SupremeCourt.


Whether the National Commission is right in requiring the appellant/complainant furnishing of an indemnity bond?


The Supreme Court held that admittedly the cheque was not signed by theappellant/complainant and the amount involved has already been reimbursed, theNational Commission erred in requiring the furnishing of an indemnity bondespecially when it does not appear to be a categorical case of the respondent thatthere was any sort of connivance between the appellant and the forgery.

Appeal allowed, part of the order of the National Commission which hasrequired the appellant to furnish the indemnity bond set aside.


Vimal Chandra Grover vs. Bank of IndiaVimal Chandra Grover vs. Bank of IndiaVimal Chandra Grover vs. Bank of IndiaVimal Chandra Grover vs. Bank of IndiaVimal Chandra Grover vs. Bank of India

II (2000) CPII (2000) CPII (2000) CPII (2000) CPII (2000) CPJ 11 (SJ 11 (SJ 11 (SJ 11 (SJ 11 (SC)C)C)C)C)


Complainant applied for an overdraft limit of Rs.5,00,000/- against pledge ofshares of Rs.10,60,900/- to the respondent Bank. As per the terms of sanction of theoverdraft limit shares were got to be transferred in the name of the Bank. In duecourse of time appellant/complainant paid an installment of Rs.1,45,600/- to theBank against the overdraft limit. Overdraft amount was to be adjusted in threeequal installments. Appellant vide its letter dated 23.04.1992 requested therespondent Bank to sell 500 shares of Castrol Ltd. apart from shares of othercompanies. After 12 days of the receipt of the letter of complainant, the Nagpurbranch of respondent Bank sent a letter dated 5.5.1992 to its Head office, Bombayagreeing to the terms of the appellant set out in his letter dated 23.4.1992, NagpurBranch vide its letter dated 29.07.1992, after receiving letter from Head office foundthat the shares were not in the Head office and informed the appellant/complainantthat Head office was not holding shares and found lying with the Nagpur branchonly and therefore could not sell the shares. In the meantime, the prices of theshares fell and thus could not be sold at the price indicated by the Complainant.Therefore, complainant filed claim for Rs.5,09,037.53 from the Bank before theNational Commission.*


Whether the transaction between customer and bank, being a commercialactivity, comes under the purview of definition ‘services’ of the Consumer ProtectionAct, 1986?

Whether the Bank is bound to dispose of the shares on the instruction of itscustomer and is not liable for deficiency in service for not doing the same?


Before the Supreme Court Respondent Bank submitted that appellant/complainant is not Consumer within meaning of sub clause (2) of clause (d) of Sec.2of the Act and overdraft unit provided by the bank is not, ‘service’ within the meaning

*The National commission held that there was no significance on the part of the bank against thisorder. An appeal was preffered before the Supreme court.

----------------------


of the Act being without any ‘consideration’ of the complainant. Supreme Courtallowed the appeal holding that overdraft limit prescribed by the Bank was notwithout consideration. Bank is rendering service by providing overdraft facilities toa consumer, which is not without consideration. Bank is charging interest andother charges as well in providing the service. Provision for overdraft facility iscertainly a part of the Banking and its service within the meaning of Clause (o) ofsection 2 of the Act. Request for sale of part of the pledged shares for getting overdraftfacilities and which is agreed to by the Bank is certainly part of the service connectedwith the grant of overdraft facilities. Appellant as a consumer was hiring servicesof the Bank for consideration by way of payment of interest for the overdraftfacilities received by him by pledging the shares of different companies.

Further, Supreme Court held that the Bank has a right under the law to retainthe pledged goods is not in dispute. But once the Bank having agreed to sell part ofthe pledged goods, it could not fall back on those very provisions to raise a plea of itsright under the law to retain the pledged goods.

Further, in these days of revolution in information technology Bank is merrilygoing on corresponding with its customer, the appellant, and also with its ownHead office. It was not difficult for the Bank to find out on receipt of the letterdated 23.4.1992 of the appellant where the pledged shares were lying. It took 12 daysto transmit the request of the appellant to its Head office. When the Nagpur Branchreceived letter dated June 19, 1992 from the Head office that the shares were notlying, it took another 40 days to inform the appellant of this fact by its letter of July29, 1992. Then the Nagpur Branch find, that the shares are lying with it and then itis too late. Once the Bank agreed to sell the part of the shares on request by theappellant and without any pre-conditions, it cannot fall back on other allegeddefaults of the appellant in his dealing with the Bank. The plea of the Bank that itwould dispose of the shares only through its own broker is without substance as itnever apprised the appellant of this fact.

The Supreme Court rejected the view taken by the National Commission thatthere was no negligence on the part of the Bank or that the Bank was not bound todispose of the shares.

Appeal allowed


Bade Krishnaveni vs. Canara BankBade Krishnaveni vs. Canara BankBade Krishnaveni vs. Canara BankBade Krishnaveni vs. Canara BankBade Krishnaveni vs. Canara Bank



Complainant and her mother jointly deposited Rs.22,000/- and Rs.10,000/- infixed deposit with Respondent Bank. After the death of her mother, complainantclaimed the amount of FDR standing in the name of her deceased mother whichwas rejected by the respondent Bank on the ground that the amount of FDR hasbeen adjusted against loan taken by the husband of the complainant and a suit hasbeen filed for the balance amount. Complainant filed complaint before the DistrictForum which dismissed the complaint with an observation that the complainanthad given authorization to the Bank to adjust the FDR amounts towards the lorryloan of her husband in writing but the District Forum did not go into the questionwhether the complainant’s signatures on the blank paper was forged or not orwhether the complainant’s husband had signed blank papers and therefore, theDistrict Forum directed the complainant to seek redress in the civil court. The StateCommission, Andhra Pradesh affirmed the order of the District Forum. Complainantchallenged the order and filed Revision Petition before the National Commission.


Whether fora has jurisdiction to give direction to seek redress in civil courts inrespect of disputed questions?


The National Commission held that the District Forum has come to a rightdecision on the facts of this case. The fixed deposit made by the complainant andher mother were adjusted against the loan taken by the husband of the complainanton the authorization of the complainant and her mother. A suit for recovery of thebalance amount of loan has already been filed by the Bank. The authorization wasin writing which was produced before the District Forum. Whether the documentswere forged as alleged by the complainant will have to be decided by some otherforum. Direction given to complainant that he will have the liberty to go to the civilcourt to prove its case remain in force and therefore, can seek remedy in civil courtin accordance with law.



AmerAmerAmerAmerAmeriiiiicccccan Ean Ean Ean Ean Exxxxxprprprprpreeeeessssss Bs Bs Bs Bs Bankankankankank Ltd. Ltd. Ltd. Ltd. Ltd. TTTTT.R.R.R.R.R.S.S.S.S.S..... vvvvvsssss..... R R R R Raaaaajjjjjeeeeesssssh Gh Gh Gh Gh Gupupupupupttttta & Orsa & Orsa & Orsa & Orsa & Ors.....

I (2000) CPI (2000) CPI (2000) CPI (2000) CPI (2000) CPJ 1 (NJ 1 (NJ 1 (NJ 1 (NJ 1 (NC)C)C)C)C)


Present case is about the claim of complainant in respect of loss of travellerscheques which was repudiated by the Petitioner Bank. It is only after suchrepudiation of claim petitioner filed complaint against the Petitioner Bank allegingdeficiency in service. Complainant who had a very urgent business trip for 35 daysat a stretch to Germany and to that effect, he was in need of foreign exchange. Hecontacted his Bankers where he was advised to contact the American Express Bank,Netaji Subhah Road, Calcutta for the arrangement of foreign currency by way oftravelers cheques, which in turn advised the Complainant to collect the travelerscheques as per his requirement from their New Delhi Branch. Complainant went toNew Delhi Branch of the Petitioner Bank and collected travelers chequesamounting to Us$12,500/- equivalent to Rs.4,00,000/- from there. After reachingAirport, the complainant found that travelers cheques as well as the passport andother relevant documents were missing and after long search reported the matterto the Police Station, Cannaught Circus and also to the Petitioner Bank, New DelhiBranch. Thereafter, on several occasions complainant approached the New DelhiBranch for refund of the travelers cheques but with no results. Complainant alsoapproached the head office, USA of the Petitioner Bank but of no avail and ultimatelythe Petitioner Bank repudiated the claim of the complainant. After repudiationcomplainant filed complaint before the District Forum, Calcutta against thePetitioner Bank for deficiency in service. The District forum Calcutta allowed thecomplaint rejecting the contention of the Petitioner Bank that the District forum,Calcutta has no jurisdiction to entertain the present complaint. Petitioner Bankfiled an appeal before the State Commission, West Bengal. The State Commission,West Bengal by majority judgment, differing from the view of President, dismissedthe appeal. The Petitioner Bank against the dismissal order filed the Revision Petitionbefore the National Commission.


Whether the District forum, Calcutta had territorial jurisdiction to entertaina complaint when no part of cause of action arisen at Calcutta?

Whether Petitioner Bank can held to be deficient in service when the claim ofthe complainant was repudiated only after detailed enquiry?



The National Commission held that in the light of statement of law enunciatedby the Supreme Court in Union Bank of India’s case the District forum, Calcutta hadno territorial jurisdiction to entertain and try the complaint as no part of cause ofaction had arisen at Calcutta. The travellers cheques were purchased at Delhi,those were lost in Delhi; matter was reported to the Police at Delhi; claim for refundof the amount was lodged with the Delhi Branch of Bank; the matter wasinvestigated by the Delhi Branch of Bank and the claim was rejected by the DelhiBranch and communicated to the complainant at his business address at A-94,Sec.-5, Noida, U.P. The President of the State Commission, Calcutta rightly held thatthe District forum, Calcutta had no territorial jurisdiction to entertain thecomplaint.

Further, regarding deficiency in service, the National Commission held thatthe refund of claim was rejected by the Bank after holding detailed enquiry andproper investigation. Repudiation of claim by the Bank was in good faith after dueapplication of mind to relevant facts and circumstances and not in arbitrary or inunreasonable manner. Such being the position Petitioner Bank cannot be madeliable for any deficiency on the part of the Bank so as to give rise to a cause of actionfor a complaint under the provisions of the Consumer Protection Act, 1986.

Revision Petition accepted; set aside the majority view of State Commission aswell as the order of the District forum, Calcutta and dismissed the complaint.


CCCCCooooorrrrrpppppooooorrrrraaaaatttttiiiiiooooon Bn Bn Bn Bn Bankankankankank vvvvvsssss..... N N N N Naaaaavvvvvin in in in in JJJJJ..... S S S S Shahhahhahhahhah

I 2000 CPI 2000 CPI 2000 CPI 2000 CPI 2000 CPJ 13(SJ 13(SJ 13(SJ 13(SJ 13(SC)C)C)C)C)


Present case is about the compensation claimed by the complainant from itsBank on account of deficiency in service as the Bank delayed the matter ofrepatriation of export proceed. Complainant who was a tea exporter, had the creditfacilities with the appellant Bank, entrusted documents relating to the export oftea for the propose of realizing the proceeds from the consignee. The appellantBank issued advice of purchase of Bills to the complainant in respect of goods coveredby several invoices. Complainant while entrusting documents relating to the exportof tea instructed the appellant Bank to handover the documents only after ensuringthat the export proceeds could be repatriated to India in U.S. Dollars. The appellantBank negotiated the documents relating to the exports through foreign Bank ofSudan. The appellant Bank without informing complainant of any difficultiesexperienced by them in the matter of negotiations, realized the export proceeds inlocal currency i.e. other than in U.S. Dollars. It is only later, after realization of exportproceeds, appellant Bank informed the complainant that repatriation of exportproceeds in terms of U.S. Dollors could not be made due to certain restrictionsimposed by the government of Sudan and requested the complainant to approachthe Export Credit Guarantee Corporation of India Limited to cover the risks involvedin the export Business and to settle the claim using the insurance policy taken bythe complainant in respect of the goods covered by the entrusted documents.Complainant immediately got his claim settled before the corporation but alsofiled the complaint before the National Commission for deficiency in service againstthe appellant Bank after a decade.*


Whether there is any deficiency in service on the part of appellant Bank whichcould not realize the export proceeds timely as instructed?

Whether the National Commission can entertain a claim after lapse of a decadethough Consumer Protection Act, 1986 does not prescribe any time limitation forfiling claim?

*The National Commission allowed the complaint holding the bank deficiency in rendering theservice. Hence appeal was filed by the bank before the Supreme Court.

-----------------



The Supreme court held that the appellant Bank negotiated the documentsas provided under the agreement, so did the foreign Bank of Sudan but theconversion of the Local currency in U.S. Dollors became difficult on account of policyof government of Sudan when the realization of money in US Dollors was frustratedby reason of the governmental action, no responsibility for deficiency in servicecould be fastened on appellant Bank. Both Banks did whatever was required to bedone under the contract and therefore, commission was not justified in holdingappellant Bank to be deficient in service so as to attract the provisions of theConsumer Protection Act.

Further, the transaction in question took place in the years 1979 & 1981. Thedifficulties in realization of the amount due from the consignee became clear tothe complainant at the time when the claim was made before the corporationagainst Insurance and the claim had been made as early as on December 19, 1982but petitions alleging deficiency in service against the appellant Bank was filed onSeptember 25, 1992 that is clearly a decade after a claim had been made before thecorporation. Indeed at the relevant time there was no period of limitation underthe Consumer Protection Act to prefer a claim before the commission but that doesnot mean that the claim could be made even after unreasonably long delay. In thelegislative wisdom three years period had been prescribed as the reasonable timeunder the limitation Act to lay a claim for money. We think that period should bethe appropriate Standard adopted for computing reasonable time to raise a claimin a matter of this nature.

Appeal allowed, set aside the order of the National Commission and dismissedthe complaint.


(Annexure)

MODEL FORM OF NOTICE, COMPLAINT, AFFIDAVIT AND REPLYMODEL FORM-1 NOTICE BEFORE FILING THE COMPLAINT

Name and address.................................................................................................................(of the trader, dealer, firm, company, etc.).................................................... ............................................................(Complete address) IN RE: (Mention the goods/services complained of giving details).................................................................................................................Dear Sir,

This is to bring to your kind notice that 1 had purchased………….............from your............................... for a consideration of Rs……………………………...... paid in cash vide your cashmemo/Receipt/Invoice No....................................................... (or through cheque No ........................... dated ...................drawn on ........................................bank for a sum of Rs ....................

The said goods are suffering from the following defects:(i) ............................................

(ii) ............................................ etc

I have reported the above matter to you several times (give reference of earlierletters, if any) but despite all my pleadings you have not made good the defect inthe goods (ordeficiency in services) which is indeed regrettable and highlyunbusiness like. On account of your aforesaid dereliction of duty and failure andneglect to rectify the same I have suffered losses/incurred expenses........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

(give details)

which you are liable to compensate to me. You are hereby finally called upon to

(i) remove the said defects in the goodsand/or


(ii) replace the goods with new goods

and/or(iii) return the price/ charges paid

(iv) pay compensation for financial loss/injury/interest suffered due to yournegligence .................................................................

(give details)

in the sum of Rs ............................................ with interest @.............................. % per annumwithin……………………days of the receipt of this notice failing which 1 shall beconstrained to initiate against you for redressal of my aforesaid grievances andrecovery of the aforesaid amount such proceedings, both civil and criminal asare warranted by law, besides filing a complaint under the statutory provisionsof The Consumer Protection Act, 1986 exclusively at your own risk, cost,responsibility and consequences which please note.

Place……………………..Dated............................... Sd/-

.………. . .


Model Form –2 -The complaintModel Form –2 -The complaintModel Form –2 -The complaintModel Form –2 -The complaintModel Form –2 -The complaint

BEFORE THE HON’BLE DISTRICT CONSUMER DISPUTESREDRESSAL FORUM AT ........................................................

ORBEFORE THE HON’BLE STATE CONSUMER DISPUTES

REDRESSAL COMMISSION AT ..................................................... OR

BEFORE THE HON’BLE NATIONAL CONSUMER DISPUTES REDRESSALCOMMISSION AT NEW DELHI

IN RE: COMPLAINT NO ........................ OF 20 ......... IN THE MATTER OF:(FULL NAME) (DESCRIPTION) (COMPLETE ADDRESS)

............... ComplainantVERSUS

(FULL NAME) (DESCRIPTION) (COMPLETE ADDRESS)................................. Opposite Party/ Parties

CCCCCOOOOOMPLMPLMPLMPLMPLAINAINAINAINAINTTTTT UND UND UND UND UNDEEEEER SR SR SR SR SEEEEECCCCCTTTTTIIIIIOOOOON I2/ SN I2/ SN I2/ SN I2/ SN I2/ SEEEEECCCCCTTTTTIIIIIOOOOON 1N 1N 1N 1N 177777/////SSSSSEEEEECCCCCTTTTTIIIIIOOOOON 21 ON 21 ON 21 ON 21 ON 21 OFFFFF TTTTTHE CHE CHE CHE CHE COOOOONNNNNSSSSSUMEUMEUMEUMEUMER PRR PRR PRR PRR PROOOOOTTTTTEEEEECCCCCTTTTTIIIIIOOOOON N N N N AAAAACCCCCTTTTT,,,,, 1 1 1 1 1986986986986986.....

RESRESRESRESRESPEPEPEPEPECCCCCTTTTTFFFFFULULULULULLLLLLYYYYY S S S S SHHHHHOOOOOWWWWWEEEEETTTTTHHHHH

INTRODUCTIONINTRODUCTIONINTRODUCTIONINTRODUCTIONINTRODUCTION

(In this opening paragraph the complainant should give his introduction aswell as that of the opposite party/parties.

TTTTTRRRRRANANANANANSSSSSAAAAACCCCCTTTTTIIIIIOOOOONNNNN

(In this paragraph complainant should describe the transaction complained of,i.e., particulars and details of goods/ services availed; items of goods/kind and natureof service; date of purchase of goods/availing of service; amount paid as price/consideration, full or in part towards the goods/service; Photocopies of the bill/cashmemo/voucher or receipt should be attached and properly marked asAnnexure – A,B,C and so forth or 1,2,3 and so forth.)

DEFECT DEFICIENCYDEFECT DEFICIENCYDEFECT DEFICIENCYDEFECT DEFICIENCYDEFECT DEFICIENCY

(In this paragraph complainant should explain the grievance, i.e., whether the lossor damage has been caused by some unfair trade practice or restrictive trade practice


adopted by any trader or there is some defect in the goods or there has been deficiencyin service or the trader has charged excessive price for the goods. One should elucidatethe nature of unfair trade practice adopted by the trader, i.e., relating to the quality ofgoods/services; sponsorship; warranty or guarantee for such period promised. Thenature and extent of defects in goods should be explained and so should the deficiencyin service. In case of excessive price one should specify the details of actual price fixedby or under any law for the time being in force or as set out on goods and their packingvis-a-vis the price charged by the trader. Complaint can also be filed against offer forsale of goods hazardous to life and safety when used. You should narrate your grievanceand rest assured it is being read /heard by compassionate and pragmatic judges.Photocopies of relevant documents must be attached.)

RERERERERECCCCCTTTTTIFIFIFIFIFIIIIICCCCCAAAAATTTTTIIIIIOOOOONNNNN

(In this paragraph complainant should highlight what attempts were made by him toset things right, i.e., personal visits or negotiations; communication in writing if any;whether any legal notice was got served and / or whether he has approached any otheragency for redressal like, Civil or Criminal Court of competent jurisdiction; the stage ofits proceedings, its outcome, if any, alongwith copies (certified preferably) of suchproceedings. The nature of response got from the trader when irregularities werebrought to his notice, should also be disclosed here).

OTHER PROVISIONSOTHER PROVISIONSOTHER PROVISIONSOTHER PROVISIONSOTHER PROVISIONS

(In this paragraph reference may be made to any other law or rules or regulations ofparticular procedure which is applicable to the case and/or which has been violated bythe trader and consumer’s rights under the same. There are incidental statutoryobligations, which traders must fulfil and in case of their failure to do so the case inprima facie made out and Forum would take cognizance).

EVIDENCEEVIDENCEEVIDENCEEVIDENCEEVIDENCE

(In this paragraph complainant should give details of documents and/or witnesses hewill rely upon to substantiate his case. The documents attached as Annexures as statedabove may be incorporated in a proper list and a list of witnesses (if any) may be filedsimilarly).The annexures should be attested as “True Copy”.

JURISDICTIONJURISDICTIONJURISDICTIONJURISDICTIONJURISDICTION

(In this paragraph complainant should liquidate the claim in the complaint, i.e., upto 20lakh; 20 lakh to one crore; or above and set out the pecuniary jurisdiction of the Forum/State Commission/National Commission, as the case may be. The territorial Jurisdictionshould be highlighted to obviate any formal objection).


LLLLLIMITIMITIMITIMITIMITAAAAATTTTTIIIIIOOOOONNNNN

That the present complaint is being filed within the period prescribed under section24A of the Act.

RELIEF CLAIMEDRELIEF CLAIMEDRELIEF CLAIMEDRELIEF CLAIMEDRELIEF CLAIMED

(In this paragraph complainant should describe the nature of relief he wants to claim.i.e., for removal of defects in goods or deficiency in service; replacement with newgoods; return of the price or charges, etc., paid and/or compensation on account offinancial loss or injury or detriment to his interest occasioned by negligence of theopposite party and elucidate how you have calculated the amount of compensationclaimed).

PRPRPRPRPRAAAAAYYYYYEEEEER CLR CLR CLR CLR CLAAAAAUSUSUSUSUSEEEEE

It is, therefore, most respectfully prayed that this Hon’ble Forum/Commission maykindly be pleased to ....................................................................... (Details of reliefs which complainant wantsthe Court to grant)

Place: ................................... Dated: ...................................

Complainant Through ................................... (Advocate or Consumer Association, etc.)

VVVVVerererererifififififiiiiicccccaaaaatttttiiiiiooooon.n.n.n.n.I, ............................. the complainant above named, do hereby solemnly verify that the contentsof my above complaint are true and correct to my knowledge, no part of it is false andnothing material has been concealed therein. Verified this .............................. day of............................ 20 ...... at .......... Complainant.

Note: Although it is not compulsory, complainant may file an affidavit in support ofthe complaint which adds to the truth and veracity of allegations and givescredibility to the cause. It need not be on a Stamp paper but one should get itattested from an Oath Commissioner appointed by a High Court. The formatis just as simple.


MoMoMoMoModddddeeeeel Fl Fl Fl Fl Fooooorrrrrm –3- m –3- m –3- m –3- m –3- AfAfAfAfAffffffiiiiidddddaaaaavvvvvititititit in supp in supp in supp in supp in suppooooorrrrrttttt of of of of of t t t t the che che che che cooooompmpmpmpmplllllaintaintaintaintaint

BEFORE THE HON’BLE…………………..IN RE: COMPLAINT NO………….OF 20……………..INTHE MATTER OF:

…………………………………………………………................................................................................................................................................... Complainant

......................................................................................................................................................................................

.............................................................................................................................................. Opposite party

AFAFAFAFAFFFFFFIDIDIDIDIDAAAAAVVVVVITITITITITAffidavit ofShri…………………………………………….S/o. Shri .......................................................aged………………………………years, resident of ...............................................................................................................................................................................................................................................

(1) That I am complainant in the above case, thoroughly conversant with thefacts and circumstances of the present case and am competent to swear thisaffidavit.

(2) That the facts contained in my accompanying complaint, the contents of whichhave not been repeated herein for the sake of brevity may be read as an integralpart of this affidavit and are true and correct to my knowledge.

DeponentVVVVVerererererifififififiiiiicccccaaaaatttttiiiiiooooon:n:n:n:n:

I, the above named deponent do hereby solemnly verify that the contents of myabove affidavit are true and correct to my knowledge, no part of it is false and nothingmaterial has been concealed therein.Verified this…………………………day of………………….. 20…………. at……….

Deponent


Model Form –4- Reply by the trader to the complaintModel Form –4- Reply by the trader to the complaintModel Form –4- Reply by the trader to the complaintModel Form –4- Reply by the trader to the complaintModel Form –4- Reply by the trader to the complaint

BEFORE THE HON’BLE …………………………………….. THE CONSUMER DISPUTESREDRESSAL FORUM/ COMMISSION AT………………………

IN RE: COMPLAINT NO…………………….OF 20……………………..

IN THE MATTER OF:

...........................................................................................................................................................................ComplainantVERSUS

........................................................................................................................................................................Opposite Party

DATE OF HEARING……………………


WWWWWRITRITRITRITRITTTTTTEEEEEN SN SN SN SN STTTTTAAAAATTTTTEEEEEMEMEMEMEMENNNNNTTTTT O O O O ON BN BN BN BN BEEEEEHALHALHALHALHALFFFFF O O O O OFFFFF RES RES RES RES RESPPPPPOOOOONDNDNDNDNDEEEEENNNNNTTTTTS S S S S TTTTTO O O O O TTTTTHEHEHEHEHECOMPLAINT OF THE COMPLAINANTCOMPLAINT OF THE COMPLAINANTCOMPLAINT OF THE COMPLAINANTCOMPLAINT OF THE COMPLAINANTCOMPLAINT OF THE COMPLAINANT

RESPECTFULLY SHOWETH:Preliminary ObjectionsPreliminary ObjectionsPreliminary ObjectionsPreliminary ObjectionsPreliminary Objections

1. That the present complaint is wholly misconceived, groundless and unsustainablein law and is liable to be dismissed as such. The transaction question was withoutany consideration and free of charge.

2. That this Hon’ble Forum/ Commission has no jurisdiction to entertain and adjudicateupon the dispute involved in the complaint in as much as it is not a consumerdispute and does not fall within the ambit of the provisions of the ConsumerProtection Act,1986, hereinafter called the said Act and is exclusively triable by aCivil Court and as such the complaint is liable to be dismissed summarily on thisscore alone.

3. That the dispute raised by the complainant in the present complaint is manifestlyoutside the purview of the said Act and in any event, the Act is in addition to and notin derogation of the provisions of the.............. Act. The proceedings initiated by thecomplainant under the Act are honest, null and void and without jurisdiction.

4. That the definitions of ‘Complainant’, ‘Complaint’ ‘Consumer Dispute’ and ‘Service’,as defined in Section 2(1) of the said Act do not cover the claims arising under thepresent dispute and that from the aforesaid definitions, the complainant is not’consumer’ and the controversy involved in the complaint is not a ‘consumerdispute’.

5. That the present complaint is baseless and flagrant abuse of process of law toharass and blackmail the answering respondent.

6. That the complainant has no locus standi to initiate the present proceedings.7. That the complaint is bad for non-joinder of necessary and proper party and is

liable to be dismissed on this score alone.8 . That the complainant has already filed a Civil Suit for ................. in a court of competent

jurisdiction which is pending disposal in the Court of ............. and the present complainthas become infructuous.

9. That the present complaint is hopelessly barred by limitation. 10. That this Hon’ble Forum/Commission has no territorial or pecuniary jurisdiction in

as much as the amount involved in the subject-matter exceeds/is less than the limitprescribed by Section 11(1) Section 17(1)(a)(i)/Section 21(a)(i) of the Act.

11. That the present complaint is frivolous and vexatious and liable to be dismissedunder Section 26 of the Act.

12. That the present complaint has not been verified in accordance with law.


On Merits:On Merits:On Merits:On Merits:On Merits:In these paragraphs respondent must reply each and every allegation made and

contention raised by the complainant, factual and legal as well. In case one has alreadymade good the defect or deficiency, elucidate steps taken. One may have, inter alia,following goods defences as well.1. That the transaction entered between the parties to the above dispute is a

commercial one and the complainant cannot claim any relief from this authority inas much as .........................................................................................................(give details)

2. That the complainant had purchased the goods as a seller/retailer/distributor, etc.,for consideration of resale and as such is barred from moving this Hon’ble Forum/Commission for the alleged defect/deficiency etc. in as much as. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .(give details)

3. That the complainant has already availed the warranty period during which theanswering respondent has repaired/replaced the goods in question. The complainantis thus legally stopped from enforcing this complaint or to take benefit of his ownwrong.

4. That the present complaint is an exaggeration beyond proportion despite the factthat the complainant is himself responsible for delay and laches in as much as hehas on several occasions changed his option for class of goods/type of allotmentscheme of flats/model of vehicle, etc ........................................................................................................................................(give details)

5. That the answering respondent is well within his rights to charge extra price forthe subject-matter of the above dispute in as much as time was not the essence ofdelivery thereof. The complainant is liable to pay the increased price w.e.f ............ onaccount of escalation due to excise duty/budgetary provisions etc. in as much as…..(give details)

6. That the complainant has accepted the goods and/or service towards repair/replacement etc. without protest and the present complaint is merely an afterthought.

7. That without prejudice the answering respondent as a gesture of goodwill isprepared to.............................................................................................................................................. (give details ofrectification, if any, which can be done in case of minor or tolerable problems toavoid harassment to consumer and litigation problems)

The allegations of defect/default/negligence and/or deficiency in service are whollymisconceived, groundless, false, untenable in law besides being extraneous andirrelevant having regard to the facts and circumstances of the matter underreference.


Prayer clause with all the submissions made therein is absolutely wrong and isemphatically denied. Complainant is not entitled to any relief whatsoever and isnot entitled Model Form costs.

Sd/-(Opposite Party)(Opposite Party)(Opposite Party)(Opposite Party)(Opposite Party)

Place: ......................Dated: ...................... through

(Advocate)(Advocate)(Advocate)(Advocate)(Advocate)

VVVVVerererererifififififiiiiicccccaaaaatttttiiiiiooooonnnnn

I, .................... the above named respondent do hereby verify that the contents of paras ................to .................... of the written statement on merits are true and correct to my knowledge.While paras .............................. to ............ of preliminary objections and ................ to ......... of replyon merits are true to my information, belief and legal advice received by me andbelieved to be true while the last para is prayer to this Hon’ble Court. Verified at........................ this .......................day of................. 20 .............

Sd/-

(Opposite party) (Opposite party) (Opposite party) (Opposite party) (Opposite party)