Friday, June 18, 2010

TC: Bank returned Cheque though having Funds


Present Hon'ble Thiru Justice M. THANIKACHALAM PRESIDENT

Tmt.Vasugi Ramanan, M.A. B.L., MEMBER I

Thiru.S.Sambandam, B.Sc., MEMBER II


[Against order in C.C.No.3/2006 on the file of the DCDRF, Chennai (South)]


State Bank of India, |

rep. by its Chief Manager, | Appellant/Opposite Party

K.K. Nagar Branch, |

207, Dr.Ramaswamy Salai, |

K.K.Nagar, |

Chennai 600 086. |


S.V. Ramani, |

Proprietor, Creative Marketing Agency, | Respondent/Complainant

M/26-D, Suba Colony, |

Munusamy Salai, |

West K.K.Nagar, |

Chennai 600 040. |

The respondent as complainant filed a complaint before the District Forum against the appellant /opposite party praying for the direction to the opposite party to pay a sum of Rs.5 lakhs towards mental agony and harassment and to pay the cost. The District Forum allowed the complaint, against the said order, this appeal is preferred praying to set aside the order of the District Forum dt.16.09.2008 in C.C.3/2006.

This appeal coming before us for hearing finally on 04.03.2010. Upon hearing the arguments of the counsels on eitherside, this commission made the following order:

Counsel for the Appellant /Opposite party : M/s.P.D.Audikesavalu,


Counsel for the Respondent/ Complainant : Mr.V.Shankar, Advocate.


1. The opposite party is the appellant.

2. The complainant, who is the respondent herein, approached the District Forum, Chennai (South), claiming a sum of Rs.5 lakhs, as compensation for the alleged mental agony and harassment, on the ground that the cheque issued by him, has been returned as if there was no fund available in his account, though he had sufficient funds and this conduct of the opposite party, affected his reputation, causing mental agony and in this view, he is entitled to so much of amount, for the deficiency committed by the opposite party.

3. The appellant/opposite party, admitting the return of the cheque as incorrect, pleading technical defect, and giving explanation, would contend that due to installation of new software for the banking operation, there was certain technical problems, which resulted the returning of the cheque erroneously, when the matter was referred to the opposite party, they responded immediately, clarified the position, requested the drawee of the cheque to represent, which was represented and honoured and therefore, because of the technical snag, the cheque returned could not be construed as deficiency in service, thereby, prayed for the dismissal of the complaint, denying the other averments also.

4. The District Forum considering the admitted facts, that though there was sufficient funds, the Bank had returned the cheque as if there was no fund, which should be construed only as deficiency in service, without accepting the explanation, for which, a heavy penalty of Rs.25,000/- had slapped, in addition to, cost of Rs.3,000/-, thereby, causing grievance, giving cause of action to the opposite party, to come this Commission as appellant.

5. Heard, the learned counsel appearing for either side, perused the documents, written submissions as well as the order of the District Forum.

6. The complainant was having a Current Account with the opposite party bank, ever since 1991 not under dispute. It is also beyond controversy that the complainant had issued a cheque bearing No.702640, dated 18.08.2005, for a sum of Rs.13,620/-, favouring M/s.Gold Stein Laboratories, Chennai, which was not honoured, whereas, returned for the reason "Insufficient Funds" on 05.09.2005. Subsequently, when the matter was brought to the notice of the opposite party bank, they have rectified the mistake in the sense, when the same cheque, was represented, honoured, thereby, satisfied the requirement of the issuance of the cheque by the complainant. However, not satisfied that the deficiency was rectified as said above, a tall claim has been filed, which was accepted to some extent, which is challenged as said above.

7. The learned counsel for the appellant would contend, that this a commercial transaction, not attracting the jurisdiction of the Consumer Fora and in this view, the complaint is not maintainable. It is the further submission of the learned counsel for the appellant, that while installing the software at the time of core banking operation, there were certain technical snag, which resulted this kind of mistake, which cannot be treated as deficiency of service. Per contra, it is the submission of the learned counsel for the complainant/respondent that the opposite party bank being a nationalized one, serving to the common, should have taken sufficient precautions, while upgrading the software also, not taking such steps should be construed as deficiency in service, which was rightly considered by the District Forum, resulting degree, not to be disturbed.

8. Having heard the arguments of either side and perusing the documents, affidavits, order of the District Forum, we are of the considered opinion that though there was some deficiency, on the part of the bank, for that they should not have been penalized to the extent what the District Forum did in this case and in this view, which requires modification.

9. In this case, admittedly, before the issue was raised legally by the complainant, and when the mistake committed by the bank, was brought to its notice, admittedly that was rectified in the sense, the same cheque was ordered to be represented, honoured. Thus, the public institution namely the opposite party, realizing their mistake, rectified the same, though they committed deficiency and taking into account this factor, the District Forum should have viewed leniently, at the same time, making them to realize further, the same mistake should not be committed and not to punish them. As pleaded in the complaint, at relevant period, there was installation of new software for core banking system. Therefore, while processing was under trial, mistake mistake have occured and which cannot be taken so seriously, though it is the duty of the bank to prevent such kind of mistake also. Accepting the technical problem, pleaded by the opposite party and at the same time, considering the deficiency committed by them also, we are of the view, the compensation ordered should be reduced to the considerable extent, that to considering the fact, the Bank has not notified the same to the customers.

10. The cheque amount is only in this case is Rs.13,620/-. For not honouring the cheque, though the allegation has been made that the reputation of the complainant was affected and he was put to mental agony, to quantify the compensation on that basis to the extent of Rs.5 lakhs or Rs.25,000/-, we find no material. It is also not the case of the complainant that the drawee of the cheque had accused the complainant as if he had cheated or issued the cheque without sufficient funds etc., In the absence of any such plea and proof, awarding compensation of Rs.25,000/- with cost of Rs.3,000/- is unwarranted.

11. Having regard to the above facts and circumstances of the case, only a nominal compensation awarded, which we quantify at Rs.1,000/- with cost of Rs.500/-. As far as the question of jurisdiction is concerned, though an attempt was made, the issuance of cheque cannot be construed for commercial purpose as far as the bank is concerned, though the cheque might have been issued, to satisfy the commercial transaction. In this view, the complainant is a consumer who availed the service of the bank and the Forum has jurisdiction.

12. In the result, appeal is allowed in part and the order of the District Forum is modified, allowing the O.P. in part, directing the opposite party to pay, a sum of Rs.1,000/- as compensation with cost of Rs.500/-, dismissing the rest of the claim. There will be no order as to cost in this appeal.






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