Leave granted.
This appeal is directed against order dated 10th April, 2007 passed by the
National Consumer Disputes Redressal Commission (for short “the National
Commission”) whereby it dismissed the appeal preferred by the appellant against the
order dated 3.4.2002 of the Kerala State Consumer Disputes Redressal Commission
(for short “the State Commission”) for award of interest @18% to the complainant-
respondent on an amount of Rs.9.85 lakhs.
A perusal of the record shows that while he was working as clerk at
Chengannur branch of Federal Bank Limited (for short “the bank”), the
complainant-respondent introduced one Mr. M.P. Anil Kumar who opened savings
bank account in that branch with account no.12291. On 3.4.2000, the respondent
presented a chqeque drawn in his favour by Anil Kumar for a sum of Rs. 9.85 lakhs
before Kunchithanni branch of the bank for collection and crediting the same in his
account. It is worth mentioning that on the date of issue of cheque, Anil Kumar had
less than Rs.150/- in his account. The cheque was sent for collection to Chengannur
branch of
...2/-
the bank through M/s. Professional Couriers but the same was lost in transit. The
respondent complained to the Manager of Kunchithanni branch of the bank about
non-credit of Rs.9.85 lakhs in his account and then filed a petition before the Banking
Ombudsman for the State of Kerala. The Manager of the Kunchithanni branch of
the bank, vide his letter dated 5th June, 2000, informed the respondent that the cheque
was lost in transit and advised him to get a duplicate cheque in lieu of the lost
instrument. Thereafter, the Banking Ombudsman issued communication dated 10th
July, 2000 to the respondent that there was no deficiency of service on the part of the
bank and that he may take necessary steps to obtain duplicate cheque from the
drawer by invoking Section 45A of the Negotiable Instruments Act or approach a
court/appropriate forum for recovery of the money. However, instead of taking steps
for obtaining duplicate cheque from the drawer, namely, Anil Kumar, the respondent
filed a complaint before the State Commission claiming Rs.9.85 lakhs with interest
@18% per annum. The bank contested the complaint by asserting that there was no
deficiency of service because it had asked the complainant to obtain duplicate cheque
which he failed to do. The bank also questioned the bonafides of the complainant-
respondent by alleging that on the date of issue of cheque, the drawer had a negligible
amount of Rs.112/- in his account.
The State Commission declined the respondent’s prayer for award of
Rs.9.85 lakhs but directed the bank to pay interest @18% per annum on the cheque
amount from the date of its issue, i.e., 03.04.2000 till the date of payment. The
National Commission dismissed the appeal preferred by the appellant and confirmed
the order of the State Commission. Hence this appeal by special leave.
...3/-
Learned counsel for the appellant invited our attention to the zerox copy of
the statement of account of Anil Kumar to show that between 28th March, 1998 and
29th September, 2000 he did not deposit any amount in the bank; that outstanding
balance as on 28th March 1998 was Rs.148/- and as on 29th September, 1998 total
balance amount was Rs.87/- to his credit, and argued that the State Commission
committed grave illegality in awarding interest to the complainant-respondent by
presuming deficiency of service on the part of the appellant and ignoring the stark
reality that on the date of presentation of the cheque and five months thereafter, there
was no possibility of its encashment. He pointed out that in spite of the
communications of the bank and letter dated 10th July, 2000 of the Banking
Ombudsman, the respondent did not take steps to obtain duplicate cheque from the
drawer apparently because he knew that the drawer did not have the requisite money
for encashment of the cheque and argued the award of interest on Rs.9.85 lakhs, by
the State Commission which has been confirmed by the National Commission is
legally unsustainable. As against this, learned counsel for the respondent supported
the impugned orders and argued that the State Commission has not committed any
error by awarding interest in lieu of the loss suffered by his client due to the
appellant’s failure to credit the cheque amount in his account.
We have considered the respective submissions. In our view the State
Commission was not at all justified in awarding interest to the respondent.
Undisputedly the drawer, namely, Anil Kumar did not deposit any amount in the
bank between 28th March, 1998 and the date on which the cheque is said to have been
issued in favour of the respondent. Therefore, it was impossible for the respondent to
get the amount credited in his account. If the cheque had not been lost in transit, the
same would have been dishonoured due to
...4/-
insufficiency of funds. On its part, the bank had advised the respondent to obtain
duplicate cheque from the drawer. Banking Ombudsman gave similar advise to the
respondent by pointing out that he can get duplicate cheque by resorting to Section
45A of the Negotiable Instruments Act. However, the respondent did not take any
steps whatsoever for obtaining duplicate cheque from Anil Kumar. The reason for
this is not far to see. Anil Kumar had sum less than Rs.200/- in his account at the
relevant time. The appellant was aware of this and, therefore, he did not resort to
Section 45A of the Negotiable Instruments Act. Not only this, he did not take any
action for recovery of Rs.9.85 lakhs from Anil Kumar either by filing a complaint
before appropriate forum or by filing a suit before the competent civil court.
This being the position, the direction given by the State Commission for
payment of interest to the respondent is liable to be set aside. Consequently, the order
of the National Commission is also liable to be set aside.
Accordingly, the appeal is allowed, impugned orders are set aside and the
complaint filed before the State Commission is dismissed.
No costs.
[G.S. SINGHVI] New Delhi, January 07, 2009.