DEVINDER MALHOTRA Vs. STANDARD CHARTERED BANK

JUDGEMENT

(1.) THESE are two cross appeals preferred against the single order dated 17.5.2003 passed by District Forum. One is filed by the appellant Standard Chartered Bank and the other is filed by Mr. Devinder Malhotra, Director of M/s. Core Sector Information Systems Ltd. and are being disposed of by this single order.

(2.) THE facts given in these appeals are more or less not in dispute. The appellant company M/s. Core Sector Information Systems Ltd. was holding a Current Account at Vasant Vihar Branch of Standard Chartered Bank. At the time of opening of the account, the Bank was instructed that account would be operated jointly by three directors. Written instructions were also issued to the Bank. During the course of transactions of their business M/s. Core Sector Information Systems Ltd. deposited six cheques bearing signature of either one of the directors or two of them and not all the three directors. The amounts of the cheques were transferred to the personal account of the directors in spite of having been instructed at the time of opening of the account followed by written instructions that account would be operated jointly by all the three directors. The Bank still cleared the cheques and this act on the part of the Bank squarely falls within the ambit of deficiency in service. The appellant contends that because of this lapse on the part of the Bank, he has suffered huge losses in the absence of business inasmuch as that orders could not be arranged by the company because the company had an overall monopoly. In view of above deficiency in service which is demonstrated by the indifferent conduct of the Bank resulting in taking away of the money of the company by the other directors in their personal account, the amount of compensation for loss of business, mental agony and tension suffered by the appellant needs to be enhanced to Rs.20,000/ -. As regards the appeal, filed by Standard Chartered Bank, there is no merit as the amount of the cheque of the Current Account which was cleared by the Bank without verifying whether the cheque bore the signature of all three directors need no interference. The respondent Bank shall credit the account of the appellant with interest @ 12% awarded by the District Forum.

(3.) THE appeals are disposed of in above terms.