BANK OF MAHARASHTRA Vs. G C JAIN

JUDGEMENT

(1.) The present revision has been filed by Bank of Maharastra (hereinafter referred to as the 'Petitioner') being aggrieved by the order of the State Consumer Disputes Redressal Commission, Delhi (hereinafter referred to as the 'State Commission') in favour of G. C. Jain (hereinafter referred to as the 'Respondent').

(2.) The facts of the case according to the Respondent are that on 19.09.1998, he had requested the Petitioner/Bank to issue him a bank draft for Rs. 1 lakh in favour of M/s Reach Computers Ltd. payable at Broadway Branch, Chennai on his savings bank account No. 8683, which the Petitioner/Bank issued on the same date. Respondent thereafter collected the bank draft and took it to his office from where it got lost. As a precautionary measure, Respondent immediately informed the Manager of Petitioner/Bank in writing on 22.09.1998 (21.09.1998 being Bank Holiday) and requested to "stop payment" of the said bank draft. Respondent also lodged a complaint to this effect with Police Station, Kotla Mubarakpur, Delhi on 26.09.1998. Subsequently, Respondent requested Petitioner/Bank to credit Rs. 1 lakh in his savings bank account in view of his request for "stop payment" of bank draft. However, he was shocked to learn on 24.10.1998 from the Respondents that the Broadway Branch, Chennai had already made payment to M/s Reach Computers Ltd. Since the Respondent contended that he had suffered a loss of Rs. 1 lakh due to sheer negligence on the part of the Petitioner, he issued legal notice to the Petitioner/Bank to make good the "loss" within 15 days with 18% interest but the Petitioner/Bank did not make the necessary payment. Aggrieved Respondent filed a complaint before the District Forum requesting that the Petitioner be directed to pay him a sum of Rs. 1 lakh with interest as well as litigation expenses of Rs. 35,000/- and any other relief deemed fit and proper. Petitioner/Bank has denied the above allegations and stated that there is no deficiency of service on their part because as per the Banking Laws and the Negotiable Instruments Act 1881, a bank is duty bound to honour the bank draft if it is presented by the person in whose favour it is made. Petitioner further concluded that it is the Respondent who got into some dispute with M/s Reach Computers and, therefore, manipulated and gave wrong facts in the complaints before the District Forum. The District Forum after hearing both parties and considering the evidence on record accepted the complaint. The relevant part of the order of the District Forum reads as follows:

(3.) The Petitioner was directed to pay the Respondent Rs. 1 lakh with 12% interest w. e. f. 22.02.1999 till payment and Rs. 500/- as costs within a period of one month. Aggrieved by this order, Petitioner/Bank filed an appeal before the State Commission which dismissed the appeal. It, however, modified the order of the District Forum by setting aside the interest awarded by the District Forum and instead awarded a lump sum compensation of Rs. 25,000/- besides Rs. 10,000/- as litigation costs. The operative part of the order of the State Commission is as follows: