HUBERT J. DSOUZA Vs. CORPORATION BANK

JUDGEMENT

(1.) Alleging deficiency in service and adoption of unfair trade practice by the opposite party/Bank, the above named complainant has filed the present complaint claiming a sum of Rs. 20 lacs along with interest @ 18% per annum from 17.4.1996 i.e. the date on which the initial letter was issued by the opposite party/Bank in favour of the complainant.

(2.) In nutshell the complainant's case is that he being a Non Resident Indian held an account NRE/NRNR with the opposite party/Bank since 1989. In the year 1997, the complainant had deposited a sum of Rs.80,00,000 (Rupees eighty lacs) in his account with the opposite party/Bank. Opposite party No. 3 is stated to be a partnership firm engaged in the business of construction and Mr. P.S. Rao being one of its partners. According to the complainant, in February, 1996, during one of his visits to the Bank, opposite party No. 2 i.e. Corporation Bank, Chembur Branch, the Manager of the Bank Mr. Ambrish Angiras introduced Mr. P.S. Rao, partner of opposite party No. 3 to the complainant as a flourishing businessman and sought the indulgence of the complainant to extend the facility of a soft loan to opposite party No.3/M/s. Rao Constructions for a period of three months against the Bank standing surety against a post-dated cheque issued by opposite party No. 3 and Manager of the Bank giving a letter of guarantee to honour the said cheque when presented for payment. Complainant being allured with the said promises/assurances, paid the amount to opposite party No. 3 on 17.4.1996, O.P. No. 3 issued a post-dated cheque bearing No. 929131 dated 17.7.1996 in the sum of Rs. 20 lacs drawn in favour of opposite party No.3 on the Manager of opposite party No. 2 issuing a Bank Guarantee dated 17.4.1996 confirming and guaranteeing that the said cheque would be honoured for payment when presented. The said guarantee was given by the Branch Manager in his official capacity on the fetter head of the opposite party No. 2 and bearing the rubber stamp impression of the Bank below the signatures of the Manager.

(3.) On 16.7.1996, a day before the date of repayment Mr. Ambrish Angiras, Branch Manager of opposite party No. 2 called upon the complainant and requested him not to present the cheque dated 17.7.1996 for payment and handed over to him another post-dated cheque bearing No. 217401 dated 17.10.1996 in the sum of Rs. 20,00,000 backed by a fresh bank guarantee issued by Branch Manager of opposite party No. 2 on the letter head of the bank bearing the stamp of the bank. Complainant became assured about the repayment of the loan amount by 17.10.1996 and agreed to the suggestion. Once again the Branch Manager of opposite party No. 2 persuaded the complainant to extend the loan to opposite party No. 3 by another three months and a fresh post-dated cheque was issued assuring the repayment of loan by 15.4.1997. The said cheque was presented for payment on 10.4.1997 but inspire of the surety/bank guarantee given by the Branch Manager of opposite party No. 2, the cheque was returned unpaid with the remarks "Insufficient Funds" vide a Memo dated 10.4.1997. Complainant felt cheated by the opposite parties and despite contacting the opposite party No. 3, it failed to repay the amount of loan and bank also failed to make the payment. After issuing the legal notice, the complaint was filed as according to the complainant by not honouring its commitment under surety/bank guarantee issued by Branch Manager on behalf of opposite party No. 2/Bank, the opposite party No. 3 having not paid the amount, the Bank committed deficiency in service making them liable to indemnify the complainant for the loss occasioned to him.