CENTRAL BANK OF INDIA Vs. NARAIN STEEL TRADERS

JUDGEMENT

(1.) First Appeal No. 625/93 by the Central Bank of India and First Appeal No. 648/93 by the Bank of Rajasthan Ltd. are directed against the Order dated 11.10.93 passed by the Punjab State Consumer Disputes Redressal Commission at Chandigarh in Original Complaint No. 18/92 filed by Narain Steel Traders, complainant holding both Central Bank of India and the Bank of Rajasthan Ltd. jointly and severally liable for the deficiency in service. The State Commission granted compensation of Rs. 20,000/- and in addition directed that the complainant would be entitled to interest at the maximum rate which the Central Bank of India is charging from its loans in any scheme on the delayed payment of four demand drafts other than the demand draft of Rs. 17,362/-and interest would also be paid by both the Banks in equal shares from the date of presentation of each demand draft till its honour. The Central Bank of India was directed to pay a compensation of Rs. 3,000/- which included the costs of litigation to the complainant for the demand draft of Rs. 17,362/-.

(2.) The complainant filed a complaint under Section 17(a)(i) of the Consumer Protection Act, 1986 before the State Commission. The complainant firm supplies steel to different firms all over the country and often the payments for the goods supplied by the complainant are made by way of Bank drafts. One party in Rajasthan sent a demand draft of Rs. 17,362/- to the complainant and that was issued on 6.3.91 by the Bank of Rajasthan Ltd. on Central Bank of India, Mandi Gobindgrah. The Bank draft was presented through the complainant's Bankers and was returned unpaid for the reason that it 'exceeds arrangements'. Similarly, the complainant received two demand drafts issued on 15.4.91 by the Bank of Rajasthan Ltd. of the value of Rs. 1,45,838/- and Rs. 32,950/- and were presented for encashment to the Central Bank of India and they were also returned with the remarks that the same 'exceeds arrangements'. However, subsequently on receipt of the payments by Central Bank of India, the payments were made to the complainant on 18.4.91. Similarly the complainant received another demand draft of Rs. 1,22,232/- issued on 6.4.92 by the Bank of Rajasthan Ltd. and was returned twice for the same reason that it 'exceeds arrangements'. That was ultimately paid by the Central Bank of India on 16.4.92. Another demand draft of Rs. 2,06,052/- issued on 25.2.92 by the Bank of Rajasthan Ltd. was presented for encashment but was returned unpaid twice for the reasons that it "exceeds arrangements". It was ultimately paid on 29.2.92 when represented for encashment. The complainant alleged deficiency in service of both the Banks in not immediately making payment of the demand drafts. The complainant alleged that because of the repeated bouncing of cheques the complainant's goodwill and reputation has been seriously affected and the complainant has lost credit in the market. It is also claimed that the complainant had to take loans at high rates of interest to pay the amount when the Bank drafts issued by the Bank of Rajasthan Ltd. were dishonoured by the Central Bank of India. The complainant claimed relief of compensation of Rs. 2.5 lakhs as damages caused due to the repeated bouncing of the cheques.

(3.) On being noticed the opposite parties filed their respective versions. The Central Bank of India admitted that on 6.3.91 a demand draft of Rs. 17,362/- issued by the Bank of Rajasthan Ltd. and drawn on the Central Bank of India was presented. However, the said demand draft for Rs. 17,362/- was returned unhonoured due to oversight by the dealing official of the Bank. So far as the other demand drafts are concerned the plea is that on the basis of the arrangement by the Central Bank of India entered into with the Bank of Rajasthan Ltd., the Central Bank of India honoured its commitment from time to time but the four demand drafts exceeded the arrangements and therefore its payment could not be made as the debit balance would have exceeded the over draft limit. The Bank of Rajasthan Ltd. took the stand that since it was not having any branch at Mandi Gobindgarh, it had entered into an arrangement with the Central Bank of India which is having a branch at the said place and as per the said arrangement Central Bank of India agreed to honour the drafts issued by the Bank of Rajasthan Ltd. from time to time. It is admitted that the said drafts were dishonoured when the same were presented at Mandi Gobindgarh branch of the Central Bank of India and they were encashed on re-presentation after some period. It was denied that the complainant had suffered any loss on account of delay in encashment of the Bank drafts. It was pleaded that the claim of compensation can only be for actual loss or damage caused to the complainant and that has to be established. The prayer made by the Banks is for dismissal of the complaint.