PUNJAB AND SIND BANK Vs. SANJIV WALIA

JUDGEMENT

(1.) -This revision is directed against the order dated 4.4.2007 of Consumer Disputes Redressal Commission U.T., Chandigarh allowing appeal against the order dated 11.8.2006 of District Forum and directing the petitioner to credit amount of Rs. 20,120 in the saving bank account of the respondent together with interest @ 5% p.a. from 10.6.2005.

(2.) Facts giving rise to this revision lie in narrow compass. Shakti Kumar had issued account payee cheque of Rs. 20,120 drawn on Central Bank of India, Mohali in favour of M/s. Himmat General Finance Pvt. Ltd. On 10.6.2005, M/s. Himmat General Finance Pvt. Ltd. through its M.D. - Harcharan Singh endorsed this cheque in favour of the respondent/complainant who in token of acceptance thereof made endorsement below the endorsement made by Harcharan Singh. Respondent was having saving bank account No. 12168 with the petitioner/opposite party-bank and he deposited the cheque in that account on 14.6.2005 for crediting amount thereof after clearance. Petitioner returned the cheque saying 'endorsement on the back of cheque was irregular.' Thereupon, the respondent filed complaint seeking certain reliefs against the petitioner. It was admitted by the petitioner that the cheque in question was returned to the respondent on 14.6.2005 with the remark that 'endorsement on the back of cheque was irregular'. However, it was stated that Shakti Kumar, drawer of the cheque wrote a letter (Annexure R-1) to the paying bank that the cheque should go in the account of M/s. Himmat General Finance Pvt. Ltd. only. This company had closed the business and its Directors have been staying abroad. It was denied that the chque was illegally returned to the respondent as alleged.

(3.) Submission advanced by Mr. M.S. Rana for the petitioner was that Harcharan Singh on behalf of M/s. Himmat General Finance Pvt. Ltd. could not have legally endorsed the crossed cheque in favour of the respondent. He pointed out that Shakti Kumar, drawer of cheque had also intimated the paying bank that the amount of cheque should go in the account of M/s. Himmat General Finance Pvt. Ltd. In support of the submission, our attention was drawn to a part of the solution to problem 277 under the sub-heading "cheque payable to company- collection" of the Book - Practical Problems on Commercial Banking (copy at page 38) which states that "it is unusual for companies to negotiate cheques to third parties without routing the transaction through their banking accounts". On the other hand, while supporting the order under challenge, the respondent submitted that the letter (copy at page 31) sent by Shakti Kumar, drawer to the paying bank is undated. This could not be within the knowledge of the petitioner-bank as the cheque in question was returned on the date it was deposited in the saving account and the paying bank did not know that it will be deposited in saving account with the petitioner-bank. Obviously, the controversy between the parties revolves around the issue if the cheque in question, admittedly bearing the endorsement "and company" on the left side on top between two parallel lines issued in favour of M/s. Himmat General Finance Pvt. Ltd., could have been legally endorsed by it in favour of the respondent. Sections 123, 124 and 130 of the Negotiable Instruments Act, 1881 have bearing on the issue on hand. A combined reading of these sections would show that the negotiability of a crossed cheque can be destroyed only if it is marked "not negotiable" on its face, it is not destroyed by its simply being crossed whether generally or specially. We are, therefore, in agreement with the view taken by the State Commission that M/s. Himmat General Finance Pvt. Ltd. had validly endorsed the cheque in question in favour of the respondent. Thus, the cheque could not have been returned by the petitioner on ground of endorsement by the said Company being irregular. Aforesaid observation of the solution to problem 277 which is the opinion of the author of the book, has no statutory sanction nor the letter sent by Shakti Kumar to the paying bank could effect the negotiability of the cheque by said M/s. Himmat General Finance Pvt. Ltd. in favour of the respondent. Revision petition, therefore, deserves to be dismissed being without any merit. Accordingly, revision is dismissed. Respondent will return the cheque in question to the petitioner-bank. No order as to cost. R.P. dismissed.