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M/S. BRIGHT TRANSPORT CO. v. THE SANGLI SAHAKARI BANK LTD.
Factual and Procedural Background
The complainant company, M/s. Bright Transport Co., filed complaints claiming large sums of money along with interest and compensation from the opposite party, Sangli Zila Sahakari Bank Ltd., alleging deficiency in service. The claims relate to the bank's alleged negligence in encashing and making payments on several cheques bearing forged signatures of the complainant over a period from 2005 to 2009. The complainant maintained a current account with overdraft facility with the bank for business purposes. The matter was reported to the bank authorities and the police, resulting in the registration of an FIR and filing of a chargesheet, which is pending trial in a criminal court. The complainant relied on expert evidence establishing forgery of signatures on the cheques.
Legal Issues Presented
- Whether the consumer complaints alleging deficiency in banking services involving allegations of forgery and fraud are maintainable before the National Consumer Disputes Redressal Commission under the Consumer Protection Act, 1986.
- Whether the complainant qualifies as a "consumer" under section 2(1)(d) of the Consumer Protection Act, 1986, given the commercial nature of the bank transactions.
- Whether the Commission, in exercise of its summary jurisdiction, is competent to try complaints involving voluminous evidence, complex factual and legal questions, and pending criminal proceedings.
Arguments of the Parties
Complainant's Arguments
- The complainant claimed large monetary compensation and interest for the bank's alleged negligence in honoring forged cheques.
- They relied on expert evidence to prove forgery of signatures on the cheques.
- The complainant contended that the bank's failure to exercise due care in verifying signatures amounted to deficiency in service.
The opinion does not contain a detailed account of the opposite party's arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Synco Industries Vs. State Bank of Bikaner & Jaipur & Ors (2002) 2 SCC 1 | Complex claims involving large damages and voluminous evidence are not suitable for summary disposal by consumer forums and should be decided by civil courts. | The court relied on this precedent to hold that the present complaints involving complicated evidence and large claims were inappropriate for summary adjudication by the consumer forum. |
| V.S. Badlani Vs. Indian Bank (OP No. 24 of 2005) | Disputes involving allegations of forgery, conspiracy, and voluminous evidence should be relegated to civil courts rather than being decided by consumer forums. | The court applied this principle to find the present case similar in nature and refused to exercise jurisdiction, directing the matter to the civil court. |
| Hagwanji D. Patel Vs. The Chairman & Managing Director, Indian Bank (Consumer Complaint No. 217 / 2006) | Consumer complaints involving complicated factual and legal questions, pending criminal trials, and voluminous evidence are not maintainable before consumer forums. | The court followed this precedent to support its conclusion that the present complaints involve complex issues better suited for civil courts and criminal trial outcomes. |
Court's Reasoning and Analysis
The court observed that the complaints raised complex factual and legal issues involving allegations of forgery and fraud over multiple years, which require detailed documentary and oral evidence, including expert testimony and cross-examination. Such complexity exceeds the summary jurisdiction of the consumer forum, which is designed for relatively simple disputes and has limited time for disposal. The complainant’s business-related banking transactions further excluded them from the definition of "consumer" under the Consumer Protection Act as amended. Additionally, the existence of pending criminal proceedings on related forgery allegations meant that the consumer forum’s adjudication could interfere with or be influenced by the criminal trial. The court also noted the misuse of consumer forum jurisdiction as a means to avoid paying court fees in civil courts. Relying on binding Supreme Court precedents and its own prior decisions, the court concluded that the complaints are not maintainable before the consumer forum and should be pursued in the appropriate civil courts or tribunals.
Holding and Implications
The consumer complaints are dismissed as not maintainable before this Commission.
The direct effect of this decision is that the complainants are precluded from pursuing their claims before the National Consumer Disputes Redressal Commission and are directed to seek remedies through the civil courts or other appropriate forums. No new legal precedent was established; rather, the decision reaffirmed established principles limiting the jurisdiction of consumer forums in complex commercial disputes involving allegations of forgery and pending criminal proceedings.
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
NEW DELHI
CONSUMER CASE NO. 286 OF 2011
1. M/S. BRIGHT TRANSPORT CO. ...........Complainant(s) Versus
1. THE SANGLI SAHAKARI BANK LTD. ...........Opp.Party(s)
BEFORE:
HON'BLE MR. JUSTICE R. C. JAIN, PRESIDING MEMBER HON'BLE MR. S. K. NAIK, MEMBER
For the Complainant : Mr. Abhinay Ramkrishna, Advocate For the Opp.Party : NEMO
Dated : 12 Jan 2012
ORDER
In CC No. 286 / 2011, the complainant company has made a claim of Rs.1,27,35,431.59/- alongwith interest @24% p.a. besides a compensation of Rs.50,00,000/- for pain, suffering and mental agony. In CC No. 287/2011, he has made a claim of Rs.63,14,267.28/- alongwith interest @24% p.a. besides a compensation of Rs.50,00,000/- for pain, suffering and mental agony. These amounts are claimed by the complainant from the opposite party, Sangli Zila Sahakari Bank Ltd., a cooperative bank existing in Sangli District, Maharashtra where the complainant had a current account with overdraft facility in connection with its business. These amounts are claimed alleging deficiency in service on the part of the opposite party Bank and its official in encashing and making payment of several cheques allegedly bearing forged signature of the complainant over a period of four years from 2005 to 2009. The precise allegation of negligence is that officials of the Bank did not exercise due care in comparing the signatures on the cheques from the specimen signature of the Director of the complainant. It is, however, averred in the complaint that the matter was reported to the Bank Authorities and also to the Police. FIR was registered vide no. 13110 dated 18.01.2010 under section 408, 465, 407, 468, 471, 420 and 34 of IPC and a charge sheet stands filed and the same is awaiting trial by the concerned criminal court. According to the complainant, it has been established by the evidence of hand-writing expert that the signatures on the cheques were forged. 2. We have heard Mr. Abhinay Ramkrishna, Advocate for the complainants on the question of maintainability of these complaints before a consumer fora like this Commission. In our view, having regard to the nature and gamut of controversy which is raised in the present complaints, it cannot be decided by a consumer fora in exercise of its summary jurisdiction under the Consumer Protection Act, 1986 because the trial of such complaints would require voluminous documentary and oral evidence including cross-examination of various witness and experts, which cannot possibly be done by this Commission in such a jurisdiction. The trial and disposal of such complaints cannot be done within the stipulated time span of 3 or 4 months or even a year or so as it would require protracted trial and hearings. Needless to mention that hundreds of complaints are still pending disposal in this Commission for over a decade. 3. That apart we may notice that as per the complainant own showing they had availed the services of the opposite party bank in connection with their business / of commercial purpose inasmuch as
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it was having a current account with overdraft facility in the OP Bank and the alleged negligence / deficiency in service is relatable to the said business transactions. For this reason also we are of the view that the complainant is not a onsumerwithin the provisions of section 2(1)(d) of the Consumer Protection Act, 1986, more particularly as it stands after its amendment by the Amending Act 62 of 2002 effective from 15.03.2003. 4. Yet another reason why we would discourage the complainant from approaching this Commission is that as per the complainants there are several acts of forgery for which a criminal trial is pending. The said case is yet to be decided and the decision of the criminal cases may have a bearing on the claims made by the complainants in these complaints. This Commission has consistently taken the view in the past that complaints which are based on allegations of fraud, forgery, etc. and trial of which would require voluminous evidence and consideration are not to be entertained by this Commission. 5. In this view we are fortified by the decisions of the Supreme Court and this Commission. In the case of Synco Industries Vs. State Bank of Bikaner & Jaipur & Ors. (2002) 2 SCC 1, where the Apex Court held as under: iven the nature of the claim in the complaint and the prayer for damages in the sum of rupees fifteen crores and for an additional sum of rupees sixty lakhs for covering the cost of traveling and other expenses incurred by the appellant, it is obvious that very detailed evidence would have to be led, both to prove the claim and thereafter to prove the damages and expenses. It is, therefore, in any event, not an appropriate case to be heard and disposed of in a summary fashion. The National Commission was right in giving to the appellant liberty to move the civil court. This is an appropriate claim for a civil court to decide and, obviously, was not filed before a civil court to start with because, before the consumer forum, any figure in damages can be claimed without having to pay the court fees. This, in that sense, is an abuse of the process of the consumer forum In the case of OP No. 24 of 2005 tiled as V.S. Badlani Vs. Indian Bank, this Commission held as under: eeing various judgments of the Supreme Court and this Commission, it is evident that wherever not only the complicated questions of law but dispute questions of facts, relating to unauthorized representations made about paying higher rate of interest and requirement of recording voluminous evidence etc. and relating to forgery and conspiracy involving eight persons and other points mentioned earlier are involved, it would be desirable that the matter should not be dealt with by this Commission and could be relegated to the civil Court. We feel that in the present state of law and observation of the Supreme Court itself and the aforesaid circumstances, we cannot take any other view. It is submitted that facts of the above mentioned case were broadly similar to the instant matter where there are allegations of fraud, forgery and fabrication of documents. This Honle Commission refused to exercise its jurisdiction in such dispute and relegated the matter to the Civil Court 7. These decisions were followed by this Commission in consumer Complaint No. 217 / 2006 titled hagwanji D. Patel Vs. The Chairman & Managing Director, Indian Bankdecided on 6.05.2011 by holding as under:-
earned counsel for the complainants have not denied the above circumstances / pleas but he has submitted that the complainant is not concerned with the said transactions because the opposite party-bank having not disputed the deposit of sum of 1,96,749.24 GBP in the FCNR (B) account, they are liable to repay the said amount alongwith interest and compensation because the bifurcation of the account on the basis of the instructions issued by the attorney of the complainant was in clear violation of RBI guidelines. In our view, it will amount to over simplifying a complicated issue. Whether the opposite party-bank acted in violation of the RBI guidelines or not while effecting the bifurcation of the account of the complainant is only one circumstances in the chain of circumstances under which several transactions were effected in fraudulent manner by several persons purportedly engaged by the complainant as financial
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advisors / consultants / commission agents. What was the role of the bank manager and those persons purporting to act on behalf of the complainants has been a subject matter of investigation by the economic wing of the CBI and a chargesheet stands filed against eight accused persons. Whether the transactions were genuine / fake or fraudulent and what was the modus operandi of the perpetrators of the said transactions is the matter on which the special court is yet to give its verdict. On the face of this position, we must consider the question whether this Commission in exercise of its summary jurisdiction would be able to adjudicate al those issues arising on the complaint in an effective manner. If this Commission ventures to do it, it may have to record the evidence of all those persons whose evidence was collected by the CBI. It is only after detailed examination and cross examination of those witnesses and the documentary evidence i.e. voluminous record involved in the said bank transactions that the Commission may perhaps be able to adjudicate on the said question. We have, therefore no hesitation to hold that the complaint indeed raises very complicated question of facts and law which can only be answered by a regular Civil Court and the complainants should be relegated to the Civil Court to work out their remedy for the entire claim made by them in the present complaint or this Commission can decide upon the claim in regard to which there is no dispute between the parties. 8. It also appears to us that filing of present complaints before this Commission are nothing but an attempt to misuse the jurisdiction of this Commission only with a view to save on the court fee payable in a suit before the Civil Court. 9. Having considered the matter from different angles and having given our thoughtful consideration to the submissions made by the learned counsel for the complainants, we are of the view that these consumer complaints are not maintainable before this Commission. However, the complainants shall be free to work out its remedy in accordance with law before the appropriate court / Tribunal. With these observations, the consumer complaints are dismissed.
......................J
R. C. JAIN
PRESIDING MEMBER
......................
S. K. NAIK
MEMBER
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