- Bookmark
- Share
- CaseIQ
Pishora Singh(D) Thru Lrs. (S) v. Bank Of Punjab & Ors. (S)
Factual and Procedural Background
The appellant obtained two fixed deposit receipts (FDRs) of Rs. 1,00,000/- each on 24 February, 1996, and another FDR of Rs. 2,00,000/- on 8 March, 1996. The respondent Bank renewed the first set of FDRs on 10 April, 1996 and 7 June, 1996.
When the appellant sought encashment of the FDRs, the Bank refused to encash the FDR dated 8 March, 1996 for Rs. 2,00,000/- on the ground that it was issued without any consideration. There was no dispute regarding encashment of the two FDRs originally issued on 24 February, 1996.
The appellant filed a complaint before the District Consumer Forum regarding the Bank’s failure to encash the Rs. 2,00,000/- FDR. The District Consumer Forum, on the material and evidence on record, held the appellant entitled to encashment and interest under the FDR.
The Bank appealed to the State Commission, which allowed the appeal and held that the appellant was not entitled to encashment of the FDR dated 8 March, 1996. The appellant’s revision petition was dismissed by the National Commission by an order dated 2 June, 2004. The appellant then approached the Supreme Court by way of Civil Appeal No. 6850/2005, decided on 18 January, 2017.
Legal Issues Presented
- Whether the appellant was entitled to encashment (and interest) of the FDR dated 8 March, 1996 for Rs. 2,00,000/-, notwithstanding the Bank’s stand that it was issued by mistake/without consideration.
- Whether the State Commission and National Commission erred in denying relief to the appellant and in reversing the District Consumer Forum’s order.
Arguments of the Parties
Respondent-Bank's Arguments
- The FDR dated 8 March, 1996 was issued by mistake, and due to that mistake the Bank declined encashment.
- The appellant allegedly had only Rs. 2,00,000/- in his account, which was adjusted against the first set of FDRs issued on 24 February, 1996; therefore, he did not have an additional Rs. 2,00,000/- enabling issuance of the second FDR on 8 March, 1996.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Supreme Court noted that there was no discussion in the orders under challenge explaining the basis on which the second FDR (dated 8 March, 1996) was issued. The Court addressed the Bank’s contention that the FDR was issued by mistake and observed, upon inquiry, that no action had been taken against the allegedly defaulting officer for issuing the FDR without consideration.
The Court further reasoned that even if it were assumed that the FDR was issued fraudulently, it was all the more obligatory for the Bank to take action against its employees. As far as the appellant was concerned, the Court emphasized that the only document in his possession was the FDR issued by the Bank, and the appellant could not be expected to produce anything beyond the FDR receipt itself.
On this basis, the Court concluded that the State Commission and the National Commission were in error in dismissing the appellant’s complaint and in denying encashment of the FDR.
Holding and Implications
ALLOWED: The Supreme Court set aside the orders passed by the State Commission and the National Commission and restored the order of the District Consumer Forum.
The direct effect is that the District Consumer Forum’s directions (including entitlement to encashment of the FDR and interest as held by the Forum) stand revived and must be implemented. The Court directed that the District Consumer Forum’s order be implemented within six weeks from the date of the Supreme Court’s order. The opinion does not indicate that any broader precedent or general rule was laid down beyond resolving the parties’ dispute on these facts.
1. We have heard learned counsel for the parties.
2. The appellant had obtained two FDRs for Rs. 1,00,000/- (Rupees one lakh only) each on 24 February, 1996. Thereafter, he also obtained another FDR on 8 March, 1996 for an amount of Rs. 2,00,000/- (Rupees two lakhs only). The first set of FDRs obtained by the appellant on 24 February, 1996 were renewed by the respondent-Bank on 10 April, 1996 and on 7 June, 1996.
3. When the appellant went to encash two FDRs that were originally issued on 24 February, 1996 as well as the FDR issued on 8 March, 1996, the respondent-Bank refused to encash the second FDR for Rs. 2,00,000/- (Rupees two lakhs only) on the ground that it was issued to the appellant without any consideration. There is no dispute with regard to the encashment of the first set of two FDRs issued originally to the appellant on 24 February, 1996.
4. The complainant preferred a complaint before the District Consumer Forum with regard to the failure of the respondent-Bank to encash the FDR for Rs. 2,00,000/- (Rupees two lakhs only) issued on 8 March, 1996. On a consideration of the material placed before the District Consumer Forum as well as the evidence on record, the District Consumer Forum concluded that the appellant was entitled to encashment of the FDR and it passed appropriate orders in this regard. It was also held that the appellant was entitled to payment of interest payable under the FDR.
5. Feeling aggrieved, the respondent-Bank preferred an appeal before the State Commission which was allowed and it was held that the appellant before us was not entitled to encashment of the FDR issued on 8 March, 1996.
6. Against the order passed by the State Commission, the appellant preferred a revision petition which was dismissed by the National Commission by the impugned order dated 2 June, 2004. It is under these circumstances that the appellant is now before us.
7. It is submitted by learned counsel for the respondent-Bank that the FDR issued on 8 March, 1996 was issued by mistake and it is because of this mistake that the respondent-Bank declined to encash the FDR. On our asking, we have been informed that no action has been taken against the defaulting officer for having allegedly issued FDR on 8 March, 1996 without any consideration.
8. It is further submitted by learned counsel for the respondent-Bank that the appellant had only Rs. 2,00,000/- (Rupees two lakhs only) in his account and that amount was adjusted against the first set of FDRs issued on 24 February, 1996 and that the appellant did not have any amount to the extent of Rs. 2,00,000/- (Rupees two lakhs only) which would enable the Bank to issue the second FDR on 8 March, 1996.
9. Be that as it may, we do not see nor is there any discussion in the orders before us giving the basis on which the second FDR was issued. Assuming the FDR dated 8 March, 1996 was issued to the appellant fraudulently, it was all the more obligatory on the respondent-Bank to have taken action against its employees. As far as the appellant is concerned, the only document that he had in his possession and rightly so was the FDR issued to him by the respondent - Bank. The appellant cannot be expected to produce anything more than what is given to him by the Bank which is the FDR receipt itself.
10. Under the circumstances, we are of the view that the State Commission as well as the National Commission were in error in dismissing the complaint filed by the appellant. Accordingly, we set aside the orders passed by the State Commission as well as the National Commission and restore the order passed by the District Consumer Forum.
11. The appeal is allowed.
12. The order passed by the District Consumer Forum may be implemented within a period of six weeks from today.
SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS
Civil Appeal No(s). 6850/2005
Pishora Singh (D) Thru Lrs.….Appellant(s)
v.
Bank of Punjab & Ors.….Respondent(s)
Date : 18/01/2017 This appeal was called on for hearing today.
(Before Madan B. Lokur and Prafulla C. Pant, JJ.)
For Appellant(s) Mr. N. Gupta, Adv.
Mr. T. Gupta, Adv.
Mr. Puneet, Adv.
Ms. S. Janani, AOR
For Respondent(s) Mr. Rohit K. Aggarwal, Adv.
Mr. Avinush Kumar, Adv.
Mr. R. S. Suri, AOR
UPON hearing the counsel the Court made the following
13. The appeal is allowed in terms of the signed order.
14. The order passed by the District Consumer Forum may be implemented within a period of six weeks from today.
Alert