ORDER
B.K. Taimni, Member
1. Appellant was the opposite party before the State Commission where the respondent/ complainant had filed a complaint alleging deficiency in service on the part of the appellant Bank.
2. Very briefly the facts of the case are that there exist one unit called Mamta Trading Company, 71, Palika Bazar, Ghaziabad against whom the Local Sales Tax Authority raised a demand of Rs. 34,000. Since Mamta Trading Company wanted to agitate the matter further, the Sales Tax Authority wanted it to give a ‘Bank Guarantee’ for the demanded amount of Rs. 34,000. On being approached the appellant bank issued ‘Bank Guarantee’ subject to the Mamta Trading Company providing a ‘Counter-Guarantee’ duly supported by the like amount. It is here that the complainant comes into picture who stood as a ‘surety’ in respect of Counter Guarantee given by Mamta Trading Company in the shape of two FDRs amounting to Rs. 20,000 and Rs. 14,000. It was the case of the complainant that the guarantee was valid upto 9.12.1988 starting from 10.12.1987, the guarantee having a life of one year. It is the case of the complainant that when he went to collect the maturity amount after about 18 months of date of expiry of the guarantee, i.e., 9.12.1988, he could not get any satisfactory answer and finally he was told that the amount has been released to the Sales Tax Authority upon the invocation of guarantee. Not impressed by this, a legal notice was issued, when no reply was forthcoming, a complaint was filed before the State Commission, who directed the appellant to refund Rs. 34,000 along with interest @ 18% p.a. from the date of maturity of FDR till the date of payment along with Rs. 86 as correspondence expenses, Rs. 513 towards travelling expenses and Rs. 550 as legal fee and cost of Rs. 3,000. Aggrieved by this order this appeal has been filed before us.
3. We heard the learned Counsel for the appellant and also heard the respondent/ complainant who was present in person, as well as perused the material on record.
4. There are two points, which have been made and discussed by the State Commission as well, i.e., the letter being delivered by the Invoking authority, i.e., Sales Tax Authority, Ghaziabad on 10.12.1988. It was the case of the complainant before the State Commission that firstly, the Guarantee provided by him expired on 9.12.1988 and was not valid on 10.12.1988 and secondly the appellant bank could not have received the guarantee invocation letter on 10.12.1988 as this was a second Saturday when it normally closed at 2 p.m. and the Sales Tax Department would not open on that date. Pleas taken to the contrary were negated by the State Commission. In our view, this date of 9th or 10th December 1988 has got no relevance even though the learned Counsel for the appellant relies upon the endorsement on the Bank Guarantee issued by them in favour of Governor of Uttar Pradesh acting through the Sales Tax Officer, Ghaziabad. Even though on the endorsement the guarantee has been shown as valid up to 10.12.1988 but it needs to be appreciated that this document is the guarantee given by the Bank to the Sales Tax Authority. Basic documents as far as the complainant is concerned is the “3rd Party Letter of Pledge of Valuable Security”. The relevant portion of this guarantee/security given by the complainant c reads as follows:
You may hold the FDR 528776, 528777 Rs. 14,000, Rs. 20,000 as a continuing security for all sums due to you under the said overdraft/ loan/guarantee limit or other liability from time to time and for all sums ultimately due in the account whether on account of guarantees or otherwise together with interest and all other amount due to you, including all charges, commission, brokerage, cost of telegrams, incidental expenses as also the amount of dishonoured bills, promissory notes or cheques, notwithstanding that the overdraft or any liability due in the account may from time to time be reduced or extinguished or that the balance in the said account may be at credit or by drawings or debits by the accounts the said account is overdrawn beyond the limit.
5. A plain reading of this will make it clear that the security was of continuing nature. There is no time frame and this is the basic document which is not under challenge and we cannot read more than what is given in this document as far as the complainant is concerned.
6. We have also seen the letter of invocation issued by the Sales Tax Authority (appearing at page 69 of the paper book) which clearly bears the initial of receipt by the Bank on 10.12.1988 at 2.45 p.m. We are not inclined to read more than this. At the cost of repetition, we like to state that despite this being a fact, that as per endorsement on the Bank guarantee, the guarantee was valid till 10.12.1988 and letter is received on 10.12.1988 at 2.45. We attach no importance to this for the simple reason that the security given by the complainant was a continuing security and if the Bank has honoured the guarantee given by it by invoking on 10.12.1988, in our view, the Bank has committed no error. Bank cannot be held to be deficient in rendering service for the simple reason that they have acted within terms of the “Third party letter of pledge of valuable securities signed by the complainant on 10.12.1987 whose last line reads as follows:
This agreement shall be irrevocable and shall remain in force until discharge by you in writing.
7. In the present case neither the security document was discharged nor it was revoked, hence, in view of its continuing nature, the Bank was within its right to invoke the security / guarantee given by the complainant.
8. We also like to observe that we fail to appreciate as to under what circumstances, the complainant did not make Mamta Trading Company a party either before the State Commission or before us. The complaint in any case was bad in nature, for non-joinder of parties.
9. In the aforementioned circumstances, we are unable to sustain the order passed by the State Commission, which is set aside, the complaint is dismissed.
10. The respondent/complainant shall, however, be free to recover that amount from Mamta Trading Company as per law, if he is so advised.