ORDER
C.L. Chaudhry, J. (Member)
1. This First Appeal has been filed by the State Bank of India against the order passed by the State Consumer Disputes Redressal Commission, UP dated 2.7.99 directing the Bank to reverse the debit entries of Rs.4,80,985/- in the account of Respondent. The Respondent in this Appeal was the Complainant before the State Commission. He filed a complaint against the State Bank of India seeking directions to reverse the debit entries of Rs.7,70,000/- with regard to eight Bank Drafts. The controversy has arisen from the following facts.
2. The Complainant had an account with the State Bank of India at Kanpur. According to the Complainant there was mutual agreement between the Complainant and the Bank, contonement Branch, Kanpur under which the facility of cash credit hypothecation limit was sanctioned to the Complainant. Under the facility of cash credit, the stocks were to remain hypothecated with the Bank. During the course of business, Shri Mool Chand as representative of Firm, M/s. Harish Chandra Jaiswal of Kunda Distt. Pratapgarh contacted the Complainant for purchase of iron goods and payment was offered through Bank Drafts No.272154 dated 15.3.94 for Rs. 98,000/- drawn upon the State Bank of India of Baba Ganj Branch, Pratapgrah. Since the said party was unknown to the Complainant, Complainant agreed to deliver the goods only when the bank drafts were encashed. Mool Chand delivered the draft to the Bank on 16.3.94. The Bank after satisfying the genuineness of the Bank Draft credited the proceeds thereof in the Complainant’s account on 18.3.94 where-after the Complainant prepared a bill for Rs.89,433/- in the name of M/s. Harish Chanda Jaiswal and delivered the goods on the same date. Mr. Mool Chand further purchased iron goods from the Complainant after offering other bank Drafts. Those Bank Drafts were sent to the Opposite Party. The Branch Manager after full verification credited their proceeds in the Complainant’s account where-after the bill were prepared and the delivery was made in the name of M/s. Harish Chand Jaiswal. There were eight Bank Drafts in all, five of Rs.98,000/- each and two of Rs.93,000/- each and one for Rs.94,000/-. The delivery of the goods could not made in respect of three drafts amounting to Rs.94,000/- and Rs.93,000/- each. The State Bank of India informed the complainant on 13.4.94, that the Bank Drafts were forged and as such the Complainant should withheld the delivery of the goods against the said three forged bank drafts. The Bank started claiming the refund of the said eight Bank Drafts from the Complainant but the Complainant informed that as regards five Bank Drafts, the Complainant had already sold and delivered the goods after the Bank Drafts were encashed and credited in the Complainant’s account by the Bank and as such there was no question of refunding of the amount of the said five Bank Drafts. Complainant, however, offered to refund the amount in respect of remaining three Bank Drafts against which the delivery was withheld on the condition that if the Bank furnished an Indemnity Bond to secure the Complainant in case the customer claimed goods from the Complainant or refund of the amounts in respect of those three Bank Drafts. The Bank did not accept the condition of Indemnity Bond and on the contrary the Bank arbitrarily and unilaterally reversed the credit entries of the eight Bank Drafts. In these premises, the Complainant claimed that the Opposite Party be directed to reverse the debit entries of Rs.7,70,000/-. The interest also be paid and further direction to pay Rs.7,70,000/- with interest towards damages for not making available the Bank Account for further operation.
3. Notice on the complaint was given to the Opposite Party Bank. The Bank filed a power of attorney but it did not appear thereafter. Therefore, the Bank was proceeded ex-parte.
4. After considering the material placed on record by the Complainant, the State Commission allowed the complaint and directed the Bank to reverse the debit entries of Rs.4,80,985/- in the account of the Complainant. The State Commission returned the finding that the Bank was at fault in debiting the entire credit of the Bank Drafts against the account of the Complainant. As soon as the Complainant was informed of the forged Bank Drafts, he stopped the delivery of the goods. So the Complainant was not at fault. Bank Drafts Once received by the Bank and proceeds thereof were credited in the account of Customer, the customer is entitled to conduct the business of the goods hypothecated through the Bank as per the terms of mutual agreement. The Bank was not entitled to debit the amount involved in the sales already made by the Complainant. This action of the Bank resulted in deficiency in service and loss to the Complainant.
5. Aggrieved by the order of the State Commission, the Bank has filed the present Appeal.
6. We have heard the learned counsel for the parties. On behalf of the bank it was contended that Shri Kuldeep Singh filed his vakalatnama before the State Commission but he did not attend the proceedings which resulted into the State Commission proceeding ex-parte against the Appellant. The Appellant Bank was advised by Shri Kuldeep Singh that he wold take care of the matter and the officers of the Bank were not required to be present on each and every date and he would advise when such presence would be required. On 13.8.91, a news item published wherein it was reported that the State Commission had passed orders against the Appellant. On merits it was stated that the Respondent was enjoying a cash credit limit of Rs.3 lakh with the Appellant. Between 16.3.94 to 7.4.94 the Respondent deposited eight Bank Drafts with the Appellant Bank for collection. All the drafts were drawn on State Bank of India, Main Branch, Kanpur and purported to h ave been issued on State Bank of India, Baba Ganj, Pratapgarh. The Appellant Bank in all good faith sent drafts for collection to the drawee/paying Bank. Because of the fact that the drafts were sent for collection by the Appellant Bank for its genuine customer, the Kanpur Main Branch of the Appellant Bank paid the said drafts even in the absence of advice from the issuing Branch. As the Respondent was dealing with the Appellant Bank since long, as such, Appellant Bank had no doubt regarding genuineness of Bank Drafts and sent the same for collection in normal course of business. On 13.4.99, Bank came to know that all the eight Bank Drafts which were collected by the Bank on behalf of the complainant were forged. The drafts were prepared by some miscreants on the stolen drafts forms. The Appellant Bank immediately advised the Complainant to refund the amount withdrawn by it from the account. On 14.4.94, a complaint was also filed with the Police. The Appellant Bank requested the Respondent to deposit the amount of Rs.7,70,000/- but the Respondent failed to do so. In these circumstances, Appellant Bank was forced to file a recovery suit against the Respondent for recovery of Rs.11,63,490.04 on 2.2.96. The Respondent has filed its written statement in the said suit which is pending for disposal. The contention was that Bank filed the suit before filing of the complaint and the complaint filed by the Respondent on the same cause of action was not maintainable. The Complainant did not mention at all about the pendency of the suit. The suit was filed on 2.2.96 whereas the complaint was filed by the Respondent before the State Commission on 15.4.96. It was also contended that the questions involved in the suit were similar to the questions which were involved in the complaint. As complicated questions of fact and law are involved whether the drafts were forged or not can be decided on the basis of elaborate documentary and oral evidence. In view of this, the complaint filed was not maintainable. On the other hand, it was contended on behalf of the Respondent that at the time of filing of the complaint they were not aware of the institution of the suit by the Bank. The complaint filed before the State Commission was maintainable and State Commission rightly allowed the same on the basis of evidence produced before it.
7. We have given our thoughtful consideration to the controversy. Question involved in this case is whether the drafts which were submitted by the Respondent to the Appellant Bank were forged and whether the Respondent could take advantage of the fact that the bank had credited the amount to the account of the Respondent before it could get instructions from the paying bank. The Bank had already filed a suit on the same allegations that the drafts given to the Bank were found to be forged as those drafts have not been issued by the Pratapgarh Branch. No payment was received by the said Branch for the issue of those drafts. Those drafts wee, therefore, without any consideration and the Respondent was not entitled to get the credit in respect of those drafts. The bank informed the Respondent that a sum of Rs. 7,70,000/- which was wrongly credited had been debited to the said account and he should pay balance of Rs. 8,42,878.04, the amount which was due from the Respondent. The Respondent is contesting the suit on the same please which are the basis of the complaint filed.
8. In our opinion, the suit is a proper remedy for deciding the Controversy involved in this case. Bank had already filed a suit and which is being contested by the Respondent. We have also perused the written statement filed by the Respondent in the suit. Virtually the written statement is on the same lines on which the complaint filed before the State Commission was based. The suit by the Bank was filed earlier. In view of this, we have no option but to hold that the complaint filed before the State Commission was not maintainable in view of the fact that the Bank had already filed a suit which is being contested by the Respondent. Both the parties will get full opportunity to substantiate their respect pleas. In view of this we allow this Appeal and set aside the order of the State Commission, however, leaving the parties to bear their own costs.